Confidential
Settlement – $9,000,000Facts
In October 1988, Plaintiff and Defendant entered into a joint venture agreement to develop a large tract of land in Contra Costa County for residential and commercial purposes. Defendant was the owner of the land and Plaintiff was a real estate developer and home builder who was to assist in the development of the project and build homes for sale on behalf of the joint venture. Under the terms of the agreement, Plaintiff was required to use its "best efforts" to obtain acquisition and development financing for the project. After incurring development costs in excess of $1,000,000 and following various disputes between the joint venturers, Plaintiff filed an action for breach of the joint venture agreement and for dissolution of the venture.
Settlement Discussions
Defendant contends that Plaintiff initially demanded $10,000,000 and Defendant offered $2,000,000. Defendant further contends that just prior to trial, they demanded $750,000 later reduced to $0.
Damages
Plaintiff claimed over $1,500,000 for out-of-pocket expenses incurred in developing the property; $10,000,000 for an alleged increase in the fair market value of the project based on Plaintiff's development activities; and $30,000,000 in lost profits from the anticipated development of the project and the sale of homes. Defendant claimed the following damages on its cross-complaint: $3,500,000 for out-of-pocket costs contributed to the development of the project; $500,000 for the value of services contributed to the joint venture; $35,000,000 for lost anticipated profits.
Other Information
Under the settlement, Plaintiff waived all claims for damages and agreed to purchase Defendant's land for a minimum of $9,000,000. If Plaintiff proceeds with its purchase and later fails to complete the purchase, Plaintiff must pay Defendant $200,000.
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