Reynolds Seafood v. Matlow-Kennedy
Published: Nov. 26, 2002 | Result Date: Oct. 22, 2002 | Filing Date: Jan. 1, 1900 |Case number: NC031223 Verdict – $0
Judge
Court
L.A. Superior Compton
Attorneys
Plaintiff
Defendant
Terry A. Rowland
(Demler, Armstrong & Rowland LLP)
Experts
Plaintiff
John Ryan
(technical)
Alan D. Wallace
(technical)
Defendant
David Johnston
(technical)
Jack Karp
(technical)
Facts
In May 2000, the plaintiff, Reynolds Seafood, a sea-urchin processing business, relocated from Maine to Los
Angeles and hired the defendant Matlow-KennedyÆs agent, Ed Smith, to represent it and locate a suitable
building. Several buildings were inspected, and eventually Reynolds decided on one located in Long Beach.
According to ReynoldÆs owner, Mr. Chea, his agent Ed Smith had told him that the building was ideal for
seafood processing and that the city would approve that use.
According to Smith, he told Chea, pursuant to industry custom and practice, that the prospective tenant was
responsible for confirming permissible use with the city. Nine months after the lease was signed and Reynolds
had been processing sea urchin, it applied for a business license and was told by Long Beach that such a use
was prohibited.
The plaintiff defaulted on its lease and was evicted, and then stipulated to a judgment for
the balance due under the lease of over $130,000.
Settlement Discussions
The plaintiff Reynolds demanded that the cross-defendant, the landlord, first pay all outstanding judgments against it (over $600,000) after which a settlement would be considered. The cross-defendants offered to pay approximately $20,000 to the landlord to satisfy its $160,000 judgment, which the landlord said it would accept.
Damages
The plaintiffÆs discovery responses alleged $8.6 million in damages for lost profits, goodwill, improvements to the building and lease costs. The plaintiffÆs expert calculated the value of the business at the time a license was denied at $1,650,000. The defendants argued that the plaintiffÆs records showed significant accounting irregularities (expenses listed as assets; inflated and uncollectable amounts receivable) and that the business was losing money and was heavily in debt.
Deliberation
four hours
Length
five days
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