Facts

Ara Sevacherian sued the former Community Redevelopment Agency of the City of Montebello over its alleged breach of a 2009 purchase and sale agreement, in which the agency allegedly agreed to purchase certain properties owned by Sevacherian and located in the City for $3.2 million. The lawsuit sought specific performance of the purchase agreement or, in the alternative damages. The plaintiff claimed that the agreement was approved by the agency's board and signed by its chairperson, however the membership of the board changed the very next day, and the new board immediately ordered that the agreement not be performed. The defendant claims the agency successfully brought a motion to strike the specific performance request, based upon changes in California's redevelopment law that dissolved the agency as of February 1, 2012.

Sevacherian sued the agency for breach of contract for its failure to perform the agreement.

Result

The parties settled. The Montebello Oversight Board, an entity created for the purpose of overseeing the winding down of the former agency's affairs following its dissolution, approved the settlement agreement and later approved by the California Department of Finance on April 5, 2013. The City agreed to pay Sevacherian $1.4 million, to be paid in installments through June of 2016, at a 7 percent interest rate, resulting in a total payment of approximately $1.6 million. Under the settlement, Sevacherian is entitled to keep the property that was the subject of the agreement, will be fully compensated for his attorneys' fees and costs in for the lawsuit and two other related lawsuits, and received a sum for breach-of-contract damages.