Facts

Plaintiff Krikorian Premier Theaters entered a lease agreement with real estate defendant, developer Westminster Central LLC. The defendant agreed to build a movie theater as part of the redevelopment of a shopping mall, and secure all the requisite licenses and permits. The plaintiff was to operate a movie theater in the building. Two years later, the defendant notified the plaintiff that it was terminating the lease in reliance on a clause in the contract that allowed termination if all license and permits were not obtained despite the use of reasonable diligence. The plaintiff sued for breach of lease, breach of the implied covenant of good faith and fair dealing, and specific performance.

PLAINTIFF'S CONTENTIONS:
The plaintiff claimed that the defendant's difficulties in fulfilling its obligations under the contract stemmed from its own lack of due diligence. It also claimed the defendant intentionally avoided telling it of defendant's intentions to change the design layout by refusing to present progress reports and other documentation related to the project. Further, the plaintiff alleged that defendant entered into negotiations with a second theater company while defendant still owed contractual obligations to plaintiff. The plaintiff maintained that it had fulfilled all of its contract duties.

DEFENDANT'S CONTENTIONS:
The defendant argued that it needed to invoke the termination clause because of unexpected difficulties with the project. It contended that the plaintiff was a difficult partner, and that the plaintiff kept trying to change the plans. It suggested the plaintiff was incompetent because it was able to build a different theater in the mall after entering into a contract with the second theater company. It also disputed the plaintiff's alleged losses.

Damages

The plaintiff sought damages for lost opportunity. It calculated the lost value of a theater with a 20-year lease to be $25 million.

Result

The jury found the defendant had wrongfully terminated the lease and breached the implied covenant, and awarded $16 million to the plaintiff.

Other Information

Plaintiff has filed a motion seeking over $2.5 million in attorney fees and $4.3 million in prejudgment interest.

Deliberation

two days

Poll

10-2 (on wrongful termination of contract)

Length

10 weeks