Confidential
Settlement – $565,000Court
San Mateo Superior
Attorneys
Plaintiff
David M. McLaughlin
(Ropers, Majeski, Kohn & Bentley)
Defendant
Richard E. McGreevy
(Leach & McGreevy LLP)
Facts
In 1999, Jerry Carroll entered into a 10-year "as-is" commercial lease with Pacific Bell, now known as SBC Communications Inc., San Antonio. Carroll leased to Pacific Bell premises consisting of about 26,000 square feet of warehouse and office space on 1.64 acres of land in San Carlos. A Pacific Bell structural engineer inspected the premises in 1999 and 2001. Two and one-half years after the lease began, Pacific Bell/SBC claimed that the buildings were constructed of unreinforced masonry and had to be demolished or seismically retrofitted to comply with a City of San Carlos Ordinance. After Carroll refused permission to demolish the buildings and refused to pay for a retrofit, Pacific Bell/SBC began paying rent of $12,544 per month when it owed approximately $31,000 per month. Carroll sued Pacific Bell Telephone Co., operating as Pacific Bell, alleging breach of contract and fraud.
Damages
Carroll claimed that the remaining lease value was more than $2.5 million. He also claimed damages for back rent, penalties and interest of $180,996, fraud damages and attorney fees. Pacific Bell/SBC claimed that the lease had a value of $1 million.
Other Information
Pacific Bell/SBC cured the contract breach two months before trial and paid Carroll $265,656 for back rent, penalties, interest and past attorney fees. Four days before trial, it paid another $65,000 in attorney fees and costs, plus $500,000 to resolve the fraud claim. It also agreed to withdraw its claim that the buildings were constructed of unreinforced masonry and pay the full balance of the lease.
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