B&C Wins at Arbitration in $9,240,000 Real Estate Dispute

B&C Partners and Trial Attorneys

Our client came to us with a problem.  They had entered into a real estate contract to sell an apartment complex in Anaheim, California for $9,240,000 but the buyer refused to close escrow.  The buyer deposited $500,000 into escrow.  The contract had a liquidated damages provision providing that, if buyer defaults on the contract, the seller can keep the $500,000.  Trial lawyers Gregory G. Brown and Mark Higuchi handled the case at Arbitration.  After a 3 day arbitration, the Arbitrator ruled in favor of Brown & Charbonneau, LLP’s client (the seller) and awarded six figures in attorneys fees and costs, in addition to finding that the seller could keep the buyer’s $500,000 deposit.

Gregory G. Brown talks about the case in the case study video below.

Arbitrator’s Ruling: Winstar v West Guinida Arbitration Award

If you do not wish to view the video, there is the text version.

My name is Gregory Brown and I have been a business and trial lawyer for over 30 years.  I want to tell you about one of our cases involving a multimillion-dollar real estate dispute.  We were hired by the owners of a large residential apartment complex in connection with the failure of the buyer to close on the sale.  The purchase and sale agreement was for $9,240,000 and had a liquidated damages clause for the $500,000 deposit, which our client kept.  In our case, the buyer sued for specific performance (to force a sale) and breach of contract.  The unique aspect in the case was that, during escrow, the governor of ca signed into law the new rent control regulations – – AB 1482, which contained retroactive provisions.  At the time, most landlords were not aware that the new law would be retroactive.  Now, as part of the deal, the buyer required that our client provide notices of a 7% rent increase to all tenants.  In the lawsuit, The buyer argued that the owner should be forced to sell the property at a reduced price (around $2m) because they were not able to raise the rents of the units due to the retroactivity of the new laws.  We argued that there is no provision in the contract allowing such a claim and certainly no legal precedence supporting this rather bizarre argument. Alternatively, the buyers sought to have the $500,000 deposit (liquidated damages subject to another video) returned even though they agreed to this amount and they were the ones who failed to close the deal by not tendering the purchase price at closing.  Since there is an arbitration provision, we will be submitting the case to binding arbitration in the near future and will keep you posted on this case.  Although we are in arbitration, a complaint was filed so that they could record a lis pendens. As a side note, our client got a real surprise when the broker demanded $250,000 or half of the deposit due to a provision deep in the agreement requiring the seller to give up half of the deposit even if the buyer fails to close.  So, our client had to pay this amount but learned a really valuable lesson – read the contract carefully!!  For more information on this topic, or if you have other business-related legal issues or disputes, call us today at 714.505.3000 or email us at inquiries@bc-llp.com.


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Brown & Charbonneau, LLP represents individuals as well as large and small companies in cases involving all forms of business disputes, including fraud, breach of contract, breach of fiduciary duty, real estate, construction, employment and many other types of  disputes. If you are involved in a business dispute, or would like to learn about your options, rights and how to protect them, we can provide you with the information you need. Contact us or call today at 714-505-3000 to schedule a consultation and learn more about how we can help you.

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Brown & Charbonneau, LLP is a top-rated business litigation, corporate, real estate and family law firm in Irvine, California.  We are honored to be named by Best’s Lawyers® as one of the Top Law Firms in the US.  As an AV-rated law firm, we are proud of our 10.0 Superb Client Rating from Avvo. Our top-reviewed Southern California attorneys have also earned specializations from the State Bar of California, as Certified Trial Specialists and are included amongst the elite attorneys to be named Super Lawyers®.  To see all our awards and ratings, click here.

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