The Law

Own Error by Ron Davis A tenant of a California shopping center will receive $1.4 million for damage attributed to water intrusion in the tenant’s leased space. The shopping center, located in Glendale, is owned by The Americana At Brand, LLC. And the tenant, Primo Hospitality Group, Inc., leases space there for the operation of a restaurant. Complications between owner and tenant arose after the restaurant owner noticed damage to the restaurant’s floors, apparently caused by water intrusion. The tenant blamed that problem on frequent pressure washing of the mall’s common areas. Some of the water, the tenant claimed, caused the floor damage. Expert inspection and testing confirmed that claim. Eventually, the water damage became so severe that a large portion of the restaurant became unusable, and eventually the entire premises were in such a condition that new flooring became necessary. When the problem later recurred, the restaurant owner abandoned the property and sued the center’s owner, claiming negligence, trespass, and nuisance. The center’s owner responded by seeking “unpaid” rent and charging breach of the “guarantee on the lease.” The result of the impasse was a trial by jury, which determined that the center’s owner and the center’s management firm were liable to the tenant for negligence, trespass and nuisance. As a result of those findings, the jury awarded the tenant $1.4 million, apportioning that as $840,000 against the center and $560,000 against center’s management firm. The jury found no other company or persons liable on claims made. The shopping center’s owner decided against contesting the jury’s decision, but focused on the lease between the two parties. That lease barred the award of any amount to the tenant because “Its build-out costs [ ] effectively constitute compensation for injury to tenant’s business.” Moreover, the center’s owner argued that allowing evidence of the $1.4 million in “build-out costs” is itself improper under the lease. The tenant countered that argument by declaring that “the center’s owner waived the right to assert (that claim) by the owner’s conduct at trial.” And the appellate court agreed with the tenant’s reasoning and affirmed the judgment favoring the tenant. The court explained: “The center’s owner has not met its burden on appeal to establish that the error that they claimed was not invited. Nor could it, as the record does not support the claim that they acquiesced in a judicial determination. Instead, the record clearly establishes that appellant proposed the revised version of the instruction they now contend was erroneous and did so without being asked to do so by the trial court. Thus, they have failed to establish their contention that they offered the final version of [their argument] merely to accommodate a prior ruling by the trial court. The facts require the conclusion that (the center’s owner) induced the “error” which they assert by their own conduct. (Primo Hospitality Group, Inc. v. The Americana At Brand, LLC 2015 WL 1566427 (Cal.App. 2 Dist.) Decision: May 2015 Published: June 2015