Adams Wine Group entered a five year commercial lease for a custom-built space with landlord Water Court (Horvitz & Levy’s client) in a commercial office building. Adams agreed to fund all construction costs above a specified allowance, then walked away from the deal partway through construction.
Water Court sued for breach of contract and Adams counterclaimed for fraud and negligent misrepresentation. Following a 24-day jury trial, Water Court obtained a directed verdict on Adams’ fraud claim, a defense verdict on Adams’ negligent misrepresentation claim, a $1.2 million judgment on its own breach of contract claim, and a $900,000 attorney fees award. The Court of Appeal affirmed the judgment in full, rejecting Adams’ contention that Water Court should have recovered only unpaid rent and nothing for restoration of the premises that had been demolished and had to be rebuilt because of Adams’ breach. The Court of Appeal also corrected a calculation error made by the trial court, which resulted in an additional award of $60,000 to Water Court. Finally, the Court of Appeal affirmed the attorney fees award in full.
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