After almost 5 days of trial, and following 5 hours of deliberation, the jury returned a unanimous verdict finding that the District had proved it was defrauded into permitting Roosevelt Lofts to demolish and replace the surface of an alley belonging to the District and a third party. The jury awarded District compensatory damages, including attorney’s fees.
The fraud consisted of failing to disclose that Lofts had not obtained the necessary permissions to demolish and replace the alley surface before commencing work; misrepresenting and concealing from District that there would be greatly increased usage of the alley for auto traffic (creating danger to users, and exposing the District to serious premises liability); and entering into an agreement to provide the District, cost-free, a new trash collection elevator, which was never provided to the District (and which Lofts was discharged from having to provide via its Chapter 11 Bankruptcy Plan Of Reorganization).
The case has a long and complicated procedural history. In 2008, the District received a jury verdict in its favor, finding that Roosevelt Lofts' intended use of the alley for automobile traffic would overburden the easement. The trial judge disregarded the jury’s verdict and entered judgment in favor of Roosevelt Lofts and dismissed District’s fraud claim. The District successfully appealed and obtained the reversal of the first trial judge’s orders on the scope of the use rights in the easement and her dismissal of the fraud claim before it went to the jury.
After the first jury trial was completed, Roosevelt Lofts filed for bankruptcy. The District successfully opposed the attempt by Roosevelt Lofts’ successor in interest to avoid being bound by the first decision of the Court of Appeal (which found that Roosevelt Lofts could not use the alley for vehicle traffic) after prevailing in two more appellate proceedings. The District also had to litigate in the bankruptcy court to obtain an order establishing the District’s rights to recover its damages from a Reserve Fund held in Bankruptcy Court. In so doing, the District had to establish that the attorney fees incurred in those other proceedings (the litigation in the bankruptcy court and the Court of Appeal) against other parties (including Roosevelt Lofts’ successor in interest) were recoverable damages, and the reasonableness of the amounts sought as damages. The jury found for the District on every item of damages, in the full amounts sought by the District.