Real estate investment partners blame each other when investment fizzles. $1.2 million. Orange County.
Partnership formed to both purchase and build properties goes south, partners sue each other.
- Case Name: Samen v. Berkowitz
- Court and Case Number: Orange County Superior Court / 30-2014-00701837-CU-MC-CJC
- Date of Verdict or Judgment: Wednesday, November 01, 2017
- Date Action was Filed: Friday, April 10, 2015
- Type of Action: Breach of Contract, Breach of Fiduciary Duty, Fraud
- Judge or Arbitrator(s): Hon. James Crandall
- Plaintiffs: Michael Samen, 52, partner.Cross-Complainant: Harry Berkowitz, 60, partner.
- Defendants: Harry Berkowitz, 60, partner.Cross-Defendant: Michael Samen, 52, partner.Cross-Defendant: NuVision Capital, LLC, investment company.
- Type of Result: Bench Verdict
- Gross Verdict or Award: $1,200,000 on complaint; $104,000 on cross-complaint. (Per defense counsel: $102,400,000 on complaint; $218,000 on cross-complaint.)
- Net Verdict or Award: $1,100,000 to plaintiff. (Per defense counsel: $802,400 to plaintiff.)
- Award as to each Defendant:
$1.2 million against defendant Berkowitz; $104,000 against cross-defendant Samen; $0 against Cross-Defendant NuVision Capital, LLC.
(Per defense counsel: $102,400,000 against defendant Berkowitz; $218,000 against cross-defendant Samen; $0 against Cross-Defendant NuVision Capital, LLC.)
- Economic Damages:
- Attorney for the Plaintiff:
Hochfelsen & Kani, LLP by Steven I. Hochfelsen, Newport Beach. (For Samen and NuVision.)
- Attorney for the Defendant:
Robertson & Culver, LLP by Jon R. Robertson, Irvine. (For Berkowitz.)
- Defendant's Technical Expert(s):
Craig Gilbert, appraisals. (For Samen and NuVision
Terry Toman, appraisals. (For Berkowitz.)
Jim Andrews, banking. (For Samen and NuVision; Nick.)
Mark Leithem, construction. (For Berkowitz)
Facts and Background
- Facts and Background:
Parties entered into partnerships to purchase properties and build spec homes in Newport Beach, Corona Del Mar and Crystal Cove. Samen would provide down payments and pay interest on purchase loans until refinance or sale. Berkowitz would provide his expertise in building projects and managing construction and get paid for his efforts. The spec home projects did not get permitted or built pursuant to the time deadline determined by the Court. Samen tried to get two of the properties sold to mitigate losses and the parties could not agree to terms to do so. Finally, Samen sold his note for down payment to NuVision Capital, which foreclosed on the properties, thus eliminating Berkowitz’s ownership interest.
- Plaintiff's Contentions:
Samen contended that Berkowitz was not competent to manage construction, misstated his experience and abilities, failed to disclose his financial condition, health conditions, and breached contracts and partnership duties with his conduct. He further contended that Berkowitz was misusing partnership construction funds for his benefit.
Berkowitz contended that Samen breached fiduciary duties and colluded with NuVision to deprive him of his interest in the properties by his sale of notes to NuVision. Berkowitz contended that NuVision was a co-conspirator.
- Defendant's Contentions:
Berkowitz contended he had a successful history of developing real property in Orange County and that he did not misuse any partnership funds. Also, that Samen breached his partnership fiduciary duties and colluded with NuVision to deprive Berkowitz of his interest in two of the properties through foreclosure on the properties for Samen’s benefit.
Berkowitz contended that NuVision was a co-conspirator. Further, that he could not complete the projects because Samen refused to provide further funding that he had agreed to provide and that Samen intentionally defaulted on the partnership’s loans to set up the foreclosure by NuVision.
Demands and Offers
- Plaintiff §998 Demand: Samen offered to pay Berkowitz $400,000; NuVision offered to pay Berkowitz $5,000.
- Plaintiff Final Demand before Trial: Samen offered to pay Berkowitz $95,000.
- Defendant §998 Offer: Berkowitz demanded payment of $1.5 million.
- Defendant Final Offer before Trial: Berkowitz demanded payment of $7 million.