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Santa Monica Tenant Sues Douglas Emmett for Breach of Contract


Posted: November 1st, 2017


Case details

Case Number: SC118105
Case Title: TRUECAR INC. VS DOUGLAS EMMETT 1995 ET AL
Case Type: Breach Rental/Lease (not UD/Evict) (General Jurisdiction)
Filing Date: 8/15/2012
Court: Santa Monica Courthouse (Los Angeles County)
Status: Dismissed

Case Summary

In August 2012, TrueCar, Inc., formerly known as Zag.com, Inc., which leased office space at the Douglas Emmett-owned facility at 120 Broadway in Santa Monica, filed suit against the Douglas Emmett, Inc. subsidiary Douglas Emmett 1998, LLC, along with another tenant, Darden Restaurants, Inc., alleging charges of “Breach of Contract,” “Inducing Breach of Contract” and “Nuisance.”

Specifically, TrueCar alleged that its oceanfront office space (Suite 200 at the building), leased principally for the “magnificent views.” However, the complaint stated that prior to the lawsuit filing construction began on the first floor allegedly at the request of defendant Darden and with the consent and approval of Douglas Emmett and resulted in “deafening noise, noxious fumes, vibrations, drilling and sawing penetrations, and other disruptions and damages to TrueCar’s Second Floor Premises.” TrueCar sought an injunction and against the construction and the right to either cancel the office lease or continue to stay at a lower rent.

A request for dismissal with prejudice was filed in February 2017.

Complaint narrative

Based on the Amended Complaint narrative, TrueCar, Inc., formerly known as Zag.com, Inc., had entered into a lease agreement with Douglas Emmett for Suite 200 at 120 Broadway in Santa Monica. TrueCar, which had originally considered leasing “different and larger office space from Douglas Emmett,” decided ultimately to lease the smaller second floor premises “because of the Building's , desirable ocean side location and the Second Floor Premises' access to air, light, and views of Ocean Avenue, the beach, and the ocean.”

However, the complaint stated that prior to the lawsuit filing construction began on the first floor allegedly at the request of defendant Darden and with the consent and approval of Douglas Emmett. The construction, which purportedly included demolition and structural changes, resulted in “deafening noise, noxious fumes, vibrations, drilling and sawing penetrations, and other disruptions and damages to TrueCar’s Second Floor Premises.”

Further, TrueCar was “informed and believes that air conditioning or other equipment is going to be placed above the patio ceiling, which will be both unsightly, noisy, and destructive of TrueCar's existing access to air and light, and its views, and create substantial and continual noise and/or fumes interfering with TrueCar’s use and enjoyment of the Second Floor Premises.”

Among other remedies, TrueCar in its complaint sought a temporary restraining order followed by a preliminary and then permanent injunction on the offending construction and/or buildout; compensatory and punitive damages; and a “declaration that at TrueCar's election, TrueCar can either: 1) vacate the Second Floor Premises, cancel the Office Lease and recover appropriate damages; or (2) remain in possession of the Second Floor Premises, pay a reduced rent, and recover appropriate damages.


Darden Restaurants replaced by N and D Restaurants

The case docket (you can search for it here) shows that roughly two weeks after the complaint the plaintiffs dismissed Darden Restaurants as a defendant. Eventually, the Florida-based entity N and D Restaurants, Inc. would take the place of Darden as a defendant (and later a cross-claimant).


Douglas Emmett’s Answer

In Douglas Emmett’s answer to the original TrueCar complaint, the commercial property landlord denied “each and every allegation” alleged by TrueCar.

Douglas Emmett claimed, among other things, that the plaintiff “fail[ed] to allege facts sufficient to state a cause of action” against DE. Further, Douglas Emmett alleged that the Plaintiff (TrueCar) “has suffered no damage as a result of any of the alleged acts or omissions of Answering Defendant and, therefore, Plaintiff is not entitled to any sum or amount whatsoever from Answering Defendant.”

Additionally, the terms of the lease, allegedly protect Douglas Emmett:

By virtue of the terms and conditions of the written lease agreement between Plaintiff and Answering Defendant including, without limitation, the provisions of Article 12 thereof, Plaintiff has released this Answering Defendant from liability for the claims asserted in the Complaint.

Douglas Emmett concluded by asking the Court that TrueCar “take nothing by way of its Complaint,” and entry of Judgement of Dismissal, and for the “Defendant's reasonable attorneys' fees, costs and expenses.”


N and D Restaurants’ Cross-Complaint

In July 2014, N and D Restaurants, Inc. filed a Cross-Complaint against Douglas Emmett in the court action. The Restaurant company alleged that after TrueCar initiated its lawsuit in August 2012, N and D, Douglas Emmett and TrueCar met to hopefully resolve the dispute. According to N and D, it “modified its construction permit with the City of Santa Monica numerous times to reflect the updated construction plans and approved work schedule as they changed to appease TrueCar.” However, TrueCar continued its action in court.

N and D alleged that during the conference between the parties “Douglas Emmett offered and N and D accepted Douglas Emmett's agreement to reimburse N and D for the costs to be incurred in modifying the building specifications and construction plans for the Restaurant in order to address TrueCar's complaints and concerns.”

Purportedly, in an August 29, 2012 email sent by Alan Golad, a Douglas Emmett executive, “Golad reiterated Douglas Emmett's commitment to reimburse N and D for all costs and fees associated with changes to the design and construction plans for the Restaurant.” The Cross-Complaint emphasizes:

In fact, Mr. Golad specifically stated that Douglas Emmett is "on the hook for various costs," and that the "differential in construction costs, design fees, and permit costs are on [Douglas Emmett's] dime." A true and correct copy of the August 29, 2012 email is attached hereto.

N and D implemented the agreed-to changes and ultimately completed the restaurant project. In March 2013, N and D submitted invoices to Douglas Emmett detailing the additional costs. N and D claimed:

Despite acknowledging receipt of N and D's demand, Douglas Emmett has failed and refused to reimburse N and D for the costs associated with the changes to the design and construction plans as requested by Douglas Emmett.

Concluding its Cross-Complaint, N and D sought compensatory damages in the amount of no less than $293,496.91 plus interest, as well as attorney’s fees and other damages.


Douglas Emmett Answers Cross-Complaint

On July 22, 2013, Douglas Emmett filed an Answer to N and D Restaurant’s Cross-Complaint, claiming that “each and every cause of action contained therein fails to allege facts sufficient to state a cause of action against Answering Cross-Defendant” (Douglas Emmett).

Douglas Emmett argued that the Cross-Claimant’s (N and D) recovery of damages “should be diminished to the extent that the damages are attributable to Cross-Complainant's own negligence or fault.” Further, Douglas Emmett asserted that N and D, in fact, “suffered no damage” resulting from any acts or omissions by DE. And Douglas Emmett claimed that it is “excused from any and all liability under the facts alleged” because the company “acted in good faith.”

Douglas Emmett sought an Judgement of Dismissal in its favor, reasonable attorney’s fees, costs and expenses.


Request for Dismissal

On February 18, 2015, all parties to the case – TrueCar, N and D Restaurants, and Douglas Emmett, filed requests for dismissal with prejudice, signaling an end to the case.

Select documents for this case are available in the table below.

Download Case Filings

Date Document
2012-08-18 COMPLAINT
2013-07-03 DOUGLAS EMMETT ANSWER
2013-07-03 N AND D RESTAURANTS CROSS-COMPLAINT
2013-07-22 DOUGLAS EMMETT ANSWER CROSS-COMPLAINT