Douglas Emmett Tenants
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Sherman Oaks Tenant Sues Douglas Emmett for Breach of Contract and Misrepresentation over Electricity Charges


Posted: June 22nd, 2018


Case details

Case Number: BC587876
Case Title: FACTS'N FIGURES INC VS GALLERIA PARK PARTNERS LLC ET AL
Case Type: Breach Rental/Lease (not UD/Evict) (General Jurisdiction)
Filing Date: 7/13/2015
Court: Stanley Mosk Courthouse (Los Angeles County)
Status: Closed 4/6/2018

Case Summary

A tenant at the Sherman Oaks Galleria, located at 15301 Ventura Boulevard, filed suit against Douglas Emmett and a related party for allegedly overcharging $490,000 in electricity bills due to the building’s malfunctioning electricity submeters. The plaintiff claims that Douglas Emmett and a related party made knowingly false misrepresentation about the submeters over the course of a decade—always insisting that they were working properly.


Complaint narrative

Facts ‘N Figures Inc., a consumer product research and testing firm, filed a complaint against Galleria Park Partners LLC and a pair of Douglas Emmett entities in July 2015 for alleged misrepresentation, negligence, breach of contract, etc.

After the defendants filed a notice of demurrer objecting to portions of the initial complaint, Facts ‘N Figures Inc. filed an amended complaint in October 2015. Many of the initial allegations remained, including misrepresentation, negligence, and breach of contract.

Per the amended complaint, Facts ‘N Figures Inc. since 2003 had been a tenant of The Sherman Oaks Galleria, located at 15301 Ventura Boulevard, in Sherman Oaks, California 91403. In 2003, the initial owner and landlord of the Galleria was Galleria Park Partners and Douglas Emmett served as the broker of the deal. The initial lease (dated late 2002) acknowledged that principals of Galleria Park Partners had a financial interest in Douglas Emmett Realty Advisors. Douglas Emmet signed the initial lease on Galleria Park Partners’ behalf. Sometime later, Douglas Emmett acquired the Galleria property from Galleria Park Partners. As a tenant, Facts ‘N Figures had signed a renewed lease with Douglas Emmett, the current owner of the Galleria, in June 2013 thereby extending its occupancy until 2018.

According to the leases, Facts ‘N Figures was to pay for all electric current used by it for the premises, but Galleria Park Partners and later Douglas Emmett were responsible for ensuring that the building's electrical systems were in working order. Facts ‘N Figures maintained that its consumption of electricity was measured by three electric submeters “owned, installed, operated and maintained by Defendants.” However, those submeters were allegedly defective.

Facts ‘N Figures maintains that Galleria Park Partners and Douglas Emmett—for years—overcharged it for electricity. Beginning in 2003, Facts ‘N Figures noticed that the electric bills it received from the defendants were significantly higher than it believed it used.

Facts ‘N Figures says it complained repeatedly in 2003 but was told by a Douglas Emmett employee and property manager that the Galleria’s staff had investigated the issue and determined that the bills accurately reflected the usage of electricity. Facts ‘N Figures alleged that those representations were false.

Told by Douglas Emmett that the submeters’ readings were accurate, Facts ‘N Figures claims that it continued to pay the electric bills because otherwise Facts ‘N Figures would be in default of the lease and forfeit the premises: a consumer research and product testing facility in which Facts ‘N Figures had already invested nearly a million dollars of improvements.

For years, the overcharging allegedly continued despite repeated complaints by Facts ‘N Figures throughout 2004 and 2006. Douglas Emmett’s property manager emailed Facts ‘N Figures, at various times in 2006 and 2012 and 2013, to say that the submeters “are showing accurate numbers,” and that Douglas Emmett “have not found any discrepancies in our billing.” The Douglas Emmett property manager also told Facts ‘N Figures that Douglas Emmett had performed “extensive research and investigation on the charges and found no discrepancies or deficiencies” in the electric bills for the premises. Facts ‘N Figures alleged that these were false misrepresentations by Douglas Emmett’s employee.

Then in June 2013, a decade after moving into the Galleria and making initial complaints, Facts ‘N Figures found itself renegotiating a new lease with Douglas Emmett. This time, as a condition of the lease, Facts ‘N Figures requested that it be permitted to inspect the submeters installed for the premises and, if it desired, to replace them at its own cost.

Douglas Emmett agreed and in August 2013, Facts ‘N Figures was granted access to the room in which the submeters were installed. Facts ‘N Figures claims that the inspection revealed that the submeters were defective. Facts ‘N Figures installed new electric submeters and claims that its electric bills were reduced by approximately 75 to 85 percent per month.

Facts ‘N Figures alleged that Douglas Emmett and Galleria Park Partners had profited from the overcharged electric bills for a decade. Facts ‘N Figures estimated that it was overcharged by $490,000.


Defendants' Notice of Demurrer

For their part, the defendants including Douglas Emmett filed notices of demurrer objecting to portions of Facts ‘N Figures’ initial complaint in July 2015 and amended complaint in October 2015.

Of note, in the defendants’ “Reply to Plaintiffs’ Opposition to Demurrer to First Amended Complaint,” dated February 2016, the defendants argued that “No part of the Lease or Amendments discusses submeters or makes the accuracy of measuring electricity by submeters a condition of the Lease or tenancy.”

The defendants’ second notice of demurrer objecting to the amended complaint maintained, among other things, that the complaint was conclusory and factually insufficient to sustain a claim. The defendants said that Facts ‘N Figures failed to allege specific facts showing that the defendants intentionally misrepresented material facts.

The second notice of demurrer occasioned a lengthy back-and-forth between the plaintiff and defendants’ respective lawyers.


Case Progression

In mid-2016, discovery began between the parties. The defendants sought to compel documents from Facts ‘N Figures to determine how the plaintiff arrived at the estimate of $490,000 in overpayments. Trial was set for March 2017. But following a series of legal maneuvers, the defendants’ lawyers expressed interest in mediation for the case according to a November 2016 application to continue the trial.

In April 2017, the defendants announced to the court that they would seek summary judgment. Summary judgment is a judgment entered by a court for one party and against another party summarily, that is without a full trial. The defendants cited several reasons why summary judgment was appropriate, including the fact that the plaintiff Facts ‘N Figures had failed to retain as evidence the three submeters after they were removed. The submeters formed the basis of the plaintiff’s claims.

For its part, Facts ‘N Figures opposed the move for summary judgment.

Throughout the latter half of 2017, the parties exchanged a series of motions designed to undercut each other’s case. But before the judge could rule on the matters—and just as a jury trial began—the parties settled in private on undisclosed terms. A notice of settlement was filed in March 2018 and a request for dismissal was filed in April 2018. The terms of the settlement were not made public.


Download Case Filings

Date Document
2015-07-13 COMPLAINT
2015-09-02 DEFENDANTS' NOTICE OF DEMURRER
2015-10-30 FIRST AMENDED COMPLAINT
2015-12-04 DEFENDANTS' NOTICE OF DEMURRER TO FIRST AMENDED COMPLAINT
2016-02-10 PLAINTIFF'S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER
2016-02-16 MOTION TO COMPEL PLAINTIFF FACTS N' FIGURES, INC'S FURTHER RESPONSES
2016-02-18 REPLY TO PLAINTIFFS' OPPOSITION TO DEMURRER TO FIRST AMENDED COMPLAINT
2016-03-07 ANSWER TO FIRST AMENDED COMPLAINT
2016-03-14 PLAINTIFF'S OPPOSITION TO THE MOTION BY DEFENDANT TO COMPEL FURTHER RESPONSES
2016-03-16 REPLY TO PLAINTIFF'S OPPOSITION TO MOTION TO COMPEL FURTHER RESPONSES
2016-03-25 NOTICE OF RULING
2016-06-22 DEFENDANT'S MOTION FOR ISSUE SANCTIONS
2016-08-17 OPPOSITION TO DEFENDANT'S MOTION FOR SANCTIONS
2016-09-28 ORDER RE: MOTION FOR SANCTIONS
2016-11-22 DEFENDANTS' UNOPPOSED APPLICATION TO CONTINUE TRIAL
2016-11-23 NOTICE OF RULING RE: APPLICATION TO CONTINUE TRIAL
2017-04-07 NOTICE OF MOTION FOR SUMMARY JUDGMENT
2017-06-05 DEFENDANT’S OPPOSITION TO PLAINTIFF APPLICATION
2017-06-05 PLAINTIFF’S APPLICATION FOR ORDER CONTINUING DEFENDANT’s MOTION
2017-09-13 PLAINTIFF OPPOSITION TO MOTION FOR SUMMARY JUDGEMENT
2018-01-05 APPLICATION FOR ORDER CONTINUING DISCOVERY
2018-03-06 NOTICE OF SETTLEMENT
2018-04-06 REQUEST FOR DISMISSAL