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California developer files breach of contract lawsuit

A real estate developer has filed a $106 million breach of contract lawsuit against the California city with which it had a 2006 commercial development agreement. Samuelson & Fetter is alleging that the city violated the terms of the contract which supposedly gave the developer the rights for developing a massive transit village next to the site of an upcoming extension to the Gold Line. The developer claims that the breach of contract stems from the fact that the city and the Gold Line Construction Authority’s plans to put a parking structure on some of the property, originally intended for development by Samuelson & Fetter, would interfere with the developer’s commercial development plans for the area.

The real estate developer filed suit in California court seeking damages in excess of $106 million. That significant amount represents alleged lost damages, lost entitlement value and lost profits. This breach of contract lawsuit could put the Station Square transit development on indefinite hold.

The city of Monrovia seems to dispute the claims that the real estate developer made in their lawsuit. City officials stated that the developer had been aware all along of the plans the city had to develop the parking structure. They also said they had been attempting to work with the developer in order to solve the disagreements between them and were surprised at the filing of the lawsuit.

City officials further alleged that Samuelson & Fetter had actually been the one to violate the agreement between them. They claim that the development company did not meet their obligation to obtain land needed for the transit development by the 2011 deadline. The city reportedly informed the developer of that alleged breach in a notice of default letter sent earlier this year.

However this lawsuit plays out in court, it does look like plans for this particular transit extension may be at least temporarily postponed. Breach of contract lawsuits like the one between this California city and real estate development company can be complex and take some time to resolve. This is one reason why it is so important that all parties which are entering into a contract clearly understand all their rights and obligations required under the agreement in question.

Source: Monrovia, CA Patch, “Monrovia’s Gold Line Development Jeopardized by $106M Lawsuit,” Nathan McIntire, Aug. 31, 2012

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