Snatching Litigation Victory from the Jaws of Defeat in Real Estate Lease Dispute

Using some creative litigation strategies, we help our client, LSI Corporation, turn the tables and receive a six-figure recovery from a "winning" plaintiff.

CASE BACKGROUND

Plaintiff Metropolitan Life Insurance Company, the owner of a commercial building, sued LSI for breach of a lease agreement, claiming damages of $2.7 million.  MetLife alleged that LSI had left the property in poor condition when the lease ended.  As an initial step, we knocked out half of the claim on a successful summary adjudication motion, and the remaining claims proceeded to trial.  After a five day trial, LSI lost a judgment of $240,000, which ordinarily spells B-A-D  N-E-W-S.  Five months later, however, MetLife, which had a judgment in its favor, very reluctantly, paid LSI nearly three times the judgment amount.

HOW DID WE MAKE IT HAPPEN?

It comes down to a lot of litigation procedure but, essentially, early in the case LSI had made an official "Offer to Compromise" with MetLife pursuant to a California Law (CCP section 998) in the amount of $390,000.  MetLife refused to accept the offer, forging ahead to trial, and recovering a judgment of only $240,000.  Under Section 998, a cost-shifting clause dictates that litigants (like MetLife) who do not "beat" the initial section 998 offer at trial are responsible for payment of certain case costs to be determined by the Court.  The idea is that such cost-shifting will encourage settlements before trial.  In this case, we persuaded the Court to apply that statute and, as a result, MetLife was ordered to reimburse LSI for the lion's shares of attorneys' fees, expert expenses and other costs that LSI had incurred to defend the lawsuit.  So, MetLife had a Pyrrhic victory, but the end result netted LSI with a six-figure recovery and no money out of pocket.