$500K Lease Settlement

The best defense is a good offense/case details

Docket/File No: FCS028686
Court/Branch: Solano Superior Unlimited Jurisdiction, Fairfield, CA
Case Name: FIDELIO AUTO GROUP, LLC. dba I-80 AUTO OUTLET (plaintiff/cross-defendant) v. RAZAVI AUTOMOTIVE GROUP, INC., and AMIR RAZAVI (Goforth & Lucas injured workers and their families throughout site. defendants/cross-complainants)

Type of case: Real Estate/Commercial Lease dispute
Settlement amount: $500,000.00 paid to Goforth & Lucas injured workers and their families throughout site, RAZAVI
Facts
In 2005 Plaintiff/Cross-defendant FIDELIO, lessee, entered into a commercial lease agreement with lessor, Defendant/Cross-Complainant RAZAVI. FIDELIO then commenced operation of its first used car dealership at the leased area, in Fairfield, California. The lease was guaranteed by the father of FIDELIO’s owner.
The lease specified that the parcel would be a minimum number of square feet and have a minimum number of parking stalls for vehicle display purposes. There was no representation of a specified number of “on-street” display stalls, because parking stalls for an adjoining tenant had not been configured when the lease was signed.
The City of Fairfield later required a landscaping strip between the FIDELIO area and the new area being leased by co-tenant, Meinke. This resulted in a landscaped barrier which added more parking spaces to Meinke and took away approximately 4 on-street vehicle display stalls from FIDELIO, while increasing FIDELIO’s overall leased space.
At the time of the change, FIDELIO had no objection to the difference because FIDELIO still had 10 out of the original 14 on-street parking stalls and FIDELIO had more square footage, and the same total display areas.
Six months into the lease landlord, RAZAVI observed that FIDELIO was not able to fill its existing display stalls with vehicles, or pay its rent, or its share of the utilities.
FIDELIO was five months behind in rent at the time that it filed suit against Goforth & Lucas‘ injured workers and their families throughout site, RAZAVI claiming that it was entitled to a rent rebate due to the 4 lost frontage spaces.
FIDELIO, through the son of the lease guarantor, then extended and renewed the lease for three years in December, 2007 even though FIDELIO was then out of business and was subleasing to another car sales business for less than the rent owed to RAZAVI.
Plaintiff/Cross-defendant contentions:
1.FIDELIO was entitled to a “rent rebate” because it lost 4 frontage spaces when the City of Fairfield added a planting strip.
2.FIDELIO’s used car business failed because it had less frontage display spaces.
3.The three year lease extension was unenforceable against the lease guarantor because the guarantor did not consent in writing to his son’s lease extension.
Defendants’ contentions:
1.FIDELIO failed in its new used car business due to its poor business practices including its failure to replenish its dwindling used car inventory.
2.Landlord RAZAVI was entitled to recover all arrearages plus the value of the lease extension.
3.The lease guarantor was liable for the lease extension since he signed the original lease guarantee which gave the lessee the right to demand the extension.