A public agency condemned our client’s commercial property in order to transfer it to a favored local property developer, which thereafter reneged on its agreement to pay our client as agreed for the condemned property. We therefore brought suit in federal court against the public agency, the favored property developer, the favored developer’s lender, and related parties. We settled the case for $530,000 under an agreement whose principal terms were disclosed by the local press.
In this case, we alleged that the original taking was unlawful because it was not done for the reasons stated in the condemnor’s resolution of necessity. We further contended that (1) the terms of the original taking, having been publicly recorded, constituted an “equitable mortgage” held by the condemnee (our client); and (2) this equitable mortgage was senior to the lender’s trust deed and therefore survived the lender’s foreclosure of the at-issue property. We thus alleged that the property remained encumbered by our client’s equitable mortgage.
Our legal arguments in this case were novel and proved successful. They addressed the confusing interplay between a public condemnor, a defaulting private transferee, the transferee’s lender, and a condemnee who failed to receive just compensation.
We previously represented the same client and related parties during the original taking. In that case, we obtained for him a cash payment of approximately $1.6 million, as well as the transferee’s obligation to transfer a parcel of developed real property to him. Under the above settlement, our client accepted the settlement payment in lieu of the promised property. His total recovery was therefore $2.13 million.
Case Name: Lau v. Cirillo et al (N.D. Cal. 2013, Case No. 5:13-cv-03946-LHK).
