Snell & Wilmer Obtains $15,573,589 Judgment for Idyllwillow LP

ORANGE COUNTY – Following a 17-day bench trial tried by Steve Graham, Colin Higgins, and Tony Carucci, Snell & Wilmer’s client, Idyllwillow LP, obtained a judgment in the amount of $15,573,589 against Berkadia Real Estate Advisors, Inc. and Joe Leon.

In 2019, Idyllwillow paid $76 million for a 56-year term leasehold interest in an apartment community on municipally-owned land in Mission Viejo. The apartment community was known as ReNew at the Shops at the time of the transaction and has since been renamed Idyllwillow Resort Apartment Homes.

Idyllwillow filed suit against its broker, Berkadia Real Estate Advisors and Joe Leon, for breach of fiduciary duty, concealment, and constructive fraud after Berkadia misrepresented the property tax methodology for the property in its pro formas. Rather than a $76 million assessed value as represented by Berkadia, the reassessed value after closing was $122 million. This resulted in Idyllwillow overpaying $11 million for the leasehold interest. Idyllwillow sought compensatory damages and pre-judgment interest as a result of the overpayment.

Berkadia aggressively defended the action, arguing among other things that it was not Idyllwillow’s broker and that Idyllwillow failed to do sufficient due diligence and thus was comparatively at fault. Berkadia also argued that certain disclaimers in the pro forma and other documents absolved it of liability. The Court rejected Berkadia’s arguments, finding that Berkadia was Idyllwillow’s broker and that Idyllwillow conducted sufficient due diligence. The Court awarded $11 million in compensatory damages and $4,573,589.02 in pre-judgment interest, for a total judgment of $15,573,589.02.

Idyllwillow is also seeking a supplemental award of over two million dollars in attorneys’ fees and costs.

“We are very appreciative of this outcome,” said Idyllwillow representative, Dean Dauger. “This was a five-year journey that led to a just result.”

In addition to Steve, Colin, and Tony, the Snell & Wilmer Orange County team included associates Justin Mello and Alexis Flores, paralegals Kyle Stowell, Lori Hawkins, and Hannah Holtzapple, and legal administrative assistants Ellie Fateh and Diane Williams.

The result portrayed was dependent on the facts of that case, and the results will differ if based on different facts.