Panorama Tower Tenants Assoc. vs. Hollywood Panorama Tower, Inc.

    12.10.2010

    Summary Judgment December 10, 2010

    Stephen Smith & Chris Leyel obtain summary judgment in this commercial fire loss case.

    On December 6, 2001, an electrical fire took place in the subterranean vault of a 20-story commercial office property known as the Hollywood Panorama Tower. The building was owned by Hollywood Panorama Towers, Inc. (HPT). The building is located at the corner of Sunset and Vine Boulevards in the heart of downtown Hollywood. Tenants included accountants, law firms, a local radio station, an investment firm, realtors, small production companies, and other small businesses. The precise cause of the electrical fire was disputed.

    As a result of the electrical fire all electricity to the building was lost and the City of Los Angeles Department of Building and Safety denied both the tenants and its owners any access to the building except by special permit. The damage to the building's electrical infrastructure was extensive and power could not be restored without major repairs to the building and the power supply equipment operated by the Department of Water & Power.

    On June 27, 2002, six tenants brought suit collectively as the Hollywood Panorama Tower Tenant's Association ("Tenants Assoc.") against the owner of the building, HPT. Each of the tenants had been leasing space in the building at the time of the electrical outage. The Tenants Assoc. alleged millions of dollars in damages based upon claims of breach of contract, negligence, fraud and deceit, conversion, constructive trust and others.

    In July 2003, the Tenants Assoc. commenced an involuntary bankruptcy case against HPT under Chapter 7 of the Bankruptcy Code. In November of 2003, the matter was converted into a Chapter 11 proceeding and reorganization efforts began on behalf of the building's owner. By this time, the building was still without power and all tenants had been displaced.

    Displaced tenant Blue Light Productions claimed $183,316 in damages. Displaced tenant Chapman Investigations claimed $303,880 in damages. Displaced tenant Reibsamen, Nickels & Rex claimed damages of $160,174. Displaced tenant Hollywood Damage Control & Recovery claimed $1,250,000 and displaced tenant DJ Union claimed $150,000 in losses. Lastly, displaced tenant RCM Technologies claimed $6,000,000 in damages.

    During the pendency of the bankruptcy matter the claims of several tenants were litigated and many were resolved. Meanwhile, the litigation in the state court was stayed for several years pending the bankruptcy pursuant to 11 U.S.C. §362.

    The claims of six members of the Tenants Assoc. went unresolved through the bankruptcy and the bankruptcy court eventually lifted the automatic stay and ordered the parties to litigate their state law liability claims in the state court.

    HPT filed a motion for summary judgment on September 22, 2010, seeking to have all of the remaining tenants' claims dismissed for lack of evidence and upon various legal theories including waiver, estoppel and failure to establish legal causation.

    On December 10, 2010, the trial court granted HPT's motion for summary judgment in its entirety after granting most of defendant's evidentiary objections. The court further determined that the plaintiffs had failed to come forward with sufficient evidence to establish a triable issue of material fact as to any of the causes of action stated in plaintiff's complaint. In July 2011, the court awarded Yoka & Smith's clients approximately $1.6 million in attorneys' fees as a result of the judgment in their favor.

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