Defense Verdict After 4 Week Malpractice Trial

Glass building

The lessee of a commercial property brought an action against its real estate broker for negligence, breach of fiduciary duty and constructive fraud, alleging that the broker had a duty to investigate whether the leased premises could be built out according to the lessee’s specifications, and whether the build-out could be completed for $30/sq.ft.

Despite some difficult facts, California partners Frances O’Meara, Holly Teel, and Steve Caine obtained a defense verdict on behalf of their broker-client after spending more than four weeks in trial. The team convinced the court held that the broker had no statutory duty to investigate whether the build-out of the premises could occur, or the price of the build-out, and that the terms of the lease of the premises did not impose those duties on the broker, as the lease specifically provided that the lessee had the responsibility for conducting its own investigation and could not rely upon representations allegedly made before the lessee entered into the lease.

The court held that the real estate broker was not negligent, did not breach any fiduciary duty, nor did he engage in any fraudulent conduct relating to the broker’s handling of lease negotiations for a commercial building.