Orange County Owner Awarded $15.5 million in Damages Against Berkadia Real Estate Advisors
Westminster, Calif. - March 4, 2025 -
In a Judgment filed February 4, 2025, the Superior Court of
California awarded $15,573,589 in damages to the owner of
Idyllwillow Resort Apartment Homes, located in Mission Viejo,
Calif., (Idyllwillow) against
Berkadia Real Estate Advisors Inc. (Berkadia) and Joe Leon. The
case, in which Snell &
Wilmer represented Idyllwillow, centered on allegations of
breach of fiduciary duty, negligence, negligent misrepresentation,
concealment, and constructive fraud.
The Court found that Joe Leon and
Berkadia acted as dual agents in the a 2019 real estate
transaction, representing both the seller (Fowler) and the buyer
(Idyllwillow), involving a property known as ReNew. The Court found
that a dual agency relationship did exist and that Joe Leon and
Berkadia breached their fiduciary duties by misrepresenting the
methodology for calculating real estate taxes, which resulted in
undervaluing the annual taxes and overstating the property’s value.
They also failed to disclose that other potential buyers had
questioned the tax methodology.
"Berkadia
completed the sale on behalf of the seller, San
Francisco-based FPA Multifamily, LLC, and the
buyer, California-based A & M
Properties", according to a 2019
Berkadia Press
Release. Multi-Housing
News in 2019 stated "Berkadia
Managing Directors Joe Leon and Jeff Rowerdink,
with Associate Director Michael Thagard of the company’s Irvine,
Calif. office, completed the deal, representing both
parties in the transaction."
August 26, 2019 - Berkadia (Michael Thagard
(left), Ali Shamari (mid left), and Joe Leon (right)) has
a Celebratory Lunch at Il Fornaio with their Clients
"We are very appreciative of this
outcome," Idyllwillow's Dean Dauger said. "This five-year journey
led to a just result."
The Court awarded Idyllwillow $11 million in damages plus $4,573,589 in prejudgment interest, totaling $15,573,589. The Court resolved several issues, including confirming the existence of a dual agency relationship, the misrepresentation of tax methodology, the owing by Berkadia of its duty to Idyllwillow, the negligence of Berkadia's actions, and the concealment of concerns raised by other buyers.
The Court awarded Idyllwillow $11 million in damages plus $4,573,589 in prejudgment interest, totaling $15,573,589. The Court resolved several issues, including confirming the existence of a dual agency relationship, the misrepresentation of tax methodology, the owing by Berkadia of its duty to Idyllwillow, the negligence of Berkadia's actions, and the concealment of concerns raised by other buyers.
September 12, 2024 - Snell & Wilmer (Tony
Carucci (left), Colin Higgins (mid left), and Steve Graham
(right)) has a Celebratory Lunch at Il Fornaio with their
Clients
The Court's decision favored
Idyllwillow, finding Berkadia and Joe Leon negligent and in breach
of fiduciary duties, awarding substantial damages for the
misrepresented tax methodology and its consequences.