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FILED CIVIL BUSINESS OFFICE 11
CENTRAL DIVISION Bryan C. Vess (#141732) BRYAN C. VESS APC 402
West Broadway, 29th Floor San Diego, California 92101 (619)
795-4300 (tel)
Attorneys for Plaintiff La Jolla Cove Suites, LLC
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121115 JAW 23 P 3: 58 Ci CPI( -SUP_FRLOR COURT
,476-ir:GaLiCCUNTY. CA
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
LA JOLLA COVE SUITES, LLC, a California) Case No.:
37-2014-38978-CU-CO-CTL limited liability partnership,
Plaintiff,
VS.
AIMCO PROPERTIES, L.P., a Delaware limited partnership; NEIL
HEIMBURGE, an individual; ERIK HEIMBURGE, an individual; SAUDRA
SQUIRES, an individual; UNIVERSAL BOOT SHOPS, a California general
partnership; RICHARD ANNEN, an individual, THE REGISTRY REAL ESTATE
GROUP, an entity of unknown qualification; and DOES 1 through 25,
inclusive,
Defendants.
FIRST AMENDED COMPLAINT FOR:
(1) INTENTIONAL INTERFERENCE WITH CONTRACTUAL RELATIONS
(2) INTENTIONAL INTERFERENCE WITH PROSPECT WE ECONOMIC
ADVANTAGE;
(3) NEGLIGENT INTERFERENCE WITH PROSPECTIVE ECONOMIC
ADVANTAGE;
(4) UNFAIR BUSINESS PRACTICES; and (5) DECLARATORY RELIEF
Jury Trial Requested
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Plaintiff, La Jolla Cove Suites, LLC ("Suites" or "Plaintiff'),
alleges as follows:
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SUMMARY OF CASE
1. A $3 billion REIT acted wrongfully from August 2014 to
January 2015, to interfere with the performance of the superior
contractual rights of others to acquire a $60 million property. The
developer eventually succeeded in wrongfully knocking out the
other
contracts, and now wrongly holds title to the Property. The REIT
is liable for the damages it
caused, including the wrongful retention of the $1 million
deposit Plaintiff made to acquire the property. The REIT is also
liable as a constructive trustee to hold the property for the
benefit of those with whom it interfered. The other defendants
were complicit in the REIT's
execution of its acquisition of the property and are jointly and
severally liable for the damages caused.
VENUE AND JURISDICTION
2. This action concerns the ownership of commercial property
located in La Jolla
("the Property").' 3. Venue is proper in this court because (i)
Defendants reside in and/or do
business within San Diego County; (ii) the Property at issue is
located in San Diego County; (iii) the contract at issue was
entered into in San Diego County; (iv) AIMCO's tortious conduct
took place in San Diego County, and (v) the events and injuries
complained of herein occurred in the City and County of San
Diego,
4. The amount in controversy under this Complaint exceeds the
minimum
jurisdictional limit of this court, and the claims asserted
herein are within the subject matter jurisdiction of this
court.
PARTIES
5. Plaintiff, La Jolla Cove, Suites, LLC (previously defined as
"Suites" or "Plaintiff'), is a California limited liability
partnership, with its principal place of business in the County of
San Diego, State of California.
The Property includes the properties located at 1141-1171 Coast
Blvd. (APN's 350-040-06-00 and'350-040-21- 00) (the "Hotel
Property"); 1187 and 1189 Coast Blvd., La Jolla, CA 92037 (APN's
350-050403 & 02)-00) (the "Red Houses Property"); and
1172-1174, 1158-64, 1154, 1146, & 1142 Prospect St. (APN's
350-040- (11-13, 15, & 16)) (the "Prospect Property").
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6. AIMCO Properties, L.P. ("AIMCO") is a Delaware limited
partnership and is authorized to do business in the State of
California, San Diego County.
7. Neil Heimburge is an individual residing in the State of
California, San Diego
County. He has or had a one-sixth ownership interest in the
Property.
8. Erik Heimburge is an individual residing in the State of
California, San Diego
County. He has or had a one-sixth ownership interest in the
Property.
9. Saundra Squires is an individual residing in the State of
California, Del Norte
County. She has or had a one-sixth ownership interest in the
Property. Collectively, the
Heimburges2 have or had a 50% ownership interest in the
Property, though the Baroudis, as
defined below, have properly exercised their rights to purchase
the Heimburges' interest.
10. Universal Boot Shops ("UBS") is a California general
partnership, and is authorized to do business in the State of
California, San Diego County.
11. Richard Annen is an individual residing in the State of
California, San Diego
County. He is a licensed broker.
12. The Registry Real Estate Group is an entity of unknown
qualification doing
business in the State of California, San Diego County. Mr. Armen
purports to be its Chief
Executive Officer, and conducted the brokerage services herein
complained of purporting to
act in that capacity. 3
13. On information and belief, Defendants operate and conduct
themselves in all
respects as the agents, employees, representatives, alter-egos,
co-conspirators, and partners of
one another. Furthermore, when they performed the acts alleged
herein, Defendants, and each
of them, acted collectively and in concert, such that there
exists an identity of interest and lack
of lawful distinction between them. On information and belief,
each of the Defendants was at
all relevant times the agent and employee of the other
Defendants and, in doing the things
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2 Defendants Erik Heimburge, Neil Heimburge and Sandra Squires
are collectively referred to as the
"Heimburges." 3 Defendants Richard Annen and The Registry Real
Estate Group are collectively referred to as "Mr. Armen."
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alleged, acted within the course and scope of that agency and
employment and/or ratified the
acts of the others.
14. Plaintiff is presently unaware of the true names and
capacities of the
defendants named as DOES 1 through 25, inclusive, and therefore
sues these defendants by
their fictitious names. Plaintiff will seek leave of court to
amend this Complaint to allege ,
their true names and capacities when they are ascertained. On
information and belief, each of
the fictitiously named defendants is legally responsible for the
acts and omissions alleged and
actually and proximately caused and/or contributed to the
injuries and damages alleged. FACTS COMMON TO ALL CAUSES OF
ACTION
15. Krista Baroudi, individually and as Trustee of the Richard
D. Heron and
Katherine H. Heron Trust, and Marco Baroudi (the "Baroudis")
owned a 50% interest in the entities that owned the Property.
16. The ownership documents between the Baroudis and the
Heimburges required
that in the event one of the parties received an offer from a
third party to purchase its interest,
and such parties desired to sell on those terms, such parties
would give the other parties a
period of time to match the third-party offer through a
mechanism called a right of first
refusal ("ROFR"). 17. On June 9, 2014, the Heimburges entered
into an agreement with PRES to sell
their interest in the Property for $26 million. The written
agreement between PRES and the Heimburges is titled "Stock and
General Partner Interest Purchase Agreement" (the "PRES
Offer").
18. Ms. Baroudi properly exercised her ROFR to match the PRES
Offer, on
August 12, 2014.
- 19. Suites thereafter came under contract with the Baroudis
pursuant to a Letter of
Intent (the "LOI"). Despite an inference that might be drawn
from its title, the LOI was a fully enforceable purchase and sale
agreement (not an agreement to agree in the future) that provided
for a transaction with two parts: (1) the Heimburges' sale of 50%
to the Baroudis,
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and (2) the Baroudis' sale of 100% to Suites. The transactions
were scheduled to close on September 30, 2014. The purchase price
was $60 million.
20. Pursuant to the LOI, Suites paid $1 million as an Initial
Deposit. 4 A. Plaintiff's Contract Was Superior To Any Right Of
AIMCO To Buy The
Property
21. Plaintiff's contract was to purchase 100% of the interests
of the family for the
entire Property. By contrast, as will be explained, until after
this case was commenced,
AIMCO never had more than a deal to acquire more than 50% of the
interests (i.e., the Heimburges' interests), and had never put any
money down. Plaintiffs deal was, therefore, "upstream" of AIMCO'S.
It was a better deal in that Plaintiff was to acquire 100%
rather
than 50%. At the same time, however, Plaintiff's deal exposed it
to more risk (because of the $1 million cash it put into the deal,
whereas AIMCO had no "hard money").
22. Because of Ms. Baroudi's ROFR rights under the
Baroudi-Suites contract, the
LOI was superior to any of AIMCO's alleged rights; it will,
accordingly, be referred to here
as the "Superior Contract"
B. AIMCO Interfered With Plaintiffs Contract And Obtained The
Property Tortiously
23. As will be shown, AIMCO would do whatever it took to get
what it wanted
(the Property), no matter what the contracts said. 1.
Background: AIMCO Used The Heimburges' Broker To
Wrongfully Provide It Confidential Information
24. AIMCO wanted to buy the Property for at least ten years,
what AIMCO's
Chief Executive Officer, Terry Considine, referred to as "a
ten-year slog. (Literally!)" From that point forward, AIMCO
undertook a campaign to ensure that no one else but it acquired
4 Suites has three members: Brian Veit, Peter Boormeester, and
Terry Arnett. They used their own hard-earned money and that of
their family members to fund the deposit. As explained here, the
gravamen of Plaintiff's claim is that AIMCO, the $3 billion REIT,
now wrongfully has possession of both the Property and Plaintiff's
$1 million deposit. AIMCO has no right to either. To get what it
wanted, it strong-armed both the Heimburges and the Baroudis after
this case was filed.
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the Property. (The Property is adjacent to another owned or
controlled by Considine's mother).
25. One of AIMCO's wrongful methods to obtain the Property was
to wrongfully
obtain confidential information from the Heimburges' broker,
Richard Armen.
26. Early on, AIMCO promised Mr. Annen that if his client Ms.
Baroudi would
not pay him, AIMCO would reduce the purchase price and would pay
him anyway.
27. After that, AIMCO used Mr. Armen to become privy to every
important piece
of information concerning the Property.
28. AIMCO did these things with clear knowledge that these
actions were
detrimental to the interests of Plaintiff (and of the Heimburges
and of the Baroudis), and despite the fact that the Heimburges had
contractual obligations to third parties and
contractual and fiduciary obligations to Ms. Baroudi to refrain
from such behavior.
2. AIMCO Wrongfully Interfered With The Baroudi-Suites "Superior
Contract"
29. As mentioned above, Suites came under contract with the
Baroudis after
Ms. Baroudi properly exercised her ROFR, on August 12, 2014.
When Ms. Baroudi chose
Suites over the $3 billion REIT as her suitor, AIMCO was
shocked. AIMCO's representatives immediately expressed their
surprise.
30. Using its "inside sourde," Mr. Annenwhom AIMCO had already
promised
to pay even if his fiduciaries/beneficiaries did notAIMCO was
aware of the deal within 24
hours by an email from Armen: "FYI 1Crista opened escrow and
wired in $1 million." 31. AIMCO wasted no lime trying to unsettle
and interfere with the Superior
Contract. The very day it learned of the deal, AIMCO commenced a
course of conduct to
ensure the Superior Contract did not close. That first day,
AIMCO's lawyers drafted
correspondence for Mr. Amen to send:
Dick:
Attached is the draft of the letter we discussed. It should be
sent by Mr. Hamburge [sic] on his letterhead to all of the
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addressees of the original notice of exercise from Ms. Baroudi
that was received earlier this week.
The purpose of the letter was to challenge Ms. Baroudi's ROFR
exercise (and, therefore, to interfere with the Superior Contract).
Mr. Armen did, in fact, recommend that day to his client ("Mr.
Hamburge [sic]") that he sign and send the AIMCO-drafted
letter.
32. This was but the first in a long line of acts AIMCO
commenced with the
specific design of interfering with the Superior Contract.
33. AIMCO at all times knew that the Superior Contract called
for the sale of the
entire Property. For example, on August 18, 2014, Ms. Baroudi's
lawyer sent an email to
AIMCO's lawyer demanding that AIMCO not interfere with her ROFR
rights and the
contractual expectations of Suites (whose name was not
disclosed, but whose existence was): We expect that AIMCO will not,
directly or indirectly, do anything to interfere with Ms. Baroudi's
right to complete the purchase of the Heimburges' shares or
interest. The Baroudi family has the legal right to complete the
purchase of the shares/interests owned by the Heimburges and the
sale of 100% of UCS/UBS to the third party, without any
interference from AIMCO.
(Emphasis added.) In other words, AIMCO knew that its
interference with Ms. Baroudi's ROFR would
necessarily affect the contractual relations between Ms. Baroudi
and her sale to Plaintiff.
34. During this time period, AIMCO used Mr. Annen, the owners'
fiduciary, as its
puppet for the specific purpose of disguising its interferences.
Such ventriloquism is not only
an affront to the obligation of Mr. Amen to perform his
fiduciary duties to his beneficiaries,
not to AIMCO, it was also a strategy to obscure that it was
really AIMCO, all along, that was
interfering with the Superior Contract.
3. ALNICO Wrongly Encouraged The Heimburges To Keep Ms. Baroudi
"Off Balance" And To Fight With Her, So That The Superior Contract
Would Not Close
35. Thereafter, AIMCO conspired with Mr. Armen to interfere with
the closing of
the Superior Contract (in order for AIMCO to acquire the
Property). A week after Suites
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entered the deal with Ms. Baroudi, and with the specific
intention of unsettling the deal,
AIMCO's lawyers advised Mr. Annen to keep Ms. Baroudi (and her
lawyers) "off balance": Dick,
A friendly suggestionlimit the emails that sound like you agree
he [Baroudi's lawyer Jim Lance] has done things validly.
Dick my strong suggestion to you is to keep him off balance. You
will look at what he sends but please do not execute anything
unless we talk.5
1 36. As part of its admitted strategy of "keep[ing] him [Ms.
Baroudi's lawyer] off balance," and preventing the Superior
Contract from closing, AIMCO had numerous
communications and clandestine meetings with the Heimburges to
strategize how AIMCO
could interfere with the Superior Contract and for AIMCO to
obtain "control" of the Property.
, 37. AIMCO ghost-wrote letters for the specific purpose of
interfering with the
Superior Contract. In these letters, AIMCO falsely contended
that Ms. Baroudi's ROFR
exercise was invalidand, therefore, that the Superior Contract
was invalidwhen AIMCO
knew (and admitted internally) it was not. The simple fact is
that no onenot the Heimburges' litigation lawyers, nor even Mr.
Annenhad ever claimed that Ms. Baroudi's
ROFR exercise (and, therefore, her proposed sale to Suites) was
anything other than perfectly validwhich it wasuntil, of course,
AIMCO became Mr. Annen's puppeteer.
38. In an email in August 2014, Mr. Bezzant admitted precisely
AIMCO's
motivation in taking action through Mr. Armen: "we will want to
.. . 'keep the pressure on'
in regard to the putative ROFR exercise...." Mr. Bezzant thanked
Mr. Annen for his role in
these efforts.
39. Even AIMCO knew the positions it was spoon-feeding Mr.
Atmenthat Ms.
Baroudi had not properly exercised her ROFRwere false: The AIMCO
senior executive
and Chief Investment Officer overseeing the deal (John Bezzant)
admitted to his lawyers and
5 Even the syntax"You will look at what he sends but ..."shows
AIMCO's control over Mr. Armen and its interference in the
process.
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Mr. Annen that Ms. Baroudi had exercised her ROFR and that AIMCO
was in "pendency"
and could move forward only if Ms. Baroudi did not timely
close:
Notice has been given, Baroudi has exercised, Aimco's ability to
close goes into "pendency" of some sort through 9/30/14 [when the
Superior Contract was subject to close], and once past that date,
if Baroudi has not closed, she is deemed to have
waived ROFR rights and parties will proceed to Aimco closing. If
she does close, Aimco deposit is released next business day.
Thus; at the very time it was admitting this fact internally,
AIMCO was insisting the opposite
to Ms. Baroudi, i.e., that her exercise was invalid.
40. So, AIMCO knew and told its own team the truthMs. Baroudi
had properly
exercised, and, therefore, the Superior Contract had priority
over AIMCO's deal (which AIMCO admitted internally was in
"pendency"). Knowing this, AIMCO nevertheless used its mouthpiece,
Mr. Annen, to claim the Opposite to his own principal. AIMCO did
all of this
with the specific intention of killing the Superior
Contract.
41. While Mr. Annenthe Heimburges' brokerwas willing to be used
as
AIMCO's mouthpiece, the Heimburges' litigation attorney, Thomas
Laube, apparently was
not. This did not suit AIMCO. Fearful that Mr. Laube would
cooperate in the closing of the
Superior Contract, and for the specific purpose of interfering
with the Superior Contact,
AIMCO directed Mr. Annen to have Mr. Laube "take a back seat."
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42. Then, when Mr. Laubethe actual lawyer for the
Heimburgesapparently
would not "keep out," AIMCO's next move was to select a new
lawyer for the Heimburges
whom AIMCO could trust to interfere with the closing of the
Superior Contract. For this
purpose, AIMCO's lawyers suggested a lawyer whom AIMCO could
trust to assert its non-
existent right to buy the Property (i.e., to interfere with the
Superior Contract), one with whom the General Counsel of AIMCO's
lawyer had a "very good relationship." AIMCO
admitted to its broker that it was doing all of this to foment
discord (and, in turn, to upset the
6 Mr. Annen immediately comforted AIMCO that, in fact, Mr. Laube
"has been told to do nothing,"but, just in case he was acting for
his clientsMr. Armen assured AIMCO that "I will remind him."
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Superior Contra.et). In an email to AIMCO's senior executive and
Chief Investment Officer Bezzant, the broker who introduced AIMCO
to the Property wondered if "the Heimburges are
willing to fight Krista [Baroudi]." In response, Bezzant
admitted that that the Heimburges' unwillingness to fight Ms.
Baroudi was the reason AIMCO offered the free lawyer: "We
have offered them [the Heimburges] free counsel to do just that
[i.e., to fight Ms. Baroudi,] but they have not 'bitten."
C. Unable To Convince Ms. Baroudi To Sell, AIMCO Contracted To
Buy The Heimburges' Interest And To Adopt A "Black Hat"
Strategy
. 43. Obviously unwilling to be ignored, and willing to do
whatever it took to steal
what Ms. Baroudi would not sell to it, on September 16, 2014,
AIMCO and the Heimburges
entered into an agreement whereby AIMCO acquired the Heimburges'
50% interest (what it called a "Contribution Agreement").
I 44. AIMCO claimed that it was entitled to buy the Heimburges'
50% interest on
the basis of the Contribution Agreement because, according to
AIMCO, Ms. Baroudi did not
validly exercise her ROFR.
45. AIMCO' s purpose in entering a contact with the Heimburges
was specifically
to interfere with the Superior Contract.
46. Days later, AIMCO's senior executive Bezzant explained to
Armen and the
Heimburges two approaches to obtaining the Property (and, by
implication, how badly AIMCO wanted the Property). One way to
obtain the Property was through a "white hat" strategyto obtain the
Property by making a deal with Ms. Baroudi. The other strategy,
Bezzant announced to the Heimburges, was for the $3 billion REIT
to pursue "more of a 'black hat' strategy." Bezzant encouraged the
Heimburges to interfere with the closing of the
Superior Contractto "muck up Krista's closing" in AIMCO's own
wordsby convening a
shareholder meeting and determining to sell to AIMCO.
47. AIMCO sued the Heimburges and the Baroudis on September 29,
2014.
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48. The next day, AIMCO tried (and failed) to obtain a temporary
restraining order to prevent Ms. Baroudi from closing the deal.
AIMCO then sent a letter to Chicago Title
giving notice that it "believed" that Krista Baroudi's ROFR was
not properly exercised.
a 49. To close the transaction on September 30, 2014, Plaintiff
assigned its purchase
rights to La Jolla Cove Shops, LLC and La Jolla Exclusive, LLC
(these entities will collectively be referred to herein as
"Shops/Exclusive"), which would be the entities that would acquire
the Property, subject to Plaintiffs membership interest in the
newly formed ownership entities.
50. Pursuant to signed Operating Agreements, Plaintiff gained a
17.86%
membership interest in Shops/Exclusive, and a third entity, La
Jolla Hotels, LLC, and a $5.3 million "deemed capital" interest in
the enterprise. The unsubordinated "deemed capital" was
the result of a very unusual capital structure that was
especially favorable to Plaintiff, in that
the Operating Agreements called for the companies to make
distributions of profits according
to these percentages.
; 51. During this time period, Plaintiff entered an agreement
with Shops/Exclusive
(the "Deposit Agreement") that, in the event the close of escrow
did not occur under the Superior Contract for any reason,
Plairgiff, and not Shops/Exclusive, had the sole right to the
Initial Deposit. From that point forward, Plaintiff alone, and
certainly not AIMCO, had the
right to the $1 million.
' 52. This structure meant that Plaintiffs right to its Deemed
Capital of $5.3 million was not subordinated to the members'
respective percentage interests. This arrangement was
very unusual, and favorable, to Plaintiff.
53. Effective as of September 30, 2014, Plaintiff,
Shops/Exclusive, and the
Baroudis entered into an "Agreement for Purchase and Sale of
Stock and Real Property and
Joint Escrow Instructions" (the "Purchase Agreement") for the
purchase of the Baroudis' entire interest in LJCS and UBS and the
Property after Ms. Baroudi's exercise of her ROFR.
Plaintiff was a party to the Purchase Agreement.
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54. Shops/Exclusive was ready, willing, and able to close the
purchase on
September 30, 2103, and funded the amount necessary to close the
purchase. Continuing
thereafter, they remained ready, willing and able to close the
purchase of the Property.
55. But for Defendants' conduct, the Shops/Exclusive purchase
would have closed
on or after September 30, 2014.
56. Because of all of AIMCO's actions, specifically including
its announced
decision to "keep the pressure on' in regard to the putative
ROFR exercise," the transaction
did not close on or after September 30.
, 57. It would have closed the days following September 30, but
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announcing on September 29 that AIMCO had acted "outrageously"
in interfering with the
Shops/Exclusive closing, within 48 hours (on October 1), Mr.
Armen returned to AIMCO's side, writing ALMCO to facilitate the
closing of the Contribution Agreement.
58. This case was filed on October 14, 2014.
r, 59. Two weeks later, on October 31, 2014, AIMCO and the
Heimburges closed on
AIMCO's deal to acquire the Heimburges' 50% interest, the
Contribution Agreement.
AIMCO agreed with the Heimburges to keep the terms of that
transaction confidential. The
closing of this transaction effectively terminated Plaintiffs
ability to buy the entire Property.
60. In the final act to carry out its interference, AIMCO closed
on the purchase of
the Baroudis' 50% on around December 16, 2014. As it had with
the Heimburges, AIMCO
agreed with the Baroudis to keep the terms of that transaction
confidential.
, 61. At that point, AIMCO finally had what it wanted: the
Property.
62. In truth, however, AIMCO's interest in the Property is
legally invalid and
subject to be judicially unwound because, among other reasons:
(i) AIMCO and the Heimburges were aware Plaintiff had superior
rights, but interfered with its (and Shops/Exclusive's) contracts;
(ii) Ms. Baroudi had already validly exercised her ROFR rights, and
was therefore "upstream" of AIMCO's interest; (iii) based thereon,
Ms. Baroudi had entered into the binding Superior Contract and was,
accordingly, legally bound to sell to
Plaintiff (and, then, to Shops/Exclusive), and (iv) AIMCO's
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Agreement was never presented to Ms. Baroudi in accordance with
the applicable ROFR
provisions.
63. Eventually, through a confidential settlement with Ms.
Baroudi, AIMCO came
to possess the $1 million initial deposit. It has no right or
entitlement to that deposit, which rightfully belongs only to
Plaintiff. '
' D. AIMCO Interfered With Multiple Contracts Over Multiple
Months
64. The gravamen of Plaintiff's claim is that AIMCO, the $3
billion REIT, wrongfully gained possession of both the Property and
Plaintiff's $1 million deposit. AIMCO has no right to either. To
get what it wanted, AIMCO wrongfully interfered with the
Superior Contract. AIMCO's acts culminated in its wrongful
acquisition of the first 50% on
October 31 (the Heimburges' interest) and the second 50% (and
the $1 million deposit) on December 16 (the Baroudis' interest). As
a result, AIMCO now possesses the Property and $1 million that
rightfully belongs to Shops/Exclusive and Plaintiff,
respectively.'
' 65. From a chronological standpoint, AIMCO's acts of
interference can be
summarized in this order:
Aug 2014 - AIMCO induced Mr. Armen, the owners' fiduciary, to
secretly circulate
AIMCO's positions, in an effort to interrupt the closing of the
Superior
Contract.
Sep. 2014 - AIMCO worked furtively to disrupt the relations of
the Heimburges and Ms.
Baroudi, and entered into the Contribution Agreement, with the
specific
intention of preventing the Superior Contract from closing.
Oct. 2014 AIMCO closed on the purchase of the Heimburges' 50% on
October 31,
thereby interfering with Suites' contract with Ms. Baroudi and
Suites' contract
with Shops/Exclusive, and preventing Plaintiff from acquiring
the
Heimburges' interest, notwithstanding Plaintiff's contractual
interest to do so.
7 The gravamen of Plaintiffs claim is not AIMCO's commencement
of litigation or any correspondence
announcing the litigation, such as its letter to Chicago Title.
These events merely provide a context to explain how the claim
evolved.
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Dec. 2014 - AIMCO closed on the purchase of Ms. Baroudi's 50%
interest on or around
December 16, thereby interfering with Suites' contract with Ms.
Baroudi and
Suites' contract with Shops/Exclusive, and preventing Plaintiff
from acquiring
that interest notwithstanding Plaintiff's contractual interest
to do so.
Dec 2014-
Jan. 2015 - AIMCO secretly agreed with Ms. Baroudi (and perhaps
the Heimburges) that AIMCO could pocket Plaintiffs $1 million
deposit. Then, with no prior notice to Plaintiff; AIMCO appeared ex
parte in another proceeding to obtain a
judgment in AIMCO's favor. Plaintiff was not party to that
action, had no prior notice of the hearing or of the effort to
obtain the judgment, was given no opportunity to be heard, and,
therefore, is not bound by the judgment. The secret agreement with
Ms. Baroudi, and the secret court appearance, are only
the latest brazen attempts by AIMCO to cloak itself behind
secret agreements
and maneuvers.
66. In doing these things, and others presently unknown to
Plaintiff, AIMCO came
to possess the Property wrongfully, interfering with Plaintiffs
superior contractual right to
buy it.
FIRST CAUSE OF ACTION
INTENTIONAL INTERFERENCE WITH CONTRACTUAL RELATIONS
(Against All Defendants) 67. Plaintiff incorporates the
allegations of the prior paragraphs as though set forth
here in full.
68. Plaintiff had contractual relations with the Baroudis (via
the Superior Contract, aka, the LOI) and with Shops/Exclusive (via
the Operating Agreements and the Deposit Agreement), and with the
Baroudi and Shops/Exclusive (via the Purchase Agreement) as alleged
above.
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t 69. At the times of their interferences (and including the
October 31 and December 16, 2014 transactions that were the
ultimate acts of interference), Defendants knew of the existence of
the contracts.
70. Defendants intentionally engaged in acts or conduct which
prevented the
performance of the contracts or that caused the performance of
those contracts to be more
expensive and burdensome. In particular, AIMCO's and the
Heimburges' wrongful conduct
here was entering into (and closing on) the Contribution
Agreement despite their knowledge of and awareness of Plaintiff's
and Shops/Exclusive's superior rights to the Property.
71. As a result of Defendants' intentional interference with
contractual relations,
the contracts were not performed and/or the performance of those
contracts became more
expensive and burdensome.
72. Plaintiff has suffered damages and losses, in an amount
presently unknown,
but including its 17.86% equity interest in Shops/Exclusive, the
$5.3 million in deemed capital, and the $1 million in cash it put
into the deal. Plaintiff has also suffered unnecessarily incurred
expenses, reasonably certain lost development profits, and other
damages, the extent
of which will be proven at trial.
73. Defendants' misconduct in causing the injuries and damage to
Plaintiff was intentional, willful, malicious and oppressive and
was known of, encouraged, authorized and
ratified by each and all of the remaining Defendants. Plaintiff
is entitled to an award of
punitive and exemplary damages against the Defendants named in
this cause of action in an
amount to be established according to proof at the time of
trial.
SECOND CAUSE OF ACTION
INTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE
(Against All Defendants)
74. Plaintiff incorporates the allegations of the prior
paragraphs as though set forth
here in full.
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75. The facts alleged above created a relationship containing a
probable future
economic benefit to Plaintiff on economically attractive terms
and conditions.
76. Defendants' conduct was independently wrongfuli.e., it was
proscribed by
some constitutional, statutory, regulatory, common law, or other
determinable legal
standardin the following respects.
a. Mr. Annen owed fiduciary duties to his actual principals 8
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b. In doing the things alleged, Mr. Annen committed a breach of
fiduciary duties to his principals. As such, Mr. Annen's conduct
was proscribed by the common law, or another determinable legal
standard.
c. In doing the things alleged, AIMCO aided and abetted the
breach by Mr. Armen of his fiduciary duties to his beneficiaries.
It has long been the established policy in the state of California
that it is wrongful to aid or abet the commission of a breach of
fiduciary duty. See, e.g., Casey v. U.S. Bank National Ass 'n
(2005) 127 Cal.App.4th 1138. As such, AIMCO's conduct was
proscribed by the common law, or another determinable legal
standard.
d. In doing the things alleged, the Heimburges materially aided
and abetted AIMCO's efforts to interfere with the performance of
Plaintiff's superior contractual rights of others and to extract a
greater sum than to which they were contractually entitled or, if
they could not, to knock Plaintiff's deal off, regardless of
Plaintiff's superior rights.
77. Defendants knew of the existence of the beneficial
relationship, established by
the facts alleged.
; 78. Defendants intentionally engaged in wrongful conduct
designed to interfere
with or disrupt Plaintiff's beneficial relationships.
I 79. As a result of Defendants' actions, there was an
interference with and
disruption to Plaintiff's fulfillment of its prospective
economic advantage.
8 Under binding California laW Mr. Annen was, as a matter of
law, a fiduciary of his clients the Heimburges and
the Baroudis. An agency relationship is fiduciary one. (Mendoza
v. Rast Produce Co., Inc. (2006) 140 Cal.App.4th 1395, 1405.) An
agent has duty to disclose to his principal any facts in his
possession material to the transaction. (Maron v. Swig (1952) 115
Cal.App.2d 87, 91.) This includes any facts the principal would
need to know in advance to protect his or her own interests.
Fulfillment of fiduciary duties requires more than the mere absence
of bad faith or fraud. Representation of the financial interests of
others imposes on a fiduciary an affirmative duty to protect those
interests and to proceed with a critical eye in assessing
information.
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80. Plaintiff has suffered damages and losses, in an amount
presently unknown,
but including its 17.86% equity interest in Shops/Exclusive, the
$5.3 million in deemed capital, and the $1 million in cash it put
into the deal. Plaintiff has also suffered unnecessarily incurred
expenses, reasonably certain lost development profits, and other
damages, the extent
of which will be proven at trial.
81. Defendants' misconduct in causing the injuries and damage to
Plaintiff was intentional, willful, malicious and oppressive and
was known of, encouraged, authorized and
ratified by each and all of the remaining Defendants. Plaintiff
is entitled to an award of
punitive and exemplary damages against the Defendants named in
this cause of action in an
amount to be established according to proof at the time of
trial.
THIRD CAUSE OF ACTION
NEGLIGENT INTERFERENCE WITH PROSPECT WE ECONOMIC ADVANTAGE
(Against All Defendants) 82. Plaintiff incorporates the
allegations of the prior paragraphs as though set forth
here in full.
83. The facts alleged above created a relationship containing a
probable future
economic benefit to Plaintiff on economically attractive terms
and conditions.
84. Defendants knew of the existence of the beneficial
relationship, established by
the facts alleged.
85. Defendants engaged in wrongful conduct, which was, at a
minimum,
negligence.
86. It was reasonably foreseeable that this wrongful conduct
would interfere with
Or disrupt Plaintiff's beneficial relationships.
87. As a result of Defendants' actions, there was an
interference with and
disruption to Plaintiff's fulfillment of its prospective
economic advantage.
n 88. Plaintiff has suffered damages and losses, in an amount
presently unknown,
but including its 17.86% equity interest in Shops/Exclusive, the
$5.3 million in deemed capital, and the $1 million in cash it put
into the deal. Plaintiff has also suffered unnecessarily
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incurred expenses, reasonably certain lost development profits,
and other damages, the extent
of which will be proven at trial.
FOURTH CAUSE OF ACTION
UNFAIR BUSINESS PRACTICES
(Against All Defendants) 89. Plaintiff incorporates the
allegations of the prior paragraphs as though set forth
here in full.
90. The conduct of Defendants as alleged throughout this
Complaint constitutes
unfair business practices under the common law of California and
unfair competition under
California Business and Professions Code sections 17200, et seq.
Such conduct includes, but
is not limited to, interfering with contractual relations,
inducing breach of contract, interfering
with prospective economic advantage, and engaging in
anti-competitive behavior.
91. On information and belief, Defendants' actions were
performed with the
objective of preventing or impeding the purposes for which
Plaintiff made the $1 million deposit, in violation of Plaintiff's
known contractual rights.
92. The actions of Defendants are also unfair business practices
as they offend
established public policy and otherwise significantly harm or
threaten competition.
FIFTH CAUSE OF ACTION
DECLARATORY RELIEF
(Against Defendants AIMCO and the Heimburges) 93. Plaintiff
incorporates the allegations of the prior paragraphs as though set
forth
here in full.
94. Several actual controversies have arisen and now exist
between Plaintiff, on
the one hand, and AIMCO and the Heimburges, on the other hand,
as follows:
(a) Plaintiff contends that Krista Baroudi properly exercised
her ROFR and has the right to purchase the Heimburges' 50% interest
for $26 million consistent with the PRES Offer. AIMCO contends, and
on information and belief the Heimburges contend, that
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ICrista Baroudi has not properly exercised her ROFR and has or
had no right to purchase the
Heimburges' interest.
(b) Plaintiff contends that the AIMCO Assignment of July 17,
2014, is invalid and unenforceable. AIMCO contends, and on
information and belief the Heimburges
contend, that the AIMCO Assignment is valid and enforceable.
(c) AIMCO contends, and on information and belief the Heimburges
contend, that the purported Amended Offer of July 25, 2014 is valid
and enforceable.
Plaintiff disputes that contention.
(d) AIMCO contends, and on information and belief the Heimburges
contend, that the Contribution Agreement of September 16, 2014 is
valid and enforceable.
Plaintiff disputes that contention.
(e) Plaintiff contends that ICrista Baroudi properly exercised
her ROFR and AIMCO's purported Amended Offer was never presented
(timely or otherwise) so as to trigger a new ROFR period. Thus,
Plaintiff contends that the AIMCO Assignment, the
Amended Offer, and the Contribution Agreement are invalid, and
consequently that the
purported sale by the Heimburges of their 50% interest in the
Property to AIMCO effective
October 31, 2014 is invalid. Further, Plaintiff contends the
purported sale by the Baroudis of
their 50% interest in the Property to AIMCO on or about December
16, 2014, is invalid.
AIMCO contends, and on information and belief the Heimburges and
the Baroudis contend,
that each purported sale is valid and enforceable.
95. Plaintiff is interested in a declaration of the rights of
the parties under the
written instruments described in the preceding paragraphs.
Plaintiff is also interested in a
declaration of the rights of the parties with respect to the
Property.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff prays for judgment as follows: On Causes of
Action Nos. 1-3:
1. For general damages according to proof;
For the imposition of a constructive trust.
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On Causes of Action Nos. 1 and 2:
3. For punitive damages.
On Causes of Action No. 4:
4. For all remedies, including injunctive relief, appropriate
disgorgement of defendants' profits by their improper and illegal
acts, restitution, and attorneys'
fees.
On Causes of Action No. 5:
5. For a declaration of the parties' rights and interests in the
contracts herein
alleged;
On All Causes of Action:
6. For attorneys' fees pursuant to the "The Tort of Another"
theory (Prentice v. North American Title Guaranty Corp. (1963) 49
Ca1.2d 618); For an award of pre-judgment interest; and
8. For such other and further relief as the Court deems just and
proper.
BRYAN C. VESS APC
By: Bryan C. Vess, Attorneys for Plaintiff LA JOLLA COVE SUITES,
LLC
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FILED CIVIL BUSINESS OFFICE 11
CENTRAL DIVISION
I 1015 JAN 23 P 3: bcI
difirda20181 O UTCYCV 2
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Bryan C. Vess (#141732) BRYAN C. VESS APC 402 West Broadway,
29th Floor San Diego, California 92101 (619) 795-4300 (tel)
Attorneys for Plaintiff La Jolla Cove Suites, LLC
LA JOLLA COVE SUITES, LLC, a California) limited liability
partnership,
) )
Plaintiff', ) )
vs. ) )
AIMCO PROPERTIES, L.P., a Delaware ) limited partnership; NEIL
HEIMBURGE, an ) individual; ERIK HEIMBURGE, an
) individual; SAUDRA SQUIRES, an ) individual; UNIVERSAL BOOT
SHOPS, a ) California general partnership; RICHARD ANNEN, an
individual, THE REGISTRY REAL ESTATE GROUP, an entity of unknown
qualification; and DOES 1 through 25, inclusive,
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
Proof of Service
Defendants.
Case No.: 37-2014-38978-CU-CO-CTL
PROOF OF SERVICE
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Valentine S. Hoy Allen Maticins Leck Gamble Mallory & Natsis
LLP 501 West Broadway, 15th Floor San Diego, CA 92101 E-mail:
vhovCW.allenmatkins.com
Attorneys for Defendant AIMCO Properties, L.P.
Telephone: 619-233-1155 Fax: 619-233-1158
Thomas R. Laube Sandler, Lasry, Laube, Byer & Valdez, LLP
402 West Broadway, 17 th Floor San Diego, CA 92101 E-mail:
tlaubesllbv.corn
Attorneys for Defendants Neil Heimburge, Erik Heimburge, and
Saundra Squires
Telephone: 619-615-6767
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I, Bryan C. Vess, declare as follows:
I I am an Officer of Bryan C. Vess, APC, counsel of record for
Plaintiff herein. I am readily familiar with the business practices
of this office for collection and processing of
correspondence for mailing with the United States Postal
Service; I am over the age of
eighteen and I am not a party to this action.
i On January 23, 2015, I served the following document(s),
bearing the title(s): FIRST AMENDED COMPLAINT
[X] by mailing electronically, by the agreement of the parties,
to the email addresses indicated below, a true copy to the
following individuals/firms:
[ X ] (State) I declare under penalty of perjury under the laws
of the State of California that the foregoing is true and
correct.
[ ] (Federal) I declare that I am employed by the office of a
member of the bar of this court at whose direction the service was
made.
I Executed on January 23, 2015, in San Diego, California.
Bryan C. Vess,
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Proof of Service