Wednesday, July 27, 2011

Court Tosses $1.5M Parking-Garage Verdict Against Beauvallon Condos

DENVER — Condo developer Craig Nassi and Beauvallon Corp. are off the hook for a $1.5 million verdict a lessee won against them in a lawsuit over parking spaces, the Colorado Court of Appeals ruled Thursday.

Matrix Fitness and Spa sued the owners of the Beauvallon condos on Lincoln Street between 9th and 10th avenues for promising exclusive use of 150 parking spaces for its customers, but only delivering on 75 exclusive spaces and 75 shared spaces.

Following a June 2009 trial, Denver District Judge Norm Haglund found Nassi and Beauvallon fraudulently induced Matrix into signing the lease. He awarded Matrix $1.5 million, a figure based on expert testimony about the amount the 75 spaces could have generated through subleases.
But a three judge panel of the Colorado Court of Appeals reversed the decision.

“We conclude that the lessee did not provide competent evidence of its damages and, thus, failed to prove its claim,” wrote Judge Russell Carparelli in the court’s opinion.

The expert opinion of the parking spaces’ value ($130 a month each) was flawed, the appeals court said. Matrix’s expert based the value on the amount the fitness club could have made subleasing the spaces, but there was nothing in the lease to indicate Matrix could have subleased the spots, which were designated for use by the club’s patrons only.

Matrix gave no other evidence as to the value of the the parking spaces, the court held:
“[T]he lessee presented no evidence that the shared use of 75 spaces rather than the exclusive use of those spaces during the relevant period caused:

• payment of excessive rent;
• any of the lessee’s customers to be unable to find a
parking space in the garage;
• the lessee to have fewer patrons or to lose revenue;
• the lessee to incur expenses to pay for customer parking
• a reduction in the value of the lessee’s business;
• the lessee’s business to fail; or
• other adverse effects to the lessee’s business.

Nassi was represented on appeal by Jennifer Fischer of Schlueter Mahoney & Ross, while Beauvallon was represented by Lisa Secor of Secor Law in Fort Collins. Matrix was represented by Erich Bethke and James Bailey of Senn Visciano Canges.