Las Palmas Associates v. Las Palmas Center Associates

—This lengthy and acrimonious litigation involves the sale of the Rancho Las Palmas Shopping Center, a 165,472-square-foot commercial complex located in Rancho Mirage, California. Appellants Las Palmas Associates et al., built and sold the property to respondents Las Palmas Center Associates et al. When a dispute arose concerning their duty to guaranty the rents of two tenants, appellants commenced an action for declaratory relief. Respondents in turn filed a cross-complaint for, among other things, fraud and breach of contract. A jury rendered verdicts awarding respondents $232,393 for breach of contract, $1.27 million for fraud, and $10 million in punitive damages. In a separate trial, the court, sitting without a jury, denied appellants declaratory relief. The court then awarded respondents $352,918 in contractual attorney’s fees and entered judgment in the sum of $11,622,918. Appellants now appeal.

Because the undisputed evidence establishes that respondents’ fraud damages are identical to their losses under the breach of contract theory, we hold that the fraud award must be reduced to $232,393. Additionally, we find it necessary to lower the punitive damage award to…