Avalon Pacific-Santa Ana, L.P. v. HD Supply Repair & Remodel, LLC

*1189 Opinion

Introduction

Avalon Pacific—Santa Ana, L.P. (Avalon), leased a parcel of real property in Santa Ana to HD Supply Repair & Remodel, LLC (HD Supply), which intended to convert the property from vacant warehouses and office space into a retail facility. After demolishing the office space, HD Supply halted renovations due to economic conditions and allowed the property to fall into disrepair. Avalon sued HD Supply and the guarantor of the lease, The Home Depot, Inc. (Home Depot), for breach of the maintenance and repair obligations of the lease and for waste. (HD Supply and Home Depot are collectively called Defendants.) However, Avalon did not terminate the lease, the initial term of which runs into 2017. HD Supply continues to pay, and Avalon continues to receive, about $50,000 a month in rent.

The jury found in favor of Avalon, and awarded it $677,000 in damages for breach of the lease against Defendants and $561,000 in damages for waste against HD Supply, both damage awards based on the cost of repairs. The trial court trebled the waste damages based on the jury’s finding that HD Supply acted willfully or maliciously. Defendants appeal from the judgment in…