Gray·Duffy Achieves Favorable Settlement in Fire Damage Case

February 2011


Overview

Michael Eisenbaum of Gray·Duffy’s Encino office negotiated a favorable settlement on behalf of the firm’s client in a fire damage lawsuit filed by the owners of a video rental business that alleged general negligence and premises liability.

Discussion

Guzman v. Americhine Trading

The firm’s client, Americhine Trading, Inc., owns a commercial property in Los Angeles, and leases individual storefront units, while operating a fabric business in the main portion of the facility.  On September 15, 2007, a fire destroyed the entire premises, including the plaintiffs’ video rental business which occupied one of Americhine’s leased units.  The plaintiffs were uninsured and lost everything. The fire department investigation claimed the fire was ignited by an unknown source, and the rapid spread of the fire was a result of excessive lint buildup in the portion of the premises occupied by Americhine.

The plaintiffs filed a complaint alleging general negligence and premises liability, and sought damages consisting of property damage, loss of use and profits and emotional distress.  The plaintiffs claimed the value of their video business was approximately $300,000.  Due to the decline in the retail video rental market, Mr. Eisenbaum asserted that the value of the business was limited to its assets, which consisted of videos and various other merchandise.  The case proceeded to mediation, at which time the plaintiffs’ reduced their settlement demand to $80,000.

As the trial date approached, the plaintiffs reduced their settlement demand to $35,000, and then to $30,000.  With the consent of the client, Mr. Eisenbaum offered $25,000 as a final settlement proposal and indicated that the offer would never increase.  Shortly thereafter, the plaintiffs accepted the offer.

Please Note: This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.