Congratulations to the Obermayer team of Matthew Green and Samantha Koopman for securing an $8million arbitration award on behalf of a national real estate company that develops and services single-family residential assets for institutional owners.  The team was also able to defeat the ~$16million counterclaim asserted against their client.  

The arbitration in issue pertained to the construction of 137 “build to rent” single family homes, whereby the defendants/developers were to construct the homes, and then sell them to the plaintiff once complete.   The parties contractually agreed that the plaintiff would pay the defendants/developers $8million in construction deposits, which was to be used for the construction of the homes themselves. However, the plaintiff subsequently learned that the defendants used the construction deposits to purchase the real property on which the homes were to be built, despite the defendants representing that they already owned this land. Plaintiff terminated the contracts as a result, and sought return of the deposits from the defendants in arbitration pursuant to a mandatory arbitration provision in the parties’ contracts.

Defendants claimed that the plaintiff improperly terminated the contracts, arguing that they were contractually permitted to purchase the land because purchasing land was part and parcel to constructing homes. Defendants not only sought retention of the construction deposit, but also asserted counterclaims in excess of $7.5million in lost profits resulting from the alleged improper termination.

After a week-long hearing before a panel of three arbitrators (with Samantha Koopman going into labor on the evening of the first day, giving birth to her second child), the arbitration panel agreed with Obermayer’s client that the defendants breached the applicable contracts, awarded a return of the entire $8million of the construction deposits paid to defendants, and rejected the defendants’ attempt to retain the deposits and seek lost profits.

Charles Shute and Kasia Parker also provided significant assistance in helping secure the award (especially after Samantha’s mid-hearing exit from the case).