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Roe (Confidential)

Goodyear Tire & Rubber Co.; L&M Tire Company, Inc.

Facts and Background:
Plaintiff is the owner of real property at the corner of 11th and Broadway in downtown San Diego. The property was originally leased by plaintiff’s predecessor in interest to Goodyear in 1957. Goodyear or a sublessee operated a tire store and automotive service business on the property beginning in approximately 1958. L&M subleased the property from Goodyear in April, 2001.

The building housing the business was substantially damaged by fire on September 10, 2006. As permitted under the lease and because of the substantial damage to the building, Goodyear terminated the lease with plaintiff and the sublease with L&M effective November 9, 2006.

Parties’ Contentions:
The disputes between the parties centered on (1) the insurance coverage provided by Goodyear pursuant to the lease with plaintiff, including whether it was appropriate in accordance with the provisions of the lease; (2) whether Goodyear improperly interfered with the payment of insurance proceeds to plaintiff; (3) the amount of insurance proceeds due plaintiff for the damage caused by the fire; (4) whether plaintiff was entitled to holdover rent or damages, including lost rents, demolition costs and interest on undisputed sums; (5) whether any environmental damage or waste was caused to the Property for which plaintiff was entitled to compensation; and (6) whether plaintiff exercised reasonable efforts to mitigate their damages after the fire.

Goodyear paid $2.1 million, which consisted of the fair market value of the premises at the time it was destroyed by fire, lost rents and sums necessary to remediate the environmental damage to the property.