SoCal Real Estate Lawsuits That Turned Heads

In the SoCal real estate industry, 2022 was the year that The One, Nile Niami’s “largest and grandest house ever built in the urban world,” actually found a buyer. It was also the year that a Sunset Strip billboard snagged a major hotel deal. And the year that Erewhon, home of the $25 bottle of water, allegedly failed to pay rent at its new home in one of the San Fernando Valley’s most iconic commercial addresses.

All of these events sparked litigation, adding to a never-ending list of L.A. real estate’s attention-grabbing lawsuits. Here TRD breaks down of some of the year’s wildest.

The One auction

Nile Niami and the mansion (Getty, Paul McClean)

Of course it was going to happen like this: After years of promises, global media attention and even a little hyperbole, The One — Nile Niami’s almost finished, 105,000-square-foot Bel-Air megamansion — sold in a March bankruptcy auction for $126 million to Richard Saghian, founder of Fashion Nova.

The price set a record for a U.S. residential auction. But it was only about half the amount needed to cover the property’s debts, which left a lot of people very unhappy. One of them was Julien Remillard, a very rich Quebecois and former longtime Niami pal. In June, amid the legal fallout from the auction, Remillard’s investment company filed a suit alleging that Remillard’s signature had been forged on an agreement stipulating that the project’s largest investor, the subprime car loan king Don Hankey, would be repaid first.

Hankey and an attorney for Niami scoffed at the claims, but Remillard wasn’t done: In November he filed another suit over a different Niami spec mansion alleging Niami defrauded him out of millions in a failed house flip. In August, a luxury furniture supplier filed another suit over The One sale, alleging breach of contract.

Erewhon’s $25 yogurt

From left: Midwood Investment & Development CEO John Usdan, Erewhon CEO Tony Antoci, and Erewhon Studio City at 12833 Ventura Boulevard (Getty Images, Google Maps/Jean-Louis Delezenne, Midwood, Facebook/Tony Antoci)

Decades ago, Sportsmen’s Lodge in Studio City was a revered Old L.A. kind of place where grandfathers caught stocked trout with grandkids and Hollywood cowboys drank too much over long lunches. Goodbye to all that. Now it has been repurposed as a modern commercial district, with one prominent space rented by Erewhon, the trendy grocery store where a jar of pasta sauce costs $30. But in September Midwood, the center’s owner and developer, sued the upscale retailer for allegedly failing to pay at least four months of rent and commandeering the property’s parking lot. The complaint even took a dig at the shop’s ridiculous prices, noting the store’s “$25 containers of yogurt and $50 bottles of vinegar.”

But that $25 yogurt apparently pays for a decent corporate legal team, and weeks later Erewhon shot back with its own suit. “This is the story of a New York developer engaging in a calloused, and illegal, bait-and-switch scheme to dupe its tenants,” the counter complaint read. It also brought in Midwood’s dealings with another trendy, high-priced tenant: the luxury gym Equinox, where membership costs $500 a month. Erewhon alleged that during its own lease negotiations Midwood neglected to disclose details about an existing anchor agreement with the gym, which cut into Erewhon’s prominence. Erewhon also fought back on the parking issue. Yes, the Valley has changed.

CEQA CEQA CEQA

(Getty)

This is not about one or two lawsuits but tens of thousands. For years project opponents all over California have eagerly wielded a remarkably strong legal tool, using the 1970 California Environmental Quality Act, or CEQA, as a basis to file suits against development proposals they don’t like. For years developers and some policymakers have complained that the suits were often underhanded and contributed to the state’s housing crisis by diminishing supply. In September a report came out that quantified the suits. And it was startling: More than half of all housing production in the state, it found, was targeted with litigation.

Murdered tenants

Chris Pearson with 22111 Erwin Street (MTV, Google Maps)

In 2018 Chris Pearson starred on “Ex on the Beach,” an MTV reality show where young attractive people show up in paradise only to be surprised by a confrontation with their ex-partners. In 2021, he was killed after being attacked with a knife in a common area of his Woodland Hills apartment building. The murder led to a case that could serve as a test of the limits of property owners’ accountability for their tenants’ safety, when his mother sued the building’s landlords, alleging they failed to maintain gate locks and misled tenants about the area’s crime risk.

It wasn’t the year’s only tenant murder landlord lawsuit: In October, about six months after her son was killed in a stabbing attack in Anaheim, Wendy Cuomo sued his former landlord, alleging the building’s security allowed the assailant to harass his victims in the building for months and then move freely throughout the complex ahead of the double slaying.

Pricey billboard

Ed Scheetz, Ian Schrager and former Standard Hollywood (LInkedin, Ian Schrager, Getty)

You may have driven by it: The oversize billboard that adorns the now-closed Standard Hotel (formerly the Thunderbird) on the Sunset Strip in West Hollywood. The iconic hotel, which was recently designated a historical site, went out of business in early 2021, then sold this March to hoteliers Ian Schrager and Ed Scheetz for a cool $120 million. But later the billboard emerged as a wedge in the deal, when the ad company using it allegedly refused to give up its sublease, prompting a June lawsuit from the building’s seller. “Osik,” the billboard lessee, “refused and still refuses” to give up the space, the company responded in one legal filing.

Beverly Hills-style corruption

The view from the Mountain of Beverly Hills (Credit: Alexei Barrionuevo)

The property already had a crazy backstory. In 2018, the so-called Mountain of Beverly Hills — an undeveloped, 157-acre piece of land located at the highest point in the 90210 zip code — was listed for sale at $1 billion. It had previously been owned by an Iranaian princess, Merv Griffin and Herbalife founder Mark Hughes, but became heavily indebted and sold in 2019 at a foreclosure auction for a whimpering $100,000.

But one of the Mountain’s purported investors was Khaled Al-Sabah, the former defense minister of Kuwait, and this May that country’s government filed an L.A. County civil suit that alleged Al-Sabah’s investments came from embezzled Kuwaiti money. All told, the suit alleged, the former military official — also a member of the country’s ruling family — had pumped a good portion of $100 million of stolen Kuwaiti Army funds into the luxe L.A. housing market, including three additional homes in Beverly Hills and an apartment in Westwood.