Zom Living Ordered to Pay $323M in Damages

Zom Living has to pay Gray Development Group $323 million after an Arizona jury found the developer stole projects from its former partner.

Phoenix-based Gray sued Zom for breach of contract, alleging that the national multifamily developer, which is based in Orlando, stole proprietary data and projects, according to Bisnow. After a unanimous jury decision found Zom liable on the claims, a Maricopa County judge ordered ZOM to pay the now-defunct Gray $323 million in compensatory damages.

In 2019, Gray tapped Zom to work together on five Arizona multifamily and commercial developments, four of which have begun construction. The projects were part of Gray’s decade-long $1.4 billion Arizona development plan, which involved 13 total projects. Gray claims that when the pair linked up, it shared confidential details on the local markets, its plans, and strategies as part of a confidentiality and noncircumvention agreement.

Zom pressed the company for more and more of Arizona market information and ultimately moved forward with the five partnered projects on its own, shutting Gray out. All five projects were conceived of and planned by Gray before Zom was a part of the conversation, Gray argued. Gray closed down permanently in 2020.

“You can’t enter into a deal, then go around the very people that made it possible and offered you a seat at the table,” President and CEO of Gray Development Group Bruce Gray said in a statement. “Contracts matter. Zom did exactly what they promised not to do.”

The projects in question are located in Phoenix and Scottsdale, including a 416-unit luxury multifamily venture in Compass’s master-planned Desert Ridge community.

Zom operates across the United States, and has offices in Dallas, Fort Lauderdale, Nashville, Boston, and Phoenix. The company is a major player in some of the country’s largest multifamily markets, including DFW.