Slumlord Case Study

Arcstone Law, Real Estate Law Case Study in Los Angeles, California 

Arcstone Law Slumlord Case Study

Defendant/Landlord retained Arcstone Law in 2016, to defend him in a habitability lawsuit.  In the action six (6) of Defendant’s tenants were seeking to recover damages after having lived in an unpermitted garage under allegedly uninhabitable conditions.  In particular, the tenants were seeking to recover back rent, statutory damages, actual damages, moving expenses, punitive damages, and attorney’s fees- an alleged total of $825,000.00.  While the lawsuit was pending the Defendant/Landlord was not allowed to evict the tenants as any attempt at eviction would be considered retaliatory.

Soon after responding to the lawsuit, Defendant requested a settlement demand.  Only two months after the lawsuit was filed Defendants demanded $390,000.00, $65,000.00 per Plaintiff to settle the entire lawsuit; at this point Plaintiff’s attorney fees were not too high.  Defendant did not accept the demand. By responding to the lawsuit and preparing to defend our clients we had immediately got Plaintiffs to lower their demand by more than half.

After reviewing the facts and documents in more detail it was discovered that tenants did not provide Defendant with notice of the conditions of Subject Property prior to filing the lawsuit- a requirement in habitability cases.  Similarly, Defendant was able to produce circumstantial evidence indicating that Plaintiffs were contributing to the conditions of Subject Property, a common occurrence in Landlord Tenant cases.

To support their allegations, Plaintiffs quickly hired mold and rodent experts whom produced reports replete with shortcomings in the Subject Property.  Plaintiffs also produced medical reports tending to show that the Subject Property was deteriorating Plaintiffs’ health and exacerbating the minor’s asthma.  Defendant now had the above-mentioned reports, unfavorable pictures, and countless discouraging jury verdicts favoring tenants- not to mention the fact  that Plaintiffs had full use and control of Subject Property- making Defendant’s retrieval of evidence difficult.

In deciding whether to continue litigating the matter, Defendant reviewed numerous jury verdicts from California.  Recent Los Angeles County jury verdicts range from $101,060.00 to $411,300.00.  A note worthy verdict came from an almost identical case with the same amount of Plaintiffs in the same area where the jury awarded $783,000.00, including attorney’s fees.

The parties opted to mediate the case and settle the matter as to avoid the unnecessary costs and fees of attending a trial.  At the mediation the case was settled for $105,000.00, each party to pay their own attorney’s fees.

In July of 2016 when the Defendant sought the assistance of Arcstone Law, the Defendant was facing a possible $825,000.00 judgment.  However, after extensive work and discovery, the case was able to settle for 1/8 of the initially alleged damages.

The attorney for Plaintiffs expressed their frustration that the tenant’s took the settlement offer at the Mediation Conference that was originally recommended by our Attorneys.


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Arcstone Law established its humble beginnings as a Foreclosure Defense Law Firm. However, as the attorneys became hungry for a more comprehensive practice, they have cultivated expertise on all areas of the law related to property owners, with experience in contracts, purchase/sales, quiet title litigation, partition actions, bankruptcy, eviction law, and most recently probate, family law and estate planning. To best assist our clients, we have developed experience in those other forums and in other areas of law that your Real Estate touches upon. The mission of the team is to become the top real estate attorneys in Southern California, and really be “The One-Stop Homeowner’s Legal Shop.”

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