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Cheating on Headquarters Sale Charged : Fluor, Developer Sued for $64 Million

November 22, 1985|ROBERT HANLEY | Times Staff Writer

The Fluor Corp. and Trammell Crow Co., the Dallas-based developer that purchased Fluor's 162-acre Irvine headquarters site earlier this year, were named in a $64-million lawsuit filed in Orange County Superior Court Thursday by a local brokerage firm which claims to have been cheated out of commissions from the sale.

The suit charges the two companies, along with First Winthrop Corp., a Boston-based real estate investment banking firm, with breach of contract, fraud and deceit arising from what Lee & Associates Commercial Real Estate Brokerage Co.--Orange claims to be Fluor's and Trammell Crow's refusal to pay it commissions on the $340-million sale.

Unfair Practices Charged

Officials for both Fluor and Trammell Crow declined to comment on the suit.

Lee and Associates is claiming in its action that it is the victim of unfair business practices by Trammell Crow designed to cheat real estate brokers of their commissions. The suit seeks $9 million in actual damages and $55 million in punitive damages.

"We believe that we were the victims of deceit, overreaching and a flagrantly unjust exercise of business economic power," said John L. Vogt, Lee and Associate's managing partner in a memo circulated within the company. "Those who engage in these practices should be stopped. In view of the amount involved in this particular case, we believe it is a proper case for exemplary damages to fulfill their purpose, which is to send a clear message to all who play the game of squeeze the broker," the memo continued.

Protection of Interest

Lee and Associates had been part of the original deal between Fluor and Trammell Crow but was asked by Trammell Crow "to step out so they could deal directly with Fluor," said Steve Fingal, an attorney representing Lee and Associates. The developer, he said, "agreed to protect Lee's interest" in the deal.

The sale by Fluor of its 162-acre headquarters site was part of the engineering, mining and construction company's strategy to raise cash by selling assets. The deal calls for Fluor to remain in the buildings for 50 years. The two companies have unveiled plans to convert much of the property into a commercial development.

Those plans led to a showdown between Fluor, Trammell Crow and the City of Irvine, which maintains that under the Irvine Business Complex ordinance, only Fluor may build on the site and only for its own corporate purposes.

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