Attorney Avery Strachan Wins Victory for Clients in Federal Claim Alleging Fraudulent Inducement

A recent decision by U.S. District Court Judge George L. Russell III denied a motion to dismiss a counterclaim alleging fraudulent inducement filed by commercial tenants’ Kobe Kansas, LLC, Young W. Bae and Chan H. Bae against a Cordish Company affiliate in Kansas City.

After initiation of a suit for nonpayment of rent in the U.S. District Court for the District of Maryland by Cordish-owned Kansas City Live Block 124 Retail LLC, Ms. Strachan’s Clients responded by filing a Counterclaim alleging fraudulent inducement based on misrepresentation of the number and prestige of other tenants committed to the development site known as the Kansas City Power & Light District (the Baes were allegedly told most of the available space was already leased to well know franchises). Further, the commercial real estate development company is alleged to have misrepresented the prospective financial success to be gained by opening a Kobe Japanese Steak & Seafood restaurant in the District (the Baes were allegedly told they could see $3 Million in annual sales but have realized averaged yearly sales of just $600K) and the future of the development as a vibrant mixed-use district that would include office space, residential housing, retail stores and entertainment venues (the Baes were allegedly told that residential condominiums would be built above their leased space, but those condominiums have never been built). In denying the landlord’s motion to dismiss, the Court noted the occupancy rate of the development is still currently only 73 percent, compared to the 85 percent advertised prior to the District opening seven years ago, and all sites adjacent to the Baes’ restaurant have been vacant since the development opened.

To read more about this case, Kansas City Live Block 124 Retail LLC v. Kobe Kansas LLC et al., which was recently featured by the Daily Record, click here.