Huntington Beach : Shopping Center Award Excessive, Judge Rules

A $2.1-million fraud judgment in favor of a group of merchants at the Old World Village shopping center in Huntington Beach should be reduced by $850,000, a Superior Court judge has ruled.

Judge James L. Smith decided that a jury’s May 5 award of more than $1.5 million in punitive damages was excessive. He gave the merchants a choice of accepting a reduction or face a new trial on the issue.

The association of shop owners that runs the shopping center had sued developer Josef Bischof, claiming he had defrauded them by failing to contribute his fair share of assessments for advertising and maintenance of the shopping center.

To compensate the association and 12 individuals for their losses, the jury awarded $530,000 in compensatory damages. The rest of the judgment was for punitive damages, designed to punish Bischof for his actions.

“If we start all over again, the new trial will be limited to the punitive damages,” said association lawyer Gerald J. Van Gemert. “The compensatory damages will not be affected.”

Bischof stated in a letter to Smith that his total assets were about $2.5 million, Van Gemert said.

The five-member board of the merchants association and 12 merchants who acted on their own must decide by June 26 whether to accept less money or seek a retrial.