Tenants of S.F. Hotel Awarded $4.5 Million

A Superior Court jury Friday awarded $4.5 million to 23 low-income tenants of a residential hotel who said they were harassed by the owner.

Lawyers for the plaintiffs called the award the largest of its type in U.S. history.

The tenants of the Balmoral Hotel sued owner James Lee and three of his partners for “malicious harassment,” complaining that vital services were interrupted in an attempt to drive them out of the building in downtown San Francisco.

In some cases, tenants said they were offered cash bribes to move so that Lee could renovate the hotel and rent rooms at tourist rates, a violation of the San Francisco rent control ordinance.

The Balmoral Hotel tenants said Lee’s efforts to force them out may have triggered 67-year-old Wayne Deaton’s decision to hang himself in his room in 1986.

The jury awarded the 23 tenants amounts ranging from $21,125 to $93,600 for a total of $1.48 million in compensatory damages, plus $3 million in punitive damages.

The 63-room hotel on Bush Street was sold to Lee in 1986. The complaints from tenants began when Lee began what he called a simple remodeling project. The suit was filed soon after Deaton was found dead in his room.

Lee and his lawyers were not immediately available for comment, but based on remarks made earlier, an appeal was expected.