Jury Gives Broker $6-Million Cut of Fluor Commission

After three days of deliberation, an Orange County Superior Court jury Wednesday awarded a local brokerage at least $6 million as a commission for its role in the 1985 sale of Fluor Corp. headquarters to a Texas developer.

The jury ruled in favor of Lee & Associates in the closely watched, 5-year-old lawsuit filed against Fluor Corp., the large Irvine-based engineering and construction firm, and Trammell Crow Co., the Dallas-based office builder.

Superior Court Judge Marvin G. Weeks said Wednesday that the jury found that some of the defendants had interfered with Lee with “fraud, malice and oppression” by depriving the broker of a sale’s commission. The finding of fraud allows the firm to make a claim for punitive damages, which could amount to an award of millions more.

A hearing on the awarding of punitive damages will begin today before Weeks and the same jury. The arguments will likely include information on the net worth of Trammell Crow, one of the nation’s largest commercial developers and building managers.

Lee was seeking a $9-million commission. It was unclear Wednesday whether interest would be paid on the jury award, but sources close to the case said the final award would be closer to $8.2 million than $6 million.

Attorneys and parties on both sides of the case refused to comment late Wednesday on the jury verdict. They noted that Weeks had previously warned the parties involved in the contentious battle about talking to the press until the case is concluded.

The civil case, which went to trial in late July and continued intermittently until Friday, drew widespread attention because of the corporate names involved, the large sums of money at stake and the complex issues in question.

The jury began deliberations Monday in the complicated case. They were asked to decide between two versions of the huge deal so divergent that the lawyers at times seemed to be describing two different transactions.

Lee said Fluor executives had agreed to pay the brokerage a $9-million commission, or 3% of the $300-million deal. Instead, Lee said, Fluor stood by while Trammell Crow executives cut Lee out and took a $5-million commission for themselves.

When Lee protested, the brokerage said, Fluor did nothing, and Trammell Crow offered the brokerage $2.5 million to drop its claim while threatening to prolong any lawsuit for years.

Lee admitted that there were no written contracts with Fluor that specifically mention the sale of the building. But, the brokerage said, it did have an oral agreement with Fluor.

Trammell Crow, on the other hand, said two Lee brokers visited the developer’s offices in 1984 and promoted a deal without Fluor’s knowledge. Trammell Crow was interested but asked to negotiate directly with Fluor. When the deal closed, Trammell Crow offered Lee a $2.5-million commission.

But when Fluor learned that Lee was seeking a commission, it denied it had any agreement with Lee. Trammell Crow withdrew the $2.5-million offer and Lee filed suit. Trammell Crow alleged Lee hoped to collect a “windfall” for doing nothing.

While such suits are still far from common, they are increasing in Southern California. For that reason--as well as the size and prestige of the litigants--this case was watched closely by the local brokerage industry.