MBC Properties, Inc. has filed a complaint against 611 Catalina Building, LLC over a dispute regarding the scope of a 1978 Grant of Easement for parking spaces in Los Angeles. The complaint was filed by MBC Properties on May 23, 2024, in the Superior Court of Los Angeles County, with Judge Christopher K. Lui presiding.
The case revolves around an easement granted in 1978 by Manufacturers Life Insurance Company to Larry and Grace Latt, allowing them to park 17 vehicles on an unimproved parking lot owned by the grantor. Over time, ownership changed hands with MBC Properties becoming the successor to the original grantees and Catalina Building taking over as the successor to the original grantor. The dispute arose when Catalina began construction on a mixed-use apartment building in 2015, leading to significant increases in property taxes due to voluntary improvements made by Catalina.
Catalina sent yearly invoices to MBC for property tax and maintenance costs from 2009 onwards. Initially, these charges ranged between $531 and $550 per year but saw a dramatic increase post-construction—reaching up to $71,174 in 2019. The trial court held that MBC was not required to reimburse Catalina for increased property taxes resulting from these improvements, interpreting that any incremental cost per space incurred due to new improvements should not be borne by MBC.
MBC argued that their reimbursement obligations were limited only to maintenance costs and real property taxes as they were at the time of the easement's creation in 1978 when it was just a vacant lot with 53 parking spaces. They contended that any interpretation requiring them to pay for increased taxes due to subsequent improvements would impose unreasonable financial burdens far exceeding those originally contemplated.
Catalina countered that MBC should pay 17/53rds of all reasonable maintenance costs and real property taxes levied against the servient tenement indefinitely. However, this interpretation was rejected by both the trial court and upon appeal. The court found that such an interpretation would allow for extravagant improvements beyond what was originally intended without providing any increased benefit to MBC.
The judgment affirmed by Judge Christopher K. Lui awarded declaratory relief favoring MBC's interpretation of their reimbursement obligations under the Easement. Additionally, both parties were found in breach of their respective obligations: Catalina for interfering with MBC’s easement rights during construction and MBC for failing to pay certain invoices within the statute of limitations period.
Representing Catalina Building was Brandon C. Murphy from Bice Murphy Law while Eric M. Schiffer and Jacob B. Bach from ACI Law Group represented MBC Properties.