FILED

CIVIL BUSINESS OFFICE 11

CENTRAL DIVISION
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Bryan C. Vess (#141732)

BRYAN C. VESS APC
402 West Broadway, 29th Floor
San Diego, California 92101
(619) 795-4300 (tel)

121115 JAW 23 P 3: 58
Ci CPI( -SUP_FRLOR COURT
,476-ir:GaLiCCUNTY. CA

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Attorneys for Plaintiff La Jolla

Cove Suites, LLC

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SAN DIEGO

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LA JOLLA COVE SUITES, LLC, a California) Case No.: 37-2014-38978-CU-CO-CTL

limited liability partnership,

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Plaintiff,

FIRST AMENDED COMPLAINT FOR:

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(1) INTENTIONAL INTERFERENCE
WITH CONTRACTUAL RELATIONS
(2) INTENTIONAL INTERFERENCE
WITH PROSPECT WE ECONOMIC
ADVANTAGE;
(3) NEGLIGENT INTERFERENCE
WITH PROSPECTIVE ECONOMIC
ADVANTAGE;
(4) UNFAIR BUSINESS PRACTICES; and
(5) DECLARATORY RELIEF

V S.

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AIMCO PROPERTIES, L.P., a Delaware

limited partnership; NEIL HEIMBURGE, an
individual; ERIK HEIMBURGE, an
individual; SAUDRA SQUIRES, an
individual; UNIVERSAL BOOT SHOPS, a
California general partnership; RICHARD
ANNEN, an individual, THE REGISTRY
REAL ESTATE GROUP, an entity of
unknown qualification; and DOES 1 through
25, inclusive,
Defendants.

Jury Trial Requested

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Plaintiff, La Jolla Cove Suites, LLC ("Suites" or "Plaintiff'), alleges as follows:

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First Amended Complaint

SUMMARY OF CASE
1.

A $3 billion REIT acted wrongfully from August 2014 to January 2015, to

interfere with the performance of the superior contractual rights of others to acquire a $60
million property. The developer eventually succeeded in wrongfully knocking out the other
contracts, and now wrongly holds title to the Property. The REIT is liable for the damages it
caused, including the wrongful retention of the $1 million deposit Plaintiff made to acquire
the property. The REIT is also liable as a constructive trustee to hold the property for the
benefit of those with whom it interfered. The other defendants were complicit in the REIT's
execution of its acquisition of the property and are jointly and severally liable for the damages
caused.
VENUE AND JURISDICTION
2.

This action concerns the ownership of commercial property located in La Jolla

("the Property").'
3.

Venue is proper in this court because (i) Defendants reside in and/or do

business within San Diego County; (ii) the Property at issue is located in San Diego County;
(iii) the contract at issue was entered into in San Diego County; (iv) AIMCO's tortious
conduct took place in San Diego County, and (v) the events and injuries complained of herein
occurred in the City and County of San Diego,
4.

The amount in controversy under this Complaint exceeds the minimum

jurisdictional limit of this court, and the claims asserted herein are within the subject matter
jurisdiction of this court.
PARTIES
5.

Plaintiff, La Jolla Cove, Suites, LLC (previously defined as "Suites" or

"Plaintiff'), is a California limited liability partnership, with its principal place of business in
the County of San Diego, State of California.
The Property includes the properties located at 1141-1171 Coast Blvd. (APN's 350-040-06-00 and'350-040-2100) (the "Hotel Property"); 1187 and 1189 Coast Blvd., La Jolla, CA 92037 (APN's 350-050403 & 02)-00) (the
"Red Houses Property"); and 1172-1174, 1158-64, 1154, 1146, & 1142 Prospect St. (APN's 350-040- (11-13,
15, & 16)) (the "Prospect Property").

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First Amended Complaint

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authorized to do business in the State of California, San Diego County.

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7.

Neil Heimburge is an individual residing in the State of California, San Diego

County. He has or had a one-sixth ownership interest in the Property.

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AIMCO Properties, L.P. ("AIMCO") is a Delaware limited partnership and is

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Erik Heimburge is an individual residing in the State of California, San Diego

County. He has or had a one-sixth ownership interest in the Property.

9.

Saundra Squires is an individual residing in the State of California, Del Norte

County. She has or had a one-sixth ownership interest in the Property. Collectively, the

Heimburges2 have or had a 50% ownership interest in the Property, though the Baroudis, as

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defined below, have properly exercised their rights to purchase the Heimburges' interest.

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authorized to do business in the State of California, San Diego County.

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Universal Boot Shops ("UBS") is a California general partnership, and is

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Richard Annen is an individual residing in the State of California, San Diego

County. He is a licensed broker.

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12.

The Registry Real Estate Group is an entity of unknown qualification doing

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business in the State of California, San Diego County. Mr. Armen purports to be its Chief

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Executive Officer, and conducted the brokerage services herein complained of purporting to

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act in that capacity. 3

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13.

On information and belief, Defendants operate and conduct themselves in all

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respects as the agents, employees, representatives, alter-egos, co-conspirators, and partners of

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one another. Furthermore, when they performed the acts alleged herein, Defendants, and each

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of them, acted collectively and in concert, such that there exists an identity of interest and lack

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of lawful distinction between them. On information and belief, each of the Defendants was at

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all relevant times the agent and employee of the other Defendants and, in doing the things

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Defendants Erik Heimburge, Neil Heimburge and Sandra Squires are collectively referred to as the
"Heimburges."
3 Defendants Richard Annen and The Registry Real Estate Group are collectively referred to as "Mr. Armen."
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First Amended Complaint

alleged, acted within the course and scope of that agency and employment and/or ratified the

acts of the others.

14.

Plaintiff is presently unaware of the true names and capacities of the

defendants named as DOES 1 through 25, inclusive, and therefore sues these defendants by

their fictitious names. Plaintiff will seek leave of court to amend this Complaint to allege ,

their true names and capacities when they are ascertained. On information and belief, each of

the fictitiously named defendants is legally responsible for the acts and omissions alleged and

actually and proximately caused and/or contributed to the injuries and damages alleged.

FACTS COMMON TO ALL CAUSES OF ACTION

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15.

Krista Baroudi, individually and as Trustee of the Richard D. Heron and

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Katherine H. Heron Trust, and Marco Baroudi (the "Baroudis") owned a 50% interest in the

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entities that owned the Property.

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16.

The ownership documents between the Baroudis and the Heimburges required

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that in the event one of the parties received an offer from a third party to purchase its interest,

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and such parties desired to sell on those terms, such parties would give the other parties a

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period of time to match the third-party offer through a mechanism called a right of first

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refusal ("ROFR").

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17.

On June 9, 2014, the Heimburges entered into an agreement with PRES to sell

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their interest in the Property for $26 million. The written agreement between PRES and the

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Heimburges is titled "Stock and General Partner Interest Purchase Agreement" (the "PRES

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Offer").

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18.

Ms. Baroudi properly exercised her ROFR to match the PRES Offer, on

August 12, 2014.

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Suites thereafter came under contract with the Baroudis pursuant to a Letter of

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Intent (the "LOI"). Despite an inference that might be drawn from its title, the LOI was a

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fully enforceable purchase and sale agreement (not an agreement to agree in the future) that

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provided for a transaction with two parts: (1) the Heimburges' sale of 50% to the Baroudis,

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First Amended Complaint

and (2) the Baroudis' sale of 100% to Suites. The transactions were scheduled to close on
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September 30, 2014. The purchase price was $60 million.

20.

Pursuant to the LOI, Suites paid $1 million as an Initial Deposit. 4

A.

Plaintiff's Contract Was Superior To Any Right Of AIMCO To Buy The

Property

21.

Plaintiff's contract was to purchase 100% of the interests of the family for the

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entire Property. By contrast, as will be explained, until after this case was commenced,

AIMCO never had more than a deal to acquire more than 50% of the interests (i.e., the

Heimburges' interests), and had never put any money down. Plaintiffs deal was, therefore,

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"upstream" of AIMCO'S. It was a better deal in that Plaintiff was to acquire 100% rather

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than 50%. At the same time, however, Plaintiff's deal exposed it to more risk (because of the

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$1 million cash it put into the deal, whereas AIMCO had no "hard money").

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22.

Because of Ms. Baroudi's ROFR rights under the Baroudi-Suites contract, the

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LOI was superior to any of AIMCO's alleged rights; it will, accordingly, be referred to here

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as the "Superior Contract"

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B.

AIMCO Interfered With Plaintiffs Contract And Obtained The Property

Tortiously

23.

As will be shown, AIMCO would do whatever it took to get what it wanted

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(the Property), no matter what the contracts said.

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1.

Background: AIMCO Used The Heimburges' Broker To

Wrongfully Provide It Confidential Information

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24.

AIMCO wanted to buy the Property for at least ten years, what AIMCO's

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Chief Executive Officer, Terry Considine, referred to as "a ten-year slog. (Literally!)" From

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that point forward, AIMCO undertook a campaign to ensure that no one else but it acquired

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Suites has three members: Brian Veit, Peter Boormeester, and Terry Arnett. They used their own hard-earned
money and that of their family members to fund the deposit. As explained here, the gravamen of Plaintiff's
claim is that AIMCO, the $3 billion REIT, now wrongfully has possession of both the Property and Plaintiff's
$1 million deposit. AIMCO has no right to either. To get what it wanted, it strong-armed both the Heimburges
and the Baroudis after this case was filed.
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First Amended Complaint

the Property. (The Property is adjacent to another owned or controlled by Considine's

mother).

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25.

One of AIMCO's wrongful methods to obtain the Property was to wrongfully

obtain confidential information from the Heimburges' broker, Richard Armen.

26.

Early on, AIMCO promised Mr. Annen that if his client Ms. Baroudi would

not pay him, AIMCO would reduce the purchase price and would pay him anyway.
27.

After that, AIMCO used Mr. Armen to become privy to every important piece

of information concerning the Property.

28.

AIMCO did these things with clear knowledge that these actions were

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detrimental to the interests of Plaintiff (and of the Heimburges and of the Baroudis), and

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despite the fact that the Heimburges had contractual obligations to third parties and

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contractual and fiduciary obligations to Ms. Baroudi to refrain from such behavior.

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2.

AIMCO Wrongfully Interfered With The Baroudi-Suites

"Superior Contract"

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29.

As mentioned above, Suites came under contract with the Baroudis after

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Ms. Baroudi properly exercised her ROFR, on August 12, 2014. When Ms. Baroudi chose

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Suites over the $3 billion REIT as her suitor, AIMCO was shocked. AIMCO's

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representatives immediately expressed their surprise.

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30.

Using its "inside sourde," Mr. Annenwhom AIMCO had already promised

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to pay even if his fiduciaries/beneficiaries did notAIMCO was aware of the deal within 24

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hours by an email from Armen: "FYI 1Crista opened escrow and wired in $1 million."

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31.

AIMCO wasted no lime trying to unsettle and interfere with the Superior

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Contract. The very day it learned of the deal, AIMCO commenced a course of conduct to

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ensure the Superior Contract did not close. That first day, AIMCO's lawyers drafted

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correspondence for Mr. Amen to send:

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Dick:

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Attached is the draft of the letter we discussed. It should be

sent by Mr. Hamburge [sic] on his letterhead to all of the

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First Amended Complaint

addressees of the original notice of exercise from Ms. Baroudi

that was received earlier this week.

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The purpose of the letter was to challenge Ms. Baroudi's ROFR exercise (and, therefore, to

interfere with the Superior Contract). Mr. Armen did, in fact, recommend that day to his

client ("Mr. Hamburge [sic]") that he sign and send the AIMCO-drafted letter.

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32.

This was but the first in a long line of acts AIMCO commenced with the

specific design of interfering with the Superior Contract.

33.

AIMCO at all times knew that the Superior Contract called for the sale of the

entire Property. For example, on August 18, 2014, Ms. Baroudi's lawyer sent an email to

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AIMCO's lawyer demanding that AIMCO not interfere with her ROFR rights and the

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contractual expectations of Suites (whose name was not disclosed, but whose existence was):

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We expect that AIMCO will not, directly or indirectly, do

anything to interfere with Ms. Baroudi's right to complete the
purchase of the Heimburges' shares or interest. The Baroudi
family has the legal right to complete the purchase of the
shares/interests owned by the Heimburges and the sale of
100% of UCS/UBS to the third party, witho
ut any
interference from AIMCO.

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(Emphasis added.)
In other words, AIMCO knew that its interference with Ms. Baroudi's ROFR would
necessarily affect the contractual relations between Ms. Baroudi and her sale to Plaintiff.
34.

During this time period, AIMCO used Mr. Annen, the owners' fiduciary, as its

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puppet for the specific purpose of disguising its interferences. Such ventriloquism is not only

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an affront to the obligation of Mr. Amen to perform his fiduciary duties to his beneficiaries,

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not to AIMCO, it was also a strategy to obscure that it was really AIMCO, all along, that was

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interfering with the Superior Contract.

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3.

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35.

ALNICO Wrongly Encouraged The Heimburges To Keep Ms.

Baroudi "Off Balance" And To Fight With Her, So That The
Superior Contract Would Not Close

Thereafter, AIMCO conspired with Mr. Armen to interfere with the closing of

the Superior Contract (in order for AIMCO to acquire the Property). A week after Suites

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7First Amended Complaint

entered the deal with Ms. Baroudi, and with the specific intention of unsettling the deal,
AIMCO's lawyers advised Mr. Annen to keep Ms. Baroudi (and her lawyers) "off balance":
Dick,
A friendly suggestionlimit the emails that sound like you
agree he [Baroudi's lawyer Jim Lance] has done things validly.
Dick my strong suggestion to you is to keep him off balance.
You will look at what he sends but please do not execute
anything unless we talk.5
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As part of its admitted strategy of "keep[ing] him [Ms. Baroudi's lawyer] off

balance," and preventing the Superior Contract from closing, AIMCO had numerous
communications and clandestine meetings with the Heimburges to strategize how AIMCO
could interfere with the Superior Contract and for AIMCO to obtain "control" of the Property.
, 37.

AIMCO ghost-wrote letters for the specific purpose of interfering with the

Superior Contract. In these letters, AIMCO falsely contended that Ms. Baroudi's ROFR
exercise was invalidand, therefore, that the Superior Contract was invalidwhen AIMCO
knew (and admitted internally) it was not. The simple fact is that no onenot the
Heimburges' litigation lawyers, nor even Mr. Annenhad ever claimed that Ms. Baroudi's
ROFR exercise (and, therefore, her proposed sale to Suites) was anything other than perfectly
validwhich it wasuntil, of course, AIMCO became Mr. Annen's puppeteer.
38.

In an email in August 2014, Mr. Bezzant admitted precisely AIMCO's

motivation in taking action through Mr. Armen: "we will want to .. . 'keep the pressure on'
in regard to the putative ROFR exercise...." Mr. Bezzant thanked Mr. Annen for his role in
these efforts.
39.

Even AIMCO knew the positions it was spoon-feeding Mr. Atmenthat Ms.

Baroudi had not properly exercised her ROFRwere false: The AIMCO senior executive
and Chief Investment Officer overseeing the deal (John Bezzant) admitted to his lawyers and

Even the syntax"You will look at what he sends but ..."shows AIMCO's control over Mr. Armen and its
interference in the process.
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First Amended Complaint

Mr. Annen that Ms. Baroudi had exercised her ROFR and that AIMCO was in "pendency"
and could move forward only if Ms. Baroudi did not timely close:
Notice has been given, Baroudi has exercised, Aimco's ability
to close goes into "pendency" of some sort through 9/30/14
[when the Superior Contract was subject to close], and once
past that date, if Baroudi has not closed, she is deemed to have
waived ROFR rights and parties will proceed to Aimco closing.
If she does close, Aimco deposit is released next business day.

Thus; at the very time it was admitting this fact internally, AIMCO was insisting the opposite
to Ms. Baroudi, i.e., that her exercise was invalid.
40.

So, AIMCO knew and told its own team the truthMs. Baroudi had properly

exercised, and, therefore, the Superior Contract had priority over AIMCO's deal (which
AIMCO admitted internally was in "pendency"). Knowing this, AIMCO nevertheless used its
mouthpiece, Mr. Annen, to claim the Opposite to his own principal. AIMCO did all of this
with the specific intention of killing the Superior Contract.
41.

While Mr. Annenthe Heimburges' brokerwas willing to be used as

AIMCO's mouthpiece, the Heimburges' litigation attorney, Thomas Laube, apparently was
not. This did not suit AIMCO. Fearful that Mr. Laube would cooperate in the closing of the
Superior Contract, and for the specific purpose of interfering with the Superior Contact,
AIMCO directed Mr. Annen to have Mr. Laube "take a back seat." 6
42.

Then, when Mr. Laubethe actual lawyer for the Heimburgesapparently

would not "keep out," AIMCO's next move was to select a new lawyer for the Heimburges
whom AIMCO could trust to interfere with the closing of the Superior Contract. For this
purpose, AIMCO's lawyers suggested a lawyer whom AIMCO could trust to assert its nonexistent right to buy the Property (i.e., to interfere with the Superior Contract), one with
whom the General Counsel of AIMCO's lawyer had a "very good relationship." AIMCO
admitted to its broker that it was doing all of this to foment discord (and, in turn, to upset the

Mr. Annen immediately comforted AIMCO that, in fact, Mr. Laube "has been told to do
nothing,"but, just in case he was acting for his clientsMr. Armen assured AIMCO that "I
will remind him."
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First Amended Complaint

Superior Contra.et). In an email to AIMCO's senior executive and Chief Investment Officer

Bezzant, the broker who introduced AIMCO to the Property wondered if "the Heimburges are

willing to fight Krista [Baroudi]." In response, Bezzant admitted that that the Heimburges'

unwillingness to fight Ms. Baroudi was the reason AIMCO offered the free lawyer: "We

have offered them [the Heimburges] free counsel to do just that [i.e., to fight Ms. Baroudi,]

but they have not 'bitten."

C.

Unable To Convince Ms. Baroudi To Sell, AIMCO Contracted To Buy

The Heimburges' Interest And To Adopt A "Black Hat" Strategy

. 43.

Obviously unwilling to be ignored, and willing to do whatever it took to steal

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what Ms. Baroudi would not sell to it, on September 16, 2014, AIMCO and the Heimburges

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entered into an agreement whereby AIMCO acquired the Heimburges' 50% interest (what it

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called a "Contribution Agreement").

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I 44.

AIMCO claimed that it was entitled to buy the Heimburges' 50% interest on

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the basis of the Contribution Agreement because, according to AIMCO, Ms. Baroudi did not

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validly exercise her ROFR.

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45.

AIMCO' s purpose in entering a contact with the Heimburges was specifically

to interfere with the Superior Contract.

46.

Days later, AIMCO's senior executive Bezzant explained to Armen and the

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Heimburges two approaches to obtaining the Property (and, by implication, how badly

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AIMCO wanted the Property). One way to obtain the Property was through a "white hat"

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strategyto obtain the Property by making a deal with Ms. Baroudi. The other strategy,

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Bezzant announced to the Heimburges, was for the $3 billion REIT to pursue "more of a

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'black hat' strategy." Bezzant encouraged the Heimburges to interfere with the closing of the

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Superior Contractto "muck up Krista's closing" in AIMCO's own wordsby convening a

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shareholder meeting and determining to sell to AIMCO.

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47.

AIMCO sued the Heimburges and the Baroudis on September 29, 2014.

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First Amended Complaint

48.

The next day, AIMCO tried (and failed) to obtain a temporary restraining order

to prevent Ms. Baroudi from closing the deal. AIMCO then sent a letter to Chicago Title

giving notice that it "believed" that Krista Baroudi's ROFR was not properly exercised.

49.

To close the transaction on September 30, 2014, Plaintiff assigned its purchase

rights to La Jolla Cove Shops, LLC and La Jolla Exclusive, LLC (these entities will

collectively be referred to herein as "Shops/Exclusive"), which would be the entities that

would acquire the Property, subject to Plaintiffs membership interest in the newly formed

ownership entities.

50.

Pursuant to signed Operating Agreements, Plaintiff gained a 17.86%

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membership interest in Shops/Exclusive, and a third entity, La Jolla Hotels, LLC, and a $5.3

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million "deemed capital" interest in the enterprise. The unsubordinated "deemed capital" was

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the result of a very unusual capital structure that was especially favorable to Plaintiff, in that

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the Operating Agreements called for the companies to make distributions of profits according

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to these percentages.

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; 51.

During this time period, Plaintiff entered an agreement with Shops/Exclusive

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(the "Deposit Agreement") that, in the event the close of escrow did not occur under the

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Superior Contract for any reason, Plairgiff, and not Shops/Exclusive, had the sole right to the

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Initial Deposit. From that point forward, Plaintiff alone, and certainly not AIMCO, had the

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right to the $1 million.

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' 52.

This structure meant that Plaintiffs right to its Deemed Capital of $5.3 million

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was not subordinated to the members' respective percentage interests. This arrangement was

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very unusual, and favorable, to Plaintiff.

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53.

Effective as of September 30, 2014, Plaintiff, Shops/Exclusive, and the

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Baroudis entered into an "Agreement for Purchase and Sale of Stock and Real Property and

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Joint Escrow Instructions" (the "Purchase Agreement") for the purchase of the Baroudis'

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entire interest in LJCS and UBS and the Property after Ms. Baroudi's exercise of her ROFR.

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Plaintiff was a party to the Purchase Agreement.

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First Amended Complaint

54.

Shops/Exclusive was ready, willing, and able to close the purchase on

September 30, 2103, and funded the amount necessary to close the purchase. Continuing

thereafter, they remained ready, willing and able to close the purchase of the Property.

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55.

But for Defendants' conduct, the Shops/Exclusive purchase would have closed

on or after September 30, 2014.

56.

Because of all of AIMCO's actions, specifically including its announced

decision to "keep the pressure on' in regard to the putative ROFR exercise," the transaction

did not close on or after September 30.

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, 57.
It would have closed the days following September 30, but after first
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announcing on September 29 that AIMCO had acted "outrageously" in interfering with the

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Shops/Exclusive closing, within 48 hours (on October 1), Mr. Armen returned to AIMCO's

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side, writing ALMCO to facilitate the closing of the Contribution Agreement.

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58.
, 59.
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This case was filed on October 14, 2014.

Two weeks later, on October 31, 2014, AIMCO and the Heimburges closed on

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AIMCO's deal to acquire the Heimburges' 50% interest, the Contribution Agreement.

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AIMCO agreed with the Heimburges to keep the terms of that transaction confidential. The

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closing of this transaction effectively terminated Plaintiffs ability to buy the entire Property.

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60.

In the final act to carry out its interference, AIMCO closed on the purchase of

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the Baroudis' 50% on around December 16, 2014. As it had with the Heimburges, AIMCO

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agreed with the Baroudis to keep the terms of that transaction confidential.

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, 61.

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62.

At that point, AIMCO finally had what it wanted: the Property.

In truth, however, AIMCO's interest in the Property is legally invalid and

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subject to be judicially unwound because, among other reasons: (i) AIMCO and the

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Heimburges were aware Plaintiff had superior rights, but interfered with its (and

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Shops/Exclusive's) contracts; (ii) Ms. Baroudi had already validly exercised her ROFR rights,

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and was therefore "upstream" of AIMCO's interest; (iii) based thereon, Ms. Baroudi had

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entered into the binding Superior Contract and was, accordingly, legally bound to sell to

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Plaintiff (and, then, to Shops/Exclusive), and (iv) AIMCO's downstream Contribution

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First Amended Complaint

Agreement was never presented to Ms. Baroudi in accordance with the applicable ROFR

provisions.

63.

Eventually, through a confidential settlement with Ms. Baroudi, AIMCO came

to possess the $1 million initial deposit. It has no right or entitlement to that deposit, which

rightfully belongs only to Plaintiff. '

' D.

64.

AIMCO Interfered With Multiple Contracts Over Multiple Months

The gravamen of Plaintiff's claim is that AIMCO, the $3 billion REIT,

wrongfully gained possession of both the Property and Plaintiff's $1 million deposit.

AIMCO has no right to either. To get what it wanted, AIMCO wrongfully interfered with the

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Superior Contract. AIMCO's acts culminated in its wrongful acquisition of the first 50% on

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October 31 (the Heimburges' interest) and the second 50% (and the $1 million deposit) on

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December 16 (the Baroudis' interest). As a result, AIMCO now possesses the Property and

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$1 million that rightfully belongs to Shops/Exclusive and Plaintiff, respectively.'

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' 65.

From a chronological standpoint, AIMCO's acts of interference can be

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summarized in this order:

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Aug 2014 - AIMCO induced Mr. Armen, the owners' fiduciary, to secretly circulate

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AIMCO's positions, in an effort to interrupt the closing of the Superior

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Contract.

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Sep. 2014 - AIMCO worked furtively to disrupt the relations of the Heimburges and Ms.

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Baroudi, and entered into the Contribution Agreement, with the specific

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intention of preventing the Superior Contract from closing.

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Oct. 2014

AIMCO closed on the purchase of the Heimburges' 50% on October 31,

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thereby interfering with Suites' contract with Ms. Baroudi and Suites' contract

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with Shops/Exclusive, and preventing Plaintiff from acquiring the

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Heimburges' interest, notwithstanding Plaintiff's contractual interest to do so.

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The gravamen of Plaintiffs claim is not AIMCO's commencement of litigation or any correspondence
announcing the litigation, such as its letter to Chicago Title. These events merely provide a context to explain
how the claim evolved.

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First Amended Complaint

Dec. 2014 - AIMCO closed on the purchase of Ms. Baroudi's 50% interest on or around
December 16, thereby interfering with Suites' contract with Ms. Baroudi and
Suites' contract with Shops/Exclusive, and preventing Plaintiff from acquiring
that interest notwithstanding Plaintiff's contractual interest to do so.
Dec 2014Jan. 2015 - AIMCO secretly agreed with Ms. Baroudi (and perhaps the Heimburges) that
AIMCO could pocket Plaintiffs $1 million deposit. Then, with no prior notice
to Plaintiff; AIMCO appeared ex parte in another proceeding to obtain a
judgment in AIMCO's favor. Plaintiff was not party to that action, had no
prior notice of the hearing or of the effort to obtain the judgment, was given no
opportunity to be heard, and, therefore, is not bound by the judgment. The
secret agreement with Ms. Baroudi, and the secret court appearance, are only
the latest brazen attempts by AIMCO to cloak itself behind secret agreements
and maneuvers.
66.

In doing these things, and others presently unknown to Plaintiff, AIMCO came

to possess the Property wrongfully, interfering with Plaintiffs superior contractual right to
buy it.
FIRST CAUSE OF ACTION
INTENTIONAL INTERFERENCE WITH CONTRACTUAL RELATIONS
(Against All Defendants)
67.

Plaintiff incorporates the allegations of the prior paragraphs as though set forth

here in full.
68.

Plaintiff had contractual relations with the Baroudis (via the Superior Contract,

aka, the LOI) and with Shops/Exclusive (via the Operating Agreements and the Deposit
Agreement), and with the Baroudi and Shops/Exclusive (via the Purchase Agreement) as
alleged above.

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First Amended Complaint

t 69.

At the times of their interferences (and including the October 31 and

December 16, 2014 transactions that were the ultimate acts of interference), Defendants knew

of the existence of the contracts.

70.

Defendants intentionally engaged in acts or conduct which prevented the

performance of the contracts or that caused the performance of those contracts to be more

expensive and burdensome. In particular, AIMCO's and the Heimburges' wrongful conduct

here was entering into (and closing on) the Contribution Agreement despite their knowledge

of and awareness of Plaintiff's and Shops/Exclusive's superior rights to the Property.

71.

As a result of Defendants' intentional interference with contractual relations,

10

the contracts were not performed and/or the performance of those contracts became more

11

expensive and burdensome.

12

72.

Plaintiff has suffered damages and losses, in an amount presently unknown,

13

but including its 17.86% equity interest in Shops/Exclusive, the $5.3 million in deemed

14

capital, and the $1 million in cash it put into the deal. Plaintiff has also suffered unnecessarily

15

incurred expenses, reasonably certain lost development profits, and other damages, the extent

16

of which will be proven at trial.

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73.

Defendants' misconduct in causing the injuries and damage to Plaintiff was

18

intentional, willful, malicious and oppressive and was known of, encouraged, authorized and

19

ratified by each and all of the remaining Defendants. Plaintiff is entitled to an award of

20

punitive and exemplary damages against the Defendants named in this cause of action in an

21

amount to be established according to proof at the time of trial.

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SECOND CAUSE OF ACTION

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INTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMIC

ADVANTAGE

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(Against All Defendants)
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26

74.

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here in full.

Plaintiff incorporates the allegations of the prior paragraphs as though set forth

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15
First Amended Complaint

75.

1
2

The facts alleged above created a relationship containing a probable future

economic benefit to Plaintiff on economically attractive terms and conditions.

76.

Defendants' conduct was independently wrongfuli.e., it was proscribed by

some constitutional, statutory, regulatory, common law, or other determinable legal

standardin the following respects.

a. Mr. Annen owed fiduciary duties to his actual principals 8;

b. In doing the things alleged, Mr. Annen committed a breach of

fiduciary duties to his principals. As such, Mr. Annen's
conduct was proscribed by the common law, or another
determinable legal standard.

8
9

c. In doing the things alleged, AIMCO aided and abetted the

breach by Mr. Armen of his fiduciary duties to his
beneficiaries. It has long been the established policy in the
state of California that it is wrongful to aid or abet the
commission of a breach of fiduciary duty. See, e.g., Casey v.
U.S. Bank National Ass 'n (2005) 127 Cal.App.4th 1138. As
such, AIMCO's conduct was proscribed by the common law,
or another determinable legal standard.

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11
12
13
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d. In doing the things alleged, the Heimburges materially aided

and abetted AIMCO's efforts to interfere with the performance
of Plaintiff's superior contractual rights of others and to extract
a greater sum than to which they were contractually entitled or,
if they could not, to knock Plaintiff's deal off, regardless of
Plaintiff's superior rights.

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16
17
18

77.

19

the facts alleged.

20

; 78.

21

Defendants intentionally engaged in wrongful conduct designed to interfere

with or disrupt Plaintiff's beneficial relationships.

22
23

Defendants knew of the existence of the beneficial relationship, established by

79.

As a result of Defendants' actions, there was an interference with and

disruption to Plaintiff's fulfillment of its prospective economic advantage.

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25
26
27
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Under binding California laW Mr. Annen was, as a matter of law, a fiduciary of his clients the Heimburges and
the Baroudis. An agency relationship is fiduciary one. (Mendoza v. Rast Produce Co., Inc. (2006) 140
Cal.App.4th 1395, 1405.) An agent has duty to disclose to his principal any facts in his possession material to
the transaction. (Maron v. Swig (1952) 115 Cal.App.2d 87, 91.) This includes any facts the principal would
need to know in advance to protect his or her own interests. Fulfillment of fiduciary duties requires more than
the mere absence of bad faith or fraud. Representation of the financial interests of others imposes on a fiduciary
an affirmative duty to protect those interests and to proceed with a critical eye in assessing information.
8

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First Amended Complaint

80.

Plaintiff has suffered damages and losses, in an amount presently unknown,

but including its 17.86% equity interest in Shops/Exclusive, the $5.3 million in deemed

capital, and the $1 million in cash it put into the deal. Plaintiff has also suffered unnecessarily

incurred expenses, reasonably certain lost development profits, and other damages, the extent

of which will be proven at trial.

81.

Defendants' misconduct in causing the injuries and damage to Plaintiff was

intentional, willful, malicious and oppressive and was known of, encouraged, authorized and

ratified by each and all of the remaining Defendants. Plaintiff is entitled to an award of

punitive and exemplary damages against the Defendants named in this cause of action in an

10

amount to be established according to proof at the time of trial.

11

THIRD CAUSE OF ACTION

12

NEGLIGENT INTERFERENCE WITH PROSPECT WE ECONOMIC ADVANTAGE

13

(Against All Defendants)

14

82.

15

here in full.

16

83.

17

84.

85.

21

negligence.

22

86.

26

Defendants engaged in wrongful conduct, which was, at a minimum,

It was reasonably foreseeable that this wrongful conduct would interfere with

Or disrupt Plaintiff's beneficial relationships.

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25

Defendants knew of the existence of the beneficial relationship, established by

the facts alleged.

20

23

The facts alleged above created a relationship containing a probable future

economic benefit to Plaintiff on economically attractive terms and conditions.

18
19

Plaintiff incorporates the allegations of the prior paragraphs as though set forth

87.

As a result of Defendants' actions, there was an interference with and

disruption to Plaintiff's fulfillment of its prospective economic advantage.

88.

Plaintiff has suffered damages and losses, in an amount presently unknown,

27

but including its 17.86% equity interest in Shops/Exclusive, the $5.3 million in deemed

28

capital, and the $1 million in cash it put into the deal. Plaintiff has also suffered unnecessarily
17
First Amended Complaint

incurred expenses, reasonably certain lost development profits, and other damages, the extent

of which will be proven at trial.

FOURTH CAUSE OF ACTION

UNFAIR BUSINESS PRACTICES

(Against All Defendants)

89.

here in full.

90.

Plaintiff incorporates the allegations of the prior paragraphs as though set forth

The conduct of Defendants as alleged throughout this Complaint constitutes

unfair business practices under the common law of California and unfair competition under

10

California Business and Professions Code sections 17200, et seq. Such conduct includes, but

11

is not limited to, interfering with contractual relations, inducing breach of contract, interfering

12

with prospective economic advantage, and engaging in anti-competitive behavior.

13

91.

On information and belief, Defendants' actions were performed with the

14

objective of preventing or impeding the purposes for which Plaintiff made the $1 million

15

deposit, in violation of Plaintiff's known contractual rights.

16
17

92.

The actions of Defendants are also unfair business practices as they offend

established public policy and otherwise significantly harm or threaten competition.

18

FIFTH CAUSE OF ACTION

19

DECLARATORY RELIEF

20

(Against Defendants AIMCO and the Heimburges)

21

93.

- 22

here in full.

23

94.

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25

Plaintiff incorporates the allegations of the prior paragraphs as though set forth

Several actual controversies have arisen and now exist between Plaintiff, on

the one hand, and AIMCO and the Heimburges, on the other hand, as follows:
(a)

Plaintiff contends that Krista Baroudi properly exercised her ROFR and

26

has the right to purchase the Heimburges' 50% interest for $26 million consistent with the

27

PRES Offer. AIMCO contends, and on information and belief the Heimburges contend, that

28
18
First Amended Complaint

ICrista Baroudi has not properly exercised her ROFR and has or had no right to purchase the

Heimburges' interest.

(b)

Plaintiff contends that the AIMCO Assignment of July 17, 2014, is

invalid and unenforceable. AIMCO contends, and on information and belief the Heimburges

contend, that the AIMCO Assignment is valid and enforceable.

(c)

AIMCO contends, and on information and belief the Heimburges

contend, that the purported Amended Offer of July 25, 2014 is valid and enforceable.

Plaintiff disputes that contention.

(d)

AIMCO contends, and on information and belief the Heimburges

10

contend, that the Contribution Agreement of September 16, 2014 is valid and enforceable.

11

Plaintiff disputes that contention.

12

(e)

Plaintiff contends that ICrista Baroudi properly exercised her ROFR and

13

AIMCO's purported Amended Offer was never presented (timely or otherwise) so as to

14

trigger a new ROFR period. Thus, Plaintiff contends that the AIMCO Assignment, the

15

Amended Offer, and the Contribution Agreement are invalid, and consequently that the

16

purported sale by the Heimburges of their 50% interest in the Property to AIMCO effective

17

October 31, 2014 is invalid. Further, Plaintiff contends the purported sale by the Baroudis of

18

their 50% interest in the Property to AIMCO on or about December 16, 2014, is invalid.

19

AIMCO contends, and on information and belief the Heimburges and the Baroudis contend,

20

that each purported sale is valid and enforceable.

21

95.

Plaintiff is interested in a declaration of the rights of the parties under the

22

written instruments described in the preceding paragraphs. Plaintiff is also interested in a

23

declaration of the rights of the parties with respect to the Property.

24
25
26
27
28

PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays for judgment as follows:
On Causes of Action Nos. 1-3:

1.

For general damages according to proof;

For the imposition of a constructive trust.
19
First Amended Complaint

1
2
3
4

On Causes of Action Nos. 1 and 2:

3.

For punitive damages.

On Causes of Action No. 4:

4.

For all remedies, including injunctive relief, appropriate disgorgement of

defendants' profits by their improper and illegal acts, restitution, and attorneys'

fees.

On Causes of Action No. 5:

5.

alleged;

9
10
11

For a declaration of the parties' rights and interests in the contracts herein

On All Causes of Action:

6.

For attorneys' fees pursuant to the "The Tort of Another" theory (Prentice v.

12

North American Title Guaranty Corp. (1963) 49 Ca1.2d 618);

13

For an award of pre-judgment interest; and

14

8.

For such other and further relief as the Court deems just and proper.

15
16

BRYAN C. VESS APC

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19

By:
Bryan C. Vess,
Attorneys for Plaintiff
LA JOLLA COVE SUITES, LLC

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90
First Amended Complaint

 FILED
CIVIL BUSINESS OFFICE 11
CENTRAL DIVISION
2
3

Bryan C. Vess (#141732)

BRYAN C. VESS APC
402 West Broadway, 29th Floor
San Diego, California 92101
(619) 795-4300 (tel)

I 1015

JAN 23 P 3: bcI

OU
difirda20181 TCYCV

4
5

Attorneys for Plaintiff La Jolla

Cove Suites, LLC

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7
8

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SAN DIEGO

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LA JOLLA COVE SUITES, LLC, a California) Case No.: 37-2014-38978-CU-CO-CTL

limited liability partnership,
)
)
Plaintiff',
)
) PROOF OF SERVICE
vs.
)
)
AIMCO PROPERTIES, L.P., a Delaware )
limited partnership; NEIL HEIMBURGE, an )
individual; ERIK HEIMBURGE, an
)
individual; SAUDRA SQUIRES, an
)
individual; UNIVERSAL BOOT SHOPS, a )
California general partnership; RICHARD
ANNEN, an individual, THE REGISTRY
REAL ESTATE GROUP, an entity of
unknown qualification; and DOES 1 through
25, inclusive,
Defendants.

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Proof of Service

I
I, Bryan C. Vess, declare as follows:
2

I am an Officer of Bryan C. Vess, APC, counsel of record for Plaintiff herein. I am

readily familiar with the business practices of this office for collection and processing of
4
correspondence for mailing with the United States Postal Service; I am over the age of
5
eighteen and I am not a party to this action.
6
i On January 23, 2015, I served the following document(s), bearing the title(s):
7
FIRST AMENDED COMPLAINT
9

[X]
by mailing electronically, by the agreement of the parties, to the email addresses
indicated below, a true copy to the following individuals/firms:

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Valentine S. Hoy
Allen Maticins Leck Gamble Mallory
& Natsis LLP
501 West Broadway, 15th Floor
San Diego, CA 92101
E-mail: vhovCW.allenmatkins.com

Attorneys for Defendant AIMCO Properties,

L.P.

Thomas R. Laube
Sandler, Lasry, Laube, Byer &
Valdez, LLP
402 West Broadway, 17 th Floor
San Diego, CA 92101
E-mail: tlaubesllbv.corn

Attorneys for Defendants Neil Heimburge,

Erik Heimburge, and Saundra Squires

Telephone: 619-233-1155
Fax: 619-233-1158

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Telephone: 619-615-6767

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[ X ] (State) I declare under penalty of perjury under the laws of the State of California that
the foregoing is true and correct.

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[]

(Federal) I declare that I am employed by the office of a member of the bar of this
court at whose direction the service was made.

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I Executed on January 23, 2015, in San Diego, California.
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Bryan C. Vess,

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2
Proof of Service