Cienega Gardens et al. v. The United States

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Counsel for the plaintiffs retained Cornerstone Research to estimate damages in a breach of contract suit brought against the U.S. government.

Retained by Latham & Watkins

Counsel for the plaintiffs retained Cornerstone Research to estimate damages in a breach of contract suit brought against the U.S. government. The plaintiffs owned low-income apartment properties with mortgages insured by the Department of Housing and Urban Development (HUD). The insurance contract stipulated that the plaintiffs could prepay the mortgages and convert the rents from HUD-restricted levels to market rates after twenty years. Subsequently, Congress passed legislation prohibiting the exercise of this contractual right.

The court ruled in our clients’ favor and adopted the damages model.

Cornerstone Research worked with Professor Richard Peiser of Harvard University to construct a damages model that compared the actual cash flow to the cash flow the plaintiffs would have received at market rates for each property. The court ruled in our clients’ favor and adopted the damages model presented by Professor Peiser. The judge’s opinion made numerous references to the “comprehensiveness and reliability” of our model, which was described as “based on objective, verifiable HUD and industry data.”

Case Expert

Richard B. Peiser

Michael D. Spear Professor of Real Estate Development,
Graduate School of Design,
Harvard University