Annandale property owner wins huge case against tenant

This building used to house the Palace restaurant.

Steve Lee, the owner of 7131 Little River Turnpike in Annandale, has won a major lawsuit against Korean restaurant chain Ebadom, which had broken a contract to lease space in the building that formerly housed the Palace restaurant.

After finding for the landlord in the case in January and awarding more than $2 million in damages, Fairfax County Circuit Judge David Oblon ruled in April that Ebadom should pay Lee more than $1.2 million in attorneys’ fees. 

 

 

According to an April 27 article in Virginia Lawyers Weekly, a case that started as a routine action for unpaid rent “turned into one of the Fairfax Circuit Court’s most heavily litigated matters for the past two years.” The complex dispute involved multiple trials on breach of contract, fraud, and statutory business conspiracy. 

 

Ebadom, which has about 200 restaurants in Korea, had signed a lease agreement in 2016 with Lee’s company, 1004 Palace Plaza LLC. 

 

The company had failed to obtain a building permit when it hired construction companies to renovate the building, and the Fairfax County Code Compliance Department issued a stop work order in August 2017. 

 

Rather than trying to correct the code violations, the company hired Greenberg Traurig, one of the biggest law firms in the United States, to sue Lee for having an unsafe building. Lee had to liquidate his other properties and borrow money to fix the building and challenge Ebadom’s lawsuit. 

 

“We had to fight this because we were being sued for something we did not do,” Lee says. “We had to fight this because it was a large oversees corporation who was bullying a local real estate owner because they have money and hired a large law firm to scare us off and threatened to take our property.”   

 

 

Lee has almost finished repairing the exterior of the Palace building in compliance with the requirements of the stop work order. When that work is done, the interior will be divided into four separate units, which should take a few more months. 

 

“We have interested parties but are not yet ready for lease agreements,” he says. 

 

Lee is also completing work on a new building next door, which will have space for four tenants connected to an internal common area. Both buildings will have “a mixture of quality restaurants and retail stores,” he said.

 

Both projects are also facing delays due to the COVID-19 pandemic. Contractors have had delays getting special-order items from out of state, as some factories have shut down, while potential tenants have closed their business or are too worried about the future to sign a lease. 

 

“We had suffered so much” dealing with the legal conflicts and trying to resolve the code violations by the tenant, Lee says. “We are almost done with the correction part and glad the court case is over. We still have legal fees to pay and don’t know how successful we’ll be to collect. But this is what happened to our property.”