--- title: "San Francisco Loan Dispute Ends in Settlement" meta: "og:description": "San Francisco sued Michael E. Johnson entities over a $5.5M loan default; case settled and dismissed in 2025 after lengthy litigation." "og:title": "San Francisco Loan Dispute Ends in Settlement" description: "San Francisco sued Michael E. Johnson entities over a $5.5M loan default; case settled and dismissed in 2025 after lengthy litigation." --- August 21, 2025 # **San Francisco Loan Dispute Ends in Settlement** San Francisco sued Michael E. Johnson entities over a $5.5M loan default; case settled and dismissed in 2025 after lengthy litigation. [**Breach of Contract**](https://exlitem.com/jury-verdict/san-francisco-loan-dispute-ends-in-settlement/jury-verdict/category/breach-of-contract-jury-verdicts-settlements) ### **Outline** Author ![](https://exlitem.com/jury-verdict/san-francisco-loan-dispute-ends-in-settlement/_ipx/q_80/user-default.svg) **Angad Chatha****Angad Chatha is a law graduate from Amritsar, Punjab, with over two years of experience in legal research and analysis. He has developed a strong niche in working with expert witnesses, providing critical support in preparing legal research and case studies. Known for his analytical mindset and attention to detail, Angad consistently delivers thorough and well-grounded insights that enhance case summaries. His commitment to accuracy and a deep understanding of legal frameworks make him a valuable asset in complex legal sector.** ![Article Image](https://media.jurimatic.com/cdn-cgi/image/q=70/images/default_1.webp) The City and County of San Francisco sued Michael E. Johnson and affiliated entities over a $5.5 million redevelopment loan tied to the Fillmore Heritage Center. The City alleged breach of contract after repeated defaults, claiming Johnson was the alter ego of his companies. Defendants denied liability and raised numerous defenses, including waiver, duress, and impossibility. A full settlement was filed in July 2023, and the court dismissed the case on August 13, 2025. ### **Case Background** Plaintiff City and County of San Francisco loaned $5.5 million to Defendant Fillmore Development Commercial, LLC. The loan, issued through the Mayor’s Office of Community Development, was backed by federal funds from the Department of Housing and Urban Development. Defendant EM Johnson Interest, Inc. guaranteed repayment. Defendant Michael E. Johnson owned and controlled FDC, EJI, and Urban Core Development, LLC. Johnson executed the loan agreement, promissory note, and guaranty on behalf of FDC and EJI. The loan supported construction at the Fillmore Heritage Center, a redevelopment project that included Yoshi’s Japanese Restaurant. ### **Cause** The dispute arose when Defendants failed to repay the loan and interest. In 2010, the parties signed an amended loan agreement as part of a workout plan. Despite this adjustment, Defendants defaulted again. In 2015, the Mayor’s Office of Housing and Community Development issued notices of default and demanded repayment. Defendants still refused to comply. Plaintiff alleged Johnson used the entities as shells and ignored corporate formalities. Plaintiff claimed Johnson was the alter ego of the entities and personally liable for their obligations. ### **Injury** Plaintiff stated Defendants’ conduct caused financial harm. The loan remained unpaid, and interest and penalties accumulated. Plaintiff argued that Defendants’ refusal to honor obligations undermined public funds secured by federal grants. The default deprived the City of resources intended for community development. ### **Damages** Plaintiff sought repayment of all amounts due under the loan, promissory note, and guaranty. Plaintiff also claimed compensatory damages, prejudgment interest, attorney’s fees, and costs of suit. Plaintiff argued its damages were ongoing and increasing because of Defendants’ continued breach. ## Key Arguments and Proceedings ### **Legal Representation** - **Plaintiff(s):**City and County of San Francisco - **Counsel for Plaintiff:** Katherine B. Bearman | Thomas S. Lakritz - **Defendant(s):**EM Johnson Interest, Inc. | Fillmore Development Commercial, LLC | Michael E. Johnson | Urban Core Development, LLC | Office of Community Investment and Infrastructure | Doe One through Twenty, Inclusive | Roes 1–50, Inclusive - **Counsel for Defendants:** James Andrew Quadra | James Brian Morales ### **Claims** The City’s central claim was breach of contract, accusing the Defendants of failing to honor their agreements. In response, the Defendants denied wrongdoing and raised several defenses. They argued that the contracts were breached by the City, invalid due to misrepresentation, or unenforceable because of duress and undue influence. They also contended that the City’s conduct excused or limited any liability and that they were entitled to recover damages and costs. ### Defense The Defendants issued a general denial of all allegations and reserved the right to amend their answer after discovery. They raised multiple affirmative defenses. They argued the complaint failed to state a valid cause of action, was barred by the statute of limitations, and lacked proof of damages. They also incorporated allegations from their cross-complaint. Further, the Defendants advanced several contract-specific defenses. They claimed the Plaintiff accepted a leasehold estate as settlement (accord and satisfaction) and therefore waived or was estopped from further claims. They alleged impossibility, frustration, mutual mistake, and Plaintiff’s own misconduct excused performance. They asserted Plaintiff acted under duress, engaged in fraudulent inducement, and failed to cooperate in good faith. Defendants also argued that any losses resulted from Plaintiff’s negligence or third-party conduct. Finally, they claimed rights to setoff and maintained that their actions were lawful, justified, and taken in good faith. ### Settlement On July 11, 2023, Plaintiff City and County of San Francisco, through Deputy City Attorney Thomas S. Lakritz, filed a Notice of Settlement before the San Francisco Superior Court. The notice confirmed a full settlement, with dismissal expected by December 1, 2023. Proof of Service showed that Kathleen K. Hill of the City Attorney’s Office electronically served defense counsel at Quadra & Coll LLP, representing Michael E. Johnson, Fillmore Development Commercial, LLC, EM Johnson Interest, Inc., and Urban Core Development, LLC. The court subsequently dismissed the case on August 13, 2025. ## Court Documents Court documents are available for purchase upon request at [Jurimatic@exlitem.com](https://exlitem.com/jury-verdict/san-francisco-loan-dispute-ends-in-settlement/mailto:Jurimatic@exlitem.com) [Share with Facebook](https://www.facebook.com/sharer/sharer.php?u=https://exlitem.com/jury-verdict/san-francisco-loan-dispute-ends-in-settlement) [Share with X](https://x.com/intent/post?url=https://exlitem.com/jury-verdict/san-francisco-loan-dispute-ends-in-settlement&text=x) [Share with LinkedIn](https://www.linkedin.com/sharing/share-offsite/?url=https://exlitem.com/jury-verdict/san-francisco-loan-dispute-ends-in-settlement) [Share with Email](https://exlitem.com/jury-verdict/san-francisco-loan-dispute-ends-in-settlement/mailto:?body=https://exlitem.com/jury-verdict/san-francisco-loan-dispute-ends-in-settlement&subject=email) [Share with WhatsApp](https://api.whatsapp.com/send?text=https://exlitem.com/jury-verdict/san-francisco-loan-dispute-ends-in-settlement%20whatsapp) ### **Find your next Expert Witness today** ![Sanjay Adhia](https://exlitem.com/jury-verdict/san-francisco-loan-dispute-ends-in-settlement/_ipx/q_80/user-default.svg) ###### **Sanjay Adhia** Forensic Psychiastry ![George Reis](https://exlitem.com/jury-verdict/san-francisco-loan-dispute-ends-in-settlement/_ipx/q_80/user-default.svg) ###### **George Reis** Forensic Imaging ![Maria Babinetz](https://exlitem.com/jury-verdict/san-francisco-loan-dispute-ends-in-settlement/_ipx/q_80/user-default.svg) ###### **Maria Babinetz** Vocational Rehabilitation Find and retain experts without brokerage or upcharge. ### Looking for more? 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