$______ VERDICT - BREACH OF CONTRACT - BREACH OF FIDUCIARY DUTY - PLAINTIFF CLAIMS DEFENDANTS BREACHED AGREEMENT TO DEVELOP PROPERTY TO BENEFIT ONE OF DEFENDANTS' COMPANIES TO DETRIMENT OF PLAINTIFF.

• Pages: 2-4

Summaries with Trial Analysis

$10,000,000 VERDICT – BREACH OF CONTRACT – BREACH OF FIDUCIARY DUTY –

PLAINTIFF CLAIMS DEFENDANTS BREACHED AGREEMENT TO DEVELOP PROPERTY TO

BENEFIT ONE OF DEFENDANTS’ COMPANIES TO DETRIMENT OF PLAINTIFF.

Miami-Dade County, FL

In this breach of contract and fiduciary duty case,

the plaintiff asserted that the defendant

investment holdings company, its principal, and

an associated luxury auto dealership acted in bad

faith and against their fiduciary duty toward the

plaintiff in development of a piece of property, to

the benefit of the defendants and detriment of the

plaintiff. The plaintiff filed this direct breach of

contract action against the defendants for breach

of contract and breach of fiduciary duty and

sought damages for lost profits. The defendants

argued that there was no breach of contract or

fiduciary duty because the dispute arose from a

failed non-binding attempt to co-develop the

property.

In 1994, after the original owner was arrested on drug

charges, the defendant principal acquired an owner-

ship interest in the defendant company which was a

seven-franchise luxury automotive dealership. When the

defendant principal acquired his ownership interest, the

auto dealership brought in approximately $50 million in

sales. In 2014, the dealership took in more than $500

million. As a result of its success, the auto dealership

came under pressure to obtain additional retail and

parking space for its cars. The plaintiff and defendant in-

vestment company entered into a business relationship

with the goal of purchasing property in Coral Gables to

develop residential condominium units and commer-

cial retail space. The defendant investment company

was managed and operated by the same defendant

principal as the defendant auto dealership.

The plaintiff and defendant investment company

agreed to purchase a property located across the street

from the defendant auto dealership. The plaintiff main-

tained that, instead of conducting themselves in good

faith and the fiduciary standard required by the parties’

agreement and applicable law, the defendants at-

tempted to utilize their relationship with the plaintiff to un-

fairly enrich themselves and the defendant auto

dealership by acquiring underground garage space for

the cost of construction and without payment for the

land or profit. When the plaintiff refused to capitulate to

the improper demands of the defendants, after having

invested millions of dollars and a substantial amount of

time in the anticipated project, the defendants pro-

ceeded to sabotage the entire project, causing

significant damages to the plaintiff.

The defendant maintained that, as is common under

these circumstances, the parties formed a company to

carry out their intentions vis-à-vis the development which

included an Operating Agreement setting forth all of the

parties’ rights, obligations, remedies and waivers. In ac-

cord with the non-final nature of the development plan,

the agreement also contained specially tailored dispute

resolution provisions. The defendants maintained that,

despite the agreement and its bright-line provisions, the

plaintiff filed the subject suit in an attempt to revisit issues

that were addressed by the terms of the agreement or

had already been decided by the court. The defen-

dants maintained that the parties never came to an

agreement on pricing, budget, financing, marketing

plan, design, and project brand and, when they were

unable to reach an agreement, the parties agreed to

invoke the Mandatory Dispute Resolution Provision of the

agreement. The end result of which was for the parties

to dissolve the company and go their separate ways.

The defendants argued that the plaintiff was unhappy

with this outcome and brought the subject action in an

attempttoprofitfromwhatwasessentiallyaprojectthat

never got off the ground and for which the plaintiff was

owed nothing by the defendants.

After a five-day trial, the jury returned a verdict for the

plaintiff, finding that both defendants breached the Op-

erating Agreement. The jury awarded $10 million in

damages from the defendant investment company.

REFERENCE

Shoma Coral Gables, LLC vs. Gables Investment Hold-

ings, LLC, et al. Case no. 2016-002102-CA-01; Judge

William Thomas, 11-01-21.

Attorney for plaintiff: Matthew P. Leto of Leto Law

Firm in Miami, FL. Attorney for plaintiff: Frank Silva,

Esq. in Coral Gables, FL. Attorneys for plaintiff: Raoul

G. Cantero, James N. Robinson and Zachary B.

Dickens of White & Case, LLP in Miami, FL. Attorney

for defendant: Gonzalo R. Dorta of Dorta Law in

Coral Gables, FL. Attorney for defendant: Sean A.

Burstyn of Burstyn Law, PLLC in Miami, FL.

COMMENTARY

The defense moved for directed verdict after the close of evidence,

claiming it was undisputed that any harm from the alleged breach

from closing of sales office and marketing that the plaintiff alleged

2

Volume 32, Issue 2, February 2022

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