From the South Florida website: After three years — and on the cusp of a jury trial — real estate powerhouse Louise Sunshine this week settled a suit filed by a former joint venture partner, alleging breach of contract on a luxury Bal Harbour condo, The Real Deal has learned.
At the heart of the suit: Sunshine allegedly reneged on the agreement with Realtor Krystal Marcus, which resulted in the partners just recouping their deposits on a $4.68 million St. Regis Bal Harbour unit — instead of making a profit on the deal.
In March 2014 a judge granted partial summary judgment, ruling that Sunshine did not abide by the joint venture agreement and owed money to Marcus, a broker associate with ONE Sotheby’s International Realty. The amount of that award was scheduled to go before a jury last week.
“The case was settled to my client’s satisfaction,” attorney Alan Kluger, founding member of Kluger, Kaplan, Silverman, Katzen & Levine told TRD. He declined to detail terms of the settlement, signed on Wednesday.
According to the lawsuit, filed by Marcus’ BHC 900 LLC, against Sunshine’s Bal Harbour LMS, the dispute originated when the two agreed to purchase a preconstruction unit at the Bal Harbour Center Condominium, known as the St. Regis, at 9701 Collins Avenue, in December 2006.
In July 2011, they signed a joint venture agreement to develop and market the unit and divide the proceeds of the sale, according to the suit, filed in Miami-Dade Circuit Court in 2012.
The joint venture also allowed Sunshine to flip the unit before closing — by assigning the purchase agreement or selling the membership interests of her purchasing entity.
Unless the unit was flipped prior to closing, Sunshine was required to close on the property and get a first mortgage for up to 60 percent of the purchase price, according to the suit.
Both Marcus and Sunshine agreed that Sunshine would try to flip the unit prior to closing. But in late 2011, Sunshine decided to rescind the contract on unit 900, saying that condo documents contained “material adverse changes,” according to the lawsuit.
Marcus’ entity “was infuriated, since it had almost a million dollars invested in the contractual rights to the unit since Dec. 1, 2006, and Sunshine agreed to come in as a partner and put up significant funds in order to market and develop the property and close the transaction in order to resell the unit at a substantial profit,” the suit said.
In January 2012, Sunshine sent a letter to Marcus, with a copy of an authorization agreement with the developer to sell the unit and for the developer to pocket all the profits. “The authorization agreement was entered into surreptitiously while [Sunshine]’s counsel was allegedly in the process of speaking with [Sunshine] to present a proposal to [Marcus] for an amicable resolution,” according to the lawsuit.
Marcus’ entity “was outraged upon learning that [Sunshine] unilaterally engaged into the authorization agreement with the developer, which extended the closing date, waived any claim to the right of rescission, and waived any ability for [Marcus]’s joint venture partner [Sunshine], to resell the unit to a third party for an amount in excess of the contract price and retain the difference,” the suit said.
Ultimately, the developer resold the unit “for a substantially lower price than that which was intended,” by the joint venture partners, according to the suit.
In March of last year, Circuit Court Judge Abby Cynamon granted a partial summary judgment in the case, saying that the joint venture agreement did not permit Sunshine’s entity the ability “to breach its contractual obligations by unilaterally disposing of the sole asset of the joint venture, thereby rendering meaningless the bargained for provisions under the joint venture agreement.”
Marcus declined to comment on the suit or the settlement. “This litigation has been resolved to the mutual satisfaction of the parties,” she said, via email to TRD.
A call placed to Sunshine’s attorney on Friday afternoon was not returned.
Meanwhile, Sunshine listed her two-story penthouse at the Grand Venetian in Miami Beach in March, and has just lowered the price from $11.75 million to $10.5 million, according to Coldwell Banker listing agents The Jills’ website. Sunshine had sued the Grand Venetian’s condominium owners association in April, for allegedly requiring her to pay an arbitrary $1 million fee to combine two penthouses into one.