Real estate investor 276 Port L.P. has sued Carlton Fields Jorden Burt and Miami shareholders Merrick L. Gross and Jay A. Steinman for legal malpractice over a derailed $25 million land deal.
The former client alleges negligence and breach of fiduciary duty.
Port alleges that the legal consultants erroneously claimed long-term leases encumbering the property could be removed — claims Port says ultimately led to the loss of a $250,000 deposit when the deal couldn’t close. Records show 276 Port is managed by Gary Crouch, who is managing partner of commercial investment company ADR Partners, according to his LinkedIn.
Carlton Fields denies any wrongdoing and promised to “staunchly defend” itself against the plaintiff’s attempt “to blame Carlton Fields for its own business decisions,” the Daily Business Review reported.
Port had engaged the Tampa-based law firm’s legal services in 2016 to acquire an 8.5-acre parcel on the 17th Street Causeway opposite Port Everglades in Fort Lauderdale and minutes from Fort Lauderdale International Airport, despite ground leases with 40 years remaining. Port believed “certain perceived defaults” would allow it to terminate them, according to the Daily Business Review.
Court documents show a $10,000 retainer and $595 hourly fees were charged for the analysis and other legal services.
According to the lawsuit, transferred to Palm Beach after it was initially filed in Broward Circuit Court, “the $25 million purchase price for the property was premised on the assumption that the leases were in default or would be in default at some future time and could be terminated,” the Daily Business Review reported. With the leases in place, the $25 million price tag would have “been excessive and unjustified,” according to the complaint.
“We believe that the likelihood of prevailing on some of these claims, at least in connection with terminating the ground leases, would be greater than 50 percent,” according to Gross’ analysis included in court filings. “There is a lesser chance of collecting money damages, except for rent, because of the speculative nature of lost profits and the timing issues.”
Port said it relied on that opinion, which led it to forfeit its hefty deposit months later when the transaction tanked. [Daily Business Review] — Gabrielle Paluch