Carlton Fields sued over failed Fort Lauderdale real estate deal

276 Port alleges malpractice in the loss of a $250k deposit

Feb.February 02, 2017 12:50 PM

Port Everglades

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

Related Articles

Daily Digest Miami

Miami Beach OKs hotel development on Lincoln Road, Bank OZK’s construction lending is up: Daily digest

1515 Sunset Drive and Facundo Bacardi

Bacardi-owned company sues construction firm for defects and delays at Coral Gables office development

30 Indian Creek Island Road and Shlomo Alexander

The Alexander Group allegedly mismanaged and then refused to complete Indian Creek Island mansion: lawsuit

Power struggle between Fisher Island association’s directors ignites lawsuit

La Social’s original location at 7601 Biscayne Boulevard (Credit: Google Maps)

The Weekly Dish: La Social to open in downtown Miami, Salt & Straw is going to Wynwood 25 & more

Echo Brickell and PMG principal Ryan Shear

Construction of Echo Brickell allegedly damaged neighboring condo building: lawsuit

Daily Digest Miami

Rise in climate-related home buyouts could worsen housing inequality, Eurostars parent buys historic downtown Miami property: Daily digest

Miami Beach Mayor Dan Gelber and Natalie Nichols home at 1531 Stillwater Drive (Credit: Getty Images)

Miami-Dade judge strikes down Miami Beach short-term rental ban