Judge strikes down claims brought against former Canyon Ranch condo-hotel

One of the property's condo associations is alleging Z Capital intentionally drove down unit prices

Aug.August 10, 2018 04:45 PM

Carillon Miami (Credit: Phillip Pessar via Flickr)

At least one major component of a long and complicated legal battle between the owner of the Carillon hotel in Miami Beach and a homeowners association has finally reached a verdict.

A Miami-Dade County Circuit Court judge dismissed a number of claims with prejudice brought by the Central Carillon Beach Condo Association against a company affiliated with Z Capital, the development group, regarding the shared amenities and facilities of the three-tower condo-hotel project.

The lawsuit was first filed back in May 2016, just over a year after Carillon Miami, formerly known as Canyon Ranch, at 6801 Collins Avenue was purchased out of bankruptcy auction by Illinois-based Z Capital.

At the time, the project’s condominium associations had opposed the results of the bankruptcy and filed a lawsuit against the bankruptcy debtor.

The central tower’s condo association filed a separate lawsuit against the hotel’s ownership group, alleging that it had breached its fiduciary duty, or obligation to act fairly and equitably to the association, over its common spaces and amenities shared between that the condo owners and hotel. These shared spaces include the spa, pool and hotel lobbies.

The complaint alleged that the defendants knowingly and willingly violated provisions of the Florida’s Condominium Act. It said the defendants did this by concocting a scheme to manipulate and drive down the values of one of the condo towers. The Central Beach condo association alleges the development group engaged in this scheme by making the units unprofitable so it could intentionally buy them at a lower price.

The judge ultimately ruled in favor of Z Capital on the claims that it breached its fiduciary duty to the association. But the condo association still has other claims that have not been dismissed with prejudice, including one for breach of contract.

A statement from Z Capital’s Carillon Hotel LLC, the new name of the ownership, said the company was “grateful that the court rejected these unfounded claims” and that it looked forward “to putting this lengthy, costly and distracting matter behind us.”

Ron Lowy of Miami-based Lowy Cook, who represents the association, said he believes “that the court misapprehended the bankruptcy case.” Two primary counts of his lawsuit are still presiding, he added.

Z Capital paid $21.6 million for the Carillon Resort & Spa in January 2015. The company installed new management led by Z Capital’s Thomas Wicky, who previously managed The Breakers in Palm Beach, as well as Adrian Zecha, founder of Amanresorts and GHM Hotels, and Jonathan Breene, developer and creator of the Setai South Beach.

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