A Miami-Dade judge overturned developer Masoud Shojaee’s $10 million court victory against an affiliate of his former joint venture partner Ugo Colombo.
Miami-Dade Circuit Court Judge William Thomas on Monday threw out an October jury verdict in favor of Shoma Coral Gables, an affiliate of Shojaee’s Shoma Group.
The jury had handed Shoma Coral Gables a $10 million award after concluding that Colombo and an affiliate of his development company CMC Group, breached a partnership agreement to build The Collection Residences, a 128-unit luxury condominium. The Coral Gables project, a joint venture between Shoma and CMC Group, never broke ground. Colombo’s exotic car dealership The Collection was also a defendant in the lawsuit, but the jury did not issue a verdict against the company.
The verdict had appeared to be the finale in a long-fought legal war, but Thomas’ ruling now adds another chapter to the acrimonious fight between two heavyweight South Florida developers.
In nullifying the jury verdict,Thomas ruled that Shoma Coral Gables was not entitled to $10 million in damages because the Shojaee entity did not suffer individual harm as a result of the CMC Group affiliate’s wrongful closing of the condo project’s sales office and discontinuing marketing for The Collection Residences.
“The joint venture suffered the harm [and] not Shoma, the suing member,” Thomas wrote. “The operating agreement clearly gave Shoma exclusive rights, but these exclusive rights could not be exercised to exclusively enrich or benefit Shoma.”
Sean Burstyn, the attorney for Colombo and his company, said the entire case was “meritless litigation,” and that his client expects Shoma will be required to pay all of Colombo’s attorney fees and court costs.
“Mr. Colombo has been content to follow the agreed-upon procedures for distributing certain cash proceeds of the company, and Shoma’s attempt to race ahead to that cash through litigation was rejected in its entirety,” Burstyn said. “At no time has Mr. Colombo ever been held liable to Shoma.”
Shojaee did not respond to a text message seeking comment. Shoma’s general counsel Frank Silva did not respond to a phone message and an email requesting comment. Jim Robinson and Raoul Cantero, attorneys for Shoma Coral Gables, were in court and did not respond to emails requesting comment.
While the jury determined that the CMC Group affiliate was liable for $10 million in damages, Colombo was not personally on the hook for the monetary judgment, even though jurors concluded he had breached the joint venture’s agreement, according to the jury verdict.
Thomas’ ruling is the latest turn of events in the six-year legal battle between the two real estate tycoons over their once-hyped plan for The Collection Residences, which also included retail and an underground garage. In 2013, through their equally owned Coral Gables Luxury Holdings, Shojaee and Colombo paid $27 million for the 2.8-acre site at 4101 Salzedo Street and 4112 Aurora Street.
The partnership began to unravel in 2015 when Shoma Coral Gables said it was pulling out of the project. The following year Shoma sued Colombo, The Collection and CMC Group affiliate Gables Investment Holdings.
Shoma’s suit alleged that Colombo’s companies attempted to exploit the joint venture by pushing to buy the underground garage and some of the retail space for a lowball price. When Shoma refused, CMC’s affiliate retaliated by canceling condo sales and marketing, the suit alleged.
Colombo’s The Collection luxury dealership, which is headquartered across the street from the development site, had grown and needed the extra garage space, according to Shoma Coral Gable’s suit.
In 2019, Coral Gables Luxury Holdings sold the property to Baptist Health for $37 million.
The net proceeds of the sale, $16 million, is being held in escrow, according to court filings. The $10 million jury verdict disbursement was likely to come from the escrow. As 50-50 members of the joint venture, following Thomas’ ruling, now the proceeds could end up being split between the partners’ affiliates pursuant to a process outlined in their operating agreement, according to court filings.
Colombo’s recent projects include the 527-unit Brickell Flatiron tower in Miami. His CMC Group is currently developing the boutique, eight-story Onda Residences in Bay Harbor Islands along with Morabito Properties.
The Collection, also led by CEO Ken Gorin, is expanding to another Gables location, specifically for Jaguars and Land Rovers.