Appeals court restores Masoud Shojaee’s $10M win against Ugo Colombo affiliate

An appeals court restored Masoud Shojaee’s Shoma Group’s $10 million jury award against an affiliate of Ugo Colombo, adding another twist in the long-running lawsuit over a failed Coral Gables project. 

The Third District Court of Appeal nixed a state judge’s ruling from last year that had quashed the jury’s damages award to Shoma. 

Entities tied to Shojaee and CMC Group founder Colombo have been locked in a seven-year litigation over their fizzled joint venture to build The Collection Residences. The 128-unit high-end condominium was supposed to rise across the street from Colombo’s The Collection luxury car dealership but plans went awry sometime in 2015 and construction never started. 

After pulling out of the JV, Shojaee’s Shoma Coral Gables entity sued Colombo, his affiliate and The Collection, alleging that they had wanted to buy the project’s underground garage and ground-floor retail but offered a price lowballed by about $6 million, according to court filings. When they couldn’t reach a deal, Colombo’s affiliate retaliated by closing the sales office and discontinuing marketing, according to Shoma’s complaint. 

Shoma won initially. In 2021, a jury sided with the firm determining that Colombo and his affiliate breached the JV operating agreement. The jury verdict for $10 million was against the Colombo affiliate but it awarded zero damages against Colombo individually. 

But in January of last year, Miami-Dade Circuit Court Judge William Thomas threw out the jury verdict. 

Now, the appeals court disagreed and directed the lower court to reinstate the verdict.  

Thomas and the appeals court didn’t see eye-to-eye on one specific point: whether Shoma Coral Gables suffered individual harm that is separate from any harm suffered by the Shojaee-Colombo JV entity, Coral Gables Luxury Holdings, by the closing of the sales office and the discontinuing of marketing. 

While Thomas said no, the appeals court saw things differently. 

Shoma’s claim is that it was individually impacted because under the JV agreement the partners were to jointly manage the project. Shoma’s claim is that CMC’s entity violated this by “unilaterally modifying the project’s marketing and sales,” essentially trumping Shoma’s rights as a co-manager under the JV, the appeals courts’ opinion says. 

The appeals court went one step further to opine on Thomas’ decision to overturn the jury verdict. 

“In Florida, where cases are properly submitted to a jury for a determination of competing facts — judges do not — and cannot, act as the seventh juror and override that finding,” appeals court Judge Monica Gordo wrote. 

Sean Burstyn, the attorney for Colombo’s affiliate, signaled in an emailed statement that the battle isn’t over.

“Rulings have gone both ways throughout this case. The court’s opinion initiates the next phase of the litigation,” Burstyn said. 

Colombo and his affiliate have a pending motion against Shoma Coral Gables for attorney fees for the duration of the seven-year lawsuit. 

In a statement emailed through a spokesperson, Shojaee called the case “seven years of agony”. 

“Credibility and character are so important in our business and this decision proves that we were in the right,” he said. “At this point, we simply want to recover from CMC the money we invested in a failed project and move on.”

Jim Robinson and Raoul Cantero, Shoma’s attorneys, said that the firm will seek attorney fees from Colombo’s affiliate. Coupled with interest, the total could be $16 million, Robinson and Cantero of White & Case said in an emailed statement. 

Coral Gables Luxury Holdings bought the 2.8-acre The Collection Residences development site at 4101 Salzedo Street and 4112 Aurora Street in 2013 for $27 million. 

During the course of the litigation and in 2019, the partnership sold the site to Baptist Hospital for $37 million. 

Miami-based CMC is known for high-profile projects such as the 527-unit Brickell Flatiron condo tower and the Epic Residences & Hotel with 342 condos and more than 400 hotel keys. 

In partnership with Miami Beach-based Morabito Properties, CMC is developing the 41-unit Onda Residences condo in Bay Harbor Islands. 

Shoma, based in Coral Gables, is led by Shojaee and his wife, Stephanie Shojaee. The firm’s completed projects include the 33-unit Ten30 condo in South Beach and Shoma Village with 304 apartments and over 30,000 square feet of retail. 

In December, Shoma partnered with David Martin’s Terra on plans for an apartment complex in the Fontainebleau neighborhood west of Miami International Airport.