The loser in a pitched battle with Donald Trump over a failed Fort Lauderdale condo tower gets another chance at a legal malpractice lawsuit against his attorneys.
The Third District Court of Appeal unanimously vacated a default judgment against would-be buyer Deer Valley Realty Inc., which had been ordered to pay Beck & Lee more than $208,000 for its work in the Trump case. The appellate panel also reversed a decision by Miami-Dade Circuit Judge Jorge Cueto striking Deer Valley’s counterclaims against the law firm.
This doesn’t automatically revive the fee dispute. Instead, the trial court will hold an evidentiary hearing to determine whether Deer Valley purposely missed a deadline to secure a new attorney in the Beck & Lee case.
The Miami law firm sued New Jersey-based Deer Valley in Miami-Dade Circuit Court in 2015 claiming its client didn’t pay $208,879 for the lawsuit filed by the firm against Trump and others involved with a planned 24-story beachfront condominium.
The Trump lawsuit in Broward Circuit Court was one of several filed over the failed Trump International Hotel & Tower, which changed ownership and opened last year as the Conrad Fort Lauderdale at 551 N. Fort Lauderdale Beach Blvd.
Deer Valley sued the Trump before his election as well as the Trump Organization LLC, Trump Florida Management LLC and others alleging Trump’s involvement in the condo-hotel project was exaggerated. Prospective buyers like Deer Valley, which deposited $345,000 for a unit, were told Trump had a significant investment in the project even though he put in no money, according to a third amended complaint.
Beck & Lee claimed its bills weren’t paid, but Deer Valley turned around in a counterclaim alleging negligence and overbilling. Beck & Lee didn’t include Corus Construction Ventures LLC as a defendant and either reached or knew of settlements reached between Corus and other would-be buyers, according to Deer Valley’s second amended counterclaim. The law firm also allegedly brought “unfavorable” witnesses to testify, didn’t object to some of the defense arguments and didn’t bring in pertinent records.
In March 2014, a Fort Lauderdale jury sided with Trump and affiliates on claims of negligent and fraudulent misrepresentation, misleading advertising and violation of the Interstate Land Sales Disclosure Act and a judgment to that effect was entered. Deer Valley and the Trump defendants settled the defendants’ claims to attorney fees, court records show.
In related federal litigation, Trump and the Trump Organization were sanctioned for failing to disclose a $5 million insurance policy that could have been used to pay buyer’s claims after the project’s collapse.
Beck & Lee withdrew from representing Deer Valley in 2014.
In the litigation between the law firm and Deer Valley, company attorneys withdrew, and the court gave Deer Valley 20 days to secure a new attorney Sept. 29, 2017. On Oct. 19, 2017, Deer Valley asked for an extension, but Beck & Lee asked the following day to enforce the original order and sought sanctions because the Deer Valley counsel’s withdrawal was “calculated to hinder” the lawsuit, the appellate court opinion said.
Deer Valley wasn’t represented at a hearing on the sanctions motion.
Cueto sided with Beck & Lee and issued final judgment on the legal fees and a separate order for sanctions against Deer Valley and striking its pleadings.
The Third DCA said Cueto should have made a determination that Deer Valley intentionally failed to meet the deadline to secure counsel.
“When a default judgment is entered against a party for failure to obey a court order, the order of default must contain specific findings of the noncomplying party’s willful or deliberate refusal to obey the court order,” Judge Richard Suarez wrote. Judges Kevin Emas and Edwin A. Scales III concurred.
Beck & Lee’s attorneys declined to comment. The law firm was represented by Cullin O’Brien at Cullin O’Brien Law in Fort Lauderdale and by Rumberger, Kirk & Caldwell partners M. Stephen Smith and Michael Holt in Miami.
On remand, if the court finds Deer Valley didn’t intentionally miss the deadline, its counterclaims would be brought up again.
But if the court again sanctions Deer Valley, it must include support for its determination.
Deer Valley attorneys hailed the appellate decision.
“We are pleased that the appellate court has found in our client’s favor and corrected the error that occurred, and we are also pleased that our client will now have the opportunity to demonstrate how it was damaged by Beck & Lee’s practices,” said David Pohl, one of Deer Valley’s attorneys.
Pohl worked on the appeal with M. Todd Parker, the co-founding partners at Parker Pohl in New York, and Rice Pugatch Robinson Storfer & Cohen shareholder Chad Pugatch and associate George Zinkler III.