(John Disney/Daily Report)
A jury awarded $14.3 million to a Miami lawyer claiming New York investor Harvey Silverman and his partners committed civil conspiracy in a downtown Miami real estate deal.
The verdict delivered late Monday in Miami-Dade Circuit Court is a vindication for a company operated by Miami real estate investor and lawyer David Stone, said his lawyer, Michael Olin of Michael S. Olin P.A. in Miami.
“We were very happy with this verdict, and we believe that it’s an appropriate verdict and sends the message that you can’t behave like this,” Olin said.
Attorneys for Silverman insisted several attorneys signed off on the plan for the purchase between Miami and Southeast First avenues and Second and Third streets. Silverman plans to appeal.
“This case was based upon a never-before recognized and untested theory of liability,” said Steven Binhak, a Miami attorney who represented Silverman. “We believe the appellate court will agree with us that the verdict is unsustainable as a matter of law. Harvey Silverman and Silverman Partners at all times followed the advice of their lawyers and never intended to defraud or harm anyone.”
Binhak’s co-counsel were Scott Cosgrove of Leon Cosgrove in Coral Gables and David Freedman at Coffey Burlington in Miami, who represented Silverman Partners LP.
Silverman is also the plaintiff in a $40 million lawsuit against Miami Worldcenter developer Art Falcone, alleging he was improperly ousted from that project.
The trial stemmed from Silverman’s $21.5 million purchase of a 2-acre parking lot in downtown Miami in 2007.
The buyer, Burdines 1225 LLC, obtained two mortgages for the purchase—one from the defunct Orion Bank for $16 million and a second mortgage from Stone’s company, 1225 8th Street Properties Inc., for $5.5 million. Silverman and Silverman Partners personally guaranteed the note.
When the financial crisis hit, the property value fell sharply. Silverman and his partners were either unable or unwilling to repay the notes due in 2009 and came up with a complicated plan to buy back the first mortgage and foreclose on the property, according to Olin’s court filings.
Stone and his attorneys filed a counterclaim in a 2009 foreclosure case alleging Silverman engaged in civil fraud conspiracy to avoid paying the second mortgage and set up a shell company, Big Rock C.I. LLC, to hide his involvement.
Iberia Bank, which took over Orion, wound up selling the note.
After an eight-day trial before Judge Beth Bloom, jurors awarded Stone’s company $5.3 million in compensatory damages plus $9 million in punitive damages—$3 million against Silverman, $3 million against Silverman Partners and $3 million against Big Rock.
Two co-defendants who advised Silverman on the deal, Richard Ackerman and Leonard Ackerman, were found not liable.