Michael S. Olin (J. Albert Diaz)
Details: In 2007, New York investor Harry Silverman purchased a 2-acre parking lot in downtown Miami from a company operated by Miami real estate investor and lawyer David Stone for $21.5 million.
Silverman and his partners obtained two mortgages for the purchase—one from the failed Orion Bank for $16 million and a second mortgage from Stone’s company, 1225 8th Street Properties Inc., for $5.5 million. Silverman, his wife Karen and Silverman Partners LP personally guaranteed the Orion note.
Case: 1225 8th Street Properties v. Burdines 1225 et al
Case no: 09-61500CA04
Description: Conspiracy to defraud
Filing date: Foreclosure counterclaim and third-party complaint filed Oct. 14, 2009
Trial dates: June 9-18, 2014
Judge: Miami-Dade Circuit Judge Beth Bloom
Plaintiffs attorneys: Michael Olin and Alaina Fotiu-Wojtowicz, Michael S. Olin P.A., Miami, and Joel Perwin, Joel S. Perwin P.A., Miami
Defense attorneys: Steven Binhak, Law Office of Stephen James Binhak, Miami, and Scott Cosgrove, Leon Cosgrove, Coral Gables; David Freedman, Coffey Burlington, Miami; and Francisco Rodriguez, Akerman
Verdict amount: $23.8 million
Plaintiffs case: When the housing market crashed, the property value fell sharply. Silverman and his partners were either unable or unwilling to repay the notes due in 2009 and devised a complicated plan to buy back the first mortgage and foreclose on the property, according to Olin.
Stone and his attorneys filed a counterclaim in the 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. They also sued Richard Ackerman, a Delray Beach real estate expert, and Leonard Ackerman, a New York lawyer, for allegedly helping advise Silverman on a scheme to avoid paying the second mortgage.
Stone testified about the underlying transaction. Daniel Stone, secretary and treasurer of 1225 SW Eighth Street Properties, was the damages witness testifying about the amount due on the note. Greg Mirmelli, a partner in Burdines 1225, was a third-party witness describing how the three partners obtained the money for the purchase.
The plaintiffs also read aloud portions of Richard Ackerman’s deposition and played a video of Silverman’s deposition, which plaintiffs say showed the two contradicted documents in evidence.
Defense case: All the defendants in the case testified, claiming they were following the advice of their attorneys and therefore not liable. Also testifying was West Palm Beach attorney Arthur Menor of Shutts & Bowen, who represented Big Rock and said the advice he gave his client was legal.
Outcome: Jurors deliberated just over five hours before finding Silverman, Silverman Partners and Big Rock conspired to cause harm to Stone’s company. They awarded compensatory damages of $5.3 million and punitive damages of $9 million. Jurors cleared the Ackermans of liability.
On June 27, Bloom entered a final judgment, awarding an additional $9.5 million in unjust enrichment against Silverman and Silverman Partners, making the total verdict $23.8 million.
Comments: “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.
Post-verdict: Plaintiffs have filed a motion for a new trial against Richard Ackerman, claiming the jurors’ finding that he wasn’t an agent of Silverman was against the manifest weight of the evidence. Silverman’s attorneys filed a motion to set aside the verdict and a motion for a new trial.