Huge Post-Trial Victory in Epic Battle of the Steves (Plus David O. Markus)!

Final Order

In a huge post-trial victory by GT’s Steve Binhak over Adorno’s Steve Ginsburg, Judge Jordan has overturned a jury verdict — including an award of punitive damages — in a condo dispute that involved misrepresentations over whether a new building (“Asia”) would block an existing water view at Carbonell on Brickell Key.

Judge Jordan basically found that there was no evidence of damages, and he seems to me to be right:

At the hearing on the post-trial motions, Mr. Soltero argued that the $200,000 or $250,000 “view premium” was supported by evidence that Mr. Enriquez (the seller) told Ms. Aguila (the broker) that Unit 3608, with the view, was worth over $2 million, and that Ms. Aguila herself said it was worth $1.7 million to $1.8 million. See Transcript of Hearing [D.E. 228] at 51. That argument does not work for a number of reasons. First, Mr. Soltero cannot defend the “view premium” on what Ms. Aguila told him that Mr. Enriquez said to her about the supposed value of Unit 3608, or what Ms.Aguila herself opined. See, e.g., Bekins Van Lines v. Schaefffer, 630 So.2d633, 634 (Fla. 4th DCA 1994) (owner of property could not testify about property’s value “based upon telephone and personal conversations with others”). Second, if Mr. Soltero is suggesting that he bought Unit 3608 for less than what it was really worth with unobstructed water views (i.e., that he paid $1.7 million when it was really worth $2 million or more, as it was represented), then the benefit of the bargain theory may not even apply. Cf. Getelman v. Levey, 481 So.2d 1236, 1239-40 (Fla. 3d DCA 1985) (the benefit of the bargain rule “is designed for a situation where a party has effected a sale of property by representing it as worth more than its actual value,” and does not apply where the buyer obtains the property representing that it is “worth less than its actual value”).b. Mr. Soltero also relies, in part, on opinions he personally expressed at trial concerning Unit 3608’s actual value, or its value as it was represented. Those opinions, however, cannot save the verdict. First, my trial notes reflect that Mr. Soltero testified that Unit 3608 was worth $1.2 million at the time of trial (i.e., in July of 2009). Such a valuation does nothing to put an actual value on Unit 3608 at the time of the sale (i.e., in December of 2005), or to show what the value was if the representations about Asia had been true, which are the two critical numbers required under Florida law for an appropriate benefit of the bargain comparison. See, e.g., Studebaker, 19 So. at 179; Kind, 889 So.2d at 90. Second, to the extent that Mr. Soltero tried to put an actual or “as represented” value on Unit 3608 as of December of 2005, such an opinion was hopelessly speculative, as Mr. Soltero did not take into account or explain the effect on his valuation of either an overheated real estate market — in which many were buying as speculators in the hope that prices would continue to climb — or comparable sales on the 08 line of Carbonell around that time on his valuation.

It is true that under Florida law an owner of property, including an owner of real property, may generally express an opinion as to its value. But such an owner, like any other witness, must be shown to be competent to testify about valuation. Mere ownership, without more, is not enough. And when the valuation of a condominium apartment has to be made in the context of an unsustainable bubble market, like the one that existed in late 2005, and the alleged reduction in value is based in part on something as subjective as a less expansive water view, it was incumbent upon Mr. Soltero to explain that his opinion was something more than mere speculation.

Query — why not put on a damages expert for the difference in value?I’m less sure about Judge Jordan killing the puni award (“first time in 10 years on the bench”) based on an improper net worth comment made by Ginsburg:

In closing argument, Mr. Soltero’s counsel told the jury that “even $10 million in punitive damages is chickenfeed to Swire, who’s invested over $800 million in Brickell Key alone.” This argument was based on evidence that Swire Pacific Holdings — and not the Swire defendants on trial — had invested hundreds of millions of dollars in Brickell Key. The defendants lodged a contemporaneous objection, but I mistakenly overruled the objection. Mr. Soltero’s counsel then told the jury “that’s what the law allows. Those are the punitive damages that [Mr. Soltero] is asking you to award.” As a result of this second statement, I gave the jury a curative instruction: “Let me just add one thing, ladies and gentlemen. Swire Pacific Holdings is not a party in this case. And you may not consider any assets or conduct of Swire Pacific Holdings in deciding the issues in this case, including the issue of punitive damages, if you should award them.”

After closing arguments were finished, I reminded Mr. Soltero’s counsel that I had repeatedly ruled that he could not use the assets of the related Swire entities that were not parties, admonished him for violating those rulings and for “playing games,” and said that I expressed no view on what effect, if any, that improper closing argument would have on a verdict in favor of Mr. Soltero. The response of Mr. Soltero’s counsel was that the $800 million figure came from the website of Swire Realty.

Guess you had to be there, but it sounds like the Judge got a little ticked over Ginsburg going over the line, which is fine, though the curative instruction was pretty good and probably sufficient in most circumstances.

Oh yeah — our friend DOM (moonlighting from his successful crim practice) represented the defendant broker at trial.

Congrats all around (well, almost all around)!