Buyers Succeed in Backing out of Sunny Isles Condo Purchases Despite Partial Suit Loss

Prospective buyers of five Sunny Isles Beach condominium units lost their claim that the developer inflated unit sizes but won their demand to back out of the deals.

Pilac Management Ltd., Marcio Silveira Kogut and Francisco Alimari Netto each were in line to buy a Parque Towers unit, while Rebecca Christina Vallias and Hugo Kawasaki were going to buy a unit together, as were Josh Kurzban and Michelle Kurzban. Collectively they put over $3 million in deposits.

They separately sued developer J. Milton & Associates affiliate Parque Towers Developers LLC—and won their argument that Parque was finished late.

J. Milton finished one tower in February 2019 and the second the following June, even as official documents pledged completion by end of 2017.

The 26 and 29-story Parque towers, with 320 units, rise above a deck with five pools and are between the Intracoastal and Northeast 163rd Street at 300-330 Sunny Isles Blvd.

Miami-Dade Circuit Judge William Thomas issued his split order on Dec. 4 after a five-day bench trial from Aug. 31 to Sept. 2 and Sept. 8 and 11.

Thomas threw out claims buyers they were misled by promotional materials touting 2,500-square-foot units, noting that official condo documents list units as 1,885 and 1,937 square feet. These records warn marketing materials are not to be relied on and “expressly disclaim” unit sizes listed elsewhere, he wrote.

“The prospectus advises a potential buyer at Parque Towers to ‘refer to this prospectus and its exhibits for correct representations,’ in bold capitalized font on page 1 of the document,” Thomas wrote.

Purchase contracts say sizes vary because of calculation variations and construction changes, and implore buyers to confirm sizes before closing and not to rely on marketing literature.

“Considering the clear, unambiguous language of the contract with respect to non-reliance by purchasers on promotional materials and the non-representations of Parque Towers with respect to square footage of the units,” he wrote, “the court concludes that the issue of square footage is adequately covered in the contract, and expressly contradicts the allegations of the five purchasers.”

The bigger size in brochures is accounted by the inclusion of balconies, storage for mechanical equipment and part of the hallways in front of front doors.

Thomas threw out J. Milton’s force majeure defense. He didn’t say the construction issues created no delay but that the evidence was insufficient.

The court needed more “to conclude the cause and effect of delays encountered were justifiable and defensible,” Thomas said.

Engineering consultant John Pistorino cited environmental permitting, code changes, water-removal and Hurricane Irma as delays, but he didn’t help the court understand the cause and effect relationship, Thomas said.

J. Milton argued purchase contracts had no time of the essence clauses and the only way it could have been in breach is if it refused to finish after buyers demanded closing in a reasonable time.

Thomas disagreed, pointing out buyers noticed J. Milton that they wanted their deposits back unless the condo was finished in 20 days. They waited over a year past completion deadline before making this demand, he added.

While the developer ran into construction issues, it kept giving buyers the late 2017 construction time frame, Thomas added.

What This Means

The decision swings in favor of the buyers even if they only won part of their suit, their attorney said.

By winning their late completion counts but losing the inflated size claim, buyers technically get their money back as damages and not deposit refunds, said Samuel “Clay” Reiner II, senior partner at Reiner & Reiner in Miami.

“Because the damages were equal to the deposits, the effect of the judge’s ruling is the same as if we were granted rescission,” said Reiner.

Not so fast, said J. Milton attorney Robert Frankel.

Thomas’ order doesn’t explicitly say over $3 million is to be refunded, and if the judge follows up ordering this, it will be appealed, said Frankel, of the Law Offices of Robert Frankel in Plantation.

The attorneys for each side disagreed with the parts of the ruling that they lost.

Reiner, who worked with firm partner David Reiner II, disagreed with Thomas’ reasoning on the square footage saying this is an issue of consumer protection against developers who have lawyers to draft contracts.

“Most of the time consumers depend on the marketing materials and not the contracts,” Reiner said.

Frankel vehemently reiterated there was no hard completion deadline and the force majeure defenses were legitimate.

Official condo documents “say it in black and white it’s an estimated date,” Frankel said. “The prospectus says it’s only an estimated date for completion. I don’t know how much clearer it could be.”

He pointed out the testimony of Pistorino, the engineering consultant, in which the expert said that an underground power conduit running parallel to water and sewer connectors was identified late in the construction.

Because the builders didn’t know about it, as the power company didn’t tell them, the developer was significantly slowed down by having to rethink and move water and sewer connections, Pistorino said in testimony. Also, after builders got environmental approval, it was discovered that mangroves had grown inland, meaning more project redesigns were needed not to disturb the protected shrubs.

More Suits

Pilca Management was first to file suit, in May 2018, saying it put a $600,000 deposit for a $1.2 million.

The other suits were filed last year with Vallias and Kawasaki saying they put a $740,000 deposit for a $1.5 million unit; the Kurzbans a nearly $580,000 deposit plus $12,000 for upgrades for a $1.2 million unit; Kogut a $645,000 deposit for a $1.3 million unit; and Alimari Netto a $550,000 deposit for a $1.1 million unit.

They also named nominal defender First American Title Insurance Co., as it’s the deposits escrow agent.

None of the buyers initially levied claims on the unit sizes but added them in their amended complaints.

Thomas pointed this out, adding that four buyers didn’t even make an issue of it in their notice to J. Milton. Two had said it wasn’t even a big issue for them, and they didn’t know about it until Reiner & Reiner told them.

“Both Vallias and Alimari admitted to being first made aware of the alleged square footage issue by their lawyers,” Thomas wrote.

J. Milton through its affiliate turned around to countersue the buyers for failing to close the transactions and to pay the balance.

Thomas denied the couterclaims on the ground that he sided with the buyers on the late completion counts.

There have been 14 suits filed by prospective Parque buyers against J. Milton alleging misrepresentations of unit sizes.

They include a class action filed by David Reiner with Joseph Isacoff as class representative in front of Thomas.

Frankel said Thomas’ recent decision on unit size claims bodes well for J. Milton in the class action case it’s facing.

“Given his strong-worded ruling on Friday night, assuming he won’t deviate from that decision, my view is that the class action case is dead on arrival,” Frankel said.

Then again it’s impossible to predict for sure, he added.

Indeed, Miami-Dade Circuit Judge Valerie Manno Schurr in December 2019 granted the Kurzbans’ motion for partial summary judgment but then vacated that order.

The Kurzbans’ case was then consolidated with the other four in front of Thomas.

Read the order: 

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