Judge in Surfside collapse lawsuit agrees to pay condo owners more for property loss

·7 min read
Pedro Portal/pportal@miamiherald.com | Sept. 10, 2021

The judge overseeing the class-action lawsuit for the Surfside condo collapse said Tuesday he would increase the payout for condo owners whose homes were destroyed last summer.

Miami-Dade Circuit Judge Michael Hanzman gave preliminary approval to pay the 136 unit owners of Champlain Towers South a total of $96 million, which he said was the appraised value of their homes prior to the June 24 collapse.

The owners previously agreed to an $83 million allocation, but about 50 of them signed a letter last week asking that Hanzman reconsider the payment after a $1 billion settlement was announced for the wrongful death and personal injury claims. The collapse killed 98 people.

The additional $13 million may come from the planned sale of the beachfront property where the 12-story condo building once stood, or from other funds, said Michael Goldberg, the receiver for the Champlain Towers South condominium association.

Hanzman said he would not take money from the $1 billion wrongful death and personal injury settlement. The vast majority of that money will be paid to the estates of the 98 victims.

The 1.8-acre property at 8777 Collins Ave. will be sold for $120 million to billionaire developer Hussain Sajwani, of the Dubai-based DAMAC Properties, after no other prospective buyers bid on the land by a Friday deadline. But unit owners won’t see any money until after the sale closes. Goldberg said he expected it to close between June 20 and July 20.

Hanzman said he wanted to help the unit owners because he considers them victims in the case, although he said some may argue the owners let the building fall into disrepair.

“I do believe in many ways they have been victimized by this, they have been traumatized by this, and I want to see them in a position to get a new home and carry on with their lives,” he said.

‘I can’t let this engulf my life anymore’

The $96 million figure is a compromise between the positions of lawyers representing the owners and the wrongful death claimants. Attorney Gonzalo Dorta, representing owners, asked Tuesday that their share be raised to $105 million. Attorney Judd Rosen, speaking for the family members of the wrongful death class, said the $83 million was adequate but he would not oppose increasing it to $96 million.

The money will be allocated in proportion to the size of each owner’s unit.

By adding $13 million to the total, unit owners — including the heirs of deceased owners — would receive, on average, $705,882 each. That’s $95,588 more than they would have received under the $83 million settlement.

However, many have argued they are not receiving a fair appraised value for their units and nothing close to what the market value would have been on the day of the collapse. Many surviving owners say they will receive less than half what their homes were worth and they will struggle to find a new place to live in the Miami area, especially given skyrocketing housing prices.

They’ve also argued they were rushed and pressured to sign the settlement by lawyers for the families who cited an untested Florida statute that holds individual condo owners liable if their association’s insurance is insufficient to cover personal-injury claims.

When an owner asked Hanzman to obtain a second appraisal opinion, considering that the original settlement figure hovered around $150 million (for the sale of the land and property insurance on the building), Hanzman rejected his request.

“It’s not based on an appraisal at all,” he said. “The wrongful death claimants believe, rightly or wrongly, that owners were partly responsible and could be assessed under a no-fault Florida law. I gave them a gift of $13 million. If this case had legally played out in court I believe the unit owners would have wound up with nothing. They need to take their $96 million and realize what a good job these lawyers did.”

Longtime owner Alfredo Lopez said he is thankful the case is resolved and he is trying to come to terms with his altered financial state.

“I know some owners are really upset because we accepted the $83 million based on the assumption that the total recovery would be $300 to $400 million, so when they hear $1 billion, they feel we deserve a piece for our losses,” said Lopez, who escaped the building with his wife and son. “My philosophy is, we were cut out of that, and $96 million is better than $83 million. No, we didn’t get $150 million or $120 million or the $105 million Mr. Dorta went to bat for. We won’t recover our investment or live on oceanfront property again or have the same standard of living.

“But I can’t let this engulf my life anymore. It’s not a healthy way to live.”

Raysa Rodriguez, who lived in 907 for 18 years, said based on the size of her unit, her compensation will rise from $443,718 to $513,216.

“We are very appreciative of the additional $13 million,” she said.

Owner Steve Rosenthal, who was rescued from his balcony carrying a shopping bag with only a few items of clothing, said: “Of course everybody would have wanted more, but it’s a good decision.”

Judge wants to see $1B settlement agreement

Hanzman expressed frustration with the lawyers in the class-action case who said they needed more time to submit their settlement agreement because of remaining sticking points with attorneys for the defendants.

The legal team’s lead attorney, Harley Tropin, announced that the final settlement for deaths and injuries has grown to $1,004,600,000 — a slight increase in total compensation since the tentative agreement was announced on May 11. That amount was $997 million.

Tropin told the judge that the legal team needed more time to resolve matters in the final settlement deal unrelated to financial issues. “We’re optimistic that we can get it done, but we haven’t gotten it done yet,” Tropin said.

Hanzman then gave the lawyers an ultimatum. He set a new deadline for noon Friday to submit the final settlement agreement. If both sides don’t meet that deadline, the judge said he would hold an evidentiary hearing on June 1, and require the lawyers to explain why they could not get the deal done.

The plaintiff attorneys are representing the 98 people who died in the condo building’s collapse as well as some who suffered injuries; the defense attorneys are representing more than 20 defendants, including developers, contractors and engineers.

“At some point this plane has to come in for a landing,” Hanzman said. “I am not going to let this plane circle forever. ... I will enforce [the settlement] if you can’t come to terms on the agreement.”

Hanzman also announced that he will preside over all claims hearings, for heirs with wrongful death claims and for survivors with personal injury and psychological harm claims. He will decide how much each will be paid in damages from the settlement. He has appointed two claims administrators — veteran lawyer Robert Parks and retired Circuit Judge John Thornton — to review the claims filed by victims and their attorneys and to calculate each life’s worth.

“I gave it a lot of thought,” Hanzman said. “Mr. Parker and Mr. Thornton are outstanding. But I felt with a two-step process I would have a large number of exceptions and I’d still have to adjudicate. I’ll hear everyone’s presentation and we’ll do these hearings by the end of August.”

Hanzman agreed that surviving owners who want to submit a simplified claim form for injury and waive their right to a hearing would be entitled to a flat $50,000 payment, with guests or renters entitled to $10,000. Family members of the deceased who are unlikely to have a claim would receive a flat $1 million “liquidated option” payment.

“Children who have no net earnings accumulation and no survivors may not recover anything while other victims could have claims of tens of millions of dollars,” Hanzman said. “I realize it’s going to take a lot of time to meet with families and assess claims. I assume some will accept the liquidated $1 million. And the $50,000 is only for people who do not want to go to a hearing on their injury claim.”

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