Buyers Sue Florida Law Firm Over Failed Condo Project
About 25 would-be buyers in a failed Florida condominium development are suing the law firm that held their deposit money, arguing it didn’t do enough to safeguard $2.5 million of their funds.
However, a lawyer for the venerable Gunster Yoakley & Stewart law firm says it did nothing wrong in fulfilling its role as escrow agent, reports the Palm Beach Post. The only reason the firm is named as a defendant in the Palm Beach County Circuit Court suit, says West Palm Beach attorney Scott Link, is because “they’re the last person standing with money.”
Some $10 million in deposits allegedly has not been refunded on the abandoned 338-unit Palladio Terrace luxury development in West Palm Beach by the developer, Miami-based Merco Group of the Palm Beaches, even though the Intracoastal Waterway property has been foreclosed upon by the lender, Eastern Financial Florida Credit Union.
At issue in the suit against Gunster Yoakley is whether the law firm acted negligently by releasing escrow money to Merco:
“Under Florida law, deposits can be released to a developer once construction has commenced on a project,” the newspaper writes. “The lawsuit alleges Gunster released 10 percent in deposits to Merco when Merco informed Gunster that construction had begun. But the lawsuit says Gunster ‘turned a blind eye to facts’ showing that construction hadn’t really started.”
