Come on, Gunster, don't be down -- turn that smile into a frown, you big galute:
More than two dozen buyers trying to recover deposits on the failed Palladio Terrace condo have filed a $2.5 million lawsuit against the Gunster Yoakley law firm, claiming the firm failed to properly guard their cash when it served as the condo's escrow agent.
Merco Group of the Palm Beaches, Palladio Terrace's developer, abandoned plans to build the West Palm Beach luxury condo two years ago, but it has not returned all $10 million in deposits it obtained from would-be buyers. These and other buyers have lobbed lawsuits against Merco, seeking the return of their money. Some judgments have been reached but not paid by Miami-based Merco.
Now, 26 would-be Palladio Terrace buyers are pointing the finger at Gunster Yoakley, saying the firm was negligent in releasing their money to Merco in the first place.
"Knowing you have one of the largest, most important law firms in the county protecting your money - only to find out that they didn't - is outrageous," said Steve Katzman, a Boca Raton lawyer representing the group. "If a project fails, the only thing standing between you and the loss of your money is the escrow agent."
The lawsuit, filed Wednesday in Palm Beach County Circuit Court, shines an unfavorable light on a venerable law firm. The suit also adds to the drama surrounding Palladio Terrace, a high-rise planned along the Intracoastal Waterway. At the height of the real estate boom, Palladio Terrace netted $100 million in pre-sales on 338 units priced as high as $3 million. The project died when the market began softening. The lender, Eastern Financial Florida Credit Union, recently took back the property in a $30 million foreclosure.
A Gunster Yoakley attorney says the law firm refuses to shoulder any blame for the unrefunded deposits.
"Gunster is really unhappy about being sued," said Scott Link, the firm's West Palm Beach attorney. "Gunster doesn't think it did anything wrong. In acting as the escrow agent, they fulfilled their obligation."
Link said the only reason Gunster is being sued now is "they're the last person standing with money."
A few things -- first of all, the suit sounds like a stretch. I'd want to see the complaint before I comment further on the theory, as I'm not entirely clear on the duties of an escrow agent in this context.
Note to Steve Katzman: reserve the term "outrageous" for something really really bad. This is sad, unfortunate, regrettable, and probably sucks arse, but I don't know if Gunster's conduct here is truly "outrageous."Note to Scott Link -- don't talk about a law firm in terms of its feelings. Firms are not "happy" or "sad"; indeed, they are not anthropomorphic entities.
There, my blog is happy now.