Appellate Court Upholds Ruling on Billionaire's Construction Defect Suit
The case involves the former Palm Beach home of construction mogul Leo A. Vecellio Jr., who claimed he paid $11 million — for repairs.
March 21, 2018 at 03:16 PM
4 minute read
A state appellate court ruled Wednesday in a long-running fight over a billionaire's sprawling Palm Beach estate, which was built as a spec home and plagued by defective construction claims.
The Fourth District Court of Appeal affirmed “in all respects” Palm Beach Circuit Judge Gregory M. Keyser's ruling in “voluminous appeals” over the former home of real estate mogul Leo A. Vecellio Jr.
Vecellio's family has been in the construction business since the 1930s. The decision turned on whether a party could collect the same damages twice.
Vecellio and his wife, Kathryn, control the Vecellio Group Inc., engineering contractors with public- and private-sector clients.
When the Vecellios purchased the oceanfront home at 589 N. County Road in 2008, they expected the 10-bedroom, 25,391-square-foot mansion to be a dream home. But instead, they said they found it riddled with mold, leaks and other structural defects that cost millions of dollars to repair and eventually forced them into a rental.
The estate became the centerpiece in a fraud case when the couple initiated a multimillion-dollar suit.
The Vecellios sued sellers Dean and Laura DeSantis; developer and general contractor Addison Development Corp. and Addison Construction Corp.; Addison's principal Danny Swanson; and subcontractors that worked on the project. The Vecellios recovered $3 million in damages from the Addison companies, Swanson and the DeSantis family and settled with 10 subcontractors for nearly $2.73 million.
But litigants on both sides challenged the outcome, with the Addison companies, Swanson and the sellers appealing the judgment and the Vecellios seeking a higher dollar amount. Ten issues were raised on the appeal.
The Fourth DCA consolidated the appeal and cross-appeal and upheld Keyser's ruling. It wrote to address two issues: the form of the judgments and Keyser's decision to allow the subcontractor settlements to reduce the couple's recovery on their breach-of-contract claim against the sellers and Addison companies.
Keyser found the buyers were entitled to a total of $3.5 million from multiple parties, but the damages overlapped, according to the appellate ruling. He attributed about $2.51 million to Addison Construction under its warranty, nearly $3.34 million against the sellers and Addison Development under their contract's addendum and found about $2.37 million recoverable against the DeSantis family under the purchase agreement.
Keyser's final judgment factored in pretrial settlements and prejudgment interest. He ultimately awarded $2.65 million against the DeSantis couple and Addison Development, $852,921 against the sellers, $518,607 against Addison Construction and $120,342 against Addison and the sellers for fraud.
The DeSantises bought the showplace property in 2002. Construction lasted from 2004 to late 2006, and Addison began marketing the 1.6-acre estate in early 2007. The Vecellios arrived in 2008 and sued in 2009. The Vecellios claimed they put $11 million into repairs. The house sold for about $25 million in 2014, about $15 million short of what the previous owners reportedly paid.
“What is disputed is whether the potential for double recovery needed to be addressed pre-judgment or post-judgment. Addison argues the judgments should have indicated they were joint and several on their face,” Judge Dorian K. Damoorgian wrote for the unanimous appellate panel. “Buyers counter that Addison is arguing about a 'non-issue,' because the 'law is clear that a party may not collect the same damages twice [and this] is a collection issue.' We agree with buyers.”
Judges Melanie May and Martha Warner concurred.
Appellate attorneys had no comment on the decision by deadline.
The Vecellios were represented by Jack J. Aiello, G. Joseph Curley, Gregor J. Schwinghammer Jr. and Roger Feicht of Gunster in West Palm Beach.
Diane H. Tutt of Conroy Simberg in Hollywood represented Addison Construction, Addison Development and Swanson.
Dean and Laura DiSantis were represented by Thomas A. Valdez and Robert J. Cousins of Quintairos, Prieto, Wood & Boyer in Tampa and Charles E. Muller II and Brian A. Lebensburger of Muller & Lebensburger in Miami.
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