Shopping Center Landlord Ramco Faces Fired South Florida Whistleblower in Court
A former property manager for shopping center owner Ramco says she was fired after raising questions about millions of dollar worth of vendor charges that were passed on to tenants.
August 30, 2018 at 01:03 PM
5 minute read
Shopping plaza owner and operator Ramco-Gershenson Properties Trust is accused in a whistleblower lawsuit of firing a whistleblower who reported an alleged scheme to inflate rental income by millions of dollars.
Jeannette Hathaway, who lives in Miami-Dade County, is suing publicly traded Ramco, a Farmington Hills, Michigan-based shopping center real estate investment trust, saying it subjected her to workplace harassment until firing her Feb. 26 because of her reports.
Ramco generated millions of dollars under an elaborate strategy that left its tenants paying artificially higher rates for common area management, according to a July 19 amended complaint filed with U.S. District Judge William Dimitrouleas in Fort Lauderdale.
The company had 2017 revenue of $265 million.
Ramco declined comment, and its attorneys, Jackson Lewis principal Jason Berkowitz and associate Valerie Hooker in Miami, didn't respond to a request for comment by deadline.
The lawsuit claims Ramco's conduct violated the Federal Trade Commission Act, the Florida Deceptive and Unfair Trade Practices Act and the Florida Civil Remedies for Criminal Practices Act.
An Aug. 16 motion to dismiss the amended complaint argued the lawsuit doesn't qualify under the Florida Whistleblower Act because it fails to show a causal link between Hathaway's conduct and her firing. The attorneys also argued the lawsuit lacks sufficient facts to establish an actual violation of the cited laws.
The lawsuit offered this scenario: Ramco vendors provide tenant services such as security, maintenance, cleaning and roof repair at its shopping plazas. Ramco contracts set fees for vendor storage and parking at the shopping centers. Hathaway maintained the contracts and fees were unnecessary because the vendors didn't need storage or special parking provisions. To make everyone whole, however, she said Ramco told vendors to inflate their invoices, and the landlord passed along the higher costs to tenants.
The extra fees were reflected in charges for common area maintenance, or CAM, said attorney Rod Hannah, who filed the lawsuit along with Ryan Lamchick. Hannah is a Plantation solo practitioner, and Lamchick is a partner at The Lamchick Law Group in Miami.
“The sad part is you have all these tenants who were paying these inflated CAM charges that were kept in the dark,” Hannah said.
Hathaway was Ramco's Southeast Florida property manager from May 2014 until her firing and was paid $100,602 a year, according to court filings.
She oversaw 11 Ramco properties in South Florida but was not part of the scheme, Hannah said. She hammered out contracts with service vendors, but he said those were legitimate and needed.
Hathaway maintained other contracts at Ramco properties nationally were illegitimate — and faced harassment at work for speaking up, including false accusations, according to the complaint.
A Ramco administrator said in an email that Hathaway called a tenant a “f*cking c*nt.” In another instance at a meeting with human resources and a regional supervisor, Hathaway was accused of being rude to tenants and not effectively managing her properties, according to the lawsuit.
Hathaway raised the vendor contract issue with former Ramco chief operating officer John Hendrickson and other supervisors about the alleged fraud.
When Hendrickson asked Hathaway why she wasn't attending the 2017 holiday party in Michigan, he followed up with, “I guess you don't want to be up here with us crooks.”
Hannah painted Hendrickson as a trigger for the CAM contracts by pushing for more ancillary income, or AI.
“I guess you can call him the catalyst because he wanted an aggressive AI program,” Hannah said. “If you look at it in that light objectively, that's not illegal, but it resulted in this practice being engaged in by the various property managers throughout the country. That resulted in the inflated CAMs.”
Hendrickson was Ramco COO from May 2015 until April when he left to become Midwest regional president of the Brixmor Property Group REIT. He didn't return a request for comment through his LinkedIn webpage and to his Brixmor email.
Hathaway originally sued in May in Broward Circuit Court, and Ramco successfully moved the lawsuit to federal court.
In addition to the whistleblower claims, Hathaway alleged breach of contract for $12,231 in unpaid wages. She based the dollar figure on a verbal agreement she had with Ramco for year-end bonuses and commissions if she met AI quotas and other performance metrics.
She also is seeking back pay, front pay if she won't be hired back, compensatory damages for emotional distress, humiliation and dignity as well as legal fees.
Properties managed by Hathaway included the West Broward Shopping Center in Plantation, Rivertowne Square in Deerfield Beach, Mission Bay Plaza in Boca Raton and Marketplace of Delray in Delray Beach.
After Hathaway raised her allegations with supervisors, an outside law firm was hired to investigate, but the results were incomplete, according to the lawsuit.
“She continued to voice her objections” after that, Hannah said. “That's what ultimately led to (her firing). … She was the squeaky wheel that they didn't want to add any oil to.”
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