Attorneys with the Fort Lauderdale law firm Zebersky Payne Shaw Lewenz kept a case alive through a grueling discovery process and appellate procedure to secure a $3.8 million settlement for their client.

Zebersky Payne Shaw Lewenz partner Jordan Shaw and firm associate Kimberly Slaven represented Chinese businessman Zhijun Mao in his lawsuit against defendant James Hannon. Although the March 2017 suit ultimately ended favorably for Mao with June's multimillion-dollar settlement, his attorneys say the end result doesn't subtract from the intensely personal nature of the case.

“Mao was telling me this story about how he had this quote-unquote mentor, and how this 'mentor' was a seasoned businessman,” Shaw said.

But court filings suggest Mao would soon learn these feelings weren't reciprocated.

Melbourne attorney Tino Gonzalez represented Hannon and his company in the litigation. A receptionist at the law office told the Daily Business Review Gonzalez would not be available to provide comment by press time.

Hannon's answer and affirmative defenses denied Mao's allegations. The filing attributed Mao's failure to obtain the 8-acre parcel to the Chinese businessman's inability to finance the purchase, rather than any deception by the defendant. It also alleged Mao made misrepresentations of his own to the defendants regarding his ability to arrange loans, barring him “from being entitled to an award of damages.”

Derailed deal

But according to plaintiff counsel Shaw, Mao regarded Hannon as a father figure and didn't think twice in March 2015 when Hannon, a real estate broker, offered to help him purchase a 7.95 acre property in North Dakota. Because Mao and his company, Asian Real Estate Investment Consulting, were having trouble securing lenders to complete the purchase, Mao entered an agreement for Hannon's company SIHG to obtain funding.

The plan was for Hannon's company to own the property until it was bought outright, at which point the asset would transfer back to Mao's business. Mao claimed he had previously purchased a 5% equity interest in SIHG for $500,000, further reinforcing his confidence in working with Hannon to finalize the deal.

Simultaneously, Hannon was using SIHG to acquire a separate five-acre property in North Dakota, according to Mao. The businessman asked Mao for his assistance in buying the property by contributing money to SIHG. Another deal was allegedly struck between the two in which Mao would make payments to the title company on SIHG's behalf with the expectation that he'd be repaid with interest by Hannon, who was allegedly set to receive money from a purported construction loan and EB-5 investors.

Now entangled in two agreements with Hannon, Mao went on to make several financial contributions to in order to secure both properties, court filings claim. This included $450,000 in service of the nearly eight-acre property Mao sought to procure, as well as $350,000 on behalf of SIHG and the five-acre parcel of land. Later in 2015, Hannon asked Mao for an additional loan of $2.9 million dollars. Shaw said his client made the payments at a considerable price.

“Not only did he wire the $2.9 million from his personal funds, but he had asked his family in China to put almost all of their life savings into this deal,” Shaw said. After Mao made the payment with the stipulation that the money be put toward both properties, Hannon went silent. Shaw said when the two men did eventually chat, Hannon never mentioned that the entirety of Mao's money had actually been put toward the five-acre property alone.

“He closed on the property under the name of North Dakota Real Estate Investment LLC, which Jim Hannon owned 100% of,” Shaw said.

Because the property wasn't purchased in SIHG's title as Mao had anticipated, this left his 5% stake in the company and his expectation of 5% interest in the property inert. Now left with no equity and no property of his own, Mao was short nearly $4 million with nothing to show for it. Shaw said his client “felt as though he dishonored his family by allowing Mr. Hannon to defraud him” before adding that Mao was never paid back for his contributions.

Read the complaint:

The lawsuit filed against Hannon and his businesses in Broward Circuit Court included breach of fiduciary duty, fraud and unjust enrichment among the charges. The defendants responded to the complaint by filing a motion for transfer of action. Although the plaintiff resided in Broward County, the motion contended either Brevard County or McKenzie County in North Dakota — Hannon's county of residence and the location of the contented properties respectively — were more appropriate venues for litigation. In an affidavit attached to the motion, Hannon testified none of the parties named in Mao's suit had any business or residency in Broward at the time of the plaintiff's allegations.

Once the motion was denied, the defendants appealed to Florida's Fourth District Court of Appeal. Slaven took the lead on filing the plaintiff's appellate brief.

“One of their arguments to transfer the venue was it was an investment, and based on the discovery we received, there was actual fraud going on,” he said. “There had been an agreement which had been completely and totally backtracked, and they were trying to re-frame it in a way that was not accurate or fair to our client. It was gratifying to get a good result for Mao.”

The appellate court ultimately ruled in Mao's favor, preserving the case's jurisdiction in Broward County.

Shaw said a lengthy and demanding discovery process followed. According to the attorney, the documents produced contrasted with the agreements that had been reached between Mao and Hannon.

“When we looked at the incorporation documents, we realized that no, the company he closed on the property with was owned 100% by Mr. Hannon,” Shaw said, noting Mao had been told payments for the five-acre property would be made through SIHG.

Shaw said email records showed that investors working alongside Hannon were concerned with Mao's involvement with the purchase, since they'd been told Hannon wouldn't be receiving any stake in the property.

“[The emails] highlighted they were playing on the personal relationship Mao had established with Jim Hannon,” the attorney said. “The documents showed regardless of their assertions to the contrary, Mao did not own any interest in anything that he paid for. … That ultimately culminated in [Hannon] taking everything.”

Shaw said the parties entered mediation proceedings with a plaintiff's motion for summary judgment. But the litigants reached a settlement in which Hannon would provide Mao $3.3 million in cash and 2.69 acres in Melbourne valued between $400,000 and $600,000.

“This was not one we expected to be easy nor did it end up being easy,” Shaw said.

For the attorneys, it meant “deciphering hundreds and hundreds of pages and purchase documents, emails and presentations,” as well as determining liability in the lawsuit as some of the most daunting aspects of the case.

“We joked liability is clear,” Shaw said. “But there's nothing about this that is simple.”

Case: ZHIJUN MAO v. SIHG et. al

Case No.: CACE-17-004870

Description: Fraud

Filing date: March 10, 2017

Verdict/Settlement date: June 6, 2019

Judge: Broward Circuit Judge David Haimes

Plaintiffs' attorneys: Jordan A. Shaw and Kimberly A. Slaven, Zebersky, Payne, Shaw, Lewenz, Fort Lauderdale

Defense attorneys: Tino Gonzalez, Law Office of Tino Gonzalez, Melbourne

Settlement amount:$3.8 million, including $3.3 million cash and 2.79 acres of land in Melbourne