The Third District Court of Appeal has thrown out a $24 million judgment against a Miami developer fighting a breach of contract lawsuit against a Florida hotel.

The appellate court reversed a judgment against Michael Rosen after finding the hotel that sued him, West Florida-based Harborside Suites, did not establish that he'd infringed the terms of a guaranty agreement.

“Although Harborside might have established that the bank never executed a written release, to prevail in its summary judgment motion, Harborside had the burden to establish conclusively that the developer had not satisfied the pre-Sales Requirement, which it did not do,” the court said.

Harborside sued Rosen in October 2012, claiming he owed nearly $40 million to the hotel following its purchase of a foreclosed condominium project in Hillsborough County where  Rosen personally guaranteed a $41 million dollar construction loan, according to the complaint. The suit alleged Rosen violated the guaranty by failing to pay now-defunct financial institution AmTrust Bank when it commenced a foreclosure action against the project.

Rosen argued in the trial court that all of the conditions needed to release him from his guaranty obligations were met prior to the foreclosure. He specifically pointed to the guaranty's stipulation that he'd no longer be answerable “upon borrower's satisfaction of the presales requirement in accordance with the terms and conditions of the [construction loan] agreement,” and noted he delivered 125 sales contracts for the condominium to the bank in May 2005 as discussed. Rosen also cited AmTrust Bank's support of the loan past the deadline for the presales requirement as proof he had held up his end of the arrangement.

Then-Miami Dade Circuit Judge Rodney Smith, who was elevated to the federal district court in June, originally granted Harborside's motion for summary judgment against Rosen in September 2016. The order allowed the hotel to recover more than $24 million against Rosen for breach of contract, prompting an appeal to the Third DCA.

Although the appellate panel previously affirmed the summary judgment in December, the court opted to grant Rosen's motion for rehearing. The newly-published opinion said the court  re-examined the summary judgment evidence to reach their latest decision.

Read the appellate court's opinion:

“It appears from the record that the trial court concluded that Rosen was not released from the personal guaranty because the Bank never provided Rosen a written release of the guaranty agreement,” the opinion said, noting the trial court did not expand on its reasoning behind the decision. “In our view, the issue is not whether the Bank executed a written release, but rather, whether Rosen was entitled to one. Whether the Bank actually executed a written release (it did not) is not determinative of whether Rosen was discharged of his guaranty obligation.”

The appellate court found Harborside did not conclusively establish that Rosen breached his contractual obligations, and in turn failed to meet their burden to have a motion for summary judgment granted.

Harborside's response to Rosen's motion for rehearing argued in part that regardless of whether the contract had been met, a written release was legally required for Rosen to be released from it. Nelson Mullins partner Beverly Pohl, one of the appellate attorneys who represented the hotel, declined to comment.

Gunster attorney Jonathan Kaskel represented Rosen alongside fellow firm shareholder Angel Cortiñas. He did not respond to requests for comment by press time.

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