Scott D. Kravetz of Duane Morris and Benjamin H. Brodsky of Brodsky Fotiu-Wojtowicz in Miami secured a $4.2 million judgment for their developer client, who sued contractors over a yearlong delay . Courtesy photos.

Miami attorneys Scott D. Kravetz of Duane Morris and Benjamin H. Brodsky of Brodsky Fotiu-Wojtowicz emerged from a bench trial with a $4.2 million judgment for the developer of a luxury apartment complex in St. Petersburg, who sued contracting giant Swinerton Builders Corp. and its daughter company over a yearlong delay.

After a two-week trial, Miami-Dade Circuit Judge Beatrice A. Butchko found that Cambridge Swinerton Builders Inc. breached its agreement with The Hermitage St. Pete LLC while constructing the apartment building—a $52 million project the plaintiffs lawyers claim was “completely disorganized.”

It's rare for a case like this to go to trial instead of settling, according to Kravetz and Brodsky, as litigation is intricate, expensive and hard-fought.

“It's easy to get fatigued,” Brodsky said. “The client can get sick of writing checks after a while. But this client had the fortitude and the courage in their convictions to stay the course.”

Both parties are major corporations. The plaintiff's parent company, Allen Morris Co., is one of the largest real estate firms in the southeast and built Florida headquarters for AT&T, Florida Power and Light, and Bank of America International. Defendant Swinerton, meanwhile, is one of the country's biggest construction companies and has built hotels, schools, hospitals, apartments and government buildings across the U.S.

Allen Morris had selected what was an up-and-coming neighborhood in the Tampa Bay area for The Hermitage complex, but frequent changes in Cambridge Swinerton's project management staff led to “predictable disarray,” according to Brodsky.

“People didn't know what was happening at the beginning of the job, the middle of the job or the end of the job,” Brodsky said. “It was just a rotating cast of characters.”

The developers eventually brought Swinerton's main San Francisco office in to help right the ship, and the project ”limped across the finish line,” as Brodsky put it. But it was more than a year late.

During that year, The Hermitage's $52 million in construction financing accrued interest, and no one was renting out the units.

“Every day that the developer can't rent a unit is a dollar lost, so they missed a whole year of revenue,” Brodsky said.

The Hermitage sued under a liquidated damages provision that both parties had agreed to in their 2014 contract, which said that if either party was found to be entitled to damages over project delays, they would accept a particular amount. That number would be calculated based on how many days the project was late and the amount of rentable space per square foot in the building, even if the actual damages were more or less than that.

The Hermitage claimed it was owed $4.2 million in liquidated damages, though Brodsky and Kravetz claim their client suffered a bigger loss.

The defendant denied any wrongdoing and swiped back with a counter-complaint, claiming the project was late because of the plaintiff's own mistakes and negligence. Swinerton sought liquidated damages plus about $3 million in  outstanding payments.

Counsel to Swinerton, Melinda S. Gentile and Charles Fombrun of Peckar & Abramson in Miami did not respond to requests for comment by deadline.

1 million pages of documents

At trial, it was up to Butchko in the complex business division to decide why the project was late and who was to blame.

“Two long weeks” of dense, jargon-heavy testimony ensued, according to Kravetz, who felt the defendant had tried to settle the case by tiring out the plaintiff with new arguments and explanations.

“I firmly believe that this was a classic case of the contractor over-playing their hand, hoping that they would create litigation fatigue on behalf of the developer,” Kravetz said. “And fortunately, our client had the financial resources to go to the mat.”

It wasn't the type of case to take shortcuts, according to Brodsky.

“It's 'know the documents' or die,” Brodsky said.

Digging through more than a million pages of documents took pure “elbow grease,” according to Brodsky, who said the case hinged on finding “little nuggets” in the defendant's own emails, schedules and charts.

Kravetz and Brodsky said they had to fly around the country gathering depositions, and expert witnesses had to be flown in to testify. The attorneys also hired a consulting firm that used presentations and graphics to simplify and dissect each of the contractor's claims and explain why they had no merit.

But all of that doesn't come cheap, which can be off-putting for plaintiffs, according to Kravetz.

“Sometimes developer clients don't want to go spend in excess of $1 million on attorney fees and litigate a case for two or three years, only to end up going to trial and getting 40 cents or 50 cents on the dollar,” Kravetz said. “Our client had the financial resources to go to the finish line on this and prove that they were right, and they were vindicated.”

Butchko found the plaintiff was entitled to all of the liquidated damages it requested. With about $1.5 million in attorney fees, plus costs and interest factored in, Kravetz and Brodsky estimate their client could get between $6 million and $7 million.

Kravetz and Brodsky had never met before this case, but the developer threw them together after interviewing both their firms and struggling to decide. It turned out to be a strong match, according to Brodksy.

“That was the cool thing, to be with your buddy trying the case,” Brodsky said. “Even though we weren't at the same firm it felt like we were, and we locked our arms.”

Read Butchko's verdict transcript:  

 

Case: The Hermitage St. Pete v. Cambridge Swinerton Builders

Case No.: 17-158272-CA-01

Description: Contract and indebtedness

Filing date: June 30, 2017

Verdict date: July 10, 2019

Judge: Miami-Dade Circuit Judge Beatrice A. Butchko

Plaintiffs attorneys: Scott D. Kravetz, Duane Morris, Miami; Benjamin H. Brodsky, Brodsky Fotiu-Wojtowicz, Miami

Defense attorneys: Melinda S. Gentile and Charles Fombrun, Peckar & Abramson, Miami

Verdict amount: $4,215,802

 

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