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Court Sides With Trump In Failed Beachfront Project

Gage Skidmore
Creative Commons

TALLAHASSEE — Donald Trump didn't misrepresent his role in a beachfront project in Fort Lauderdale that went bust in 2009, a Florida appeals court has ruled.

Investors in the project have battled for years to get back hundreds of thousands of dollars in deposits from the real estate developer — who's now the Republican presidential frontrunner, banking on his brand to boost him into the White House — and his associates.

The 4th District Court of Appeal sided with Trump and associates in rulings in two separate cases involving what was pitched as a swanky, Trump-branded waterfront hotel and condominium project. The court heard oral arguments in the cases in January.

The plaintiffs in the two cases, John Taglieri and Deer Valley Realty, sued Trump after they couldn't get their deposits returned on units in the foreclosed building. The lawsuits accused Trump of falsely claiming he was the project developer when, instead, he only had a deal that allowed the developers to use his name.

Trump and his lawyers blamed the project's failure on the nation's real-estate market crash and contended that Trump's role was "clearly identified" in documents signed by the investors. Trump's lawyers also argued that documents clearly identified SB Hotel Associates, and not Trump, as the developer of the project.

The failed Trump International Hotel & Tower Fort Lauderdale is among other Trump-branded projects that tanked — including projects in California, Mexico and Tampa — and prompted lawsuits from disgruntled investors who lost millions of dollars in deposits.

The two cases are the last active lawsuits filed by investors after the Fort Lauderdale project went under in 2009. Other companies affiliated with what was supposed to be a luxury resort bearing the signature Trump name reached settlements with dozens of plaintiffs in 2014. All of the other companies associated with the Fort Lauderdale project — except for Trump, Trump Florida Management and Trump Organization — have also settled with the plaintiffs in the two active lawsuits, according to lawyers representing the plaintiffs.

Taglieri put down $146,000 in 2005 for a condo with a preconstruction price of nearly $775,000. According to court documents, promotional materials that bore Trump's signature and letterhead persuaded the Boston restaurant owner to purchase the condo unit. Deer Valley, affiliated with Michael Goodson, put down $345,000 for a $1.7 million unit more than three years before the project went into foreclosure, the court documents show.

A Broward County circuit judge in 2014 ruled in favor of Trump Organization, and a jury sided with Trump and his management company.

In the appeals, the plaintiffs' lawyers argued that Broward Circuit Judge Jeffrey Streitfeld erred in allowing evidence regarding the 2008 market crash. Streitfeld also erred by not allowing the plaintiffs' expert to rebut the evidence, their lawyers alleged.

On Wednesday, a three-judge panel upheld Streitfeld's decisions in the Deer Valley case. The appellate court on April 14 also affirmed the decision in the Tagliere case.

Deer Valley's complaint was based on "offering documents" that explained Trump's role in the hotel project, appeals-court Judge Melanie May wrote in six-page opinion joined by judges Alan Forst and Rosemarie Scher.

"The property report stated in capital letters that 'the condominium shall initially be known as the Trump International Hotel … pursuant to a license agreement with Donald J. Trump. If that license agreement is terminated, rights to the Trump name and servicemarks must cease. This may have a negative impact on the value of your unit,' " May wrote. "The purchase agreement and other documents had similar disclosures."

The three-judge panel on Wednesday also reversed Streitfeld's decision granting $180,000 in lawyer's fees to the defendants in the Deer Valley case. The judges ruled that Trump and associates are only eligible for a portion of lawyer's fees, and ordered the lower court to determine the amount.

Dara Kam is the Senior Reporter of The News Service Of Florida.