Condo Buyers Can Sue Trump on Project
(CN) - Investors who bought luxury condos in the Trump Tower Tampa can sue Donald Trump over allegedly misleading claims about his supposed "partnership" in the project, which was exposed as merely an agreement to license his name when Trump sued the actual developer in 2007.
A federal judge in Florida found that Trump and The Trump Organization qualified as either developers or agents, and not just a licensor, of the Trump Tower Tampa, allowing investors to sue them under the Interstate Land Sales Full Disclosure Act.
Investor and lead plaintiff Steve Aaron claimed Trump represented that he was a developer and investor of the luxury condo project in Tampa, when he was actually only licensing his name to local developer and non-party SimDag-RoBEL and had invested no money in the project.
Aaron and other plaintiffs say that Trump hid his confidential license agreement with SimDag, and the plaintiffs would not have purchased condo units if they knew it was not a Trump development, which they discovered in 2007 after Trump sued SimDag for allegedly breaching the licensing agreement.
Judge Steven Merryday agreed that Trump and The Trump Organization are either developers or agents of the Trump Tower Tampa under the Interstate Land Sales Full Disclosure Act (ILSFDA).
"The defendants not only acted on behalf of SimDag in promoting the sale of the units, but the defendants distributed marketing material that portrayed the Trump Tower Tampa as an 'exclusive,' Trump development, i.e., one of 'the finest properties from the biggest name in real estate,'" Merryday wrote. "Under the language of the ILSFDA, the defendants undoubtedly qualify as either a 'developer' or an 'agent.'"
But the judge wouldn't go so far as to grant summary judgment on whether the secret agreement qualified as the omission of a "material fact" under the Act.
Merryday said it wasn't clear how much importance investors placed on Trump's supposed "partnership" in the project, as the marketing materials portrayed him, in comparison with other elements of the deal.
"Whether under the circumstances (including the property report, purchase agreement, condominium disclosures, and other disclaimers) a 'reasonable likelihood' exists that the omitted or untrue fact 'would have assumed actual significance in the deliberations of the reasonable investor' remains a genuine issue of material fact," Merryday wrote. (Parentheses in original)