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Friday, February 23, 2024 | Back issues
Courthouse News Service Courthouse News Service

Condo Buyers Can Press Suit Against Trump

(CN) Donald Trump may have easily shaken off the mantle of presidential aspirant, but he's having a far more difficult time shaking a lawsuit filed by angry condo buyers who claim he misled them about his role in developing a luxury tower in Florida.

A federal judge in Miami refused to dismiss claims against Trump by buyers of condominiums and apartments in the Trump International Hotel and Tower Fort Lauderdale, after saying he was unmoved by arguments made by Trump's attorneys that the buyers should have known he'd only licensed his name to be on the building.

In an 81-page complaint filed in May 2009, the buyers said they were enticed by marketing materials in which Trump called the Fort Lauderdale project "my latest development" and by letters over his signature that announced the beginning of the tower's construction.

But the project ran into financial trouble and Trump exercised his right to terminate the licensing agreement and removed his name from the building, which remains unfinished. As a result, the home buyers said, they lost hundreds of thousands of dollars in deposits.

Trump's attorneys argued that the purchase agreement signed by the buyerss clearly contradicted "alleged misrepresentation made by Mr. Trump" and others that they were the developers of the building, and clearly stated that the project's actual developer was an entity called SB Hotel.

"I find neither argument convincing," U.S. District Judge Adalberto Jordan said, pointing out that purchase agreements neither state that SB Hotel is the sole developer of the project or that the other developers named as defendants - including Trump - were not also involved in its development.

In addition to Trump, the Trump Organization and Trump Florida Management LLC, the list of defendants includes SB Hotel Associates LLC, New York developer Roy Stillman, Corus Bank NA and the Chicago Title Insurance Co.

Trump's lawyers also attempted to argue that the plaintiffs failed to alleged sufficient facts showing that the defendants acted as a joint venture or that they are developers.

"This argument fares no better," Jordan said.

In his decision, Jordan noted that during the "media blitz" following the announcement of the project the defendants - again, including Trump - presented themselves as the team of developers behind the building.

"If, for instance, someone says that he is a police officer, the natural inference is that the person is indeed a police officer," he wrote. "Similarly, by purposefully going on a media blitz, the defendants called themselves 'developers,' and a plaintiff could have believed that alleged misrepresentation."

But if Jordan is allowing the case to go forward, he did strike down the plaintiffs' claim for punitive damages on the grounds that Florida law does not allow them in cases of breach of contract, unless the breach states an independent tort claim.

The same holds true for breach of the covenant of good faith and fair dealing, he said.

In a statement to The New York Times, Trump attorney Alan Garten said, "Trump was not the developer of the project and the fact that Mr. Trump had agreed to license his name was expressly disclosed in the purchase contracts which all buyers signed.

"To be clear, Judge Jordan did not validate any of the buyers' claims, but simply determined that the plaintiffs satisfied the bare minimum pleading requirements to allow the case to go to the next stage - nothing more," Garten said.

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