Judge reduces city payment in Palm Avenue suit

The city was unsuccessful in reversing a jury verdict that ordered the payment of nearly $50 million in damages to a developer for breach of contract, but did it get a judge to reduce the sum of the award by more than $48 million.

On Thursday, 12th Judicial Circuit Court Judge Erika Quartermaine ordered the city to instead pay $1.4 million in damages to Buck-Leiter Palm Development Avenue as part of the verdict. The adjustment was part of a series of post-trial motions in a lawsuit regarding the failed development of  city-owned property on Palm Avenue. That land is now the site of the Palm Avenue parking garage and Art Ovation Hotel.

In May, a jury found the city breached a contract when it decided not to move forward on the development of the site with Buck-Leiter in 2008. The developer planned to build a parking garage, hotel, condos and retail space. The jury ordered the city to pay $49.8 million to developer, a sum based on claims of lost profits from the project.

Following the verdict, the city filed motions seeking to void the jury’s decision and reduce the sum of the award. Quartermaine declined to overrule the verdict itself, but she did determine the city’s obligation was based on figures that were too speculative.  

In her ruling, Quartermaine said Buck-Leiter’s claims of lost profits did not adequately reflect the changing economic conditions when the city withdrew from the redevelopment agreement. Figures calculated by Jack Buck, a member of the project team, were not substantive enough to form the basis for an award, she said.

"The amount awarded was grossly disproportionate to the amount of work and expenditures put forth by Buck-Leiter," Quartermaine wrote. "It amounts to more than a thirty-three fold increase of Buck-Leiter's investment after just two years during a recession where Buck-Leiter did not ultimately construct anything."

Quartermaine did hold the city liable for $1.4 million — equal to the out-of-pocket expenses Buck-Leiter said it incurred while developing plans for the project. The city will have to pay interest on that figure since the date of the verdict.

The order said Buck-Leiter is entitled to seek additional payment in the city to recover expenses related to the litigation, including attorney’s fees. A hearing on that subject will be held in the future.   

Quartermaine ordered both parties to enter mediation within 45 days, with the expenses to be borne by the city.

Fournier said the City Commission would likely discuss the city’s next steps in the lawsuit at a future shade meeting, a private meeting of a public body that is permitted to discuss litigation strategy.