MIAMI — The settlement agreement that would pay $83 million to victims of the Surfside condominium collapse has received preliminary approval and an endorsement from the judge overseeing lawsuits arising from the disaster that killed 98 people.
The agreement between lawyers representing surviving condo owners and heirs with wrongful death claims that was hammered out during a contentious Feb. 4 mediation session “passes muster with flying colors,” Miami-Dade County Circuit Court Judge Michael Hanzman wrote in his order granting approval.
“From the tenor of my order you can see I find it to be an eminently fair and reasonable compromise,” Hanzman said during a status hearing on Wednesday. “I could not be happier that you all have reached an agreement under tremendous pressure in a highly-charged emotional case. I’ve tried to lay out the pros and cons of the arguments. Absent something glaring being pointed out to me, I think it’s an excellent result.”
But he acknowledged that neither side in the dispute over how the money should be divided will be satisfied with their allocation from the $83 million “common fund.”
“As anticipated, the victims of this tragedy are in disagreement over how these funds (and any future recoveries) should be divided,” he wrote.
Some surviving owners plan to submit objections to the settlement. They believe they have been treated unfairly and there has not been enough discussion of their concerns.
“We are getting sandbagged again and again,” said Alfredo Lopez, who lived in unit 605 for 23 years with his wife and son and is now renting an apartment. “To listen to the praise of this agreement does not paint a true picture of how victims feel scared, bullied and insulted. We lost everything and we deserve a fair share. I’m getting 30 cents on the dollar for my home. Where am I going to live?”
Insurance on the 13-story, 136-unit building carried by the condo association will pay most of the first $50 million of the allocation, and the sale of the 1.8-acre property at 8777 Collins Ave. where Champlain Towers South once stood would pay the remaining $33 million. The opening bid for the oceanfront property, which will be sold at auction, is $120 million.
Surviving unit owners angry and distraught over their allocation, which would pay them only 40% to 50% of the value of their condos, believe the common fund should not be capped and they should be eligible for more funds, such as money from the upcoming land sale and settlements totaling $55.55 million with three major defendants in the class-action lawsuit that were filed Tuesday.
The law firm Becker, which represented the association, will pay $31 million. Engineering firm Morabito Consultants, hired to inspect Champlain South for its 40-year recertification, will pay $16 million. DeSimone Consulting Engineers, which served as the structural engineer for a luxury condo built just feet away from Champlain South called Eighty Seven Park, will pay $8.55 million.
Some heirs of people who died and their lawyers have argued the surviving unit owners should receive no money at all given that claims for loss of life are worth more than claims for loss of property as well as asserting negligence on the part of the owners for delays in the renovation of the building, which crumbled in June. They cite Florida statute 718.119 that assigns liability to unit owners when their association’s insurance is insufficient to cover wrongful death or personal injury claims.
Hanzman agreed that the wrongful death claimants “rely heavily” on the obscure state law to support their position and drive the settlement. He addressed surviving unit owners’ argument that the law “does not contemplate an outlier event such as this, where owner ‘value’ would be eviscerated, and question whether, as a matter of public policy, property owners should forfeit the entire value of their condominiums if negligence on the part of their association results in an unforeseeable (at least to the owners) disaster.
“There is no question that (a) we are in uncharted waters; (b) 718.119 has not been judicially refined; and (c) the issue of whether the statute can/should be applied here and decimate owner ‘value’ would be a hotly debated one of first impression.”
But he warned that if the dispute was litigated in court, “both sides face substantial risk and any payment(s) could be delayed for years.”
If owners accept the settlement agreement, they would be released from any liability claims “except to any tenant or guest who may have occupied their particular unit at the time of the collapse,” Hanzman wrote.
If owners accept, they would be required to exit the case. But the heirs of deceased owners who accept their share would be allowed to stay in and pursue their wrongful death claims.
Surviving owners who opt out of the settlement would risk “walking away empty-handed,” Hanzman said, and being sued for liability.
In his order, Hanzman also stated that he “may (or may not) reduce an owner’s recovery by any insurance payment received to compensate them for the value of their unit (not contents).”
In addition to deducting homeowners’ insurance payments from their allocation, he said unit owners “may also be required to pay — out of the aggregate $83 million ‘Common Fund’ — attorney’s fees and costs to compensate counsel for services performed solely on behalf of the economic loss subclass.”
Survivors can file written objections to the settlement by March 23 and Hanzman will discuss those objections during a Final Approval Hearing on March 30.
In other business Wednesday, four defendants associated with the neighboring building were added to the class-action lawsuit, including the condo association for Eighty Seven Park, an architect and a firm that monitored vibrations generated during construction.
Personal items recovered from the rubble of the building by firefighters and other rescue team members are now being returned to owners, said Michael Goldberg, court-appointed receiver for the Champlain South association.
“Individuals have begun picking up belongings from the safes that were found,” he said. “We plan to release additional property found at the site, such as purses containing ID.”
———
