Masoud Shojaee’s Shoma Group won a $10 million award in its yearslong suit against Ugo Colombo affiliate over a failed joint venture to develop a Coral Gables condo project.
A jury on Friday determined an entity tied to Colombo’s CMC Group breached the partnership’s operating agreement and is on the hook for the damages, although it said Colombo individually is not responsible for any of the monetary damages awarded to Shoma, according to the verdict.
The Collection Residences at Coral Gables (Diener Properties)
The two Miami real estate tycoons, through their equally owned partnership Coral Gables Luxury Holdings, embarked on a once-hyped plan for the 128-unit Collection Residences with retail and underground garage. They bought the 2.8-acre site at 4101 Salzedo Street and 4112 Aurora Street in 2013 for $27 million. It is across the street from the headquarters of Colombo’s Collection luxury car dealership.
Plans went awry in 2015 when Shoma said it was pulling out of the development. The following year, its affiliate Shoma Coral Gables sued Colombo, his Collection business and his CMC’s affiliate Gables Investment Holdings. Shoma Coral Gables alleged in part that they tried to take advantage of the partnership to buy the underground garage space and some of the retail on the cheap for use by the dealership, according to the complaint. The car sale business was growing and needed the additional room. When Shoma declined to acquiesce to the allegedly lowball price, CMC’s affiliate retaliated by canceling condo marketing efforts and closing the condo sales office, the complaint says.
Shojaee and his attorney touted the verdict as ending a six-year, costly lawsuit.
“It was satisfying to receive the jury verdict in Shoma’s favor … on a dispute that the jury has now determined was caused by Ugo Colombo and CMC’s violation of the parties’ written agreement,” Shojaee said in an emailed statement.
His attorney, Jim Robinson, added that Shoma proved CMC’s affiliate “sabotaged the project.”
Although they said this was a clear victory for Shoma, an attorney for Colombo and his entities did not exactly agree.
In fact, Colombo’s attorney Sean Burstyn said the case was resolved in Colombo’s favor, as the jury determined he caused no harm to the partnership, and is not personally liable to Shoma. The zero dollar award against Colombo “was obviously appropriate,” he said in an emailed statement.
“This started out as a manufactured claim by Mr. Shojaee and his attorneys for over $60 million,” he added in his statement. “That claim was 100 percent resolved in our favor, as the jury found that Mr. Colombo caused no harm to the joint venture.”
The $10 million award has not yet been paid, and it is likely to come from the net proceeds of the site sale, according to Robinson. In 2019, Baptist Health bought the property for $37 million.
According to a transcript of Robinson’s cross-examination of Colombo, $16 million in sale proceeds is held in escrow. The $10 million will likely come from these funds.
According to Shoma’s complaint, CMC and Colombo wanted to buy prime retail space for $14.3 million and the basement garage for nearly $3.2 million. Shoma countered with $18.6 million for the retail and $5.5 million for the parking. The two sides’ standoff led to the alleged project sabotage.
Colombo’s entity was not always on the losing end of the dispute. Miami-Dade Circuit Judge William Thomas in 2018 sided with the defendants on Shojaee’s $56 million lost profit claim.
The judge dismissed claims against Colombo alleging interference with the operating agreement, and then also dismissed Gables Investment as a defendant.
Shoma dismissed its pending claims at the time, including that the Collection dealership had been parking cars on the site for less than market-rate payment. Shoma then appealed its claims that the judge had dismissed.
In 2020, the appellate court overturned the trial court, allowing Shoma to pursue its breach of operating agreement claim, with the jury trial on this leading to the latest verdict.
Shojaee’s recent ventures include a plan to develop a 19-story, 333-unit apartment building with a garage and retail in North Bay Village.
Colombo’s projects include the 527-unit Brickell Flatiron tower. CMC, along with Morabito Properties, are developing the boutique, eight-story Onda Residences in Bay Harbor Islands.
As for his Collection dealership, Colombo is building an additional Gables location specifically for Jaguars, which will be transferred from the headquarters, and Land Rovers, which will be a new addition to the firm’s offerings.