Unit owners of Champlain Towers South could receive an $83 million settlement, marking the first major payout in the Surfside condo collapse litigation.
The agreement was reached on Thursday night between Champlain Towers South unit owners and those who lost loved ones, following mediation by attorney Bruce Greer. Miami-Dade Judge Michael Hanzman said he was encouraged by the agreement, calling it “promising news” at a hearing on Friday.
Litigation surrounding the deadly collapse of the 12-story, 136-unit building in late June has divided unit owners, renters, survivors and families of those who died, especially amid ongoing investigations into the cause of the tragedy that killed 98 people.
Details of the settlement are still to be hammered out, including whether unit owners can opt out and pursue a higher payout in the litigation, and if the payout would cover financial losses for renters.
A formal settlement is expected to be submitted to the court next week, with a hearing likely occurring in the coming weeks, said attorney Judd Rosen, who represents the wrongful death class in the mediation. The settlement also would be subject to objections from opponents.
The funds would likely come from a combination of insurance payouts and the proceeds of the sale of the oceanfront property at 8777 Collins Avenue.
An auction of the site is now expected to occur in mid- to late-April, the association’s court-appointed receiver, Michael Goldberg, said on Friday. The stalking horse bidder, Dubai developer Damac Properties, set the minimum price for the property at $120 million.
Unit owners’ settlement
In the tentative agreement revealed in court on Friday, Rosen said that in exchange for settling out of the litigation, unit owners would be released from any potential liability claims against them.
A state law cited by Goldberg says unit owners could be on the hook for damage payments in events such as the collapse, but only up to the value of their condos and for liability beyond the property’s insurance. The association has $18 million in liability coverage.
The $83 million is for property claims only, meaning it would be spread among the owners of 136 units, unless some owners are given the right to opt out and choose to do so. Plaintiffs who are both property owners and in the wrongful death pool would proceed with their wrongful death claims, while also receiving a portion of the property owners’ payout.
The funds could be divided among the owners in such ways as based on each owners’ percentage stake in the building under the condo declaration, or based on the appraised value of each unit.
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The tentative settlement is a turnaround from a previous stalemate on disbursements among unit owners and families who lost loved ones. The wrongful death claimants had argued that not only should condo owners get nothing, but that they also should be assessed for liability and potentially also be exposed to individual claims, mediator Greer had said in court in October. At the same time, some unit owners had argued they should be entitled to the entirety of the insurance and land sale proceeds, and anything remaining would be available for the wrongful death victims.
Hanzman, who had stressed he wanted to avoid a fight among the victims on disbursements, on Friday said that although he is yet to rule on the settlement for the unit owners, the proposal addresses the overarching issue.
“It looks to me you have reached the primary issue, which is how much would be distributed to the condo unit owners,” he told attorneys. “I know it had to have been a stressful, heated negotiation.”