Court: Insurers Have Ponied Up $50M For Surfside Collapse Compensation

In an emotional and wide-ranging court hearing, a Miami-Dade circuit judge spelled out Friday what he called a "Herculean undertaking" in weighing the numerous claims and demands from victims of the collapse of Champlain Towers South in Surfside.

Judge Michael Hanzman, who made an impassioned speech to open Friday's hearing, indicated that property claims would trump claims of wrongful death and injury, saying the building was underinsured to compensate all victims at the present time.

"There are going to be limited assets available to compensate everyone for property loss, as well as for the loss of life," he said.

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The jurist also poured cold water on the idea of rebuilding the structure so some survivors could remain living on the site, calling it a "longshot."

And Hanzman heard desires to build a memorial to the victims, either on the site or even possibly in neighboring Miami Beach. But even a proposed memorial has the potential to pit those who survived the Champlain Towers collapse against those who have lost loved ones.

"The court is aware that many victims have expressed a desire that this sacred ground be preserved as a memorial to those who we have lost," Hanzman said. "The court completely understands that sense, but this court does not have the power to nor would ever ask or force the victims of this tragedy, who have lost their homes and have lost loved ones, to donate their property to the public."

The judge's comment was further evidence that he is leaning toward giving credence to property loss concerns as the complex business litigation moves forward.

"The court's initial assessment is that the value of the land must go to paying people their economic harm," the judge said.

Hanzman on Wednesday ordered that efforts start to sell the property.

There had been 33 lawsuits filed relating to the collapse of Champlain Towers South, which happened about 1:30 a.m. on June 24. On Friday morning at the time of the hearing, there had been 92 bodies identified in the rubble.

Hanzman stayed all of the pending lawsuits, telling a steering committee of lawyers to produce a consolidated claim within 30 days. He wasn't in the mood for any delays.

"It better happen. I expect it. I demand it," the judge said.

Another expectation is that the city of Surfside will be named as a defendant. Lawyers at the hearing said the city's role in the collapse is being fully investigated. Surfside's chief building official told residents their building was sound three years ago after a report had found structural damage.

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About 60 people were on the Zoom call with others in attendance at the hearing. The purpose was to sort out the steering committee and to create two tracks of litigation: property and wrongful death/injury.

Appointed receiver Michael Goldberg, who oversaw the $188 million liquidation of con-man Scott Rothstein's empire, said he has secured $50 million so far from insurance companies — $31 million from Great American, the primary insurer.

But Champlain Towers South with its 136 units was estimated to be worth $100 million when it fell.

"The property was dramatically underinsured," Hanzman said. So "$31 million will not come close to building that structure."

An attorney representing a group of victims told the judge he was concerned that there could be difficulty separating claims from survivors and those who lost loved ones. Even among property owners who survived, there are competing interests between those who paid cash and those who had a mortgage.

Hanzman said he knows there will be "allocation issues." He said third-party claims, liability insurance and other recoveries can go to compensate those who suffered the loss of a loved one.

Some victims believe if the building was rebuilt that an additional $400 million could be generated for victims of all stripes. Some victims want to return to the live on the site in a new condo tower.

"I spoke to one gentleman whose parents were the original buyer, in 1981. His children were born in the building, he spent decades there. The feeling I got is that this was their home. And many of them want to rebuild their home," Goldberg said.

"For that group, they need to come up with a viable plan."

Such a plan must include fair-market compensation for those who don't want to return to a new building. Hanzman was not optimistic.

More: Remembering those who died in the Champlain Towers condo collapse in Surfside

"Basically keeping the condominium intact, taking care of the equity of all parties who have perished and simultaneously securing construction, financing and building the structure would be a Herculean undertaking, in my view," the judge said.

Still, Hanzman insisted that all viable options will be looked at by the steering committee.

Attorney Stuart Z. Grossman, who is a liaison for the steering committee and has an office in Boca Raton, said, "There is not enough money but as a leader I promise you no stone will be left unturned."

Lawyer Harley Tropin, who was head of the steering committee, added, "In a tragic and complex situation, the court has worked tirelessly to keep the case on track and balance the competing goals of the victims."

The hearing was not in the Miami-Dade County Courthouse but was instead at an offsite hearing room for juvenile court. The main civil courthouse, prone to mold and flooding, was closed because of safety concerns during a review prompted by the Champlain Towers collapse.

The hearing was absent of the contentious legal wrangling characteristic of such litigation. Some attorneys, such as the one looking to sell the property, are offering their services for free.

Mayor Dan Gelber of Miami Beach also has said he will find a place at North Beach Oceanside Park for a memorial for the victims in his city. And two community leaders, lobbyist Rodney Barreto and lawyer Manny Kadre, have volunteered to raise money to buy the property at fair-market value to create a memorial.

"I could not be more pleased to appoint this group of lawyers, and to have them before the court representing these victims in an effort to secure for them all legal rights that the law entitles them to," Hanzman said.

"This is going to be a difficult case, both emotionally and legally. "

jpacenti@pbpost.com

This article originally appeared on Palm Beach Post: Surfside collapse: Judge says 'Herculean undertaking' awaits in compensating victims, families

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