Judge hears passionate arguments from Surfside victims but OKs $83 million settlement [Miami Herald]
Miami Herald (FL)
Victims of the Surfside condominium collapse made impassioned pleas about how money in a legal dispute should be divided, but at the end of a court hearing Wednesday the judge overseeing the case was not swayed and approved an $83 million settlement he had previously endorsed.
Miami-Dade Circuit Court Judge Michael Hanzman listened to emotional arguments on both sides and ruled that an agreement reached in mediation would stand, paying owners of the 136 units of Champlain Towers South in proportion to the size of their units but substantially less than the appraised or market value.
“It’s been a very difficult day for all of us,” said Hanzman, whose eyes at one point welled with tears, as did those of others in the courtroom. “I know there are a lot of hard feelings and discomfort with this settlement. But a settlement is a compromise. I’ve said from the outset we can’t let perfect be the enemy of good. For people to walk away with $83 million quickly is a remarkable result.”
Hanzman is overseeing lawsuits arising from the June 24 disaster that killed 98 people. He has been pushing for a settlement over what he predicted could be five years of acrimonious and costly litigation between surviving owners with property claims and relatives of the dead with wrongful death claims. Some relatives argued that owners were negligent in the maintenance of the 40-year-old building and should receive no compensation.
“My pain is unbearable. My heart is shattered in a million pieces and beyond repair. There are words for orphan or widow but no word for a parent who has lost a child,” said Eileen Rosenberg, whose daughter Malky Weisz, 26, and son-in-law Benny Weisz, 32, were among more than two dozen visitors who died in the collapse. Hours before the building fell, they had arrived from New Jersey to visit Malky’s father, Harry, who owned a unit on the second floor.
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“We can’t equate losing an apartment and furnishings to losing a life,” she said, choking back tears. “When you invest and lose money you move on. When you lose a child you cannot move on. Economic hurt will heal over time but losing a child will never heal. Ninety-eight people perished unnecessarily due to the unit owners of the building. I believe it is fairer to compensate families rather than those who have suffered economic loss.”
Martin Langesfeld, whose sister Nicole and her husband, Luis Sadovnic, died in unit 804 owned by Sadovnic’s family, told the judge “life should be paid first.”
“We believe it is completely unfair to give the only guaranteed money in this case to unit owners who may be liable,” Langesfeld said.
Tali Naibryf’s brother Ilan, a University of Chicago student, was staying in a unit owned by his girlfriend Deborah Berezdivin’s family. They were in Surfside to attend a funeral. Both died in the collapse.
“My brother was an innocent visitor unaware of any damage to the building,” Tali Naibryf said. “My brother paid with his life.”
Surviving condo owners talked about the trauma they have suffered and the difficulty they face in finding a new home and rebuilding their lives when they are only receiving 30-40 percent of what their units were worth. They asked Hanzman to increase the amount of the settlement. Some asked that he wait to see if the sale of the 1.8-acre oceanfront property at 8777 Collins Avenue will yield more than the opening bid of $120 million and that he apply money being paid by insurance companies in lawsuit settlements with defendants.
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The $83 million is to be paid with $30 million in insurance coverage on the building plus $53 million from the property sale.
“I am homeless and don’t know where I will live or how I will get my family’s life back,” said Deborah Soriano, who escaped from 1105 with her two children and is renting an apartment. “We lost more than property. We lost the ability to sleep, work, focus, socialize and be optimistic about our future.
“When did the owners turn into criminals? The wrongful death claimants deserve to get everything they can but why should it be taken from us?”
Alfredo Lopez and his wife, who lived in unit 605 for 23 years with their son, both told the judge the settlement amount is not fair to the owners who have been pressured to take it.
“We are being asked to accept a mediated settlement by lawyers that quite frankly — I don’t know any owners who agreed to it,” Lopez said. “It’s a surreal situation. I do not expect full compensation but we’re only receiving a fraction of my home’s value.”
Raysa Rodriguez, owner of unit 907 for 18 years, recounted the terror she experienced starting at 1:23 a.m. that night when she phoned her best friends in 1210 to tell them to get out but couldn’t reach them. They lived in the section of the building that had collapsed a moment before.
“I live with these memories every night — a lady screaming, ‘Please help me. Don’t leave me,’ ” Rodriguez said, her voice trembling. “I’m grieving every day for people I loved and lost.”
Rodriguez estimates she’ll receive about $440,000 for her unit that could have sold for $700,000 — or more in South Florida’s skyrocketing real estate market.
An obscure Florida condo law puts owners at risk. If their condo building’s insurance is inadequate to cover a personal injury or wrongful death payout, they can be held liable and assessed up to the value of their unit.
In the Surfside case, if the owners agree to the settlement, they will be released from all liability. Many have said that the threat of being sued is forcing them to accept the settlement.
“I have to rule based on law, not on emotions,” Hanzman said. “The Florida Legislature enacted a statute. We can debate whether this is a wise piece of legislation and argue that it’s not meant for this case because the Legislature never contemplated this case. Maybe there will be some changes to the law as a result but I have to rule on it as it stands.”
If owners accept their share of the settlement, they must also exit the class-action case while relatives of the deceased can stay in it to pursue their wrongful death claims. However, on Wednesday Hanzman opened a window for owners who want to make claims based on the psychological trauma they have suffered to remain in the case. He said he’ll take a closer look.
“We need to determine who is making claims for psychological harm or injury and preserve their right to pursue those claims,” he said. “Everyone in this case is a victim. When I use the term economic loss I don’t mean to diminish your pain and suffering.”
Hanzman decided to subtract $750,000 from the $83 million pot to pay expenses for maintenance of the property and some attorneys’ fees. He will also make the total settlement amount contingent on a minimum $120 million sale of the property.
“The stories are heartbreaking. The court has never seen a case like this. There have been mass tragedies but this one feels different,” he said. “For owners to say, ‘Judge, we did nothing wrong, why are we being punished?’ is ignoring the reality. No one is being penalized. At the end of the day, wrongful death claims take precedence over economic claims.”
The $83 million figure is roughly based on a contested $95 million appraisal of the building minus $15 million that was to be spent on renovations and paid for with assessments of owners. Hanzman said it’s an equitable and reasonable compromise given that “the economic loss group’s worst case scenario was zero and their best case scenario was $150 million and for the wrongful death group, their best case was $150 million and worst was zero.”
Hanzman’s plan all along was to quickly allocate money for economic loss claims through settlement talks so that displaced owners could get some reimbursement and exit the class-action suit in what he warned was a “limited-funds case where no one will be happy with their allocation.”
“Some say I expressed that preference aggressively,” Hanzman said. So when mediator Bruce Greer initially told him mediation was “impossible” due to the intractability of the two sides, Hanzman asked Greer to try again. During an 11-hour mediation session on Feb. 4, a compromise was reached.
“The court could have kicked the can down the road,” Hanzman said. “Absent a settlement this would have taken at least five years to work its way through the courts.”
Once the settlement is finalized, owners have 10 days to opt out of it, which Hanzman called a “risky venture” in that they would have to pay for their own lawyer, would still have the liability threat hanging over their heads and would be gambling that they could “possibly receive more money, or possibly receive nothing.”
Oren Cytrynbaum, who lived on the ninth floor, lamented the choice facing owners.
“We don’t know the cause of the collapse,” he said. “We should not be made to feel as if we’re responsible. We did not take those lives. And a billion dollars will not bring those lives back. We’re not asking for anything more than fair compensation for our homes. We’re just trying to rebuild our lives.”