Property Markets Group won legal fees for a drawn out lawsuit tied to Muse Residences condo tower in Sunny Isles Beach.
An appeals court sided with PMG by upholding a lower court’s order awarding the firm $507,500 in attorney fees and costs, as well as interest. The decision issued last week marks the second win for PMG in the five-year litigation.
PMG, led by Kevin Maloney, Ryan Shear and Dan Kaplan, and its project partner, S2 Development, completed the 49-story, 68-unit Muse in 2018. PMG, which lists offices in New York and Miami, is an active developer in South Florida with projects in the pipeline including the supertall Waldorf Astoria-branded condo-hotel in downtown Miami. Aventura-based S2 is led by J. Claudio Stivelman.
Muse, at 17100 Collins Avenue, is among the luxury towers peppering the skyline in Sunny Isles Beach.
Issues arose when Stephen Hess, who had put three Muse condos under contract in 2014, wanted to back out of the deals. In 2018, Hess sued PMG and S2 alleging that he was duped about the size of the condos, according to court filings. He sought reimbursement for his $6.1 million deposit.
Hess, a doctor in Clearwater, claimed that Muse marketing materials misrepresented the unit sizes as roughly 400 square feet bigger than they actually are, filings show. In advertising materials, portions of the condos were marked as “A/C Area,” which Hess thought meant strictly living areas. In reality, this included columns, balconies and other common elements, Hess argued in court. A disclaimer on floor plans about what “A/C Area” means was tiny and “unreadable,” which Hess claimed violated state law, according to court filings.
In 2020, Hess lost. Miami-Dade Circuit Judge William Thomas ruled in favor of PMG and S2 by concluding that Hess had missed his chance to void his purchase agreement because he failed to close the deals by the 2018 due date and defaulted under the contract.
Thomas also determined that because Hess had assigned his purchase contracts to three entities, one for each of the units he planned to buy, he lacked standing to sue the developers’ entity.
The dispute continued with Hess and PMG battling over PMG’s attorney fees and costs. In 2021, Thomas awarded PMG $507,500 in trial and appeal court fees and costs, as well as post-judgment interest.
Hess appealed the decision, partly arguing that his assignment of his purchase contracts for the units to three entities –– Muse 2101 LLC, Muse 1901 LLC and Muse 2201 LLC –– precluded a judgment against him for attorney fees and costs.
Last week, the appeals court sided with PMG by upholding Thomas’ decision to award the development firm fees and costs. The agreement under which Hess assigned his purchase agreements to the three entities said that Hess “shall remain liable to seller [PMG]” until the purchase closes. Because Hess never closed on the units, he remained liable to PMG, the appeals court opinion says. Also, Hess’ purchase agreements said that in case of litigation, the winner of the lawsuit, or in this case PMG, would be entitled to attorney fees and costs.
Attorney Michael Schlesinger, representing Hess, declined comment, as did attorneys Josh Rubens and Philippe Lieberman of Kluger Kaplan, who represent PMG.
Disputes over how unit sizes are represented in marketing materials have arisen at other luxury South Florida condo projects. Court decisions often have varied over the years. In 2019, one Miami-Dade Circuit Court judge sided with the buyers of a unit at the Parque Towers in Sunny Isles Beach, and another sided with the developer. The judges issued the conflicting orders within roughly a week of each other.