Masoud Shojae’s Shoma group loses key court battle against Ugo Colombo

Left to right: Masoud Shojaee of Shoma Group and Ugo Colombo of CMC Group (Shoma Group, CMC Group, iStock/Illustration by Steven Dilakian for The Real Deal)

A Miami-Dade judge has overturned developer Masoud Shojaee’s $10 million court victory against a subsidiary of his former joint venture partner Ugo Colombo.

Miami-Dade Circuit Court Judge William Thomas on Monday overturned an October jury verdict in favor of Shoma Coral Gables, a subsidiary of Shojaee’s Shoma Group.

The jury had awarded Shoma Coral Gables a $10 million prize after finding that Colombo and a subsidiary of his development company CMC Group had broken a partnership agreement to build The Collection Residences, a 128-unit luxury condominium. The Coral Gables project, a joint venture between Shoma and CMC Group, never got off the ground. Colombo exotic car dealership The Collection was also charged in the trial, but the jury did not return a verdict against the company.

The verdict had seemed like the end of a long-running legal war, but Thomas’ decision now adds another chapter to the acrimonious fight between two South Florida heavyweight developers.

In overturning the jury verdict, Thomas ruled that Shoma Coral Gables was not entitled to $10 million in damages because the Shojaee entity suffered no individual harm as a result of the wrongful closure by the subsidiary of the CMC group of the sales office of the condo project and the cessation of marketing for The Collection Residences.

“The joint venture suffered the damage [and] not Shoma, the prosecuting member,” Thomas wrote. “The operating agreement clearly gave exclusive rights to Shoma, but those exclusive rights could not be exercised to exclusively enrich or benefit Shoma.”

Sean Burstyn, the attorney for Colombo and his company, said the whole matter was a “meritless dispute” and that his client expects Shoma to be required to pay all attorneys’ fees and costs. Colombo court costs.

“Mr. Colombo was content to follow agreed-upon procedures for the distribution of certain Company cash products, and Shoma’s attempt to rush to that cash through litigation was rejected in its entirety” , Burstyn said, “At no time was Mr. Colombo held accountable to Shoma.”

Shojaee did not respond to a text message seeking comment. Shoma’s general counsel, Frank Silva, did not respond to a phone message and email seeking comment. Jim Robinson and Raoul Cantero, attorneys for Shoma Coral Gables, were in court and did not respond to emails seeking comment.

While the jury determined that the CMC Group subsidiary was liable for $10 million in damages, Colombo was not personally liable for the monetary judgment, even though jurors found he had breached the settlement agreement. joint venture, according to the verdict of the jury.

Thomas’ decision is the latest turn of events in the six-year legal battle between the two real estate moguls over their once-publicized plan for The Collection Residences, which also included retail and an underground garage. In 2013, through their equally owned Coral Gables Luxury Holdings, Shojaee and Colombo paid $27 million for the 2.8-acre site at 4101 Salzedo Street and 4112 Aurora Street.

The partnership began to unravel in 2015 when Shoma Coral Gables said he was pulling out of the project. The following year, Shoma sued Colombo, The Collection and CMC Group subsidiary Gables Investment Holdings.

Shoma’s lawsuit alleged that the Colombo companies attempted to exploit the joint venture by lobbying to buy the underground garage and part of the retail space at a low price. When Shoma refused, the CMC subsidiary retaliated by canceling condo sales and marketing, according to the lawsuit.

Colombo luxury dealership The Collection, headquartered opposite the development site, had grown and needed additional garage space, according to Shoma Coral Gable’s suit.

In 2019, Coral Gables Luxury Holdings sold the property to Baptist Health for $37 million.

The net proceeds of the sale, $16 million, are being held in escrow, according to court documents. The $10 million jury verdict payout would likely come from the receiver. As 50-50 members of the joint venture, following Thomas’ decision, proceeds could now be divided among the partners’ affiliates in accordance with a process outlined in their operating agreement, according to documents filed by the court.

Shojaee’s current projects include a 19-story, 333-unit apartment building with a garage and retail outlets in North Bay Village.

Recent Colombo projects include the 527-unit Brickell Flatiron Tower in Miami. His CMC Group is currently developing the eight-story boutique Onda Residences in the Bay Harbor Islands with Morabito Properties.

The Collection, also led by CEO Ken Gorin, is expanding to another Gables location, specifically for Jaguars and Land Rovers.

About Jessica J. Bass

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