Evelyn Greenstone Kammet (Miami, FL) (D&O/Appeal) successfully defended a shareholder derivative action brought by a Sunny Isles Beach hotel owner who purchased a unit in a neighboring condominium simply to obtain standing to sue the condominium association derivatively. The derivative action named the condominium association and each of its board members individually, asserting claims for breach of fiduciary duty and injunctive relief. Both causes of action were based on allegations that the association wrongfully refused to accept an offer of $2.5 million to purchase association property and refused to assert a claimed legal right against RK Centers, LLC (“RK”) for an alleged failure by RK to repair damages to a sewer main servicing the condominium.
The trial court ordered an investigation into the allegations of the derivative complaint pursuant to Fla. Stat. 617.07401 to determine whether maintaining the action was in the association’s best interest. After an extensive months-long investigation, the investigation revealed that Plaintiff did not adequately represent the interests of the association’s members due his personal motivation in filing suit, that motivation being his desperate need for additional parking for his hotel, which is located across the street from the condominium. Plaintiff admitted during the investigation that he had been leasing association-owned property for hotel parking since 1999. The investigation revealed that Plaintiff purchased a unit within the condominium immediately after the association declined to renew his lease for a portion of the property on which he was parking 100 cars for his hotel. The non-renewal occurred just before Plaintiff signed a purchase and sales agreement with a developer for the sale of another 170-space parking lot which was used by the hotel, on which the developer planned to construct a mixed-use condo-hotel. Plaintiff filed the derivative action within weeks of the association’s decision not to sell him the property because the failed sale and the expiration/non-renewal of the lease agreement left him desperate for parking for his hotel.
Based on these findings, and others, the trial court entered a final order of dismissal with prejudice. Plaintiff then appealed the trial court’s order. Ms. Kammet successfully defended the appeal, resulting in a published opinion of Florida’s Third District Court of Appeals. See Cornfeld v. Plaza of the Americas Club., Inc., 273 So.3d 1096 (Fla. 3d DCA 2019). Not only did the appellate court affirm the trial court’s dismissal, but it awarded Defendants’ their appellate attorneys’ fees, remanding the matter to the trial court to determine the amount to be awarded. On remand, and as a result of a previously filed motion for prevailing parties’ attorneys’ fees and costs (for the fees and costs incurred at the trial court level), the trial court granted entitlement to Defendants for reimbursement of their fees and costs as prevailing party pursuant to Fla. Stat. 718.303, awarding one-hundred percent of the fees and costs sought. This resulted in the entry of a Final Judgment of Fees and Costs on September 17, 2019 in the amount of $268,266.96 in favor of Defendants.