A Florida circuit court judge has ruled that attorney and real estate investor, David S. Band, will stand trial a second time to decide if damages are owed to a fellow investor in the St. John Grande Bay condominium complex. Judge Charles E. Roberts' order means that Band -- who was exonerated in early May of defrauding investors in the soured Grande Bay deal -- will face another jury as early as the end of the year. If that jury decides that Band does owe investor Harold Libby money, the award could top $1 million.
Band's attorney, Steven Hutton, plans to appeal the judge's decision to the Florida 2nd District Court of Appeals, which could take a year or more. But the damages hearing could take place in the interim, according to court procedures. The new trial could take place this year. The court has ordered the hearing be expedited because Libby is 85.
The ruling marks a setback for Band, 74, who has been battling for several years now on a number of legal fronts. For Libby, the reversal in the Grande Bay case was a welcome surprise.
"Obviously Mr. Libby is thrilled with the court's ruling, because while we weren't displeased with the verdict in May, we felt their defense was misplaced and the court has recognized that," said Michael Keane, Libby's attorney.
Both Hutton and Keane said that in more than three decades of practicing law, it was only the first and second time, respectively, that a judge has overturned a jury's finding after trial. In making his ruling, Roberts determined that Band, was not entitled to use as a defense a series of "conflict waiver" letters Libby signed after investing in Grande Bay, which is at least $45 million over budget and remains unfinished. The judge had earlier ruled the defense was admissable.
The jury this spring found that while Band violated his fiduciary duty to his client, Libby, he did not have to pay any damages for that breach. That conclusion came, in part, because Libby invested hundreds of thousands of dollars in the St. John condominium complex over several years, visited Grande Bay which is located in Cruz Bay, St. John while the project was under construction, and failed to read documents explaining project risk and other critical matters.
Roberts' order sets aside the damages finding and that Libby waived his ability to bring a claim of breach of fiduciary duty. "The Court is persuaded that as a matter of law, there can be no waiver of a breach of fiduciary duty," Roberts wrote in his early September order. The judge also denied, in a hearing last week, Hutton's effort to quash a new damages hearing.
Libby claimed in a lawsuit filed in August 2008 that Band failed to properly represent him or inform him of pertinent facts in the 48-unit Grande Bay project. Keane argued at trial that Libby relied exclusively on Band's counsel regarding Grande Bay and other investments. Hutton countered that Band was entitled to use the waiver letters as a defense, and that sufficient evidence supported that claim.
The court determined before the late April trial that Band did not represent Libby in the Grande Bay investment specifically. Hutton also argued that Libby, who has extensive real estate experience buying shopping malls and retail centers in several states, sought outside advice when needed. "Libby was well aware of how to seek independent advice when he deemed necessary," Hutton wrote in a brief to the court.
Because of that, Hutton claimed that Libby's contention that he was taken advantage of by Band was "unfounded," according to court documents related to Roberts' order. Hutton said he believes Band will prevail. He has until early October to file an appeal with the district court, he said. We feel like the court was looking behind the jury verdict, and you just can't do that," Hutton said. "As such, I really do think we'll win on appeal."