Harvey Silverman

Harvey Silverman Review

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Harvey Silverman Conspired and Schemed to Defraud- a court finding states! IN THE CIRCUIT COURT OF THE 11TH JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA GENERAL JURISDICTION DIVISION CASE NO. 09-61500 CA 04 16 SE 2ND STREET, LLC, a limited liability company, as successor in interest to IBERIABANK, as assignee of Big Rock, C.I., LLC, and successor in interest to Orion Bank by virtue of the purchase, assumption and assignment of certain assets of Orion Bank from FDIC as Receiver, Plaintiff, vs. BURDINES 1225, LLC; 1225 S.W. 8th Street, PROPERTY INC.; PWP 1225, LLC; BURDINES 1225-44B LLC; BURDINES GARAGE, LLC; GREGORY MIRMELLI; SILVERMAN PARTNERS, L.P.; HARVEY SILVERMAN; and KAREN SILVERMAN, Defendants. _________________________________/ FINAL JUDGMENT ON ALL CLAIMS THIS CAUSE came before the Court for both jury and non-jury trial from June 9 through June 18, 2014, and then on June 23, 2014, on the Second Amended Counter, Cross, and Third Party Claims (the “Counterclaim”) of 1225 S.W. 8th Street Property, Inc. (Address: 136 SE 1st Avenue, Miami, FL 33131) dated October 3, 2012, against CASE NO. 09-61500 CA 04 2 Harvey Silverman (Address: 111 Beach Lane, Wainscott, NY 11975), Silverman Partners, L.P. (Address: 111 Beach Lane, Wainscott, NY 11975), Leonard Ackerman (Address: 290 Georgica Road, East Hampton, NY 11937), Richard Ackerman (Address: 334 North Palm Trail Delray Beach, FL 33483), and Big Rock C.I., LLC (Address: 315 South Beverly Hill Drive, Suite 515, Beverly Hill, CA 90212). On June 12, 2014, after 1225 S.W. 8th Street Property, Inc. (“8th Street”) rested its case, the Court granted motions for directed verdict in favor of Richard Ackerman, Leonard Ackerman, and Big Rock, C.I., LLC on the unjust enrichment claim in Count I of the Counterclaim. On June 18, 2014 the jury rendered a verdict on the legal claim asserted in Count II of the Counterclaim and found Harvey Silverman, Silverman Partners, L.P., and Big Rock C.I., LLC liable for compensatory and punitive damages. The jury found for the Defendants Richard Ackerman and Leonard Ackerman. The jury awarded $5,308,250 in compensatory damages, jointly and severally, against Harvey Silverman, Silverman Partners, L.P., and Big Rock C.I., LLC. The second phase of the punitive damage trial was presented before the same jury on June 23, 2014. In the jury’s second deliberation, the jury awarded punitive damages in the amount of $3,000,000 each against Harvey Silverman, Silverman Partners, L.P., and Big Rock C.I. for a total of $9,000,000. By agreement of all parties, the Count I equitable claim for unjust enrichment against Harvey Silverman and Silverman Partners, L.P. was tried before this court without a jury. On those claims, the Court makes the following findings of fact and CASE NO. 09-61500 CA 04 3 conclusions of law: I. FINDINGS OF FACT 1. The Court adopts the findings of fact on liability and tort damages inherent in the jury’s verdict. These include that Harvey Silverman, Silverman Partners, L.P., and Big Rock C.I., LLC conspired and schemed to defraud 8th Street, and in so doing, proximately caused damage to 8th Street in the amount of $5,308,250.00. 2. Harvey Silverman and Silverman Partners, L.P. both signed unconditional guarantees in the face amount of the $16 million Burdines 1225, LLC Promissory Note to Orion Bank,1 and had no valid defenses to the enforceability of those guarantees. 3. The debt ultimately found to be due on the guaranteed Note was $32,691,487.03.2 4. In 2013, Harvey Silverman and Silverman Partners, L.P. paid $2,000,000 to a successor to Orion Bank in full satisfaction of not only the Harvey Silverman and Silverman Partners, L.P. guarantees, but also a like guarantee signed by Harvey Silverman’s spouse, Karen Silverman.3 5. An entity that Harvey Silverman, through Silverman Partners, L.P., held a 50% ownership interest in and bore full responsibility for financing – BNB Ventures, LLC – also loaned approximately $2,000,000 (on a $3,000,000 credit line) to Big Rock C.I., 1 See Plaintiff’s Trial Exhibits 12 & 14. 2 See Defendant’s Trial Exhibit uu ¶4. 3 See Plaintiff’s Trial Exhibit 71. CASE NO. 09-61500 CA 04 4 LLC in furtherance of the scheme to defraud 8th Street.4 Although Big Rock was unable to foreclose before the scheme was discovered, that scheme ultimately allowed the sufficient passage of time and improvement in the South Florida real estate market to permit Harvey Silverman and Silverman Partners, L.P. to extinguish the three guarantees for only $2,000,000 paid to a successor to Orion Bank. 6. Big Rock C.I., LLC never repaid the $2,000,000 provided by BNB Ventures, LLC. Nonetheless, the $2,000,000 loan is not an offset to the unjust benefit received by Harvey Silverman and Silverman Partners, L.P. because it was money paid as part of the scheme to defraud. 7. Had Harvey Silverman and Silverman Partners, L.P. not embarked on the scheme to defraud, their liability on the guarantees would have been the face amount of the guarantees plus enforcement costs and past due balances at that time. Rather than address their obligations lawfully, however, Harvey Silverman and Silverman Partners, L.P. conspired to default the loan and defraud 8th Street out of its second mortgage, and that exposure under the guarantees grew to the $32,691,487.03 awarded in the foreclosure judgment. It was Defendants’ exposure on the guarantees that prompted the fraud that the jury found to exist. The Court finds that the unjust benefit to Harvey Silverman and Silverman Partners, L.P. was the amount due under the Note (and therefore the guarantees) at the time Defendant Big Rock C.I., LLC initiated this foreclosure action on August 20, 2009 to avoid Harvey Silverman’s and Silverman 4 See Plaintiff’s Trial Exhibit 28. CASE NO. 09-61500 CA 04 5 Partners, L.P.’s liability under the guarantees, or $16,769,788.69.5 As a result of their conduct Harvey Silverman and Silverman Partners, L.P. benefitted and were able to discharge what began as a $16,769,788.69 obligation for only $2,000,000. 8. Harvey Silverman and Silverman Partners, L.P. knew of this benefit at the time of their wrongdoing. In fact the testimony at trial was that Harvey Silverman’s and Silverman Partners, L.P.’s conduct was designed to achieve this result – the foreclosure and elimination of 8th Street’s mortgage security. 9. Harvey Silverman and Silverman Partners, L.P. accepted or retained the benefit that resulted from their scheme to defraud when they discharged their obligations for payment of only $2,000,000. Indeed, Harvey Silverman and Silverman Partners, L.P. took this benefit at 8th Street’s expense by conspiring to foreclose on the property and eliminate 8th Street’s mortgage security interest. 10. The circumstances are such that Harvey Silverman and Silverman Partners, L.P., should, in fairness and equity, be required to compensate 8th Street for the benefit they received. The Court determines that the benefit to Harvey Silverman and Silverman Partners, L.P. was $14,769,788.69, or $16,769,788.69 minus the $2,000,000 paid for the release of the Harvey Silverman, Karen Silverman, and Silverman Partners, L.P. guarantees.6 5 See Complaint filed by Big Rock, C.I., LLC on August 20, 2009 (marked for identification at trial as Plaintiff’s 1-LLL) at ¶ 22. The Court is not including an amount for attorney’s fees, although such fees were sought in the Complaint. 6 The benefit received could be measured by the foreclosure judgment amount less the $2,000,000 paid by Defendants for release of the guarantees. The CASE NO. 09-61500 CA 04 6 II. CONCLUSIONS OF LAW 11. As an equitable remedy, unjust enrichment is not tied to any specific set of facts. Equity abhors a wrong, and is designed to right those where legal remedies may not suffice. See 14th & Heinberg, LLC v. Terhaar & Cronley Gen. Contractors, Inc., 43 So. 3d 877, 880-81 (Fla. 1st DCA 2010) (“an implied-in-law ‘quasi-contract’ is . . . an obligation imposed by the court to bring about justice and equity, without regard to the intent of the parties and without regard to whether they have an agreement . . .”). 12. The Court may award damages or restitution where appropriate to prevent a defendant’s unjust enrichment. See Sun Coast Int’l, Inc. v. Dep’t of Bus. Regulation, Div. of Fla. Land Sales, Condos. & Mobile Homes, 596 So. 2d 1118, 1121-22 (Fla. 1st DCA 1992) (a party aggrieved in equity “has a right of action pursuant to a quasi contract . . . based primarily upon the theory that the defendant has received a benefit or has been unjustly enriched, and accordingly to compensate the plaintiff”). 13. Damages for unjust enrichment are based on the value of the benefit to the recipient, not the cost to the party providing the benefit. Levine v. Fieni McFarlane, Inc., 690 So. 2d 712, 713 (Fla. 4th DCA 1997) (damages for unjust enrichment are based on value from standpoint of the recipient of the benefits); Tooltrend, Inc. v. CMT Utensili, SRL, 198 F.3d 802, 806 (11th Cir.1999) (unjust enrichment is “measured in terms of the benefit to the owner, not the cost to the provider”); Court has chosen a more favorable measurement to the Defendants. CASE NO. 09-61500 CA 04 7 Accordingly, it is ORDERED AND ADJUDGED as follows: 14. 1225 S.W. 8th Street Property, Inc. shall have and recover for its compensatory damages under Count II of the Counterclaim the sum of five million three hundred eight thousand two hundred fifty dollars and no cents ($5,308,250.00) from Defendants Harvey Silverman, Silverman Partners L.P., and Big Rock C.I., LLC, jointly and severally, to bear interest at the legal rate, for which let execution issue in accordance with law. 15. 1225 S.W. 8th Street Property, Inc. shall have and recover the additional sum of three million dollars ($3,000,000.00) as punitive damages under Count II of the Counterclaim against Defendant Harvey Silverman, to bear interest at the legal rate, for which let execution issue in accordance with law. 16. 1225 S.W. 8th Street Property, Inc. shall have and recover the additional sum of three million dollars ($3,000,000.00) under Count II of the Counterclaim as punitive damages against Defendant Silverman Partners, L.P., to bear interest at the legal rate, for which let execution issue in accordance with law. 17. 1225 S.W. 8th Street Property, Inc. shall have and recover the additional sum of three million dollars ($3,000,000.00) under Count II of the Counterclaim as punitive damages against Defendant Big Rock C.I., LLC to bear interest at the legal rate, for which let execution issue in accordance with law. 18. The Court awards the sum of fourteen million seven hundred sixty-nine thousand seven hundred eighty-eight dollars and sixty-nine cents ($14,769,788.69) CASE NO. 09-61500 CA 04 8 under Count I of the Counterclaim as the unjust enrichment damages of 1225 S.W. 8th Street Property, Inc. against Defendants Harvey Silverman and Silverman Partners, L.P., jointly and severally. To preclude a double recovery, this amount is reduced by the $5,308,250 awarded by the jury against Harvey Silverman or Silverman Partners, L.P. for compensatory damages on Count II of the Counterclaim, for an award to 1225 S.W. 8th Street Property, Inc. on Count I of the Counterclaim of nine million four hundred sixty-one thousand five hundred thirty-eight dollars and sixty-nine cents ($9,461,538.69) against Harvey Silverman and Silverman Partners, L.P., jointly and severally, to bear interest at the legal rate, for which let execution issue in accordance with law. Accordingly, the total compensatory award to 1225 S.W. 8th Street Property, Inc. is fourteen million seven hundred sixty-nine thousand seven hundred eighty-eight dollars and sixty-nine cents ($14,769,788.69), to bear interest at the legal rate, for which let execution issue in accordance with law. 19. 1225 S.W. 8th Street Property, Inc. shall take nothing by this action in its claims against Defendants Richard Ackerman and Leonard Ackerman, who shall go hence without day. 1225 S.W. 8th Street Property, Inc. shall take nothing by this action in its claim for unjust enrichment against Big Rock, C.I., LLC, which shall go hence without day pursuant to the Court’s ruling on Big Rock, C.I., LLC’s Motion for Directed Verdict at the close of 1225 S.W. 8th Street Property, Inc.’s case in chief. 20. The claims for Equitable Lien in Count I, for Declaratory Relief in Count III, and for Foreclosure in Count IV are dismissed as moot. CASE NO. 09-61500 CA 04 9 21. It is further ordered and adjudged that the judgment debtors shall complete, under oath, Florida Rule of Civil Procedure Form 1.977 (Fact Information Sheet), including all required attachments, and serve it on the judgment creditor’s attorney within 45 days from the date of this Final Judgment, unless the Final Judgment is satisfied or post-judgment discovery is stayed. Jurisdiction of this case is retained to enter further orders that are proper to compel the judgment debtors to complete form 1.977, including all required attachments, and serve it on the judgment creditor‘s attorney. DONE AND ORDERED in Chambers at Miami-Dade County, Florida, on 06/27/14. ________________________ BETH BLOOM CIRCUIT COURT JUDGE FINAL ORDERS AS TO ALL PARTIES SRS DISPOSITION NUMBER 2 THE COURT DISMISSES THIS CASE AGAINST ANY PARTY NOT LISTED IN THIS FINAL ORDER OR PREVIOUS ORDER(S). THIS CASE IS CLOSED AS TO ALL PARTIES. Judge’s Initials BB The parties served with this Order are indicated in the accompanying 11th Circuit email confirmation which includes all emails provided by the submitter. The movant shall IMMEDIATELY serve a true and correct copy of this Order, by mail, facsimile, email or hand-delivery, to all parties/counsel of record for whom service is not indicated by the accompanying 11th Circuit confirmation, and file proof of service with the Clerk of Court. Signed original order sent electronically to the Clerk of Courts for filing in the Court file. Copies Furnished to: CASE NO. 09-61500 CA 04 10 All parties of record .

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