Fort Lauderdale, Fla. (June 3, 2024) - Fort Lauderdale Managing Partner Cheryl Wilke recently secured a defense verdict for civil engineering firm Gulfstream Design Group and its owner, Matthew Lahti, in a high-stakes professional negligence case in which the plaintiff sought more than $20 million. The verdict by a six-person jury in St. Augustine followed a nine-day trial.
The case involved a 100-acre tract of land in St. Johns County, Florida, owned by the plaintiff, Cynthia Taylor. The land was zoned for rural farming, and she wished to sell the property for development. She entered into a contract with Southeast Georgia Acquisitions ("SGA") to sell the property with the goal of creating a 200-home subdivision. SGA hired Doug Burnett as land use counsel and our client, Gulfstream Design Group, as the civil engineer to design the project.
In St. Johns County, only a property owner can submit a Planned Unit Development Plan ("PUD") for the purpose of rezoning. In this case, Burnett and Gulfstream created text and a proposed map for the PUD and submitted it for approval. The PUD was approved first at the staff level, then by planning and zoning and then by the County Commission. All the services were provided prior to closing with PUD approval, a condition of sale.
However, immediately after approval, the County Commission indicated it would be requiring a change in flood zones, resulting in a less desirable development options including fewer homesites. SGA requested an extension of the property closing from Taylor to sort out the issues with the County and redraft the proposed site map. Taylor denied the request, resulting in termination of the contract by SGA.
Taylor was provided with her deposit but immediately sued all parties. As to SGA she alleged fraud and breach of contract. As to Gulfstream she alleged that, since the PUD was submitted on her behalf, Gulfstream had a fiduciary duty to her and breached that duty by creating a PUD with a plan that could not be built.The judge denied a motion for summary judgment on that issue, asserting that the existence of a fiduciary duty is a fact question for the jury.
The defenses presented were clear: there was no duty of any kind owed by Gulfstream and its sole responsibility was to create a PUD plan consistentwith the then-existing zoning and related requirements of the County. Gulfstream did so, and the PUD was approved. The subsequent change in flood zones was solely related to FEMA requirements and did not result from any negligence on the part of Gulfstream or Lahti.
The plaintiff asserted that her damages were over $20 million as a result of the "burden" of the PUD and the professional negligence of the defendants. She also asserted that the property was "unmarketable." This contention was undercut by the fact that another developer offered Taylor $4.75 million for the property within 60 days of the termination of the SGA deal.As a result, mitigation of damages was a crucial part of the affirmative defenses presented to the jury.
A proposal for settlement was submitted to the plaintiff for a minimal amount, but she ignored it and the trial moved forward as to all parties.
After nine days of jury trial and six and a half hours of deliberations, the jury found no fiduciary duty on the part of Gulfstream and no professional negligence. They did find that SGA breached the contract, but awarded no damages attributable to the breach.
As a result, Ms. Wilke is now seeking all fees and costs from the plaintiff as a result of the defense verdict.
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