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Business Observer Friday, May 5, 2017 3 years ago

Developer vindicated

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“I'd like to have won all of it, but this case was a major factor for change. The bad people who were in this town are gone.” — Hugh Culverhouse Jr.

A Florida appeals court upheld a Sarasota County judge's decision in a high-profile case where developer Hugh Culverhouse Jr. accused other developers of cutting him out of a lucrative mixed-use project through political machinations.

The ruling from the Second District Court of Appeals, handed down April 28, is another vindication for the targets of Culverhouse's lawsuit, fellow prominent Sarasota area developers Henry Rodriguez and Randy Benderson. The appeals court ruling also keeps in place a decision from the trial judge, Sarasota County Circuit Court Judge Peter Dubensky, to invalidate a $20 million jury verdict that initially went against Rodriguez and Benderson. While the $20 million verdict was wiped out, a $150,000 judgment against an entity controlled by University Park-based Benderson Development remained in place.

“I am pleased that it's over,” Rodriguez says in a written statement emailed to the Business Observer. “Both sides had excellent advocates.”

Culverhouse, in an interview, says while he's disappointed the jury's verdict was overturned he has no regrets in going to trial because he believes it exposed over-chummy relationships between developers and county officials.

“I'd like to have won all of it,” says Culverhouse, “but this case was a major factor for change. The bad people who were in this town are gone.”

The appeals court decision comes a little more than two years after Dubensky's original ruling, a directed verdict. That directed verdict — a rare decision from a judge to overrule a jury— erased the March 2015 decision that temporarily put Culverhouse on the winning side of the case.

The six-person jury had sided with Culverhouse after a two-week trial over a failed mixed-used project on 1,000 acres in south Sarasota County. The project initially was split three ways: Rodriguez, who has developed both residential and commercial properties in Sarasota, was going to oversee the homebuilding; Benderson was going to oversee retail and office space; and Culverhouse was going to develop manufacturing, warehouse and some retail and commercial space.

Culverhouse claimed Benderson and Rodriguez, through conversations with county officials, conspired to destroy the project when they realized certain elements of it had changed or were no longer in their favor.

But attorneys for Benderson and Rodriguez, in the trial and with the appeals court, argued that the case hung on legislative privilege — not what the defendants might have said. Legislative privilege, says Sarasota attorney Morgan Bentley, who represented Rodriguez, is why Sarasota County commissioners didn't have to testify in the trial about decisions made in the land project that was at the center of Culverhouse's lawsuit.

And because commissioners didn't testify, defense attorneys contended there's no way to know why the project wasn't approved. The jury, say the attorneys, therefore made a speculative decision in the case that wasn't based on the law. Dubensky, and more recently the appeals court, agreed.

While Rodriguez, in his written statement, makes note of the first amendment implications of the appeals court decision, Bentley says the case is also a cautionary tale for any developer who enters into a public-private partnership. By nature, these are complicated deals where the public officials tend to have a legal advantage.

“A public-private partnership is a term thrown around all the time,” Bentley tells Coffee Talk. “But you can't really be a in a partnership with an entity that can change its mind on anything at anytime.”

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