They nearly pulled it off.
After four years of courtroom battles, three groups of
long-warring players were ready to set aside their
differences.
Leisure Resorts, the longtime owner of the Palm Harbor
Marina, which catered to some of the largest, most expensive
yachts in the world, had been hamstrung by lawsuits for
years and wanted peace.
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The link between land and water, captured here in a red brick sidewalk promenade along the waterfront next to Waterview Towers, grew to be a large issue in the litigation between West Palm Beach, the Palm Harbor Marina and the condo dwellers at Waterview Towers in downtown West Palm Beach. |
Deep in the background but motivating the many legal moves, one critical argument remained untried: the unprecedented and potentially lucrative question of the condo board’s claim to the Palm Harbor Marina.
If the condo board could prove that
claim, the company that had believed itself to be the sole
owner for nearly 50 years, Leisure Resorts, could, with the
city, owe the condo owners millions for its past use and be
required to pay millions more far into the future.
If the settlement went through, however, the claim would be
extinguished.
Forever.
A settlement in 12 hours
In April 2018, Waldman quit after four years as Waterview’s
board president.
Almost immediately, the new condo board sent peace overtures
to Leisure Resorts and then-West Palm Beach Mayor Jeri Muoio.
Five weeks later, they sat down together.
They emerged 12 hours later with a four-page document
spelling out the terms of what they called a global
settlement.
It took another year for Muoio’s successor, Keith James, to
bring the settlement before city commissioners. They have
yet to vote on it.
Whether the global settlement was in fact global remains in
dispute.
All the parties signed it, even Waldman. He later said in a
legal filing that he and a second condo owner named Laura
Bennett signed it "because they understood that it (signing)
was required to allow the mediation to continue."
Referring to it as a term sheet, they argued it was not
final, pointing to wording in the document itself: “The
mediation shall be continued to facilitate preparation of a
final settlement agreement.”
Also, they pointed out, they had been excluded from the
talks that produced it, consigned to an outer chamber while
the association’s new leadership negotiated on their behalf.
Sidewalk payout removes biggest hurdle
Among its many provisions, the term sheet called for the
city to end the 1979 lease that had caused problems in
previous lawsuits. The city would give condo dwellers title
to their property.
It called for the city to pay the condo owners $2.5 million
to buy a sidewalk, which, through a legal challenge filed by
the condo owners under Waldman, stood as a potential
multimillion-dollar city liability. While the $2.5 million
is about what Waterview has said in court it has spent on
litigation, it said it intended to spend $1 million of the
settlement to expand its parking garage.
Those moves would sever the decades-long arrangement tying
the commercial portions of the property to the residential,
a step requiring the approval of all the condo owners.
They also would remove the issue of control over the marina,
forever ending the condo association’s claim to it.
And with that, it would bring to a screeching halt five
lawsuits, including the condo association’s challenge to the
ownership of the marina.
In a detailed July 2019 contract labeled an “implementation
agreement,” Leisure would be allowed to build a yacht club
up to 75 feet high (enough for six stories) with up to 40
“overnight suites” that would satisfy Leisure’s decade-long
ambitions to build a hotel. Current condo residents would
get a free lifetime membership.
But that document also commits Waterview to “publicly
support and not challenge Palm Harbor’s applications for all
permits and approvals (including variances)” for the yacht
club building, raising the question of whether Leisure could
exceed the height limit without opposition.
By taking ownership of the building, Waterview residents
would be relieved of paying the city rent of $56,575 a year
for the 132 condos, or $428 per condo. Asking prices for
condos in the building start at $1.3 million.
Supporters acted as if the global settlement were a done
deal. Then-Waterview Vice President Melissa Parker told
condo residents the next day that "all parties are in
agreement."
The city, however, seemed to believe more talks would ensue.
In asking two weeks later for the court to place a hold on
the marina lawsuit, the city wrote that the mediation
"resulted in an outline of a proposed universal settlement
agreement" that will “require further discussions.”
Threats, emails and a defamation suit
At this point, the strains within Waterview erupted into
open warfare.
Concerned that Waldman and Bennett would not agree to the
settlement, the board’s new attorney, Dennis Eisenger,
called Waterview attorney Bob Sweetapple in October 2018. He
wanted to know how the board could secure Waldman’s
approval. Waldman is individually named in the suits,
meaning they can’t be settled without him.
In an affidavit, Sweetapple said Eisenger told him that if
Waldman did not cooperate, the board would use “reams of
evidence that contained financial misdealings and breaches
of fiduciary duty to ‘expose’ Mr. Waldman and ‘destroy
him.’”
"I indicated to Mr. Eisenger that this threat should not be
made,” Sweetapple said in his affidavit. “He stated that he
had given the board the same advice, but the decision had
been made."
In a December 2018 response, Eisenger wrote that he never
uttered those words.
“Rather, I merely stated that the association had advised me
that it had gathered a great deal of information about Mr.
Waldman involving alleged misrepresentations and breach of
his fiduciary responsibilities to the association, and that
you be requested to ask him to immediately cease any further
detrimental activities and conduct of that nature.”
‘Truly transformational’
Waldman did not back down.
Two weeks after the lawyers spoke, the condo board sent
residents a nine-page letter labeled “official
communication.”
It would form the basis of Waldman’s libel suit.
The Nov. 8 letter pointed out that the association had spent
$2 million on legal fees since 2014.
The global settlement, the board told the residents, would
put an end to all of that.
But the board couldn’t tell the residents what was in the
settlement because they had been directed “to maintain
strict confidentiality” since the mediation was ongoing and
litigation remained on hold.
The board complied with the confidentiality decree despite
“misinformation disseminated, overly aggressive and
vindictive behavior on the part of others, and vicious
personal attacks on board members.”
Calling itself the “only accurate, factual, unbiased and
permitted source of information,” the board suggested
residents block email from “unofficial and unauthorized”
sources.
It explained that the new board found itself in conflict
with the old leadership, which favored continued litigation
costing thousands with no clear path toward a viable
solution.
Then it turned to the settlement discussions, calling them
“truly transformational.”
"Our attorneys noted that the agreement is exceptional, and
advised us that no court could have ordered the parties to
do what was agreed upon in the settlement," the board told
residents.
They anticipated unit owners would vote on it by the end of
2018.
‘Real and substantial risks’
Under “risks to not settling,” the board revealed that it
had secured a risk assessment of all the outstanding
litigation, a second opinion on the cases and a third
independent legal opinion on “two specific matters of great
concern.”
“All legal opinions emphatically concluded that continued
litigation in all of the cases was not in the best interest
of the association.”
The board couldn’t share those opinions with condo owners,
however, because they were confidential. The board did tell
the condo owners that “the association faces real and
substantial risks, including financial liability to the
membership and potential loss of control over the
association if these cases proceed to litigate to
conclusion.”
The previous president, Waldman, had failed to disclose the
risks and had maintained “exclusive, sole and continuous
communication” with the litigation attorneys, meaning John
Eubanks and Sweetapple.
“This tremendous financial liability and risk is independent
of the enormous amount of attorney’s fees that could be
expected over the next several years that will result in an
immediate assessment to the membership if the membership
vote fails to approve the settlement.”
The board, it said, had fired Eubanks and Sweetapple because
of “conflicts created by the prior president,” leading to
“irreconcilable differences.”
Eubanks and Sweetapple withdrew from the cases that month.
That same day Waldman sent out an email of his own, a copy
of which does not appear in court files.
But the board replied to it two days later.
It urged residents to block Waldman’s email and pointed out
that he had signed the mediation agreement and so “is not
allowed to do anything that undermines the very agreement
that he is a part of.”
“Now it is crystal clear that Waldman has no intention of
upholding his end of the agreement, which could jeopardize
the settlement for the entire association unless it is
corrected NOW, which we intend to do.”
‘Litigator in chief’
In a recent court document, the association pointed out that
Waldman called himself “litigator in chief” during his four
years as board president. But his 2018 departure as
president came in an unrelated spat: His fellow board
members refused to let him replace a partial wall with
floor-to-ceiling glass to expand the glistening view of the
Intracoastal Waterway and Palm Beach.
While Waldman, 77, played an oversized role in the lawsuits
that redefined the relationship between the condo and the
marina, he won’t talk about his work.
Since he left the board, he has filed the defamation suit
and defended himself against a stalking suit filed by a
board member. In a court filing he wrote he is subjected to
“scorn and ridicule” in the building, and his “every move”
is scrutinized.
“My significant other of 17 years,” he wrote, visits
infrequently and “does not use the lobby or walk through it
because she feels so uncomfortable.”
Waldman grew up in Brooklyn, served as a combat helicopter
pilot in Vietnam and became a successful developer in
Washington, D.C.
He came to Waterview in December 2011, when he and his
partner, Linda Priscilla, paid $385,000 for a penthouse
unit. He added a second unit six years later under a company
he controlled called Brookland Square.
Brookland paid $1.7 million for that unit in February 2018
and sold it for $2.2 million 14 months later.
Unanimous approval required
While the condo board’s letters in November 2018 led Waldman
to sue for libel, he sued the board again when it tried to
make a change to the original, foundational document
creating the condominium.
The change, he argued, would have cut him and Bennett, whose
2014 lawsuit to block a hotel started years of litigation,
from having a say in an action needed to execute the
settlement.
Instead of requiring the approval of 100 percent of the
condo owners to make any changes to the condo’s foundational
documents, the board proposed instead allowing changes with
just 80 percent of owners’ approval.
The March 2019 vote passed with 127 units in favor, two
failing to vote and three against — two units owned by
Waldman and one by Bennett.
Waldman and Bennett sued, saying the board’s assertion that
it could change the condo’s structure without approval of
100 percent of the residents defied condominium law.
In July, Palm Beach County Circuit Judge Glenn Kelley backed
their arguments, handing Waldman and Bennett a huge victory
by invalidating the lopsided condo election.
But he allowed other elements of the suit to live on.
Prescient city attorney?
Fifteen months after the marathon mediation session, the
settlement document went public when Mayor James asked city
commissioners to approve it.
That didn’t happen.
James pulled the item from the Sept. 23, 2019, agenda,
telling commissioners he would schedule a closed session
instead. That session still has not been held.
But first, some members of the public and some commissioners
weighed in at the meeting, the only public discussion the
proposed settlement has had.
Scott Holtz, a resident who has run unsuccessfully for Port
of Palm Beach commission, said he couldn’t fathom the city’s
willingness to accept the settlement.
“I scratch my head and wonder what could possibly be going
on here where you’re in a situation where you’re not only
giving away public land, you’re paying for the privilege of
doing so, and all you’re getting back in return is partial
access to something you’re giving up in the settlement,”
Holtz said. “That whole thing doesn’t wash.”
Commissioner Kelly Shoaf asked City Attorney Kimberly
Rothenburg why the city is settling with a developer who has
not sued. The settlement, Rothenburg said, would “resolve
not only pending litigation but also threatened litigation.”
Two months later, she appeared prescient.
‘For reasons we cannot fathom’
Instead of the closed session, commissioners got individual
briefings, which are not covered by state open meeting laws.
In addition to briefings by staff, several commissioners met
with Cheryl Chase, the Connecticut-based head of marina
owner Leisure Resorts, who visited the city in November
2019.
In two follow-up memos, Chase did not mince words.
Giving the condo residents their land now, as proposed in
the settlement agreement, avoids “the unseemly and
politically disastrous prospect” in 2073 — when the city
would retake the land under the existing 99-year lease — “of
evicting all 134 of the then-unit owners from the property.”
She made the case for commissioners to pay $2.5 million for
the sidewalk, giving credibility to the main allegation in
the marina lawsuit that the city doesn’t own the sidewalk so
it couldn’t legitimately lease the docks to Leisure Resorts.
“The purchase … would forever end any and all further
attempts to litigate issues of who controls access to the
water, or riparian rights, the public’s right to use and
enjoy the walkway, as well as any other associated issue.
“If the issue of riparian rights is adjudicated in court and
determined against the city, the result would be disastrous
for the city, costing it tens of millions of dollars.”
If the city rejects the settlement, “although it pains us to
do so given how much we have invested in our relationship,”
the city, she wrote, can count on a $120 million lawsuit
based on reimbursement for the $20 million expansion and the
marina’s $100 million value.
Despite walking commissioners through the site’s history,
she wrote in the Nov. 18 letter, “For reasons we cannot
fathom, we have been unable to impress upon you the severity
of the financial exposure and other negative consequences
the city faces should you delay or fail to approve this
settlement.”
And turning on the city attorney, who Chase wrote “is not
being realistic about the various costs and risks that the
city faces,” Chase called the current legal issues “the
product of past mistakes and miscalculations by the City
Attorney’s Office.”
‘Whole case boils down to ... Waldman’
Five ongoing lawsuits, including the suit over control of
the marina, had been frozen to give Waterview and Leisure
time to prove their case that Waldman and Bennett must be
forced by the court to accept the global settlement.
In May 2020, the association dropped the freeze, saying it
did so because the city had not yet approved the settlement.
But Leisure didn’t follow through on its threats to sue the
city.
Instead, it trained its legal might on Waldman.
“There’s no point in going after the city right now,” said
Leisure attorney Gerald Richman, who joined the litigation
in March. “That’s not our main focus.”
“Right now, really, the whole case boils down to fighting
against Waldman.”
The condo board is pursuing him as well.
“The Waterview association feels like it made an agreement
to settle all of this and wants to close on that deal with
the parties,” attorney Mike Levin said. “It’s a very
complicated dispute. That’s why the resolution is in
everybody’s best interest.”
If a court compels Waldman and Bennett to accept the
settlement, Richman is confident the city will accept it as
well.
Mayor James wouldn’t comment on issues surrounding the case
but his office said “the city remains willing to work toward
amicable resolution of all pertinent pending litigation.”
Waldman’s lawyer insists the litigation will not force
Waldman to sign.
Now that a judge has thrown out the condo vote because less
than 100 percent of the owners approved it, Waldman is
asking the court to throw out the remaining arguments posed
by Leisure and Waterview.
Among those, the condo association argues that Waldman and
Bennett gave up their decision-making role years earlier
when the condo board agreed to pay for the lawsuits and
protect them from liability, leaving sole decision-making
authority in the hands of the board.
But it’s ludicrous to say Waldman and Bennett would have no
say in a settlement, Waldman’s attorney, Dan Rosenbaum,
argued. What if, for example, the settlement required
Waldman to pay millions?
The bottom line is that all the arguments depend on whether
the June 2018 “global settlement” is actually a settlement,
he said.
Calling it “an agreement to agree in the future,” Rosenbaum
pointed out in an October filing that it can’t be final
because the city never signed it. And it can’t be enacted if
100 percent approval of the condo owners is required to make
changes in the condo’s structure because Waldman and Bennett
won’t vote for that.
To Richman, Waldman just wants to hang on to power.
“I hate to call it a vendetta, but it’s like a vendetta to
him,” Richman said. “I think he’s on a power trip, enjoying
it.”
To Rosenbaum, a victory for Waldman is a restored
reputation.
“He feels he’s been wronged,” Rosenbaum said. “The character
issue has transcended the whole issue.”
Facing Waldman’s motion for summary judgment, which, if
granted, would send the case careening into the appellate
courts, the attorneys sat down with Waldman this month for a
two-day deposition.
Two days weren’t enough.
On Nov. 16, after the second eight-hour day, Richman said, a
third day would have to be scheduled. And his side wants to
depose other condo owners who voted against the rule change,
pushing a planned Dec. 7 hearing into the new year.
Waldman has countered by asking the judge to rule only on
whether the global settlement is indeed a settlement, which
would speed up the outcome.
As the lawyers pursue that case, the marina suit, which once
held so much promise for Waterview residents, remains in
limbo, no longer pressed by the condo association as they
push for a “global settlement” that would make it all moot.