Article Courtesy of Miami New Times

By Gus Garcia-Roberts
Published April 3, 2009

On Wednesday, New Times published "Treasure Island", the story of serious civil and criminal fraud allegations involving the Grandview Palace condo association in North Bay Village, the building's father-and-son developers, and an insurance provider accused of being a shell corporation. 

That same day, the attorneys representing the insurance company and the developers -- Dr. Charles C. Edwards, a famed Baltimore spine surgeon; and his son James -- in the civil case filed their official defense in court.

For the most part, the filing is bogged down with cumbersome legalese. But the defense attorney, Alvin B. Davis, makes a few interesting arguments in his clients' defense:

• "The Association accepted and consented to the purchase of insurance policies from Florida Mutual... The management company hired by the Association issued the checks paid to Florida Mutual."

In other words, the condo association's members had a chance to do their research beforehand and object to the Florida Mutual contract. They didn't.

• "The Association has not suffered any damages. Florida Mutual offered to defend the Association for any and all claims properly covered under the Florida Mutual policies."

So even if the insurance company wasn't licensed, according to state prosecutors in the criminal case, Florida Mutual would've paid out all claims anyway. A document filed in 2006 claims the company paid $800 to a Grandview Palace tenant whose car was allegedly damaged by a garage door -- but the plaintiff's attorney, Aaron Cohen, says he "doubts" that payment was actually made.

• "Plaintiff alleges, at most, a breach of contract action, for which claims of conversion, civil theft, conspiracy for fraud, and aiding and abetting fraud are not actionable."

• "Plaintiff and Defendants were operating under a mistake of fact and/or law... Defendant acted on and relied upon the advice of counsel."

This is perhaps the most compelling claim, and echoes what Attorney Davis told New Times: that "[Florida Mutual's founders] received advice that state licensing wasn't required. Davis wouldn't identify the origin of that advice, though, and this document doesn't either. The claim contradicts a North Bay Village Police report that had Vidal Sainz, a Miami insurance agent listed as a managing agent for the company, saying he informed Dr. Edwards that running an insurance carrier without a license "constituted a felony."

• "The current non-developer members of the Board of Directors of the Association are pursuing this action in bad faith and with unclean hands."

Them's fighting words -- and an echo of Davis's condemnation of the condo association's suit as "a vendetta and a money-grab."

In related news, North Bay Village Mayor Oscar Alfonso has weighed in with his opinion on the criminal charges. As of now, only the insurance company as a corporation -- not Charles or James Edwards -- has been charged with felonies, and Alfonso agrees with state Rep. Julio Robaina that if a crime was commited, individuals need to be be charged. "It would be an awful precedent if the State Attorney's Office said, 'Okay, give the money back and be nice from now on,'" Alfonso says. "I'm not here to pass judgment, but if in fact they created the insurance company for the purpose of defrauding the condominium association, they should be charged with a crime."