Facing a crippling bill to repair flood damage to their homes, board members of an Orlando condo community sued their contractor this week for inflating his cost estimates — just weeks after that same contractor was arrested in Lee County for alleged overbilling.
Flooded ground-floor units at the Dockside at Ventura, a condo complex in east Orlando, facing steep assessments following flooding from Hurricane Ian, on Monday, September 25, 2023.
The two suits were filed Monday in Orange
County Circuit Court. The condo board is seeking relief from
a judge for the contract with SFR Restoration.
The condo association also sued three former board members, who were recalled and eventually removed from their posts last year. The lawsuit alleges that Richard Pannullo, Ronaldo Loyo and Niya Loyo breached their fiduciary duty in rewarding the contract, and also that they received improper personal benefits for doing so.
Reached by phone, Pannullo said he had no comment. The Loyos couldn’t be reached.
In addition to a ruling on the validity of the construction contract, the filing against the contractor seeks an injunction on the firm’s $18 million loan to Dockside at Ventura condominiums in east Orlando. In essence, the loan allows the residents to pay off their debt to the contractor over time, and lets work proceed without waiting for an insurance settlement, but it also balloons the total bill to about $27 million including interest.
Dockside filed that lawsuit against several affiliated companies involved in the work and loan: SFR Services LLC, Southern Florida Restoration, LLC, and South Florida Real Estate, LLC. The three companies are based in Stuart and managed by Ricky McGraw, the principal of SFR.
Last month Florida Chief Financial Officer Jimmy Patronis announced McGraw’s arrest in Lee County, accused of felony charges of grand theft and insurance fraud following an investigation by the Florida Department of Financial Services. The arrest was “for his alleged involvement in intentionally inflating and overbilling a roof replacement claim to defraud Tower Hill Insurance Company out of more than $214,000,” according to a Dec. 5 news release.
McGraw declined to comment on the lawsuit’s allegations this week, and he previously declined comment to the Insurance Journal about his arrest.
Dockside’s lawsuit alleges that SFR’s $27 million estimate “contains millions of dollars of interior work that would ordinarily be the responsibility of individual unit owners (rather than Dockside itself),” and that because it exceeds 5% of the association’s budget, the prior board should have sought multiple bids.
The community also alleges that remediation and reconstruction should have been “priced and completed for less than $10 million” and that the inflated costs were to seek a greater insurance award.
The 266-unit condo neighborhood is off Curry Ford Road just east of Semoran Boulevard in Orlando.
When Hurricane Ian blew through Central Florida in 2022, the retention pond in the middle of the community spilled over, sending floodwaters into first-floor units, and destroying vehicles in the parking lot.
Many residents were rescued by airboats after the storm.
Today most of the first floor units remain under construction, stripped down to the studs and uninhabitable for their owners.
The loan came with monthly assessments ranging from $650 per month to more than $1,000 per month depending on the unit size, stoking fears from the community of seniors and young families that they wouldn’t be able to afford to stay there. Residents began paying the new charge in October.
In the wake of the upheaval, Leuven helped organize a recall effort of the former board, which proved successful as they were ousted by an arbitrator late last year.
With the new board in place for weeks, Leuven said she and her neighbors are tired, and just want to their community back to normal.
“We need to get people back home again,” she said. “We just want to get back to how we were.”