Michael Kreitzer Secures $4.3 Jury Verdict on Behalf of Homebuilder Robert Kelly Blake

Press Release
September 26, 2011

Jury finds commercial developer Jim Ellis in breach of contract and liable for unjust enrichment and attorney, Thomas Bluth, liable for malpractice.

Miami, FL. - Bilzin Sumberg Litigation Chair Michael Kreitzer has just secured a $4.3 million jury verdict on behalf of Fort Lauderdale home-builder Robert Kelly Blake. The verdict stems from a lawsuit against commercial developer Jim Ellis of Ellis Diversified, Inc. for breach of contract and unjust enrichment and against Thomas Bluth, Ellis' long-time in-house counsel, for malpractice. Ellis violated a joint venture agreement with Blake to develop and market eight luxury homes on Staniel Cay, a remote tropical destination in the Exumas district of the Bahamas. Bluth was found liable for having violated his fiduciary duties in connection with his joint representation of Ellis and Blake.

In 2006, Blake negotiated the purchase of an eight-acre site beside an inlet on Staniel Cay, which was subdivided into eight lots. According to the testimony, Ellis was eager to pursue a joint venture with Blake on the Staniel Cay project and both parties orally agreed that Blake and his company, Blake Development, would begin work immediately to develop the property.

Under the Staniel Cay Joint Venture, Blake was responsible for the identification of the property, purchasing the property, overseeing the design of the property, managing construction, providing general contracting services and for directing sales and marketing for the luxury homes and marina. Ellis was responsible for funding the Project.

Originally, land for the Staniel Cay venture was to be purchased in the name of an entity in which both Blake and Ellis would be shareholders. However, when Ellis attorney notified Blake that an alleged criminal record precluded the formation of a Bahamian corporation, the pair agreed that Ellis would take title to the property in his own name.

Blake proceed with construction on the lots as agreed; however, as the Project neared completion, Ellis saw an opportunity to terminate Blake from the partnership thereby increasing Ellis' own ownership interest and profits. The scheme was to bury within an otherwise standard agreement for Residential Construction, a clause that would have relinquished Blakes rights under the Staniel Cay Joint Venture.

When Robert Blake refused to sign away his rights to the project, Jim Ellis and Thomas Bluth cut him out of the joint venture, repudiating the oral agreement and denying him the profits that he was owed, said Michael Kreitzer, attorney for Robert Blake and Litigation Chair of Bilzin, Sumberg, Baena, Price & Axelrod.

The jury found Ellis to be in breach of contract and that he was unjustly enriched by his actions. The jury also found that his attorney, Thomas Bluth, committed legal malpractice in his dealings with Blake.

The jury saw the issue for what it was: an attempt to take advantage and profit at the expense of another. Ellis had a responsibility to honor his agreement with Blake, and Bluth had a duty to warn him of Ellis intentions, said Kreitzer.

About Bilzin

Sumberg Bilzin Sumberg Baena Price & Axelrod LLP is a commercial law firm with extensive experience in the areas of commercial finance, corporate and securities, environmental law, land use and government relations, litigation, real estate, restructuring and bankruptcy, tax and wealth preservation planning. For more information, please visit www.bilzin.com.

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Michael N. Kreitzer

Michael N. Kreitzer

Partner, Litigation Practice Group Chair
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