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Donald Trump Sanctioned for Failure to Disclose Insurance Policy in Ft. Lauderdale Condo-Hotel Case

Philip R. Stein & Shalia M. Sakona

Last week, Judge Kathleen Williams of the U.S. District Court for the Southern District of Florida granted plaintiffs’ motion for sanctions against Donald Trump for his initial failure to disclose a relevant insurance policy in connection with litigation arising from the failed Trump International Hotel & Tower in Fort Lauderdale. This action was brought by would-be be purchasers of condo units against Trump and the developers who licensed his name for use in the project. These purchasers allegedly lost their 20% deposits when the tower defaulted on its $139 million loan in 2009. Trump was the only defendant not to settle the claims.

In his initial disclosures in 2011, Trump denied that any insurance policy relevant to plaintiffs’ claims existed. In November of 2013, however, plaintiffs learned from Trump’s general counsel that there had been such an insurance policy, but that it had since “dried up,” potentially as a result of a 2013 settlement with investors in Trump Baja. Plaintiffs subsequently filed a motion for sanctions, which Trump hotly contested for seven months. Plaintiffs theorize that the notorious apprentice-hirer/fringe political pundit/businessman has a national litigation strategy of failing to disclose applicable insurance policies that could otherwise be used to settle claims against him.

Judge Williams ultimately ordered Trump to pay all of plaintiffs’ fees in connection with two mediation conferences, a settlement conference, the sanctions motion and the deposition of Trump’s general counsel, potentially making it an expensive and embarrassing day for The Donald.

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