Following a three and a half week trial a jury awarded Richman Greer's client, American Somax Ventures, $8.6 million on its claims of breach of contract related to its development efforts at River Bridge in Greenacres, Florida.
In 1984, American Somax contracted with River Bridge Corporation, the developer of River Bridge and a wholly owned subsidiary of Mobil Land Development Corp., to be the exclusive builder of single-family homes in River Bridge. American Somax was guaranteed its exclusivity through a right of first refusal contained in its contract. The contract also required American Somax to designate River Bridge Realty Corporation, another wholly owned subsidiary of Mobil Land, as the exclusive agent for the sale of its homes. In 1986, American Somax began the construction of homes in Windward Isle, a subdivision within River Bridge.
From the beginning, American Somax and the builders of the multi-family product in River Bridge experienced difficulties with both River Bridge Corp. and River Bridge Realty. These problems included failure to construct adequate amenities in the community, failure to properly advertise and market the development as a whole and the communities specifically, and failure to have a properly trained sales force. These problems caused slower than anticipated sales in the entire River Bridge development. While American Somax and River Bridge Corp. projected that the 43 homes slated to be built in Windward Isle would be completely sold within 24 months, after 2 years, only 15 homes were sold.
When the builders complained about River Bridge Corp. and River Bridge Realty's breaches of its obligations, they agreed to hire an independent marketing consultant to evaluate the project as a whole. River Bridge Corp. required that the builders pay half of the cost to bring in the consultant. When the consultant - The Greenman Group - completed its analysis, it confirmed the builders complaints and pointed to the deficiencies of River Bridge Corp. and River Bridge Realty as the chief cause of the dreadful sales. Thereafter, it took River Bridge over two years to start implementing the changes recommended in the Greenman report.
At the same time the community was underperforming, River Bridge Corp. repeatedly refused to honor American Somax's right of first refusal to acquire all other parcels within River Bridge that were designated for single-family development. Instead, River Bridge Corp. treated American Somax's right as a "right of first offer". The key distinction is that in a right of first refusal American Somax had the right to acquire future parcels on the same terms and conditions as agreed to between River Bridge Corp. and another party; instead, River Bridge Corp. merely sent American Somax notices that parcels were being made available at certain prices and terms and insisted that American Somax acquire the property on those terms or waive its rights. American Somax's requests to be apprised of third party offers acceptable to River Bridge Corp. were ignored, and the property was sold to other builders. Ultimately, over 650 single-family homes were built in River Bridge by other builders in breach of American Somax's contract rights.
At trial, the jury determined that River Bridge Corp. breached the right of first refusal and that the breach resulted in substantial lost profits to American Somax; which profits would have been realized on the construction and sale of the other 650 homes in River Bridge which American Somax would have built had River Bridge Corp. not breached the right of first refusal provision of the contract. The jury also determined that River Bridge Corp. breached its obligation to construct amenities and that River Bridge Realty breached its obligations under the exclusive listing agreement; these breaches caused American Somax to suffer lost profits in its efforts to sell homes in Windward Isle. In total, the jury awarded American Somax $8.6 million dollars in damages, the exact amount sought.
Following the verdict, the trial court awarded attorney's fees to American Somax in the amount of $3.5 million as the prevailing party. In arriving at the amount of attorney's fees, the court considered the complexity of the case and the result obtained (which was every dollar sought by American Somax as damages) and awarded a contingency fee risk multiplier of 2.0 to the reasonable hours expended by Richman Greer on behalf of American Somax.