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Successful Defense of Condo Developers

November 2008

The firm successfully concluded the defense of condominium developers arising from a failed project in Gulf Shores, Alabama. The clients were referred to the firm by transactional attorneys with a major Alabama law firm due to conflicts that firm had continuing its representation as litigation counsel. The litigation was instituted by 63 plaintiffs on March 6, 2007, in the United States District Court for the Northern District of Alabama and quickly spawned an arbitration proceeding, an adversary proceeding in the United States Bankruptcy Court for the Southern District of Alabama, and two state court actions in Baldwin County, Alabama. The firm contended that the developers should have no liability for the following claims: (1) violation of the Federal Interstate Land Sales Disclosure Act; (2) violation of the Alabama Uniform Condominium Act; (3) breach of contract; (4) fraud/misrepresentation; (5) fraud; (6) conspiracy to defraud; (7) negligence/wantonness; (8) unjust enrichment; and (9) claims regarding letters of credit and deposits. The plaintiffs claimed millions of dollars in compensatory damages from the firm’s clients. The firm argued that any liability or responsibility in the case was that of the title insurer of the property, and that its clients had no liability for damages. The ultimate settlement involved no payments by the developers and a substantial payment to the plaintiffs by the title insurer, vindicating the firm’s strategy.

Related Practice Area: Business Litigation

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