Builder fights verdict; millions at stake
Nearly a decade ago, a South Florida real estate developer and a successful sandwich shop founder became fast friends in a business deal. They called their planned dreamy green community “Destiny” and it was tobe larger in scope than Walt Disney World.
But the concept on vacant lands south of Orlando, pushed by Anthony Pugliese III, of Delray Beach, and Subway restaurants creator Frederick DeLuca, was destined to fail and wind up as the focus of years of court battles in Palm Beach County.
“This Destiny project was a gold mine,” Pugliese’s attorney Tricia “CK” Hoffler explained in a civil trial earlier this year.
Now, the abandoned venture is the focus of millions of dollars in
legal damages, following a jury’s verdict favoring DeLuca’s estate.
The actual amount that Pugliese owes is in dispute as attorneys are to return to Circuit Judge Donald Hafele’s courtroom Thursday.
Pugliese’s counsel wants the judge to consider changing his recent order tabulating the impact of the Feb. 10 jury award.
Attorneys for DeLuca’s widow say Pugliese, and his business manager Joseph Reamer, must pay about $12.7 million, plus 5 percent interest per year, for damages tied to fraud and civil theft violations and contract breach claims.
But Pugliese’s lawyers insist the amount is really $8.7 million plus interest, based on their interpretation of the judge’s ruling. And with appeals underway, their client has no intention to pay any sum for the foreseeable future.
“We’re not going to write a check to anyone, anytime soon,” Edgar Belaval Jr., litigation manager for Pugliese, told the Sun Sentinel.
Both sides agree that the jury award of $2.9million in damages should be tripled under the law.
Then it gets complicated, in part because of the subtraction of $1.2 million that Pugliese already paid DeLuca in a related criminal case.
DeLuca died of leukemia in 2015; hewas 67.
Rick Hutchison, attorney for DeLuca’s estate, said Hafele’s order clearly shows a $4 million judgment for breach of contract plus an $8.7 million judgment for fraud, for a total of $12.7 million.
“My clients are pleased with the outcome of thecase and are appreciative of the time and effort the court and the jury gave this matter,” said Hutchison, adding he’ll soon file papers to force Pugliese to fork over the money before the appeals process is complete.
Attorneys’ fees, expected to run into the millions, also will be sought.
Pugliese is challenging the jury verdict, as well as more than a dozen claims that the court prohibited fromthe trial.
DeLuca and Pugliese sued each other in 2009 over the aborted project, and the developer once said he was entitled to $20 billion in damages.
But in 2015, Pugliese and Reamer pleaded no contest to felony fraud charges, resulting in a six-month jail sentence and 10 years of probation for Pugliese, and a four-year probation term for Reamer, 58.
Prosecutors brought the charges in 2012 based on DeLuca’s allegations that Pugliese and Reamer created fake companies and used phony billings to steal from DeLuca.
The money went to expenses at Pugliese’s oceanfront mansion in the townof Gulf Stream, including an $11,000 “moat chilling machine” to cool a pond to keep fish alive, records show.
“I thought that, clearly, I had been wronged,” DeLuca said in a sworn statement, explaining his decision to go to the Palm Beach County State Attorney’s Office. “That is why I went to the authorities.”
At the trial this year, Pugliese and Reamer testified they diverted the money into a reserve account because DeLuca had been wavering on his investment in the project on 41,000 undeveloped acres in Osceola and Indian River counties.
Hutchison urged jurors not to award any money to the men he branded as thieves.
“This was an organized scheme to defraud,” Hutchison said, while asking for DeLuca’s survivors to collect $46.3 million for the alleged fraud, plus more for punitive damages.
But Pugliese attorney, Willie Gary, said the developer had “paid the price” for his mistakes and deserved to be compensated for theway DeLuca reneged on the partnership and “caused a billion-dollar project to go down the drain.”
Yet after 7 1⁄ hours of deliberations, 2 the jury decided DeLuca owed Pugliese nothing for the project’s collapse.
Pugliese testified he led a team of architects and engineers to create Destiny, pitched in 2008 as “America’s First Eco-Sustainable City.” He said it was supposed to be bigger than Washington, D.C., and dedicated to preservation and green technology.
“It’s the best site left in Florida,” Pugliese boasted of the undeveloped property’s promising location near major highways.
But Hutchison argued Pugliese was unable to guide a project of that magnitude, and, because of incompetence, wound up with 27,000 acres of mostly wetlands near Yeehaw Junction.
“Itwas a fantasy,” the lawyer said of turning whatwas essentially a swamp into a beautiful place to live and work.