From ‘bleak’ to a $1.1 billion settlement: Judge reflects on twists of Surfside condo case
In an interview with the Miami Herald, the judge who oversaw the lawsuit spawned by the collapse of Champlain Towers South discusses the extraordinary case.
In the difficult days following the collapse of a condominium in Surfside last June, Miami-Dade Circuit Judge Michael Hanzman found himself in a courtroom packed with shell-shocked families and dark-suited lawyers.
Upwards of 100 people were feared dead. The judge had already learned the condo association for Champlain Towers South, which had delayed structural repairs on the 12story tower, was woefully under-insured. Trying to pinpoint blame loomed as a legal quagmire. The building was four decades old, its original developers, engineers and builders dead, and a host of other possible contributors to the unprecedented failure would line up lawyers and experts to argue otherwise.
Hanzman was staring at a class-action lawsuit with what he called “bleak” prospects — a low chance of bringing victims adequate compensation and a high chance of dragging on for years. But the judge, a former classaction attorney himself, signaled early on that he intended to light a fire under everyone involved, setting the tone for a legal case that would ultimately prove nearly as extraordinary as the catastrophe that led to it:
“Buckle up,” he told the throng of attorneys. “It won’t be business as usual.”
With his final order and judgment issued last month and more than $1.1 billion in settlement checks being cut this month to about 250 people who lost loved ones or suffered injury themselves, Hanzman reflected on the key decisions and pivotal moments of the case in an interview with the Miami Herald in his downtown Miami office.
Resolving such a complex class-action case in 14 months was perhaps the most unexpected result — stunningly swift, according to legal experts, including attorneys involved in the litigation. Not only were there more than 30 defendants, from consulting engineers to contractors building a luxury condo next door, but infighting also erupted between 136 unit owners and the families of 98 residents killed in the collapse. It was a festering dispute Hanzman likened to a “cancer” that threatened to upend any potential settlement .
In the first weeks, Hanzman made a string of calls that would prove critical. He left the most difficult decisions — how much each life was worth — to the end, with five weeks of highly unusual and emotionally wrenching private hearings with individual families.
“I thought it was important to meet with everybody personally and give them the opportunity to talk to us about their loss, about their loved ones, about their grieving and about what we could do to help,” Hanzman, 61, told the Herald.
And in between, came a surprise “Perry Mason moment” straight out of a TV courtroom drama — a turn the judge admits even he did not see coming. It would reshape the case, nearly doubling the money for survivors.
“It’s a long chain of events, and if any link isn’t taken care of, the whole thing falls apart,” Hanzman said.
The initial search and
‘‘ I LEANED ON MY FAMILY AND FRIENDS. YOU JUST BRACE YOURSELF, AND GO IN AND DO THE JOB. Judge Michael Hanzman
rescue effort at the collapse site was a logistical nightmare. First responders from dozens of places crawled over unstable ruins. Heavy equipment was needed, structural engineers, medical forensics experts, and more. The legal case — initially dozens of separate lawsuits pouring in — was no different. Early on, Hanzman served a role akin to disaster manager, organizing resources for the many legal challenges ahead.
He won agreement from the dozens of plaintiffs’ lawyers to consolidate individual suits into one case under the “class action” designation. He appointed a leadership team among them, a group that would help lead settlement discussions with defendants, their lawyers and insurers.
He named another attorney, Michael Goldberg, to act as a representative or “receiver” for the now-defunct condo association, who would
also become a sounding board for the unit owners who survived. And he selected a mediator, attorney Bruce Greer, who would do a lot of the heavy lifting of steering the closeddoor negotiations that would forge the wrongful-death and personal-injury settlement as well as the property loss agreement.
And with some condo owners left homeless and financially hurting, Hanzman, in a decision that rankled some at the time, quickly rebuffed consideration of turning the disaster site into a memorial. The nearly two-acre oceanfront property was, at the time, the biggest asset in what was initially a “limited funds” case. The condo association’s property and liability insurance amounted to just $48 million. He laid the groundwork for bids that would lead to the sale of the site on Collins Avenue for $120 million to a Middle Eastern developer.
Perhaps the biggest initial challenge was putting a price tag on the value of the 136 destroyed units. An independent appraisal drew fire from many owners as too low, but mediator Greer persuaded the owners to accept $83 million as a settlement in March. Two months later, when they learned the relatives of the people who died would be collecting nearly $1 billion for their losses, the property owners said they deserved more. Hanzman boosted their pot to $96 million.
It was still not enough to buy anything similar to the oceanfront homes they lost, but the new deal came with a critical trade-off. It freed unit owners from the threat of being sued under an obscure Florida law by the relatives of the 98 who were killed in the calamity. Hanzman warned the owners that as members of the condo association, they faced potential liability for failing to repair structural problems. Getting that agreement ended the threat of a protracted fight between victims — unit owners who felt they had done nothing negligent and some relatives who sought to blame and possibly sue them.
“I knew it was a problem, and I knew if we didn’t deal with it up front, it was just going to become more of a problem,” Hanzman said in court at the end of August. “It was a cancer in this case that needed to be cut out, and it needed to be cut out quickly.”l
BLINDSIDED, BUT IN GOOD WAY
As Hanzman dealt with that first wave of challenges, settlements with individual defendants slowly built up the pot. Still, Hanzman calculated it might come to perhaps $300 or $400 million, an amount he knew was not nearly enough to satisfy some 250 survivors and family members of the deceased with a legal right to collect compensation. .
In May, a dramatic announcement largely erased that concern. A core group of lawyers, quietly negotiating behind the scenes, informed Hanzman that plaintiffs had reached a settlement totaling nearly $997 million at that point with more than 20 defendants and other parties Though none of them admitted to wrongdoing or liability, attorneys for their insurance companies were persuaded to settle by Greer, the mediator, who was working for free himself.
“I’m shocked by this result — I think it’s fantastic,” Hanzman said in court.
But the real shocker, the judge told the Herald, was that the bulk of the settlement came from a company that had largely escaped mention in the courtroom and in media coverage of the collapse. Securitas Security Services USA agreed to pay what turned out to be half of the total settlement — $517 million. Its employees managed the Champlain Towers South’s alarm system, front desk and visitors under a contract with the condo association.
“I was completely blindsided by the size of the settlement and the portion of it that was funded by Securitas,” Hanzman told the Herald. “That was brand new to me. They were just not on my radar screen at all. They hadn’t been sued. I’d never heard of them. They hadn’t been brought up at a hearing.”
Securitas, a huge Swedishbased
security company, would not comment on its part of the settlement. But in a deposition taken in March and obtained by the Herald, a Securitas manager revealed that a company employee in charge of the front desk on the night of the building’s collapse was not trained by the firm in how to operate an “all-call” alarm system designed to alert the residents of an imminent catastrophe. The guard on duty also said in a statement that she did not activate the alarm system because she didn’t know how to use it.
When the pool deck at Champlain Towers South caved in — seven minutes before the midand oceanfront sections of the building collapsed — an alarm button, if it were pressed and functioning properly, could have broadcast a warning to the entire building.
Martin Langesfeld — whose sister, attorney Nicole Langesfeld, 26, and brother-in-law,
Luis Sadovnic, died in the collapse — said he was “shocked” to learn from a Herald reporter about the existence of an all-call button and Securitas’ failure to train its guards.
“Ninety-eight beautiful lives could have been saved,” Langesfeld said.
Security experts doubt that everyone would have been able to escape, but they believe it was enough time for at least some of the other victims to have made their way out of the structure before it suddenly collapsed like a house of cards.
TEARFUL STORIES
When he approved the final wrongful-death settlement on June 23, amounting to about
$1.1 billion from more than 30 defendants, it was just one day before the anniversary of the condo collapse. Yet perhaps the most difficult task remained — dividing the money.
The victims in the Surfside tragedy were diverse in experience and age, ranging from 1 to 92. They included lawyers, doctors, accountants, engineers, college students, retirees, a musician, a flight attendant, a Pilates instructor and a rabbi. There were the Guara sisters, Lucia, 10, and Emma, 4, who died with their parents. There was Elena Chavez, 87, still working as a travel agent, who died with her daughter, Elena Blasser, 64. Theresa Velasquez, 36, who died with her parents, was a LiveNation executive and former Miami Beach DJ.
The judge said he consulted with several experts, including Washington, D.C., attorney Kenneth Feinberg, the special master in the massive 9/11 terrorist attack case, who recommended some sort of “formulagrid system.”
Hanzman, though conflicted about his own decision, went with something more personal, setting up a series of hearings with each family. “I told them I struggled mightily with whether to have the hearings because the last thing I wanted to do was put anybody through additional trauma and grief.”
The private court hearings were meant to divide the money in a fair way but they also proved cathartic, marked by hugs, tears and tissues. Family videos were played, memories shared. They were highly unusual for a reason. Legal experts say most class-action cases involve
far too many plaintiffs to allow such sessions, which proved unlike any Hanzman had ever experienced in his 37-year legal career.
Between late July and late August, Hanzman — assisted by retired MiamiDade Circuit Judge Jonathan Colby, an expert in wrongful-death and personal-injury cases — reviewed about 120 claims. Dozens of others were resolved without hearings. In the end, Hanzman said, they issued awards that for the most part jibed with what their lawyers sought for damages. The process, he admits, was draining.
“I leaned on my family and my close friends,” said Hanzman, especially Colby, who flew in from California to assist him. “You just brace yourself, and you go in and you do the job.”
The court-appointed receiver, attorney Michael Goldberg, sat in on six sessions, including with parents who lost children and children who lost parents.
“It was gut wrenching and I was continuously crying throughout and felt physically ill,” said Goldberg, a partner with the Akerman law firm. “I would not have been able to do what they just went through, and the victims in this case need to understand the personal sacrifices the judges made to accomplish this.”
A few families who spoke to the Miami Herald said the sessions provided a closure of sorts.
The parents of Ilan Naibryf, who was born in Argentina and grew up in Broward, spoke of their brilliant son, a physics and molecular biology major at the University of Chicago. Ilan, 21, died along with his girlfriend, Deborah Berezdivin, while they were staying in her family’s eighth-floor unit at Champlain Towers South.
“The judge wanted to honor the 98 victims by allowing us the space and time to share our thoughts about the person we lost,” said Ilan’s mother, Ronit Felszer. “Everyone in the courtroom was crying. They made us feel cared about and protected.”
Ilan’s father, Carlos Naibryf, added: “We wanted everyone to know our son and how he was lost to negligence.”
THE FINAL SETTLEMENT
In the end, Hanzman and Colby pored over lawyers’ binders on their clients and evaluated the plaintiffs’ claims based on income lost over a lifetime, pain and suffering for their survivors, and possible medical expenses. They continued their work into the nights and weekends over the five summer weeks, estimating awards one case at a time.
Hanzman said one of the practical struggles was working under Florida’s wrongful death statute, which only recognizes certain people as “statutory survivors” of victims who can be compensated for the loss of a life or injury.
“There were stepchildren that were literally raised by people, but because they were not statutory survivors, they had no claim,” Hanzman said. “There were parents that would have no claim when their children in their 20s died, but they happened to have a surviving spouse. There were children who had no claim because a parent was deceased, but also had a surviving spouse. There were a number of instances where somebody looking at it might say, well, this really isn’t fair.”
In the end, the judges awarded almost all of the $1.1 billion settlement to relatives of people who died in the building’s collapse.
Later this month, the relatives of 79 people who were killed — along with 3 survivors who suffered severe injuries and lost loved ones — will start receiving damage awards ranging from $5 million to $35 million. The average payout will be about $13 million. Many of the wrongful-death awards will be more than $20 million, according to estimates based on court records.
In addition, the relatives of another 19 people who died will receive $1 million each, the minimum payout allowed by the judge for those who chose not to have a mini-trial before him.
Separately, the vast majority of roughly 110 people who incurred some personal injury — including many who survived because they were living in the front section of the building facing Collins Avenue that didn’t collapse — will receive the minimum of $50,000 up to $150,000 in compensation. And another 30 people with personal content losses will get between $10,000 and $50,000.
At the end of August, Hanzman also decided to carve out $65 million of the landmark wrongful-death settlement for the plaintiff attorneys’ fees — onethird less than the $100 million they requested in compensation but far more than some families though was justified. Early on, Hanzman himself had warned lawyers that they might be asked to work for free because so little money was on the horizon, but he ultimately credited their work for the unexpected outcome.
“You don’t penalize them for that when the case turns out to be an out-of-the-park home run,” Hanzman said in court at the end of August. “You reward that, when lawyers ... step up and come to your aid at a time of need, when it looks like they’re entering into what many would call a real bad bargain. You don’t penalize them for that.”
Jay Weaver: 305-376-3446, @jayhweaver