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Ruling Returns Trump Deposits

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By SHANNON BEHNKEN, The Tampa Tribune

Published: September 28, 2007

TAMPA - A buyer of two condominium units in the stalled Trump Tower Tampa may soon get its deposits back - all because the developer failed to respond to its lawsuit.

Tampa-based SimDag LLC must pay $587,916 to ADAJA Properties LLC, the Tampa company that purchased the condos, Hillsborough County Circuit Court Judge Frank Gomez ruled this month.

The company isn't the only one to file suit seeking money back, but it's the first to get a judgment in its case. If the developer had answered the lawsuit, as is typical, the suit would still be in court, said Sander Moody, a professor at Florida Coastal School of Law in Jacksonville.

'It smells like someone made a really bad mistake,' Moody said. 'But it's so bad that I'm surprised it was made.'

Kathy Rentas of the law firm Becker & Poliakoff, which is representing SimDag in the suit, said the response wasn't filed because she didn't know about the suit.

'It was an unfortunate set of circumstances, but we will now be moving to set aside the default and vacate the judgment,' Rentas said. That would give SimDag the opportunity to argue the merits of the allegations against it.

A judge can reverse the judgment, but failing to file the response has complicated the case and made it much more difficult for SimDag to win, Moody said.
SimDag CEO Frank Dagostino could not be reached for comment.

ADAJA filed its breach of contract lawsuit in June, claiming the tower wasn't going be completed by the date mandated in its purchase contract.

An attorney representing ADAJA said SimDag should have just returned the deposits.

'We believe it's the right thing to do,' said Andy Mayts, with Holcomb & Mayts in Tampa. 'Everyone was just excited about the Trump name being on the building, but it now looks like it won't come to fruition.'

The $300 million Trump Tower was announced in early 2005 as a luxury 52-story high-rise on the Hillsborough River downtown. The project never went vertical, as the developer struggled to obtain financing and ran into trouble with unstable soil beneath the site and with rising construction costs.

Some buyers dropped out and two filed a joint lawsuit. SimDag answered that lawsuit and it is now at a standstill, Rentas said, and must work its way through the legal process.

In May, the tower's namesake, real estate mogul Donald Trump, sued seeking to terminate his licensing agreement with SimDag.

This month, a federal judge in Tampa granted SimDag 45 more days to respond to Trump's lawsuit. That time will expire in mid-November.
SimDag has told buyers it is negotiating with a New York hedge fund as a last-ditch effort to get financing and will return buyers' deposits if that deal doesn't come through.

That's why it's so 'bizarre' that SimDag didn't respond to ADAJA's lawsuit, said Moody, the law professor.

'It's odd for a company that is still in business and has assets that can be attached to the default judgment,' he said.

Moody said he's not surprised that SimDag's attorney plans to ask for the judgment to be set aside, but added: 'The company has really put itself in an uphill battle.'

Reporter Shannon Behnken can be reached at (813) 259-7804 or sbehnken@tampatrib.com.

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