Jury awards damages over failed Short North condo project
By John Futty
The Columbus
Dispatch Friday May 25, 2012 8:24 PM
A company that failed to build a proposed condominium tower in the Short North
defrauded the people who deposited money to reserve homes in the building, a
Franklin County jury ruled today.
The Common Pleas Court jury awarded $200,000 in damages to 17 plaintiffs who lost a combined $191,000 when the Ibiza on High project went bankrupt.
The judgment was against RMRW Limited, a company owned by Short North developers Ray Brown, Michael Council, Rajesh Lahoti and Wilbur Ischie.
The jury found, however, that the company’s four owners were not individually liable. Afterward, the jurors told the attorneys that they were unable to attribute any single acts of fraud to any of the individuals.
“In our minds, a fraud verdict against RMRW is as good as a fraud verdict against the individuals,” said Brian Laliberte, attorney for the plaintiffs. “RMRW has assets.”
Tim O’Neill, one of a half-dozen plaintiffs in the courtroom when the verdicts were announced, said he was glad that the “long, drawn-out process” is over.
“We’re relieved the jury realized that we were wronged,” he said.
Terrence Wheeler, who represented the defendants, said his clients were “pleased that the jurors found that, individually, they did not commit fraud. In my mind, the jurors wanted to find a way to give (the depositors) their money back. My clients are OK with that.”
The developers bought land at N. High Street and Hubbard Avenue in 2006, cleared the site in 2007 and began taking deposits in 2008 for a $35 million tower that was supposed to open in 2010.
The proposed 11-story, 135-unit building, with a rooftop pool and adjacent parking garage, was to be the biggest condominium development in the Short North, with prices ranging from $159,999 to $1.5 million per unit.
The developers pre-sold more than 70 units, collecting about $1.2 million in deposits. But construction never began on Ibiza, buyers didn’t get their deposits back, and the developers’ real-estate company, Apex, filed for Chapter 11 bankruptcy protection in April 2011.
It is unclear whether other depositors now will come forward with additional claims.
The jurors deliberated for more than four hours after hearing three days of testimony from 13 witnesses in the courtroom of Judge Richard A. Frye. Brown was the only defendant to take the stand.
In closing arguments this morning, Laliberte said it was clear to the developers by July 2008 that they couldn’t get a construction loan from a bank, yet they continued to tell depositors that the project would happen. In the end, he said, they spent all the depositors’ money “to keep the lights on at Apex” and on other items unrelated to construction.
Wheeler told the jury that his clients were acting in good faith, but the collapse of the stock and housing markets in 2008 prevented them from getting financing for the project. He said the plaintiffs failed to identify “one penny” that was spent improperly.
The Common Pleas Court jury awarded $200,000 in damages to 17 plaintiffs who lost a combined $191,000 when the Ibiza on High project went bankrupt.
The judgment was against RMRW Limited, a company owned by Short North developers Ray Brown, Michael Council, Rajesh Lahoti and Wilbur Ischie.
The jury found, however, that the company’s four owners were not individually liable. Afterward, the jurors told the attorneys that they were unable to attribute any single acts of fraud to any of the individuals.
“In our minds, a fraud verdict against RMRW is as good as a fraud verdict against the individuals,” said Brian Laliberte, attorney for the plaintiffs. “RMRW has assets.”
Tim O’Neill, one of a half-dozen plaintiffs in the courtroom when the verdicts were announced, said he was glad that the “long, drawn-out process” is over.
“We’re relieved the jury realized that we were wronged,” he said.
Terrence Wheeler, who represented the defendants, said his clients were “pleased that the jurors found that, individually, they did not commit fraud. In my mind, the jurors wanted to find a way to give (the depositors) their money back. My clients are OK with that.”
The developers bought land at N. High Street and Hubbard Avenue in 2006, cleared the site in 2007 and began taking deposits in 2008 for a $35 million tower that was supposed to open in 2010.
The proposed 11-story, 135-unit building, with a rooftop pool and adjacent parking garage, was to be the biggest condominium development in the Short North, with prices ranging from $159,999 to $1.5 million per unit.
The developers pre-sold more than 70 units, collecting about $1.2 million in deposits. But construction never began on Ibiza, buyers didn’t get their deposits back, and the developers’ real-estate company, Apex, filed for Chapter 11 bankruptcy protection in April 2011.
It is unclear whether other depositors now will come forward with additional claims.
The jurors deliberated for more than four hours after hearing three days of testimony from 13 witnesses in the courtroom of Judge Richard A. Frye. Brown was the only defendant to take the stand.
In closing arguments this morning, Laliberte said it was clear to the developers by July 2008 that they couldn’t get a construction loan from a bank, yet they continued to tell depositors that the project would happen. In the end, he said, they spent all the depositors’ money “to keep the lights on at Apex” and on other items unrelated to construction.
Wheeler told the jury that his clients were acting in good faith, but the collapse of the stock and housing markets in 2008 prevented them from getting financing for the project. He said the plaintiffs failed to identify “one penny” that was spent improperly.
