By Francisco Alvarado, FloridaBulldog.org
The effort to build a new civil court building to replace the historic, but crumbling, Dade County Courthouse in downtown Miami recently took a bizarre turn that prompted a local judge to remove herself from a high-profile case involving prominent developer Russell Galbut and another local landmark, the Shelborne Hotel in Miami Beach.
Miami-Dade Circuit Court Judge Jennifer Bailey took herself off the case on Dec. 19 after disclosing she briefly attended a meeting with Chief Judge Bertila Soto at which Galbut presented preliminary plans to build a new civil courthouse on nearby property that’s partially owned by one of his companies.
Bailey transferred the case to Miami-Dade Circuit Judge Beatrice Butchko, who like Bailey had actively campaigned to convince voters to approve a 2014 bond referendum to pay for a new $350 million courthouse.
Butchko quickly dismissed eight of 12 counts against the Shelborne Ocean Beach Hotel Condominium Association and five companies owned by Galbut, his brother Abraham and other relatives. The counts alleged civil conspiracy, breach of fiduciary duty and other wrongdoing.
“This is so shocking, you can’t believe it’s happening,” said David Kraus, a plaintiff in the Shelborne case.
Miami attorney Kevin Malek represents four-dozen Shelborne Hotel room owners who claim that Galbut’s companies and the condo association illegally tried to force them out. Malek told Florida Bulldog that his clients would appeal Butchko’s rulings, which he said severely weakened their case a week before the beginning of the Jan. 9 trial period. The trial on the remaining counts had not begun as of Thursday.
“This case is not over,” Malek said. “We will be back.”
A fair shake?
His clients, however, have little faith that they will get a fair shake as long as the case remains in Miami-Dade. Several of the unit owners, including Kraus, told Florida Bulldog they don’t believe any Miami-Dade judge can rule impartially on their case while Galbut is talking about building them a new home.
“Pretty much every judge wants a new courthouse,” said plaintiff Mark Shemel.
The Shelborne was converted into a condo hotel about a decade ago, allowing individual investors to buy rooms that are rented to tourists. In 2012, 40 of those investors sued alleging that the five Galbut entities – three of which own units in the hotel and two others that run the hotel’s operations – and the condo association broke Florida law by authorizing nearly $30 million in illegal assessments, or roughly $107,142 per room, for renovations at the Shelborne.
In court documents, the unit owners accuse Galbut of stacking the association’s board with flunkies and trying to force them out by foreclosing on their rooms because they refuse to pay the assessments. They also allege their rooms were demolished without their consent during the renovations, resulting in the City of Miami Beach revoking their certificates of occupancy until they fixed their units.
Their lawyer, Malek, sought unsuccessfully last week to remove Butchko from the case due to her advocacy for the 2014 bond referendum. She declined to recuse, while also rejecting a motion that sought to move the case outside of Miami-Dade County.
Nevertheless, Judge Butchko’s dismissal of the eight counts against the Galbut entities and the condo association was a jolt to plaintiffs in the long-running case.
“This lawsuit has been going on for years and Butchko dismissed our entire case within days,” said Kraus, who owns two rooms at the Shelborne. “How could she have reviewed so much evidence in such a short amount of time?”
Judges Bailey and Butchko declined comment through court spokeswoman Eunice Sigler, who said state law bars judges from publicly commenting on their rulings. Still, Sigler said Butchko had not been influenced by Galbut’s interest in developing a new courthouse.
“Judges rule based on the facts presented and applicable law,” Sigler said. “And their rulings can always be appealed to a higher court.”
‘A far-fetched theory’
Ron Lowy, Galbut’s personal attorney, said the 40 Shelborne owners are pursuing a “far-fetched” theory as to why Butchko dismissed the eight counts.
“I don’t believe any judge in Miami-Dade is going to give up their view of justice and doing what’s right simply because [Galbut] may in the future submit a formal proposal which may result in the construction of a new courthouse,” Lowy said. “The plaintiffs were simply unable to prove their case.”
Both Lowy and Sigler also noted that Miami-Dade County government, not the 11th judicial circuit, is the actual owner of the current courthouse and it is that body which would negotiate with Galbut for any deal for a new building.
Still, it was Bailey’s concern about a perception of possible impropriety and conflict of interest that caused her to remove herself from the Shelborne case, according to a transcript of the Dec. 14 hearing.
Bailey explained that two weeks before the court hearing, she was invited “out of the blue” to participate in a meeting with Galbut and Chief Judge Soto because she is the only local judge who is familiar with national courthouse standards and guidelines.
Three years ago, Soto, Bailey and Butchko were among a group of judges and high profile lawyers who led a public awareness campaign to tell voters that the downtown courthouse, built in 1926, had fallen into a state of disrepair and was no longer safe for the people who work there. Their goal: to convince Miami-Dade voters to approve a bond referendum to pay the nearly $400 million cost to build a new courthouse, plus repair the existing building, which was listed on the U.S. National Register of Historic Places in 1989. Voters, however, rejected the referendum.
“I was very involved in public appearances with all that,” Bailey said during the Dec. 14 hearing. “Suffice it to say I am very involved in the campaign to get a new courthouse for my judges and the people I work with.”
Bailey relayed that when she showed up for the meeting with Soto, Galbut was also there. She said the plans Gabut presented were very preliminary and that she did not believe his proposal would go anywhere. However, she soon realized that his plan is gaining steam and that she needed to address it with the lawyers involved in the Shelborne litigation.
A judicial ‘epiphany’
“I had the epiphany that it might be a potential issue in this case,” Bailey said according to the transcript. “If I am a plaintiff and I read in the newspaper in a month that Russell Galbut is going to build a new courthouse, I might not be incredibly comfortable with Judge Bailey hearing my case.”
Five days later, Bailey transferred the case to Butchko. However, the plaintiffs’ don’t believe they got a fair shot in court.
“I don’t think there is a conspiracy between Galbut and Butchko,” said owner Mark Shemel said. “But she is very sympathetic about getting a new courthouse. So it’s certainly possible she is sympathetic to the defendants.”
Shemel noted that Galbut has been involved in new courthouse talks for quite some time. He cited statements made by Greenberg Traurig attorney Ron Rosengarten, who represents two of the Galbut entities.
In a Jan. 3 motion, Rosengarten admitted that Galbut has been communicating with Soto, Miami-Dade Mayor Carlos Gimenez’s office, Clerk of Courts Harvey Ruvin, members of the Dade Heritage Trust and retired judge Scott Silverman for more than a year about getting involved in a possible deal to develop an “expanded courthouse project.”
Silverman, who declined comment, was the court appointed mediator in the Shelborne case. Galbut’s lawyer, Lowy, said his client only met once with Silverman and that the encounter took place after the mediation had ended with an impasse.
“That bothers me,” said plaintiff Shemel. “Silverman made the plaintiffs feel doomed. The whole thing stinks.”
FRANK DADDARIO / January 13, 2017 11:22 am
………..so WHY is the old courthouse in such disrepair ? ………….oh you mean to say the millions spent over the years to sub-contractors was wasted on shoddy construction and inferior materials ? – or the repair work was NOT done at all ? …………….who was responsible for the maintenance and up-keep ?………..or is it so impossible to even get good honest qualified labor in MIAMI ?…………here in BROWEIRD the olde courthouse parking garage was so poorly constructed it actually collapsed prior to it’s planned demolition – at night two whole floors imploded before the real demolition even began – no iron re-bar was installed originally ! but of course the original contractor charged the county for millions in re-bar that was never installed !……………i’m sure the olde MIAMI building could be in tip-top sparkling shape today IF it had been properly maintained over the years – BUT then there is less chance at kick-backs and bribes and under-the-table transactions with NEW construction – right ?…………..how come in NYC a building like that would be worth $1,ooo,ooo,ooo ?………..what a show this is…………….the once tallest building south of Atlanta is simply disrespected and left to rot here in MIAMI
Leah / January 13, 2017 2:54 pm
THe Miami Dade voters didn’t approve the bond referendum to approve $350 MILLION to improve the new courthouse because we don’t TRUST. That’s an enormous amount. As someone who just went through the 2nd $30-million assessment at the Shelborne, I can vouch for the WASTE! 5 years ago we had a major special assessment, and a beautiful and glamorous lobby replaced the old one; yet within 2 years, we received another major special assessment (so big that over 50% of the residents had to sell, or face losing their units to foreclosure!), and it was all knocked down to comply with the tastes of someone else! What…? Talk about frivolous and wanton waste..just another example of the corruption that entails Miami Dade county. And Judge Butchko who is involved with the interested developers of the Courthouse, ruled against the owners at the Shelborne ( in favor of the Galbuts). The developers of the courthouse are the Galbuts…..- so make your own conclusion.
LChristine / January 13, 2017 2:58 pm
Nice article. It has some “meat” to show the readers that it is not a slanted or biased report. If anything, it is a moderated report. I wish it were more biting, but the facts speak for themselves. Thank you for reporting some Truths of Miami Dade county corruption. If we don’t speak up against it, we are essentially endorsing it.
G HUTT / January 20, 2017 7:16 pm
I had heard about the corruption in Miami but not until I joined this case had I experienced how created interests can totally leave a group of people without the right to have their rightful day in court,the right to present EVIDENCE was taken away and deemed frivolous by a judge who had been in this case for a week and during the Holidays when she was off.
When did she read the case? She was out until the 6th,and then decided that our case,which had been filed over three years ago,and in the hands of Judge Bailey,who recused herself after having been in a conference with Galbut in November,took herself out three weeks after the fact.
Then we are given a “trial in chambers”.
What happened to justice?,what happened to having a jury decide?
Judge Butchko was Judge and executioner, taking away our RIGHT to be heard in court.FYI Judge Butchko was totally involved in the bill to build a new courthouse.The Galbuts are negotiating the construction of this new courthouse,what judge is not going to feel indebted to them?
Let me point to you that Judge Silverman was the SECOND appointed mediator to our case,this after it was suggested by the defendants as the person to use,bear in mind that the FIRST appointed mediator ( Freud) who was scheduled for MONTHS recused himself the day BEFORE mediation because he realized at the last minute that he had done work for the Galbuts…HOW does he not know this for months???
Then Judge Silverman steps in…lucky us! This cost us a small fortune in fees,for what? He is a personal friend of Russell Galbut also.
There was to be no settlement,our trust is gone,who can we trust?
We are NOT giving up,not being bullied and not quitting,not until we are give our day in court or a settlement that makes sense comes to us.
Welcome to Miami!
C D Z / January 26, 2017 10:21 am
THE RAILROADING OF OUR CASE.
Judge Butchko,who had the case transferred by Judge Bailey once she had an “epiphany’ after having dealings with Russell Galbut (whom we are suing) had indeed DENIED most of the defendants summary judgments during a conference call with attorneys and Judge Butchko ,at that time Alice Sum requested they be heard by hew and Bailey says “SHE HAS NO TIME FOR THAT” this case is going to court the 9th,the conference happened on the 6th.
Following that conversation Butchko agreed to hear all the defendants arguments
and invited them to bring forth everything.to have her “look ” at it,this happened immediately after,in chambers,our attorney asked WHEN was she doing this,she said RIGHT NOW,our attorney didn’t have any of the briefs with him yet she continued to methodically and without even being familiar with our case,granted all but one summary judgement to the defendants!! Needless to say,this is a clear violation of our rights to a JURY trial,which we where queued for Jan 9th,for seven weeks.Now a seven week trial is a complicated trial,this judge was JUDGE and EXECUTIONER,our rights where taken away,WHY?
The writing is on the wall,no judge in Dade County is going to jeopardize their new “house” as Judge Bailey calls it,not one,so we are left with appeals and FEDERAL court and,and getting Tallahasse involved.This is far from over.
Evelyn Bailey / January 27, 2017 1:48 pm
Why would a developer who has a case before a Miami court submit a plan–pro bono– to rebuild the Miami-Dade courthouse?
Why would Miami- Dade judges entertain such a proposal WITHOUT vetting potential builders/bidders?
When do judicial “epiphanies”, rather than laws, govern our courts? Why would a judge gut this case days before a jury was set to hear it?
What happens in this case has the potential to become case law for all condo owners in Florida.
Rulings in this case may give condo boards a green light to skirt laws that require 75 percent majority vote by owners in order to make material alterations. The Shelborne was closed and converted to a Wyndham Hotel, without the owners’ knowledge nor vote. Owners were assessed to pay for the covert Wyndham plan .Florida condo owners—beware. Share this story with your legislators and condo associations.