FL Judge OKs $83M Surfside Property Settlement

MONDAY, APRIL 4, 2022


Last week, Miami-Dade Circuit Judge Michael Hanzman ruled that people who owned units at the Champlain Towers South in Surfside, Florida, that collapsed in June 2021, would divide $83 million for property losses.

“It gives them certainty. These people need certainty, and they need to carry on,” said Judge Hanzman before approving the deal at Wednesday’s (March 30) hearing. “Maybe it's not 100% of value, but it's pretty close. I think it's an outstanding result.”

According to reports, compensation for families over the 98 deaths is still to be determined.

Tower Background

The complex was built in 1981 by late developer Nathan Reiber and Nattel Construction, which is listed as inactive in state records. Since the collapse, media outlets and the City of Surfside have uncovered documents surrounding the structure’s condition. According to a 2018 inspection report from Morabito Consultants, the condominium had “major structural damage” to its concrete structural slab below the pool deck that needed “extensive repairs.” These damages included descriptions of abundant cracking and spalling throughout the columns and walls, in addition to exposed and deteriorating rebar.

The report was generated in preparation for the building’s 40-year recertification.

While Morabito did not warn that the building was unsafe, it urged the condo association to make repairs soon, as the concrete problems could “expand exponentially.” At the time of this assessment, repairs would have cost an estimated $9 million. However, after dissension among board members and owners, delayed action caused the repair prices to hike up another $6 million to a total of $15 million.

At the time of the collapse, consultants acknowledged that the building was in the early stages of a three-year renovation plan, which had started with roof work about six weeks prior.

Collapse Information, Investigation

Around 1:30 a.m. on June 24, 2021, part of the Champlain Towers South condominium in Surfside, Florida was reported to have collapsed. Made of up of three buildings, the towers were each 12 stories tall and contained 342 units.

That same day, more than 80 rescue units were reportedly on the scene. By Sunday, 35 victims were pulled from the structure with two more pulled from the rubble. Eleven of them were treated for their injuries.

A state of emergency was also declared on the day of the collapse, which allowed the Department of Homeland Security and FEMA to coordinate relief efforts at the scene, which also involved containing a fire within the debris. The following Saturday, Gov. Ron DeSantis and Surfside Mayor Charles Burkett turned their attention to the “sister building” to the tower that fell, noting that it was built with the same team. Residents in Champlain Towers North began being aided by FEMA to find temporary housing.

Crews also reported that day that a fire had been diminished.

That Sunday, heavy equipment was sent to the scene to help manage the shifting debris after rescuers dug a 125-foot-long trench (20 feet wide and 40 feet deep) to add to the around-the-clock excavation effort.

In later reports, it was determined that the partial collapse had resulted in the death of 98 people.

In August, the U.S. Department of Commerce’s National Institute of Standards and Technology announced its selection of a team of technical experts to investigate the partial collapse of the Champlain Towers South.

The investigation team is headed by Judith Mitrani-Reiser, Associate Chief of the Materials and Structural Systems Division in NIST’s Engineering Laboratory. In her role, Mitrani-Reiser will lead the development and coordination of statutory processes for making buildings safer.

In early investigations of the collapse, the Miami Herald brought to light that the 12-story condominium tower had had multiple, extensive structural flaws present since the beginning of the building’s life—about 40 years.

Reportedly, the plans that came from a firm that no longer exists specified structural columns that were too narrow to accommodate the necessary amount of rebar to support the building. This meant that contractors had to choose between inadequately attaching floor slabs to supports or putting extra steel into columns that were too small.

Most experts weighing in on the matter chose the latter, which is a recipe for air pockets that accelerate corrosion.

Among the speculation that was looking at how a partial collapse of a patio could have brought down part of a 12-story building, The Washington Post also brought together engineers, construction plans and a computer simulation to come to two main scenarios.

First, if the deck initially collapsed where it joined the building’s facade, that could have overloaded the already-thin columns, causing them to buckle. Second, if the deck remained attached to the columns as it kept collapsing, that would have caused the tugging and twisting on the columns and the surrounding beams, causing them to fall.

Regardless of the final cause, building codes and inspections are already being reformed—with some Miami engineers saying that they have been evaluating 30-50 properties a week.

The Champlain Towers South investigation will be the fifth investigation NIST has conducted using authorities granted by the 2002 National Construction Safety Team (NCST) Act. The Act reportedly gives NIST and its team the primary authority to investigate the site of a building disaster; access key pieces of evidence such as records and documents; and collect and preserve evidence from the site of a failure or disaster.

In addition, the Act also calls for NIST to issue reports and make recommendations to improve building codes and standards. The NIST investigation into the partial collapse of the Champlain Towers South is projected to take years to complete.

Property Loss Settlement

The $83 million split for property owners of the 136-unit Champlain Towers South building is expected to be made up of money gathered from insurance policies and the sale of the now-vacant beachfront property.

Under this agreement, each unit owner will be paid a share based on their ownership portion of a condominium unit and for personal items that were lost. Unless they opt out, unit owners who accept the deal will be required to relinquish their rights to sue individually but also could avoid an assessment because of the loss.

The deal does not include money for wrongful death claims arising from the 98 fatalities. According to reports, this settlement is awaiting further input from court-appointed experts before it can be finalized by the judge.

In the coming weeks, the property is slated to be put up for auction. While there has reportedly been an offer for about $120 million on the table for months, attorneys think that others might be proposed as the auction date nears closer.

Two Recent Settlements

After the collapse of the Champlain Towers South, it was reported that Morabito Consultants’ insurers initially refused to cover the company’s losses, and in turn, sued them for negligence. As a response, Morabito denied the allegations and sued its insurance companies, claiming it provided professional services to the condo association.

At the same time this lawsuit was filed, victims accused the Champlain Towers South Condominium Association’s law firm, Becker, for “callous, reckless, and conscious disregard” for the safety of residents. The suit also claimed that Becker “had knowledge of complaints from residents regarding the building’s condition for years before the collapse” and that the firm had a responsibility to warn residents about the building’s structural damages and associated risks.

As a result of these allegations, Miami-based attorneys representing relatives suing for wrongful death of the collapse, Rachel Furst and Harley Tropin, worked with attorney Stuart Grossman, mediator Bruce Greer and additional attorneys for the insurers of the two firms to develop a settlement.

According to reports, the firms have agreed to pay an undisclosed sum and are slated to avoid a trial on accusations of negligence. The settlement, however, must still be reviewed and approved by Hanzman.

While the two firms are looking to have the settlement approved, Hanzman continues to oversee the complicated suit against multiple defendants. Moving forward, he will continue to decide how to allot compensation for the surviving condo owners and relatives of those who died.

In February, surviving Champlain South owners were offered an $83 million settlement to compensate their losses. These particular settlements with Morabito and Becker may or may not affect that amount as Hanzman weighs the details of the agreements.

Other Lawsuits

In November 2021, a lawsuit filed on behalf of Champlain Towers South victims and family members, alleged that the construction of a neighboring luxury building is what triggered the deadly collapse in Surfside, Florida.

The lawsuit contends that excavation and construction work on the adjacent Eighty Seven Park tower caused the Champlain Towers South to become unstable. It has been filed as part of an existing case in Miami-Dade County Circuit Court that involves the planned sale of the Champlain Towers property to benefit victims.

The nine defendants include developers of Eighty Seven Park, an engineering firm, the Champlain Towers South condo association and a Miami law firm.

Champlain Towers, the lawsuit claims, “was an older building in need of routine repairs and maintenance, but it was not until excavation and construction began on the luxury high-rise condominium project next door” that the building became unsafe.

The document further explains that the excavation, pile driving and other construction work at Eighty Seven Park between 2016 and 2019 caused vibrations that weakened the structure. The suit also alleges that groundwater had been funneled from the new building to the Champlain Towers property basement after developers bought a small road separating the two.

While the 169-page document does not cite a specific amount for the damages, attorneys believe the number could easily run into the hundreds of millions of dollars.

In response to the suit, defendants have publicly denied that construction was responsible for the collapse, as the Eighty Seven Park is located directly south of the Champlain Towers site.

“As numerous media reports have documented, Champlain Towers South was improperly designed, poorly constructed, significantly underfunded and inadequately maintained and repaired,” said attorney David B. Weinstein, who represents 8701 Collins Development LLC.

“We expect a full review of the facts — and the ongoing investigation by NIST — will affirm our position.”

   

Tagged categories: Accidents; Building design; Commercial / Architectural; Condominiums/High-Rise Residential; Fatalities; Good Technical Practice; Government; Health and safety; NA; North America; Program/Project Management; Project Management; Residential; Safety

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