COMMUNITY MARITIME PARK ASSOCIATES INC v. MARITIME PARK DEVELOPMENT PARTNERS LLC

Filing 368

ORDER. Signed by CHIEF JUDGE M CASEY RODGERS on February 4, 2014. (aow)

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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF FLORIDA
PENSACOLA DIVISION
COMMUNITY MARITIME PARK
ASSOCIATES, INC.,
Plaintiff,
v.

Case No. 3:11cv60/MCR/CJK

MARITIME PARK DEVELOPMENT
PARTNERS, LLC,
Defendant.
_______________________________/
ORDER
The Court has previously determined that the public works contract at issue in this
case, which Plaintiff awarded Defendant in August 2009, is void for material
noncompliance with Florida’s competitive negotiations statute, known as the Competitive
Consultants Negotiations Act (“CCNA”), Fla. Stat. § 287.055 and that disgorgement is the
proper remedy.1 In light of Defendant’s affirmative defense of equitable setoff and to
resolve issues of fact regarding whether fraud occurred in the CCNA process, the Court
held a final evidentiary hearing on January 30, 2013, through February 5, 2013. This order
sets forth the Court’s findings of fact and conclusions of law on these remaining issues.
Procedural Background
In 2011, Plaintiff Community Maritime Park Associates, Inc. (“CMPA”) brought suit
in state court seeking rescission and cancellation of a public works development contract
(“Development Agreement”) it entered into with Defendant Maritime Park Development
Partners, LLC. (“MPDP”), alleging fraud, misrepresentation, and rescission on public policy
grounds for the violation of Florida’s competitive award statutes. MPDP removed the case

1

No other public bidding process was engaged in pursuant to Florida law. See Fla. Stat. § 255.20.

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to federal court. CMPA later moved for summary judgment on Count III of its complaint for
violation of the CCNA, which the Court granted partially, declaring the professional services
portion of the Development Agreement void. (Doc. 207). On reconsideration, the Court
determined that the entire Development Agreement was void for violation of the CCNA and
because no other Florida competitive award or bidding statute was engaged in, which in
turn required disgorgement of all public monies paid on the void contract in an amount yet
to be determined. (Doc. 252). The parties have stipulated to the undisputed facts set forth
in the prior orders,2 and the Court incorporates those facts herein by reference, without
reciting them again in full (doc. 306, at 28, ¶1). The following summary of the operative
undisputed background facts from those orders, however, will be helpful to an
understanding of the remaining issues.
CMPA is a publicly funded non-profit corporation governed by a Board appointed
by the City of Pensacola, Florida, tasked with developing and managing city-owned
property known as the Vince Whibbs, Sr. Community Maritime Park, a project originally
estimated to exceed $38 million in construction costs. In seeking a Master Developer for
the project, CMPA was required by the CCNA to competitively award the contract to the
most highly qualified firm.3 Accordingly, in early 2007, CMPA proceeded to engage in a
two-stage competitive negotiations process under the CCNA, first selecting the most
qualified firm and then engaging with that firm in contract negotiations. To solicit qualified
professional services firms to compete for the project, CMPA issued a formal Request for
Qualifications (RFQ). Among the requirements listed in the RFQ, candidates for Master
Developer had to demonstrate the following regarding their businesses: (1) previously
completed projects of at least $50 million; (2) successful development of at least one major

2

The parties also stipulate to the facts set forth in the Court’s order granting CMPA a prelim inary
injunction (doc. 227) to preserve the status quo regarding funds owed to MPDP by Magi Construction, LLC,
a firm created between MPDP and Hoar Construction Com pany for purposes of the design-build contract, until
the Court determ ined the final am ount to be disgorged.
3

Pursuant to the CCNA, any firm desiring to participate in the com petitive selection process m ust
first be certified by the agency as qualified, that is, "fully qualified to render the required service," based on
its capabilities, adequacy of personnel, past record, and experience of the firm . Fla. Stat. § 287.055(3)(c).
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mixed-use project; (3) ability to obtain or attract financing for all aspects of the proposed
project; (4) a team including qualified professionals registered in the State of Florida, and
(5) a team record of long-term management of completed projects, (6) a team record of
small and minority business inclusion, and also (7) a record of satisfying clients and end
users. All personnel assigned to the project were required to be employees of the Master
Developer or a collaborative partner and had to be approved by CMPA. Master Developer
candidates were required to identify each organization that would provide services,
including company principals. Another crucial requirement of the qualifications process
was that the chosen Master Developer be able to demonstrate sufficient financial capacity
in order to obtain and attract adequate financing for all aspects of the project. This
requirement–to demonstrate financial capacity–garnered the highest point total on CMPA's
Master Developer evaluation sheet included in the RFQ. Based on the applicants’ RFQ
submissions, CMPA selected four qualified firms, with an organization known as Land
Capital Group, Inc. (“Land Capital”) ranked as the top firm.4
CMPA then issued a Request for Proposals (RFP), soliciting proposals only from
the four finalists and requesting more details regarding each candidate's vision, concept
and implementation plans for development of the park. The RFP did not require the four
finalists to restate their RFQ responses and qualifications but did permit supplementation
of the prior submissions and emphasized the importance of the applicant’s experience and
financial capacity. The finalists were also required to submit a transmittal letter identifying
the lead proposers and any persons with an equity interest in the project, describing their
legal and financial relationships and confirming that any legal entity created for the project
was in existence and that the person signing the letter was authorized to act on its behalf.
The finalists also participated in oral presentations before CMPA.
Land Capital submitted an RFP response to CMPA on May 30, 2008, and presented
an oral presentation on June 13, 2008. Both included representations by Land Capital’s
4

The CCNA required the agency to evaluate qualifications of the firm s, including professional
personnel and past perform ance, and to "select in order of preference no fewer than three firm s deem ed to
be the m ost highly qualified." Fla. Stat. § 287.055(4)(a), (b).

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CEO Scott Davison that Land Capital had partnered in a joint venture with entities known
as Brass Real Estate Fund and Magi Real Estate (“Brass/Magi”), owned by an individual
named Richard Rodriguez. Davison stated in the RFP transmittal letter that Land Capital
and Brass/Magi had created a project specific development entity–Defendant MPDP–to
enter into the Development Agreement with CMPA, and that Jeffrey Galt, Chief Financial
Officer of Brass/Magi, would serve as president of MPDP and Davison as vice-president.
Galt and Bruce Cutright, the individual named in Land Capital’s RFP as the project
manager, both participated in the June 2009 oral presentation with Davison. Land
Capital’s RFP response outlined in detail Cutright’s impressive project history. CMPA was
impressed by Land Capital’s written response and “assembled team” of professionals, as
well as its oral presentation, and as a result, Land Capital maintained its top ranking
following the RFP process.
As the top-ranked firm, Land Capital earned the right to engage in contract
negotiations with CMPA.5 The contract negotiations commenced in August or September
of 2008 between Galt and Davison for MPDP, and CMPA’s representative, Owen Beitsch.
Later in the process, Barry Abramson participated as the City’s representative, as well as
City Attorney Rusty Wells, among others, while Trinity Capital Advisors, the second most
qualified firm, waited on standby, in case negotiations with MPDP did not produce an
acceptable agreement.
During the course of the negotiations and prior to the execution of the Development
Agreement, Land Capital financially collapsed and was unable to play any role in the
project. Although CMPA was not aware of Land Capital’s demise, it did become aware in
December 2008 that Land Capital was suffering financial difficulties; however, Davison and
Galt assured CMPA and the public that its financial partner, Brass/Magi, was sound and
therefore Land Capital’s financial troubles would not threaten the project. In late April

5

Under the CCNA, if negotiations with the m ost highly qualified firm did not result in a contract,
CMPA was required to negotiate with the next m ost highly qualified firm . In this case, the second-ranked firm
was an entity known as Trinity Capital Advisors.

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2009, after an audit confirmed that Brass/Magi was financially sound,6 CMPA and the City
Council approved a final Development Agreement which identified MPDP as Master
Developer. The record unquestionably reflects that at that time, CMPA understood, based
on the representations of Davison and Galt, that MPDP was a joint venture between Land
Capital and Brass/Magi.
The final Development Agreement, which was executed by all parties on August 14,
2009, set forth four separate roles for the Master Developer: (1) to act as Project
Coordinator, for which it would be paid a 4% Development Fee; (2) to act as CMPA's agent
in managing the facilities, for which it would be paid a management fee; (3) the potential
to act as design-build contractor, in CMPA's sole discretion, for an additional 3% fee; and
(4) to act as developer of private improvements under a separate sub-lease.

The

Development Agreement required the Master Developer to be a qualified design-build
contractor as of the date of the Agreement was executed, although the design-build
contract would be awarded separately, at CMPA's discretion.7 CMPA ultimately voted in
January 2010 to award the design-build contract to MPDP. MPDP, however, proved to be
unable to acquire the necessary bonding without the aid of another company, Hoar
Construction, with whom MPDP formed a new company, Magi Construction, LLC (not to
be confused with Brass/Magi), to be named as the general contractor. As a result of this
arrangement, MPDP and Hoar Construction agreed to share the Master Developer’s 3%
fee for the design-build contract.
After entering into the Development Agreement with MPDP, CMPA became aware
of the following: (1) Land Capital had not merely suffered financial difficulties but had
actually collapsed during the contract negotiations; (2) neither Land Capital nor MPDP
were members of a joint venture with Brass/Magi; and (3) MPDP, which was a project-

6

The audit was perform ed by Mort O'Sullivan, a certified public accountant.

7

City Attorney W ells testified that he counseled the City not to execute the contract until Mark W hite
– whom MPDP intended to use as the qualifying contractor for purposes of the design-build contract– was fully
licensed as a contractor in Florida. The contract execution date was delayed from April until August 2009 due
to delays in W hite obtaining a Florida contractor’s license.

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specific corporation with no assets and no professional qualifications of its own, had
entered into the Development Agreement as Master Developer without any legal affiliation
with Brass/Magi or Land Capital, the firm selected as the most qualified under the CCNA
procedures. As a result, CMPA rescinded the contract in January 2011 and filed this law
suit.
In its prior orders granting summary judgment, the Court concluded that the
Development Agreement had been awarded to a shell entity, i.e., MPDP, and not the firm
selected as the most highly qualified through the CCNA competitive qualifications
procedure, which was Land Capital. The Court found that this irregularity constituted a
material noncompliance with the CCNA. Although in Florida a public body has “wide
discretion” to implement competitive award procedures for public improvements and courts
will not interfere when the procedures are “based on an honest exercise of this discretion,”
Liberty Cnty. v. Baxter’s Asphalt & Concrete, Inc., 421 So. 2d 505, 507 (Fla. 1982), the
Court in this case concluded that CMPA had no discretion under the statute to award the
professional services portion of the Development Agreement to an entity that was not
affiliated with the firm deemed “most highly qualified” within the meaning of the CCNA and
which did not compete at all in the qualifications portion of the award process. Also,
because no other competitive award procedures were used, the Court concluded that the
entire Development Agreement was void and that disgorgement of money paid under the
void public contract was required. Additionally, the Court entered a preliminary injunction,
requiring MPDP to deposit with the Court any money it received as profit from the designbuild contract, up to the sum of $460,786, in order to preserve the status quo until the
amount of disgorgement could be determined.8
Although it was not necessary for purposes of summary judgment to determine
whether the statutory noncompliance resulted from knowing misrepresentations by MPDP,
8
The Prelim inary Injunction Order is currently the subject of an appeal to the Eleventh Circuit Court
of Appeals (see doc. 235, notice of appeal); however, this Court retains jurisdiction over the com plaint. See
State of Ala. v. EPA, 871 F. 2d 1548, 1553-54 (11th Cir. 1989) (stating, “[t]he district court had jurisdiction to
grant sum m ary judgm ent and to dism iss the suit despite the pending interlocutory appeal” of a prelim inary
injunction).

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as CMPA argued, or from a good faith mistake, as MPDP argued, this factual issue must
now be resolved in order for the Court to determine the amount that is due to be repaid to
the public treasury by MPDP. As explained in prior orders (see docs. 207 & 252), an
equitable defense of setoff is only potentially available to MPDP to the extent no fraud or
misrepresentation invaded the statutory competitive award process. MPDP insists it should
not be required to repay any amounts it received on the void contract, arguing it acted in
good faith by providing valuable services under the contract. CMPA argues that all
amounts paid on the void public contract must be disgorged because misrepresentations
of MPDP’s officers corrupted the statutory competitive award process. To resolve these
remaining issues of fact and determine the amount of money MPDP must return to CMPA,
the Court held an evidentiary hearing. Now, having fully considered the testimony and
evidence presented at the hearing, the complete record, the applicable case law, and the
arguments of counsel, the Court makes the following findings of fact and conclusions of
law.
Findings of Fact
1.

Through the RFQ issued in February 2007, CMPA sought a "firm" that

possessed "the experience, professional qualifications, financial resources, and willingness
to enable it to undertake and complete" the project. (Doc. 18-3). The RFQ required,
among many things, that all personnel assigned to the project be employees of the Master
Developer or a collaborative partner. Also, the requirement to demonstrate financial
capacity, which garnered the highest point total on CMPA's Master Developer evaluation
sheet included in the RFQ, illustrates the importance of this factor to CMPA in making the
award. Land Capital’s application named Land Capital and Silver Cloud Partners, Inc., as
Master Developers, with Silver Cloud’s founder, Harold DeBlanc listed as project manager.
Halcyon Ltd., and its president, Michael Buckley, were listed as the team’s development
strategists, and other team members included various architectural, design, financing, and
marketing specialists. Davison, as Land Capital’s CEO, represented in his cover letter

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accompanying Land Capital’s RFQ application that this team of professionals had been
“assembled” for the project.
2.

The RFP issued to the four finalists in February 2008 required, among other

things, a letter identifying the lead proposers and persons with an equity interest in the
project, along with a brief description of the legal and financial relationships of the team.
It also required general team information, including the Developer’s experience, an outline
of the project concept, and anticipated project financing, among other things. The proposal
also had to identify the roles of the individual personnel who would work on the project,
along with details regarding the project manager’s experience, in addition to demonstrating
the proposer’s financial capacity to carry out the proposed project and honor any
obligations and responsibilities negotiated. The RFP stated expressly that information
previously provided in the RFQ response regarding the proposer’s team did not need to
be restated in the RFP response.
Davison represented in Land Capital’s RFP proposal letter in May 2008 that Land
Capital was the “lead proposer;” that Brass/Magi would have an equity interest in the
project; that MPDP would serve as the Developer’s “legal entity;” and that MPDP was a
“joint venture” between Land Capital and Brass/Magi, “each represented by their own
limited liability companies.” Land Capital’s RFP response omitted reference to Silver
Cloud, which previously had been listed in the RFQ response as one of the master
developers with Land Capital, and instead identified Land Capital as lead developer with
Brass/Magi as co-developers and financiers. Bruce Cutright, identified as a consultant and
project manager, was a new team member at the RFP stage along with various
architectural, design and civil engineering companies, only three of which had been named
as team members in the RFQ. Davison emphasized during the RFP oral presentation on
June 13, 2008, that Land Capital was the “managing partner” of the team. Davison also
stated during that presentation that MPDP was an equity stakeholder and a “partnership”
between Brass/Magi and one of Land Capital’s “subsidiaries,” but no further detail was
provided regarding MPDP’s members.

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3.

In the interval between Land Capital’s RFQ and RFP submissions, Land

Capital’s financial stability had drastically deteriorated, as both Davison and Galt testified,
yet they did not fully disclose this substantial change, or the extent of it, in their RFP written
responses or oral presentation on June 13, 2008, but instead represented to CMPA that
Land Capital would be the “lead developer” on the project.

Davison particularly

emphasized during the oral presentation that “without a doubt” Land Capital would be the
“lead developer” for the project, though he knew at the time that Land Capital was
financially collapsing. Davison admitted on cross examination that, while making these
representations, he did not expressly disclose that Land Capital was (1) undergoing
financial difficulties; (2) operating with only one to four employees instead of the 85 or 90
employees as originally represented to CMPA; or (3) in danger of being evicted from its
business offices.9 Davison attempted to explain at the hearing that he had been referring
to the project team as a whole in representing that Land Capital had 90 or so employees,
but this was not the impression given during his RFP presentation to CMPA. Galt knew
of Davison’s financial difficulties before joining in and submitting the RFP response; he
testified that he became involved in the project at the RFP stage because Davison was
looking for new financial backing due to his personal and business financial troubles.10
4.

Davison and Galt also failed to fully disclose that Land Capital’s team

qualifications had substantially changed between the RFQ and RFP stages. Neither Land
Capital’s written RFP proposal nor Davison’s presentation before CMPA on June 13, 2008,
included any express disclosure that RFQ-identified team members, such as Silver Cloud
and Halcyon–whose qualifications and employees had helped Land Capital earn the

9

W ithin a m onth of the oral presentation–by July 2008–Land Capital had been evicted from its
offices, and Davison adm itted that by October 2008, he had closed the last Land Capital office. Before the
Developm ent Agreem ent was signed, all of Land Capital's staff had been laid off. Davison said he did inform
CMPA during a public m eeting in Decem ber 2008 that Land Capital's project pipeline had decreased from
$500 m illion to $150 m illion, but on cross exam ination, he adm itted that the project pipeline projection he
provided to CMPA still included projects that he had hoped to obtain and develop but for which Land Capital
had no contract.
10

Rodriguez testified that he was aware of Davison's financial troubles som etim e after Land Capital’s
RFP subm ission and before the Developm ent Agreem ent was entered.

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number-one ranking at the RFQ stage–were no longer involved with the team or relevant
to the project, or that Bruce Cutright, touted in the RFP as the project manager with an
impressive project history, was not, and never had been, actually employed by any of the
team members. Moreover, in the RFP, Davison linked Land Capital to Brass/Magi for
purposes of meeting the financing requirement, representing repeatedly that they were
“joint venture partners,” but testimony by Galt and Rodriguez demonstrated that no actual
joint venture ever existed. It is also significant that Land Capital and Brass/Magi together
did not possess the requisite mixed-use project experience without the team members that
had been presented to CMPA in the RFQ response and that CMPA did not know those
team members were no longer involved.11
The record is clear that CMPA understood the firm or team qualifications of the four
finalists–as represented in their RFQ presentations–would continue to exist throughout the
selection process, as supplemented by additional detail presented in the RFP responses
and subject to CMPA’s right to approve replacement personnel. The Honorable Lacey
Collier, Chairman of CMPA during the qualifications phase and throughout 2010, testified
that he understood the RFP to be a continuation of the qualification process with the topranked firms, not a chance for participants to start over, and he further testified that Land
Capital would have been eliminated from the competitive process had CMPA known at any
time before entering the contract that Land Capital no longer met the minimum
requirements of the qualifications stage. Ed Spears, Executive Director of CMPA, similarly
testified that the minimum qualifications set forth by Land Capital in the RFQ were never

11
The parties do not dispute that the Land Capital team subm itted an RFQ response that m et the
requisite qualifications, including m ulti-use waterfront projects com parable to the project planned here, but
the evidence is clear that the substituted team set forth in the RFP lacked any m ulti-use waterfront project
history. Davison adm itted during the hearing that Brass/Magi did not have m ixed use waterfront experience
as required by the RFQ. Land Capital’s original team touted the qualifications of Silver Cloud with its
em ployee project m anager DeBlanc, and Halcyon with its em ployee Buckley, to satisfy the project qualification
requirem ents, including that of m ixed-use waterfront developm ents. As noted above, there is no evidence
that CMPA was directly inform ed that Silver Cloud and Halcyon were no longer part of the team . Richard
Rodriguez, the owner of Brass/Magi, testified in his deposition that his com panies em ployed persons licensed
in areas of construction, architecture, and accounting, but he adm itted that neither his com panies nor Land
Capital possessed all of the qualifications required for this project.

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formally amended or altered during the competitive award process. Davison testified that
Land Capital’s RFQ representations were accurate when they were made but that
circumstances changed before the RFP response was submitted, requiring him to bring in
new team members and a new financial partner and that CMPA simply “presumed
incorrectly” that prior team qualifications were still relevant. The Court finds that any
incorrect presumption on CMPA’s part was the direct result of Davison’s omission of
material information regarding both Land Capital’s financial troubles and the true nature
of its changing team.
5.

Davison represented his team as already assembled and as “partners,”

although in fact they were not bound together by any formal agreement or legal
arrangement, in spite of the fact that the team and legal relationships were required to
have been formed and in place before the proposals were submitted. For example,
Davison touted Cutright as a key team member while knowing Land Capital had not
secured him as an employee or by any other formal agreement. Judge Collier testified that
team members were required to be employees or “partners” in the legal sense. He said
the CMPA Board had relied heavily on Land Capital’s representations of in-house
capability during the qualifications process, envisioning that the team members would have
employee status and Land Capital thus would have in-house capability to manage
professionals, such as architects and engineers, as required by the express terms of the
original RFQ. Judge Collier also testified that Cutright’s impressive project history was
highly influential in CMPA’s decision to select Land Capital’s team as the most highly
qualified, and he believed Davison had misrepresented Cutright as a team member in 2008
for purposes of qualifying for the project without having secured him through a formal
agreement.12 City Attorney Wells testified that he, too, expected there to have been some

12

Also, the RFP required candidates to dem onstrate the extent and nature of m eaningful involvem ent
by local and m inority contractors. Judge Collier testified that Davison persuaded m any Board m em bers to
vote for Land Capital during the CCNA qualifications process by pledging to donate $250,000 of the
developer's fee to a contractor academ y – a m inority contractor inclusion and education program . Judge
Collier testified that the Board later learned Davison had intended this to be only an "in kind" contribution
(Davison considered his participation in m eetings and workshops with the m inority contractors as his

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contractual arrangement between Cutright and the proposer before Land Capital included
him in the RFP proposal. This expectation was based on requirements in the RFQ/RFP
process as well as the CCNA, both of which contemplated the selection of “a qualified firm”
as defined in the CCNA.
Davison testified that he intended Cutright to be a team member, but it did not work
out in the end, and he blamed the failure on the lengthy contract negotiations phase,
insisting MPDP could not offer Cutright a contract until the Development Agreement was
signed.13 During the negotiations, however, Davison continued to lead CMPA to believe
Cutright was secured for the project. This is evidenced by Beitsch’s comments during a
public meeting on March 13, 2009, when, based on an impression Davison had given him,
Beitsch stated Cutright had become a “formal part of the team.” But Davison knew this
was not true.

The evidence shows that on October 3, 2008, during the contract

negotiations, Skip Greeby, Cutright's employer, sent Davison an email informing him that
Cutright might not be available for the project if MPDP did not formalize an agreement with
him soon. Greeby encouraged Davison to finalize an agreement with Cutright soon
because Cutright had been represented as "an integral part" of Land Capital's team, and
it might otherwise appear as though a “bait and switch” had occurred. Cutright stated in
his deposition that he had been available from September through December 2008 and
needed the work but that he was never offered a contract by MPDP. In the end, he
accepted a job with the University of Texas, but he testified at the hearing that he would
have been prepared to return and work full time on this project if MPDP had offered him
an agreement. The Development Agreement ultimately identified Cutright as a key figure,
who could be replaced only on approval of CMPA and guaranteed he would devote a

contribution), which, according to Judge Collier, “really am ounts to nothing.” Judge Collier further testified that
during the process he becam e personally skeptical of representations m ade by Davison, who, according to
Judge Collier, always had an answer for any issue that arose and as a result, he had voted against Land
Capital during the qualifications procedures.
13

If Land Capital or MPDP had been a qualified firm with the financial capacity required, it would have
had the capacity to em ploy key personnel in house, as contem plated by the RFQ and RFP.

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minimum of one day per week to the site preparation project and would visit the site twice
per month. Even then, MPDP had no formal agreement with Cutright, and by the time the
Development Agreement was signed in August 2009, Cutright had taken the job in Texas.
It is clear that CMPA’s members were led to believe that Cutright was an employee of Land
Capital or a listed collaborative partner, when he was not.14 It is also clear that because
of his impressive project history, Cutright’s role as project manager was highly influential
in CMPA’s decision to award the Development Agreement to Land Capital.
Moreover, the evidence showed that nearly Land Capital’s entire project team
changed between the RFQ and RFP stages, and there was never even an informal
agreement between Land Capital and any team member. At most, the testimony of
Richard Rodriguez and Cutright suggests that they had “intended” to partner with Davison
and Land Capital when first approached to join in the project, but circumstances, of which
CMPA plainly was never informed, changed. Unable to present evidence of any binding
relationships between the entities of Land Capital, MPDP, and Brass/Magi, Davison and
Galt testified that they thought the individuals identified in the RFP were “the team” and
that therefore, the project entity and legal relationships were not significant. Galt testified
that Land Capital's asset was Davison, and Davison agreed, comparing himself to a movie
director and testifying that although he works with collaborative partners, it is his knowledge
that “makes the thing go.” Again, this was clearly not CMPA’s understanding. By the plain
language of the formal requests for qualifications and proposals, CMPA sought a qualified
“firm” with in-house professionals with the requisite expertise, an extensive project history,
and the financial wherewithal to complete the project, not simply knowledgeable individuals
who were willing to contract out the work. Davison in fact had no “assembled team” or firm
possessing all of the necessary qualifications, contrary to his representations to CMPA,
because no formal or informal agreements bound his company to any other “team”
14

Although the term “collaborative partner” was not explicitly defined in the RFQ, and Davison
testified that he viewed his team m em bers as collaborative partners in a loose sense of the word, this clearly
was not CMPA’s understanding. In fact, it defies com m on sense to suggest on this record that anything other
than a legally secure partnership was intended. In any event, it is undisputed that Cutright was not em ployed
by Land Capital, and his em ployer, Greeby, was not listed in the RFP as a partner or team m em ber.

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members or licensed professionals. Davison himself admittedly had no contractor’s
license, no engineering or architecture license, no accountant, landscaping or real estate
brokers license, and no project history as required of the winning "firm" under the plain
terms of the CCNA and the RFQ, and neither did Galt or MPDP.
6.

Beginning with Land Capital’s May 2008 letter accompanying the RFP,

Davison linked Land Capital to Brass/Magi for purposes of meeting the financing
requirement by representing repeatedly that they were “joint venture partners,” each
represented by its own limited liability company. However, the testimony of Galt and
Rodriguez demonstrates that no actual joint venture ever existed. Davison also falsely
represented during the June 13, 2008, oral RFP presentation that Land Capital was the
“managing partner” of MPDP. The evidence shows that when these representations were
made, MPDP's sole equity member was MP-LC Development Partner, LLC ("MP-LC"), a
shell corporation that Davison testified he created for the special purpose of being a
member of MPDP. MP-LC had no assets or professional employees, and there was no
evidence that it was ever connected to or controlled by Land Capital or Brass/Magi.15
Rodriguez created a Texas LLC, Maritime Park Development Partners, LLC (“the Texas
LLC”), which joined MPDP on July 31, 2009, over a year after Davison represented to
CMPA that MPDP was a joint venture between Land Capital and Brass/Magi through their
limited liability companies.16 Rodriguez was the CEO of the Texas LLC, but Rodriguez
individually was not an equity member. Furthermore, the Texas LLC was not connected

15

Davison transferred his interest in MP-LC to his friend Mark W hite prior to execution of the
Developm ent Agreem ent due to Davison’s own financial difficulties. W hite did not bring any financial strength
to MPDP, and he testified that he would not have been involved with Land Capital in an equity ownership
capacity because he knew of Davison's financial troubles. After the Developm ent Agreem ent was signed in
August 2009, W hite becam e a vice president and em ployee of MPDP, earning an annual salary of $275,000
from MPDP.
16
The RFP contem plated that any legal entity created to enter into the Developm ent Agreem ent
would be in existence prior to the RFP. Davison created MPDP prior to subm itting Land Capital's RFP
response with only a shell corporation as its m em ber, and Rodriguez's Texas LLC did not join the entity until
over a year later. Even then, MPDP clearly was not a joint venture or partnership with Brass/Magi as
represented.

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with Brass/Magi except to share Rodriguez as a common owner, and Brass/Magi was not
a member of MPDP. Rodriguez denied being financially responsible for MPDP and denied
having any joint venture partnership with Land Capital or MPDP.17
The record contains no evidence of a joint venture or partnership between Land
Capital, Magi/Brass and MPDP. Davison testified that he had used the terms “joint
venture” and “partner” only in the loose associational or general sense of the words, not
in a legal sense.

Similarly, although Galt made statements at CMPA meetings

representing that Land Capital had “partnered” with Brass/Magi for the project, during his
testimony at the evidentiary hearing, he emphasized that he had “partnered” with Davison
for this project, and even then, only in a loose sense. Galt testified that he was aware of
Land Capital’s financial problems before entering into the RFP and because of those
problems, he would not have entered into a joint venture with Land Capital. He also
confirmed that neither Land Capital nor Davison were equity owners of the development
entity, MPDP, again, because of Land Capital’s financial problems.18 There is no evidence
that Davison or Galt disclosed Land Capital’s financial problems to CMPA or explained
their casual use of legal terms during the process. Based on the testimony, it is obvious
to the Court that CMPA used and understood the terms joint venture and partner in their
commonly accepted legal sense, and in any event, no disclosure was made to lead them
to believe otherwise. Davison and Galt were sophisticated businessmen engaged in a

17
Rodriguez also testified that MPDP was not a "shell" corporation because that im plies it had no
purpose. He testified that instead, it had intellectual capital and was a special purpose entity in contem plation
of a transaction. The CCNA procedures, however, were designed to ensure the Developm ent Agreem ent was
awarded to a qualified “firm ” com prised of qualified professionals with the expertise and financial capability
to com plete the project, not a special purpose entity with only intellectual capital and no legal connection to
a qualified firm .
18

In fact, in his deposition testim ony, Galt went so far as to say that anyone who read the newspaper
would have known of Land Capital’s financial problem s. On cross exam ination at the hearing, G alt also
acknowledged that Land Capital’s changed circum stances between the tim e of the RFQ representations and
the tim e MPDP signed on as Master Developer was som ething he, as a business m an, would have expected
to be disclosed. Nonetheless, although he continued to represent him self to CMPA as a partner with Davison,
he never disclosed the true facts about Land Capital to CMPA.

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formal public procurement process, and both were fully aware of what was expected and
what they were representing.
7.

Davison did not disclose that Land Capital was having any financial

difficulties until directly questioned during a public meeting on December 12, 2008, after
CMPA board members and the public had begun to hear rumors and news reports that
some Land Capital projects had fallen into foreclosure. CMPA Board member Betina Terry
testified that previously, Davison had visited her office on many occasions and had
personally assured her and told her not to worry about the rumors of Land Capital project
foreclosures.19 He told her that the facts had been misrepresented in the media and that
the project financing was sound. By this time, although Davison testified that he was
hopeful Land Capital would come through, Land Capital was unquestionably collapsing.
Davison’s deposition testimony indicates that by December 2008, he had “considered” the
possibility that Land Capital would be unable to be involved in the project going forward.20
When confronted about the foreclosure proceedings during a public meeting in December
2008, Davison acknowledged them but assured CMPA that Land Capital had remedied
each situation and had changed to an out-sourcing business model, which, according to
Davison, was a common measure taken by other companies as well. Davison continued
to assure CMPA that it was “business as usual” at Land Capital. Furthermore, he assured
CMPA that Land Capital’s financial problems did not put the project at risk, explaining that
the development entity, MPDP, was isolated from Land Capital’s financial difficulties.
Davison again emphasized that Land Capital was “a joint venture” with Brass/Magi, who
were the “equity partners” and “predominant owners of the project.” Davison told CMPA
he had purposefully secured this “strong financial partner” because he knew the project

19

Davison testified that he relied heavily on his ability to develop strong personal relationships. He
boasted at a public m eeting that "[t]he CMPA Board has com e to know m e very well."
20

Certainly Galt and Rodriguez knew this as well, as their testim ony confirm s they knew of Land
Capital’s financial difficulties from the beginning and for this reason, Land Capital was not involved in MPDP.

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was too big for Land Capital alone.21 In reality, there was no joint venture partnership.
Rodriguez disclaimed having any individual liability for MPDP, and, although he owns the
Texas LLC that is the predominate owner of MPDP, the Texas LLC was created solely for
this purpose with no assets and also is not connected to Brass/Magi.
8.

Davison testified that he disclosed Land Capital’s demise by telephone to

Abramson, the City’s representative, while negotiating the contract in late February or
March 2009. According to Davison, an email from Abramson dated March 7, 2009,
requesting Magi’s financial statements for review is proof that he made this disclosure.
The Court does not agree, and even assuming Davison made such a disclosure by
telephone, this does not amount to a public disclosure to CMPA.
Abramson’s deposition testimony, a portion of which was admitted at trial, neither
confirmed nor denied Davison’s purported disclosure. Instead, Abramson testified that he
recalled hearing of Davison's financial troubles from Beitsch, CMPA’s representative,
sometime between November 2008 and April 2009.

Abramson recalled that they

discussed their understanding that Brass/Magi were the development partners providing
the financial wherewithal for the development entity, as opposed to Davison and Land
Capital, with Rodriguez as the “real money guy” in Brass/Magi. This understanding is
consistent with Davison’s public representations.22 However, neither Abramson nor CMPA
were aware that in reality, Rodriguez was not financially obligated in any way. Abramson
testified that based on the representation that Brass/Magi were the financial partners, he
suggested having a qualified auditor look into this “member’s” financial records. This was

21

Judge Collier testified that he had contacted the second-ranked applicant, Trinity Capital Advisors,
to m ake sure it was still on board in case the negotiations with Land Capital were unsuccessful. He further
testified that CMPA would not have proceeded with Land Capital had it known of Land Capital’s lack of
qualifications, but he said he was satisfied by Davison’s explanations at the Decem ber 2008 m eeting
regarding CMPA’s partnership with Brass/Magi and because of CMPA’s subsequent review of Magi’s
financials.
22

Furtherm ore, the RFP had stated Brass/Magi was the financial partner and offered its financials
for CMPA to review. According to Judge Collier, CMPA had decided in Decem ber 2008 to reassess the
financial strength of Magi based on Davison's assurances at the public m eeting that Brass/Magi was the
financially responsible partner.

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done by Mort O’Sullivan, who reported during a CMPA Board meeting on March 13, 2009,
that he had reviewed “the financial statements of the stronger of the partners, Magi
Financial,” and found them to be financially sound. Thus, Davison’s assertion that
Abramson requested Brass/Magi’s financials in response to Davison’s telephone
“disclosure” is inconsistent with Abramson’s testimony.
9.

Instead of making a full public disclosure regarding Land Capital’s demise

and making sure that CMPA was well aware of the fact that Land Capital would no longer
be involved in the project, the record shows that throughout the contract negotiations,
Davison and Galt continued to lead CMPA to believe that MPDP was a joint venture
partnership between Land Capital and Brass/Magi. Davison appeared at public meetings
on December 1 and December 12, 2008, and again in January 2009, and continued to
refer to a partnership. He also never corrected or clarified statements made at these
meetings by Beitsch and Abramson that confirmed this relationship. Specifically, on
December 1, 2008, during a public meeting before the CMPA Board, CMPA’s
representative Beitsch, who had been negotiating with Davison and Galt, explained that
CMPA should refer to the Developer as MPDP, not Land Capital, because MPDP was the
development entity created to carry out the project and it was important to correctly identify
the party CMPA was dealing with. Beitsch further explained at this public meeting his
understanding that the development entity was comprised of Brass/Magi and Land Capital,
whom he described as the “active participants” in the development group. Davison was
present at the meeting and addressed CMPA after Beitsch yet he did not offer any
correction, or clarification, in spite of the fact that Land Capital was collapsing and there
was no joint venture agreement. In fact, both Galt and Rodriguez now deny that a joint
venture ever existed.
At the December 12, 2008, meeting discussed above, Davison continued to mislead
CMPA by expressly assuring CMPA that Magi was “the financially strong” partner in the
development entity. Also, at a public workshop on January 28, 2009, Abramson reported
that the development entity consisted of Land Capital and Brass, and he dispelled public

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concern by expressing confidence that Davison had a sense of the overall picture of this
project and that Land Capital and Magi would bring in the necessary expertise to get the
job accomplished,23 and Davison sat by quietly. Galt spoke on behalf of MPDP at a
January 2009 meeting, and again represented that he had “partnered” with Davison, and
he touted the benefits of proceeding through MPDP, which would serve as the one
responsible entity for the project, though Davison knew MPDP had no assets or financially
responsible “members.”
Again, in Abramson’s email to Galt on March 7, 2009, he expressly referred to Magi
as one of MPDP’s “members,” and neither Galt nor Davison corrected this false
impression.24 Instead, Davison and Galt gave CMPA a false sense of security by providing
Magi’s financials for CMPA’s review while knowing that Magi was never a joint venture
partner in MPDP in a legal sense, which was the only relationship that mattered to CMPA.
Judge Collier and City Attorney Wells testified that CMPA considered Magi’s financial
statements to be more than adequate, satisfying their concern about Land Capital’s
financial difficulties. Thus, the record reflects that CMPA reasonably believed Brass/Magi
were members of, or partners in, MPDP, based on Davison and Galt’s representations.
10.

Galt testified that CMPA knew Land Capital was no longer involved at the

time the Development Agreement was signed because Davison was asked to sign the
Development Agreement only on behalf of MPDP, not Land Capital, and an express

23

Abram son’s statem ent that MPDP would bring in the requisite professionals m erely illustrates his
trust in Davison and does not contradict the requirem ent in the RFQ and RFP that the Developer have inhouse professionals to m anage the project, which is what CMPA expected all along. There is no reason
Abram son would have known of the RFQ requirem ent as he was not involved at that tim e, and he had no
authority to reassess the qualifications of the firm chosen by CMPA as m ost qualified. Judge Collier testified
that the CMPA Board anticipated team m em bers would be em ployees or form al partners of the firm chosen,
and he confirm ed that the City did not have the right to renegotiate the qualifications of an applicant outside
of the form al qualifications process.
24

Abram son asked for "MPDP m em bers' (Magi's) financial statem ents." (Defendant's Ex. 22). Galt
testified he provided Magi's financials only because CMPA requested them , m aintaining he did not represent
them as MPDP's financials, and Davison testified that MPDP was a new entity with no assets so there was
no reason to subm it MPDP's financials. Nonetheless, it is clear from the record that Galt and Davison
intended CMPA to believe that MPDP and Brass/Magi were linked together as joint venture partners, which
was not true.

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provision in the Development Agreement stated, "As of the effective date of this
Agreement, the Developer is Controlled by Richard J. Rodriguez."25 However, by the time
the Agreement was approved in April 2009, enough had been disclosed about Land
Capital’s financial difficulties that CMPA clearly looked to Rodriguez as the “partner” who
would be providing the financial capacity for the team, based on Davison and Galt’s
misrepresentations, when in reality, neither Rodriguez nor Brass/Magi were legal members
or joint venture partners in MPDP as CMPA contemplated and had been led to believe.
It is clear from the evidence that CMPA was not fully aware of the true makeup of the
development entity or the complete demise of Land Capital, the winning firm, until well after
the Agreement was approved and signed.
11.

CMPA also required the Master Developer to be prepared and qualified

through the CCNA process to assume the design-build contractor role at the time of
entering into the Development Agreement, although CMPA retained discretion to
separately award that portion of the contract. The Development Agreement provided for
an additional 3% fee to the Master Developer if named the design-build contractor as well.
This arrangement was intended to promote greater efficiencies and cost savings for the
project. However, after execution of the Development Agreement and subsequent award
of the design-build contract to MPDP, CMPA learned that MPDP was actually not
financially positioned to step into the design-build construction general contractor role, as
had been contemplated.
In January 2010, Mark White, a vice president of MPDP who took over as project
manager after it was clear that Bruce Cutright would not fill that role, requested that MPDP
be awarded the design-build contract. CMPA approved the request, but MPDP was unable

25

Rodriguez actually controlled the Texas LLC, which was the controlling m em ber of MPDP. The
Texas LLC did not becom e a m em ber of MPDP until July 2009, which was after the Developm ent Agreem ent
had been negotiated and approved but before it was form ally executed. The problem was that neither
Rodriguez nor Brass/Magi were financially responsible for any obligations of the Texas LLC or MPDP. To
com pound the problem , Davison was not listed as in control of the developm ent entity or as a key person for
any particular role to be perform ed by the Master Developer. CMPA m aintains it was not aware of the true
m akeup of MPDP until it began its discovery in this case, which is supported by the record.

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to secure the necessary bonding for the project and instead cobbled together a last-minute
proposal to create an LLC with Hoar Construction to provide the requisite bonding capacity.
CMPA ultimately approved an arrangement whereby MPDP and Hoar Construction formed
a new company, Magi Construction, LLC, which was then named as the general contractor
on the design-build contract. This was done in some haste because MPDP’s inability to
secure the requisite bonding placed CMPA in danger of losing nearly $12 million worth of
new market tax credits for the project. The creation of Magi Construction LLC prevented
the loss of these tax incentives and cured–for the moment–the problem of MPDP not
having the bonding capacity as represented. Under this arrangement, Hoar Construction
and MPDP agreed to share the Developer’s 3% fee for the design-build contract.26 It is
significant that MPDP would not have had the opportunity to create this arrangement and
share in the design-build fee had it not prevailed as Master Developer through the CCNA
public procurement process.
12.

The parties stipulated that CMPA paid MPDP a total of $2,547,429.9627

pursuant to the Development Agreement, consisting of $1,490,263.35 as reimbursable
project costs;28 $150,000 as reimbursement for attorney’s fees and legal expenses; and
$907,166.61 as the Developer’s 4% Development Fee. The parties also stipulated that
MPDP’s share of the profits from the design-build contract is $560,785.96, consisting of

26

Hoar Construction is the controlling partner of Magi Construction LLC with a 51% interest and
MPDP shares a 49% interest; Hoar and MPDP agreed to split the 3% Master Developer’s fee for the
design-build project according to these percentages. After the Court’s sum m ary judgm ent ruling, CMPA
requested a prelim inary injunction to preserve the status quo regarding profit owed to MPDP from Hoar
Construction based on the design-build contract. The Court granted the m otion, and MPDP appealed. This
appeal is still pending, see supra Note 8.
27
In paragraph 3 of the parties’ stipulated facts, the total is stated as $2,547,529.96, which the Court
disregards as a m isprint. The individual am ounts listed correctly add up to $2,547,429.96, which is consistent
with paragraph 2 of the stipulated facts and counsel’s representation during closing argum ents.
28

CMPA’s attorney stated during closing argum ent that within this total of reim bursable costs is the
sum of $70,922, which was paid to MPDP for lot clearing. The parties stipulated that MPDP paid $64,808 of
that am ount directly to a subcontractor.

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$100,000, which was already paid, and an additional $460,786 that it is scheduled to
receive, which is the subject of the Court’s preliminary injunction.
Conclusions of Law
“A contract that contravenes an established interest of society can be found to be
void as against public policy.” Chandris, S.A. v. Yanakakis, 668 So. 2d 180, 185 (Fla.
1995); see also Am. Cas. Co. v. Coastal Caisson Drill Co., 542 So. 2d 957, 958 (Fla.
1989). Also, public policy concerns are “heightened” when a public entity is involved in the
contract. See City of Hialeah Gardens v. John L. Adams & Co., 599 So. 2d 1322, 1324
(Fla. 3d DCA 1992), rev. denied, 613 So. 2d 5 (Fla. 1992). In Florida, competitive bid and
qualifications-based competitive award statutes are designed to protect the public. See
Emerald Corr. Mgm’t v. Bay Cnty. Bd. of Cnty. Cmm’rs, 955 So. 2d 647, 652 (Fla. 1st DCA
2007); City of Sweetwater v. Solo Constr. Corp., 823 So. 2d 798, 801 (Fla. 3d DCA 2002),
rev. denied, 845 So. 2d 888 (Fla. 2003); see also Coastal Caisson Drill Co., 542 So. 2d at
958 (stating Fla. Stat. § 255.05 is for the protection of the public). Florida courts have
observed that the state’s competitive award or competitive bid statutes confer “reciprocal
benefits” on the participant and the public authority but also impose “reciprocal obligations”
on each. Emerald Corr. Mgm’t, 955 So. 2d at 652 (internal quotation marks omitted); see
also City of Sweetwater, 823 So. 2d at 801. The aim of Florida’s public policy in the
competitive award context is “to eliminate improper influence, or the temptation to exert
improper influence, in the obtaining of [CCNA] project funding awards and to eliminate
arrangements which encourage the payment of inequitable fees bearing no reasonable
relationship to the services actually performed.” City of Hialeah Gardens, 599 So. 2d at
1325 (specifically discussing contingency fee arrangements, which are expressly prohibited
in the CCNA).

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Florida courts have long held that a municipality “may recover the full amount paid”
on a contract that is void as expressly prohibited by law.29 Town of Boca Raton v.
Raulerson, 146 So. 576, 577 (Fla. 1933); see also Wester v. Belote, 138 So. 721, 724
(1931) (recognizing that where an illegal or void contract already has been awarded and
executed, and payments made by the public entity, the payments may be recovered back
for the public treasury). Additionally, “courts have an ‘affirmative duty’ to avoid allowing a
party who violates public policy to receive any substantial benefits from his or her
wrongdoing.” City of Hialeah Gardens, 599 So. 2d at 1325 & n.3 (also noting that it is the
court’s duty to avoid "a raid on the public treasury" 30); see also Cooper v. Paris, 413 So.
2d 772, 774 (Fla. 1st DCA 1982). The Court concludes that in order to protect the public
treasury, these principles must apply equally as a warning to participants in a public

29

The Florida Suprem e Court explained in Town of Boca Raton v. Raulerson:

This rule m ay, at a glance, seem a harsh one, because under it the town would be
allowed to keep what it needs and uses and escape paym ent therefor, but the statute is upon
the books for all to read and heed. It is a warning to those who becom e public officers that
they m ay not take advantage of their position by dealing with them selves, and, being so
warned, they enter upon such transactions at their peril. Should we apply in such instances
the rule that recovery should be lim ited to the profit enjoyed from the transgression, it would
open the way and extend the invitation to fraud as well as violation of the law.
Town of Boca Raton v. Raulerson, 146 So. 576, 577 (Fla. 1933).
30

This com m ent was m ade in the slightly different context of considering a contingency fee
arrangem ent regarding a project within the scope of the CCNA. See City of Hialeah Gardens, 599 So. 2d at
1323-24. The CCNA requires professionals, nam ely, architects or engineers, to represent that they have not
agreed to pay a contingency fee for the purpose of securing the award of a public contract within the scope
of the CCNA and crim inalizes the paym ent of such a fee, see Fla. Stat. § 287.055(6); as a result, the court
in City of Hialeah Gardens concluded that such an agreem ent renders the contract void and unenforceable
as against public policy. In this case, although CMPA also alleged and provided som e evidence that MPDP
had offered to pay a contingency fee for the award of the Developm ent Agreem ent (see doc. 18-5), there was
no evidence that a contingency fee was ever actually paid. Nonetheless, the Court finds that the context
here–i.e., the failure to com ply with the CCNA-required qualifications process coupled with findings in this
Order showing false and m isleading statem ents and intentional om issions were m ade during the CCNA
qualifications process–is sufficiently analogous in nature to warrant applying the sam e general principles
articulated in City of Hialeah Gardens. Also, although the Florida Suprem e Court subsequently has reversed
a decision relying on City of Hialeah Gardens, see Rotemi Realty, Inc. v. Act Realty Co., 911 So. 2d 1181,
1183 (Fla. 2005), the Court finds that decision, which involved a real estate brokerage arrangem ent, is
factually distinguishable from the fraud context of this case and does not preclude reliance by this Court on
the general principles stated in City of Hialeah Gardens.

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procurement process who attempt to take advantage of the system by injecting material
misrepresentations and omissions into the process to gain or retain a competitive
advantage over other applicants competing in the public award process. As explained in
City of Hialeah Gardens, citizens have a right to expect good faith and honest dealings with
regard to expenditures of public money. Id. at 1325.
It is also firmly established in Florida law that where a competitive public contract
was awarded in violation of a statute but “in apparent good faith, in an honest effort to
pursue the requirements of competitive bidding statutes, and it is not shown that the
contract as actually entered into is to the public’s disadvantage in any way, nor that it has
been entered into with unlawful or fraudulent intent,” the decision of whether to restrain
payments to the contracting party – or, presumably the converse, whether to require
complete disgorgement payments received on the void contract – will rest with the court’s
discretion in light of the equities involved. Wester, 138 So. at 726. Relying on this
principal, the Florida First District Court of Appeal permitted quantum meruit recovery of
money spent in reliance on a public contract declared void due to a failure to meet
statutory bidding requirements on grounds that, although the public official had required
performance of the void contract, there was no indication of “fraud, corruption or unfair
practices on the part of either party to the contract.” Robinson’s Inc. v. Short, 146 So. 2d
108, 114-18 (Fla. 1st DCA 1962), cert. denied, 152 So. 2d 170 & 155 So. 2d 548 (Fla.
1963). In Robinson’s, the court reasoned that the contract at issue in the case, which “was
considered void for direct evasion of an express mandatory [statutory bidding] provision,”
had been awarded for an honest bid, despite the statutory noncompliance. Id. (noting the
bid had disclosed that a major portion of the contracted printing would be performed out
of state, contrary to the statutory requirements). The court further stressed that the public
had benefitted from performance of the contract because the services provided were
necessary and there was no taint of fraud; thus, equitable quantum meruit recovery was
not precluded. See id. After distinguishing other contexts where the law precluded any
payment of public funds on a void contract (such as where there was no effort to comply

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with the statutes or a theory of implied contract), the Robinson court further explained that
if some equitable recovery is appropriate, it is limited to actual cost of goods and services
provided for the public’s benefit, not to exceed their reasonable fair value, and may not
include any element of profit. Id. at 116-17. In sum, where a contract has already been
awarded and performance has been rendered, quantum meruit, or presumably a right of
setoff, regarding the public money will lie in equity upon proof of the following: (1) good
faith in the competitive award process by all parties; (2) the services and supplies provided
were necessary and beneficial to the public entity, no effort was made to restrain the
performance, and performance was essential to prevent loss to the public; and (3) the cost
did not exceed reasonable fair value for the goods and services provided. Id. at 118.
In this case, MPDP has asserted it acted in good faith in the CCNA process, that it
performed and provided development services pursuant to the contract for over a year,
which benefitted the public, and that the cost of those services did not exceed their fair
value. CMPA disagrees, arguing that despite its own good faith attempt to comply with the
competitive award statutes, the statutory noncompliance, which was the award of the
Development Agreement to an unqualified firm, resulted because of fraud and
misrepresentations on the part of MPDP’s principals, foreclosing any equitable setoff and
requiring MPDP to repay all public money received pursuant to the contract. Having
carefully reviewed all of the evidence, the Court finds, for reasons stated in the findings of
facts listed above and below, that material misrepresentations and omissions invaded the
competitive award process, precluding MPDP from benefitting from a defense of setoff
based on any services it may have provided as Master Developer and requiring MPDP to
disgorge the Development Fee.
Having been chosen to negotiate in this statutory public procurement process based
on qualifications, Land Capital and MPDP through their officers, Davison and Galt, had a
continuing duty to disclose material information or withdraw if material qualifications were
no longer met. See generally Loc. No. 234 v. Henley & Beckwith, Inc., 66 So. 2d 818, 823
(Fla. 1953) (“[O]ne who has entered into a contract or undertaking which is violative of

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public policy owes to the public the continuing duty of withdrawing from such an
agreement.”). The record before the Court demonstrates that instead of complying with
this duty, Davison and Galt repeatedly to misled CMPA by failing to fully disclose material
facts about Land Capital and MPDP for the purposes of qualifying for and maintaining a
competitive advantage in the public procurement process. “Florida law recognizes that
fraud can occur by omission and places a duty on one who undertakes to disclose material
information to disclose that information fully.” ZC Ins. Co. v. Brooks, 847 So. 2d 547, 551
(Fla. 4th DCA 2003), rev. denied, 860 So. 2d 980 (Fla. 2003); see also Gutter v. Wunker,
631 So. 2d 1117, 1118-19 (Fla. 4th DCA 1994) ("[W]here a party in an arm's length
transaction undertakes to disclose information, all material facts must be [fully] disclosed.").
Galt and Davison were sophisticated businessmen on whom the importance and formality
of a public procurement process would not have been lost.
Beginning with the RFQ process, Davison created false impressions that he had an
impressive and professional “assembled” team, knowing there were no binding legal
relationships among the members as contemplated by the RFQ. In fact, the team
completely changed between the RFQ and RFP submissions, and Davison acknowledged
in his testimony that he did not disclose expressly, either verbally or in writing, that the
initial team members were no longer involved, although it was clear CMPA believed
otherwise. This “assembled team" had helped Land Capital secure the number one
ranking during the initial stage of the CCNA process. The RFP also required a fully
assembled team, and Davison again represented that he had one when in fact he did not
and instead merely hoped that he had one. He also misled CMPA to believe that Cutright
was a team member and would be a key figure, when in fact Cutright had not been secured
contractually as an employee or through any legally binding consultant agreement.
Moreover, Davison and Galt both made repeated assertions in the RFP proposal,
during the RFP oral presentation to CMPA, and during public meetings throughout the
contract negotiations that there was an existing “partnership” or “joint venture” relationship
between Land Capital and Brass/Magi through MPDP, despite the absence of one. "A joint

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venture is a legal relationship, similar to a partnership but more limited in scope."
Jackson-Shaw Co. v. Jacksonville Aviation Auth., 8 So. 3d 1076, 1089 (Fla. 2008). Joint
ventures are created for the purpose of a particular business deal or transaction and must
arise out of a contract which includes: "(1) a community of interest in the performance of
the common purpose, (2) joint control or right of control, (3) a joint proprietary interest in
the subject matter, (4) a right to share in the profits and (5) a duty to share in any losses
which may be sustained." Id. (internal marks omitted). Although MPDP was created out
of a community interest in a common purpose, Land Capital and Brass/Magi had no joint
control of MPDP, no right to share in the profits of MPDP, and no obligation to share in any
losses sustained by MPDP, as is required of a joint venture member. See Jackson-Shaw
Co., 8 So. 3d at 1089. Neither MPDP nor its true legal members (the LLCs created to be
MPDP’s members) had any assets nor were they connected to Land Capital or Brass/Magi
as Davison repeatedly assured CMPA. The record confirms that Davison and Galt
continued to lead CMPA to believe that Brass/Magi was Land Capital’s financial “partner,”
joint venture member, or at least was affiliated with MPDP’s LLC legal members, despite
the fact that Richardson would not allow his companies to be an equity partner with Land
Capital. In fact, Richardson denied the existence of any joint venture relationship between
his companies (Brass/Magi) and Land Capital or MPDP. The Court rejects Davison’s and
Galt’s assertions that they used the terms “joint venture” and “partnership” only in a loose
sense with no intent to mislead. Their repeated use of these terms throughout the formal
public procurement process for the purpose of securing the Master Developer Agreement
over other competitors demonstrates an intent to deceive.
Davison also falsely represented that Land Capital would be the “lead developer”
when, as noted, he knew it was financially collapsing. It is clear from the record that Land
Capital was failing even as Davison and Galt presented the RFP proposal. Its financial
difficulties were the reason that Galt and Rodriguez became involved in the project
(Davison needed a financial backer), and also the reason that neither Galt nor Rodriguez
was willing to enter into a legal joint venture with Davison or Land Capital. Galt testified

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that he knew of Davison’s and Land Capital’s financial troubles before the RFP was
submitted. Obviously, Davison was fully aware of it as well. Davison, Galt and Rodriguez
all testified that the circumstances had changed between the time the RFP proposal was
submitted and the Development Agreement was approved and executed, and they insist
they did their best to work through a difficult situation when Land Capital began to fail.
However, the Development Agreement was not approved or executed until well after Land
Capital’s demise was obvious to them, and the parties did not disclose either its collapse
or the lack of any legally binding joint venture agreement between Land Capital and
Brass/Magi or MPDP’s members. Based on Davison’s and Galt’s assurances, CMPA was
misled to believe it was negotiating with the most highly qualified firm under the CCNA and
that Land Capital had in place the team and joint venture arrangement promised, in
addition to the financial commitment of Brass/Magi. Despite a continuing obligation to fully
disclose the legal relationships and true state of affairs of Land Capital and MPDP, and
many opportunities to do so, no such disclosure was ever made. As a consequence,
Davison and Galt wrongfully gained a competitive advantage for Land Capital and MPDP
over Trinity Capital Advisors, the next most qualified firm.
The Court rejects as contrary to the evidence Davison’s assertion that he acted out
of optimism that Land Capital would survive, as opposed to bad faith. The Court also
disagrees with MPDP’s assertion that Land Capital’s demise was fully disclosed by
Davison’s public acknowledgment of some of Land Capital’s financial troubles as well as
the wording of the Development Agreement. As noted above, Davison’s public statements
misled CMPA to believe Land Capital would pull through and that MPDP was controlled by
Rodriguez and the financially strong partner, Brass/Magi. Regarding the Development
Agreement, although it was signed by MPDP, not Land Capital, and included a provision
naming Rodriguez as the person in control of the development entity, neither the true legal
members of MPDP nor its true “shell” status were disclosed. In the face of Davison’s and
Galt’s repeated public assurances that Brass/Magi was the financially responsible joint
venture partner of Land Capital and MPDP, neither the general awareness of Land Capital’s

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financial troubles nor the wording of the Development Agreement can be considered
adequate disclosure of MPDP’s true members or the true state of affairs.31
Based on Davison’s and Galt’s material misrepresentations and omissions on behalf
of Land Capital and MPDP in this public procurement process, the Court concludes that the
circumstances of this case do not fall within the narrow good faith exception established in
Robinson’s, and thus there is no need to consider the remaining factors set forth in
Robinson’s, such as fair market value for services provided by the Master Developer.32
Consequently, the entire amount paid to MPDP as the Master Developer’s Development
Fee of $907,166.61 must be disgorged, regardless of any services actually provided by
MPDP as Master Developer. The Court has “an affirmative duty to see that the party
violating public policy not benefit in any way as a result of his wrongdoing.” Cooper, 413
So. 2d at 774. Also, consistent with the Court’s Preliminary Injunction Order, MPDP must
disgorge the profit from the design-build contract, which totals $560,785.96 ($100,000 that
MPDP already received plus $460,786).33 Although the validity of that contract is not at
issue in this case and is not challenged, MPDP’s profit from the design-build contract flowed
directly from the rights it wrongfully obtained as Master Developer under the Development
Agreement and through the CCNA process. Thus, this profit must be disgorged as well.
CMPA also would have the Court require MPDP to repay amounts that passed
through MPDP as reimbursable costs paid directly to project professionals and

31
Even if the Court accepts Davison's testim ony that he m ade a private "disclosure" of Land Capital's
dem ise to Abram son in late February 2009, this inform al telephone conversation with Abram son, who was
not a CMPA Board m em ber, was too little too late to constitute full disclosure.
32

The Court finds it puzzling that MPDP argues in its trial brief that it should not have been required
to litigate fair m arket value without notice in the pleadings that any harm had occurred, when in fact, the
Court’s use of the Robinson’s analytical fram ework was to MPDP’s benefit. If there had been no fraud, MPDP
m ight have been perm itted to retain that portion of the Developm ent Fee that was the fair m arket value of the
services it provided as a setoff. In light of the m aterial m isrepresentations and om issions, however, there is
no need to consider whether MPDP provided any valuable developer services.
33

To the extent paym ent am ounts discussed in the Prelim inary Injunction Order or in other previous
orders are inconsistent with this Order, this Order controls. At the tim e of all prior orders, the evidentiary
hearing had not yet been conducted, and the parties stipulated to the am ounts stated in this Order in their
pretrial statem ent.

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subcontractors, totaling $1,490,263.35, and amounts reimbursed for legal fees, totaling
$150,000. With one exception, there is no dispute that the project reimbursable costs
totaling $1,490,263.35 were paid directly to the project professionals and subcontractors
for services they provided. The one exception is that CMPA reimbursed MPDP $70,922 for
lot clearing but MPDP only paid the contractor $64,808, leaving a difference of $6,114,
which MPDP apparently retained. This benefit to MPDP must be disgorged. Similarly, the
$150,000 legal fees were reimbursed for MPDP’s benefit and must also be disgorged. In
all other respects, however, the record shows that MPDP acted as a mere payment agent
for CMPA with regard to the reimbursable costs. There is no dispute that qualified
professionals and subcontractors, not MPDP, provided these valuable services and that
MPDP remitted the reimbursement directly to them.34 In fact, for over a year, CMPA
approved the invoices as reasonable payment for services provided by the professionals
and subcontractors, and the public benefitted from the work.35 Requiring repayment of
these amounts from MPDP would be more in the nature of damages and a windfall to the
public, as opposed to equitable disgorgement.

34

The reim bursable costs were paid based on receipts from the professionals after CMPA reviewed
them without objection to the cost of the work or m aterials provided. CMPA did not plead that it was harm ed
by the work or m aterials provided by the project professionals or subcontractors.
35

The park is now constructed, so CMPA will not have to restart the public procurem ent process with
a qualified Master Developer. Although the Court previously concluded that MPDP is not entitled to the benefit
of an equitable setoff under the Robinson’s analysis, these reim bursable costs fall outside the scope of that
analysis because the record clearly indicates that these costs were not incurred by the Developer. The Court
is not here applying a setoff but sim ply concluding as a m atter of equity that MPDP did not derive any “benefit”
from these paym ents. The Florida cases suggesting that a m unicipality m ay recover all m oney paid on a
contract that is void for violation of com petitive bid statutes used discretionary language, i.e., "m ay," and did
not involve the type of developer agreem ent at issue in this case. Those cases involved contracts for a
particular m aterial or service that was provided by the contractor whereas here, as stated above, the project
reim bursable costs were not com pensation paid to MPDP for any m aterials or services that MPDP provided.
However, this is not to say that CMPA still owes M PDP on any outstanding invoices for costs. The
Developm ent Agreem ent is void, and MPDP can claim no rights under a void contract. See Harris v. Sch. Bd.
of Duval Cnty., 921 So. 2d 725, 735 (Fla. 1st DCA 2006) (“‘A contract entered into in violation of statutes and
rules requiring com petitive bids is absolutely void . . . and no rights can be acquired thereunder by the
contracting party.” (quoting W ester, 138 So. at 724)). The Court concludes only that equitable disgorgem ent
of these am ounts from MPDP is not appropriate.

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Accordingly:
1.

Defendant Maritime Park Development Partners, LLC, is ordered to disgorge

to Plaintiff Community Maritime Park Associates, Inc., the total sum of $1,624,066.57.36
2.

The Clerk is directed to enter judgment accordingly in favor of Plaintiff and

against the Defendant and tax costs against the Defendant.
DONE and ORDERED this 4th day of February, 2014.

M. Casey Rodgers
M. CASEY RODGERS
CHIEF UNITED STATES DISTRICT JUDGE

36

The total judgm ent represents am ounts CMPA paid on the void Developm ent Agreem ent as the
Developm ent Fee ($907,166.61), the reim bursem ent of M PDP’s attorney's fees ($150,000), MPDP's profit
on the lot clearing ($6,114), and MPDP's profit from the design-build contract ($560,785.96).

Case No. 3:11cv60/MCR/CJK