MIAMI — A district court judge has ruled that it is too early for a group of defendants in an ongoing property scam case to request sanctions against their litigant.
Judge Edwin Torres of the U.S. District Court for the Southern District of Florida issued a decision on Oct. 10 detailing why it would be inappropriate to grant the Miller defendants (Jeffrey Miller, Park Centre Med-Suites, Gardens Med-Suites and Medical Practice Operations) their motion for sanctions against TIC Park Centre.
The Miller defendants asked for Rule 11 sanctions after being accused of running a property scam that left TIC out of more than $100,000. They argued that TIC had no evidence and was only speculating about illegal activity.
However, the court said that the motion for sanctions was premature. According to a previous judgment by the U.S. Court of Appeals for the Eleventh Circuit, Rule 11 sanctions are normally determined at the end of a case.
“The reason Rule 11 sanctions are deferred until the end of a case is to allow the court to ‘gain a full sense of the case and to avoid unnecessary delay of disposition of the case on the merits,’” the district court ruling said.
TIC initially sued the defendants after accusing them of taking part in illegal activity that led to the loss of millions of dollars in commercial property investments in Miami Gardens.
TIC said the defendants executed leasing scams to steal money from the property, which contributed to its foreclosure. According to the court document, TIC alleged the Miller defendants violated their Property Management Agreement and Tenant in Common Agreement when it entered into two allegedly fraudulent leases with Park-Centre and Gardens back in 2010.
Park Centre and Gardens then went on to sublease the property to other tenants, while some of the defendants did business in their wives’ names to take money from the plaintiff’s property, TIC alleged.
TIC said it lost out on $130,000 in rental income that would have been paid to the property, but was instead diverted to the owner of the entities that operated as facades for the defendants.
The defendants said their actions were reasonable as business judgments, and that the losses were a result of recession, not illegal activity, but the court said it was too soon to go for sanctions and dismissed their motion.