MIAMI -- The U.S. District Court for the Southern District of Florida has granted summary judgment for an asset management company being sued for breach of contract after failing to come to a written agreement with a fund manager.
Webster Hughes filed the lawsuit last year against Priderock Capital Partners LLC - which specializes in acquiring, developing, financing, managing and renovating apartment communities across the United States - for breach of oral contract and breach of contract implied-in-fact.
Hughes, whose work included reviewing monthly Federal Home Mortgage Loan Corporation (Freddie Mac) servicing reports to confirm cash flows and comparing actual numbers to previous projections, had claimed that Priderock cut ties amid the parties failing to sign an actual written agreement.
Priderock had argued that Hughes' claims fell short because a verbal agreement isn’t permitted under Florida's Statue of Frauds.
U.S. District Court Judge Robin L. Rosenberg
“Counts I and II are each barred by the Statute of Frauds because plaintiff seeks to enforce an oral or implied-in-fact agreement for a multiyear term, which was not intended or capable of being performed within one year,” the ruling states.
Hughes' and Priderock’s working relationship began in 2015 when they partnered to launch the Priderock Multifamily Debt Opportunity Fund. It was meant to serve as an investment fund that obtains limited mortgaged securities that Freddie Mac provides. However, while the two went back-and-forth with 10 written contract proposals, Hughes and Priderock never actually signed a written agreement, only an oral agreement.
Hughes said that the he and Priderock verbally agreed that Hughes would get $200,000 a year for the life of the fund, with an additional 10 percent for the returns of the fund, as well as reimbursement for any of his out-of-pocket expenses and licensing fee.
U.S. District Judge Robin L. Rosenberg presided.