Verdict in cemetery deal: $6 million plus possibly huge punitive award

Lies and double-dealing between wealthy developers and a prominent attorney who is pushing a huge government-backed transit project downtown cost two elderly widows dearly when they sold a Boca Raton cemetery 11 years ago, a jury ruled Friday.

After finding that wildly successful South Florida home builders Arthur and Edward Falcone committed civil theft in the $6.1 million cemetery deal, the jury ordered them to pay $2 million to the adult children of the widows, who died during the lengthy litigation. Because the jury of three men and three women agreed the two acted with criminal intent, under Florida law, the amount automatically triples to $6 million.

And the tab could go far higher.

The behavior of Edward Falcone, who conspired with attorney Michael Masanoff, was so egregious that the developer, who paid $28 million for a mansion on Palm Beach, should be punished, the jury agreed. The jury is to return to court on June 16 to determine how much Edward Falcone should pay in punitive damages, which are based largely on a person’s net worth.

Attorneys representing the adult children of Kathleen and Elishka Michael said they were pleased by the verdict. In closing arguments, attorney Michael Avenatti asked the jury to award the family $35 million. Now, with punitive damages in the mix, he could again seek that amount.

“They are going to punish the defendants for all the lying that has gone on all these years,” said attorney Edward Ricci, who also represented the Michaels.

The family’s star witness turned out to be Masanoff.

The former chairman of the board that oversees Tri-Rail, who persuaded the Palm Beach County Commission to sell him 6 acres in West Palm Beach to create a $300 million “transit village” of office towers, shops and condos, testified that the Falcones paid him $100,000 to work both sides of the cemetery deal.

He represented the widows when he worked for the once powerful Boca Raton law firm, Sachs, Sax and Klein. When he left the firm, he contacted Arthur Falcone to see if he was interested in buying the cemetery on Military Trail, then known as Heritage Manor. While Arthur Falcone passed on the deal, his brother, Edward, later pursued it. (Years ago, a judge ruled that Arthur Falcone couldn’t be pursued for punitive damages.)

During the trial, Masanoff testified that the Falcones encouraged him to breach his fiduciary responsibility to the widows. The brothers also agreed to conceal the $100,000 payment, he said.

Attorney William Cornwell, who represented the Falcones, couldn’t be reached after the verdict. The Falcones, who attended the trial, weren’t in the courtroom when the jury decision was announced.

During closing arguments, Cornwell demonized Masanoff, who reached a confidential settlement with the family before the trial began.

“Mr. Masanoff did a mea culpa and tried to blame us for what he did and then lied about for 10 years,” Cornwell said. But, he said, there was no evidence Masanoff sweetened the deal for the Falcones.

The cemetery was in shambles when the Falcones bought it, he said. Temporary crypts were leaking, people who had bought grave sites were suing and the state was threatening to yank its license. In August 2002, long before the Falcones were involved, the family agreed to sell the cemetery for $7.2 million. Seven months later, the Falcones paid $6.1 million for it.

Ultimately, it appears jurors didn’t believe the family was fleeced on the sale. They awarded nothing in damages related to the sale of the cemetery business and the land. Instead, they awarded $2 million in damages for the attorneys fees and costs the family spent in the transaction.

The family already has pocketed some money from the deal gone awry. In addition to Masanoff, attorneys Peter Sachs, Spencer Sax and former U.S. Rep. Ron Klein paid undisclosed amounts to settle claims against them.

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