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DEAUVILLE BEACH RESORT LOSES COURT BATTLE TIED TO $400K JUDGMENT


THE OWNERS OF THE FABLED MIAMI BEACH HOTEL ARE SEPARATELY BEING SUED FOR FAILING
TO MAINTAIN THE 63-YEAR-OLD OCEANFRONT BUILDING

Miami /
Oct.October 14, 2020 11:30 AM
By Francisco Alvarado
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Deauville Beach Resort

UPDATED, Oct. 14, 12:35 p.m.: The Deauville Beach Resort’s management company
and a Miami attorney engaged in a “sham” court petition to transfer assets so
the firm could avoid paying a six-figure judgment, according to a recent ruling
by Miami-Dade Judge Michael Hanzman.

Hanzman dismissed a 2018 petition filed by lawyer Felix Caceres seeking an
assignment for the benefit of Deauville Hotel Management’s creditors. The
assignment is a state court alternative to federal bankruptcy that allows a
debtor to voluntarily assign its assets to a third party. The assets are to be
liquidated so that the debts are fully or partially paid back.



Belinda Meruelo, manager for Deauville Hotel Management, LLC., signed an
agreement conveying all of the company’s assets to Caceres, who was supposed to
act as a trustee and disperses the assets. However, the Caceres-Deauville
agreement stated the management company has zero assets and zero money. It’s
only creditors are Kemesia and Patrick Ward, a married couple who won a judgment
of more than $400,000 against Deauville Hotel Management in a separate lawsuit.

Hanzman determined Caceres was conflicted because he is an acquaintance of
Meruelo and her family, who own the 63-year-old oceanfront hotel at 6701 Collins
Avenue under a separate company called Deauville Associates LLC.



“The Court finds that this assignment was effectuated not for the legitimate
purpose of marshaling assets for the benefit of creditors … and with the intent
to shield the debtors’ principal from potential liability,” Hanzman’s order
states. “This assignment was a sham intended to frustrate the collection efforts
of creditors Kemesia Ward and Patrick Ward.”

An attorney for Deauville Hotel Management did not respond to requests for
comment.

Faudlin Pierre, the attorney representing the Wards, said the Meruelos have put
up a fight at every turn, expecting that his clients would not push back.
“Clearly, they are mistaken,” Pierre said. “This has been a long road in which
the Deauville hotel has fraudulently attempted to avoid paying this judgment.
The court correctly found this was a total sham.” 


Caceres’ lawyer Clayton Kaeiser said in a written statement that his client is
currently deciding whether to file an appeal.

“The court was wrong both procedurally and factually,” Kaeiser said. “The court
did not allow us to present any evidence at the hearing. It made its findings
based on the word ‘acquaintance,’ which is defined as a person one knows
slightly but who is not a close friend. Obviously, from the litigation in the
case, Mr. Caceres became an acquaintance of all the parties.”



Designed by famed architect Melvin Grossman, the Deauville Beach Resort is part
of Miami Beach’s rich history. In 1964, the Beatles stayed and performed at the
hotel for the Ed Sullivan Show. The property, owned by the Meruelos since 2004,
has been shuttered for nearly three years after it was damaged by fire and
Hurricane Irma.

Kemesia and Patrick Ward sued Deauville Hotel Management for allegedly ruining
their wedding in the summer of 2010. Their complaint claims that the couple had
booked a ballroom at the hotel for their wedding reception, but were not able to
hold it there after a Miami Beach building inspector deemed the space unsafe for
occupancy. The ceremony and party were relocated to the Deauville’s lobby, where
the event was crashed by other hotel guests, including people in their bathing
suits, according to court documents.

In 2015, a jury ruled in favor of the Wards, awarding them $27,986 in damages
and $405,222 in attorney fees. Deauville Hotel Management appealed and lost in
2017.

Last year, the city of Miami Beach sued Deauville Associates for failing to
maintain the property, which is considered a contributing structure to the
city’s North Shore Historic District. In its lawsuit, the city alleges the
owners have no intention of fixing the building voluntarily and are “hedging
[their] bets” that Miami Beach will allow the demolition of the hotel.



--------------------------------------------------------------------------------

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