The FDIC has filed suit against Sarasota attorney Robert Messick and his law firm Icard, Merrill, Cullis, Timm, Furen & Ginsburg for malpractice, seeking $4.6 million in damages and a jury trial.
The case involves the now defunct First Priority Bank in Bradenton and the River Meadows Development, organized and managed by Mark Brivik, a Sarasota developer who had been arrested and charged with defrauding investors. Prosecutors later declined to file formal charges.
In the suit filed Dec. 22 in U.S. District Court in Tampa, Messick has been charged with having multiple conflicts of interest in representing the bank, Brivak, the lender and other parties involved in a deal to finance the waterfront development along the Manatee River in 2006.
The suit alleges that Brivik, along with five other investors, formed River Meadows in 2005 and tried to buy five parcels of land to develop a 97-lot residential subdivision in Manatee County. Four of the parcels were purchased but owners of a final 25-acre plot would not agree to sell, only allowing Brivik a partial right of first refusal on the property.
Messick, the FDIC alleges, was involved in all aspects of the deal from property negotiations for Brivik to drafting an operating agreement for the borrower and a purchase-and-sale agreement. The fact that the final piece of land for the project had not been purchased was never disclosed by Messick in dealings with the bank, the FDIC suit says.
The bank’s board of directors approved a $5.3 million loan for the project, but the suit alleges “had Messick informed the bank about these material facts, the bank would have never made the River Meadows loan.”
The Florida Office of Financial Regulation closed First Priority in August 2008. The bank had $43 million in non-performing loans and was operating with a meager $1.5 million in total equity capital.
“The claims of the FDIC against our firm are baseless and another example of similar misplaced actions that have become commonplace as a result of the larger economic downtown,” said Mike Furen, chairman of the board of Icard Merrill. “Our firm will vigorously defend these claims because we are not responsible for loan losses suffered by First Priority Bank or the FDIC. Our role was limited to the preparation of the documents for a loan transaction that was agreed to by the bank and its borrower before our firm first became involved and we were not involved in the underwriting or loan approval process.”
A previous suit against Icard by other investors in the development resulted in a settlement.
The suit charges Messick, a member of the board of directors for Sabal Palm Bank and a Sarasota Chamber of Commerce trustee, and his firm with breaching their fiduciary duties by failing to inform the bank that River Meadows never had an option to purchase the final parcel and failing to point out their conflict of interest.
Representatives with the Coral Gables law firm that filed the suit on behalf of the FDIC said they could not comment.