Wynwood warehouse owners sue over unpaid $500k deposit in failed $12.7M sale

Wynwood warehouse owners sue over unpaid $500k deposit in failed $12.7M sale

Monday, July 24, 2017

320 Northwest 26th Street and 380 Northwest 26th Street

A $12.7 million deal for a pair of wholesale shoe warehouses in Wynwood has cratered after the buyer allegedly pushed back the closing date several times and failed to pay a $500,000 deposit, according to a recent lawsuit filed in Miami-Dade Circuit Court.

The sellers, Yuan Yin Yen and Hsi Yueh Yen, are suing MGC Development Corp. and the transaction’s escrow agent — Miami-based law firm Avila Rrodriguez Hernandez Mena and Ferri — for breach of commercial contract, breach of implied escrow agreement and breach of fidiuciary duty. The Yens’ attorney John Patterson did not respond to a phone message and an email requesting comment. Efforts to reach representatives of MGC were unsuccessful.

The lawsuit states the Yens and MGC entered into a sales contract on April 1, 2016 for 320 Northwest 26th Street and 380 Northwest 26th Street, two adjacent properties. The deal included an initial $50,000 deposit and an additional $450,000 to be paid after both sides completed their due diligence. On April 8, 2016, Avila Rodriguez founding partner Daniel Mena notified the Yens and their attorney via letter that the $50,000 had been placed in escrow.

Three months later, Mena sent another letter informing the Yens that his client had deposited another $250,000, shortly before both sides agreed to deposit the balance by November 30, 2016, the anticipated closing date, according to documents attached to the lawsuit.

The sales contract was amended two more times to extend the closing date twice to February 28, 2017 and then to April 28, 2017 at the buyer’s request. The Yens also had the option to accelerate the April closing by 10 days.

However, Mena informed the Yens and their counsel in early April that MGC could not make the final $200,000 for the deposit and requested another extension to close the deal by August 31, the lawsuit claims. The Yens refused and the deal failed to close. Despite sending MGC and Mena demand letters for the full $500,000 nonrefundable deposit, the Yens never got their money, they allege.

Mena was on vacation and unavailable for comment, but his law firm partner Eduardo Rodriguez declined to comment on the specifics of the lawsuit. He said the $500,000 has been deposited into a court registry. “We will let the court decide who is entitled to the funds,” Rodriguez said.

According to Miami-Dade property records, the Yens bought the two properties in 1993 and 1996 for $184,000 and $108,000 respectively.

Source: The Real Deal