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Bahamas Sales Associate v. Byers

United States District Court, M.D. Florida, Jacksonville Division

August 31, 2017




         This RICO action involving a failed real estate development, hotly contested for nearly a decade, is before the Court on Defendants Edward R. Ginn, III, ERG Enterprises, LP, Lubert-Adler Management Company, LP, and Dean Adler's (collectively “Defendants”) Motion for Summary Judgment (Doc. 527), to which Plaintiffs responded (Doc. 550), and Defendants replied (Doc. 571). In the course of reviewing the motion for summary judgment, the Court has also considered: (1) Plaintiffs' Motion to Exclude Testimony of Expert Witnesses Ian Ratner, Joshua Harris, and Rosemary Nicholls (Doc. 558) and Defendants' response in opposition (Doc. 559); and (2) Nutmeg Insurance Company's Motion for Reimbursement of Defense Fees Paid on Behalf of Third Party Plaintiffs (Doc. 518) and Third-Party Plaintiffs Edward R. Ginn, III and ERG Enterprises, L.P.'s response (Doc. 523). The Court has reviewed the extensive written record and heard oral argument on the motion for summary judgment at the June 26, 2017 hearing, the record of which is incorporated herein. (Docs. 576, 579).


         Over the years, real estate developer Edward R. Ginn, III (“Bobby Ginn” or “Ginn”) and his affiliated companies acquired a reputation for building lavish resort communities with upscale amenities. (Doc. 557-233 at 3). At different points in time, Ginn operated through various corporate entities, including Ginn Development Company and later, The Ginn Companies, LLC. Ginn's investment partner, Lubert-Adler Management Company, LP (“Lubert-Adler”) manages real estate equity investment funds (the “LA Funds”), which invest in a broad spectrum of real estate projects, such as office buildings, retail centers, and hotels. (Doc. 528-69 ¶ 1). In 1998, the LA Funds began investing in residential resort communities developed by Ginn, which were aimed at the “baby boomer” second and retirement home markets. (Id. ¶ 6; Doc. 528-1 at 1). According to Lubert-Adler's co-founder Dean Adler, each Ginn development in which the LA Funds invested was owned by a limited liability limited partnership (“LLLP”), with the particular LA Fund acting as a limited partner in the LLLP. (Doc. 528-69 ¶ 7). The general partners of the LLLPs were entities wholly-owned by ERG Enterprises, LP (“ERG”), a Ginn affiliate. (Id.).

         Ginn's projects were financed with equity and debt from the LA Funds, third-party debt, and proceeds from lot and condominium sales. (Id. ¶ 10). These Ginn/Lubert-Adler joint ventures typically generated proceeds from the sale of real estate, particularly the pre-sale of single family unimproved lots directly to investors. (Doc. 528-1 at 1). The joint ventures could close on lots before completing the infrastructure and amenities because they posted performance bonds that assured investors that the infrastructure would be finished. (Id.).

         Beginning in late 2006 and continuing through the spring of 2008, Plaintiffs, numbering 51, [1] purchased undeveloped lots in Ginn Sur Mer, [2] a Ginn/Lubert-Adler planned luxury resort community on Grand Bahama Island. Plaintiffs were sophisticated real estate investors, looking for the “total lifestyle” experience that Ginn projects promised. (Doc. 317 ¶ 49). Some Plaintiffs, such as Doug Smith, hired attorneys to assist with due diligence for two Ginn Sur Mer lot purchases (Doc. 557-151), while other Plaintiffs, like Vic Taglia, performed their own inquiries before purchasing their lots (Doc. 557-35). Although at the time Plaintiffs bought their lots Ginn Sur Mer consisted of undeveloped “swampland, ” (Doc. 528-7 at 104:23), Ginn's plans for the property included approximately 2, 000 home sites, condominium towers, a hotel, a marina, two golf courses, and a casino. Ginn-LA West End Ltd., LLLP (“West End”) served as the corporate parent of the Ginn Sur Mer developer entity and entered into the purchase contracts with Plaintiffs.[3] (See, e.g., Doc. 528-10).

         While Ginn/Lubert-Adler projects were typically financed on a per project basis, Adler described this approach as “somewhat inefficient from a capitalization standpoint, ” as it prevented the developments from taking advantage of “favorable entity-level financing options.” (Doc. 528-1 at 2). In 2005, an alternate financing opportunity arose. Credit Suisse Securities (USA) LLC (“Credit Suisse”), a global commercial lender, approached The Ginn Company and proposed a loan which would allow for the financing of multiple development projects through a single lending facility.[4] (Doc. 557-199 at 47:23-48:2). In a June 2, 2006 memo to the Advisory Committee of LA Fund III and the Executive Board of the Advisory Committee of LA Fund IV, Adler described the objectives of the new method of “pooled financing”:

(1) eliminating loan guarantees by paying off all existing recourse debt with new non-recourse financing;[5] (2) providing a revolving credit facility to fund the horizontal development and amenity costs at each community; (3) creating a loan with a five-year duration, which, subject to covenant compliance, provides for “staying power” in the event of a downturn; and (4) mitigating Lubert-Adler capital risk through a dividend of $325 million, which would (a) return all currently outstanding Lubert-Adler capital and preferred returns at all five communities of $285 million; and (b) provide a $51 million reserve for potential future capital needs.

(Doc. 528-1 at 3). To that end, on June 8, 2006, Credit Suisse issued a $675 million lending facility (the “Loan”) to Ginn-LA CS Borrowers, LLC and Ginn-LA Conduit Lender, Inc. (the “Borrowers”).[6] The transaction comprised a syndicated loan facility funded by 45 financial institutions with a five year term that was available for, and collateralized by, five properties: Tesoro (Florida), Quail West (Florida), Hammock Beach River Club (Florida), Laurelmor (North Carolina), and Ginn Sur Mer (Grand Bahama Island) (collectively “the Communities”).[7] Lubert-Adler anticipated that sales in the more mature communities, such as Tesoro and Quail West, would bolster the development of the early-stage properties, which included Ginn Sur Mer. (Doc. 528-24 at 52:9-21).

         The Loan consisted of a $385 million senior secured first lien term loan facility; a $165 million senior secured synthetic revolving credit facility; and a $125 million senior secured second lien term loan facility. (Doc. 557-24). Lubert-Adler intended that sales proceeds from any of the collateralized properties would fund development costs and pay down the credit revolver, the funds from which would become available for withdrawal again and be used to build horizontal infrastructure and amenities at all of the Communities. (Doc. 528-1 at 2). In addition, $158 million of the first lien loan repaid existing debt to third party lenders. (Id. at 7). Finally, the Loan provided for a dividend distribution to ERG and certain LA Funds of approximately $325 million ($200 million from the first lien loan and $125 million from the second lien loan).[8] (Id.; Doc. 557-199 at 53:10-54:15).

         The Loan's closing coincided with the softening of the real estate market, which eventually devolved into the Great Recession.[9] While Ginn Sur Mer lot sales were relatively robust when they began in October 2006, by 2008 they had measurably slowed, with the last sale occurring in April 2008.[10] With a weakened real estate market, lot and condominium sales were slower than projected in all five Communities, resulting in reduced cash flow, and by April 2007, the Borrowers could not comply with their financial and reporting requirements under the Loan. (Doc. 557-73). Further, because they were in default, they could not draw on the revolver to pay expenses. (Doc. 557-65).

         As a result, although they were not contractually obligated to do so, the Borrowers negotiated a restructuring plan (the “2007 Restructure”) in which certain LA Funds would invest approximately $200 million in the five Communities.[11] LA Funds IV and V committed $160 million of that investment to the completion of Ginn Sur Mer's Phase I infrastructure work ($124 million) and a golf course ($36 million). (Doc. 528-20 at 25-26). Sales in all of the Communities were still slow, leading to additional investments from LA Funds through 2008. Despite the additional investment, as the real estate market collapsed and the global economy contracted, in June and July 2008, the Borrowers again failed to make required interest, principal, and other payments. As part of a 2008 restructuring agreement (“2008 Restructure”), certain LA Funds invested approximately $7.55 million to fund operating and development expenses in the Communities and avoid default. Additional investments by LA Funds made from 2006-2008 totaled approximately $87.3 million.[12] (Doc. 528-20 at 22). Overall, between 2006 and 2008, LA Funds invested approximately $193.8 million in Ginn Sur Mer.[13] (Id.).

         As history has shown, the real estate market did not immediately rebound. The Credit Suisse lender group was unwilling to commit additional funds to continue developing the Communities (Doc. 528-69 ¶ 51), and consequently, the Borrowers defaulted on the Loan on July 1, 2008. (Doc. 557-168).

         Plaintiffs claim that because of Defendants' allegedly fraudulent actions in connection with the Loan, its restructuring, and ultimate default, Ginn Sur Mer was never developed as planned; as a result, they allegedly suffered monetary damages, including the amounts they paid for and owe on their lots and other incidental fees and costs associated with their lot purchases. (Doc. 317 ¶ 190). These events led to six lawsuits filed against Defendants between 2008 and 2012, which the Court consolidated on July 24, 2013.[14] (Doc. 152). The litigation has been fiercely contested, involving at least two appeals to the Eleventh Circuit in 2012 and 2013 (Doc. 141; Case 3:10-cv-422-TJC-JRK, Doc. 67), the appointment of a special master in 2015 to oversee the voluminous discovery (Doc. 251), and insurance coverage disputes litigated to summary judgment (Docs. 337, 504), among other issues. Plaintiffs have filed four amended master complaints in the consolidated proceeding, asserting numerous claims which they have subsequently withdrawn or had dismissed, claims based on title defects, misrepresentations regarding taxes, and an appraisal fraud scheme. (Docs. 154, 239, 300, 317).[15]

         The FAMC, the current operative pleading, filed on August 24, 2015, alleges two counts for violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1962(c) and (d), against Defendants based on a “cash out” scheme. (Doc. 317). In the FAMC, Plaintiffs allege that following the collapse of the Ginn real estate market, Defendants concocted the cash out scheme to eliminate their investment risk and harvest unearned profits from the five Communities. To accomplish their goal, they used Ginn Sur Mer to collateralize the Loan. Plaintiffs assert that at least two of the projects (Tesoro and Quail West) securing the Loan were already failing when the Loan closed, so Defendants knew default was likely and Ginn Sur Mer was at serious risk of foreclosure-even if Ginn Sur Mer itself succeeded. (Id. ¶¶ 66, 92).

         Defendants allegedly knew that no reasonably prudent buyer would purchase lots in Ginn Sur Mer with knowledge of the Loan; thus, they executed the cash out scheme and concealed the Loan and the likelihood of default therefrom to induce purchases of residential lots. In addition, after the Loan closed, they allegedly made misleading statements in marketing materials which concealed the Loan's detrimental effects on Ginn Sur Mer's development. In total, the FAMC lists 76 predicate acts of mail and wire fraud. (Doc. 317-1). Plaintiffs allege that if they had known about the Loan and its potential effects, they would never have purchased their Ginn Sur Mer lots. (Doc. 317 ¶¶ 170, 187-90; Doc. 550 at 66 n.6).


         Summary judgment is proper where there is no genuine issue as to any material fact and “the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “The burden of demonstrating the satisfaction of this standard lies with the movant, who must present pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, that establish the absence of any genuine material, factual dispute.” Branche v. Airtran Airways, Inc., 342 F.3d 1248, 1252-53 (11th Cir. 2003) (internal quotations omitted). An issue is genuine when the evidence is such that a reasonable jury could return a verdict for the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986).

         In determining whether summary judgment is appropriate, a court must draw inferences from the evidence in the light most favorable to the non-movant and resolve all reasonable doubts in that party's favor. See Centurion Air Cargo, Inc. v. United Parcel Serv. Co., 420 F.3d 1146, 1149 (11th Cir. 2005). However, “Rule 56 mandates the entry of summary judgment, upon motion, against a party who fails to make a showing sufficient to establish an element essential to his case on which he bears the burden of proof at trial.” Schechter v. Ga. State Univ., 341 F. App'x 560, 562 (11th Cir. 2009) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)). “[W]hen the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (footnote omitted). “Although the existence of a genuine issue of material fact precludes judgment as a matter of law, a jury question does not exist because of the presence of a mere scintilla of evidence.” Gold v. City of Miami, 151 F.3d 1346, 1350 (11th Cir. 1998) (quotation marks omitted).

         III. ANALYSIS

         As we begin, a note about Plaintiffs' response to the motion for summary judgment is appropriate. In their response, Plaintiffs have a lengthy listing called “Statement of Undisputed Facts.” However, many of the “facts” are not undisputed, and Plaintiffs make no effort to link the “facts” to any specific issue or argument, leaving the Court to guess as to their relevancy. Although Plaintiffs' response spans 74 pages, it is largely a prolix compilation of “facts” and quotations, unhinged from any argument. The actual Argument section is a mere nine pages and contains very few citations to the record or case law, making it difficult for the Court to utilize it. See Fed.R.Civ.P. 56(c)(1)(A) (the party arguing the existence of a genuine issue of material fact must support the assertion with citations to the record); Celotex, 477 U.S. at 325 (where moving party demonstrates lack of evidence supporting the non-moving party's case, the non-moving party must come forward with specific facts showing a genuine dispute); Matsushita, 475 U.S. at 587 (to show genuine issue, non-moving party must provide support by identifying sufficient evidence in the record).

         At the summary judgment hearing, the Court permitted Plaintiffs to file a supplemental notice containing citations to the record on two issues: (1) evidence that Ginn testified that there was a plan prior to the Loan closing to buy parcels; and (2) evidence of a HUD appointment. (Doc. 579 at 103-04). On June 30, 2017, Plaintiffs filed the Notice Identifying Evidence (Doc. 578), which purports to identify “other record evidence referenced at the hearing” beyond what the Court allowed. Neither in their response nor in their supplement do Plaintiffs explain their initial failure to properly cite the record in their response to the motion for summary judgment. The Court did not authorize Plaintiffs to supplement their response other than as to the two issues and will not allow Plaintiffs to bolster their deficient response after the motion was under advisement. In any event, the Notice does nothing to help Plaintiffs' summary judgment position. The Notice, therefore, is due to be stricken, except as it relates to the two aforementioned issues.

         In their motion for summary judgment, Defendants contend that Plaintiffs cannot establish the requisite elements of their RICO claims because they fail to show: (1) proximate cause (loss causation); (2) pattern of racketeering; and (3) predicate acts of fraud. (Doc. 527 at 3).

         A. Loss Causation

         To prevail on a RICO claim, a plaintiff must prove four elements: “(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.”[16] See Lawrie v. Ginn Dev. Co., LLC, 656 F. App'x 464, 467 (11th Cir. 2016) (quoting Williams v. Mohawk Indus., Inc., 465 F.3d 1277, 1282 (11th Cir. 2006)). Additionally, a plaintiff bringing a civil RICO action for damages must show (1) that an injury occurred to business or property, and (2) “that such injury was ‘by reason of' the substantive RICO violation.” Id. (quoting 18 U.S.C. § 1964(c)). The “by reason of” standard requires that the defendant's misconduct directly and proximately cause the plaintiff's injury. Id.

         For federal RICO purposes, courts analyze proximate cause “in light of its common-law foundations.” Hemi Grp., LLC v. City of N.Y., N.Y., 559 U.S. 1, 9 (2010); see also First Nationwide Bank v. Gelt Funding Corp., 27 F.3d 763, 769 (2d Cir. 1994) (“Central to the notion of proximate cause is the idea that a person is not liable to all those who may have been injured by his conduct, but only to those with respect to whom his acts were ‘a substantial factor in the sequence of responsible causation, ' and whose injury was ‘reasonably foreseeable or anticipated as a natural consequence.' Although we are mindful of the admonition that RICO is to be liberally construed, the foregoing holds true in a RICO setting because proximate cause, a common law concept, exists independently of the statute.”) (internal citations omitted). Proximate cause is typically a question of fact. See Gibson v. Credit Suisse AG, No. 1:10-CV-00001-JLQ, 2016 WL 4033104, at *6 (D. Idaho July 27, 2016) (citation omitted). However, “a link that is too remote, purely contingent, or indirec[t] is insufficient.” Hemi Grp., 559 U.S. at 9 (internal quotations and citation omitted). When evaluating proximate cause, courts must ask “whether the alleged violation led directly to the plaintiff's injuries” without any intervening cause. Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 461 (2006).

         Defendants argue that Plaintiffs cannot establish that the Loan and its subsequent default-not the collapse of the real estate market-proximately caused their damages. (Doc. 527 at 16-20). Defendants point to numerous other courts which have examined the market crash's effect on real estate developments, including Ginn Sur Mer, and found that the collapse proximately caused purchasers' harm. In fact, Defendants argue that the evidence shows that the Loan actually benefitted Ginn Sur Mer. Despite Plaintiffs' contentions that lot sales were thriving and would have continued to do so in 2008 and beyond, Defendants assert that this is merely speculative, and Ginn Sur Mer, like numerous other real estate developments at the time, fell victim to the Great Recession.

         Defendants cite several cases in which the inability to prove causation stymied other plaintiffs' efforts to pursue similar claims against Ginn and Lubert-Adler. At least three federal courts, including the Eleventh Circuit, have concluded that plaintiffs failed to show that the Loan proximately caused investors' losses at Ginn Sur Mer and the other Communities included in the Loan collateral. In approving the class action settlement in Demsheck v. Ginn Development Company, LLC, the district court found that “[a]s there was a sharp rise and subsequent ‘crash' of virtually the entire United States housing market, it would be nearly impossible to prove that but-for the actions of Defendant Ginn, their subsidiaries, Lubert-Adler and a few banks, Plaintiffs would not have suffered injury.” No. 3:09-CV-335-J-25TEM, 2014 WL 11370089, at *4 (M.D. Fla. Mar. 5, 2014), aff'd sub nom. Greco v. Ginn Dev. Co., LLC, 635 F. App'x 628 (11th Cir. 2015).[17] In affirming Demsheck over an investor's objection, the Eleventh Circuit quoted the district court's findings regarding causation with approval. Greco, 635 F. App'x at 632. Similar to Demsheck and Greco, the Bankruptcy Court for the Southern District of Florida dismissed the claims of lot owners in adversary proceedings in the Tesoro and Quail West bankruptcy action in part because their claims were too attenuated in light of the collapse of the real estate market.[18] In re Ginn-LA St. Lucie Ltd., LLLP, No. 08-29769 (Bankr. S.D. Fla. 2013) (Docs. 698, 728). Finally, the District Court of Idaho granted summary judgment for defendants, including Credit Suisse, in a case involving fraud claims relating to the Loan, finding that the plaintiffs failed to produce evidence raising a genuine issue of fact to show that the Credit Suisse loans caused the failure of the Ginn resorts. Gibson, 2016 WL 4033104, at *9. The Gibson court dealt with similar arguments as here, namely plaintiffs asserted that they had shown causation because the loan recapitalization to the developers (including Ginn Sur Mer's) left less equity and operating capital in the resorts than existed previously. Id. The court observed that “[a]ny loan would result in less equity, but yet not all loans fail. Plaintiffs do not establish how recapitalization and less equity caused the failure of the resorts.” Id. Further, the court foreclosed the plaintiffs' argument that the Loan caused the resorts to fail, characterizing this assertion as “strained because the market collapse began during the same time frame as the defaults occurred.” Id.

         A hypothetical proposed by the Honorable Richard Posner of the Seventh Circuit Court of Appeals encapsulates the dilemma Plaintiffs face in proving loss causation:

Suppose that an issuer of common stock misrepresents the qualifications or background of its principals, and if it had been truthful the plaintiff would not have bought any of the stock. The price of the stock then plummets, not because the truth is discovered but because of a collapse of the market for the issuer's product wholly beyond the issuer's control. There is “transaction causation, ” because the plaintiff would not have bought the stock, and so would not have sustained the loss, had the defendant been truthful, but there is no “loss causation, ” because the kind of loss that occurred was not the kind that the disclosure requirement that the defendant violated was intended to prevent. To hold the defendant liable for the loss would produce overdeterrence by making him an insurer against conditions outside his control.

Movitz v. First Nat. Bank of Chicago, 148 F.3d 760, 763 (7th Cir. 1998). Similarly, even if Plaintiffs could prove they would not have purchased their lots had they known about the Loan, that would only demonstrate but for (or transaction) causation. They still must show that the Loan, not the crash, caused their damages. And, as Defendants assert, the “market crash, which devastated resort communities and did not discriminate based on how the developments were financed, caused the loss in value to plaintiffs' lots, not the financing.” (Doc. 527 at 20) (citing Greco, Gibson, In re Ginn-LA St. Lucie, and the Harris Report (Doc. 528-14)).

         The undisputed evidence belies any claim that Ginn Sur Mer sales were booming and would continue to do so in 2008 and beyond. In fact, 81 lot sales closed in 2006; 78 closed from January - June 2007; and 35 closed from July 2007 - April 2008. (Doc. 528-69 ¶ 46). Only seven closings occurred in 2008, all occurring from January until April. (Id. ¶¶ 46-47). This evidence undermines Plaintiffs' argument that lot sales were “thriving, ” showing instead that they had markedly slowed in late 2007 and were nearly at a standstill in 2008.

         Defendants' unrebutted experts' analysis of market conditions helps explain the dwindling sales. Joshua Harris analyzed the real estate market forces which affected Gin Sur Mer. (Doc. 528-14 at 3). Despite Plaintiffs' claims that Defendants recognized a collapse of the Ginn market in late 2005/early 2006, and that Tesoro and Quail West were failing, Harris opines that “no economic warnings were visible to sophisticated, contemporaneous observers in 2006 and 2007, and there was no evidence of a severe real estate market crash or economic recession until mid-2008.” (Doc. 528-14 at 17). If there was a “cooldown” during 2005-2006, it was only a return to more normalized market conditions following a period of almost unsustainable growth in 2005. Id. Harris describes how most market commentators believed a slowdown in the rate of sales would occur; they did not anticipate a market freefall, certainly not before the closing of the Loan in mid-2006. (Id. at 27). Rather, many observers predicted appreciation of home values. (Id.).

         To the extent Plaintiffs argue that but for the Loan, Ginn Sur Mer would have succeeded, as the Bahamas was insulated from the U.S. housing market crash, Harris refutes this argument as well.[19] Indeed, the Bahamian economy is heavily dependent on the U.S. economy, and “the resort real estate market, which draws heavily from residents of the United States, performed as badly or worse than did the United States economy and real estate market during the Great Recession.”[20] (Id. at 49). In fact, Harris opines that the Caribbean real estate market suffered far worse than the U.S. market, and numerous projects in the Bahamas and Caribbean failed during the Great Recession. (Id. at 53, 57). Given these economic circumstances, Harris concludes that “the inability to develop GSM as planned due to the crash was by no means unique.” (Id. at 58).

         Defendants' loss causation argument is further buttressed by their unrebutted expert Ian Ratner, who (like Harris) opines that “[t]he real estate collapse caused the projected cash flows to not be realized, not actions taken by LA Partners or The Ginn Companies LLC.” (Doc. 528-20 at 4). Ratner explains that Ginn Sur Mer was better off-not “ruined”-because of the Loan. Contrary to Plaintiffs' argument that Ginn Sur Mer was “unable to access Loan proceeds for development, ” (Doc. 550 at 7), Ratner explains that: (1) from the date the Loan closed through December 31, 2008, $308.4 million was spent on operations and development at Ginn Sur Mer; and (2) had the LA Funds not made any additional investments in Ginn Sur Mer after June 2006, Ginn Sur Mer would only have had access to $133.4 million (Doc. 528-20 at 36-40). As such, Ginn Sur Mer spent $175 million more on development than it would have solely from lot sale proceeds. (Id. at 39). In light of the relevant case law, unrebutted expert reports, and other evidence of record, Defendants submit that Plaintiffs have failed to meet their burden to show proximate causation as RICO requires.

         In response to Defendants' well-supported argument, Plaintiffs' entire loss causation argument consists of the following:

PL do not claim GLA[21] anticipated the “Great Recession” in 2008. Rather, the evidence shows GLA experienced a collapse of the market for Ginn resorts in 4Q-2005/1Q-2006. There is sufficient evidence to create a triable issue of fact as to whether Plaintiffs' alleged losses directly relate to GLA's conduct motivated by the 4Q-2005/1Q-2006 downturn the market for GLA's residential resort properties in Florida.

(Doc. 550 at 66).[22] Plaintiffs reiterate the allegations of the FAMC, stating that they do not “claim damages based on a loss of value for their lots, ” instead claiming that “they would never have purchased GSM lots if they had known about the CS Loan.”[23] (Id. at 66 n.6; Doc. 317 ¶ 187-90).

         Although Plaintiffs do not state as much-leaving it to the Court to discern their meaning-the “conduct” to which they refer could only be Defendants' decision to obtain the Loan, which subsequently went into default. Plaintiffs concentrate on the theory that Defendants obtained the Loan for a fraudulent purpose-to mitigate their liability in anticipation of a market downturn, to the detriment of Ginn Sur Mer.[24] Plaintiffs contend that Ginn/Lubert-Adler's recognition of the 4Q2005/1Q2006 collapse of the Ginn real estate market motivated their decision to procure the Loan, which went into default in July 2008.[25] Plaintiffs allege that the default was not caused by paltry lot sales at Ginn Sur Mer, instead characterizing sales as “thriving, ” with “at least 194 sales closed through 2007 and at least 215 by mid-2008.” (Doc. 317 ¶¶ 137-38).[26] Plaintiffs wrongly imply that the Bahamian real estate market outperformed the United States market and conclude that the Loan caused their harm because, due to the cross-collateralized nature of the Loan, “GSM lot sale proceeds were no longer reserved for its own use.” (Doc. 550 at 4); see supra pp. 21-22. They therefore suggest that, without cross-collateralization, Ginn Sur Mer could have succeeded as a separate development, even if the other four American communities failed.

         Plaintiffs' claim that sales at Ginn Sur Mer would have thrived but for the Loan is mere speculation. Plaintiffs cite no evidence to support the assertion that sales were thriving in 2008 and would have continued to do so but for the fact that Defendants had to stop selling lots in the wake of the 2008 default. Further, they submitted no expert reports to corroborate these unsubstantiated claims. At oral argument, Plaintiffs argued that Defendants' salespeople stated that the “biggest months ever” for Ginn Sur Mer sales occurred in 2008 and that “we're selling lots at 1.4 million in the Bahamas in 2008 and we think we can continue to do so.” (Doc. 579 at 56). Plaintiffs also said that presentations to Credit Suisse indicated that Defendants “believe that there's still a market here, ” though Plaintiffs did not say who made these presentations or precisely when. (Id.). Plaintiffs did not cite to the record in their brief or at the hearing to confirm any of these statements.[27] Finally, the undisputed lot sales figures listed in Adler's affidavit show that sales were not “going gangbusters, ” as Plaintiffs stated at oral argument. (Id. at 57). To the contrary, Ginn Sur Mer closings had dramatically slowed by early 2008, months before the Loan default. (Doc. 528-69 ¶ 46).

         When factors other than a defendant's fraud are an intervening direct cause of a plaintiff's injury-such as the collapse of the housing market here- that same injury cannot be said to have occurred by reason of the defendant's actions. See First Nationwide Bank, 27 F.3d at 769 (affirming dismissal of RICO suit against mortgage brokers and borrowers for failure to adequately allege proximate cause). Thus, Plaintiffs' argument that lot sales would have continued apace ignores the impact of the recession on the American and Bahamian real estate markets, as described in numerous judicial opinions related to Ginn developments, as well as in Defendants' unrebutted expert reports. See id. at 772 (citing Bastian v. Petren Res. Corp., 892 F.2d 680, 684 (7th Cir. 1990)) (“when the plaintiff's loss coincides with a marketwide phenomenon causing comparable losses to other investors, the prospect that the plaintiff's loss was caused by the fraud decreases”).

         Plaintiffs not only failed to submit a coherent theory of loss causation, but they also failed to refute Defendants' well-supported argument. Plaintiffs did not substantively address Defendants' experts' findings as to causation or submit any rebuttal expert reports.[28] They likewise chose not to address Demsheck, Greco, Gibson, or In re Ginn-LA St. Lucie (or any proximate cause cases cited by Defendants, for that matter), other than to say that “[f]indings in other cases cited by GLA are inapposite for purposes of a motion for summary judgment here, which necessarily depends on the evidence submitted in support of PL claims.” (Doc. 550 at 66 n.7). But Plaintiffs do not cite any evidence in support of their loss causation argument, nor do they factually distinguish their case from these other highly relevant ones. See Chavez v. Sec'y Florida Dep't of Corr., 647 F.3d 1057, 1061 (11th Cir. 2011) (“district court judges are not required to ferret out delectable facts buried in a massive record”). Indeed, it is unfathomable how Plaintiffs can argue that these cases are “inapposite” when they involve the same Loan, and in some instances the same collateral, at issue here.

         Plaintiffs' conclusory argument in no way explains how the Loan caused Plaintiffs' damages. Moreover, Plaintiffs' emphasis is improperly placed. Even if Defendants acted fraudulently in obtaining and concealing the Loan, that alone would not demonstrate a factual issue regarding proximate causation. In other words, if Ginn Sur Mer failed not because Defendants allegedly took out and concealed the Loan but because of an industry-wide phenomenon (namely, the Great Recession) that destroyed their venture, then Plaintiffs have lost nothing by reason of Defendants' fraud and have no claim to damages. See Bastian, 892 F.2d at 685. Thus, to survive summary judgment, Plaintiffs bear the burden of demonstrating that there is a real basis in the record showing a genuine issue of material fact as to whether the Loan, not the market crash, proximately caused their damages. This they have failed to do.

         Accordingly, Defendants are entitled to summary judgment on this basis. See Ray v. Spirit Airlines, Inc., 836 F.3d 1340, 1351 (11th Cir. 2016) (affirming the dismissal of civil RICO complaint because it failed to adequately plead proximate cause); Se. Laborers Health & Welfare Fund v. Bayer Corp., 444 F. App'x 401, 410 (11th Cir. 2011) ...

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