Harbor Branch Foundation and FAU are back in court with a new judge

A new judge has been assigned to oversee a lawsuit filed by the Harbor Branch Foundation against Florida Atlantic University in March 2017, and both sides were back in court filing motions last week in their struggle for control of the Foundation’s $72 million endowment.

Circuit Court Judge Lawrence Mirman is the latest judge assigned to the high-stakes case, after two earlier judges recused themselves because of potential conflicts of interest.

On March 6, lawyers for FAU and the Foundation submitted an extensive list of witnesses they intend to call during the upcoming trial so Mirman can review the names and make sure he doesn’t have any personal or business relationships that would prevent him from overseeing the lawsuit.

“Because the prior two judges assigned to this case have been recused, the parties wish to address any potential conflict with the court as soon as possible,” the joint motion stated. Attorneys for both sides noted the delays have prolonged the dispute and increased the cost of litigation. They requested a phone conference with the judge to discuss the issue.

Lawyers for FAU also filed a second motion at the March 6 hearing arguing that Harbor Branch’s lawsuit is without merit and seeking to have the case dismissed. Mirman, who could not be reached for comment, has not yet responded to either filing.

On Aug. 28, 2017, Circuit Judge Robert E. Belanger, the first judge assigned to oversee the lawsuit, recused himself from the case after realizing he was friends with one of the witnesses expected to be testify on behalf of Harbor Branch Foundation.

District Court Judge Sherwood Bauer Jr. followed suit in a more dramatic fashion two months ago, on Dec. 4, recusing himself at the last moment, when lawyers were in the courtroom with exhibits set up ready to begin opening arguments.

“I spent Wednesday afternoon studying the case and at about 4:37 p.m. discovered that there is a strong appearance of a conflict of interest,” an apologetic Bauer explained to attorneys and representatives from both sides who appeared in court in December.

“I am good friends with one of the witnesses, [former FAU President] Frank Brogan, who has spoken at a family member’s funeral and at my daughter’s wedding,” Bauer said. “On occasion, we have had dinner together.

“I want to apologize to everyone here this morning. I feel bad. I’ve wasted a lot of money and time.

The dispute between FAU and the Foundation began during university budget negotiations in 2017, when Daniel Flynn, vice president of research at FAU, proposed the Foundation merge its staff, accounting, legal representation and other administrative functions with the university to save a projected $416,000 annually.

The move alarmed the Foundation’s board of directors, which feared that without independent oversight, funds placed in trust and revenue from specialty license plates that flows to the Foundation could be diverted to other uses than marine research. According to University Press, FAU in 2012 had “requested a $50,000 donation from [the Foundation] … to help build its football stadium.”

The nonprofit foundation filed a lawsuit in March 2017 to block the university’s takeover attempt, which the suit called “a blatant power grab,” relying on a 2007 Memorandum of Understanding between the two parties that stipulated the Foundation’s distributions would be made at the “sole discretion” of the board for purposes of defraying expenses, retiring debt and benefiting the institute.

Both sides have previously acknowledged that it could be difficult to find a judge without ties to some of the witnesses planned for trial. The parties’ joint list of more than 60 witnesses includes a number of prominent community figures, including Brogan, who is a former lieutenant governor of Florida and current assistant secretary of education in the Trump Administration, as well as a former president of FAU, current and former FAU and Harbor Branch board members, numerous researchers and professors, current FAU President John W. Kelly, Katha Kissman, President & CEO of Harbor Branch Oceanographic Institute Foundation, and Margaret Leinen, former Harbor Branch executive director.

A new trial date for the lawsuit has not been set.

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