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Fourth judge may finally rule in Harbor Branch lawsuit


The fate of Harbor Branch Foundation’s $72 million endowment is now in the hands of Circuit Court Judge Elizabeth Metzger, the fourth judge assigned to the high-stakes case that pits the Foundation against Florida Atlantic University.

According to court records, FAU and the Foundation have filed a flurry of motions and countermotions during the past several months, arguing over whether the Foundation’s lawsuit against FAU should be dismissed. The lawsuit was filed in 2017 to stop FAU from taking control of the multimillion endowment, which is used to support marine research.

FAU’s central argument seeking dismissal is that according to state statutes, the University, as the Foundation’s “direct support organization,” legally has the right to oversee the Foundation’s operations and use of its endowment funds.

FAU attorney Richard Mitchell argues that state statue supersedes a “Memo of Understanding” previously signed by both parties that stated the Foundation would continue to operate financially independent from FAU.

Metzger ruled on Sept. 25 that she would consider FAU’s argument after providing Foundation attorney Joseph Galardi, an opportunity to argue against the dismissal.

In his countermotion filed on Dec. 9, Galardi argued, among other things, that FAU’s argument “fails because none of the matters alleged by FAU raise any estoppel against the application of . . . laws existing at the time the parties entered the Memorandum of Understand.”

Mitchell filed another motion on Jan. 24 arguing that the Foundation failed to provide enough evidence to back up its claim.

The case has its origins in 2007, when Harbor Branch Oceanographic Institute fell on hard times and merged with Florida Atlantic University as a means of survival.

After the merger, the Harbor Branch board became the board of the Harbor Branch Foundation and there was a clear memorandum of understanding between the two parties that the Foundation would operate independently to raise and disburse money for marine research.

That arrangement worked well for 10 years, but in 2017 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 its lawsuit in March 2017 to block the university’s takeover attempt, which the suit called “a blatant power grab,” relying on the 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 benefitting the institute.

The case has dragged on because three previous judges recused themselves after realizing they had conflicts of interest because they knew potential witnesses in the case. One judge recused himself moments before the trial was scheduled to begin.

That series of recusals forced FAU and the Foundation to restart their cases each time a new judge was assigned.

The motions and countermotions now being considered by Judge Metzger are similar to motions filed previously by both sides in front of the other judges.

FAU attorney Richard Mitchell and Foundation attorney Joseph Galardi both declined to publicly speak about the case.