Let this be a lesson to those in the market for a pair of South Florida oceanfront mansions:
Instead of sending someone to bid $12.4 million of your fortune at a live auction, consider showing up to wave the paddle yourself.
That mistake may have cost California businessman and NASCAR team owner Gene Haas more than $1 million. A Miami-Dade judge ruled this week that Haas reneged on his high-stakes winning bid for two Golden Beach homes in 2011 and must fork over his deposit plus interest.
Haas, 60, who made a fortune in machinery before partnering with NASCAR driver Tony Stewart, sent a proxy to the auction, which took place in the living room of one of the two palaces up for bid. The auction happened days before Stewart zoomed to victory at Homestead-Miami Speedway’s Ford 400, earning Stewart-Haas Racing a Sprint Cup Championship.
Brothers Robert and Steven Fox owned their estates at 229 and 401 Ocean Blvd. since 1990. When the retired cardiologists and their wives decided to downsize into neighboring Hollywood Beach condos a few miles north on A1A, they put their Golden Beach homes up for sale for about $24 million total.
But after two years with no buyers, the brothers took a radical approach: They held an absolute auction on Nov. 10, 2011. About 15 bidders applied and were vetted, including Lake Worth developer Albert Wadsworth, who represented Haas.
They didn’t exactly have to squeeze into Robert Fox’s pad at 229 Ocean. The six-bedroom, six-and-two-half-bath home that fronts the Atlantic on a 29,000-square-foot lot was originally developed for the inventor of wax paper. (Steven Fox’s crib was equally sprawling, featuring four bedrooms, four full bathrooms, two half-baths, three fireplaces, a 280-foot stretch of sand from back door to ocean, and a full-house generator; its first owner came up with the patent for witch hazel astringent.)
Pompano Beach Mayor Lamar Fisher served as auctioneer. Lead-up to the unusual event prompted curious whispers and raised eyebrows in tony Golden Beach, whose mayor, Glenn Singer, attended out of personal intrigue.
Fisher kept spitting numbers, and bidders kept bidding. Andres Toro, who was hoping to nab one of the homes, put his paddle down once the offers broke $5.5 million. “It was amazing,” Toro said of the spectacle.
Haas, bidding through Wadsworth, didn’t want just one of the houses —he wanted both. The auction ended with Haas’ successful $12.4 million offer for the two luxury properties.
But when it came time to sign the paperwork, Wadsworth backed out. Haas never bought the homes.
Haas plans to appeal the decision, his attorney said.
“We consider the judgment plainly wrong as a matter of law,” said Patrick Walsh, general counsel for Haas Automation, who contends that the auction company changed the terms of the deal after Haas’ representative made the winning bid. “We … are disappointed that the trial court apparently decided that Haas Automation was somehow bound by the terms of an agreement to which it never agreed.”
The Foxes’ attorney said that audio and video recordings of the auction showed that “there was no mistaking what happened.”
“This is not a he-said, she-said issue, because the audio and video make it very clear who said what, and that’s what we were able to play for the judge,” said Miami lawyer Eric Isicoff.
He said he thought Wadsworth, Haas’ proxy, was in over his head when it came to bidding in an auction of that heft. Attempts to reach Wadsworth were unsuccessful Wednesday.
“The guy who was the eyes and ears for the actual buyer simply didn’t have the experience he needed to participate in that kind of auction,” Isicoff said. “He came to that realization too late. But unfortunately, once the gavel fell on his winning bid, he and the buyer were contractually obligated to keep up their end of the arrangement.”
If Haas loses on appeal, the $1 million-plus he sunk on his would-be Golden Beach homes won’t bankrupt him. His estimated net worth was about $740 million in 2011, according to a California business newspaper. He has donated close to $10 million to charities through his Gene Haas Foundation, and has paid some $75 million in restitution to the IRS stemming from a 2007 tax-fraud conviction.
As for the Foxes, they ended up selling their palatial estates to other bidders, although for slightly less than Haas appeared willing to pay. The homes went for a combined $10.7 million in December 2011. The real estate web site Zillow now pegs their combined value at nearly $20 million, thanks to a rebound in real estate, meaning Haas not only dropped a million-dollar deposit, but missed out on a money-making bonanza.
The brothers are continuing to enjoy retired life.
“They’re extremely happy with how things have proceeded,” Isicoff said. “Even with the possibility of appeal, they’re very optimistic.”