A missed detail in a major Miami deal sends a warning to mortgage pros about court jurisdiction
A multimillion-dollar Miami property deal fell apart and landed in court, showing just how tricky big commercial transactions can get for mortgage professionals.
Here’s what happened. In 2021, Sound Around, Inc., a company out of New York, agreed to buy a Miami building from Hialeah Last Mile Fund VII LLC and Hialeah Last Mile LLC. The plan was straightforward: the sellers would renovate the property, Sound Around would pay about $11 million, and the deal would close once Miami-Dade County signed off on the work.
But things didn’t go as planned. Douglas O’Donnell signed the agreement for Fund VII, and Sound Around believed he had the authority to speak for both selling companies. Not long after the ink dried, the sellers told Sound Around they were backing out. The reason? Renovation costs had ballooned, and they said the deal was no longer practical unless Sound Around was willing to pay millions more. Unsurprisingly, Sound Around wasn’t on board with that, and the dispute quickly turned into a legal battle.
In 2022, Sound Around took the sellers to federal court in Florida, demanding that the deal go through as originally agreed. The company wanted the court to order the sellers to finish the renovations and hand over the building. Sound Around also argued that Hialeah Last Mile LLC should be part of the agreement, even though it hadn’t signed, because it was supposedly left out by mistake.
Here’s where things got complicated – and where the story holds lessons for anyone in the mortgage business. Sound Around’s lawsuit relied on the idea that the federal court had the right to hear the case because the parties were from different states. But both Fund VII and Hialeah Last Mile LLC are limited liability companies, and the lawsuit didn’t spell out where all their members were from. That’s a key detail in federal court, and it was overlooked.
While the first lawsuit was still moving through the courts, Sound Around filed a second case against O’Donnell, this time accusing him of fraud and breach of warranty. O’Donnell pushed back, saying Sound Around was splitting its claims between two lawsuits when it should have put everything in one. The court agreed and tossed out the second case.
Meanwhile, Sound Around actually won the first round in the original lawsuit, with the court ordering the sellers to go through with the deal. But on appeal, the Eleventh Circuit Court of Appeals – on October 10, 2025 – flagged a problem: the lawsuit hadn’t properly established that the federal court had jurisdiction in the first place.
After digging into the details, it turned out that at least one member of Hialeah Last Mile LLC, Jose Rojas, was a New York resident – just like Sound Around. That meant the parties weren’t actually from different states, and the federal court didn’t have the authority to decide the case. The court dismissed the lawsuit, and Sound Around’s requests for another shot were denied.
The appeals court affirmed that decision. But because the first case never belonged in federal court, the dismissal of the second lawsuit against O’Donnell for splitting claims was also thrown out. That case is now headed back to the lower court for another look.
For mortgage professionals, this case is a wake-up call. It’s not just about the numbers or the paperwork – getting the basics right, like making sure the court can actually hear your case, can make all the difference. When big money and multiple companies are involved, missing a detail like the citizenship of LLC members can derail even the most carefully planned deals.
The bottom line? Before you get too deep into a major transaction or a courtroom fight, double-check the fundamentals. This Miami deal shows that even a multi-million-dollar agreement can unravel over a technicality, and the fallout can drag on for years. For those of us in the mortgage world, it’s a reminder to keep our eyes on both the big picture and the fine print.
