Justin Rundle allegedly crossed ethical lines set by the Florida Bar when he partnered with Jose Canero Jr. and Jose Canero Sr. on a slate of planned developments across Miami-Dade County, according to a recent court filing by Canero Group’s principals.
Rundle, a Miami-based lawyer who is the son of Miami-Dade State Attorney Katherine Fernandez Rundle, is suing the Caneros and their namesake firm, alleging they mismanaged a quartet of projects in which he and others invested $6.1 million. The projects are in Homestead, Coconut Grove and Miami’s Upper Eastside neighborhood. Rundle also accused the Caneros of paying themselves and Canero Group using project funds without investors’ authorizations, the pending lawsuit alleges.
Rundle, who claims he personally invested $625,000, is seeking damages in excess of $3 million, citing not only the lost investment, but also reputational harm.
In a June 23 motion to compel Rundle into arbitration, the Caneros allege it is their ex-partner who violated their trust, as well as Florida Bar rules governing an attorney’s conduct when entering into a business relationship with a former or existing client.
“I trusted Justin as my attorney and friend,” Canero Jr. told The Real Deal in a June 30 interview. “He drafted the documents we used in the partnership. To say we were blindsided by these accusations is an understatement.”
Miami-based Canero Group focuses on development of luxury homes, townhomes and multifamily projects. In their motion, the Caneros allege Rundle ignored clauses in operating agreements he drafted for the four projects that required that they attempt to resolve any conflicts in arbitration prior to litigation.
Ryan Clancy, Rundle’s attorney, said he will be filing a response to Canero’s motion, refuting the allegations. “Defendants push for private arbitration when they have something to hide,” Clancy said. “Instead of facing public scrutiny, [the Caneros] are trying to deflect and smear Mr. Rundle. But the facts and the law are on our side.”
From lawyer to partner
Collectively, Canero Jr. and his father have about 60 years experience in real estate development and founded Canero Group in 2012. Canero Jr. said they had never been sued prior to Rundle’s May 27 complaint, and that their firm has made “substantial profits for its clients since its inception.”
The Caneros disputed Rundle’s allegations that they sought him out as an investor, asserting that Rundle pursued them about investing in Canero Group projects in 2022, after serving years as the company’s lawyer on real estate deals, including drafting and editing contracts. The Caneros’ motion includes copies of letters Rundle wrote on his law firm’s letterhead indicating he was the Caneros’ attorney.
When they became partners, Rundle allegedly re-drafted operating agreements for the development entities that owned the four project sites. The Rundle written agreements were more favorable to him — and less favorable to the Caneros, their motion alleges.
Furthermore, Rundle allegedly violated Florida Bar rules by attempting to obtain a conflict of interest waiver from the Caneros in 2024, two years after they had become partners, the motion states. The Florida Bar requires lawyers to seek such waivers prior to entering into any business arrangement with a former or current client. Lawyers must also caution former and current clients to seek advice from an independent legal counsel.
On Feb. 23, 2024 Rundle emailed Jose Leonardo, another attorney representing the Caneros, with the subject: Waiver of Conflict.
“Basically, anytime a lawyer does business with a former client they need to disclose the Bar Rules and get a waiver,” Rundle wrote. “I meant to get this done a while ago, and we never got around to it.”
Rundle sent Leonardo another email on July 10, 2024 with the same subject line.
“Good afternoon,” Rundle wrote. “Just following up on this request from February. Please advise if there is anything you need to change, or any reason your client(s) would not be able to sign. If you want to remove Canero Senior, I think that’s fine. I don’t believe he ever paid me as an attorney.”
The Caneros did not sign the waiver, their motion states.
Projects are on track
The projects identified in Rundle’s lawsuit have “meticulously maintained accounting records, open to review for every investor,” all of whom “stand to make a handsome profit,” the Caneros’ motion states. Each development has its own separate QuickBooks accounts, bookkeepers, and fully documented expense trails, Canero explained.
Copies of each of the operating agreements drafted by Rundle allow Canero Group to bill the projects for administrative and managerial expenses. Each of the project budgets also included line items for those expenditures.
Even though every project will turn a profit, Rundle allegedly began feeding other investors a false narrative that the developments were being mismanaged, and that he and his father were allegedly making unauthorized payments to their company, Canero told TRD.
A mansion project in Miami’s Belle Meade neighborhood, which Rundle highlighted in his lawsuit, was audited independently by some of its investors, the motion states. The audit vindicated them, the Caneros assert.
“[Rundle’s] accusations made investors panic to the point that it was decided to prematurely sell the property before we could even break ground,” Canero Jr. recalled. “[Rundle] resigned as manager. But I stuck around and continued my duties and responsibilities to the other members.”
