HomeMy WebLinkAboutAttorney/Client Session - May 10, 2011 MINUTES OF ATTORNEY/CLIENT SESSION
DANIA BEACH CITY COMMISSION
TUESDAY, MAY 10, 2011 — 6:00 P.M.
1. Call to Order/Call to Order
Mayor Flury called the meeting to order at 6:00 p.m.
Present:
Mayor: Patricia A. Flury
Vice-Mayor: Bobbie Grace—Arrived at 6:30 p.m.
Commissioners: Anne Castro
Walter Duke
C. K. "Mac" McElyea
City Manager: Robert Baldwin
City Attorney:: Thomas Ansbro
City Clerk: Louise Stilson
2. Attorney/Client Session
Mayor Flury announced:
"We are about to have an attorney/client session in accordance with Florida Statute 286.011(8)
regarding the litigation styled as follows:
IN THE CIRCUIT COURT OF THE 17" JUDICIAL CIRCUIT IN AND FOR
BROWARD COUNTY, FLORIDA
Sven H. Jutz, CASE NO.: 09-051261 (04)
Plaintiff,
VS.
City of Dania Beach, Florida,
a Municipal corporation under
the laws of the State of Florida,
Defendant.
City of Dania Beach, Florida,
a Municipal corporation under
the laws of the State of Florida,
Counter-Plaintiff,
Sven H. Jutz a/k/a Ben R. Gluck,
Counter-Defendant,
and
Allegria Entertainment, Inc. d/b/a
Beach Watch Restaurant,
Third-Party Defendant
The session is estimated to last approximately one (1) hour and the following people will be in
attendance at this meeting:
(a) Mayor Pat Flury; Vice-Mayor Bobbie Grace; Commissioner Anne Castro;
Commissioner Walter Duke and Commissioner C. K. McElyea
(b) City Attorney, Tom Ansbro and Special Counsel, Jamie Cole and Dan
Abbott
(c) City Manager, Robert Baldwin.
These proceedings will be recorded by a certified court reporter and, at the conclusion of all
litigation,the transcript will be made part of the public record.
We will now temporarily adjourn this meeting and proceed to have an Attorney/Client session in the
City Manager's conference room on the second floor. At the conclusion of that meeting, we will
return to re-open the public meeting."
Mayor Flury temporarily adjourned the meeting at 6:01 p.m.
Mayor Flury re-opened the meeting at 6:42 p.m. She announced the attorney/client session was
terminated and members of the general public were now invited to return for any further
proceedings or matters.
Minutes of Attorney/Client Session 2
Dania Beach City Commission
Tuesday,May 10,2011 —6:00 p.m.
3. Adj ournment
Mayor Flury adjourned the meeting at 6:42 p.m.
ATTEST: CITY OF DANIA BEACH
LOUISE STILSON, CMC PATRICIA A. FLURY
CITY CLERK P�Flft., � MAYOR—COMMISSIONER
Approved: May 24, 2011
1 �
1
Minutes of Attorney/Client Session 3
Dania Beach City Commission
Tuesday,May 10,2011 —6:00 p.m.
` CITY COMMISSION OF
DANIA BEACH, FLORIDA
IN RE: SVEN H. JUTZ,
Plaintiff,
IN N
-vs wKIGINAL
-
CITY OF DANIA BEACH, FLORIDA,
a Municipal corporation under the
laws of the State of Florida,
Defendant.
CITY OF DANIA BEACH, FLORIDA,
a Municipal corporation under the
laws of the State of Florida,
Counter-Plaintiff,
-vs-
a Sven H. Jutz a/k/a Ben R. Gluck,
f
Counter-Defendant
and
Allegria Entertainment, Inc. d/b/a
Beach Watch Restaurant,
Third-Party Defendant .
ATTORNEY/CLIENT SESSION
Date Taken: May 10, 2011
Time : 6 : 00 p.m.
Place : 100 W. Dania Beach Blvd.
Dania Beach, Florida
Taken by Emily Scott, stenographic reporter
United Reporting, Inc.
1218 SE 3rd Avenue
b.�
Fort Lauderdale, Florida 33316
a
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1 APPEARANCES :
2 Mayor Pat Flury
3 Vice Mayor Bobbie Grace
4 Commissioner Anne Castro
5 Commissioner Walter Duke
6 Commissioner C.K. "Mac" McElyea
7 City Manager Robert Baldwin
8 City Attorney Tom Ansbro, Esq.
9 Special Counsel Daniel L. Abbott, Esq.
10 Special Counsel Jamie A. Cole, Esq.
11
12
13
14
15
16
17
18 a
19
20
21
22
23
24
25
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1 Thereupon, the following proceedings were had:
2 MAYOR FLURY: Okay. It is 6 o' clock, and
3 I am calling this public meeting to order.
4 Roll call, please?
5 CITY CLERK: Mayor Flury?
6 MAYOR FLURY: Here .
7 CITY CLERK: Commissioner Castro?
8 COMMISSIONER CASTRO: Here .
9 CITY CLERK: Commissioner Duke?
10 COMMISSIONER DUKE : Here .
11 CITY CLERK: Commissioner McElyea?
12 COMMISSIONER McELYEA: Present .
13 CITY CLERK: City Manager Baldwin?
14 CITY MANAGER BALDWIN: Here .
15 CITY CLERK: City Attorney Ansbro?
16 CITY ATTORNEY ANSBRO: Here .
17 CITY CLERK: Thank you.
18 MAYOR FLURY: Thank you.
19 The time is now 6 p.m. We are about to
20 have an attorney-client session in accordance
21 with Florida Statute 286 . 011 (8) regarding the
r
22 litigation styled as follows : In the Circuit
23 Court of the 17th Judicial Circuit in and for
24 Broward County, Florida; Case Number 09-051261
25 (04) .
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1 That ' s Sven H. Jutz v. the City of Dania
2 Beach, Florida, municipal corporation under
3 the laws of the State of Florida; City of
4 Dania Beach, Florida, municipal corporation
5 under the laws of the State of Florida,
6 Counter-Plaintiff, Sven Jutz and Ben Gluck,
7 Counter-Defendant, and Allegria Entertainment
8 doing business as Beach Watch Restautrant .
9 This session is estimated to last
10 approximately one hour. The following people
11 will be in attendance at this meeting: Mayor
12 Pat Flurry, Commissioner Anne Castro,
13 Commissioner Walter Duke, and Commissioner
14 C.K. McElyea, City Attorney Tom Ansbro,
a
15 Special Counsels Jamie Cole and Dan Abbott,
16 City Manager Robert Baldwin.
17 These proceedings will be recorded by a
18 certified court reporter, and at the
19 conclusion of all litigation, the transcript
20 will be made part of the public record.
21 We will now temporarily adjourn this
22 meeting and proceed to have an Attorney/Client
23 session in the City Manager' s conference room
24 on the second floor. At the conclusion of
25 that meeting, we will return to re-open the
X
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1 public meeting.
2 I just want to ask -- do we know -- Ms .
3 Bobbie Grace is not here at this time . She
4 may join us .
5 CITY CLERK: If she does, please note the
6 time .
7 MAYOR FLURY: Okay. Thank you.
8 (Whereupon, the proceedings were temporarily
9 adjourned and relocated to the City Manager' s conference
10 room, where they were reopened and proceeded as
11 follows : )
12 MAYOR FLURY: Okay. We have 50 minutes .
13 CITY ATTORNEY ANSBRO: We are waiting on
14 Bob Baldwin. He is coming. We have got time .
15 MAYOR FLURY: Why don't we get started.
16 CITY ATTORNEY ANSBRO: All right . We
17 will do that.
18 Dan Abbott and Jamie Cole, special
19 counsel, I am going to have Mr. Abbott -- even
20 though Mayor Flury was not here at the time,
21 we met in executive session in June of last
22 year -- is that correct?
23 MR. ABBOTT : Yes .
24 CITY ATTORNEY ANSBRO: -- and at that
25 time -- go back, if you could, and give the
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1 Mayor a current update of what we summarized
2 and talked about at that time --
3 MR. ABBOTT: Sure .
4 CITY ATTORNEY ANSBRO: -- as a
5 commission.
6 MR. ABBOTT : Sure .
7 The Allegria Entertainment lawsuit is
g litigation with your lessee of your pier for
9 the Beach Watch Restaurant, for the bait shop
10 and for the pier admission fees .
11 It is a lease that was entered into back
12 in 2003 for operations that began in 2007 ; and
13 the initial complaint was filed by Allegria in
14 2009, and you filed a counterclaim very
15 shortly thereafter in 2009 .
16 The complaint, at this point, now
17 contains 21 counts, 21 counts that your lessee
18 has sought recovery against the City; and
19 rather than talking about all 21 of those
20 counts, I am going to group them together.
21 Several of the counts allege a breach of
22 contract --
23 (City Manager Baldwin enters the proceedings
24 at 6 : 09 p.m. )
25 MR. ABBOTT: -- for duties that simply do
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1 not exist in the lease, things like : you
2 should have built us a two-story restaurant or
3 you have made us pay property taxes for the
4 building and the City should pay those .
5 Those are obligations that simply do not
6 exist in the lease, and we have moved for
7 summary judgment on those counts . That ' s a
8 procedural motion that says, we shouldn' t even
9 have to try the case in front of a jury, those
10 counts just don' t have any legal merit .
11 Some of the counts allege breach of
12 duties that are contained in the lease : When
13 you built the building, you provided the
g'.
14 air-conditioning, for instance, and the fire
15 alarm system that Allegria alleges are not r
16 functioning properly. Those claims are not
17 subject to summary judgment because we
18 can' t -- we can' t unprove the facts . When
19 Allegria says, those things aren' t working
20 properly, those things are going to be subject
21 to a trial .
22 There are a couple of counts on what the
23 law calls quasicontractual theories . They
24 seek a reformation of the contract . In other
25 words, they say that the contract was not
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1 written properly, that the actual agreement is
2 different than what was written down; and they
3 have got a claim of fraud in the inducement,
4 that we tricked them into entering into the
5 lease . We have a motion for summary judgment
6 on those claims, as well .
7 And, lastly, there are a couple of
8 noncontractual claims . There is a -- what
9 used to be labelled as a defamation action; it
10 has been refiled as a civil rights action now,
11 and we have a motion for summary judgment on
12 those claims, as well .
13 So, in essence, a number of allegations
14 against the City that we have not complied
15 with the lease for and have, otherwise,
16 adversely affected the business that ' s going
17 on on your pier attorney.
18 CITY ATTORNEY ANSBRO: One thing, for
19 Pat, a little bit more of a go-back.
20 The catalyst for why we are in court is
21 that when we found out they had essentially
22 subleased or assigned the lease to somebody
23 else without advance City approval, that was
24 the catalyst so say, now, you have done it,
25 you have done that; and they lied to us, in
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1 this room, that they had not done that . We
2 proved that they had done it, and we found a
3 number of nasty things they were trying to
4 pull with these people to lie to us .
5 We said, that ' s it. I sent them a
6 default letter with that issue and a couple
7 other things that they cured, minor things;
8 but that one, to us, was uncurable . It ' s
9 like, you broke it, the marriage is over.
10 Before we could file the eviction suit on
11 that claim, they countersued with the first of
12 four lawyers to say -- like five days before
13 we could get our case heard, with this jury
14 trial suit against it. It was their measure
15 to slap us back and try to force us into a
16 settlement, and early on they talked about
17 settlement. That ' s why we are in this . It ' s
18 heightened into a nuclear war now.
19 MR. ABBOTT: Yeah, Tom is exactly right, y
20 and that was the basis of the counterclaim, as
21 initially alleged, that your lessee had
22 subleased the premises, without your approval,
23 which is contrary to the terms of the lease .
24 Pursuant to some direction we got the
25 last time we were in executive session, we
TM
MA
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1 have since amended that counterclaim to allege
2 additional breaches of the lease by your
3 tenant . One of the claims is that they are
4 not maintaining proper financial records, so
5 you can' t determine what is due to you for
6 things like pier admission and for percentage
7 rent if sales of the restaurant pass a certain
8 threshold.
9 We have a claim that the restaurant is
10 supposed to be run as a first-class
11 restaurant . We have alleged breach of that
12 provision, and we intend to show the
13 restaurant is not being run as the sort of
14 establishment that you envisioned; and we have
15 a claim that they haven' t procured the sort of
16 the insurance that is required under the terms
17 of the lease .
18 One thing that is not currently in the
19 counterclaim, because it has just happened,
20 your lessee has breached its obligation to pay
21 property taxes for the leased premises for
22 this calendar year. That just came to our
23 attention in the last couple of weeks .
24 We have sent a notice of default but we
25 have not -- we cannot amend the counterclaim
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1 until their time to cure that has passed.
2 It ' s about $21, 000 in property taxes that they
3 haven' t paid.
4 Since last we met about a year ago, the
5 case has heated up, and we are getting ready
6 for trial, and trial is coming up in less than
7 a month now. There have been a number of
8 depositions taken of fact witnesses . Both
9 parties have retained expert witnesses, and
10 some of those experts have been deposed.
11 The experts fall into three main areas .
12 The first is both sides have air-conditioning
13 experts, since your lessee has alleged that
14 the air-conditioning system that was installed
15 in the restaurant isn' t sufficient to cool the
16 restaurant . We have both hired experts in
17 terms of the quality of that, of that system.
18 Both parties have hired restaurant
19 experts : us, to provide testimony that the
20 restaurant is not being run as a first-class
21 establishment; their expert will presumably
22 say it is .
23 And, lastly, both sides retained
24 accountants to deal with Allegria ' s claim that
25 certain actions of the City have cost them
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1 money in the form of lost profits that they
2 would have made under the lease, or so they
3 allege .
4 As Tom has pointed out, we met in
5 executive session almost a year ago. At that
6 time, certain estimates of your likelihood of
7 success were provided to the Commission.
8 Here is what we said, generally speaking:
9 We think have a relatively small, perhaps a
10 15% chance or so, that you will suffer a
11 significant adverse monetary judgment. In
12 other words, there are claims against the City
13 that you have breached the lease, that you
14 haven' t provided the parking that is required,
15 that the air-conditioning is not as good as it
16 should have been, that you should have allowed
17 some parties that you didn' t allow.
18 We think we have good defenses to most of
19 those claims, and so we think there is only
20 about a 15% chance you will suffer a
21 significant monetary judgment .
22 On the other hand, we didn' t give an
23 especially high likelihood of success on our
24 eviction action. I think the estimate we
25 provided was about 30 or 35% . That ' s because,
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1 while we contend that Allegria breached a
2 number of provisions in the lease, usually,
3 somebody that tries to foreclose on a
4 commercial lease is because the tenant stopped
5 paying, has stopped paying their rent . That
6 is the typical basis of an eviction action,
7 and your tenant has been paying the rent.
8 So, these claims that we have of breach
9 of a lease are a little bit of a difficult row
10 to hoe, especially when your tenant has
11 initially paid a substantial amount of
12 build-out cost. They put hundreds of
13 thousands of dollars, allegedly, into the
14 build-out of building; and to try to end that
15 tenancy 10 to 15 years before the lease is due
16 to expire is a difficult case to prove .
17 That ' s why we have given you a relatively low
18 estimate of the chances of success .
19 The most likely outcome, I think we said,
20 was about a 50% chance that the jury is going
21 to just tell everybody to go back and abide by
22 the terms of the agreement, that Allegria can
23 stay but they don' t get any money, and people
24 should just proceed under the terms of the
25 lease and into future .
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1 We haven' t substantially changed those
2 estimates . There has been discovery. There
3 have been a lot more witnesses, but we think,
4 generally speaking, that is still a pretty
5 good estimate your chance of success or lack
6 of success in the litigation.
7 Also, since last we met, we were ordered
8 to go to mediation that is a Court-ordered
9 process, to see if the case can be settled.
10 Your City Attorney, Tom Ansbro and others were
11 there . I think Tom wanted to share a thought
12 or two with you about the mediation before I
13 moved on.
14 CITY ATTORNEY ANSBRO: Well, the mediator
15 was a fellow named Howard Jaffe, a long-time
16 litigator, 35, 40 years as a civil trial
17 litigator, jury trials, since he has been
18 retired several years, he has done a thousand
19 mediations and successfully mediated 800 of
20 those, so that ' s an 80% success rate .
21 He came into the mediation, the opening
22 statements to lay out the facts, he read
23 everything, very thorough, very competent, big
24 bear of a guy, 614" , 280-pound guy, very --
25 almost intimidating, deep voice .
h
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1 He takes the other side in to start the
2 talk. Twenty minutes later he comes back to
3 us . He is visibly agitated. His hands are
4 shaking. He takes his old briefcase that he
5 used to use in trial and starts putting papers
6 away and says, I am done here .
7 I said, what is that about?
g I have done ten mediations of my own. I
9 have been in 40 of them, probably, in my
10 career. I have never seen the mediator give
11 up, ever, much less in 20 minutes .
12 I asked, please, sit down, what happened.
13 He wouldn' t precisely tell us . We found
14 out later. What had happened is they impugned
15 his integrity, saying you are in their pocket,
16 saying are you a Dania Beach resident, are you
17 hired by them -- they attacked his integrity
18 to where he just lost it.
19 We persuaded him, please, stay, let ' s
20 just -- and make sure we go through the
21 process of mediation so we can report to the
5;.
22 judge that we tried.
23 COMMISSIONER CASTRO: Can I interrupt you
24 for a second?
25 They were represented by counsel at
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1 mediation?
2 CITY ATTORNEY ANSBRO: Yes .
3 COMMISSIONER CASTRO: And counsel
4 participated in that?
5 CITY ATTORNEY ANSBRO: Yes .
6 COMMISSIONER CASTRO: Seriously?
7 CITY ATTORNEY ANSBRO: Oh, yes .
8 COMMISSIONER CASTRO: Wasn' t counsel part
9 of selecting the mediator?
10 CITY ATTORNEY ANSBRO: Yes, mutually
11 selected. We proposed, and he accepted our
12 offer of this particular guy; but, you know, I
13 had never heard of the guy before .
14 COMMISSIONER CASTRO: I don't care . I
15 think some action should be taken against that
16 attorney, is what I think.
17 CITY ATTORNEY ANSBRO: Well, and I can
e
18 tell you what he -- something funny, I heard
19 him say -- he said, oh, I can tell you this,
20 they are, quote, bad actors, nasty, nasty
21 people; which is no surprise to me, much less
22 to any of you.
23 But go ahead and tell us, if you can, to
24 the extent we have to report what happened at
25 the mediation.
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1 MR. ABBOTT : Yes, the mediator was
2 eventually convinced to return to the
3 mediation.
4 At the mediation, we received a
5 settlement demand from Allegria in the amount
6 of $5 . 272 million. So, if you were to pay
7 them that amount of money, they would agree to
8 the cancellation of the lease .
9 I don' t know where exactly that number
10 comes from. The plaintiff' s expert accountant
11 has testified that damages to Allegria are in
12 the rough amount of $7 million. That ' s an
13 awfully big number. Let me tell you,
14 generally, where those numbers come from.
15 About 3 million of those $7 million are
16 based upon profits that would have been
17 recovered if there were a second floor to the
18 restaurant, an obligation that you simply
19 didn' t have under the terms of the lease; and
20 he essentially said, well, if you doubled the
21 floor area by having a second floor and you
22 assume that they would double their business,
23 they would make a lot more money.
24 We don' t take that as an especially
25 serious claim, but that is where about
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1 3 million of the 7 million comes from.
2 About 2 million of the remaining money is
3 purported lost profits based upon -- premised
4 upon the following: That the first year of
5 operation, Allegria made some money in their
6 business operations . Since then, the business
7 has been gradually failing, profits have
8 fallen from year to year.
9 The expert said, well, if they would have
10 continued to make the same profits they did
11 the first year and even made greater profits
12 over the life of the lease, they would have
13 made a lot more money; and I assume that the
14 reason they are making less money now than
15 they used to is because the City breached its
16 obligations . It was not especially powerful
17 testimony, so I don' t want you to be scared.
18 I mean, it is a $7-million claim. I
19 believe that ' s what they are asking the jury
20 for . It ' s an inflated claim, though, and we
21 have some awfully good arguments against it .
22 I don' t know where the $5 million came from,
23 but that was the demand at mediation.
24 There was one other relatively brief
25 exchange after that demand was received. The
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1 mediator didn' t suspect you were in a big
2 hurry to cut a $5-million check, so he had
3 initially contacted the attorney for Allegria
4 and said, we are going to have to think of a
5 different framework, would you be interested
6 in a framework that included the following: A
s
7 set departure date, in other words, sometime
8 in the future that you would leave the
9 premises; in addition to that, an opportunity
10 to assign the lease to somebody who the City
11 would approve, so they could presumably make
12 some money in transferring the lease to a
13 third party and, lastly, maybe some money to
14 supplement that.
15 The attorney said that that framework
16 might very well be acceptable, and the
17 mediator asked your team, if that framework
18 might be acceptable; and we said, sure, we
19 would be happy to hear what they have to say.
20 Then the mediator went to talk to your
21 plaintiffs and returned to say, Allegria is
22 not interested in a framework like that .
23 $5 million was the demand, and the mediation
24 ended shortly after that .
J.
25 We are set for trial . We have those
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1 motions for summary judgment set and coming
2 up. We are specially set for trial, which
3 means we will begin trial on this date, unless
4 something unusual happens, on June 13th, so in
5 less than a month now. We are ready to go .
6 So, what are those -- what options do you
7 have at this point? You can settle the case
8 for $5 million. You could reinitiate
9 settlement discussions and see if their
y
10 settlement position has changed since the
11 mediation, although the mediation was just
12 this past Monday. I am not sure that their
13 position will have changed substantially; or
14 you can prepare to try the case, which,
15 candidly, seems to be your most viable option
16 at this point .
17 But we are here to take direction from
18 you and to answer any questions you might
19 have . Having said that, I will open the floor
20 and do my best to answer any questions .
21 COMMISSIONER DUKE: What ' s the source of
22 payment for a monetary loss?
23 MR. ABBOTT : For the City?
24 COMMISSIONER DUKE : Uh-huh, are we
25 insured?
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1 CITY ATTORNEY ANSBRO: No.
2 MR. ABBOTT: I would suspect not .
3 CITY ATTORNEY ANSBRO: I tendered this
4 for insurance, as I always do whenever a claim
5 comes in. They say this is a contract dispute
6 and there is not coverage --
7 COMMISSIONER DUKE: Okay.
8 CITY ATTORNEY ANSBRO: -- unlike a
9 slip-and-fall or a PI, personal injury type of
10 case, so there is no coverage .
11 COMMISSIONER DUKE: And you had described
12 some sort of ratio percentage for a
13 significant monetary loss . What is that to
14 you, the 5 million you are talking about?
15 MR. ABBOTT : You know, there is quibbling
16 about the -- about the quality of the
17 air-conditioning system. The air-conditioning
18 system, a brand-new one up to their specs,
19 would be $100, 000 .
20 They do say the air-conditioning system
21 isn' t working that well . We have some
22 contrary testimony. Maybe a claim like that
23 can go either way, but this
24 multi-million-dollar claim is what I mean to
25 suggest is a very unlikely outcome .
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1 MAYOR FLURY: Do we remember exactly what
2 they put into that -- into the build-out?
3 CITY ATTORNEY ANSBRO: The claim is 150 .
4 MR. ABBOTT: That ' s what --
5 CITY ATTORNEY ANSBRO: 122 for build-out;
6 and then, at the end of the day, when they
7 say -- it was supposed to be 850 they kept
5
8 talking about .
9 MR. ABBOTT : Well, that ' s in the
10 complaint . The complaint has made the
11 representation that between the build-out and
12 the restaurant equipment was $850, 000 . They
13 were even only able to get their expert to
14 purportedly verify a little over $100, 000 .
15 MAYOR FLURY: I would believe the 800, 000
16 in a heartbeat, because they had to put in the
17 walls . They had to put in the kitchen, all
18 that equipment . They had to put in the
19 ceiling. They -- we gave them the shell .
20 CITY ATTORNEY ANSBRO: I will tell you
21 this . It is my clear recollection they came
22 in and were going to do it first class,
23 everything was going to be brand-new. s
24 Then they came in and went, this is not
25 going to work. They went and bought used
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1 equipment, used coolers .
2 Now, the kitchen stuff had to be new.
3 That is correct . They had to be fabricated.
4 MAYOR FLURY: Yes .
5 CITY ATTORNEY ANSBRO: And they are being
6 sued by the fellow that put the work in there .
7 MR. ABBOTT : They have not paid a number
g of their contractors, which is making them,
9 generally, willing witnesses .
10 I mean, oftentimes, if I were to call the '
11 other side ' s contractor, they are not in a
12 hurry to talk to me . These people are talking
13 to us . I think they haven' t been paid.
14 MAYOR FLURY: Even if it was eight or
15 nine hundred thousand, whatever, they are not
16 going to accept anything but their five .
17 Do you feel pretty comfortable about
18 that?
19 CITY ATTORNEY ANSBRO: They seem
20 extremely stubborn about it . They were
21 willing to call impasse, which means we don' t
22 talk anymore .
23 Now, I was interested in the idea they
24 get to stay for a certain period of time and
25 we give them more opportunity to try to sell
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1 it . At some point -- you may not know this,
2 but Bea Morley, who used to own a lot of
3 nightclubs, came around here . I met her about
4 three months ago.
5 She said, I have a number of people from
6 Russia and all these weird places over there
7 that want to invest in this kind of thing, and
8 if I bring that here, will you do it?
9 I said, you can' t talk to me, talk to
10 them, get them to sell off, give us a
11 reasonable person that can run a restaurant
12 that is not a criminal, and we ' ll approve
13 them. We will take whoever you can if it is a
14 viable person who can run a restaurant .
15 She has been on that track to try to work
16 something out, and nothing has worked out,
17 partly because, she said, they are so
18 difficult to deal with.
19 Myself and Colin Donnelly have lived and
20 breathed this, and I have found them to be
21 extremely untruthful; and I think, if we --we
22 have this opportunity, if you want to give it
23 to us, to paint the picture of who they are,
24 they are awful people .
25 I went back onto the website last week to
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1 read all the stuff from Trip Advisors, the v
2 people who go as customers; and the one
3 comment word you see -- I must have seen it 75
4 times -- is "rude . " There is one thing in
5 there from the guy who went two or three
6 months into the restaurant being brand-new,
7 opened, six months later he said, I take it
8 all back, it was me that went there, they are
9 completely different, I don' t know what
10 happened.
11 You read it, and it ' s horrible reading to
12 read this about our place that we wanted to be
13 a signature place . The people hate it. They
14 hate it.
E
15 MAYOR FLURY: How long do you estimate a
16 trial would be?
17 CITY ATTORNEY ANSBRO: A week, five days .
18 COMMISSIONER CASTRO: Just out of
19 curiosity, once again, if we prevail, they are
20 off the restaurant and the pier, right?
21 MR. ABBOTT : If we prevail in our
22 counterclaim, yes, they would be evicted from
23 the entire premises .
24 COMMISSIONER CASTRO: And, to me, that ' s
25 the key, because, remember -- and I don' t know
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1 how this plays into the case, because here
2 they are coming and saying we interfered with
3 the restaurant operations, yet they had the
4 restaurant for sale before we even got here .
5 So, they had already made a mind to exit, but
6 what they want to do is keep the pier.
7 Now, that doesn' t help the case in any
8 way?
9 MR. ABBOTT : Well, it ' s interesting you
10 should mention that . When we deposed the
11 expert, the entire claim for damages is on the
12 restaurant part of the operations .
13 So, remember, we have been naturally
14 suspicious, because they haven' t kept very
15 good records, for how much money they are
16 making in the bait shop and are they
17 delivering to you your proper share of the
18 pier entry fees . They have continued to hide
19 that information from me by not providing it
20 to their experts so I could ask some
21 questions . The only thing they want to talk
22 about is the restaurant .
23 COMMISSIONER DUKE : Have they paid the
24 income taxes? Is the Internal Revenue Service
25 after them for any reason?
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1 MR. ABBOTT: I am not aware of any
2 Internal Revenue Service claim, but that ' s a
3 good point . I can certainly find that out .
4 COMMISSIONER CASTRO: We did an audit --
5 we tried to do an audit .
6 MR. ABBOTT : Yes .
7 COMMISSIONER CASTRO: That ' s part of the
8 evidence, I assume?
9 MR. ABBOTT : Yes .
10 COMMISSIONER CASTRO: When the --
11 CITY ATTORNEY ANSBRO: Don' t forget, by
12 the way, your recollection of that, say, four-
13 or five-page report where the guy concluded
14 that, even had they -- people were not
15 skimming off the top and cashiers taking money
16 and bartenders taking money, they couldn' t
17 have possibly made $1 . 2 gross, just because it
18 wasn' t -- the numbers weren' t there to support
19 it .
20 They couldn' t even show 800 as a gross
21 revenue, and the guy said, they just don' t
22 make the nuts to get to the --
23 COMMISSIONER CASTRO: And to this point,
24 they are trying to get out of the revenue
25 figure because they' re saying the first few
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1 months were profitable and after that, it
2 wasn' t. It is our fault that it wasn' t, which
3 supports them making a minimum payment, which
4 is what they want to do, even though they may
5 have owed us more money, which I believe they
6 did, because of the pier operation, but they
7 didn' t keep the records .
8 But to your point about painting who they
9 are, I assume you are going to call them to
10 testify?
11 MR. ABBOTT: Of course .
12 COMMISSIONER CASTRO: And I assume you
13 are going to push their buttons, because they
14 are easy to push, because they are nasty, mean
15 people; and I hope a jury sees that because
16 that ' s where it all, like you said, comes
17 down.
18 Secondly, I think the honesty will come
19 out -- or dishonesty or lack of honesty,
20 either through the audit, perception or
21 whatever and that --
22 COMMISSIONER DUKE : The parties and all
23 that .
24 CITY ATTORNEY ANSBRO: It ' s everything.
25 I keep saying, in my mind, it ' s painting
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1 a picture stroke by stroke until the jury
2 goes, oh, my God, I get it . It ' s like the
3 Caylee Anthony case: I get it, you must have
4 killed her; I get it, you are bad people, look
5 what you did. _
6 We are trying to show as many people as
7 we can, like your story the other day, going
8 there to have a glass of wine, the experiences
9 of real people and how they were treated over
a
10 there : Pregnant women whose cars were towed.
4
11 COMMISSIONER DUKE: But does the very
12 fact that they are bad people mean they are in
13 default of the lease?
14 COMMISSIONER CASTRO: No.
15 CITY ATTORNEY ANSBRO: It ' s part of
16 running a first-class operation.
17 COMMISSIONER CASTRO: Right .
18 CITY ATTORNEY ANSBRO: The people we
19 hired, by the way, are the Maersks, the people
20 who bought the Maerssk boat line .
21 COMMISSIONER CASTRO: The other thing I
22 will do is --
23 (Vice Mayor Grace joined the proceedings at
24 6 : 30 p.m. )
25 CITY ATTORNEY ANSBRO: Vice Mayor Grace
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1 joined us at 6 : 30 .
2 COMMISSIONER CASTRO: The other thing I
3 will do is go to character and possibly
4 honesty, which is where you want to start
5 spreading it, because that ' s where it is going
6 to come out .
7 The other thing is, did you interview or
8 talk to any of their former employees?
9 MR. ABBOTT: Yes, we have, primarily in
10 connection with the sublease issue . We have
11 found a former server there who supports our a
12 thought that this was really a turnkey
13 operation. In other words, Allegria ' s
14 contention now is, that was never really a
15 sublease, we just brought in a manager to help
16 with the work, but we were involved the whole
17 time; the server says that is not the case.
18 CITY ATTORNEY ANSBRO: The evidence is
19 such that, what they were doing -- they turned
20 it over to these other people . It was three
21 people, a husband, wife and a cook.
22 They began to cook in the bait shop.
23 They put little stuff in there to make
24 smoothies and cook Jamaican patties, and it
25 outraged the guy to whom they had just
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1 subleased the restaurant that they are
2 competing with him.
3 That started to come up in his
4 deposition. They didn' t want to go too far
5 into it . I said, wait for the jury trial for
6 that .
7 More importantly, to me, is that the week
8 we found out they were lying to us and the
9 people came in to Colin and me on a Friday
10 night to say, we are the tenant .
11 We said, who are you?
12 When they told us the story, I had BSO
13 take a complete report, and we found out the
14 fraud they did to these people and us .
15 That following Sunday, the wife calls the
16 guy, says I need to meet with you and we need
17 to change some papers in the documents, we
18 need to show that you were an employee .
19 He said, I am not going to -- my lawyer
20 is not around, that doesn' t do it .
21 That ' s going to come out . If I can paint
22 this, through these guys, paint every stroke
23 of the lying, the deceit . I have got to get
24 it because the concern is, it ' s just not
25 enough to say, well, you lied to us but we
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1 cured it, what ' s the big deal . They were
2 worried a jury is not going to like that,
3 because of the investment in that . I want to
4 show the lies, you know. If you show the
5 deceit, I think you can get them.
6 COMMISSIONER CASTRO: I think, first of
7 all, what you have to do is connect the lying
8 to the fact they didn' t invest that much into
9 it . As a matter of fact, they were subleasing
10 to people who had no experience, so they
11 weren' t trying to maintain a first -- you
12 know, they wanted the pier. That ' s what they
13 ended up coming out of. That ' s what they
14 wanted.
15 There are some other employees you might
16 want to talk to because there were issues when
17 the restaurant first opened, and even months
18 into the opening.
19 I have a friend who worked there, and she
20 told me they were washing dishes in the
21 bathroom. I mean, there is a lot of stuff,
22 really crazy. That ' s why I never went there .
23 Never did I go there to eat because I wasn' t
24 going to go there .
25 I can give you a name later if you could
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1 check the employee stuff, you can find it.
2 She actually, I think, worked in the bait shop
3 and the restaurant but mostly in the bait
4 shop.
5 There is a lot of weird stuff there,
6 which, again, will tell you, these people were
7 not only not running a first-class operation,
8 they weren' t managing it adequately. That ' s
9 the bargain of the deal . That ' s their
10 problem; that ' s not our problem.
11 I assume you have all the records of the
12 air-conditioning fixes? We went out 52 times,
13 all that stuff, so --
14 CITY ATTORNEY ANSBRO: I will tell you
15 one of the best parts is they talked about it
16 was our fault the alarm kept going off. We
17 had the alarm company come in. They testified
18 beautifully for the City. They said they
r
19 didn' t know how to set the alarm. They were
20 sleeping.
21 Guess what they did with the
22 air-conditioning? We finally got the truth
23 out of them. They didn' t change the filters
24 on them; they were black. They didn' t tighten
25 the belts to the fan, so the thing is not even
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1 working efficiently. Guess what, people get
2 it in a jury box like, I have been stupid
3 before and didn' t change the oil or I didn' t
4 change the AC filter.
5 COMMISSIONER CASTRO: It ' s Florida, of
6 course, you have to maintain.
7 CITY ATTORNEY ANSBRO: It ' s one thing to
8 maintain it, but then to say it ' s a blowback
9 to us, that we did it, is really bad.
10 I tell you one thing that happened is
11 that apparently a key employee that runs the
12 bait shop and very important to them, lives
13 here nearby. In one of the depositions, they
14 got spooked about something that came out, and
15 they called her immediately to say, that
16 better not be you that said that to them. She
17 is terrified for her job. I can' t use her as
18 a witness because she wants her job.
19 COMMISSIONER CASTRO: You will have to
20 tell me her name later.
21 CITY ATTORNEY ANSBRO: We will deal
22 with --
23 COMMISSIONER CASTRO: The bottom line, so
24 I am clear, again, I don' t want them to stay;
25 and you know what, I have never done anything
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1 with them or against them.
2 I have kind of -- they sent me emails
3 early on that were just atrocious about what
4 kind of clientele they wanted and didn' t want
5 and who wanted on the pier; and just, at that
6 point, I realized they weren' t the right
7 people, especially for marketing our city and
8 portraying our city for what it is .
9 And I don' t care about that if they ran a
10 successful restaurant, I would be hanging out
11 with them and doing the right thing as far as
12 the honoring the agreement .
13 I think they dishonored the agreement
14 every opportunity they had. Just because we
15 cure it now, I don't think it makes a
16 difference going forward, so I don' t think we
17 should have to do business with them anymore .
18 So, if anything comes up with any more
19 settlement framework, if you are looking for
20 votes, I am not voting for that . I want them
21 gone, out, go do whatever they want . I want
22 the pier and the restaurant back and whatever
23 happens .
24 COMMISSIONER McELYEA: I have heard
25 nothing but bad news from the Mayor and
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1 commissioners and from other tenants and
2 employees, as well . I know the employee you
3 are speaking about . She has been around a
4 long time .
5 CITY ATTORNEY ANSBRO: And I can' t use
6 her.
7 COMMISSIONER McELYEA: I know you can' t.
8 Also, I have been in the towing business
9 for 50-some years and I have never towed a
10 car, to my knowledge, from the pier. The
11 company -- he has had three companies in
12 there . He gets $20 . From each one of them,
13 he gets the $20 . The tow truck runs Aboy and
14 Chief. That ' s two that I know of.
15 CITY ATTORNEY ANSBRO: This came up
16 recently when we had the deposition -- I
17 forget who it was; but Colin had found out
18 they are closed on Monday all day, and Colin
19 said, you know what, they are towing on Monday
20 when there is nobody there .
21 I said, let ' s bring it up at a deposition
22 and see if they stop.
23 We brought it up, and Elizabeth says, are
24 you saying we should let people park there for
25 free?
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1 I went, don' t say another word. That ' s
2 it . That ' s just what I want to paint for the
3 jury. It ' s a dog in a manger, okay, you are
4 closed and you are towing people when you are
5 closed.
6 COMMISSIONER CASTRO: That ' s because they
7 are getting 20 bucks a car.
8 CITY ATTORNEY ANSBRO: These guys are
9 telling me, don' t get angry. I am angry at
10 these people because I am the one --
11 COMMISSIONER McELYEA: Or you pay $5 and
12 park all day with a slip from them.
13 CITY ATTORNEY ANSBRO: It ' s just the
14 betrayal of it all .
15 MAYOR FLURY: Tom, the -- this issue of a
16 first-class restaurant, I think it ' s very
17 important that we elaborate on why the
18 first-class restaurant is there . I mean, this
19 was designed to be a destination place for our
20 City. You know that whole story, so I --
21 CITY ATTORNEY ANSBRO: I think -- you are
22 probably the one I am going to want up there
23 to say that because you are the one that
24 really was the catalyst to try to get it done .
25 He was nervous about it, but you said, we can
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1 do this and we can do it right.
2 And we did want a two-storey restaurant
3 there . That was the deal . We worked really
4 hard; nice, fine dining at night and a casual
5 place in the daytime .
6 I remember sitting in a Planning and
7 Zoning Board meeting where one board member
8 said, I don' t think it can support two
9 storeys; it will compromise the structure .
10 I thought, oh, my God, what if that ' s
11 true .
12 And I got Ken Cook, the building official
13 at that time, to run the research. I think we
14 determined it would cost us another 500, 000,
15 and even if we could do it, even if we could
16 permit it, it wouldn' t hold.
17 MAYOR FLURY: The pier wouldn' t hold it .
18 The pier, as it existed today, would not hold
19 a two-storey structure .
20 CITY ATTORNEY ANSBRO: Correct . So, then
21 the thing was, we told them that, they were
22 notified of it . What do they do? Do they
23 seek reformation?
24 MAYOR FLURY: Well, they won' t sign the
L.
25 lease or whatever.
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1 CITY ATTORNEY ANSBRO: No, the lease was
2 signed. Don' t forget, that' s odd. The lease
3 was signed. Ivan brought it to us before we
4 even knew what we were doing. They signed the
5 lease and took the old Tarpon Bend lease that
6 I brought and made very few changes, didn't
7 use a lawyer.
g I kept saying, you should really get a
9 lawyer to read your side of this thing.
10 We don' t need no stinking lawyer.
11 So, they didn't use a lawyer, and three
12 years later, a year and a half later, we begin
13 the design and are like, wow, you can' t do two
14 storeys .
15 They knew about it, and we have to show
16 that they knew about it, and they participated
17 in the design of the structure . They were
18 there for every meeting when the kitchen is
19 being designed.
20 Now, here they are trying to say, you
21 lied to us, you committed fraud, you induced
22 us into this; and here they are lying about
23 the property taxes . They paid the taxes for
24 the last two years and now they are not paying
25 this year. I am done with them.
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1 MAYOR FLURY: Why do you think they
2 cancelled our deposition?
3 CITY ATTORNEY ANSBRO: We don't know. I
4 think they want to resume Walter' s, but they
5 haven' t talked about you. I don' t know if
6 they are saving expenses or what .
7 COMMISSIONER CASTRO: They didn' t call
8 me .
9 MAYOR FLURY: Generally consensus here,
10 if I am reading everybody right, is that we
11 want to proceed; is that correct?
12 COMMISSIONER CASTRO: Yes .
13 MAYOR FLURY: This is what it ' s all
14 about .
15 COMMISSIONER DUKE : It sounds like our
16 only option.
17 CITY ATTORNEY ANSBRO: I do want to point
18 out, Walter brought it up and it is extremely
19 important to know, that we have $105, 000 in
20 this today, plus more that has to be billed,
21 and it ' s going to be very costly to take this
22 out to jury trial . It could be another month
23 and a half to do it . I don' t like it, but now
24 we are in it to win it .
25 COMMISSIONER CASTRO: The alternative is
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1 $5 million, so, I mean, what are you --
2 CITY ATTORNEY ANSBRO: Yeah, like Abbott
3 said, what ' s that movie "I want 6 million" --
4 you can see him doing that . How stupid.
5 COMMISSIONER CASTRO: Just real quick,
6 too, so you all know, they wrote a letter to
7 the company I work for. Their allegation was
8 that I somehow interfered with their credit
9 relationship with my company, which I have
10 nothing to do with, don' t even have access to
11 the system. If you can use that in any way --
12 I actually told our counsel, you know, as
13 a public figure, I know there is a higher
14 level for defamation and slander; but they are
15 coming at me in my personal environment now.
16 If we can use that in any way, I am happy to
17 do that, because it obviously ticked me off.
18 There is no basis for it . It is easy to
19 prove, anything, you know. So, if that works
20 for you, let me know.
Y'
21 MR. ABBOTT : Do you have a copy of that
22 letter?
23 COMMISSIONER CASTRO: No.
24 Counsel would have a copy of that, but
25 you know counsel for the company, I believe,
Imm
777
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1 Larry Joplin (phonetic) . He called me to ask
2 me about it, and he was laughing; but he wrote
3 them a nice letter back saying he will take it
4 under serious advisement and research it or
5 investigate it or get back to it and the
6 Southern Wine takes these things seriously,
7 blah, blah, blah -- and they do. They take
8 them very seriously, but at the same time, it
9 was just bogus .
10 MR. ABBOTT : I ' ll find it . Thank you.
11 CITY ATTORNEY ANSBRO: I haven' t heard
12 back from them whether or not we can do this,
13 but I asked the other fellow working with you,
14 if we can get some of these people who have
15 written these reviews and are so angry, I want
16 them on the stand. I want to trot twenty
17 people up there for five minutes : Tell me
18 about your experience there .
19 People know what it is like to have a
20 crap time in a restaurant . They know how
21 angry it is, and the last thing I saw was four
22 entries in March, alone, on Trip Advisor,
23 where they say, you' ll know from the day you
24 walk up to the door -- just like he said, you
25 walk up to the door, here are the rules of
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1 what you will do. They warn you.
2 The man will walk you in. It doesn' t
3 matter where you want to sit; they will tell
4 you where you are going to sit. If you say, I
5 am here for a glass of wine, he goes like this
6 (indicating) and walks you over to the bar, if
7 they even let you do that.
8 We have a case, a young woman came up and
9 her little daughter had to go to the bathroom:
10 Can she use the bathroom?
11 No, she can' t . Go down there .
12 She has to go right now.
13 No, she can' t.
14 I want that woman on the stand. Anybody
15 who sits in the jury box with a kid that has
16 to go to the bathroom, paint the picture, you
17 know. They are nasty.
18 MAYOR FLURY: Okay. We know they are
19 nasty. I mean, is the direction -- you know,
20 they are here for direction.
21 CITY ATTORNEY ANSBRO: Well, what I am
22 telling you is --
F
23 MAYOR FLURY: Calm down, Tom. Calm down.
24 COMMISSIONER CASTRO: Breathe .
25 CITY ATTORNEY ANSBRO: I know.
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1 MAYOR FLURY: Mac, are you okay going
2 forward?
3 COMMISSIONER McELYEA: I go for broke .
4 MAYOR FLURY: Anne?
5 COMMISSIONER CASTRO: I am with Mac.
6 COMMISSIONER DUKE: Me, too.
7 MAYOR FLURY: Bobbie hadn' t heard it, but
8 we went to mediation --
9 VICE MAYOR GRACE : I know what it is all
10 about .
11 CITY ATTORNEY ANSBRO: Okay. Well, the
12 mediation was -- their demand was, you pay us
13 $6 million and we will go away. I don' t know
14 where that came from --
15 COMMISSIONER McELYEA: 60 cents .
16 MAYOR FLURY: Okay. Anything else you
17 need from us?
18 MR. ABBOTT : No, ma ' am, I think that was
19 very clear. Thank you for your time .
20 MAYOR FLURY: We thank you. Good luck.
21 COMMISSIONER CASTRO: Thank you,
22 gentlemen.
23 (Whereupon, the proceedings were temporarily
24 adjourned and relocated to the City Commission Meeting
25 Room, where they were reopened and proceeded as
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1 follows : )
2 MAYOR FLURY: I will now re-open the
3 public meeting.
4 The attorney-client session was
5 terminated, and members of the general public
6 are now invited to return for further
7 proceedings or matters . Thank you.
8 CITY ATTORNEY ANSBRO: We just had an
9 executive session on the Beach Watch pier
10 restaurant, and it was with regard to the law,
11 a private session. We are going to take a
12 15-minute break, and we will come back for the
13 regular commission meeting.
14 (Whereupon, the proceeding was concluded at
15 6 : 51 p.m. )
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1
2 C E R T I F I C A T E
3
4 THE STATE OF FLORIDA)
COUNTY OF BROWARD)
5
6
7 I, EMILY SCOTT, certify that I was
8 authorized to and did stenographically report the
9 foregoing proceedings and that the transcript is a
10 true and complete record of my stenographic notes .
11 Dated this 1st day of June, 2011 .
F
12
13
14
15
16
EMILY SCOTT
17
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A alleges 7:15 attention 10:23 belts 33:25 called 34:15 42:1
Abbott 2:9 4:15 Allegria 1:16 4:7 attorney 2:8 3:15 Ben 1:13 4:6 calling 3:3
5:18,19,23 6:3,6 6:7,13 7:15,19 3:16 4:14 5:13,16 Bend 39:5 calls 7:23 31:15
6:25 9:19 17:1 13:1,22 17:5,11 5:24 6:4 8:17,18 best 20:20 33:15 Calm 43:23,23
20:23 21:2,15 18:5 19:3,21 14:10,14 16:2,5,7 betrayal 37:14 cancellation 17:8
22:4,9 23:7 25:21 Allegria's 11:24 16:10,16,17 19:3 better 34:16 cancelled 40:2
26:9 27:1,6,9 30:13 19:15 21:1,3,8 big 14:23 17:13 candidly 20:15
28:11 30:9 41:2 allow 12:17 22:3,5,20 23:5,19 19:1 32:1 car 36:10 37:7
41:21 42:10 44:18 allowed 12:16 25:17 27:11 28:24 billed 40:20 care 16:14 35:9
abide 13:21 alternative 40:25 29:15,18,25 30:18 bit 8:19 13:9 career 15:10
able 22:13 amend 10:25 33:14 34:7,21 black 33:24 cars 29:10
Aboy 36:13 amended 10:1 36:5,15 37:8,13 blah 42:7,7,7 case 3:24 7:9 9:13
AC 34:4 amount 13:11 17:5 37:21 38:20 39:1 blowback34:8 11:5 13:16 14:9
accept 23:16 17:7,12 40:3,17 41:2 Blvd 1:22 20:7,14 21:10
acceptable 19:16,18 angry 37:9,9 42:15 42:11 43:21,25 board 38:7,7 26:1,7 29:3 30:17
accepted 16:11 42:21 44:11 45:8 boat 29:20 43:8
access 4 1:10 Anne 2:4 4:12 44:4 attorney-client 3:20 Bob 5:14 cashiers 27:15
accountant 17:10 Ansbro 2:8 3:15,16 45:4 Bobbie 2:3 5:3 44:7 Castro 2:4 3:7,8
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