Board agrees to decide later whether to go after almost $400,000 in attorneys’ fees, based on whether it can succeed in getting money from Citizens for Sunshine
For almost 85 minutes late on the night of June 5, the Sarasota city commissioners asked questions and debated whether they should spend more taxpayer money to collect the almost $400,000 in legal fees the city has paid in a Sunshine Law case.
Thomas Shults of the Kirk Pinkerton firm in Sarasota — the outside counsel for former Commissioner Susan Chapman — offered an estimate of $25,000 to $50,000 for pursing a judgment in the city’s favor. Additionally, Shults made it clear that Citizens for Sunshine — which lost the case at the 12th Judicial Circuit Court level and then on appeal — thus far has produced no documentation showing that it has any financial resources. Most likely, Shults indicated, it would be necessary to “pierce the corporate veil” of Citizens for Sunshine to determine who its members are and try to collect any judgment from them, if the 12th Circuit Court ruled for the city on claims for those fees.
Finally, the commissioners voted 3-2 to try to collect only the $9,238.16 that 12th Judicial Circuit Court Judge Brian Iten already has determined the city is owed for its costs in the case. The motion by Commissioner Willie Shaw called for deferring any action on collecting attorneys’ fees.
Vice Mayor Liz Alpert and Commissioner Hagen Brody cast the “No” votes. Brody repeatedly voiced concerns about spending more taxpayer dollars when he felt the city had no realistic expectation of getting any money from the nonprofit Citizens for Sunshine. Alpert initially seemed to favor trying to collect the $9,200. However, as the board was nearing a vote, she pointed out that it was 11:20 p.m. and said she believed it would be better for the commissioners to take time to consider what had been discussed that night and then make a decision later.
The meeting began at 2:30 p.m., was adjourned about 5:30 p.m. and then resumed at 6 p.m. on June 5.
Brody especially questioned whether the city would win on the arguments Shults proposed, which Shults said he believed were solid grounds for convincing a judge that the lawsuit was both frivolous and that it was filed in bad faith. Brody told his colleagues, “The chance of success is so small.”
Furthermore, Brody said, “I know that piercing the corporate veil in Florida is tough.”
Commissioner Jennifer Ahearn-Koch — who, like Brody, just joined the board in mid-May — disagreed with him. The Second District Court of Appeal’s upholding of Iten’s July 2016 ruling for Chapman and its denial of a motion from Citizens for Sunshine, seeking a written opinion in the case, were “strong [in showing] that this whole case was in bad faith and that there was no evidence [to support the nonprofit’s claim that Chapman had violated the Sunshine Law],” she said.
She joined many residents in the community who commended Chapman for fighting the lawsuit, Ahearn-Koch added.
Additionally, she told her colleagues, if the city could collect the attorneys’ fees, she felt that would deter future litigation against the city on Sunshine Law grounds.
Alpert was not persuaded on that final point: “I am not certain that getting a judgment against [Citizens for Sunshine] for attorneys’ fees will deter them from anything.”
Shaw pointed out that he was the only remaining member of the commission at the time Citizens for Sunshine filed its suit. “You don’t give up the fight when you’re in the fight,” he said. “I wouldn’t dare give up now. … All five elected officials were under that same watchful eye” for more than three years, he added. “That’s not a good feeling at all.”
“I think that there’s more at stake than just dollars,” Mayor Shelli Freeland Eddie agreed. This Citizens for Sunshine case and other complaints the nonprofit has filed against the city in recent years have changed the way the City Commission functions, she added. Board members’ participation in meetings outside the formal ones at City Hall “has been significantly altered from what I remember before. I think that we have the ability to possibly influence law going forward. …Nevertheless,” she continued, “I am concerned about the [expense].”
The heart of the matter
The lawsuit was filed eight days after an Oct. 10, 2013 meeting organized by downtown merchants and held at the Tsunami restaurant. Chapman and then-Commissioner Suzanne Atwell attended it, along with City Manager Tom Barwin and Deputy City Manager Marlon Brown, court records show. No notice of the session was provided to the public and more than one commissioner was present, Citizens for Sunshine contended. Additionally, the nonprofit argued in its complaint, Chapman and Atwell participated in talks about a topic they had every expectation they would be discussing later at the City Commission dais —homelessness in downtown Sarasota.
The city and Atwell — who also were defendants in the suit —settled with the nonprofit, though Atwell admitted no wrongdoing. In the wake of the legal action, the city began issuing notices of upcoming community events and gatherings, and taking minutes at those sessions, when the expectation existed that more than one commissioner would be in attendance.
Chapman, who argued vociferously that she had done nothing wrong, proceeded to fight the Sunshine suit.
During the June 5 City Commission meeting, City Attorney Robert Fournier reported that the total of the attorneys’ fees to-date is $399,743. In November 2016, Iten awarded Chapman the $9,238.16 in costs, which was accruing interest at the statutory rate of 4.91%, Shults said during the April 17 City Commission meeting.
Shults also filed the necessary paperwork for the award of attorney’s fees, he noted during that April discussion, in the event the City Commission chose to pursue them.
Arguments and finances
In reviewing the background, Fournier told the board members on June 5, “I think the likelihood of receiving the full sum [of attorneys’ fees] is low, because the corporation [Citizens for Sunshine] doesn’t have any assets …”
In response to questions from Alpert — who is an attorney — Shults explained that the nonprofit filed an affidavit showing it has no bank accounts. “They claim they own no property. … As far as I know, they have no insurance.”
“How do you pay the filing fee to file a lawsuit if you have no bank account?” Alpert responded.
“That’s a good question,” Shults replied. “I don’t know what the answer to that is.”
Shults did explain that he learned from researching case law that a nonprofit corporation’s “veil” can be pierced when a judgment has been recorded against it. Because Iten already has issued the order for the payment of costs, Shults continued, the city has the legal opening to ask the judge to let it determine who the members of Citizens for Sunshine are “in order to estimate individual liability.”
Shults also pointed out that he believes a strong case can be made that the nonprofit filed the lawsuit in bad faith. Sarasota resident Mike Lasche stated in a deposition in the case that the president of the nonprofit at the time the case was filed told Lasche, in a private conversation, that the lawsuit would be dropped if the City Commission agreed to build a homeless shelter on 12th Street.
Shults later identified Anthony Lorenzo as the Citizens for Sunshine president who participated in the conversation with Lasche.
In public comments at the June 5 meeting, Lasche referenced the statement Shults had discussed,” saying the topic of the lawsuit came up during a conversation he was having with Lorenzo about other matters.
Brody disagreed with Shults, saying it would be difficult to prove that Lorenzo’s statement served as the basis for the lawsuit.
The biggest expense to the city would be in pursuing attorneys’ fees on the bad faith claim, Shults also acknowledged to the board. “It involves essentially a new trial. You would need to bring in witnesses. … That could exceed that $50,000 estimate.”
If the city prevailed and could collect nothing from Citizens for Sunshine, Mayor Freeland Eddie asked him, “What is the city’s obligations in terms of paying your attorney’s fees [for that part of the case]?”
“You would pay my attorney’s fees,” he replied, eliciting laughter from some of the commissioners.