City attorney and commissioners debate holding a ‘shade’ meeting on a counter offer
Sarasota City Commissioner Hagen Brody has told his colleagues he would like for the city to make a settlement offer to a limited liability company in which the city has been engaged in litigation over an alleged breach of contract.
He wants that to happen before the county judge presiding over the trial in the case — which ended in late May — rules on motions, including the city’s request for dismissal of the litigation, based on the assertion that insufficient evidence was introduced in court to prove the plaintiff’s arguments.
However, after about 15 minutes of discussion at the end of the City Commission’s regular meeting on June 18, the majority of the board members did not indicate a willingness to make a counter offer to Palm Avenue Development LLC at this stage.
Most of their talk late that night focused on whether to hold a “shade” meeting to discuss a proposal to Buck-Leiter Palm Avenue Development LLC.
On May 21, a Sarasota County jury reached a verdict that said the city was liable for approximately $49.8 million for backing out of an agreement Buck-Leiter claims it forged with the city almost a decade ago to construct the Palm Avenue parking garage and a hotel/condominium complex/retail project adjacent to the garage.
During the June 4 City Commission meeting, City Attorney Robert Fournier provided details of the case from the city’s perspective. He noted that County Judge Erika Quartermaine has requested the full transcript of the proceedings before ruling on the motion for a directed verdict that Sarasota attorney Morgan Bentley of Bentley & Bruning made before she sent the case to the jury. Bentley is representing the city as outside counsel in the case. It could be early July, Fournier said on June 4, before the transcript is completed.
When Brody asked about the status of the transcript on June 18, Fournier said that a rough draft only had been made available. After the document has been finalized, Fournier continued, Buck-Leiter will have 21 days to file its response to the city’s motion for the directed verdict, and then the city would have 21 days to reply. Based on the timeline he anticipated, Fournier said, it probably would be six weeks before the commissioners needed to make a decision on how to proceed.
During the commission’s June 4 regular meeting, Fournier noted that Bentley had received a settlement letter from Buck-Leiter attorney Thomas E. Leiter of Peoria, Ill. However, Fournier said, the letter did not provide specific terms. Because of that and because Quartermaine had had filed notice that she would rule on Bentley’s motion and other motions in the case, he added that he saw no need for the City Commission to act at that time.
On June 18, Fournier explained that he had received another letter from Leiter, “which I’m obligated to submit to the City Commission, because it’s not up to me to accept or reject these proposals.”
In that letter, Leiter wrote that his clients “will accept the principal sum of the jury verdict in the amount of $49,782,431.00 and will waive all prejudgment interest and attorneys’ fees.”
He pointed out that his clients are entitled to the verdict amount, plus interest and fees, noting the interest rate is provided by statute and has varied from year to year. In 2008, he wrote, it was 11% a year; in 2011, it ranged between 4.75% and 6%. Since 2011, he continued, it has remained at 4.75%. Therefore, he added, because a computation is required for each year for settlement purposes, “a reasonable annual estimated rate is 5% which could add additional liability for the City in excess of $24,000,000.00.” Attorneys’ fees could exceed $75 million, he noted.
He suggested five installments from the city for the $49,782,431, with the first — $9,782,431 — to be made no later than July 3.
Leiter further asked that the City Commission provide acceptance of those terms in writing no later than 5 p.m. on June 19.
Shade meeting or open meeting?
“Why is this not a shade meeting?” Brody asked after Fournier brought up the letter on June 18.
Brody was referring to a private meeting between Fournier and the commissioners, as allowed under the state Sunshine Law, for specific types of legal discussions.
“No. 1, you have to announce at a prior meeting that you need a shade meeting,” Fournier replied. Since he received the latest letter on June 6, the board has not had a regular meeting, Fournier added, and the settlement offer was good only until late the following afternoon.
Nonetheless, Fournier said, “I wouldn’t have had a shade meeting to discuss this. I think you can discuss this right out in the open.”
“So we couldn’t have a shade meeting after this meeting?” Brody asked.
“No, there has to be notice,” Fournier explained, referring to the state law requiring public advertisement of local government meetings, even those held in the shade.
When Brody asked for further clarification, Fournier again pointed out that he would have to announce in a regular board meeting that he needed to hold a shade meeting, and then notice of the shade meeting would have to provided to the public “at least 72 hours [in advance of the session], usually more than that.”
“Are we going to consider a counteroffer?” Brody then asked.
“It’s up to you,” Fournier replied.
“I’d prefer to do it in the shade,” Brody said.
“But you can’t [before the June 19 deadline],” Fournier explained, prompting a laugh from Commissioner Willie Shaw, who is the longest serving city commissioner.
“That’s funny. That’s funny,” Brody said, adding that the city commissioners “have emergency meetings all the time.” He added that he felt the board should have had a shade meeting about the June 6 letter from Leiter.
Then Commissioner Shelli Freeland Eddie suggested that the board members could direct Fournier to schedule a shade meeting, and Fournier could tell Leiter that they would like for Leiter to keep the offer open longer, so they could discuss it.
“Procedurally, I would have to tell you I need the shade meeting, which I haven’t done,” Fournier responded. “You know what the offer is. … It just didn’t seem to me that you would even want to entertain a proposal like this.”
“But the commission has the right to ask for a meeting to discuss that, right?” she asked.
The applicable state statute says it is up to the local government body’s attorney to say that it is his or her recommendation to hold a shade meeting on a specific issue, Fournier explained. “I just don’t think this is appropriate for a shade meeting.”
“I’m not interested in a shade meeting,” Vice Mayor Jen Ahearn-Koch said.
Brody again asserted his interest in having one, adding that he could talk one-on-one with Fournier about whether a shade meeting is warranted.
Fournier responded that any of the commissioners may speak with him one-on-one. However, he pointed out, a counter offer would have to be discussed in public.
Freeland Eddie reiterated her suggestion about asking Fournier to seek more time from the Buck-Leiter attorney, so Fournier could request a shade meeting for a discussion with the commissioners.
Then Fournier explained that the shade meeting would be restricted to talk of a settlement and litigation expenses. “You can’t just have it to discuss the case.”
“I think that there needs to be some sort of discussion,” Brody said once more. “Obviously, there is some settlement out there that would be favorable.” That discussion should occur before Judge Quartermaine rules on motions in the case, Brody added.
That had not been his assumption, Fournier said. If the city does not prevail on the motions, Fournier told the board, it would be appropriate to discuss an appeal.
Then Freeland Eddie said she wanted a shade meeting only if that would be appropriate, adding that strategies for civil litigation are different from those for cases involving local governments. Freeland Eddie also is an attorney.
Fournier said the commissioners could discuss an independent settlement offer in a shade meeting.
“I think we should probably do that at some point before these trial motions are decided,” Brody responded. “That’s all I’m saying.”