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Item K2* 1:45 P.M. CLOSED SESSION * BOARD OF COUNTY COMMISSIONERS AGENDA ITEM SUMMARY Meeting Date: 5/20/09 — KL Division: County Attorney Bulk Item.: Yes No xx Staff Contact Person: Bob Shillinger x3474 AGENDA ITEM WORDING: A closed executive session of the Board of County Commissioners in the matter of Fonticiella Construction Corp. v. Monroe County, Case No. CA K 09-424. ITEM BACKGROUND: Legal staff desires direction from the Board on the case. Per F.S. 286.011(8), the subject matter of the meeting shall be confined to settlement negotiations or strategy sessions related to litigation expenditures. Present at the meeting will be the Commissioners, County Administrator Roman Gastesi, County Attorney Suzanne Hutton, Chief Assistant County Attorney Bob Shillinger, Assistant County Attorney Susan Grimsley, Assistant County Attorney Cynthia Hall, Assistant County Attorney Lisa Granger and a certified court reporter. PREVIOUS RELEVANT BOCC ACTION: 5/12/09 BOCC approved Closed Session for 5/20/09 at 1:45 p.m. in Key Largo CONTRACT/AGREEMENT CHANGES: N/A STAFF RECOMMENDATIONS: Approval. TOTAL COST: 200.00 INDIRECT COST: COST TO COUNTY: @$200.00 BUDGETED: Yes xx No SOURCE OF FUNDS: REVENUE PRODUCING: Yes No xx AMOUNT PER MONTH Year APPROVED BY: County Atty xx OMB/Purchasing n/a Risk Management n/a DOCUMENTATION: Included DISPOSITION: Revised 2/05 Not Required X AGENDA ITEM # County of Monroe The Florida Keys Robert B. ShMinger, County Attorney" Pedro J. Mercado, Assistant County Attorney ** Susan M. Grimsley, Assistant County Attorney** Natileene W. Cassel, Assistant County Attorney** Cynthia L. Hall, Assistant County Attorney ** Christine Limbert-Barrows, Assistant County Attorney ** Derek V. Howard, Assistant County Attorney** Lisa Granger, Assistant County Attorney Steven T. Williams, Assistant County Attorney ** Board Certified in City, County & Local Govt. Law January 9, 2014 Amy Heavilin, Clerk of the Circuit Court Sixteenth Judicial Circuit, State of Florida Monroe County Courthouse 500 Whitehead Street Key West FL 33040 BOARD OF COUNTY COMMISSIONERS Mayor Sylvia J. Murphy, District 5 Im Mayor Pro Tern, Danny L. Kolhage, District 1 George Neugent, District 2 Heather Carruthers, District 3 David Rice, District 4 Office of the County Attorney 1111 I P Sttcet, Suite 408 Key West, FL 33040 (305) 292-3470 — Phone (305) 292-3516 — Fax In Re: Fonticella Construction Corp. v. Monroe County, Case No.: CA-K-09-424 Dear Ms. Heavilin: Please find enclosed herewith the transcript of the May 20, 2009 closed attorney/client session of the Monroe County Board of County Commissioners regarding the above -referenced matters. Under F.S. 286.011(8), the transcript may be made part of the public record because the litigation has concluded. Thank you for your assistance with this matter. Please contact me should you have any questions. Sincerely, -- 2 -n 7K -C 771 C. Robert B. Shillinger Monroe County Attorney Enclosure - C=) I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MEETING OF THE MONROE COUNTY BOARD OF COUNTY COMMISSIONERS ATTORNEY -CLIENT CLOSED EXECUTIVE SESSION RE: FONTICIELLA CONSTRUCTION CORP. VS. MONROE COUNTY CA-K 09-424 MURRAY E. NELSON GOVERNMENT CENTER 102050 OVERSEAS HIGHWAY KEY LARGO, FLORIDA 33037 May 20, 2009 2:48 P.M. - 3:15 P.M. COPY Commissioners Present: COMMISSIONER HEATHER CARRUTHERS MAYOR PRO TEM SYLVIA J. MURPHY MAYOR GEORGE NUGENT COMMISSIONER MARIO DIGENNARO COMMISSIONER KIM WINGINGTON COUNTY ATTORNEY SUZANNE HUTTON, ESQ. ASSISTANT COUNTY NATILEENE CASSEL, ESQ. CHIEF ASSISTANT COUNTY ATTORNEY BOB SHILLINGER, ESQ. COUNTY ADMINISTRATOR ROMAN GASTESI ALL KEYS REPORTING Olde Towne Centre 600 Whitehead Street 9701 Overseas Highway Suite 206, 2nd Floor Marathon, Florida Key West, Florida 305-289-1201 305-294-2601 All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE MAYOR: Close the BOCC meeting and go into closed session. MS. HUTTON: Closed attorney/client session pursuant to section 286.011, subsection eight, Florida Statutes will now be held. Estimated the meeting will take, approximately, 30 minutes. Persons attending will be county commissioners, County Administrator Roman Gastesi, County Attorney Suzanne Hutton, Chief Assistant County Attorney Robert Shillinger, Assistant County Attorney Natileen Cassel and a certified court reporter. Since the law prohibits any other person from being present at the closed session, the commissioners, attorneys for the county, and the court reporter will now remain in the meeting room and all other persons are required to leave the room. When the closed session is over we will reconvene and reopen the public meeting. The public meeting is now closed. For the record, the meeting -- if you'll call the closed session to order. THE MAYOR: Call the closed session to order. MS. HUTTON: For the record, this meeting is being held upon the request of County Attorney Suzanne Hutton, announced at the prior public BOCC special meeting held May 12th, 2009, that I needed advice concerning the pending matter, Fonticiella Construction Corp. versus Monroe County, CA K 09-424. At that meeting the board All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 approved holding today's closed session and public notice was given at the May 12th, 2009, BOCC special meeting and through publication of the agenda for the May 20th, 2009, BOCC regular meeting. For the record and benefit of the court reporter, each of us will state our name and positions, starting with the commissioners. COMMISSIONER CARRUTHERS: Heather Carruthers. Monroe County Commissioner, district three. COMMISSIONER DIGENNARO: Mario DiGennaro, Monroe County Commissioner, district four. THE MAYOR: George Nugent, County Commissioner, district two. COMMISSIONER MURPHY: Commissioner Sylvia Murphy, district five. COMMISSIONER WINGINGTON: Kim Wingington. County Commissioner, district one. MS. HUTTON: Suzanne Hutton, County Attorney. MR. GASTESI: Roman Gastesi, County Administrator. MR. SHILLINGER: Bob Shillinger, Chief Assistant County Attorney. MS. CASSEL: Natileene Cassel, Assistant County Attorney. MS. HUTTON: Just as a reminder we will only be discussing negotiations and -- related to settlement, and All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 4 Al 1 2 3 4 5 M. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 strategy relating to litigation expenditures. No decisive action at this meeting. Any decisions the board makes will be done at a meeting open to the public. I'm going to turn this over to Bob. MR. SHILLINGER: Good morning -- good afternoon. We're here about the Fonticiella versus Monroe County. It's the medical examiner case. Same admonition applies on the attorney/client privilege as we did in the last presentation. Fonticiella is the medical examiner's. So they were the general contractor. Here is some real basic dates as to what went out to the contract. It was entered on May 19th, 2004. We gave a notice of proceeding. There was some delays because of permitting issues. It took us almost two years to get the notice to proceeding. Actually, over two years. And it took them just under two years to complete the building. I'm going to turn it over to Nat, with respect to the con -- the actual specifics of the contract amount. She has worked -- we -- we need a little context. We got sued in March by the Fonticiella Corporation. We looked at the claim, investigated it. Spent probably, 140, 150 hours of staff time, attorney staff time looking over the case, working with the facilities development folks and we saw that there were some weaknesses. We were able to put off filing an answer so that we could arrange a quick All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 5 L A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 mediation with the other side. Figuring, that if we could reach a deal that was palatable, we may be able to save money in the long run. And so we went to mediation last week, last Wednesday. And we've come back with a proposed settlement offer. And we'll get into the terms of it, but just so you have an idea of where we're going, it will be $600,000 total, we would pay to them to close out the case, close the retainage, close any damages, attorneys fees, that's it. Taxes, tag, title and drive the sucker off the lot, $600,000, complete releases on the other side. So that's the context in which we're coming into. Let's give you some details so you can understand where we are coming from. And we are going to make a recommendation to approve. That's going to be our recommendation. But we understand that this is kind of coming in early in the game and there may be some heartburn at getting there, so. But with that, we'll turn it over to Nat, and have the attorney questions you have. MS. CASSEL: Let me give you a little history, just to get you started. COMMISSIONER DIGENNARO: You need to move that down a little bit. MS. CASSEL: Can you hear me now? Everybody can hear me. All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 6 IM 1 2 3 4 5 6 7 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 COMMISSIONER WINGINGTON: The mikes are off. MR. SHILLINGER: The mikes are dead. MS. CASSEL: All right. I'll use my court voice; okay. And you tell me if you can't hear me anymore. Just a little history. The original contract price on this contract, back in May of 2004, was two million nine. You'll see the exact figures up there. After that there were four change orders which increased that price from 2.9 to 4,000,000. The first -- COMMISSIONER CARRUTHERS: Can I ask you to go through them. MS. CASSEL: Yes. I'm going to go through each one and go ahead and stop me, Heather, if you want to. The first change order came in July of 2005. Now, that change order had some good things and some bad things about it, you need to know that right now. It was a change order for a million dollars. The project had not begun, at that point. So we gave them, in July of 2005, a million dollars for increased costs because we could not begin the construction of that building. Why; because we didn't get through the permits and the surveys on this building on Crawl Key, where it is incredibly low. COMMISSIONER DIGENNARO: Question. Why did we fix a price, not knowing whether we were going to get the All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 19 20 21 22 23 24 25 permit? MS. CASSEL: We should not have gone into contract on this building without the permits in place. COMMISSIONER DIGENNARO: Now, we happen to know the -- well, the sentence in there somewhere or whatever you want to call it, saying, subject to permit. MS. CASSEL: What I'm saying to you is, that's not in the -- that is not in our contract and what happened was, we went out, even we were told by our contractor -- by our architect not to let this contract, at that time -- but that's easy to see now. At the time -- this is before I was with the county. But at the time there was some push to get a medical examiners' building. We didn't have one. We wanted to get one. I don't think that, initially, anybody realized how low that place was, or knew it was low. But, at any rate, what happened was, and this is the reality, that we could not begin that building until we had Army Corps of Engineers and swift mud permits in place. So what did we do; we got an increase. Gave them the change order for a million dollar increase. The good thing about that -- I know it sounds horrible, it did to me the first time I saw it too. I went, what in the world. But the good thing about it was, when we gave them that million dollars, we also got an agreement from All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West IN 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 RID 17 18 19 20 21 22 23 24 25 them that there would be no damages for delay, in that period from the contract to July the 5th of 2005. That turned out to be a very wise decision that the board made. These other three change orders came later. And they are late in the process, but I put them here so you could see how we got to the 4,000,000. And because later on you're going to come -- you're going to come to see that change order two will bite us. And there are going to be several things, as we go through here, where you Will see they're kind of a smoking gun that will get us in front of a jury. And I want to highlight those for you as we go through. Now, the downside of change order one is that we recognize, at that time, that permitting was going to put us off, was going to delay us. And, of course, we have to give a reason for the change order like that, and it was in the change order. Change order two also has that language in it. And it talks about being that there is no fault on the part of the contractor. All right. Let's move on so I can see how this claim -- we're going to get into the details of this. Here is what they've claim against us. They claim a Breach of Contract. Part of the Breach of Contract is a delay damages clause. And that -- damages for delay. I want you to know right now, we have a no damages for All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 81 9 A -A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 delay clause in our contract. It's in every contract. So you say, how the heck can they go back and get a delay damages? Well, the reason is that this is one of those areas of law that has been expanded. And the truth is that it has been plaguing contractors and owners for several years. Actually, more so in the rest of the country than here. But we're going to get bite by it, in this case. And that means that if they can show that they had no fault, and they can attribute some fault of the delay to us, then guess what, they're able to get around our no damages for delay clause. And I believe sincerely, that they will be able to do that, in this case. We also had some unpaid change orders, particularly, change order number seven. This is another place that's going to come back to bite us. And change order number seven is a change order that we determined we would not pay. And it was recommended by Jerry Barnett and by Kevin Wilson, because they felt that if we paid this change order for $154,000, and get an agreement not to have damages for delay, that that would take us from the July the 5th period, where we were with the first change order, down to beginning -- to the beginning of the building. And I believe that it would have. However, that change order was not satisfied by our then director All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 of facility development, who felt that from the E-mails and things that I was seeing, he just could not bring to you guys another increase in this building. I don't know, for some reason he felt that that was not the way to go. It turned out to be not a good decision. They're also claiming attorneys fees and costs. Our contract will allow what's called the prevailing party to get attorneys fees. The prevailing party can mean anything. It doesn't mean you got to win it 100 percent. And the judge will tell you who the prevailing party is, once he decides. So what's going to happen is, you don't have to win it or lose it 100 percent. You can actually get a portion of damages. And I got to tell you, I think we're going to get hit with them. And it -- and I hate it because for the entire 26 years of practicing law, has been to fight, fight, fight. But I got to tell you, this is when having in-house counsel may have helped you because if I were in the private section, and this case were brought to me, like many other cases have been brought to me, I would have had to spend an inordinate amount of time on the front end of that case for two reasons. I got to know the people. I got to know the documents. I've got to understand. So lots and lots of money would have been spent on the front end. I know the people. I can get my documents quite easily. They're in All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 11 my office. So I can do, Bob can do, early on, things that out -house counsel can't always do. The other thing is, they have to be sure that they got every single detail in line, up front, because they don't want to be sued for malpractice. I've got easy access. I can turn on a dime. They can't always do that. So I'm saying to you, we would have been hit with huge attorneys fees and costs. And, particularly, construction cases, they are very highly loaded on the front end and highly loaded on the end when we start going to trial. Also, you got expert witness fees. We'll talk about experts later. They also want -- asking for interest. Interest now is at 11 percent. And that would have been determined at the end of the case. Their initial theory, other than Breach of Contract, was Unjust Enrichment. An Unjust Enrichment Claim can be brought when there is something that is either not in the contract, or they did something, in addition to the contract, that they didn't get paid for. And, in this case, that is, in fact, what they did. There were several change orders where they actually did things for US. And then they forgot to do it the right way, and didn't issue a change order. But the truth is, we got the awnings. We got the signage. We got the smoke detectors. All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 12 1 ✓ 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 NOR 21 22 23 24 25 COMMISSIONER DIGENNARO: So why was that even brought? Essentially, why wasn't that brought back to the commission, at that time? MS. CASSEL: Because we didn't know it. Those change orders were never given to us until this lawsuit was filed. That's why we had to bring in the Unjust Enrichment Claim. COMMISSIONER DIGENNARO: How can they sue for change orders that they never presented? MS. CASSEL: Because we had the value -- COMMISSIONER DIGENNARO: That's ridiculous. MS. CASSEL: We had the value of the thing that they gave us. COMMISSIONER DIGENNARO: But why didn't -- COMMISSIONER CARRUTHERS: We didn't ask for it. COMMISSIONER DIGENNARO: We haven't -- MS. CASSEL: Yes. We had to have smoke detectors. COMMISSIONER DIGENNARO: But we haven't said we would have them. MS. CASSEL: We had to have smoke detectors. COMMISSIONER DIGENNARO: Wait a second. I've got something to say. MS. CASSEL: Okay. Let me hear it. Go ahead. COMMISSIONER DIGENNARO: There were certain change orders that they never presented us with the change All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 13 1 orders. MS. CASSEL: Correct. 3 COMMISSIONER DIGENNARO: Number two, they're suing 4 us because they didn't get paid. Well, because of unjust 5 enrichment, which I understand. But how can they sue us 6 before they give us the opportunity to pay for these 7 changes? 8 MS. CASSEL: Well, two things. Let me just give you 9 this just for the record, you know, a little less 10 adjunct. 11 COMMISSIONER DIGENNARO: Adjunct -- 12 MS. CASSEL: It's only $62,000. This is probably 13 the smallest claim they've got. But it's worth throwing 14 it into them because quite frankly, they actually did the 15 work. And they can prove that they did the work. So 16 they're going to the judge, or the jury, and they are 17 saying, look, we did -- we spent X amount on signs and 18 you guys have the signs. We should be paid. It's true. 19 We didn't do it under the contract, but you're unjustly 20 enriched by that sign. 21 COMMISSIONER CARRUTHERS: Well, can we give them the 22 signs back? 23 MS. CASSEL: Well, we got to have signage out there. 24 We're required to have signage and we're required to 25 have -- All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 COMMISSIONER CARRUTHERS: I can make signs. MS. CASSEL: Me too. But, you know, that's -- I don't like it either. This is -- I hate this. I don't want to hear it, but the reality is, you got to hear it because I don't want to tell you at the end of this -- at the end of this lawsuit -- COMMISSIONER DIGENNARO: I have another question to ask you. What's our minimum? What do you think, if we go all the way through a trial, what do you think, assuming that we're not going to win, what would be our losses, minimum, medium, and maximum? MS. CASSEL: My feeling is that we're never going to get any better than this settlement. COMMISSIONER DIGENNARO: Okay. I -- I just wanted to know. COMMISSIONER CARRUTHERS: 600,000. MS. CASSEL: You know -- boy, this is a terrible question for a lawyer because I don't know what those six people in that jury box are going to do. I don't know where they're going to go, but I have a real deep gut feeling, educated feeling that this is going to be the best we can do. COMMISSIONER CARRUTHERS: Okay. MS. CASSEL: You want me to give you a range, I'll try. You're definitely going to give them 207,000. All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 WE 21 22 23 24 25 That's the retainage. We owe it to them. They're going to get it. They're probably going to get over 154,000 -- let me put it up here. Here is their damages. They're probably going to get the -- this is what they're asking for in damages. So here's what I think. And this is on the modem. They're going to get the retainage. We owe it. We're holding it for them. As soon as they get the right paper work in, we got to give it to them. They're going to -- I believe that they will get change order number seven, which is the one they asked for. We have documentation which says we would approve it. It would have saved us damages for delay. It was also a value engineering thing, where they told us, it's going to cost you $412,000, but we can get this down and got the value in hand. We can get the 154. I think they're going to get that. Of the 62, oh, we could widdle a little there. But, you know, that's why I said, I cut to the edge. And I think I told you that before. Damages for delay. Now, the delay damages they're claiming 14 months. 14 months times 23,763, which is the general conditions amount that they should get on the schedule of values per month. So they can point to a place on the schedule of values where they would get general conditions. So what they have to prove is the amount of months. The figure is not -- is not going to All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 16 k 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 be a real issue. So the place where we can widdle down is the 14 months. Now I got a problem there. And I tell you why I got the problems, because some of our documentation says 14 months; not their fault. So everywhere I turn, I've got an issue. COMMISSIONER DIGENNARO: Right now, right now counsel, they're asking us $607,000 there? MR. SHILLINGER: 680 -- MS. CASSEL: 600 -- COMMISSIONER DIGENNARO: $600,000? THE MAYOR: That's the settlement number. MS. CASSEL: That's the settlement number. COMMISSIONER DIGENNARO: One second please, Counsel. MS. CASSEL: Sure. COMMISSIONER DIGENNARO: Is there any way for us to agree on two numbers here today? What I'm trying to say is, go back with 450. Say you got that. Not telling them that we will -- we are willing to go the 600. And say, listen, I got this from the commission. That's one tough commission. Then go back again, with 500. 500 is a juicy number. 500 is a juicy number. If we could give you a nod of heads for two settlement offers, give a shot at 500 and close at your 600, which you tell us you're going to recommend. MS. CASSEL: The only thing that I can tell you on All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 17 L A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that is that, quite frankly, we did that. Six hours worth of mediation on May the 13th. Where we started at their million and we started at -- COMMISSIONER DIGENNARO: Come back and tell them they're no brains, no conscience, no deep pockets. COMMISSIONER WINGINGTON: This is part -- THE MAYOR: And know we're lying. MS. CASSEL: That's part of the formal mediation process. I hear you. COMMISSIONER DIGENNARO: I mean, why not give it another shot. I'm just saying, you know. Don't call another shot at 500, go back to them. MS. CASSEL: Here is what you risk. THE MAYOR: Well, just answer this for me. MS. CASSEL: I'm sorry. Say it again. I didn't hear your question. COMMISSIONER MURPHY: My question is, simply is -- THE MAYOR: Give me a time out. We're still in the closed session. COMMISSIONER MURPHY: Is the 20V,000 retainage part of the 600,000? MS. CASSEL: Yes. It is. MS. HUTTON: Yes. COMMISSIONER MURPHY: So we're actually -- MS. CASSEL: 390-something. All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 02 20 21 22 23 24 25 COMMISSIONER MURPHY: 390,000. MS. CASSEL: 390 to settle the -- COMMISSIONER MURPHY: This is less -- COMMISSIONER DIGENNARO: I'm just -- to get a -- are you suggesting that -- I'm not saying that, but she is telling me, no, you can't do that. I'm just suggesting -- MS. CASSEL: Let me just tell you what I -- here's my feeling. COMMISSIONER DIGENNARO: -- I'm going to listen to counsel. MS. CASSEL: Here's my feeling. My feeling is that we spent six hours going back and forth in front of a really fine mediator. We argued. We went everywhere we could go, and this was the best we could honestly get. Could I go back to them? I suspect that I can go back to them. COMMISSIONER DIGENNARO: There you go. MS. CASSEL: I certainly could. And I -- and I -- COMMISSIONER DIGENNARO: Why not? MS. CASSEL: The only why not I could see is that you might lose your settlement offer. And then we're off to war. That's your decision. COMMISSIONER DIGENNARO: Yes. COMMISSIONER CARRUTHERS: So back up. All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 19 V 1 2 3 4 5 6 7 8 9 10 11 12 119M 14 15 16 17 18 19 20 21 22 23 24 25 MS. CASSEL: Let's finish the whole thing and then you can decide. Make that decision. COMMISSIONER CARRUTHERS: Can I just ask you one question before we leave this slide. This 1.1 with the two asterisks, plus attorneys fees, costs and interest, are they on a contingency, or are they -- MR. SHILLINGER: We don't know that. MS. CASSEL: Yes. We don't -- yes. We don't have any -- MR. SHILLINGER: Generally, we don't do contingency cases in claim construction work. Construction work is typically done hourly. There may be some sort of contingency multiplier, if I get you this result -- COMMISSIONER CARRUTHERS: All right. MR. SHILLINGER: -- I get my hourly rate on steroids. COMMISSIONER CARRUTHERS: But how many -- how many -- I mean, I would assume that we're talking about, probably, 40 percent of this? MR. SHILLINGER: No. MS. CASSEL: No. MR. SHILLINGER: In addition to that -- COMMISSIONER CARRUTHERS: In addition to this -- MR. SHILLINGER: Yes. We'll get to that. We'll give you some estimates. All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MS. CASSEL: We're going to give you some estimates on attorneys fees, based on real figures. COMMISSIONER DIGENNARO: I'd like to ask the Mayor a question. Mr. Mayor, basically, you know, is this -- we don't want to wait to much more for the settlement details of the case, whether or not they're going to take it. But my suggestion is, we can end this really quick. Is give a shot at 500, not paying the 600 she would do. COMMISSIONER WINGINGTON: That may not be -- THE MAYOR: No. No. Wait a minute. We can direct, and we've done this before, I think. We give them the latitude to go in with your 500,000 request. Things look like they're going to hell in a handbasket. Then you have the right to go up to their request. MR. SHILLINGER: Right. MS. CASSEL: Yes. MR. SHILLINGER: You run the risk of them saying no. MS. CASSEL: No way. We've been down this road. MR. SHILLINGER: And they could walk away from the deal. They've signed the deal. The deal was contingent upon your approval. So we would have to bring it back to you to approve at a public session, so. COMMISSIONER CARRUTHERS: When you think about it -- THE MAYOR: Well, we're giving you, as I understand it, if we chose to, we would be giving you -- do you need All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 our signature before we leave here today? MR. SHILLINGER: Yes. If you decide to approve the agreement. We will be asking to you add on an item to -- reopen the agenda. Add on this item, which was distributed this morning. COMMISSIONER DIGENNARO: I didn't realize that. MR. SHILLINGER: Right. COMMISSIONER DIGENNARO: I didn't understand that. All right. I thought we were still in negotiations. Next I sign a document. I didn't -- so the change -- MS. CASSEL: Okay. So you got -- if I confused you, I apologize. COMMISSIONER DIGENNARO: Throw my suggestion. And before discussing it anymore, guys, take counsel's advice. Don't need any more time. We had a long day. MR. SHILLINGER: Just so the record is clear. What we get for it is a total release. We avert any third -party claims. It's -- it's just going to be an ugly, long, expensive nightmare. COMMISSIONER CARRUTHERS: You're sick of it. MR. SHILLINGER: Well -- MS. CASSEL: Actually, we like it. MR. SHILLINGER: -- love to talk, but -- MS. CASSEL: We enjoy the thing, but just see going -- All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. SHILLINGER: We hear the key number. The dispute is really 876. We're settling for 392 plus retainage at 600. COMMISSIONER DIGENNARO: It's on an hourly basis this thing goes over. THE MAYOR: Yes. COMMISSIONER WINGINGTON: Okay. MR. SHILLINGER: The recommendation -- our recommendation is to go ahead and -- THE MAYOR: We do not want to go before a jury. MR. SHILLINGER: Oh, yes. I could give you those numbers on what's happened in the past. COMMISSIONER DIGENNARO: Okay. MR. SHILLINGER: And they're not pretty. COMMISSIONER DIGENNARO: Okay. MR. SHILLINGER: So -- COMMISSIONER CARRUTHERS: Just out of curiosity, where would this be heard, in Monroe or -- MR. SHILLINGER: In Monroe. COMMISSIONER CARRUTHERS: In Monroe? MR. SHILLINGER: Yes. It's assigned to Judge Audlin. COMMISSIONER DIGENNARO: Are we taking a break before we go back in? MR. SHILLINGER: So -- All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE MAYOR: Look. We got to split this up. So -- MR. SHILLINGER: You're going to close -- we close the session. THE MAYOR: We got you -- I understand. MR. SHILLINGER: Whenever you come back, after break or immediately, we'll ask you to reopen the agenda, to take unanimous consent. To add back on the item. And then -- for approval. And then you can have -- accept public comment, at that point. And I could make a quick presentation to the board, so the public knows what you're voting on. THE MAYOR: Why would you do that? MR. SHILLINGER: To avoid the Sunshine Law. COMMISSIONER CARRUTHERS: Thanks, but no thanks. MR. SHILLINGER: Okay. THE MAYOR: And, of course, this $600,000 comes out of infrastructure? MR. SHILLINGER: Infrastructure, we believe we can get it all out of. COMMISSIONER WINGINGTON: No. MS. HUTTON: No. MR. SHILLINGER: No, not all of it? MS. HUTTON: The litigation -- things related to litigation you can not. Obviously, the 207, and that portion of the -- the change orders come out of the All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 24 A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 infrastructure. MR. SHILLINGER: The permitting delays too. MS. HUTTON: The permitting delays, as well. MR. SHILLINGER: Which we can structure in such a way that can get us to THE MAYOR: So even though all of this is directly tied to an infrastructure project, directly tied with an infrastructure project, we can't use infrastructure? MS. HUTTON: No. No. What I was trying to say is, a portion. Definitely, that portion which is related to the change orders, the retainage, all of that is going to be coming out of infrastructure. And depending on how we're able to deal with the portion that's attributable to delay damages, that we may not be able to take out of infrastructure, but there's certainly $350,000 of the 600, that's going to come out of the infrastructure. THE MAYOR: My point is -- COMMISSIONER WINGINGTON: Yeah. It's a bitter pill, but -- MS. CASSEL: Yes. It's a bitter pill. COMMISSIONER WINGINGTON: -- good advice and good job you all. MR. SHILLINGER: All right. Let's do it. MS. CASSEL: Honestly, you know, the two of us would rather fight than breathe, but not when it's going down All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 1 1 the tubes. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 �:3 19 20 21 22 23 24 25 25 1 THE MAYOR: All right. Just in the confines of this group here, at this -- this -- if we ever build another fricking building in this county, we need our heads examined. COMMISSIONER WINGINGTON: That's -- MS. CASSEL: Well, I tell you this, we have made notes all along of what went wrong in this case, and a couple of other cases. And we are making changes and dealing very closely with our people. And the people who are there now are not people who made these decisions, which is something you should also note. THE MAYOR: I know that very well, but -- MS. CASSEL: You know that. COMMISSIONER CARRUTHERS: Mayor, that's acceptable to me. COMMISSIONER DIGENNARO: I'm going to smoke a cigar. THE MAYOR: Sure. Public -- private -- MS. HUTTON: We're going to close the closed session. THE MAYOR: -- closed session. MS. HUTTON: Yes. All right. And we're taking a break? THE MAYOR: Yes. COMMISSIONER DIGENNARO: Yes or no? All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 26 1 2 3 4 5 M. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MS. HUTTON: When we come back from the break, we'll open the public session. (The attorney -client closed executive session was adjourned at 3:15 p.m.) All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 27 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CERTIFICATE STATE OF FLORIDA, COUNTY OF MONROE I, Patricia A. Zischka, certify that I was authorized to and did stenographically report the foregoing proceedings and the transcript is a true record. Dated this 31st day of May, 2009. Patricia A. Zischka All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West