Item H1* 1:30 P.M. CLOSED SESSION *
BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: 2/18/15 — KL
Bulk Item: Yes No XX
Division: County Attorney
Staff Contact: Steve Williams, 288-2507
AGENDA ITEM WORDING: An Attorney -Client Closed Session in the matter of 2 Blackwater
LLC v. Monroe County, Florida, Case No. 2015-CA-28-P.
ITEM BACKGROUND:
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 Bob Shillinger, Assistant County Attorneys Steve Williams and Peter Morris and a certified
court reporter.
PREVIOUS RELEVANT BOCC ACTION:
1/21/15 BOCC scheduled Closed Session for 2/18/15 at 1:30 p.m. in Key Largo, FL
CONTRACT/AGREEMENT CHANGES: N/A
STAFF RECOMMENDATIONS:
N/A
TOTAL COST: Court Reporter costs INDIRECT COST: BUDGETED: Yes No
DIFFERENTIAL OF LOCAL PREFERENCE:
COST TO COUNTY: Court Reporter costs SOURCE OF FUNDS:
REVENUE PRODUCING: Yes _ No xx AMOUNT PER MONTH Year
APPROVED BY: County Atty X
DOCUMENTATION: Included
DISPOSITION:
Revised 2/05
OMB/Purchasing Risk Management
Not Required X
AGENDA ITEM #
County of Monroe
The Florida Keys
Robert B. Shillinger, County Attorney**
Pedro J. Mercado, Assistant County Attorney **
Cynthia L. Hall, Assistant County Attorney **
Christine Limbert-Barrows, Assistant County Attorney **
Derek V. Howard, Assistant County Attorney**
Steven T. Williams, Assistant County Attorney**
Peter H. Morris, Assistant County Attorney
Patricia Eables, Assistant County Attorney
Chris Ambrosio, Assistant County Attorney
** Board Certified in City, County & Local Govt. Law
June 6, 2017
Kevin Madok, 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 George Neugent, District 2
Mayor Pro Tern David Rice, District 4
Danny L. Kolhage, District 1
Heather Carruthers, District 3
Sylvia J. Murphy, District 5
Office of the County Attorney
1111 121h Street, Suite 408
Key West, FL 33040
(305) 292-3470 — Phone
(305) 292-3516 — Fax
In Re: 2 Blackwater LLC v. Monroe County, Case No.: CA-P-15-28
Dear Mr. Madok:
Please find enclosed herewith the transcript of the February 18, 2015 closed attorney/client
session of the Monroe County Board of County Commissioners regarding the above -
referenced matter. Under F.S. 286.011(8), the transcript may be 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,
Rp64 . ShiIIi er
Monroe County Attorney
Enclosure
CONFIDENTIAL
1
MEETING OF THE
MONROE COUNTY BOARD OF COUNTY COMMISSIONERS
ATTORNEY -CLIENT CLOSED SESSION
RE: 2 BLACKWATER, LLC VS.
MONROE COUNTY, 2015 CA 28 P
HELD AT THE
MURRAY NELSON GOVERNMENT & CULTURAL CENTER
102050 OVERSEAS HIGHWAY
KEY LARGO, FLORIDA 33037
FEBRUARY 18, 2015
1:41 P.M. - 1:58 P.M.
CONFIDENTIAL TRANSCRIPT
Commissioners Present:
COMMISSIONER SYLVIA J. MURPHY
MAYOR DANNY KOLHAGE
COMMISSIONER HEATHER CARRUTHERS
COMMISSIONER DAVID RICE
COMMISSIONER GEORGE NUGENT
COUNTY ATTORNEY BOB SHILLINGER
ASSISTANT COUNTY ATTORNEYS STEVE WILLIAMS and PETER MORRIS
COUNTY ADMINISTRATOR ROMAN GASTESI
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MAYOR KOLHAGE: I declare the --
MR. SHILLINGER: Closed session.
MAYOR KOLHAGE: -- closed session closed.
MR. WILLIAMS: Good afternoon, Commission --
MR. SHILLINGER: All right. Before we do that,
for the record, this meeting is being held upon my
request. It was announced at a prior BOCC meeting
held on January 21st, 2015, that I needed your advice
on the matter of 2 Blackwater, LLC versus Monroe
County, Florida, Case Number 2015-CA-28 P. At the
meeting the Board approved holding a closed session.
Public notice was given through public announcement of
the meeting at the January 21st, 2015 BOCC meeting and
through publication of today's agenda on the County's
website.
For the record, and benefit of the court
reporter, each of us will state our name and positon
starting with the Commission.
COMMISSIONER CARRUTHERS: Heather Carruthers,
Monroe County Commissioner, District three.
COMMISSIONER MURPHY: Sylvia Murphy, County
Commission, District five.
MAYOR KOLHAGE: Danny Kolhage, County
Commissioner, District One.
COMMISSIONER RICE: David Rice, County
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Commissioner, District Four.
COMMISSIONER NUGENT: George Nugent, County
Commissioner, District Two.
MAYOR KOLHAGE: Roman.
MR. GASTESI: Roman Gastesi, County
Administrator.
MR. SHILLINGER: Bob Shillinger, County Attorney.
MR. WILLIAMS: Steve Williams, Assistant County
Attorney.
MR. MORRIS: Peter Morris, Assistant County
Attorney.
MR. SHILLINGER: All right. Just as a reminder,
we will only be discussing settlement negotiation
strategy relating to litigation expenditures. We
cannot take any decisive action at this meeting. We
can only provide information and direction to the
attorneys. Any decision that the Board makes
considering this case will have to be done at an open
meeting that's open to the public.
And I would like to turn the matter over to
Mr. Williams who can give you a brief background
history on this case and, as well as explain why we
need your advice.
MR. WILLIAMS: January 16th we were sued by
2 Blackwater, LLC and Mr. Greenman being their
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Q
counsel, Casey Scheu being the property owner. In
very short form we were sued. They are seeking a dec
action to invalidate our final Code order, and to
declare the lien we have on the property invalid. Our
lien is currently in the amount of $96,163.32.
As you may recall, this has been here before. It
went through the Planning Commission. There was
considerable public discussion on this at the Planning
Commission level. The Planning Commission ultimately
approved and the property developer was given rights
to 41 senior affordable housing units on the property.
Why are we here today? We're here today because
a closing on the property was scheduled for
December 29th. The property owner did not appear at
the closing. They claim that the reason they did not
close was due to the County liens.
They had been attempting to negotiate the
lessening of those liens with our office. I have
worked with their counsel for some months to even
handle full lien amount placed in escrow. They can
hash it out with the County after the closing, if they
so chose. They did not. They've walked away.
We've been approached by both sides, over the
course of the months in between, about lowering those
fines, liens, whatever we want to call them.
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As you know, our office has the 25 percent
authority to bring it. If we were to do that on our
side, it would reduce it to $24,040.83. Neither buyer
or seller of this particular parcel has been willing
to step up to the plate and take on the, approximate,
$25,000 for those fines and liens.
So, the complaint itself -- if you want to hear
me address the merits of it. I would not consider it
the world's strongest complaint. I think there are
some issues with it from the beginning. These liens
have been in place for a while. They're, essentially,
attacking our Code Enforcement hearing process in
their complaint. They're not necessarily attacking
the property, which -- or anything else, but they are
saying we didn't have the requisite number of hearings
held at the proper time, whatnot.
There is a case out of the Second Circuit from
over a dozen years ago, that has a different opinion.
Never been addressed here in this county. We believe
the statute is quite clear that we do do it correctly.
No one has ever been successful in charging that
against the County that we're wrong. But,
nevertheless, we were sued, so I have to bring it to
you.
We have been approached, as recently as last
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week, with a proposal from the developer and the
developer's agent to have the parcel -- it's -- for
your edification, it's behind the northern Winn -Dixie,
up near, about Mile Marker 104. There's a little road
that goes back to a lot of houses that are right
behind that Winn -Dixie, as sort of a little,
commercial, industrial parcel, about 3.4 acres.
The developer -- oh -- yes.
COMMISSIONER NUGENT: Is this -- this is the
property in question where they want to build the
assisted living --
MR. WILLIAMS: Yes.
COMMISSIONER NUGENT: -- place?
MR. WILLIAMS: Same one. This is it. They're
still trying to. Now they're trying to close on it.
And they're claiming they can't --
COMMISSIONER NUGENT: And this is the one that
they talked about the liens because of Code
Enforcement violations?
COMMISSIONER MURPHY: Yep.
COMMISSIONER NUGENT: That Planning Commission --
COMMISSIONER MURPHY: They don't like --
COMMISSIONER NUGENT: -- went ahead and approved
it though?
MR. WILLIAMS: Yes, the Planning Commission did
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grant them approval.
COMMISSIONER NUGENT: Right.
MR. WILLIAMS: And subject to the assigned liens.
COMMISSIONER NUGENT: And the liens were in
place?
MR. WILLIAMS: Still are.
COMMISSIONER NUGENT: Even when they were seeking
approval?
MR. WILLIAMS: Yes. Have been -- this is going
back to about 2009. So, yes, the liens are there. We
sort of cut off. They claim it's in compliance. The
final amount is $96,000 worth of liens.
COMMISSIONER MURPHY: But, George, one thing you
need to understand is that they signed a contract,
even though there were liens.
MAYOR KOLHAGE: And you reduced it?
MR. WILLIAMS: We have not reduced it. We've got
the authority, under the County Attorney's provision,
to reduce it to 24,000, 25 percent of the amount. And
no one has been welling to even pay that amount.
Neither Mr. Scheu, at this point, nor -- there is
discussion --
COMMISSIONER MURPHY: In case he doesn't know --
MR. WILLIAMS: -- that the potential buyer will
pay.
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COMMISSIONER MURPHY: Mr. Scheu does -- is aware
of that figure, right?
MR. WILLIAMS: Absolutely.
COMMISSIONER MURPHY: Okay.
MR. WILLIAMS: He's the one who sued us.
COMMISSIONER MURPHY: Because his mother called
me.
MR. WILLIAMS: He's the one who sued us. So he's
aware. His counsel, Mr. Greenman, is aware. And now
we're getting the rather unusual situation where a
potential buyer is actually coming in to pay the
transgressor's former fines, even before closing, so.
And they have asked, in order to close, and one
of the reasons that we're having this meeting is to
give us direction in litigation. Do I stick hard to
this $24,000 number? Do I stick to a $96,000 number?
Do you want it reduced so we can get this, what may be
termed, policy -wise, an important benefit to the
community and for senior -assisted housing? That's
completely you guys and that's why I'm here, as where
do you want me to go?
I was served with the complaint January. We were
given additional time to answer it, until this meeting
was held here today. I think we received a letter
last week from Gorman Development, the property
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developer, asking for a -- basically, they wanted to
buy 2.39 of the 3.4 acres. They were seeking a
partial release of our lien, and pay a portion of the
fines. And then leave the rest remaining against the
other, approximate, acre left --
COMMISSIONER MURPHY: Is that legal?
MR. WILLIAMS: -- on that particular parcel, so.
Pardon me?
COMMISSIONER MURPHY: Is that legal?
MR. WILLIAMS: Yes, it is legal. We can do it if
they -- if they properly obtain RE numbers on both
parcels and -- yeah. We can do it, legally. I can
accomplish that, in terms of getting a partial lien
release on an amount you guys deem.
MAYOR KOLHAGE: What is --
COMMISSIONER MURPHY: When you say --
MR. WILLIAMS: The letter I received had no
dollar amount in it. Now, a -- I have not heard the
number directly. I don't know what they would be
willing to pay.
MR. SHILLINGER: I heard from Mr. Reed, on behalf
of the buyer, verbally, he was thinking of something
in the neighborhood of around $5,000 -- stop.
(Unidentified person enters the room.)
MR. SHILLINGER: We're in a closed session, sir.
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You'll have
10
COMMISSIONER MURPHY: Closed session.
UNIDENTIFIED SPEAKER: I'm sorry.
(Unidentified person exits the room.)
COMMISSIONER MURPHY: Okay.
COMMISSIONER NUGENT: Let me get this straight.
We have a multimillion dollar development that's going
to take place here.
MR. WILLIAMS: Yes.
COMMISSIONER NUGENT: And we've already cut these
guys some slack on the original fine? No?
MR. WILLIAMS: Not yet. Now they're at $96,000,
the full amount of the fine. It's $96,000.
COMMISSIONER NUGENT: I thought there was a 25 --
I thought you said 25 --
COMMISSIONER MURPHY: No.
MR. WILLIAMS: I've got the authority, if they
were to come in. I -- that is, without having to come
to you guys, we have an ordinance that allows me to go
down to a certain number.
COMMISSIONER NUGENT: Okay.
MR. WILLIAMS: Yeah. And I have not done that.
Given the history of this case and knowing that you
guys had opinions on this, I haven't done it,
although, I have the authority to.
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COMMISSIONER CARRUTHERS: Well, how would we cut
them slack in other ways, like with time?
COMMISSIONER NUGENT: I vote we get something
from them.
COMMISSIONER CARRUTHERS: I know we can get
something from them, because I remember --
MR. WILLIAMS: It's been before you before, when
it was going through the Planning Commission. There
was discussion of what was going to happen then. It
was --
MR. SHILLINGER: It was a ROGO reservation or
something like that?
COMMISSIONER CARRUTHERS: Yeah, that's what I --
COMMISSIONER MURPHY: Well, it's a stalemate
right now because the Scheus won't -- they will not go
to closing. They will not pay those liens. And now
they're suing us.
COMMISSIONER CARRUTHERS: Are they the ones
that -- that caused the infractions?
MR. SHILLINGER: Yes.
MR. WILLIAMS: Yes. Yes.
COMMISSIONER MURPHY: Yes.
COMMISSIONER NUGENT: Well, the liens, and the
violation runs with the property.
MR. WILLIAMS: It does.
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COMMISSIONER CARRUTHERS: Yeah.
MR. WILLIAMS: And that's what the potential
buyers -- and I am certain, given the project they're
putting on there, and whatever funding requirements
they may have. Well, the federal dollars, of course,
they don't want to acquire, with our liens there.
Maybe -- I haven't seen the documents. I'm just
speaking off the top of my head, is, they don't want
to get this project started with the liens sitting
there, when they acquire it. They're trying to get
this done at closing, or before closing.
MAYOR KOLHAGE: Well, they can pay it.
MR. SHILLINGER: That's an option.
COMMISSIONER NUGENT: Well --
MR. WILLIAMS: So that's why I'm sitting here.
That is an absolute option.
COMMISSIONER MURPHY: And what -- what I think
he's saying is that if you take the full property,
only part of what is going with Gorman.
MR. WILLIAMS: Correct.
COMMISSIONER MURPHY: If you take that and divide
it, and divide the 24,000, accordingly, the rest of
that fine stays with the property the Scheus still
own.
COMMISSIONER NUGENT: Well, we're --
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COMMISSIONER MURPHY: And Gorman will pay the
part of the fine that goes with --
COMMISSIONER NUGENT: I don't care who pays it,
but we're talking about letting you do what you can do
with the County Commission allowing you to do, which
is reduce it by 75 percent, right?
MR. WILLIAMS: That would take my number down to
24.
COMMISSIONER NUGENT: So that rounds to 25. So,
there you go.
MAYOR KOLHAGE: And that's how I feel.
COMMISSIONER MURPHY: But that -- all right. But
what you're doing, George, is letting the Scheus off
the hook for the whole lien.
COMMISSIONER CARRUTHERS: Well --
COMMISSIONER MURPHY: Yeah.
COMMISSIONER NUGENT: Well, but we've been doing
that. We've allowed the attorneys to do that on their
own, right?
MR. WILLIAMS: Yeah.
COMMISSIONER MURPHY: No, not let them off the
hook altogether.
COMMISSIONER NUGENT: We're not letting them off
the hook altogether.
MAYOR KOLHAGE: You're talking about --
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COMMISSIONER MURPHY: Letting the Scheus off the
hook.
MR. SHILLINGER: Are you talking a partial lien
release for 25 percent?
MAYOR KOLHAGE: No. I'm not.
COMMISSIONER MURPHY: No.
COMMISSIONER CARRUTHERS: You're talking about
him reducing the fines.
MR. SHILLINGER: Right.
MAYOR KOLHAGE: That's it.
MR. SHILLINGER: For the 25 percent on the whole.
COMMISSIONER MURPHY: On the whole thing.
MR. SHILLINGER: And not seeking anything further
on Mr. Scheu? Are we talking the parcel, the
remainder of his properties?
COMMISSIONER MURPHY: Well, see now --
COMMISSIONER NUGENT: The violation runs with the
property, not with the owner that's selling the
property.
MR. SHILLINGER: It's runs with the property
where the violation is --
COMMISSIONER MURPHY: Okay.
MR. SHILLINGER: -- and any other properties
owned by the property -- the violator, within the
community.
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COMMISSIONER MURPHY: And, then, of that
adjoining property --
MR. SHILLINGER: Excuse me.
(Unidentified person enters the room.)
MR. SHILLINGER: Peter, station yourself there.
(Unidentified person exits the room.)
MR. MORRIS: All right.
MAYOR KOLHAGE: Well, if you want to get the
sense of the Commission, my sense is that you can
reduce it, but you have the authority to reduce it,
and that's it.
MR. WILLIAMS: Well, that -- I've got four nods
and someone who doesn't appear to be nodding. But
I've got four.
COMMISSIONER MURPHY: It's not that I don't
appear to be nodding. I don't want to see -- quite
frankly, I don't want the Scheus -- they live in this
community. I know what they're like. And I don't
want to see them off the hook.
MR. WILLIAMS: Well, quite frankly, they're not
that easy to deal with, with our office, too.
COMMISSIONER MURPHY: Yes, I can well imagine.
MR. WILLIAMS: But, I mean, that's why I'm here.
And that's why we get your position. And that's what
we will do.
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MAYOR KOLHAGE: Why, if Gorman --
COMMISSIONER MURPHY: Because Gorman will be
paying the fine. The entire -- but listen, Danny.
Gorman will pay the entire fines, but Scheus will
still own the other half of that property.
MR. WILLIAMS: Approximately --
COMMISSIONER MURPHY: They're off the hook.
COMMISSIONER CARRUTHERS: What is the percentage
of the Scheus --
COMMISSIONER MURPHY: And that's what they want.
MR. WILLIAMS: This is cutting 3.4 and the
Gorman -- the developer is acquiring 2.39 of it. So
there will be, approximately, one acre left in that
parcel that the Scheus will own.
MAYOR KOLHAGE: Well, I see what Commissioner
Murphy is saying, yeah.
MR. WILLIAMS: Yeah.
MAYOR KOLHAGE: And I agree --
COMMISSIONER CARRUTHERS: Yeah.
MAYOR KOLHAGE: -- her. Take a portion of that
24.
MR. WILLIAMS: They've labeled -- they've had it
surveyed. What we're referring to is parcel A, as the
parcel that would be developed, or 2.39 acres. We can
agree, if it's the will of the Commission, to accept
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the $24,000 figure, for that portion, and then we will
release the lien as to that section that's properly,
legally described. I've received it. But the rest --
the remainder of the lien I can have remaining --
COMMISSIONER MURPHY: Yes.
MR. WILLIAMS: -- against Mr. Scheu for the other
acre that's left.
COMMISSIONER MURPHY: And then did you --
COMMISSIONER CARRUTHERS: What you mean by
remainder, you mean another 72,000 remains?
MR. WILLIAMS: If that's what you determine.
COMMISSIONER NUGENT: Steve. What's the
justification for us, and I don't have a problem -- I
don't think -- because Sylvia doesn't like them --
COMMISSIONER MURPHY: I don't like their way of
doing business.
COMMISSIONER NUGENT: So, I'm trying to stay with
consistency here, with what we've done in the past.
Then --
COMMISSIONER MURPHY: George, would you stop
stirring the pot.
COMMISSIONER NUGENT: Huh?
COMMISSIONER MURPHY: You've been doing this all
day. Stirring the pot. Physically, you're doing this
and it reminds me of stirring the pot.
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MR. WILLIAMS: And, so, how long do you want to
stay --
COMMISSIONER RICE: How much of a portion of the
24 --
COMMISSIONER MURPHY: Yes.
COMMISSIONER RICE: -- between two pieces of
property, Gorman pays whatever percentage their
property represents of the whole, and the remainder
stays --
MR. WILLIAMS: I can do that. I can do that.
COMMISSIONER NUGENT: Right. Okay.
MR. WILLIAMS: I follow.
COMMISSIONER MURPHY: Okay.
MR. SHILLINGER: But what that will do is
probably allow this litigation to continue forward
because --
MR. WILLIAMS: Well, considering -- I mean, it's
roughly, 3/4 of $24,000. The part left to Mr. Scheu
is only going to be four or 5,000. So, he's got to
decide whether he would want to pay Mr. Greenman to
continue with the litigation for that four or five --
COMMISSIONER NUGENT: Or --
MR. WILLIAMS: -- litigate past --
COMMISSIONER MURPHY: But, listen --
COMMISSIONER NUGENT: Again, my question is, are
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we being consistent in what we've done with other
properties in doing this?
COMMISSIONER MURPHY: And what we've done -- but
what we've done, George, is that we give them, if
Mr. Scheu is, we'll say, going to have to pay 10,000
of the 24, we give him X number of days to pay it.
Otherwise, it goes to -- jacks right up to the
original. What do you think, George?
COMMISSIONER NUGENT: I'm on board.
MAYOR KOLHAGE: Steve, you all --
COMMISSIONER CARRUTHERS: That's a good idea.
MR. WILLIAMS: Okay.
MAYOR KOLHAGE: You have your direction.
MR. WILLIAMS: I can float this out there.
Again, it's litigation that's pending. I will take
this to both the purchasers and the sellers and point
out what was said here today. And we'll find out
whether they want to continue with litigation or have
their closing.
COMMISSIONER MURPHY: And how much time would you
give the Scheus to pay their piddly little amount
that's left over, 60 days?
MR. WILLIAMS: That's common in the Code world.
Yeah, 60 days is very common.
COMMISSIONER MURPHY: I know we've done this lots
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of times.
MR. WILLIAMS: Yeah.
MR. SHILLINGER: And then we would have to bring
back a settlement agreement at a future Commission
meeting to be voted upon. Okay?
MAYOR KOLHAGE: Okay.
MR. SHILLINGER: Does that conclude the closed
session?
COMMISSIONER MURPHY: And I want you to know he
deserves a medal.
MAYOR KOLHAGE: Okay. That concludes the closed
session. I'm closing it.
(The attorney/client closed session was concluded at 1:58
P.M.)
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21
CERTIFICATE
STATE OF FLORIDA,
COUNTY OF MONROE
I, Patricia A. Zischka, do hereby certify that
I was authorized to and did stenographically report
the foregoing proceedings; and that the transcript,
pages 2 through 20 are a true and correct record of
my notes.
I further certify that I am not a relative,
employee, attorney, or counsel of any of the
parties, nor am I a relative or employee of any of
the parties' attorneys or counsel connected with the
action, nor am I financially interested in the
action.
Dated this 2nd day of March, 2015.Qa )0-
Patricia A. Zi chka
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