$12 million damage claim survives court challenge
Posted on Tuesday, June 13, 2017
by Kathy Prucnell for islander.org
The plaintiff in an ongoing federal lawsuit against the city of Anna Maria is claiming $12 million in damages.
After weathering a storm of court filings in May, a federal judge refused to strike the claim for damages from Shawn Kaleta and his company, Beach to Bay Construction LLC.
U.S. District Court Magistrate Judge Amanda Arnold Sansone June 6 denied a city motion to strike or dismiss the plaintiffs’ damage claim — fleshed out in May by expert reports.
The reports claimed $12 million to the surprise of attorneys representing the city, who cried foul.
Attorneys from Dean, Ringers, Morgan & Lawton PA, hired by the city’s insurer, opposed Kaleta’s attorneys from Najmy Thompson PL of Bradenton at a 70-minute hearing at the federal courthouse in Tampa.
“The judge agreed with us that the report met the strict requirements for expert damages reports,” Louis Najmy wrote in a June 6 text.
In documents filed before the hearing, the Dean firm argued the Kaleta revelations on the “eve of the discovery deadline” caused “irreparable harm” because the city spent more than a year in litigation without the report.
The expert report supplements the plaintiffs’ amended complaint.
“Under two different theories, the experts were able to validate lost profits and business earnings,” Najmy said, adding the report includes “actual, up-to-date and future losses.”
Business consultants Matthew M. Clark of Kentucky and Lewis D. Olds of Arizona prepared the report, which determined 38 permits were lost due to a “defacto embargo — a blackball imposed” on the developer since 2015. According to the report, the developer’s projected lost profits to 2020 amount to $12,339,055.
Najmy said the consultant’s lost earnings calculation of $11,441,885 “seemed to track the lost permits approach.”
Kaleta’s amended complaint alleges the city violated his First Amendment rights by imposing erroneous building restrictions, making false statements to the press and public and filing an “unsubstantiated” business complaint — deterring his rights to petition the government and free speech.
It also alleges the city violated Kaleta’s rights under the Equal Protection Clause of the 14th Amendment for discriminating in permitting and other practices.
Kaleta first filed a four-count complaint in February 2016.
On a trajectory for trial in October, Sansone’s June 6 order required Kaleta to provide the city with documents to support the expert report, including closing, sale and construction costs.
Rebuttal expert reports are due June 15. Discovery was extended until June 30.
The trial is set for 8:45 a.m., Monday, Oct. 2, before Judge James D. Whittemore, a Clinton appointee, in the Sam M. Gibbons U.S. Courthouse in Tampa.
Is a settlement possible?
Could there be a middle ground in the federal case of Shawn Kaleta and Beach to Bay Construction LLC v. City of Anna Maria?
Attorney Louis Najmy, of Najmy Thompson LP of Bradenton, one of Kaleta’s attorneys, said his client is a committed member of the island community who wants to settle.
“Shawn Kaleta is willing to bare a large part of the financial burden of the damages in an effort to settle this — to quickly settle this and not go to trial,” Najmy said June 6.
Anna Maria Mayor Dan Murphy said June 7 the city is “on the defense” and plans to continue to defend the lawsuit.
Murphy added he’s had no conversations related to a settlement.
Florida Municipal Trust Insurance accepted the claim for potential damages and is paying the city’s legal fees, according Anna Maria clerk/treasurer Leanne Addy.
The FMTI general liability policy protects the city for up to $1.5 million in damages.
According to the policy, the insurer controls the acceptance of a settlement offer.
What is the likelihood of Anna Maria settling with the developer — considering the $12 million damage claim?
Murphy declined comment June 6, but added: “Good question.”