022299 special attorney- client session • 1
1 BEFORE THE CITY OF SANFORD CITY COMMISSION
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In Re : Executive Session, Attorney Client Session.
6 Monday, February 22 , 1999
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11 REPORT OF PROCEEDINGS before the City of
12 Sanford City Commission, on Monday, February 22 ,
13 1999, Sanford City Hall, City Manager' s Conference
14 Room, 300 North Park Avenue, Sanford, Seminole
15 County, Florida, commencing at or about 3 : 15 p. m.
16 pursuant to Notice herein, the Honorable Larry A.
17 Dale, Mayor, presiding.
18 Commissioners present : Herbert "Whitey"
19 Eckstein, Brady Lessard, Velma H. Williams, Kerry D.
20 Lyons . Also present : Tony VanDerworp, City
21 Manager.
22 Attorneys present : WILLIAM L. COLBERT, City
23 Attorney, CATHERINE D. REISCHMANN, Assistant City
24 Attorney, Co-Counsel : JOHN BRENNAN and MICHAEL
25 WRIGHT, Esquires .
C.B. Ellerbe&Associates
P.O.Box 1422
Sanford,FL 32772-1422
ORIGINAL
• 2
1 MAYOR DALE : Let ' s call the Special Work
2 Session to order. And turn it over to the City
3 Attorney.
4 MR. COLBERT: Thank you, Mayor. You may
5 recall, all of you Commissioners, that I asked for
6 an Attorney-Client Session at our last meeting; and
7 you were gracious enough to schedule one .
8 The purpose of this meeting is to discuss
9 pending litigation, specifically the Golf Course
10 Litigation.
11 The people who will be here today will be the
12 City Commissioners, the City Manager, myself and
ID13 Mrs . Reischmann of our Firm. And J. Brennan and
14 Michael Wright, Co-Counsel, that the Commission
15 authorized us to engage at your last meeting.
16 I expect that this meeting will last
17 approximately an hour, maybe slightly longer. The
18 purpose of it is to discuss that pending litigation,
19 potential settlement matters, potential cost-
20 containment matters .
21 Those conclude my comments and the public part
22 of this meeting.
23 And if it is okay with the Commission we will
24 go into the Attorney-Client Session. We will close
25 the doors and have our discussion. And then we will
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1 have to adjourn it the same way we commenced it;
2 and that is with the doors open.
3 MAYOR DALE : Okay. Does anybody have any
4 objection to going into the Attorney-Client Session?
5 All right . Let ' s close the doors, then, and
6 we ' ll do that . Thank you.
7 MR. COLBERT: All right, sir. Thank you.
8 Before we get into the meat of the session, I want
9 to review with the Members of the Commission on the
10 record the Statute, at least how it applies to us .
11 Some people call this an exception to the
12 Sunshine Law; and it is not . Some people call it a
13 shade meeting; and I cringe at that, because it is
14 not really a shade meeting.
15 The most this is, is a delayed broadcast . And
16 I want every Commissioner to think of that in the
17 entire proceeding. Mr. Ellerbe is here . He will
18 make a verbatim record. No one should leave the
19 meeting while this part of it is in progress ; nor
20 should anyone come into the room.
21 What each of us says will be made a part of the
22 permanent record. And at the conclusion of this
23 litigation in whatever manner it is finally
24 concluded, a copy of the transcript will be
25 released. The press, any member of the public, any
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1 citizen or any person who wants a copy can come read
2 it or purchase a copy.
3 So I just remind all of you that that provision
4 of the law does apply as we go forward today.
5 MAYOR DALE : And let me remind us also that
6 this is specifically a session on the Golf Course
7 Litigation.
8 MR. COLBERT: Yes, sir.
9 MAYOR DALE : And not to discuss any other
10 business .
11 MR. COLBERT: That is correct . We can discuss
12 no other items . We can discuss things relating to
• 13 settlement; we can discuss litigation strategy,
14 things that pertain directly to the pending
15 litigation.
16 All of that is fair game; but nothing else,
17 even incidental to it--
18 MAYOR DALE : We can hold that until the Work
19 Session is over.
20 MR. COLBERT: That is correct .
21 And also, before the meeting is over we will
22 try to see if the Commission is of one mind, that is
23 if you-all build a consensus to go in a particular
24 direction, but you can' t take formal action in the
25 form of a vote in an Executive Session or Attorney-
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1 Client Session.
2 But we will try to see if there is a consensus,
3 and any direction from the Commission. Right now
4 our direction has been to move forward with the
5 litigation.
6 I have given the example before, and perhaps
7 some of you have heard it : We, the Attorneys, are
8 the soldiers . You-all are the generals .
9 We march to the orders you have given us; and
10 if we leave today and you have not changed our
11 direction, we will be moving forward with the
12 litigation.
13 If by consensus you give us some other
14 direction today, we will attempt to follow those
15 directions .
16 Are there any questions at this point on the
17 procedure?
18 COMMISSIONER ECKSTEIN: Yes, I have a question.
19 MR. COLBERT: Yes, sir?
20 COMMISSIONER ECKSTEIN: Are there any
21 restrictions on the Commission Members and the
22 parties here as far as saying what goes on in this
23 meeting to someone else?
24 MR. COLBERT: This is a. . .This is a
25 confidential session.
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1 It is an Attorney-Client session; and the
2 contents of this meeting should not be disclosed
3 until the litigation is over.
4 COMMISSIONER ECKSTEIN: Well, is there a
5 penalty?
6 MR. COLBERT: Well--
7 COMMISSIONER ECKSTEIN: I don' t think there is
8 but I 'm just saying--
9 MR. COLBERT: --there is no--
10 COMMISSIONER ECKSTEIN: I would feel more
11 comfortable if we all understand that we shouldn' t
12 relate how we feel to either of the parties involved
• 13 or to anybody.
14 MAYOR DALE : Well, under that, that brings up a
15 point that I wanted to ask of the Attorneys .
16 And that is : We 've been under this litigation
17 now for quite some time . And the litigant has had
18 meetings with various of us; and is that--As a
19 matter of fact I think that might be where
20 Commissioner Eckstein is coming to, is that we
21 should not be discussing, in my opinion, the pending
22 litigation with the litigant .
23 What is the advice there?
24 MR. COLBERT: That is my advice, also .
25 MAYOR DALE : See, I don' t want to meet with
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him, period.
2 MR. COLBERT: Yes . I can' t tell you that you
3 cannot legally do it . I can tell you from a
4 strategy standpoint that it doesn' t make good
5 strategy to meet with your Attorneys in private and
6 then for the other side of litigation to, to
7 understand the strategy and where we may go from
8 here and what direction we may take . I have been
9 involved in other cities when that very thing
10 happened.
11 And what it does, it simply drives up the cost
12 of litigation and prolongs it rather than bringing
13 it to a conclusion.
14 MAYOR DALE : And then a lot of things, like
15 this letter we got on the fifteenth of February,
16 where Mr. Daniels says, "And Mr. Oxford and me . . .Mr.
17 Oxford and I met with two of the City Commissioners
18 last week. "
19 "They indicated the City may be within their
20 rights to get the golf course back. "
21 We don' t want to be making statements like that
22 to the news media.
23 COMMISSIONER LESSARD: How do we know that
24 statements like that were made?
25 COMMISSIONER ECKSTEIN: No, I did, I said it .
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1 COMMISSIONER LESSARD: But if you don' t meet
2 with him he can' t say that you--
3 MAYOR DALE : Well , I agree, and I think this is
4 a- -
5 COMMISSIONER ECKSTEIN: And you have to
6 understand the nature of the conversation. It was
7 not--There was a reason why I said that .
8 COMMISSIONER LESSARD: Right, well, Whitey, I 'm
9 not- -
10 COMMISSIONER ECKSTEIN: Okay. Well , I 'm not in
11 contact . I didn' t meet with him--This went on for
12 about a half hour, 40--and that--and you know, and I
13 just simply said, I said, you know, I was trying to
14 get this thing settled.
15 I wanted, you know, and I just said, you know,
16 I said, "You've always taken a chance that you could
17 lose this golf course . "
18 And I said, you know, "That means if something
19 is found- - " because he was talking about his
20 discovery stage and all of this kind of stuff .
21 And I said, "Well, you know, " I just told him
22 right up front, I said, "You know, let ' s get this
23 thing settled one way or another. "
24 And he hasn' t done anything.
25 MAYOR DALE : Well, I think it ' s smart, and the
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1 Attorneys agree--
2 COMMISSIONER ECKSTEIN: Absolutely.
3 MAYOR DALE : --for us not to even discuss
4 things with him.
5 If we want things discussed with him, then our
6 Attorney, our legal staff should discuss things with
7 his Attorney, see .
8 COMMISSIONER ECKSTEIN: Well, this is part of
9 the conversation--
10 MAYOR DALE: Sure, umm-hmm, but even then we
11 still are under the--he has sued us .
12 COMMISSIONER ECKSTEIN: Yeah, but we hadn' t
• 13 sued him?
14 MAYOR DALE : It doesn' t matter.
15 MR. COLBERT: Well, Mayor, you are right . When
16 we walk out of this room we don' t need to say
17 anything- -
18 COMMISSIONER ECKSTEIN: Well , I just wanted to
19 say--
20 MR. COLBERT: If you don' t agree, when you walk
21 out of here and--
22 COMMISSIONER ECKSTEIN: I, you know, I was the
23 guilty party there and with ever who was along. It
24 was, as far as strategy that, you know, look,
25 because I didn' t say anything for a long period of
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1 time . And I felt that--
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2 MAYOR DALE : Well, I mean I didn' t bring it up
3 to--
4 COMMISSIONER ECKSTEIN: Well, no, I mean to
5 tell you, I felt that I was being lied to a little
6 bit, also, okay?
7 Because I think I 'm more familiar with this
8 case than anybody with the exception of Bill
9 Colbert . And he and I probably, we went back to
10 1987 when we first got involved down there . And we
11 were talking about, he was mentioning some things
12
about the contract and breaches in the contract .
• 13 You know, I, I mean the thrust of the
14 conversation--
15 MAYOR DALE : It is just easy for games to be
16 played when you' re meeting outside of legal counsel .
17 COMMISSIONER ECKSTEIN: Yes, and in retrospect,
18 you know, I, it wasn' t Carey (phonetically) . . . it was
19 me . And I ' ll be, I ' ll tell you--
20 MAYOR DALE : Well, I didn' t bring it up to
21 chastise any Commissioner.
22 COMMISSIONER ECKSTEIN: No, I will never lie .
23 MAYOR DALE : I just brought it up to see if the
24 Attorneys agreed with my thinking, from a business
25 standpoint .
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1 And I 've been in business for thirty years .
2 If I ever had, was involved in any legal action, my
3 Attorneys advised me very strongly, "Do not talk. "
4 Once a suit has been filed, you know, have your
5 Attorney present if you' re going to meet with them
6 or have your Attorney meet with his Attorney.
7 That is usually the way it ' s done .
8 COMMISSIONER WILLIAMS : I have a question.
9 When will the transcript be released to the public?
10 MR. COLBERT: The transcript will be released,
11 Commissioner Williams, at the conclusion of the
12 litigation. That is, when the entire litigation is
13 over.
14 There are several ways it could be concluded.
15 One would be some type of settlement .
16 Two, a trial and a verdict . And then an
17 appeal and whatever the final disposition is . But
18 it is not released until that point in time .
19 COMMISSIONER ECKSTEIN: That is the complete
20 transcript, any parenthetical remarks--
21 MAYOR DALE : It is verbatim.
22 COMMISSIONER ECKSTEIN: Verbatim?
23 MR. COLBERT: Yes, verbatim. There is nothing
24 off the record when we ' re in this room. That is
25 important for everyone to understand.
C.B. Ellerbe&Associates
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• 1 MR. WRIGHT: Because we went through this with
2 the Holiday Inn and the FOP; and whether it has
3 been released I ' ve not even been aware of it, you
4 know.
5 COMMISSIONER ECKSTEIN: Yes .
6 MR. COLBERT: Okay. If there are no other
7 questions, let me just set the stage for just a
8 moment .
9 We have kind of divided the presentation into a
10 couple of parts . Mrs . Reischmann of our office is
11 going to just review with you very briefly the
12 history of this and the current status of the
13 litigation.
14 Jay is going to, Jay Brennan is going to
15 discuss with you the pleadings that their office has
16 prepared, the counterclaim, the discovery that they
17 are prepared to go forward with and any other
18 comments that they have .
19 I think the City Manager has perhaps, I 'm sure
20 he has received at least one letter; and perhaps he
21 has prepared a response that he and I discussed
22 briefly today.
23 And Mike will bring you-all up-to-date on that .
24 Those things will probably take us ten, fifteen
25 minutes to do.
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1 And then the remainder of the time we want to 13
2 respond to your questions, provide you with as much
3 information as we can; and listen to your
4 discussion and your directions to us of where we go
5 from here .
6 So, if there are no other questions I ' ll ask
7 Mrs . Reischmann if she would just give us a brief
8 history; and then bring us up to the current date,
9 where we are from the legal standpoint .
10 MAYOR DALE : Okay.
11 MS . REISCHMANN: I just wanted to be real brief
12 on this, since you-all can read it . I don' t need to
• 13 read it to you.
14 But we went back to ' 45, which is- -otherwise
15 we ' ve got to go through barrels and barrels of
16 papers .
17 This is where we have a lease for twenty five
18 years for a dollar per year. And ' 49 is really the
19 lease that we have now. This is the ninety-nine-
20 year lease .
21 There was a provision there for fifteen hundred
22 a year to be applied to the clubhouse; but
23 otherwise it was a dollar per year.
24 This was assigned. And the rent--that fifteen
25 hundred was eliminated. We were down to a dollar a
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1 year.
2 And in sixty five it was assigned again. Here
3 is where we get our funky language, with the capital
4 improvements being in lieu of rent .
5 And then we had a sixty-eight-year term on the
6 lease we have currently. And that is with the five
7 percent of gross revenue being the amount of the
8 rent ; but capital improvements in lieu of that .
9 And there was also this five-year improvement
10 program that they had to begin. That was entered in
11 eighty-six. In eighty-eight the City sent a letter
12 to Seminole Club saying it was satisfied with the
13 condition of the golf course .
14 The City also entered into the irrigation
15 lease, which has the same term as the eighty-one
16 lease .
17 And that is also a concern right now, is the
18 expense of that; the fact that we, we needed them
19 to. . . to use the golf course to irrigate; but at the
20 present time we have no need for using the
21 wastewater on the golf course .
22 In ninety seven we entered into another
23 contract with them whereby we agreed to pay them to
24 maintain the irrigation system.
25 Prior to that time we were required to maintain
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1 the irrigation system ourselves, the City was .
2 Last year is when all the action happened. In
3 February we sent the demand letter for the two-
4 fifty-five-three-forty-six.
5 Then we were negotiating; and we received the
6 money; but it was under protest, along with a two-
7 count lawsuit .
8 Count One, and this was by Seminole Club
9 against us : Count One, it was a Declaratory
10 Judgment, asking for interpretation of the lease;
11 and saying that they were entitled to actually
12 credit against future rent .
13 Count Two was saying that the City breached the
14 lease because we sent that demand letter. We moved
15 to dismiss and strike this .
16 And we sought to place the money in the court
17 registry so that we wouldn' t exercise any control
18 over it .
19 And, therefore, possibly. . .possibly cause the
20 Court to say that we had exercised control over it .
21 Then in January the Court did rule that we
22 could place the funds in the court registry. And we
23 still have these motions outstanding, which we have
24 already scheduled for hearing.
25 If there aren' t any questions about that--
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1 COMMISSIONER ECKSTEIN: Well , I have two
2 things . When Mr. Welchel had the lease assigned to
3 him in nineteen sixty five, he then sold the lease
4 to Howard Welchel or transferred the lease to Howard
5 Welchel--or not Howard--Howard McNulty, George
6 Phillips and John Pierce .
7 Okay? That was left out there until Jack
8 Daniels and a man from up north, I think it
9 was . . .Tony Coroni (spelled phonetically) or
10 something like that .
11 And he was in the garbage business . And they
12 bought the course together; and eventually the
13 lease was assigned to Jack Coroni (spelled
14 phonetically) because he bought the others out .
15 But I want to know, because I think you ought
16 to know this, because I had John Mercer and myself
17 in nineteen eighty seven, I believe, we had, we
18 spent twenty five hundred dollars, because there
19 were some breaches in the lease .
20 And the Colbert Firm came back with the opinion
21 that since there were a number of breaches but they
22 were minor, they were all correctable .
23 And that we tried to look at a major breach;
24 and there wasn' t one . Do you remember that, Bill,
25 when you did that?
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• 1 MR. COLBERT: Yes, sir. 17
2 COMMISSIONER ECKSTEIN: And so the City did
3 look into the provisions of that lease . And we
4 looked at all aspects of the lease and the capital
5 improvements and all that .
6 And, you know, Bill found that they had
7 violated some things and, you know, Jack ultimately
8 corrected those minor breaches .
9 So I would just let you know the Law Firm was
10 retained for that purpose--mainly, Mercer in that
11 group--
12 MAYOR DALE : When was this?
• 13 COMMISSIONER ECKSTEIN: Nineteen eighty seven,
14 nineteen eighty--just before John went out of
15 office . I guess it was nineteen eighty seven, maybe
16 nineteen eighty eight .
17 So that the Colbert Firm should have a record
18 of that .
19 MAYOR DALE : A couple of questions that I had
20 on there, number one, I don' t even know how we ever
21 started with a dollar a year, especially when we got
22 on up to sixty five
23 When did the constitution provision start that
24 said that a public entity had to get fair market
25 value?
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1 I mean now we even have to get appraisals for
2 these--
3 MR. COLBERT: The appraisal provisions and
4 those types of things are much more recent . There
5 has been a body of law that basically says that--and
6 it has always been that something needs to serve a
7 public purpose .
8 There can still be sometimes a lease that has
9 what we Attorneys call a nominal consideration, a
10 dollar or something like that .
11 But then there needs to be other provisions of
12 the lease which provide a public purpose or public
• 13 benefit .
14 And the Court then looks at the entire
15 consideration in determining whether it is lawful or
16 not .
17 The fact that a lease may say a dollar a year
18 by itself doesn' t make it a quid-pro-quo--And we
19 haven' t even been getting a dollar a year. We have
20 not been getting a dime, not a penny.
21 MAYOR DALE : The other thing that I had on--
22 Leave it up there .
23 MRS . REISCHMANN: Okay.
24 MAYOR DALE : --a question about is When this
25 was done, what I wanted to get on the record- -and,
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1 of course, I guess you-all already know it : The
2 five-year improvement program was four hundred and
3 some thousand dollars .
4 MR. COLBERT: That ' s correct .
5 MAYOR DALE : That was not to be taken as a
6 credit . That was in addition to any other thing--
7 and he took it as a credit, which led to the-- Lee
8 saying Wait a minute, now, and bringing it to the
9 Commission and saying Well, wait a minute .
10 And then there were a lot of other breaches in
11 that lease, because sooner or later we ' ll amend it
12 as we go along.
III13 MR. COLBERT: And they will come into that in a
14 little bit .
15 MRS . REISCHMANN: Hurrying along here . . . I don' t
16 mean to take too much time; but we did want to show
17 you the actual language in the lease now, because it
18 is really helpful, I think, to go back and look at
19 it, remind you of the lease terms .
20 The rent, oh, the language states, "Lessee
21 covenants to spend annually on capital improvements
22 in lieu of rent first to the golf course itself ;
23 and then to building improvements and additional
24 structures . . . involving some five percent of all
25 gross revenue .
IIII
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1 And we, we showed you in eighty eight where we
2 said we were satisfied with the condition of the
3 golf course .
4 Looking at how we define capital improvements
5 in the lease, those types of improvements which
6 become permanent in nature, as opposed to those
7 required only to maintain repair and condition.
8 Then we have this, this language in here,
9 "Provided the expense required herein for re-working
10 and renovation of tees and greens shall be
11 considered as capital improvements . " An additional
12 little twist to that .
13 Desired changes : These are some of the
14 changes that we have all come to as being. . . as being
15 desired.
16 One is just getting rid of all of paragraph
17 two.
18 MAYOR DALE : A question on that paragraph up
19 there, hold it up there a minute . What was the
20 reason we sent them a letter saying we were
21 satisfied with the course?
22 That had something to do with capital
23 improvements as far as the tees and greens, things
24 of that nature, didn' t it?
25 What was the purpose of our sending that
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1 letter? The purpose of sending that letter was to
2 say We ' re satisfied with the course, to no longer
3 take that as a deduction?
4 MRS . REISCHMANN: That is our argument . And I
5 think it is a good argument, based on--
6 MAYOR DALE : Well, that is what the lease
7 said. . . .wasn' t that what the lease said?
8 MRS . REISCHMANN: That ' s true . However, from,
9 after a year we did not argue with him to applying
10 expenses that applied to other than building
11 improvements and other structures .
12 MAYOR DALE : We did?
• 13 MRS . REISCHMANN: We didn' t send a letter
14 making--
15 MAYOR DALE : Well, we did as soon as the--I
16 mean if a new Commission comes on line and says Wait
17 a minute, we don' t--that ' s what I did. . .we no longer
18 will do this . We' re not going to do this .
19 MRS . REISCHMANN: That ' s right .
20 MR. COLBERT: We are not arguing, or we ' re not,
21 you know, contesting that point . I think--
22 MAYOR DALE : No, I 'm just saying I want to be
23 sure that I 'm remembering this right .
24 MR. COLBERT: Yes, sure .
25 MAYOR DALE : The reason we sent him that letter
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1 that you had on there before, We ' re satisfied with
2 the condition of the course or the greens or
3 whatever it was .
4 MRS . REISCHMANN: Umm-hmm.
5 MAYOR DALE : But because of the provision in
6 there that we did that, he just simply said We ' ll
7 take that as a capital improvement .
8 MRS . REISCHMANN: And then the building
9 improvement and additional structures .
10 MAYOR DALE : But yet he continued to do so .
11 MRS . REISCHMANN: He continued to do so,
12 but . . .but we certainly would contend that from then
13 on he was entitled only to deduct building
14 improvements and additional structures .
15 MAYOR DALE : That ' s right .
16 MR. COLBERT: That ' s correct .
17 MRS . REISCHMANN: The additional item that we
18 would like changed is to cancel the irrigation
19 contracts, which are no longer helpful to the City
20 whatsoever.
21 Finally, just a quick look at the figures that
22 we 've been talking about here . The two fifty five
23 figure . . .The Finance Director and the City Manager
24 came up with this figure, looking at the records
25 from nineteen eighty one to nineteen ninety eight .
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1 And as the Mayor alluded to, Mr. Daniels did
2 not put any money into capital improvements for the
3 first five years other than pursuant to that
4 requirement in the lease for the five-year
5 improvement plan.
6 So, this includes the amount, counting him as
7 giving no capital improvements for the first five
8 years .
9 So, that is how we arrive at that figure . We,
10 because the Commission instructed us to, to look at
11 this in a different way perhaps to try to settle it,
12 we sent a settlement letter, saying that we would
• 13 consider one fifty nine, nine seventy nine, based on
14 the fact that there is a statute of limitations
15 argument that you go back five years from the date
16 you knew or should have known of the breach.
17 Of course, the date that we knew or should have
18 known is subject to a lot of argument one way or the
19 other that I think Jay will get into.
20 And it reflects rent due as if he could only
21 get credit for capital improvements, for building
22 improvements and other structures .
23 But any amounts he put into the Court would not
24 be, quote, capital improvements that would entitle
25 him to a credit .
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1 Lastly, a hundred thousand is something the
2 Commission said was an accessible compromise; and
3 it does match up with the figures .
4 I don' t know if you remember doing this, but
5 you kind of went through the exercise of looking at
6 the one fifty nine, nine seventy nine, taking out
7 the amount that they claimed in additional capital
8 improvements over those years .
9 And it rounds out to about a hundred thousand.
10 COMMISSIONER LESSARD: Can I ask you as
11 question, Katie, about the hundred thousand dollars?
12 Because I kind of went along with that in the spirit
• 13 of cooperation. I, I didn' t want the hundred
14 thousand; but I agreed that I would go along with
15 it to. . . I- -That is not still on the table, is it?
16 Because I think the Commission was kind of
17 under the impression that a hundred thousand dollars
18 was assuming there was a good faith effort on the
19 other side .
20 COMMISSIONER LYONS : It was never accepted, so
21 it is not on the table .
22 MAYOR DALE : We sent him a thing that said we
23 would settle for a hundred thousand dollars and
24 these changes in the lease that we were talking
25 about .
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And he sent us a letter back that says, I tell
2 you what, you pay me a hundred thousand dollars and
3 I ' ll drop this suit and I won' t file the next one . "
4 COMMISSIONER LESSARD : All I 'm asking, Mayor--
5 MAYOR DALE : That ' s what happened.
6 COMMISSIONER LESSARD : All I 'm asking is, We
7 sent him a letter, and--
8 MAYOR DALE : And he sent us a letter back,
9 saying, "You pay me a hundred thousand dollars, I ' ll
10 drop this suit and I won' t file the next one . "
11 COMMISSIONER LESSARD : Okay. So that letter
12 has no merit--
• 13 MAYOR DALE : Whatever suit that was .
14 COMMISSIONER LESSARD: Okay. That ' s what I 'm
15 asking. Does that letter have any merit any more?
16 MR. BRENNAN: Once it ' s rejected you' re done .
17 MR. COLBERT: Okay. This may be a good point
18 for Tony to take about two minutes and describe for
19 you the negotiations--well, probably that is too
20 strong a term, but the communication between Jack
21 Daniels and the City Manager' s Office over the
22 course of the last several months .
23 That was done by Mr. Daniels and Mr. VanDerworp
24 responded; and those particular communications were
25 done after a City Commission Meeting in an attempt
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1 to resolve the case .
2 They did not go directly through Counsel . So
3 if you could just take a minute or two for that .
4 MR. VAN DERWORP: This is in response to the
5 letter sent to Jack Daniels--to myself, dated
6 February fifteenth.
7 You have all received a copy of that . And
8 there was a copy directly to you. And in that
9 letter it says, "Please answer my question as to
10 what we have not done in order to complete the
11 lawsuit . "
12 So what I 've done is I 've drafted a letter.
• 13 Mr. Colbert has reviewed this letter this afternoon.
14 Basically, outlining the facts with respect to
15 what the . . .Mayfair has not done to complete the
16 lawsuit .
17 And it starts back on July fourteenth, where
18 the Commission agreed to accept the hundred
19 thousand. On August seventeenth a settlement offer
20 was transmitted to Mr. Daniels .
21 We did not hear anything with respect to that .
22 So on October twelfth the City Commission again
23 directed me to notify Mr. Daniels regarding the
24 settlement agreement .
25 And directed that the agreement be scheduled
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1 for the November ninth meeting, where a decision
2 would be made to move forward with the pending
3 litigation.
4 These are all certified letters that were sent
5 to Daniels . On November ninth I received a reply
6 from Mr. Daniels . It says that he has no
7 acknowledgment of any proposed settlement agreement .
8 And that--his letter also suggested that
9 settlement should start with two fifty five back to
10 the Mayfair, the City pay him a hundred thousand
11 dollars of the cost of legal expenses and then they
12 will terminate the lawsuit .
• 13 And also, the letter goes on, that if the City
14 had some other stipulations that we would be
15 interested in, send them to him.
16 Based on the information that they--the City
17 Commission directed that the City Attorney proceed
18 with discovery and litigation on the matter.
19 So, on February the fifth we received a letter
20 from you agreeing to the August settlement terms .
21 So, between August and February fifth, that is the--
22 that is the time frame where we first got a proposed
23 settlement from Mayfair, saying pay him--and now we
24 received a letter saying that they would agree with
25 the August settlement terms .
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1 And the last paragraph just says, "You took no
2 action in response to this, after necessitating the
3 Commission placing a decision to move forward on the
4 ninth, the November ninth meeting.
5 So, that is the most recent history.
6 MAYOR DALE : Well , even the letter they sent
7 February the fifth did not agree with the August
8 settlement terms that we sent in August .
9 Because his letter of February fifth says,
10 "I ' ll give you a hundred thousand dollars; and you
11 will sign the current lease . "
12 MR. COLBERT: The existing lease .
13 MAYOR DALE : The existing lease . But that was
14 not the August settlement .
15 MR. VAN DERWORP: Well, the August settlement
16 says--
17 COMMISSIONER LYONS : That was the counter-
18 offer, which was that we rejected it .
19 MR. COLBERT: To answer Commissioner Lessard' s
20 question, I thought that was a good place there for
21 you-all to see what it was as of August, with a
22 short legal answer to the question.
23 The City made an offer which he rejected, in
24 the form of a counter-offer. And that hundred
25 thousand dollars is not on the table unless the City
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1 Commission wants it to be and renews it . 1
2 This might be a good place for Jay Brennan to
3 go forward and let you-all see what they have been
4 working on since they were retained, in the way of a
5 counterclaim.
6 COMMISSIONER ECKSTEIN: I just want to clarify
7 something before they start .
8 MR. COLBERT: Okay.
9 COMMISSIONER ECKSTEIN: Here is what I want to
10 clarify: Now I understand the context . And I don' t
11 want the Commission to think that I acted. . .acted
12 irresponsibly.
• 13 Under--I am fairly familiar with the golf
14 course, as a member out there for a long, long time .
15 I have friends out there .
16 And during the course of the conversation Jack
17 said, "Well, you know, I 've never done anything
18 wrong. "
19 Well , you tell me a businessman, an officer of
20 the court that has never done anything wrong, I 'm
21 very suspicious, okay?
22 That is impossible .
23 So, there were examples that I gave him that,
24 that he did do wrong. For example, if there was
25 work to be done out there, he would exchange a
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1 membership, let ' s say.
2 Or if somebody was providing natural gas for
3 him or gas, instead of . . . instead of taking payment,
4 he would, for example, give out a membership or
5 something like that .
6 And I said, "Jack, that is wrong. I mean that
7 is fraud, because you are de--you know, you are
8 hurting--the City is supposed to get five percent of
9 that revenue . You can' t do that . I mean even if
10 you give away a golf ball in lieu of something,
11 you' re not abiding by your lease . "
12 So I said, "In that case, you know, you could
13 use the golf course to do things like that . "
14 So I wanted you to know, because Jack was
15 trying--I didn' t want him--Jack underestimates me a
16 little bit, okay?
17 And he underestimates a lot of us . And I, just
18 from that meeting, I just wanted to make sure that,
19 not earth-shattering things, because there are some
20 things that he did out there that businessmen do.
21 And, you know, I thought that was wrong,
22 because, you know, if a membership is two hundred
23 dollars and somebody does your electrical wiring,
24 well, ten dollars of that is our money, whatever,
25 you know, whatever five percent of two hundred is .
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1 And so that is how it came up in that context .
2 So it wasn' t that I was going in and saying Jack,
3 you know--
4 MAYOR DALE : No, I understand. And Jack will--
5 COMMISSIONER ECKSTEIN: I said, I said, "Jack,
6 you know-- " And I know who is involved in Sanford.
7 MAYOR DALE : Well , he is playing some of these
8 games . That ' s what I 'm looking to deal with him
9 about, but, you know, I think when we get into
10 discovery we ' re going to find a lot of things--
11
COMMISSIONER ECKSTEIN: Well--
12 MAYOR DALE : --that I think could be, I
• 13 personally think might be fraud if we get into this .
14 COMMISSIONER ECKSTEIN: Right .
15 MAYOR DALE : But that is--
16 COMMISSIONER ECKSTEIN: Well, I didn' t go in
17 there trying to spill the beans ; but when somebody
18 says he has never done anything wrong, I said,
19 "Well , Jack, you ought to think about some of these
20 things that you've done . "
21 MAYOR DALE : Well , I understand.
22 COMMISSIONER ECKSTEIN: Do you follow me? And
23 he says, "Well , all I have to do is pay the City
24 five percent of the money and, you know, everything
25 is good, you know. " I said--
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1
MAYOR DALE : Well, but what brought this, your
2 intent--to give the man time to gather his sense on
3 these things . And, that . . . I mean we ' re going, if
4 we ' re going to counter-sue him we want to go after
5 this thing hard.
6 COMMISSIONER ECKSTEIN: Yes .
7 MAYOR DALE : Or if we ' re going to agree for
8 settlement we want to go at it hard.
9 COMMISSIONER ECKSTEIN: But he also knows, but
10 by the same token, he also knows that he is not as
11 strong as he thinks going into this suit, that, you
12 know, that we have some ammunition, too.
• 13 MAYOR DALE : Yes, but do we want to let him
14 know that? is what I mean.
15 COMMISSIONER ECKSTEIN: Well , because I would
16 like to settle this suit, without having to go
17 through all of the--
18 MAYOR DALE : He, believe me, he knows all the
19 things he did wrong. And he knows the things that
20 we might find out as we go into this discovery
21 phase .
22 And I think the taxpayers deserve an answer to
23 it, you know.
24 I don' t know, for instance, even when he said
25 he spent the four hundred and ninety eight, whatever
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1 it was, thousand dollars for the five-year
2 improvement plan, and then took it as a credit?
3 Which was against the lease .
4 And I said, "No, that, you can' t have that . "
5 And I brought it to you-all and you said, No, that
6 wasn' t right?
7 I don' t even know that he spent the four
8 hundred and ninety eight thousand dollars .
9 I can' t see it out there . How do we know he
10 even spent it? I can' t see four hundred and ninety
11 eight thousand dollars in the kind of improvements
12 he was supposed to have done .
• 13 So I mean there are a lot of things I want to
14 know why, why did it happen? You know, how was he
15 able to, you know, fill in the swimming pool and all
16 of these things?
17 I mean I made a list one time; and it is that
18 long (indicating) , you know, of things that he
19 violated in that lease; that gives me suspicion,
20 you know, that was supposed to have been to the
21 benefit of the taxpayers .
22 So--
23 COMMISSIONER WILLIAMS : I have a question. If
24 it is true that he did not agree to the offers, the
25 settlement terms, shouldn' t this be modified?
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1 MAYOR DALE : Yes .
2 COMMISSIONER WILLIAMS : I mean for the record.
3 I 'm saying if he did not agree to the offers .
4 MR. BRENNAN: Purporting to agree, it should
5 say purporting to agree or attempting to agree or
6 something like that .
7 COMMISSIONER WILLIAMS : Or he agreed to part of
8 it?
9 MAYOR DALE : Has this thing already gone out to
10 him?
11 MR. VAN DERWORP: No, that ' s why I, I provided
12 it to you so you could see the chronology and the-
411 13 COMMISSIONER ECKSTEIN: But there is one thing
14 I wanted you to add, Tony, that you didn' t add. And
15 that is the intent . . .of the intent of this
16 Commission all along to not stand in the way of his
17 signing that lease .
18 Because I think, because Jack Daniels, one of
19 the things he ' s going to say is that . . . is that we
20 have . . .we have precluded any type of negotiation
21 with anybody because we are holding up this lease .
22 And I , unless--I didn' t read it completely, but
23 did you put that in there?
24 MR. VAN DERWORP : I put in there that . . . the
25 settlement letter states that the City cannot enter
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1 into discussion of the assignment of the lease while
2 litigation is pending.
3 MAYOR DALE : There is nothing to assign,
4 Whitey. Once he has sued us we couldn' t assign it .
5 COMMISSIONER ECKSTEIN: I understand it . But
6 as far as holding up any of the--He is going to
7 claim all along that--
8 MAYOR DALE : Why, sure, he is . He is going to
9 claim that we interfered tortiously with his ability
10 to assign the lease, which is bull ; and that is why
11 we hired these Attorneys .
12 COMMISSIONER ECKSTEIN: Got you . Right . Okay.
13 MAYOR DALE : They will protect us on that
14 issue .
15 COMMISSIONER ECKSTEIN: Well , if they can
16 protect--
17 MAYOR DALE : --talking to him and all of those
18 other things . Because, I mean if he paid us the
19 two hundred and fifty five thousand dollars or if he
20 had paid what he was supposed to have paid all
21 along--I never even knew he had a lease to assign
22 until after we called him in breach.
23 And then all of a sudden he nose-thumbs and
24 brings us a letter, "I 've got a lease to assign. "
25 Well , I didn' t even know there was one . Did
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1 you know there was a lease to assign before this
2 started? I didn' t .
3 COMMISSIONER ECKSTEIN: Well , that ' s the thing.
4 And I told him the other day, I says, "You know,
5 this guy is a friend of yours . "
6 I said, "Where is the lease? Let me see the
7 lease . Is there a deposit? "
8 You know. . .and he said, "Well , I can' t get a
9 deposit until the lease is cleared of any type of
10 obligations against it . " So we were just going
11 around and around and around.
12 MAYOR DALE : Well, that ' s what Tony is saying.
13 We have nothing to assign. The thing is in
14 litigation.
15 "You have sued us . We ' re saying the breach you
16 have sued us over--How are we going to assign
17 anything while we 've got a lawsuit going? "
18 You can' t . So that ' s the purpose of what he
19 says in this letter, I think.
20 And, you know, I do think what Dr. Williams
21 says, is that ought to be cleared up . And that,
22 "By virtue of your letter of November the ninth,
23 you, you didn' t accept the terms-- "
24 MR. VAN DERWORP: "Rejected it all . "
25 MAYOR DALE : "Rejected it all . We rejected
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1 your offer with the letter of November the ninth,
2 which says Well, I don' t have any knowledge of your
3 thing, and I won' t settle it unless you pay me a
4 hundred thousand dollars . "
5 "And, by the way, I ' ll drop that suit and I
6 won' t start the second one . "
7 Has the second suit ever been filed? I don' t
8 even know--
9 MR. COLBERT: He has filed one suit that I 'm
10 aware of, Mayor.
11 MAYOR DALE: And I mean I did not even know
12 that there was a lease--that he intended to assign a
13 lease until this letter that you sent out .
14 MR. COLBERT: Mr. Brennan and Mr. Wright have
15 been busy for about two weeks; and they have about
16 ten documents that they would like to review with
17 you .
18 Probably not item by item; but I would like
19 for them to have an opportunity to let you know
20 where they are as it relates to going forward.
21 And then, as I said, once they have concluded
22 that we ' ll be happy to take direction from the
23 Commission by consensus .
24 MAYOR DALE : All right .
25 MR. BRENNAN: Thank you, Bill . I ' ll hand these
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1 out .
2 And I ' ll just give everybody a brief overview.
3 There is a lot of information really new.
4 MR. VAN DERWORP: Also, could I have my letter
5 back?
6 I ' ll send out the revised version?
7 COMMISSIONER LESSARD: Yes . That is a great
8 letter.
9 MR. VAN DERWORP: And I ' ll also add those two
10 things as directed and such and such.
11 MR. BRENNAN: Let me re-introduce ourselves ;
12 Jay Brennan and Mike Wright, with the Gray, Harris
III1 13 and Robinson Firm. We really appreciate the
14 opportunity to work with you, to advise the City and
15 to work with Bill and Katie and their Law Firm,
16 which we have a lot of respect for.
17 And as you see from the documents here, we
18 propose that we would come in and appear as co-
19 counsel in the case .
20 I heard some discussion today about pursuing
21 settlement as one alternative; pursuing litigation
22 as another alternative .
23 I have in mind, and my practice for
24 approximately twenty years has been business and
25 commercial litigation, including a substantial
0
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1 amount of lease litigation.
2 I think there is a third course . And I think
3 any business, a complicated business case like this,
4 should be litigated along two tracks .
5 One along the settlement and negotiations
6 track. And one along the litigation track.
7 And I would perceive the pleadings and the
8 discovery that I have proposed here hopefully to
9 assist us in the negotiation and in the settlement
10 process so that we can arrive at an agreement that
11 is fair to all sides ; and in particular is fair to
12 the City and to the citizens .
• 13 And so, with that in mind, I wanted to clear
14 the air there, that I think that if we pursue
15 litigation, that does not have to be to the
16 exclusion of settlement and negotiation.
17 And I have proposed another alternative, the
18 possibility of mediation, in which--Bill, have you
19 been involved with the City in substantial
20 mediation?
21 MR. COLBERT: We have done some .
22 MR. BRENNAN: Where there would be a third
23 party. And I 've inquired of one Larry Watson, who
24 is a preeminent business mediator.
25 And that, the added dynamic of mediation is
•
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1 that you bring in a third party to prevent, in the
2 case of Mr. Daniels, to prevent this kind of
3 P osturing that we saw, it looks like, in the letters
4 leading up to his February fifth letter.
5 To get the principals to the table and
6 hopefully to arrive at a fair solution.
7 So, litigation and settlement are not mutually
8 exclusive . And what I 've tried to do here
9 is . . . these are our drafts, as Bill said, the lease
10 goes back to the forties . We have been involved for
11 about two weeks, but we 've tried to raise in our
12 discovery requests--we have a request for documents
13 and a set of interrogatories, questions that have to
14 be answered under oath.
15 We ' ve tried to, in our discovery and in our
16 pleadings, our Answer and our proposed Counterclaim,
17 raised all the possible issues that could be raised;
18 the issues of fraud and misrepresentation of double
19 counting with regard to the improvement moneys, and
20 as Commissioner Eckstein mentioned, the possibility
21 of an understatement of the gross revenues .
22 The possibility of an overstatement of the
23 capital improvements or a mischaracterization of
24 normal operating expenses as capital improvements .
25 We 've raised all of those issues in our
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1 pleadings . And in our request for documents we ' ve
2 asked for tax returns .
3 We 've asked for sales tax and income tax
4 returns, financial records .
5 And essentially what the litigation would give
6 us the right to do would be to conduct a complete
7 audit of this business to find out whether revenues
8 have been under-reported.
9 Whether capital improvements have been
10 overstated or mischaracterized.
11 And I think we see in tax returns what true
12 capital improvements, what depreciable items are
• 13 reflected on the tax returns; what were merely
14 expense items .
15 And we have the opportunity with help either
16 through the City' s accounting staff or through an
17 outside accounting person to really audit this
18 situation and find out whether or not the lease has
19 been fully complied with.
20 So, this, these pleadings are more extensive
21 perhaps than what we ' ll actually be filing.
22 What I was hoping to do was to solicit input
23 from the Commissioners, from the Mayor, from Katie
24 and Bill .
25 And then we would try to narrow this down to
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1 'I
something that t at we really felt was viable and
2 meritorious .
3 MAYOR DALE : Are you aware that we 've got
4 property that legally belongs to the City, and
5 eminent domain, including the County--When the
6 County bought the property to four-lane 46-A? He
7 was paid for that .
8 And then he tried to take that as a credit,
9 even though he ' s been paid for it . Were you aware
10 of that?
11 MR. BRENNAN: No.
12 COMMISSIONER LESSARD: He tried to take the
13 credit in the context--
14 MAYOR DALE : He tried to take credit for that;
15 and his Attorney says it makes no difference, he
16 still gets--whether he got paid for it or not, he
17 still gets to take that as a credit .
18 And we all said No, no, no. Yes, he
19 received. . .Tony, I forget how much money, but it was
20 a substantial amount, two hundred thousand, a
21 hundred and sixty or eighty thousand, do you
22 remember how much--
23 COMMISSIONER LESSARD: It was over a hundred
24 thousand.
25 MAYOR DALE : A hundred and sixty eight thousand
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1 comes to my mind. 43
2 And he tried to take that again as a credit--
3 because he--
4 COMMISSIONER LESSARD: --part of his cash flow.
5 MAYOR DALE : And he tried to take that money
6 and use it then as a credit . So that is the type of
7 thing that really gets us upset throughout all of
8 this stuff .
9 And do we know, for instance--I keep hearing
10 over and over and over in my daily walk that prior
11 City Officials played golf out there for free, many,
12 many, many, many, many times .
13 I mean that would be a substantial element, I
14 would think, here, too, because that is lost
15 revenue, in all due respect .
16 COMMISSIONER ECKSTEIN: Let me just make this
17 comment . And I want to make it to the Attorneys and
18 also to Bill, to refresh his memory.
19 The golf course was something that--and if I
20 may also play Devil ' s advocate, if I may do that,
21 Counselor, Jay?
22 MR. BRENNAN: Yes .
23 COMMISSIONER ECKSTEIN: And Mike?
24 MR. WRIGHT: Yes .
25 COMMISSIONER ECKSTEIN: I 'm going to play
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1 Devil ' s advocate here a little bit . 44
2 I can remember when there was a possibility of
3 the City getting the course back; because one of
4 the City Commissioners came to me and said, "Would
5 you please run the golf course?"
6 MAYOR DALE: When was this?
7 COMMISSIONER ECKSTEIN: About nineteen eighty
8 and--oh, before Daniels became involved.
9 And Tony Carioni is the guy' s name, was the
10 other partner.
11 And Daniels and Tony Foncica and Carioni--
12 Foncica was a very minor partner, I believe . . . to go
• 13 over the course .
14 And in nineteen eighty six, I think, I got
15 elected to the City Commission. And we took off in
16 nineteen eighty seven; and there is a group of
17 people that very much, like the Mayor, that were
18 interested in receiving some money from the golf
19 course, because he had angered a lot of people with
20 his policies out there as, you know, his attitude .
21 And many people started to leave the golf
22 course and went to Timacuan and other places like
23 that .
24 And they were angry. And so there were
25 meetings that Betty Smith was called into and that I
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• 1 was called into. 45
2 And that is when we asked Bill to look at the
3
lease . And Bill came back and said, Well, these
4 are minor breaches . These are correctable . They
5 can put in the junior program out there . They can
6 do this, this and this and correct all of these
7 problems and their story. "
8 Well, here is my argument : I ' ll plead guilty,
9 that I was part of the Commission that took a very
10 benign attitude towards the golf course .
11 And, you know, it was kind of a Good Old Boy
12 system. It existed with Mike Welchel . The City had
• 13 never paid--received any revenue .
14 This is something that was audited by, I
15 believe, Henry Tamm, at that time, was our City
16 Clerk.
17 I think he was looking at police revenues
18 coming in. The City Commission never really saw and
19 audited the statement from the golf course, and was,
20 you know, just went on and on and on.
21 And so when it went out of McNulty' s hands and
22 Pierce ' s hands, who are two Good Old Boys here in
23 Sanford. . . and this guy started getting everybody
24 mad. . . then people wanted to start looking at this
25 lease .
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110
1 Now, here is what I 'm saying: If I were
2 arguing this case I would say, you know, for so many
3 years, and it wasn' t until this current
4 administration--
5 MAYOR DALE : Umm-hmm--
6 COMMISSIONER ECKSTEIN: --took over, that for
7 so many years the City--even this Law Firm,
8 Colbert ' s Law Firm, you know, really was not pro-
9 active in pursuing the revenues .
10 Of course, he was not given direction. I 'm
11 not, in all honesty with Bill--But, but we were not
12 pro-active in trying to receive any revenue from the
411 13 golf course .
14 And it just went on until this current
15 administration took over and with the Mayor and the
16 two new Commissioners that even care and be pro-
17 active, now all of a sudden we want to. . .we want to,
18 you know, go back and receive the revenues that we
19 think we deserve .
20 Well, you know, I think the Judge is going to
21 be very hesitant to look at that unless we really
22 can prove some things that he did, you know, in a
23 very--you know, surreptitiously to fraud, you know,
24 to really--
25 MAYOR DALE : That we really were defrauded,
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• 1 that we were defrauded; that we were lied to.
2 COMMISSIONER ECKSTEIN: I 'm claiming that
3 issue . I 'm making that point .
4 MAYOR DALE : Me, too .
5 COMMISSIONER ECKSTEIN: And I 'm making that
6 point . I 'm not defending--
7 MAYOR DALE : Well, it is a point .
8 COMMISSIONER LESSARD: You have raised an
9 important issue, Commissioner.
10 COMMISSIONER ECKSTEIN: And I raise that issue;
11 and then, you know, what about Welchel? What about
12 the capital improvements out there?
• 13 And, you know- -and the way capital improvements
14 are done, well, what we ' ll do here is we ' ll build
15 this shed over here .
16 Give me ten thousand dollars . And Robitad
17 (spelled phonetically) is going to build this shed,
18 and, you know, he lives out here; and he has
19 certain privileges .
20 And he drives a cart . So we ' ll say that is ten
21 thousand dollars . Robitad has never claimed that as
22 revenue . I 'm just making this up.
23 But if he can show us that this has really cost
24 him, you know, this is kind of like the barter
25 system.
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1 Jack Daniels believes in the barter system. I 4
2 guess that ' s the right word, Larry.
3 COMMISSIONER LESSARD: That ' s what it sounds
4 like to me .
5 MAYOR DALE : And the barter system defrauds the
6 taxpayers .
7 COMMISSIONER ECKSTEIN: Exactly. But I was
8 part of the Commission that, you know, after that,
9 what Bill did for us in eighty-eight, you know, that
10 was the end of the, end of the story, that was the
11 end of the line .
12 We just didn' t go after the capital
• 13 improvement . When he redid the fairways or when he
14 did this, you know, he presented his thing in; we
15 had no real audit of it .
16 We didn' t go out there and see if we had fair
17 value for what he said he paid. So, my argument is,
18 you know, that the way he . . . the way he performed is
19 the way he has always performed.
20 And previous Commissions, me being part of it,
21 are at fault and, you know, mia culpa on my part .
22 And, of course, we have talked amongst each other.
23 But even the City Managers weren' t pro-active .
24 Nobody was .
25 So, I ' ll plead that type of argument and, you
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know, I think that Jack Daniels will kind of say the
2 same thing unless we really can show that he served,
3 that he acted surreptitiously in a way to defraud
4 the City of much revenue .
5 COMMISSIONER LESSARD: Right . And along those
6 same very lines, you know, to get down to brass
7 tacks, I mean how far back can we go or can you guys
8 go and bring this to court and what-have-you?
9 Do you go back to day-one when Jack Daniels
10 took it over?
11 MR. BRENNAN: Well , that ' s the way we have
12 prepared these pleadings, but Commissioner Eckstein
41/ 13 has raised an excellent point .
14 MR. WRIGHT: Sure .
15 MR. BRENNAN: There are issues of waiver,
16 issues of estoppel . He has already pled those in
17 his lawsuit, that we are estopped from going back
18 into the past .
19 There is a statute of limitations . Normally,
20 on a fraud claim it ' s a four-year statute of
21 limitations . On a breach of contract the claim is
22 five years .
23 Those are going to be very viable defenses that
24 will be raised and we would have to overcome . And I
25 can' t tell you with any certainty today whether
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• 1 those could be overcome .
2 But that is one of the reasons why I very
3 strongly believe that you don' t abandon negotiations
4 and abandon settlement and put all of our eggs in
5 the basket of pursuing a lawsuit .
6 MR. WRIGHT: Right .
7 MR. BRENNAN: That we pursue on both tracks .
8 And I think in speaking with Bill before coming to
9 this meeting, I have agreed a hundred percent with
10 Bill ' s assessment of the case and with the
11 settlement that Bill attempted to bring to closure
12 under all the circumstances . . . as I know them at
1
13 this point in time seem like a reasonable approach
14 of getting the matter--
15 MAYOR DALE : Well, if you can prove fraud,
16 can' t you, doesn' t that statute of limitation go out
17 the window?
18 MR. BRENNAN: Well, the statute applies--it
19 kicks in when we knew or should have known.
20 And that is going to be, for example, if a
21 former Commission--It becomes a mixed question of
22 facts and law.
23 But if some former Commissioners, if there was
24 knowledge or if there was enough--
25 MAYOR DALE : What if those Commissioners were
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1 playing golf out there, would that be--
2 MR. BRENNAN: Well, then, that would be--
3 COMMISSIONER LESSARD: How would you ever know
4 that, though--
5 MAYOR DALE : You do both; and you get witnesses
6 to come in and testify.
7 COMMISSIONER ECKSTEIN: Jack Daniels never
8 did. It was the previous owners who let
9 Commissioners--
10 MAYOR DALE: I don' t know that .
11 MR. WRIGHT: We couched this in the pleadings
12 in the context that we are going to pursue this
13 claim.
14 MR. BRENNAN: Right .
15 MR. WRIGHT: And at a minimum, they are chips
16 on the table .
17 MR. BRENNAN: Yes .
18 MR. WRIGHT: To give him incentive to come to
19 the table and be realistic about what he will and
20 will not do with the City.
21 Because I think, as I can see from the past,
22 he, it is almost as if he is not taking anything
23 you-all have done too seriously.
24 MR. BRENNAN: Right .
25 MAYOR DALE : Who was the Mayor when this lease
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1 was signed?
2 COMMISSIONER LYONS : Lee Moore .
3 COMMISSIONER ECKSTEIN: Lee Moore .
4 MAYOR DALE : Let ' s see, and you' re saying that
5 Jack never let anybody play golf out there for free?
6 COMMISSIONER ECKSTEIN: The only person. . .all
7 right, part of the contract tells me McNulty was
8 getting a free ride, membership for the rest of his
9 life . Okay?
10 There were no real Commissioners playing golf
11 back then. The . . .one . . . the only Commissioner I
12 know of, and I think he had to pay- -McNulty and Nim
10 13 (spelled phonetically) didn' t charge them, I don' t
14 think; but . . .was Dave . . . .Milt--
15 MAYOR DALE : Dave Balt--
16 COMMISSIONER ECKSTEIN: Milt, Milt Smith.
17 MAYOR DALE : Milt Smith?
18 COMMISSIONER ECKSTEIN: Milt Smith is the only
19 one that played golf on the greens . Nobody on the
20 Commission played, when I was on the Commission--
21 MAYOR DALE : Blake (spelled phonetically)
22 didn' t play golf--
23 COMMISSIONER ECKSTEIN: --with the exception of
24 Lee Moore .
25 MR. WRIGHT: So, your point being that if they
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1 were playing golf there was no incentive on their 53
2 part--
3 MAYOR DALE : Sure . What do they care? They've
4 got their own private membership out there .
5 MR. WRIGHT: --to make an issue about it .
6 MAYOR DALE : And I, here again, I 'm playing
7 Devil ' s advocate .
8 COMMISSIONER ECKSTEIN: I don' t think Lee Moore
9 did. I think Lee Moore paid.
10 MAYOR DALE: Well, I 've heard that he didn' t .
11 COMMISSIONER LESSARD: But at the same time,
12 how the Court is going to look at this . You 've got
13 a staff at City Hall, you've got a City Manager. . . It
14 doesn' t matter what happens, the City Hall today, to
15 accord the same City Hall today with ten, twenty
16 years ago--
17 COMMISSIONER LYONS : The same with
18 corporations .
19 COMMISSIONER LESSARD: Right .
20 MR. VAN DERWORP: And we ' re bound by the
21 actions of the agencies .
22 MAYOR DALE : Yes, unless there was fraud in a
23 case like that, if there were fraud somewhere in the
24 thing and they were defrauding the public, then that
25 is a different ball game .
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1 But I 'm just saying Why would we leave that 54
2 stone unturned, you know? There is enough talk out
3 there, to me . . . I don' t know what you-all are
4 hearing. . . that there was .
5 And it is at least worth investigating on the
6 part of the taxpayers, that that was occurring.
7 COMMISSIONER LESSARD: Mayor, I tell you what .
8 I feel like we ' re in good hands . And I ' ll tell you
9 today--
10 COMMISSIONER WILLIAMS : I ' ll say the same .
11 COMMISSIONER LESSARD: And I can tell you it ' s
12 going to be very difficult to mediate a settlement .
411 13 I mean in my opinion that hundred thousand
14 dollar deal was a sweetheart deal .
15 MAYOR DALE : For him.
16 COMMISSIONER LESSARD: Yes, absolutely.
17 MAYOR DALE : They should have jumped all over
18 it .
19 COMMISSIONER LESSARD: We should have jumped
20 all over it and settled it . I didn' t like the deal
21 at that time, but that is water under the bridge .
22 I, I ' ll say this, though: My position is going
23 to remain fairly firm.
24 Aggressive litigation is oftentimes the best
25 catalyst for settlement .
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1 MAYOR DALE : I agree with that . And we best
2 get on with it .
3 COMMISSIONER LESSARD: Look, I love all of
4 this . We ' re about to get into litigation. And I
5 think we are now in a spot where we ' re going to have
6 to litigate or at least posture strong litigation to
7 get ourselves out of this mess .
8 That is the only way we ' re going to achieve a
9 settlement at this point .
10 This is what, you know, whichever direction we
11 go I said I ' ll be with the Commission. I ' ll walk
12 out this door, you know, arm-in-arm on the decision
13 they make .
14 The only thing that I think that you' re going
15 to find is, you need to figure out what your outcome
16 is going to be, I mean what the ultimate outcome
17 would be, because you guys can' t go into this
18 without knowing--
19 MR. BRENNAN: Well, let ' s give them some--We
20 need some goal, because--
21 MAYOR DALE : That ' s what I thought . The
22 outcome, to me, is twofold.
23 If we can get a settlement, let ' s agree on a
24 settlement that we ' ll take .
25 But if he just won' t settle and we get so far
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• 1 into it we might as well litigate, I 'm willing to go
2 for broke .
3 And to me, going for broke means going all the
4 way back to the constitutionality that we gave that
5 thing away, the taxpayer--we gave away a taxpayers '
6 asset, which is illegal .
7 I don' t, I mean to me we just gave it away.
8 We just simply said Hey, you want a golf course?
9 Take this one .
10 COMMISSIONER ECKSTEIN: Well, the reason why we
11 gave it away, there was consideration. Sure, we
12 didn' t want to fool with the golf course .
13 MAYOR DALE : Well, it doesn' t matter. From a
14 legal standpoint it doesn' t matter that you didn' t
15 want to fool with it ; so you gave the taxpayers '
16 asset away. You didn' t do that--
17 COMMISSIONER ECKSTEIN: No, I know that, but it
18 makes sense sometimes that you don' t--At that time
19 it was not considered the asset it is considered
20 today.
21 MAYOR DALE : It doesn' t matter. It still had a
22 value at the time . And it--
23 COMMISSIONER ECKSTEIN: Not much of a value .
24 MAYOR DALE : Oh, I disagree with that .
25 COMMISSIONER LESSARD: Well , the Mayor is
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1 right . We need to decide what settlement we want to
2 take .
3 COMMISSIONER ECKSTEIN: You' re forgetting the
4 third choice .
5 COMMISSIONER LYONS : Well , wait, wait a second.
6 Let me say here real quick--
7 COMMISSIONER ECKSTEIN: We set goals .
8 COMMISSIONER LYONS : We said a hundred thousand
9 dollars, okay, that August seventh letter says that .
10 It doesn' t say anything else about changing the
11 lease . Okay? That is why, you know, I know that
12 Brady had some loans to pay--
13
• MAYOR DALE : Right .
14 MR. VAN DERWORP : But it doesn' t say anything
15 about changing the provisions of the lease---
16 COMMISSIONER LYONS : Let me finish: So, if we
17 do decide on some kind of a--We need to clearly
18 know, because I called Bill and asked him, you know,
19 what things are we asking of- -because I don' t think
20 that we were unclear on that, a hundred thousand
21 dollars, yes .
22 You know, if we had to reduce green fees,
23 whatever, but we never as a Commission, I don' t
24 think, said Yes, we ' re on the same page on that .
25 And what the Mayor is saying about going for
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1 broke, I 've talked to this fellow a couple of times,
2 twice, and that ' s it .
3 The first time I ever met him and talked to
4 him.
5 And I think that we are in the position, we can
6 get whatever, and that is what I was saying, we can
7 get, I think, whatever we ' re looking for, whether
8 it ' s a settlement or whatever, get the golf course
9 back.
10 I mean I think it could be done .
11 COMMISSIONER ECKSTEIN: I agree, but let me
12 tell you a third choice .
• 13 COMMISSIONER LYONS : A third choice?
14 COMMISSIONER ECKSTEIN: Here is the third
15 choice, and this, and I very seldom make comments
16 that I think I 'm right on unequivocally.
17 COMMISSIONER LYONS : Umm-hmm.
18 COMMISSIONER ECKSTEIN: The citizens of this
19 town want a new lessee of that course .
20 COMMISSIONER LYONS : Right .
21 COMMISSIONER ECKSTEIN: They want a new
22 operator of that course . They have said to me for
23 thirteen years, they said, "Please, whatever you do,
24 get us somebody in there and we ' ll come back.
25 Because he ' s not very friendly to the citizens . It
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is not a user-friendly course . The people in 59
2 Sanford have no, you know, really-- " it used to be a
3 Mecca, okay?
4 I mean I knew every attorney in town, I knew
5 every judge in town; I knew every politician in
6 town because of Mayfair.
7 And you know the same people . And everybody
8 left, as if to the four corners of this County and
9 other counties .
10 What I don' t want is, I don' t want to hold up
11 this litigation--hold this thing up with litigation,
12 which precludes another person from coming in here .
• 13 Now, I ' ll tell you, if he had a buyer right now
14 who is going to come in here, who is going to be a
15 good operator, user-friendly to the City, I ' d say,
16 Well, I don' t want any litigation. I want the new
17 guy in there .
18 That ' s my number one goal .
19 MAYOR DALE : Well, he ' s got several but he
20 won' t tell you about it .
21 COMMISSIONER ECKSTEIN: But do you actually, if
22 there is--but that is what I 'm saying, that is a
23 third--if he won' t--
24 MAYOR DALE : But he won' t .
25 COMMISSIONER ECKSTEIN: But, see, he says he
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1 can' t because he ' s got this--
2 MAYOR DALE : This is an old-time personal
3 friend of his--
4 COMMISSIONER ECKSTEIN: I agree--
5 MAYOR DALE : --called Berry Austin (spelled
6 phonetically) .
7 COMMISSIONER ECKSTEIN: And I told him that .
8 That I would like to see a new owner come in there
9 and, you know--
10 MAYOR DALE : I can tell you for a fact, because
11 they have called me . And I 'm talking about people
12 with the money, people with the expertise and people
13 with the desire to make that a course .
14 And I have to tell them when they call me, "I
15 don' t have anything to lease to you, guys . "
16 "Jack Daniels right now has the lease, even
17 though it ' s under litigation, I can' t negotiate a
18 lease with you. "
19 But these people are calling me, beating their
20 heads against the wall saying, you know, The man
21 won' t even talk to us, and here we ' re willing to pay
22 him X amount of dollars .
23 And it is a substantial amount .
24 COMMISSIONER ECKSTEIN: Suppose he ' s willing to
25 talk now?
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• 1 MAYOR DALE: Well, he hasn' t been willing to
2 talk.
3 MR. BRENNAN: We could do that as a part of the
4 settlement offer.
5 COMMISSIONER ECKSTEIN: That ' s what my third
6 alternative involved. If--
7 MAYOR DALE : That is what I would like to see.
8 COMMISSIONER ECKSTEIN: That ' s the thing.
9 MAYOR DALE : I really don' t want, I mean when
10 you saw my own letter and the thing saying, "I ' ll
11 settle-- " what a ridiculous thing that was .
12 The point I was making was that the people of
• 13 this town that own it, the taxpayers--
14 COMMISSIONER ECKSTEIN: Right .
15 MAYOR DALE: To have a valuable asset, and
16 they' re not getting a dime out of it .
17 COMMISSIONER ECKSTEIN: And we don' t--
18 MAYOR DALE : I would really not rather take it
19 back--
20 COMMISSIONER ECKSTEIN: Right .
21 MAYOR DALE : And I certainly don' t want to sell
22 it for that amount . Because I think it ' s important
23 that we keep that large tract of land for the
24 benefit of the taxpayers that own it .
25 And the golf course, you know, might be the
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• 1 very thing to do with it; and it has been and might
2 continue to be .
3 I would a whole lots rather get something that
4 is of benefit to the taxpayers from a recreational
5 standpoint .
6 But this has not been that .
7 COMMISSIONER LESSARD: And actually the City,
8 technically, is subsidizing that, through irrigation
9 and other--
10 MAYOR DALE : Subsidizing it? We ' re paying for
11 it .
12 COMMISSIONER LESSARD: Right . Applying the
13 ordinance, number one, is a hundred thousand
14 dollars, here is the settlement and an assignment of
15 the lease .
16 MAYOR DALE : Right . And he didn' t accept that
17 settlement . So that is dead. Forget that .
18 COMMISSIONER LESSARD: Okay. But what I 'm
19 saying is, I mean this is what Whitey is saying, and
20 this is the catch, is Where is the assignment of the
21 lease?
22 Is that before or after--
23 MAYOR DALE : Well, it always has been my
24 intent, and I thought it was your intent, and it was
25 always my intent, and I assumed we were in this
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1 together, that we would accept less than the two 63
2 hundred and fifty five thousand dollars if he would
3 make certain concessions in an assignment of a new
4 lease .
5 COMMISSIONER ECKSTEIN: And that was the
6 agreement .
7 COMMISSIONER LESSARD: I don' t know whether we
8 ought to do the hundred thousand without any--
9 MAYOR DALE : Because it was intended, because
10 that letter--That was the intent of the settlement,
11 a hundred thousand---That was because Berry Oster
12 was coming in saying Yeah, I agree to all of that,
• 13 I ' ll do all of those things .
14 So we, we thought that that was, you know, he
15 was saying, "I ' ll do all of those things . " So,
16 fine .
17 COMMISSIONER LESSARD: Right .
18 MAYOR DALE : "Then we ' ll settle for a hundred
19 thousand. "
20 COMMISSIONER ECKSTEIN: Yes, but that never
21 happened.
22 MAYOR DALE : That never happened.
23 COMMISSIONER LYONS : That was through Berry?
24 MAYOR DALE: Yeah, that ' s right . He said that
25 he would do all of those things, and make that lease
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1 a better lease for the taxpayers that own the golf
2 course .
3 COMMISSIONER LESSARD: So, obviously, what
4 we ' re going to do, the financial settlement and the
5 lease--
6 MAYOR DALE: In any event, that settlement in
7 August is out the door.
8 He did not accept it .
9 COMMISSIONER ECKSTEIN: Well, we ' ve made our
10 presentation.
11 We need to listen to these guys .
12 COMMISSIONER LESSARD: Right .
• 13 COMMISSIONER ECKSTEIN: And I think they' re the
14 experts . And, you know, now, I think you can see
15 the way we feel .
16 And, you know, and lay out the parameters .
17 Nothing is guaranteed but you know some of the
18 history of this right now.
19 MAYOR DALE : Well, let ' s see if we can--
20 MR. COLBERT: I would like to hear from
21 Commissioner Williams for a minute if we could.
22 MAYOR DALE : All right .
23 MR. COLBERT: I know I work for all five of
24 you--
25 MAYOR DALE : Well, let me ask a couple of
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• 1 things and then I ' ll let you speak. 65
2 I just want to ask a couple of things before I
3 forget it .
4 MR. COLBERT: Sure .
5 MAYOR DALE : In this list of things that you' re
6 talking about that you want to see the materials,
7 the breaches and this and that and the other, there
8 is nothing--I 've not seen this, just looking over
9 this . Maybe it ' s in there .
10 But there is nothing in here about him failing
11 to keep a program that he said he would in the
12 lease . The pro shop, you know, and all those things
13 that he was supposed to do.
14 MR. BRENNAN: We 've got those specific items--
15 MAYOR DALE : I haven' t seen any of it . And
16 then when you said a while ago--
17 COMMISSIONER ECKSTEIN: He did do it .
18 MAYOR DALE : --several years ago--
19 COMMISSIONER ECKSTEIN: For a short period of
20 time . Well, he did it .
21 MAYOR DALE : He hasn' t consistently. He is
22 not doing it now.
23 COMMISSIONER ECKSTEIN: In eighty eight he went
24 back--
25 MAYOR DALE : He hasn' t done it since I 've been
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2 COMMISSIONER ECKSTEIN: Well , in eighty eight
3 he went back and addressed those minor breaches .
4 MAYOR DALE: Yes, but the lease doesn' t say you
5 do it when you get caught .
6 COMMISSIONER ECKSTEIN: I understand it .
7 That ' s why I 'm at fault, because we didn' t follow
8 through on it .
9 MAYOR DALE: But that ' s not in here, not that I
10 can see .
11 COMMISSIONER LESSARD: Okay.
12 MAYOR DALE: Commissioner Williams, they want
• 13 to hear from you.
14 COMMISSIONER WILLIAMS : I just wanted to say
15 that my position would be for us to work towards our
16 initial goal ; and that was to, you know, agree to
17 the hundred thousand dollars, plus a change in the
18 lease .
19 And I think the bottom line . . . that ' s the bottom
20 line .
21 MAYOR DALE : Well, let ' s get a consensus here
22 amongst ourselves so these guys can proceed.
23 Do we want to settle it? And if so, what do
24 you want to--the large parameters of the settlement
25 to be?
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1 MR. BRENNAN: Do you want a change of the lease
2 while it is in the hands of Mr. Daniels?
3 MAYOR DALE: I think you' re going to have to,
4 as part of this settlement, I think the changes in
5 the lease are going to have to occur as part of this
6 lawsuit settlement if he ' s just going to sit on his
7 hands .
8 Otherwise you could be maybe looking at a
9 tortious interference of a lease later on. If you
10 settle it and then say that--See, if you can' t
11 settle it, then leave the lease the way it is if
12 that ' s part of the settlement; am I right?
• 13 MR. WRIGHT: Right .
14 MAYOR DALE : Okay.
15 MR. BRENNAN: Now, the other thing--
16 MAYOR DALE : That would be in his hands .
17 MR. BRENNAN: I ' ll put this on the table . I
18 don' t know if it ' s viable at all ; but we could, if
19 it is feasible, to buy him out of the lease and
20 settle in that direction so that if we re-lease it
21 to another third party it is a party that we select,
22 as opposed to someone that--
23 COMMISSIONER LESSARD: Right .
24 MR. BRENNAN: --that he foists upon us . This
25 is my part--
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1 MAYOR DALE : Well, why would he want us to buy
2 him out when he ' s got people willing to pay him a
3 substantial, what I would say is a substantial sum?
4 We would have to match that .
5 MR. VAN DERWORP: We couldn' t pay it . We don' t
6 have the money.
7 COMMISSIONER LESSARD: He wouldn' t sell it to
8 us anyway, even if we did have the money. He is
9 just trying to make the best of things--
10 MAYOR DALE : We might just talk about a
11 consensus, yes, or the settlement--Dr. Williams has
12 said what she would like to see us settle for, and
13 that is a hundred thousand dollars, with the
1411
14 provisions in the lease that are more beneficial to
15 the taxpayers .
16 Are you in agreement with that?
17 COMMISSIONER LESSARD: I say this, Mayor: I
18 know I 'm going to be the minority. I was in the
19 minority on that hundred thousand dollar thing.
20 I think to become so preoccupied with
21 settlement that it corrupts our strategy. And that
22 is my vote .
23 I say we go into this looking to litigate
24 aggressively; and settlement is a byproduct rather
25 than a target, so to speak.
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1 COMMISSIONER LYONS : My question, though, is
2 Can we go ahead with this and try to settle at the
3 same time?
4 MR. BRENNAN: Yes .
5 MR. WRIGHT: Sure .
6 MAYOR DALE : Well, I think Commissioner Lessard
7 makes a good point . We don' t want to be so mind set
8 on taking a settlement . . .because I 'm. . . I still think
9 that when we get into this discovery there is going
10 be a lot of things that he doesn' t want the
11 taxpayers to know about .
12 COMMISSIONER LESSARD: Well, that ' s what I 'm
• 13 saying--
14 MAYOR DALE : And if we settle it we ' re never
15 going to find those things out on- -for the benefit
16 of the taxpayers .
17 I wouldn' t settle or--that ' s my--
18 COMMISSIONER LESSARD: I just think it corrupts
19 our strategy, you know, because like Mike said
20 earlier, Jack Daniels is not taking anything this
21 Commission has done seriously.
22 And I will tell you this, though, if we do go
23 the way I 'm saying, at a certain point you reach a
24 threshold of spending on legal fees and energies--
25 COMMISSIONER LYONS : Right .
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!II 1 COMMISSIONER LESSARD : - -that you do end up 70
2 going for broke on it .
3 MR. WRIGHT: I think the tact you take is, you
4 give Jack the idea and the perception in his mind
5 that you want to first and foremost pursue this
6 litigation to its most aggressive level, that--but
7 at the same time do not do anything to discourage
8 him or his lawyer from talking to you about what
9 settlement they want to do.
10 Because you' re going to know when he wants to
11 settle, because then he starts talking on a more
12 serious level .
• 13 My perception is that he has not been that
14 serious about this matter.
15 COMMISSIONER LESSARD: You ' re right .
16 COMMISSIONER WILLIAMS : I ' ll go along with
17 that . I--
18 COMMISSIONER ECKSTEIN: Gentlemen, I ' ll agree
19 with that . And I 'm not going to ask you if you have
20 a smoking gun.
21 Because I assume you do. And I don' t want, I
22 don' t think it ' s proper for us to talk about that .
23 But if you think that there is something that
24 we need to move forward to because of the discovery
25 nature of it, of this . . . of this litigation, and
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1 there is, and you feel confident there is a smoking
2 gun out there, not the fact that he fills in the
3 swimming pool and--because I think the Mayor is, I
4 think that is--the Mayor is wrong there on the Pro
5 Shop and all of these other things .
6 But there has got to be more of a smoking gun
7 there . And I trust that you have . . . that you have
8 something that you can go with that will maybe give
9 us what we need to push us over the threshold,
10 because courts are going to be very leery of having
11 somebody doing business for eighteen years--
12 COMMISSIONER LESSARD: Oh, yes .
• 13 COMMISSIONER ECKSTEIN: And, you know. . .and I
14 understand where Larry was coming from; but I also,
15 you know, I 've been part of losing some, too, by
16 juries .
17 And they are very reluctant to take away
18 something that is a proprietary interest or a vested
19 interest all of these years that he has had it .
20 I ' ll be honest with you. The Mayor, you know,
21 he is a bull in a china closet; and, you know, his
22 strategy is probably a good one .
23 But if you guys have a compelling case that you
24 think--I ' ll go, you know, I 'm with you a hundred
25 percent and you will hear no more from me .
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• 1 COMMISSIONER LESSARD: In other words, you
2 don' t want to settle it, is what you' re saying?
3 COMMISSIONER ECKSTEIN: Well, I 'm just leaving
4 it up to them That ' s what I 'm saying, it ' s
5 there . . . they are the, they are our Counselors,
6 right?
7 I mean that is what they went to school for?
8 MAYOR DALE: Well, let me see if I can give you
9 a consensus here .
10 This Commission, I think what I hear them
11 saying, unless I 'm wrong in what I 'm hearing, we
12 want to pursue this as aggressively as we can.
13 If settlement comes out of it, good.
14 MR. BRENNAN: The, as far as settlement goes,
15 do we want to pursue settlement by negotiation, by
16 mediation, by what means?
17 MAYOR DALE: I think if settlement comes from
18 that, then we would look at it later.
19 COMMISSIONER WILLIAMS : What do you think?
20 MAYOR DALE : I mean don' t you think the
21 aggressive way to do this si to countersue him
22 immediately?
23 MR. BRENNAN: Well, no, we can' t countersue him
24 immediately.
25 Let me talk to you about the timing. I think
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1 we should pursue mediation, then, to answer your 73
2 question.
3 Because of the dynamics of that third party;
4 but the, on our counterclaim, because there are acts
5 of breach. . . that we have to give them sixty days
6 notice of . . . the timing of it is, we could send our
7 discovery immediately, the request for documents and
8 the interrogatories .
9 MAYOR DALE: Yes .
10 MR. BRENNAN: As far as any breach goes, if we
11 want to use it as a basis in our counterclaim to try
12 to terminate the lease we 've got to give them a new
• 13 60-day-notice letter.
14 MAYOR DALE : You mean all of this time that we
15 gave them sixty days didn' t count?
16 MR. BRENNAN: Well, we gave them sixty days
17 just on the two hundred and fifty five thousand.
18 That was the only breach that we put him on notice--
19 MAYOR DALE : Okay. So on all of these other
20 counts we 've got to give him sixty days?
21 MR. BRENNAN: Right . And what I would--We 've
22 got Bill and Katie ' s Motion to Dismiss pending.
23 By the time we get a hearing and get that
24 resolved, that ' s going to take about sixty days
25 anyway with the Judge ' s calendar.
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1 So we, we look at the sixty-day-notice letter
2 and the new breaches claimed.
3 We send out the discovery immediately. Send
4 them a new sixty-day-notice letter; and then we set
5 out, in about sixty days we can file the
6 counterclaim.
7 And at the same time we can be having
8 discussions about the possibility of mediating the
9 case .
10 MAYOR DALE : Does that suit you-all?
11 COMMISSIONER LESSARD: That ' s fine, but somehow
12 you need to be aware of whatever terms, the lease
411/ 13 changes that the Commission wants to make .
14 MAYOR DALE : We can arrange at that point to
15 have another meeting.
16 MR. WRIGHT: One thing, one phase, and I think
17 you already understand this, is that no matter what
18 changes you have sitting here, it doesn' t
19 necessarily mean that he ' s going to have all of a
20 sudden---if I may use the words "Get religion, " in
21 the meantime and abide by all of them, because--and
22 you know, basically what the City bargained for is,
23 I think what the City bargained for was that they
24 wanted to benefit for the public, you know, a lot of
25 different ways, including programs, maybe some
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1 discounts or some programs for citizens who are 75
2 wanting programs for youth or a seniors program.
3 And there are many different programs that are
4 physically in there . . . they wanted a Pro Shop that is
5 run in a first class way.
6 There are a lot of things that are specifically
7 in the lease that the City wants and they are not
8 getting. And--
9 MAYOR DALE : Plus, we want the course to be
10 taken care of .
11 MR. WRIGHT: And you want the course to be
12 taken care of . None of those things are being done .
• 13 And if you tighten the lease up and make it even
14 more specific you've still got to have somebody on
15 the other side who is ready, willing and able to
16 abide by the lease and act in good faith and not
17 push the City to--
18 MAYOR DALE : Well, let me ask you this, playing
19 the Devil ' s advocate here . . .as part of that
20 settlement could we insist that he assign that lease
21 to somebody of our agreement?
22 MR. WRIGHT: I think you can put that on the
23 table, but it is . . . it is hard to do. Or you could
24 be--as part of your settlement saying We ' re not
25 going to settle unless you--
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• 1 MAYOR DALE: I mean obviously he is wanting to
2 get, he has told us that he wants the power to blah-
3 blah-blah. And part of the thing has been on the
4 streets . We 've all heard it . I assume we 've all
5 heard it, is that Berry is going to give him an
6 under-the-table lease .
7 Now, I 've heard that all over. Have you heard
8 that?
9 COMMISSIONER LESSARD: Make it instead that the
10 City insists, can we say Agreeable to both parties?
11 You know.
12 MR. BRENNAN: Yes, you have a lot of
411 13 flexibility in a settlement agreement .
14 COMMISSIONER LYONS : We 've got to get to that
15 point first, though.
16 MAYOR DALE : Yes, and that ' s a big "if . " But I
17 agree, Whitey, you know. . .you said I was a bull in a
18 china--I am an aggressive player.
19 I mean if somebody is beating on me I 'm going
20 to beat them back.
21 But I 'm not going to go out there and start
22 hitting on people; but if they' re hitting on me,
23 the best way to get out of that is to hit them back
24 and hit them hard enough that they leave you alone .
25 MR. WRIGHT: Yes, but I 'm telling you, the
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III1 judges and juries, I mean I 've seen some strange
2 things--
3 COMMISSIONER LESSARD: I don' t think this thing
4 will go to court if we do it right .
5 COMMISSIONER LYONS : I don' t think it will
6 either.
7 MAYOR DALE : But we ought to prepare for it .
8 COMMISSIONER LESSARD: Oh, absolutely.
9 MAYOR DALE: And if it does go to court, win
10 it .
11 MR. WRIGHT: Whitey, I think, and, Jay, please
12 break in if I 'm wrong, but I think. . . I think the
Ill) 13 City has strength; and I think the City has
14 weaknesses .
15 What I was trying to get at, you know, there is
16 no . . . there is no smoking gun or magic bullet here;
17 but the strategy of aggressively pursuing what
18 rights you either, the City has clearly under the
19 law or at least have a chance of making a good
20 argument that you have . . .and I think, also, is that
21 you' re probably weaker in the law area. You' re
22 stronger to the extent you can get it before a jury.
23 I 'm not sure that Jack is going to get--and I
24 don' t know this for a fact .
25 I mean I 'm not a member, I 'm not a citizen up
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1 here; and I don' t hang out up here a whole lot; 78
2 but my perception is, based on what I do know, is
3 that there are more people more likely than not, any
4 given person on the jury is not going to feel like,
5 when they look at the simple picture here . . .and the
6 simple picture is that lease of that course for
7 almost twenty years without paying one red cent, I
8 think most people--
9 COMMISSIONER LYONS : But, see, what is the
10 remedy here? It makes it--
11 MR. WRIGHT: Once you get beyond the--
12 COMMISSIONER ECKSTEIN: I mean an important
13 thing--yeah, but Jack comes out, yeah, he says,
14 "Okay. I 've given like three hundred thousand
15 dollars in service and I get fifteen thousand
16 dollars--
17 MR. WRIGHT: I think once you get beyond all
18 the legal maneuvers and the Motion to Dismiss and
19 Directed Verdict--
20 MAYOR DALE : Well, I was going to say--
21 MR. WRIGHT: --as to a smoking gun, that is up
22 to the jury.
23 MAYOR DALE: You don' t see our commission
24 chambers filled with people over here protesting
25 being mistreated by this Commission.
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1 MR. WRIGHT: No. And-- 79
2 MAYOR DALE : There hasn' t been one person that
3 has been on his side . So that ought to give you an
4 idea of how the people feel .
5 MR. WRIGHT: Well , the thing that I 'm concerned
6 with was that if there is indeed fraud out there,
7 like I said, you know, every--As hard as you try to
8 pay correct income taxes you do make mistakes .
9 MAYOR DALE : Yes, but as far as these numbers
10 go--
11 MR. WRIGHT: That is the smoking gun as far as
12 I 'm concerned.
• 13 MAYOR DALE : Oh, yeah. I wouldn' t say that .
14 That is one of the things that I would look for--
15 MR. WRIGHT: If we find this type of things,
16 well, that would really upset the judge .
17 MR. BRENNAN: Where the smoking gun is
18 presently is we know we haven' t received a penny of
19 rent since 1981 .
20 And do our eyes tell us that there are capital
21 improvements out there sufficient to offset the rent
22 during that period?
23 MR. WRIGHT: And we know that the course has
24 not been maintained.
25 If you go to any other golf course in Orlando,
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80
2 MAYOR DALE : It is not in good shape by any
3 means . Any golfer that you take out there . . .and
4 we've had ours out there at your request ; and he
5 has had people out there .
6 And they will tell you real quick it is not
7 being taken care of .
8 MR. WRIGHT: Well, what do you check to see?
9 Does he buy ten thousand dollars worth of fertilizer
10 or does he buy five? You know, that, how do you
11 verify that? I know you can do that but it is
12 tough. I mean--
13 MR. BRENNAN: It takes a lot of time, you' re
14 right .
15 MAYOR DALE : A lot of time .
16 MR. BRENNAN: And that is why we would pursue
17 settlement; no question about it .
18 MR. COLBERT: Okay. I think where we are,
19 gentlemen, we 've got a consensus of this Commission
20 to go forward aggressively with the litigation.
21 And going forward with some of the things that
22 Jay has mentioned here, in a timely fashion, over
23 the next sixty days or so.
24 Keeping in mind that there may be a potential
25 for settlement . If we detect some serious moves in
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411 1 81
that regard, or if we have anything significant to
2 report, we will request another Attorney-Client
3 session so we can apprise you-all of it .
4 In the meantime, if you-all do have a question,
5 you can certainly give us a call and we can talk to
6 you one-on-one .
7 As we go out from here I would ask you again or
8 caution you again; and that is, although it is not
9 illegal for you to say something outside this
10 meeting, it is ill-advised from a strategy
11 standpoint and it would be counter-productive to the
12 City' s case .
13 MAYOR DALE : Well, let me see if we have a
14 consensus on that . Whitey, you asked earlier--
15 COMMISSIONER ECKSTEIN: No, I said right up
16 front--
17 MAYOR DALE: Well, you asked that we have a
18 consensus not to discuss what went on in this room.
19 COMMISSIONER ECKSTEIN: Right .
20 MAYOR DALE: Do we have a consensus on that?
21 COMMISSIONER MEMBERS : Yes .
22 COMMISSIONER LYONS : And we will refer all
23 questions to you guys .
24 MR. COLBERT: It would also be appropriate,
25 perhaps, unless you-all particularly want the
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1 handouts that were given to you, to give that back
2 to us?
3 MAYOR DALE : Yes, that was my next question.
4 MR. COLBERT: Since that would go out over--and
5 be modified--
6 MAYOR DALE : If we want to look at it we can
7 come to your office, right?
8 MR. COLBERT: Yes .
9 COMMISSIONER ECKSTEIN: Do you like this, the
10 way we ' re going, Bill?
11 MR. COLBERT: It will be what it is, and it is
12 the wish of the Commission.
• 13 COMMISSIONER ECKSTEIN: And if you weren' t
14 comfortable you would say something?
15 MR. COLBERT: I would.
16 MR. VAN DERWORP: And based on past experience,
17 you know, if I receive any calls, if Daniels calls
18 me to talk about it, I 'm not going to even talk to
19 them?
20 MAYOR DALE : Refer it to Bill .
21 MR. VAN DERWORP: And if they send any
22 correspondence to any of us--
23 MAYOR DALE: Send it back.
24 MR. VAN DERWORP : Well, we usually give it to
25 Mr. Colbert .
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1 MR. COLBERT: Give it to me . 83
2 MR. VAN DERWORP: Also, there is an annual
3 maintenance report that was sent in that Jack. . .and
4 Jack knows that we' re working at the lease
5 provisions . . . I received a maintenance report last
6 week. Also, reviewing that--
7 MAYOR DALE : Well, share that with this
8 Commission.
9 MR. VAN DERWORP: And report that back with
10 the Commission?
11 And also the irrigation agreement, you know, it
12 is in effect until we change it . So I will be--
• 13 MAYOR DALE : Well, I asked about that at a work
14 session here a while back.
15 MR. VAN DERWORP: Yes .
16 MAYOR DALE : Does that agreement require us,
17 make us give that water to him?
18 MR. VAN DERWORP: Yes .
19 MAYOR DALE : I know whatever water he is using
20 he didn' t pay for; but does it require us to put so
21 many gallons of water a month, on that lease? Or
22 can we just shut it off?
23 MR. VAN DERWORP : I will have to report back to
24 you on that .
25 MAYOR DALE: I would like to look at that,
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• 1 because I would just as soon shut it off . 84
2 MR. VAN DERWORP : Now, on the irrigation and
3 maintenance, that is coming up in March.
4 COMMISSIONER ECKSTEIN: Fourteen thousand a
5 quarter.
6 MAYOR DALE : Okay. We need to adjourn this
7 with the doors open?
8 Are we ready for that?
9 MR. COLBERT: One other comment while we ' re in
10 here, I would like for Jay to review that letter one
11 more time before it goes out .
12 MAYOR DALE : All right . You got it .
• 13 MR. VAN DERWORP: Okay. I need to add in
14 something that you rejected--
15 MAYOR DALE : And none of us are going to have
16 any contact with Jack or his Lawyer or Pete Knowles
17 or anybody else representing Jack without the
18 authority of this legal team advising us on what to
19 do. So, you are not to have any contact with them
20 under any circumstances .
21 MR. COLBERT: We can open the doors, and it
22 will take us just a moment . Let me make a couple of
23 comments .
24 Okay, Commissioners, we are back in the public
25 part of our session. I appreciate your input and
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•
1 your comments . We have got direction from you. We 85
2 know how to proceed.
3 This concludes all of the things that I had to
4 discuss with you in the Attorney-Client session.
5 And, Mr. Chairman, you can adjourn at any time
6 you feel that that is appropriate .
7 MAYOR DALE : Thank you. We will adjourn the
8 executive session.
9 (Thereupon the meeting was concluded. )
10 CERTIFICATE OF NOTARY/CSR
11 STATE OF FLORIDA )
12 SS .
• 13 COUNTY OF SEMINOLE )
14 I, C. B . Ellerbe, CP, CSR and Notary Public,
15 State of Florida at Large, do hereby certify that I
16 was authorized to and did report the proceedings in
17 the foregoing cause, Pages 1 through 85 . I further
18 certify that said transcription is a true and
19 correct record of my stenographic report of said
20 hearing. IN WITNESS WHEREOF I have hereunto
21 affixed my hand and official seals this the 1st day
GSR
22 of October, A. D. , 1999 . ) i► CL e - 'S D. ;LL.E rsE
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