After Carollo verdict, Calle Ocho businesses set legal sights on city. And a bigger payout

That staggering $63.5 million judgment was a satisfying vindication for two Little Havana business men in their years-long legal battle with Joe Carollo. But, realistically, they don’t expect to collect anywhere near that from the Miami commissioner.

They have much higher hopes for their next legal target, one with far deeper pockets: the city of Miami itself.

Though the city agreed to foot the $2 million-and-rising legal bill for Carollo’s federal civil suit, it was not a defendant in the case and does not appear to be on the hook for the massive damages awarded by a Broward County jury last week. But largely forgotten in the legal and political drama over the verdict against one commissioner: A corporation run by William “Bill” Fuller and his business partners called Mad Room also sued Miami nearly two years ago in federal court, arguing the city administration was complicit in a relentless campaign of political retaliation by Carollo to shut them down.

While it’s impossible to predict the actions of a new and different jury, the Carollo verdict could serve as a legal litmus test — one with massive consequences for Miami’s political leaders and its taxpayers.

“It [potentially] sucks for the taxpayers,” Fuller, whose properties include the iconic Ball & Chain nightclub, told the Miami Herald in an interview. “But as taxpayers, we need to hold these public officials accountable. Lots of things could have been done by the city and others to mitigate [my damages]. But at the end of the day, these people don’t belong in any type of office.”

Unlike Carollo, whose limited assets will make collecting damages difficult, one legal expert said courts have consistently ruled that if cities like Miami are found liable of civil rights offense, there are no protections to limit damage payouts. And the Broward jury found that Carollo did just that, violating the First Amendment rights of Fuller and a partner, Martin Pinilla, because he targeted them after they backed a candidate running against Carollo.

“Obviously, a judgment in this lawsuit is going to be against the city itself, so theoretically, it’s collectible,” said Miami Attorney Judd Rosen, who has won numerous large paydays in civil court.

Rosen also pointed out that punitive damage awards will be linked to the city’s ability to pay — something not taken into consideration during the Carollo trial. Cities can raise cash when needed through tax increases and bonds.

Miami City Attorney Victoria Mendez said of the upcoming trial that “we look forward to finally addressing this matter in court.”

In a document obtained by the Miami Herald, she told commissioners the city had already paid or been billed $5.1 million in attorneys’ fees for the Carollo case [$1.93 million] and the Mad Room case [$3.27 million]. Mendez said she believes most or all of the amount will be paid by insurance and that she’s arguing for even more coverage.

Mendez also said state law and the city charter dictate Carollo’s legal bills should be paid by Miami. And she warned that should Carollo win his case on appeal, he could sue the city for indemnification, essentially compensation for his expenses, in which the city would be forced to cover his court costs.

“The City of Miami may continue to pay Commissioner Carollo’s legal expenses on appeal,” she noted.

Fuller and Pinilla’s Attorney Jeff Gutchess said he will argue Carollo was working in his official capacity when the men’s businesses were harmed and that the city of Miami should be on the hook for the $16 million that were awarded in compensatory damages.

Carollo, along with several city officials, all testified during the trial that they had followed proper procedures to challenge businesses they argued had failed to pull proper construction permits or to correct numerous code violations

FIRST TRIAL ‘ALL PERSONAL’

Fuller said he filed a separate lawsuit against the city after originally just trying to haul Carollo into court.

“The first trial was all personal. It was about squarely putting blame on Joe Carollo,” Fuller said. “But as we continued to fight back, to defend ourselves, the city kept upping the ante. The city shut down our businesses. The lawsuit will show how the city used their mechanisms to shut down our businesses.”

Now, he expects to fully collect from the city of Miami if he gets a favorable verdict in the Mad Room trial — and potentially a much larger payout. Unlike in the Carollo trial, when the defense was actually scolded by the judge when it tried to introduce Carollo’s modest salary of $58,000 a year, attorneys are expected to discuss the city’s ability to pay damages in front of jurors.

Still, Fuller said he intends to seek Carollo’s assets, asking the court to garnish the commissioner’s wages and put a lien on his multi-million dollar Coconut Grove home. And there might be little the commissioner can do about that.

Florida law says that to “stay,” or temporarily halt collection of the $63.5 million judgment against Carollo during an appeal, the commissioner would have to obtain a bond worth the entire judgment and twice the yearly interest rate. And finding someone to put up the bond money is unlikely because of the risk: Should the commissioner lose on appeal, by law, the plaintiffs are permitted to collect the substantial verdict from the posted bond money.

‘RUN THEM TO THE GROUND’

The follow-up lawsuit against Miami is not currently set for trial as the two sides continue to battle over discovery during status update hearings. It’s also possible that it could be delayed until after Carollo’s appeal — as a decision there could potentially spark settlement talks as well.

But the 104-page lawsuit filed in September 2021 by Fuller and partners Ben and Zach Bush, is filled with juicy tidbits and accusations alleging Carollo and city administrators teamed up to use the full power of city government to destroy businesses operated by the men. It says the city was successful in shutting down one company, forcing another to move and even closing down Ball & Chain for over a year during the pandemic in a squabble over occupancy permits.

Among the accusations are that Carollo told Mendez to “take these guys properties” and “run them to the ground.” It also alleges that an assistant city manager warned former Code Compliance Director Orlando Diez that “Carollo wants your head” and “there will be consequences” if he didn’t follow the commissioner’s instructions. Diez testified against Carollo in the first trial.

The second federal civil lawsuit — filed by Mad Room as an umbrella corporation for Ball & Chain, Altos Mexicano, Taquerias El Mexicano, Little Havana Arts Building and La Gran Fiesta against the city of Miami — alleges that the city and Carollo were so egregious in an attempt to destroy Fuller and his partners that an ordinance was created to be solely target their companies.

It says that the city attorney’s office provided Carollo with a list of 11 properties to be inspected, all but three owned by Fuller and his partners and that city inspectors only took cursory looks at parking lots on the three properties not owned by the men while constantly citing the other properties and trying to pull their permits.

More specifically, the seven-count lawsuit filed in U.S. District Court for the Southern District of Florida accuses the city of ignoring due process in citing plaintiff’s properties and of using police and code enforcement to undertake unlawful search and seizures. It also accuses commissioners of violating the city charter.

According to the lawsuit, the city of Miami “developed and deployed a deliberate policy” creating laws, planned by the city attorney and enacted by code enforcement, fire, police and other departments “to destroy Plaintiffs’ constitutionally protected rights to their real property and in their businesses.”

It says city policy “corrupted” departments in an effort to run Fuller and his partners out of town. It also says the city’s vendetta against the men was so spiteful that government was “weaponized” against Fuller, who along with his partners were trapped in a “nightmare runaround” by pulling entitlements like certificates of occupancy and then “moving the goalposts” when new demands were met.

In the end — with arguments that echo the ones in the Carollo case — it simply demanded a trial by jury.

“You have to chill these public officials so they don’t do it again,” Fuller said.