Jesse Scheckner
Miami’s legal woes and the dire financial straits of embattled Commissioner Joe Carollo continue.
An insurance company for Miami filed a multimillion-dollar suit in federal court this week seeking to reclaim funds from — and stop future payment for — legal costs of defending Carollo against numerous lawsuits since 2018.
QBE Specialty Insurance Co. is seeking $5 million. It paid most of that sum to the city this year to cover expenses from five lawsuits locals Bill Fuller and Martin Pinilla filed against Carollo, claiming he targeted their businesses with city resources after they supported his political opponent.
In its 66-page complaint filed Monday, QBE asserts it has “no duty” to cover Carollo’s defense expenses, citing a 1989 Florida Supreme Court denial in which ex-Justice Leander Shaw wrote, “It is axiomatic in the insurance industry that one should not be able to insure against one’s own intentional misconduct.”
“The fundamental premise underlying each and every one of the” lawsuits, QBE wrote, “is that Carollo — through his own actions and by conscripting others to do his bidding — engaged in a yearslong campaign of harassment with the conscious objective of inflicting harm on the underlying plaintiff.”
The company is also arguing it’s not responsible for insuring Miami through its Law Enforcement Liability Policy, which excludes coverage for “damages arising out of the willful violation of a penal statute or ordinance.” Carollo’s actions, the suit says, were “deliberate” and “willful” with the goal of depriving the plaintiffs of their property and harming their reputation.
QBE wired Miami $4.5 million in January to reimburse costs from two of the lawsuits. That “exhausted the remaining amount of the $5 million limit” of one of its insurance policies for the city. The company claims associated legal costs exceed “$10 million to date.”
A Broward jury last year awarded Fuller and Pinilla $63.5 million for what the men said was a protracted vendetta Carollo launched against them and their Ball & Chain nightclub in Little Havana after they supported his opponent, Alfonso “Alfie” Leon, in a 2017 race for the City Commission.
The two business owners sued Carollo in 2018, claiming he’d infringed on their right to free speech during and since a rally they held for Leon in November 2017 at one of their properties. The trial, which began April 10, 2023, included videos showing police and code enforcers entering their properties, demanding permits from staff readily available on city computers, and Carollo — a former two-term Miami Mayor notorious for his bellicosity on the dais — outside the club at night bickering with valets over parking.
Carollo’s lawyers argued he was acting in response to resident complaints about noise and street disruptions by serial permit abusers with no regard for those living in the surrounding area. They said the more than a dozen witnesses who testified for the plaintiffs, including three former police chiefs and a former city manager, lied under oath.
The jury ultimately sided with the plaintiffs, awarding Fuller $8.6 million in compensation and $25.7 million in punitive damages and Pinilla $7.3 million in compensation and $21.9 million in punitive damages.
Fuller and Pinilla filed a separate, $28 million suit against the city through a company they partly own, Mad Room Hospitality, which owns Ball & Chain and a Mexican restaurant in Little Havana that reopened in February after being closed for two years.
That suit named Carollo, Miami Building Director Asael Marrero, City Manager Art Noriega, Assistant City Attorney Rachel Dooley and ex-City Attorney Victoria Méndez as defendants.
City Commissioners removed Méndez from her post last month for, among other things, pushing the city to use taxpayer money to cover Carollo’s legal fees, legal advice that almost cost the city $56 million in state tax funding and dubious real estate dealings with her husband and mother through Miami-Dade’s nonprofit Guardianship Program.
Fuller and Pinilla also sued QBE in January for $18.6 million in attorney’s fees and partial damages from the $63.5 million judgment.
