COMMISSIONER JOE CAROLLO v. PLATINUM ADVISORS, LLC

• Court: District Court of Appeal of Florida
• Decided: February 10, 2021
• Docket: 20-0576
• Status: Published

Opinion

Third District Court of Appeal State of Florida

Opinion filed February 10, 2021. Not final until disposition of timely filed motion for rehearing.

________________

No. 3D20-576 Lower Tribunal No. 19-29594 ________________

Commissioner Joe Carollo, et al., Appellants,

vs.

Platinum Advisors, LLC, et al., Appellees.

An Appeal from a non-final order from the Circuit Court for Miami-Dade County, Spencer Eig and Veronica Diaz, Judges.

Kuehne Davis Law, P.A., and Benedict P. Kuehne and Michael T. Davis, for appellants.

Brodsky Fotiu-Wojtowicz, PLLC, and Benjamin H. Brodsky, for appellees.

Before FERNANDEZ, SCALES and HENDON, JJ.

SCALES, J. Appellants Miami City Commissioner Joe Carollo and Consulting

Associates Group, Inc. (together, “Carollo”) appeal from a non-final order

denying their motion to dismiss, on immunity grounds, the complaint of

appellees Platinum Advisors, LLC and SkyViews of America, LLC. Although

the appellees characterized their suit as directed toward Commissioner

Carollo in his individual capacity, the conduct that the appellees alleged is

actionable occurred only in Carollo’s capacity as an elected official engaged

in the legislative process. Therefore, such alleged conduct is shielded from

liability by both absolute legislative immunity and qualified immunity. We

further conclude that the appellees’ complaint failed to adequately allege that

Carollo’s conduct was undertaken with the requisite bad faith or malicious

purpose to waive such immunity. Accordingly, we reverse the trial court’s

non-final order denying Carollo’s motion to dismiss the appellees’ complaint.

I. Facts

In 2016, during an interim when Carollo was not an elected official, he

executed a one-year services agreement (the “Agreement”) on behalf of his

private consulting firm (Consulting Associates Group, Inc.) with Platinum

Advisors. The Agreement provided that Carollo would advise Platinum

Advisors in its effort to locate a site and secure required governmental

approval to erect a Ferris wheel, also called an observation wheel. The

2 Agreement imposed a duty on Carollo not to disclose Platinum Advisors’

confidential and proprietary information.

Eventually, Platinum Advisors and its affiliate SkyViews applied to the

City of Miami for development approval of the observation wheel to be

located at Bayside Marketplace on City of Miami property.

During the term of the Agreement, Carollo announced his candidacy

for Miami City Commissioner. Platinum Advisors terminated Carollo’s

consulting contract in September 2017, and Carollo was elected in

November 2017. Platinum Advisors proceeded with its observation wheel

application over the next two years. It received preliminary staff approvals,

entered a pre-construction phase and, after obtaining several permits, began

working at the site in August 2018. During this period before final

development approval, Carollo refrained from any involvement, both at

public meetings and behind the scenes, with Platinum Advisors’ application.

A hearing for final planning and zoning approval of the application was

scheduled before the Miami City Commission on September 26, 2019. At

that hearing, after Platinum Advisors’ agenda item was removed from the

consent agenda by the City Attorney, the City Commission took up a

discussion of the project’s economic benefits. Carollo participated in this

public discussion. He urged his fellow Commissioners either to reject the

3 application or to renegotiate its terms in order to increase revenues to the

City. As a result of this discussion, the City Commission deferred approval

of the application to a subsequent City Commission meeting. Our limited

record indicates that, at a subsequent public meeting, the City Commission

approved the project, but apparently at a greater cost to the appellees.

On October 17, 2019, Platinum Advisors and SkyViews sued Carollo

for damages and injunctive relief relating to Carollo’s alleged (i) breach of

fiduciary duty, (ii) breach of the Agreement, and (iii) misappropriation of trade

secrets in violation of Florida’s Uniform Trade Secrets Act. 1 The complaint

alleges that by participating in the discussion on the agenda item at the

September 26, 2019 City Commission meeting, and arguing at the meeting

that the City should negotiate a more favorable deal, Carollo (i) both

disclosed and used trade secrets and confidential and proprietary

information to instigate City Commission dissent and derail the appellees’

application, (ii) committed a malicious and bad faith violation of his fiduciary

and contractual duties, and (iii) sought a political benefit to himself by

1 The appellees’ complaint also sought to enjoin Carollo from what it alleged were Carollo’s violations of section 112.3143(4) of the Florida Statutes. This provision prohibits an “appointed public officer” from participating in matters that constitute a conflict of interest.

4 causing a renegotiation of the arrangement between the City and the

appellees.

Carollo sought to dismiss the complaint, arguing that, because all of

the alleged actions giving rise to the appellees’ several counts occurred in

Carollo’s capacity as a city commissioner, he was entitled to both absolute

legislative immunity and qualified immunity. On February 20, 2020, the trial

court entered a non-final order denying Carollo’s motion to dismiss. Carollo

timely appeals this order. We have jurisdiction pursuant to Florida Rule of

Appellate Procedure 9.130(a)(3)(F)(iii). 2

II. Analysis3

The appellees concede that the only conduct undertaken by Carollo

that the appellees allege is actionable occurred while Carollo was speaking

from the dais at the September 26, 2019 City Commission meeting on an

agenda item properly before the City Commission. Because Carollo’s

alleged actionable conduct occurred during the legislative process of a duly

2 This rule reads, in relevant part, as follows: “Appeals to the district courts of appeal of nonfinal orders are limited to those that . . . deny a motion that . . . asserts entitlement to sovereign immunity.” Fla. R. App. P. 9.130(a)(3)(F)(iii). 3 We review de novo a trial court’s sovereign immunity determination. City of Miami Firefighters’ & Police Officers’ Ret. Tr. & Plan v. Castro, 279 So. 3d 803, 806 n.11 (Fla. 3d DCA 2019).

5 noticed agenda item, Carollo maintains that he is entitled to both absolute

legislative immunity and qualified immunity. We agree with Carollo.

A. Absolute Legislative Immunity and Qualified Immunity

A city commissioner enjoys absolute legislative immunity when acting

in a legislative capacity. P.C.B. P’ship v. City of Largo, 549 So. 2d 738, 740

(Fla. 2d DCA 1989); Penthouse, Inc. v. Saba, 399 So. 2d 456, 458 (Fla. 2d

DCA 1981) (“If an exercise of legislative . . . power is involved, the immunity

is absolute.”).

Qualified immunity has a broader scope. It protects government

officials from suit for the exercise of their discretionary duties in an array of

situations and settings. Thus, a government official – including a city

commissioner performing a legislative duty – enjoys qualified immunity from

liability for civil damages so long as his or her conduct “does not violate

clearly established statutory or constitutional rights of which a reasonable

person would have known.” Mandelstam v. City of S. Miami, 685 So. 2d 868,

870 (Fla. 3d DCA 1996) (quoting City of Hialeah v. Fernandez, 661 So. 2d

335, 338 (Fla. 3d DCA 1995) (quoting Harlow v. Fitzgerald, 457 U.S. 800,

818 (1982)).

We have little difficulty concluding that, when he participated in the

discussion regarding his former client’s application – a duly noticed item on

6 the City Commission’s agenda – Carollo was engaged in precisely the type

of legislative conduct expected of elected city commissioners. His former

client’s project was on the agenda for the City Commission meeting, and

Carollo participated in the discussion of the agenda item in his role as a City

Commissioner. Hence, irrespective of whether Carollo’s participation in the

discussion was ethical, Carollo enjoyed both absolute legislative and

qualified immunity from civil suit for the comments he made at that meeting.

B. Section 768.28(9)(a) of the Florida Statutes

Our inquiry would end here but for a statutory waiver of these two

categories of sovereign immunity, as provided in section 768.28(9)(a) of the

Florida Statutes. This statute, which limits sovereign immunity for individuals,

provides in pertinent part, as follows:

No officer, employee, or agent of the state or any of its subdivisions[4] shall be held personally liable in tort or named as a party defendant in any action for any injury or damage suffered as a result of any act, event, or omission of action in the scope of his or her employment or function, unless such officer, employee, or agent acted in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety or property.

§ 768.28(9)(a), Fla. Stat. (2019) (emphasis added).

4 In its definition of a state subdivision, the statute expressly includes a municipality. § 768.28(2), Fla. Stat. (2019).

7 Section 768.28(9)(a) waives a city commissioner’s absolute legislative

immunity or qualified immunity if the city commissioner acts, in the scope of

his or her governmental function, “in bad faith or with malicious purpose.”

The appellees argue that they have adequately alleged that Carollo’s

conduct – i.e., participating in the discussion at the September 26, 2019

commission meeting and arguing against the appellees’ financial interests –

was in bad faith or with a malicious purpose.

The appellees rely on Palazzo Las Olas Group LLC v. City of Fort

Lauderdale, 966 So. 2d 497 (Fla. 4th DCA 2007). But Palazzo is readily

distinguishable. Palazzo, in a detailed complaint, alleged that it had spent

over two years and more than five million dollars in pre-development efforts

to develop a mixed-use project in a good faith reliance upon representations

and requests by the City, after the City had accepted Palazzo’s response to

the City’s request for proposals. Id. at 499. Palazzo alleged that, following

extensive prior administrative approvals from the City, the City – after having

specifically ordered Palazzo to design and build a project that would not

comply with certain building limitations – had, in bad faith and with a

malicious purpose, used that very non-compliance to deny Palazzo’s site

plan for the project. Id. Palazzo sued the City, essentially alleging that the

City was estopped from denying its site plan. Id. at 498-99. Palazzo also

8 sued the Mayor and several city commissioners alleging that these

individuals had conspired to interfere with the business relationship that the

parties’ conduct had created between the City and Palazzo. Id. at 500. The

trial court dismissed Palazzo’s complaint, including the conspiracy claims

against the individual defendants. With regard to those individual

defendants, the trial court concluded that the complaint’s allegations did not

rise to the level of bad faith or malicious purpose required to trigger section

768.28(9)(a)’s waiver. Id. at 503.

The Fourth District reversed the trial court’s order, and while the

Palazzo court does not elaborate on the specific allegations made against

the individuals, the opinion expressly notes that that the complaint’s

allegations against the individuals were “not predicated solely upon the act

of voting.” Thus, we can assume that, absent a chronicle of specific

allegations against the individuals in the Palazzo opinion, those allegations

identified conduct by the individual defendants – outside of mere comments

made or votes taken at a city commission meeting – that was consistent with

a conspiracy to derail Palazzo’s project. The Palazzo court simply notes that

such allegations were “minimally sufficient to allege the kind of bad faith and

malicious purpose necessary to seek to impose individual liability.” Id. at 503.

9 We do not find a similar minimal sufficiency in the instant case, and, as

mentioned above, the instant complaint’s allegations identify no actionable

conduct by Carollo other than his comments made at a Miami City

Commission meeting regarding a duly noticed agenda item. In paragraphs

30 to 34 of their complaint, the appellees make a series of conclusory

allegations that Carollo acted in bad faith or with malicious purpose, but such

conclusory allegations are insufficient to establish a waiver of immunity. See

P.C.B. P’ship, 549 So. 2d at 741.

Additionally, for the purposes of section 768.28(9)(a), Florida appellate

courts equate bad faith to actual malice. See Parker v. State of Fla. Bd. of

Regents ex rel. Fla. State Univ., 724 So. 2d 163, 167 (Fla. 1st DCA 1998);

Ford v. Rowland, 562 So. 2d 731, 734 (Fla. 5th DCA 1990). To establish the

requisite actual malice contemplated by 768.28(9)(a), “there must be

conduct much more reprehensible and unacceptable than a mere intentional

tort.” Duyser by Duyser v. Sch. Bd. of Broward Cnty., 573 So. 2d 130, 131

(Fla. 4th 1991); see also Soto v. City of N. Miami, No. 17-22090-Civ-Scola,

2017 WL 4685301 at *4 (S.D. Fla. 2017).

While the appellees may feel betrayed (and possibly they were

financially harmed) by what the appellees perceive as Carollo’s unethical

behavior toward them, Carollo, in a legislative context, was seeking a better

10 financial deal for the City of Miami and its taxpayers. Viewed in this light,

Carollo’s alleged conduct of participating in the discussion of his former

client’s project does not meet the high bar of actual malice.

III. Conclusion

At the motion to dismiss stage, we assume Carollo owed Platinum

Advisors the fiduciary and contractual duties alleged in the appellees’

complaint. The issue is whether Carollo enjoys immunity for his conduct that

allegedly breached those duties. Because the appellees’ complaint identifies

only conduct undertaken by Carollo during a City Commission meeting in

Carollo’s capacity as a City Commissioner, and because the appellees have

not adequately alleged that Carollo’s conduct was undertaken in bad faith or

for a malicious purpose, Carollo is entitled to overlapping absolute legislative

immunity and qualified immunity. We reverse the trial court’s denial of

Carollo’s motion to dismiss and remand with instructions for the trial court to

enter an order dismissing the appellees’ complaint. 5

Reversed and remanded with instructions.

5 Carollo concedes that, because the appellees have not yet been given the opportunity to amend their complaint, the dismissal should be without prejudice.