09-30-2010 VC SP AC-MMINUTES OF THE SPECIAL SESSION
VILLAGE COUNCIL OF NORTH PALM BEACH, FLORIDA
• SEPTEMBER 30, 2010
Present: William L. Manuel, Mayor
Darryl Aubrey, Sc.D., Vice Mayor
David B. Norris, President Pro Tem
T.R. Hernacki, P.E., Councilman
Robert A. Gebbia, Councilman
Jimmy Knight, Village Manager
Leonard Rubin, Village Attorney
Melissa Teal, Village Clerk
ROLL CALL
Mayor Manuel called the meeting to order at 7:00 p.m. All members of Council were present. All
members of staffwere present.
REQUEST FOR ATTORNEY-CLIENT SESSION
Village Attorney Len Rubin requested that the Village Council meet in anattorney-client session
to discuss ongoing litigation between the Village and S&H Foster's Inc. d/b/a Foster's Pub,
Case No. 502008CA028708
ANNOUNCEMENT OF CLOSED ATTORNEY-CLIENT SESSION
Mayor Manuel announced that the Village Council would recess for the purpose of holding a
closed Attorney-Client Session. Mayor Manuel estimated that the Attorney-Client Session
would last not more than thirty (30) minutes.
RECESS
Mayor Manuel recessed the Special Session at 7:02 p.m.
RECONVENED SPECIAL SESSION
The Special Session reconvened at 7:27 p.m. Mayor Manuel announced the termination of the
Attorney-Client Session. All members of Council were present. All members of staffwere present.
ADJOURNMENT
There being no further business to come before the Council, the meeting adjourned at 7:27 p.m.
Melissa Teal, CMC, Village Clerk
Attorney/Client Meeting
Fosters vs Village of NPB
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VILLAGE OF NORTH PALM BEACH
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CLOSED ATTORNEY-CLIENT SESSION
0" RIG INAL
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RE: FOSTER'S PUB LITIGATION
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Thursday, September 30th, 2010
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7:03 p.m. - 7:25 p.m.
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APPEARANCES:
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WILLIAM L. MANUEL, MAYOR
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DARRYL C. AUBREY, VICE MAYOR
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DAVID B. NORRIS, PRESIDENT PRO TEM
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T.R. HERNACKI, P.E., COUNCILMAN
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ROBERT A. GEBBIA, COUNCILMAN
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JIMMY KNIGHT, VILLAGE MANAGER
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LEONARD RUBIN, VILLAGE ATTORNEY
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(Thereupon, the following proceedings were
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had:)
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- - -
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MR. RUBIN: Is it my show?
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MAYOR MANUEL: You need to announce who is
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present.
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MR. RUBIN: We can announce who is present.
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All members of council and the village
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manager, Jimmy Knight, and myself, Len Rubin,
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village attorney, all present.
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We are here, as you all are well aware, to
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talk about Foster's Pub.
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MAYOR MANUEL: Are we recording?
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MR. RUBIN: She is recording.
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MAYOR MANUEL: And do you need the names of
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the members of council?
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MR. RUBIN: She has them.
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As you all are aware, I sent you a copy of
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the order that was entered by Judge French; and,
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essentially, what he ruled was that Foster's Pub
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was entitled to continue operating between the
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hours of 2:00 a.m. to 7:00 a.m., although that is
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a mistake. It will be corrected to 5:00 a.m. to
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reflect the current operating hours.
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He found that they were entitled to continue
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to operate during those hours that they currently
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operate pursuant to their grandfather status until
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their leasehold expires in December of 2015.
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So it is of limited duration. It is five
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years from this coming December.
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And, as I said, the judgment will be
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corrected to reflect 5:00 a.m., not 7:00 a.m., and
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counsel for Foster's Pub agreed to that.
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Why I am here today is to seek guidance from
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the council as to whether you want to pursue an
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appeal. I know we touched on that in prior
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attorney-client sessions, but now is the time to
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make that decision.
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The village's position or my position and the
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position of trial counsel is that, again, Judge
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French missed the mark in his ruling.
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Essentially he said that the Foster's Pub
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lease prevents the application of a valid village
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police power ordinance or Section 3-2 of the
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village code regulating the sale of alcoholic
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beverages.
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I will just give you why we think it is in
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error, like a thumbnail sketch.
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First of all, the Florida Statutes are clear
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that once property is annexed into a municipality,
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the laws and regulations of that municipality
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control.
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Two, Florida law is also clear that drinking
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establishments in bars acquire no vested rights in
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their hours of operation.
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Turning to the precise lease, the lease that
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Foster's entered into with the owners of Live Oak
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Plaza was expressly subject to all laws,
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regulations, ordinances in effect.
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And, finally, that lease did not guarantee
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any specific hours at all. It never addressed
12
hours. Although there was some self-serving
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testimony at trial from Mr. Foster about how the
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hours were discussed, it was not ever set forth in
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the lease agreement.
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So our option right now is to appeal to the
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Fourth District Court of Appeal. I sort of went
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through some positives and negatives just to start
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the conversation.
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The clear positive is that we seek to enforce
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our ordinances within the village uniformly, why
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should Foster's Pub be treated differently than
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any other bar that might operate within the
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village.
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It is a bad decision which sets bad precedent
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on a much more global home rule power scale than
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just what applies within the village.
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And we did talk to the League last time, as
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Bill was there, I believe, when we were facing the
5
appeal with respect to the injunction, and at that
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time the board told us, if it ever goes to final
7
appeal, to come back again and request an amicus
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from the Palm Beach County League of Cities.
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So if the council decides to move forward in
10
that direction in filing an appeal, we definitely
11
will request that the League file an amicus to
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support our cause.
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VICE MAYOR AUBREY: Excuse me, what is that?
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MR. RUBIN: Oh, amicus is a friend of the
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court brief, because the issues are ones that
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affect municipalities, then they would submit a
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separate brief basically explaining why they
18
believe that the decision was in error. There is
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actually a rule that addresses how you go about
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doing that.
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And just to give you the negatives, just to
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give you the flip side, there is some risk that we
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can establish bad law, that the Court could rule
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against us; and, you know, it will have impact
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beyond the Village of North Palm Beach. There is
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a cost. I don't believe the cost is factor --
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You have a filing f ee of about, I am trying
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to think of the appellate fee, of probably about
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$400. I don't anticipate it will be more than
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$5,000 in attorney's fees primarily because these
6
issues were briefed the first go around.
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Although the issues were slightly different,
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one of the elements of the injunction appeal was
9
whether they could state a cause of action, so
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many of the same arguments will be raised again.
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I'm a little discouraged by the fact that
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they issued that affirmance without an opinion
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last time.
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I was discouraged by their lack of
15
understanding or their seeming lack of
16
understanding of the underlying issues. And there
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is a time factor. It will take probably a year to
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get through that process.
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So those are the positives and negatives, and
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I just need guidance from the council as to
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whether we want to move forward with the appeal.
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MR. KNIGHT: I would like to just jump in.
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MR. RUBIN: And Jimmy, you can jump in.
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MR. KNIGHT: Just to kind of let everyone
25
know where we have gone and what we have done, you
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know, we have, prior to us going to court, which
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we did just last month, there are --
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You know, we met with the Foster's, with the
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mediator. We tried to come up with some means by
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which to, you know, have all parties win, if you
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will. That did not go well. We ended up in
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court.
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We thought that we made a passionate
9
argument, although the Judge seemed to be
10
certainly his heels dug in, hardened in his
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position that the lease, itself, established a
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right for the Foster's Pub.
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I think I was abundantly clear that we didn't
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believe that this was not personal with the
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Foster's Pub.
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We actually were sympathetic to the fact of
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the situation that they find themselves in, and we
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asserted the fact that the owner of the property,
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the landlord, if you will, made representations to
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you as a village council that any disagreement was
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between him and the leaseholder or the lessee.
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And I think the exact statement from
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Mr. Brandenburg at the time was is his client was
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more than capable of, you know, settling any
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issues between Foster's Pub and them.
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We know now that that has not occurred, and I
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need to report to you that expenses to date are
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somewhere around $20,000. We just paid as part of
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the trial a $9,700 bill. I think it was 10,000 or
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thereabouts before that.
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So we've clearly exceeded that of what we
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have collected now in ad valorem and/or our
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business tax receipts.
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As a matter of fact, I was real clear when I
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testified at the trial that had we known that we
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would be placed in this situation, we would not
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have annexed it. It just would not have been the
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proper marriage. We would not have annexed that
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property.
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We thought that, you know, we got on to a
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point of understanding clearly, you know, be it
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his personal beliefs or compassion for the
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Foster's, whatever the case may be.
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From my personal standpoint, I understand
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that, you know, we could be setting ourselves up
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for bad case law. I think though we have an
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obligation to protect the village's or the
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municipal police enforcement powers.
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I think the work is all but done. I think
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the cost would be minimal, and I think that, you
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know, my recommendation is that we go forward.
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It is not against Foster's Pub. As a matter
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of fact, we have spoken to the Foster's attorney.
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They are very much aware of it.
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As a matter of fact, they have relayed to us
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that if for some reason the village had won the
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ruling, you know, their next step was to go after
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the property owner.
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So I think that they understand that they
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have other remedies, and we tried to convince the
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Judge that they had other remedies, but it is
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clearly sitting in our lap.
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MR. RUBIN: Just to expound upon that, they
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believed, according to their attorney, that they
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had to pursue a claim against the village first,
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which I believe they thought would be denied,
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which it wasn't, before they pursued the claim
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against the property owner.
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And I think Mr. Gorman, if you talk to him
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privately, will be the first one to admit that he
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is surprised where we have all ended up; but,
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nonetheless, this is where we are.
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MR. KNIGHT: Not that he is not happy.
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MR. RUBIN: Not that he is not happy,
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correct.
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MAYOR MANUEL: Vice Mayor Aubrey.
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VICE MAYOR AUBREY: Yeah. May I ask a
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question about the lease?
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MR. RUBIN: Yes.
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VICE MAYOR AUBREY: I assume the lease was
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entered into by the previous owner of the
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property, not by the current owner of the
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property?
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MR. RUBIN: I can't say that for sure. I
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think I have it actually in my briefcase that I
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left in the council chambers.
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VICE MAYOR AUBREY: And is it an iron clad --
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MR. NORRIS: I think that was true.
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MR. RUBIN: I believe that is true, but they
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assumed the lease when they bought the property.
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VICE MAYOR AUBREY: And is the lease, was it
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a fixed period iron clad through 2015?
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MR. RUBIN: No. Actually, what it was was it
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was through 2000 --
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Originally it was through 2005 with an option
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for another five years to bring it to 2010, but I
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did look at this today.
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Prior to this happening, it was extended to
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include two option periods with an increase in the
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rent and how things were calculated to take it
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through the 2015.
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They said well, because the Foster's wanted
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an additional five years, they said, we will give
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you an additional five years in addition to the
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five you had previously, so it was through 2010 to
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bring it through 2015 with some additional
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consideration.
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VICE MAYOR AUBREY: What I was coming at, was
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there any way any kind of renewal period to alter
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the terms of the lease in our favor?
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Is there any way that it can be reopened?
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MR. KNIGHT: Well, that was something that
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through mediation we were trying to get there. I
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think what we had thrown out was 2013.
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MR. RUBIN: Right.
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MR. KNIGHT: It is somewhat arbitrary, but we
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figured, you know, by the time, if we did appeal
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it, by the time it would get heard, you know, and
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it was five years from the date that it had been
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annexed.
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So we figured, you know, to utilize that 2013
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number, you know, they had that grandfather
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status, if you will, for five years, but it was
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rejected.
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And, you know, it is important to note
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although the order seems to suggest that they have
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this grandfather status to 2015, and although I
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think Len has contacted Mr. Gorman and Mr. Gorman
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says that's his understanding, we are not sure
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that if they amend the lease for another 10 years
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that we wouldn't be --
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VICE MAYOR AUBREY: Right back in the same
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spot.
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MR. RUBIN: Well, it does, and that's true,
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Jimmy, but it does say in his order, and David
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Gorman is on record. I have an e-mail that he
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sent to Hochman saying that he agrees it is only
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to 2015.
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VICE MAYOR AUBREY: 2000 and what?
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MR. RUBIN: 15.
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VICE MAYOR AUBREY: 15.
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MR. RUBIN: Because if you look at the last
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page of the order, it does say, until its
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leasehold expires in 2015.
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VICE MAYOR AUBREY: So there is no way that
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can be reopened?
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MR. RUBIN: Not according to this.
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VICE MAYOR AUBREY: There is no crack in
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there?
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MR. RUBIN: I want to say no way, but Judge
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French's ruling right now is to 2015, so it is
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five years from this coming December.
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MAYOR MANUEL: Councilman Gebbia, did you
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have a question?
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COUNCILMAN GEBBIA: I think you are just
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talking about exactly the question I have is, is
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the Judge's ruling absolute, and if it is not, if
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we are under any, you know, additional risk of
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having them come in on the eleventh hour again and
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asking for some additional time, we may be in this
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thing forever.
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MR. RUBIN: No. He did --
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Gorman did agree that it is just to 2015.
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COUNCILMAN GEBBIA: But is that ---
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Just because he agreed doesn't have any --
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MR. RUBIN: And that's the way the order
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reads. He would have a tough time saying it is
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beyond that, because now they know and they are in
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the village.
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It is one thing where you have a lease in
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effect before you are in the village, but now that
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they are here, and they know the Judge ordered
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through 2015, it is tough now to say oh, no, well
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this should continue ad infinitum, on and on.
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COUNCILMAN GEBBIA: So then the real issue,
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other than living with this for another five
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years, is whether or not we think there is some
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precedence being set here which could affect a lot
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of other things that may come into the village?
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MR. RUBIN: Correct.
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MR. KNIGHT: And I don't --
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You know what, I don't think that any of
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these rulings --
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Well, maybe they have been predicted. I
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think we thought that the case law was clear and
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clearly on our side.
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So, you know, for that reason, you know, I am
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inclined to recommend that you appeal it, even if
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it takes us four and -a -half years. You know, it
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is not really about winning, and I am not really
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trying to displease Foster's. I just think we are
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trying to protect our powers.
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MAYOR MANUEL: Mr. Hernacki, do you have
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anything?
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MR. HERNACKI: Proceed with the appeal.
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MAYOR MANUEL: Mr. Norris.
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MR. NORRIS: First of all, if you recall when
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this started, I was representing Foster's, which I
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no longer do.
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Mr. Rubin says so that means I can
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participate, correct?
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MR. RUBIN: Correct.
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MR. NORRIS: Okay. My initial thought when
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we started this was, let's just get past it, you
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know. You know, you can say attorney's fees
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aren't going to be much; and, you know, as you
7
know I am an attorney, and there is a lot of times
8
where that doesn't prove to be true so --
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And it is not in the total control of our
10
attorney in that respect.
11
So depending upon what the other side does,
12
dictates, you have to respond, and so don't be
13
surprised that it ends up being much more than
14
$5,000, the $5,000 estimate.
15
So with that in mind, my initial thought was
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let's just -- don't want to incur that expense.
17
Why continue to fight. It is kind of like a, in
18
some sense, an anti -business type of fight
19
situation.
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I don't see where it creates a horrible
21
precedent for us if we just, if we just suck it up
22
and go with this bad, bad ruling.
23
But listening to the arguments, and the
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biggest concern I have is that the order and the
25
way it reads, because I can see them coming back
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and saying, you know, we are extending the lease,
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and the lease hasn't expired.
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So, you know, the language is not clear, and
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then you are back in front of the Judge, and the
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Judge may be a very business friendly type of
6
Judge or something and go with it.
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So it is a wide open situation potentially
8
there. So given that, I. you know, I think we
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should appeal.
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MAYOR MANUEL: I have a couple of questions
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for you, Mr. Rubin.
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MR. RUBIN: Yes, sir.
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MAYOR MANUEL: In the Judge's order he stated
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some previous precedent cases, didn't he?
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MR. RUBIN: He, in favor of his ruling, in
16
support of his ruling?
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MAYOR MANUEL: In support of his ruling.
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MR. RUBIN: Well, the case that he cites in
19
support of his ruling had to do with a leasehold
20
as a protected property right.
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But what he ignores is that even if there was
22
a protected property right, which I don't believe
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there is, because we are not talking about the use
24
of the property, we are talking about hours of
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operation.
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And even if we now said that that use is
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prohibited, the remedy is not to enjoin
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enforcement of a valid ordinance. The remedy
4
would be some sort of damages for denying them a
5
use or impairing previously existing property
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rights.
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The big flaw in his reasoning is that somehow
8
the property right can trump the ordinance.
9
Now, there might be a situation where
10
damages, money damages might have to be paid for
11
impairment of a property right. Again, I don't
12
believe he has one.
13
But the leasehold or whatever property right
14
is in existence does not trump an ordinance.
15
That's one of the major flaws and the reasoning in
16
my opinion.
17
MAYOR MANUEL: So if you took this up to the
18
Fourth DCA, do you feel confident that you are
19
going --
20
I know that you have said in the past that
21
you felt that the DCA would probably look at this
22
from the point of the law.
23
MR. RUBIN: I hope. I mean, they are
24
supposed to. They are supposed to look at it from
25
the point of the law and not from what they
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believe.
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You know, I believe at the beginning the
3
Judges were sympathetic, took a pro business
4
approach as council member Norris said and maybe
5
looked at more the equities and ignored the law a
6
little bit.
7
Now the Fourth DCA I am hopeful will look at
8
the law. That's their job. They are an appellate
9
court; but, unfortunately, you never know.
10
MAYOR MANUEL: I am in favor of going
11
forward, but I would do so --
12
I would like to have, again, the support of
13
the League.
14
MR. RUBIN: I agree.
15
MAYOR MANUEL: If we don't have their
16
support, then I question going forward.
17
I know that it is probably the right thing to
18
do, but I think we need to at least have counsel
19
with her, because I know that she is very --
20
And this is not a black mark on you at all.
21
MR. RUBIN: No, I understand.
22
MAYOR MANUEL: But, in other words, she has
23
dealt with these city issues throughout the state
24
for a long period of time and been very successful
25
with them, so I would like to make sure we have
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that on board.
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MR. RUBIN: I will speak with her.
3
MAYOR MANUEL: And I think the cost, based on
4
what you are saying, probably under $6,500,
5
because if there is no fact finding to be done on
6
this case --
7
MR. RUBIN: No. An appeal is --
8
MR. HERNACKI: It is like a flat fee.
9
MR. RUBIN: It is scheduled.
10
I mean, appeals, it is a matter of preparing
11
the initial brief, preparing a reply brief and
12
attending oral argument, if it is scheduled.
13
MR. KNIGHT: And I will share with you,
14
during the trial, and having discussed this with
15
your outside counsel, the whole trial for us was
16
presented with the belief that it was probably
17
going to go to the Fourth DCA.
18
Everything that we did, everything that we
19
said, you know, we did so with the belief that it
20
would be heard by a higher court so --
21
MR. HERNACKI: I would add one thing.
22
In dealing with annexations going forward,
23
depending upon when this ends, you know, we
24
should --
25
We should learn, I guess learn from this that
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if there are any leases there, and to me the
2
ruling says the lease trumps the property owner.
3
MR. RUBIN: Right.
4
MR. HERNACKI: You know so --
5
But if we have properties that are annexed in
6
and they are subject to leases, well, we need to
7
make sure that those tenants are on board.
8
MR. RUBIN: And the joke is, if it was
9
involuntary, and say it went to referendum; and,
10
you know, it was just by a vote, the laws still
11
apply. Just because you weren't in favor of
12
coming in doesn't mean that the ordinances won't
13
be effective.
14
He just was focused on this. You know, we
15
knew it would impair their business, but we took
16
it anyway. Well, we took it anyway because we
17
believed our ordinance would prevail and that
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any --
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We didn't change the playing field. The
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property owner did. So if there was any remedy,
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it would be against the property owner and not the
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village.
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MAYOR MANUEL: I have another question you
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brought up. If the village went to referendum on
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this particular case and prevailed --
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MR. RUBIN: In changing the hours or --
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MAYOR MANUEL: In changing or limiting the
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hours to what the ordinance reads to 2:00 a.m., I
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believe.
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MR. RUBIN: Right, but the ordinance already
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reads that, so that's why it is tough.
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And even then, he really --
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He uses that, and I believe, again, that his
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reasoning is flawed, but he uses that just to
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distinguish a case that really had no basis to be
11
distinguished.
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Somehow that, because it went to referendum,
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that the will of people should prevail.
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Well, regardless of whether an ordinance is
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proposed by referendum through the initiative
16
process or whether it is enacted by the council,
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it has the same legal effect.
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MR. HERNACKI: It is still the will of the
19
people. Council represents the will of the
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people.
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MR. RUBIN: Exactly. It is either through
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your represented body or it is through --
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It is just a different mechanism to get to
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the same place.
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MR. KNIGHT: And Mayor, I actually asked Len
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Attornev/Client Meeting
Fosters vs Village of NPB
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the same exact question.
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MR. RUBIN: Yeah. Jimmy and I had that
3
discussion.
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MR. KNIGHT: We debated that, and the truth
5
of the matter, it looks like in the finding he is
6
saying that he enjoys a grandfather status.
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MR. RUBIN: Right.
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MR. KNIGHT: And whether you did it by
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referendum, he would probably still assert that he
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has a grandfather status.
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MR. RUBIN: I think he would.
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MAYOR MANUEL: All right.
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Mr. Gebbia, are you in favor of going
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forward?
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COUNCILMAN GEBBIA: Yes.
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MAYOR MANUEL: Vice Mayor Aubrey.
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VICE MAYOR AUBREY: Yeah. As a matter of
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principle, I think we should go forward.
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MAYOR MANUEL: I believe we should. I think
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you need to keep us up to date, particularly --
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MR. RUBIN: I will.
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MAYOR MANUEL: -- the cost feature.
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And one last question. If we did prevail
24
with the DCA, would we be able to get any
25
reimbursement?
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Attorney/Client Meeting Fosters vs Village of NPB
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Attorney/Client Meeting
Village of NTB
1 C E R T I FI C A T E
2 THE STATE OF FLORIDA
3 COUNTY OF PALM BEACH
4 1, MAUREEN HALL, Registered Professional
S Reporter, do hereby certify that I was authorized to and
6 did report the foregoing proceedings at the time and
place herein stated, and that the foregoing is a true
8 and correct transcription of my stenotype notes taken
9 during said proceedings.
10 IN WITNESS WHEREOF, I have hereunto set my
11 hand thi S 4T" day of OCTOBER 2010
12
13
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is
16 MAUREEN HALL
Registered Professional Reporter
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