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HomeMy WebLinkAboutItem 02 Approval of Colella Mediated Settlement Agreement ocoee florido AGENDA ITEM COVER SHEET Meeting Date: April 16, 2019 Item # Reviewed By: Contact Name: Mary Solik, Esq. Department Director: Contact Number: 407.367.7868 City Manager: Subject: Colella Mediated Settlement Agreement Background Summary: The City has acquired Parcel 101 from Margaret Colella through an eminent domain Order of Taking. The final valuation of the property acquired needs to be resolved, either through mediation or jury trial. The property was needed for the relocation of City Hall. Issue: The parties reached a Mediated Settlement Agreement subject to City Commission approval. Recommendations: Approve attached Mediated Settlement Agreement. Attachments: Memorandum and Mediated Settlement Agreement. Financial Impact: $141,329.00. Type of Item: (please mark with an "x) Public Hearing For Clerk's Dept Use: Ordinance First Reading X Consent Agenda Ordinance Second Reading Public Hearing' Resolution Regular Agenda x Commission Approval Discussion& Direction Original Document/Contract Attached for Execution by City Clerk Original Document/Contract Held by Department for Execution Reviewed by City Attorney N/A Reviewed by Finance Dept. N/A Reviewed by N/A 2 TY LA 1K Mary Doty Solik, Esq. 407-367-7868 121 S. Orange Ave., Ste. 1500 msolik@dotysoliklaw.com Orlando, FL 32801 fax: 407-377-6801 MEMORANDUM TO: The Honorable Mayor and Commissioners of the City of Ocoee FROM: Mary Doty Solik, Special Counsel DATE: April 4, 2019 RE: City of Ocoee v. Margaret Colella, Parcel 101 BACKGROUND The referenced case is a condemnation action. Parcel 101 is necessary for the City Hall Relocation Project. The .18 acre parent tract was owned by Margaret Colella and is located at 16 E. Mc Key Street. The property is improved with a 1,005 sq. ft. single family residential structure built in 1945. The property was a rental. John Robbins, the City's appraiser, first appraised the property in April 2017. He concluded to a value of $92,000. The initial presuit offer was made to the property owner in this amount plus 10%, or$101,200.00, on October 25, 2017. Ms. Colella rejected the City's offer and the matter proceeded to eminent domain. The case was filed on January 24, 2018 and due to several delays associated with judicial reassignments, the Order of Taking was entered on July 31, 2018. This date is the date of value. The matter was mediated on March 28, 2019. Prior to the mediation the property owner presented the City with its appraisal, prepared by Richard Dreggors. Mr. Dreggors' opinion of value for Parcel 101 was $226,100.00. If the mediation had not been settled and the case proceeded to trial I would have recommended that the City obtain an updated or new appraisal of the property contemporaneous with the date of value, July 31, 2018. The Dreggors report identified two comparable sales of single family residential properties in the proximity of the Colella property 1 that occurred in July and September 2018. These two properties were very similar to the Colella property in all relevant aspects: age, condition, size, numbers of bedrooms and baths, etc. In my opinion these two sales would indicate an estimated value of the Colella property of $155,000.00. Mr. Robbins' report was prepared over a year prior to the date of value and did not have the benefit of more current market data emanating from a rising real estate market. At mediation the parties agreed to a settlement for Parcel 101 in the amount of $182,500.00. This results in an attorney's fees in the amount of $26,829.00, calculated on the statutory formula based on the benefits obtained for the property owner. The parties also agreed on settlement of all expert costs. The property owner submitted the $26,000.00 in costs but agreed to compromise this amount at $24,000.00, which I deem to be reasonable. The total amount to be paid by the City pursuant to the Mediated Settlement Agreement is $233,329.00 with credit given for the $92,000.00 previously deposited. If the matter had not been settled at mediation but proceeded to trial, the City would be responsible for not only its costs (attorney's fees and expert costs) but those of the property owner's as well. I would expect the property owner's expert costs to substantially increase. The property owner's attorney's fees would be calculated on the ultimate jury award but would be higher if a jury came back at a number higher than $182,500. The City would also be responsible for statutory interest at the rate of 6% on the difference between the deposit amount of$92,000.00 and the jury award. It is quite possible that the City's total exposure for litigation costs alone could exceed the value of the property acquired. The Mediated Settlement Agreement, however, is subject to City Commission approval. It is my opinion this settlement eliminates cost risks effectively and is in the best interest of the City. RECOMMENDATION It is respectfully recommended that the City Commission approve the Mediated Settlement Agreement, and authorize Staff to execute all documents necessary to conclude these matters. MDS/kh cc: Robert Frank Craig Shadrix Michael Rumer 2 IN THE CIRCUIT COURT OF THE 9TH JUDICIAL. CIRCUIT, IN AND FOR ORANGE COUNTY, FLORIDA CITY OF OCOEE, a municipal corp., Petitioner, CASE NO.:2018-CA-732 Parcel 101 v. MARGARET MCCLOSKEY COLELLA; and SCOTT RANDOLPH, ORANGE COUNTY TAX COLLECTOR, Respondents. MEDIATION SETTLEMENT AGREEMENT The Petitioner, City of Ocoee and Respondent, Margaret McCloskey Colella, have reached the following settlement in mediation: 1. Petitioner agrees to pay Respondent ($182,500.00), one hundred eighty-two thousand and five hundred dollars, with a credit of$92,000.00 which was deposited on July 31, 2018. 2. Petitioner also agrees to statutory Attorney's fees of($26,829.00), and expert costs of ($24,000.00). 3. Respondent agrees to surrender the possession of the property by June 30, 2019, and Petitioner agrees that Respondent may remove appliances, faucets, fans,etc. 4. Attorneys for the Petitioner and Respondent shall work together to expedite the stipulated final judgment and payment in this case. 00315359 1 5. Any other terms and conditions of the mediated settlement agreement are as follows: City of Ocoee Commission must approve this settlement. .. iv, , 3/4, All , , ,_, 7n. „21/. 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