CAO 98-12
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CITY OF MIAMI BEACH
OFFICE OF THE CITY ATTORNEY
MEMORANDUM
To:
SERGIO RODRIGUEZ
City Manager
CAO - 98-12
Date:
April 6, 1998
From:
MURRAY H. DUBBIN
City Attorney
Robert Dixon
Deputy City Attorney
Subject:
POWER TO COMPROMISE LIENS; WHO IS AUTHORIZED TO
COMPROMISE LIENS.
You have requested a legal opinion with regard to the question: On what authority is the
City Administration allowed to mitigate fines in order to settle liens?
The City deals with several different types of liens:
Liens which are subject to compromise:
A. Code Liens: Section 9B-9 CMB Code provides that the Special Master may enter
an order imposing a fine against a violator. 9B-9(e) further provides that the Special Master may
reduce a fme imposed pursuant to this section. Included within this designation are Code
Compliance fines, Fire Code fines, Building violations fines ( but excluding building liens
created under Section 8-1), ADA fines and Sanitation violation fines (but excluding liens
imposed pursuant to Section 25-92); all of which are tried and have fines/liens created pursuant
to the City's Special Master proceedings. The City's Special Masters also have the authority
pursuant to 162..09(2)(c), Fla. Stat., to "reduce a fine imposed pursuant to this section." As a
general rule, a Code type of lien is the only type of fine/lien that should be considered for
compromtse.
Reasons to negotiate a compromise on Code Liens: (1) When faced with
conflicting claims as to the priority of a City Lien, the Rule that controls is "first in time, as first
in right." Prior recorded liens, mortgages and encumbrances are paramount. The opposite is true
with "special assessment liens" which have the same rank and dignity as ad valorem taxes. Code
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Liens are generally subject to being wiped out in mortgage/lien foreclosure proceedings; (2)
Section 162.09(3), Fla. Stat. Specifically provides: "No lien created pursuant to the provisions of
this part may be foreclosed on real property which is a homestead under Section 4 Art. X of the
State Constitution."; (3) directly related to the priority issue in subparagraph (I) above is the
question of how much equity the title holder has in the property. Many times the administration
is faced with the situation where the amount owed to bona fide prior lienors on the subject
property equals or exceeds its market value; (4) occasionally, the order which imposed the lien is
invalid; either from a failure to comply with the requirements of Chapter 162, Fla. Stat. or an
obvious lack of due process by reason of insufficient notice and sometimes no notice of the
Special Master proceedings being given to the property owner; (5) occasionally, the amount of
the lien, when viewed with the reason for its imposition shocks the conscience of any reasonable
person; and (6) Liens imposed in Special Master proceedings are 'always subject to being
reduced by the Special Master. Special Masters have previously regularly reduced these type of
fines/liens from 50% to 90%; negotiated compromises usually keep the reduction within 20%.
Lastly, Code Liens are sometimes the subjectmatter of bankruptcy or foreclosure proceedings; it
is in these type of proceedings that compromise is essential.
Liens which should not be settled:
B. Water Liens: Section 45-12(d) provides that when water is furnished to the
owner or occupants of any premises, the charge for such water service shall be and constitute a
lien against the premises. This type of Lien is treated as a "special assessment lien" against the
subject real property and until fully paid and discharged, remains as a lien equal in rank and
dignity with the lien of ad valorem taxes and is superior in rank and dignity to all other liens,
encumbrances, titles and claims to or against the real property involved.
C. Garbage and Refuse Liens: Where the owners of the property fail to comply
with the requirements of Section 25-92, the City Code Section 25-93 authorizes the City
Manager to cause such work to be done and requires that he keep an account of the costs thereof,
whereupon such cost shall be a charge and lien against the property. This type of Lien is treated
as a "special assessment lien" against the subject real property and until fully paid and
discharged, remains as a lien equal in rank and dignity with the lien of ad valorem taxes and is
superior in rank and dignity to all other liens, encumbrances, titles and claims to or against the
real property involved.
D. Building Liens: Section 8-1 of the City Code provides that pursuant to the
provisions of Miami-Dade County Ordinance No. 57-22, the South Florida Building Code was
adopted as the Building Code of the City. All liens imposed under the authority of the South
Florida Building Code are treated as a "special assessment lien" against the subject real property
and until fully paid and discharged, remains as a lien equal in rank and dignity with the lien of ad
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valorem taxes and is superior in rank and dignity to all other liens, encwnbrances, titles and
claims to or against the real property involved.
POWER TO COMPROMISE: The City has all governmental, corporate, and
proprietary powers to enable it to conduct municipal government, perform municipal functions,
and render municipal services, and may exercise any power for municipal purposes except as
expressly prohibited by law or the Charterl. This includes the power to settle and compromise
disputed claims in its favor or against it2 before or after suit has begun on it and before or after a
lien has been filed. The powers of the City are construed liberally in favor of the City, limited
only by the United States andthe Florida Constitutions, general and special law and specific
limitations in the CMB Charter3.
Power to compromise disputed, questionable or even uncollectible liens may be expressly
, . "cohferred or implied, as from the power to sue and to be sued" or as a necessary incident of the ' , .
power to contract.s But the City would have no power to compromise a claim which is not
doubtful, uncollectible or which is subject to one of the above reasons to compromise. A
compromise for less that the amount due on a claim which is not subject to one of the above
infirmities or a well reasoned bases could be considered an improper diversion of public monet.
In other words, the City cannot, under the guise of a compromise, surrender valuable rights or
interests in claims over which there is no substantial controversy, dispute or infirmity.
Accordingly, notwithstanding that the right of compromise or settlement follows logically from
the right to maintain and defend suits, the City has no right to discharge a debt without payment
IArt. I, ~ectiOJl 103(a), CMB Charter.
2StiW< v. Crummer Co., 153 Fla. 640, 15 So.2d 441; Coral Gables v.~, 128 Fla. 874,
176 So. 40.
3Art. I, Section 104, CMB Charter.
4CQ1e. v. Burton, 313 Ky 557, 232 SW.2d 838; Snyder v. St Paul 197 Minn. 308,267
N.W. 249; &lQJ2 v.~, 84 OhioL. Abst. 417,171 N.E. 2d 222.
'Grimes v. Hamilton County, 37 Iowa 153; ~ v. .emn, 148 K.an 885, 85 P.2d 10;
Edelstein v. Asbwy park, 51 N.J. Super 368,143 A.2d 860; Mount Vernon v. Mount Vernon
Trust Co. 270 N.Y. 400, 1 N.E.2d 825; ~ v. Cochran County. 50 SW.2d 848,852 (Tex. Civ.
App.)
60swel:o Falls v. Fulton, 265 NYS 436, 442; Cincinnati v.RoWers 16 Ohio App 139;
And~ar Associates Inc. V. Board ofZoninl: Appeals ofVillal:e of Port Washin~on North, 30
AD.2d 672, 291 NYS.2d 991.
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which may be obtained from persons who are solvent and responsible where no controversy
exists respecting the validity or binding effect of the indebtedness.
WHO IS AUTHORIZED TO COMPROMISE: The City Manager is the Chief
Executive Officer and head of the administrative branch of the City government'. More
specifically, the City Manager has the power to "negotiate all contracts and agreement in which
the City is a party subject to the approval of the City Attorney and City CommissionB." This
includes agreements to compromise doubtful Code Liens. However, it should be noted that
fines/liens created by the City's Special Master proceedings may be reduced (mitigated) at any
time by the Special Master9. While the City Manager (or his designee) may negotiate to
compromise Code fines/liens, that negotiation to be legal and binding must be submitted for the
approval of the City AttorneylO and the Special Master. Any reduction of the fine/lien is in the
final discretion of the Special Master within his/her quasi judicial power; or in thealtermtivea
negotiated compromise may be presented to the Commission for approval. The law invests the
City Manager with discretion in such adjustments which he is to exercise for the best interest of
the City.
7 Art.IV, Section 4.02, CMB Charter.
BArt.IV, Section 4.02(1), CMB Charter.
9See Section 162.09(2)(c), Fla. Stat. and Section 9B-9(e) CMB Code.
IOArt III, Section 3.01(b), CMB Charter, states that the City Attorney has the power to
prepare or review all . . . contracts... and other written instruments in which the municipality is
concerned, and shall endorse on each his . . . approval of the form, language and execution
thereof.
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