LTC 136-2021 Major Litigation Victory in Chakra 5, Inc. et al. v. City of Miami Beach, et al.!M IA M I BEACH
OFFICE OF THE CITY ATTORNEY
L TC No. 136-2021
LETTER TO COMMISSION
TO: Mayor Dan Gelber and Members of the City Commission
Rafael A. Paz, Acting City Attorney
April 1, 2021 ~
SUBJECT: Major Litigation Victory in Chakra 5, Inc. et al. v. City of Miami Beach, et al.!
FROM:
DATE:
The purpose of this L TC is to bring you the great news of the City's court victory in a major
litigation matter that the City has been fighting hard since 2013. After eight years, Miami-
Dade Circuit Court Judge Mark Blumstein recently issued a final summary judgment order
dismissing the case with prejudice in favor of the City.
The case was litigated for the City by a team of attorneys, led by First Assistant City
Attorney Rob Rosenwald, with assistance over the years from First Assistant City
Attorney Nick Kallergis, former Chief Deputy City Attorney Donald Papy, Paralegal
Specialist Jamie Morales, and cooperating lawyers from outside counsel at Carlton
Fields.
The legal team was assisted by many members of the Administration over the years,
including staff in the City's Code Compliance Department, including Director Hernan
Cardeno, Fire Department staff, Finance Department staff, and the City's internal
auditors. This was truly a team effort, and the victory belongs to us all.
The lawsuit, Chakra 5, Inc. et al. v. City of Miami Beach, et al., Case No. 2013-017885-
CA-01, was filed in 2013 on behalf of a nightclub (operating out of the old Billboard Live
space) after the 2012 arrest of seven code compliance officers and fire inspectors for
soliciting and accepting bribes in a 2011 FBI undercover sting operation at the nightclub.
The lawsuit alleged that these rogue code compliance officers and fire inspectors had
harassed, cited, and extorted money from the Club since it opened in 2006, causing it to
ultimately close in 2012. Plaintiffs also alleged, without any evidence, that the City knew
about the bribery and did nothing to stop it. Plaintiffs steadfastly demanded a minimum of
$15.1 million in damages, and they hired two experts to testify as to the damages
allegedly suffered by Plaintiffs as the alleged result of the City's alleged actions.
The City presented undisputed evidence that the City provided multiple levels of review
that Plaintiffs could have invoked to stop the alleged harassment and eventual bribes,
including appealing any citations to the City's special master, filing an action in Circuit
Court if they were not happy with the result, and/or reporting the misconduct to the City.
Plaintiffs failed to invoke any of these procedures, or, when they did appeal a citation to
WVe are committed to providing excellent public servce and safety to all who live work and play mn our vibrant, tropcal, historic community
Letter to C om m ission
A pril 1, 2021
Page 2
the special m aster, they w ere granted a full hearing and som etim es granted relief.
P la in t iff s n ever appealed anyt hing at all to C ircuit C ourt .
T h e C it y a ls o p r e s e n te d d e p o s it io n te s tim o n y o f m ultiple C ity staff w ho all testified as to
th e d e ta ile d a n d fr e q u e n t p r io r e ffo rt s o f th e C it y to p r e v e n t m is c o n d u c t b y ro g u e
e m p lo y e e s , in cl u d in g m u ltip le p r io r re g u la r ly s c h e d u le d a u d its o f C o d e C o m p li a n c e
o p e r a ti o n s , a n d p r io r in v e s ti g a t io n s , te r m in a tio n , p ro s e c u t io n , a n d im p r is o n m e n t o f th o s e
fe w p r io r e m p lo y e e s w h o h a d e n g a g e d in w ro n g f u l c o n d u c t.
After the 2012 FBI operation that led to this lawsuit, the City enacted even more
comprehensive reforms that have successfully prevented any further allegation of
bribery or other misconduct by Code Compliance or Fire Department inspectors.
These reforms include the requirement that all inspectors wear body-worn cameras
in any interaction with the public, that inspectors accurately log their inspections
for better supervisory review, and GPS location tracking of their vehicles. Also, as
you know, the City recently appointed its first Inspector General to help the City in
its efforts to stamp out corruption altogether.
The two-count Amended Complaint in this case was premised on alleged § 1983
violations of Plaintiffs' federal substantive and procedural due process rights. According
to Plaintiffs' Amended Complaint, the City was liable for the Club's foreclosure because
City inspectors had (i) issued unjustified citations to Chakra starting in 2006; (ii) conducted
harassing inspections of the premises starting in 2006; and (iii) solicited illegal bribes from
Turgman between June and December 2011, all of which purportedly caused Plaintiffs to
lose revenue rendering them unable to pay the mortgage. The City, while admitting the
bribery by the rogue employees in 2011, vigorously defended these claims of City liability.
On October 14, 2016, the trial court first dismissed the Amended Complaint, with
prejudice, for failure to state a cause of action against the City for either substantive or
procedural due process violations. Plaintiffs appealed that dismissal to the Third District
Court of Appeal, where the City's case was argued by First Assistant City Attorney Rob
Rosenwald. The Third DCA affirmed the dismissal, with prejudice, of Plaintiffs'
substantive due process claim, holding that Plaintiffs did not have a constitutionally-
protected interest in challenging the City's "allegedly unfair and corrupt application of the
City's zoning and other business regulations." See Chakra 5, Inc. v. City of Miami Beach,
254 So. 3d 1056, 1068 (Fla. 3d DCA 2018).
However, because the trial court had considered evidence outside of the Amended
Complaint's allegations, it reversed the dismissal, with prejudice, of Plaintiffs' procedural
due process claim. The case was sent back to the trial court for discovery and possible
trial on the procedural due process claim.
We are com mi tted to pro ding excellen t publc serce and satety to all who lve work, and ploy in our b rant topical, husto vc com munity
Le tt e r to C o m m iss io n
A pr il 1, 2 0 2 1
P a g e 3
T h e C ity , fo llo w in g th re e y e a rs o f ex te n s iv e d is c o v e ry , su b s e q u e n tly fil e d its m o tio n fo r
fi n a l s u m m a ry ju d g m e n t o n th e re m a in in g cl a im . Ju d g e B lu m s te in h e ld a n e a rly tw o -h o u r
lo n g he a rin g o n th e m o tio n o n M a rc h 16 , 2 0 2 1 , a rg u e d by o u r c o o p e ra tin g o u ts id e
c o u n se l, A la n R o se n th a l. O n th e ev e n in g o f M a rc h 3 0 , 2 0 2 1, J u d g e B lu m s te in e n te re d a
th irt y-tw o (3 2 ) pa g e O rd e r, g ra n tin g o u r m o tio n fo r fi n a l s u m m a ry ju d g m e n t a n d
d is m is s in g th e ca s e . H e sta te d in th a t O rd e r:
P la in tiff s ha v e no t o ff e re d an y ev id e n c e th a t th e C ity a c te d w ith d e lib e ra te
in d iff e re n c e to p ro c e d u ra l du e pro c e s s rig h ts o r th a t th e C ity c a u s e d , o r
acte d a s "th e m o v in g fo rc e [,] o f th e con st itu ti on al violation ," as they must
under [federal law]. Plaintiffs simply seek to hold the City vicariously liable
for the unlawful actions of certain rogue City employees. "(T]he law is clear
that a municipality cannot be held liable for the actions of its employees
under § 1983 based on a theory of respondeat superior." Griffin v. City of
Opa-Locka, 261 F.3d 1295, 1308 (11th Cir. 2001); Monell, 436 U.S. 694
("[A] local government may not be sued under Sec. 1983 for an injury
inflicted solely by its [rogue] employees or agents.").
attach a copy of the Order Granting Defendant City of Miami Beach's Motion for
Summary Judgment. An appeal of the Order to the Third DCA is expected. Please feel
free to contact me or Rob Rosenwald with any question or comment.
RAP/ag
WVe are committed to providing excellent public servce and satey to ail who le work, and play mn out vibrant tropical histouc community
F ilin g # 12 4056269 E -F iled 03/30/202 1 10 :4 4 :4 8 PM
IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL
CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA
CASE NO: 2013-017885-CA-0l
SECTION: CA32
JUDGE: Mark Blumstein
Chakra 5 Inc
Plaintiff(s)
VS.
City Of Mia Beh (the)
Defendant(s)
I ------------
ORDER GRANTING DEFENDANT CITY OF MIAMI BEACH'S MOTION FOR
SUMMARY FINAL JUDGMENT
THIS CA USE came before the Court on Defendant, City of Miami Beach (the "City"),
Motion for Summary Final Judgment in its favor and against Plaintiffs, Haim Turgman
("Turgman"), Chakra 5, Inc. ("Chakra"), and 150 I Ocean Drive LLC (the "Condo Owner"), on
both counts of the Amended Complaint. The Court, having reviewed the Motion and the file,
heard argument of counsel, and being otherwise fully advised, makes the following findings of
fact, conclusions of law, and rulings.
Procedural History
l. This is an eight-year-old § 1983 due process action in which Plaintiffs seek to
recover the value of the real property in which the Chakra nightclub!' operated,
and which was auctioned in a 2012 foreclosure sale.ll Turgman owned Chakra,
which operated the nightclub and entertainment venue in condominium units
owned by the Condo Owner.
2. According to Plaintiffs' Amended Complaint, the City is liable for the Club's
Case No: 2013-017885-CA-0I Page I of32
foreclosure because City inspectors had (i) issued unjustified citations to Chakra
starting in 2006; (ii) conducted harassing inspections of the premises starting in
2006; and (iii) solicited illegal bribes from Turgman between June and December
2011, all of which purportedly caused Plaintiffs to lose revenue rendering them
unable to pay the mortgage.
3. The two-count Amended Complaint is based on alleged $ 1983 violations of
Plaintiffs' federal due process rights. Neither count states whether the alleged
violations were based on Plaintiffs' "substantive" or "procedural" due process
rights.
4. On October 14, 2016, this Court dismissed the Amended Complaint, with
prejudice, for failure to state a cause of action against the City for either
substantive or procedural due process violations.
5. On appeal, the Third District Court of Appeal affirmed the dismissal, with prejudice,
of Plaintiffs' substantive due process claim, holding that Plaintiffs did not have a
constitutionally-protected interest in challenging the City's "allegedly unfair and
corrupt application of the City's zoning and other business regulations." See
Chakra 5, Inc. v. City of Miami Beach, 254 So. 3d 1056, 1068 (Fla. 3d DCA 2018).
6. However, because the trial court had considered evidence outside of the Amended
Complaint's allegations, it reversed the dismissal, with prejudice, of Plaintiffs'
procedural due process claim, but with limitations.
7. The Third District held that Plaintiffs could amend their Amended Complaint to
attempt to state a "procedural due process" claim against the City, but only for
actions occurring after May 20, 2009 because of the applicable four-year statute of
limitations. See id. at 1065, 1070 n.1 O. Notably, the Third District stated that it
"[e]xpress[ed] no opinion regarding the merits of those [procedural] claims" on
amendment. Id. at 1070.
8. Plaintiffs elected not to amend their Amended Complaint or add new claims.
Case No: 2013-017885-CA-0I Page 2 of32
Instead, they pursued a procedural due process claim based on the same factual
allegations in the Amended Complaint, most of which are outside of the
permissible limitations period and are in support of the dismissed substantive due
process claim.b?I
9. At the close of discovery, the City sought the entry of a summary final judgment.
Finding of Undisputed Facts
• I. The purchase and foreclosure of the Chakra premises.
1. In November 2005, Turgman was seeking to purchase an "entertainment venue" in
the City.
2. Turgman had never before operated a nightclub or had any experience in the
entertainment business. His only cited experience in the entertainment business
was, as a teenager, working for his father in a restaurant in Israel.
3. Before pursuing his new business venture, Turgman neither reviewed the City's
regulations governing "nightclubs, entertainment complexes, [or] entertainment
venues," nor conducted due diligence on the longevity of new nightclubs opening
in the City.
4. One of the venues he was shown was "a non-operational 25,000-square-foot
entertainment complex" comprising four condominium units in the 1501 Ocean
Steps Condominium, located at 1501 Ocean Drive, Miami Beach, Florida 33139
(the "Club Property").
5. In January 2006, Turgman organized the Condo Owner to purchase and hold title
to the Club Property. Turgman was the sole shareholder, director and officer of the
Condo Owner.
6. At the same time, Turgman incorporated Chakra "to act as the operational entity"
Case No: 2013-017885-CA-0l Page 3 of32
fo r the C lub.
7. O n M a rch 15 , 20 06 , the C ondo O w ner purcha sed the C lub P ropert y.
8. A fter renovatio ns w e re m ade to the C lu b P ro pe rt y's interio r, the C h a kra nig h tcl u b
ope ne d fo r busine ss in D ecem ber 20 06 . T urgm a n de layed the "g rand ope n ing " of
the cl ub until S upe r Bow l w ee kend Fe brua ry 20 07.
9. O n Jun e 8, 20 0 7, T urgm a n sig ne d , on be ha lf of the C o nd o O w ne r, an A m e nd e d
and Re stated C o m m e rcia l B a llo on Pro m isso ry N o te for $4 ,0 0 0 ,0 0 0 (the "B a llo o n
Note").
1 o. The Club Property was mortgaged as security for the Balloon Note.
11. The Balloon Note's interest rate was set at a minimum of 11.99%.
12. The Balloon Note's maturity date was March 14, 2011.
13. Pending maturity on March 14, 2011, only monthly interest payments were
required under the Balloon Note. Id. At maturity (only four years after origination),
the entire $4,000,000 principal balance and any unpaid amounts were due to be
paid. Id.
14. Beginning in 2009, Chakra became an "events-only rental facility."
15. After October 2009, neither Turgman nor the Condo Owner made any of the
Balloon Note's required monthly interest payments or paid real property taxes.
16. Instead of making the payments, Turgman elected to pay numerous other
expenses of the Club, including for promoters, dancers, celebrities such as
"Diddy", "Lil Wayne" and Alicia Keys, DJ's, flyers, and even attorneys' fees.
17. On October 23, 2009, Turgman, on behalf of Chakra, entered into a
"Memorandum of Understanding" with Rose Entertainment LLC ("Rose") for
"management" services at the Club. Pursuant to that agreement, Turgman and
Chakra paid Rose nearly $75,000 between November 1 and November 12, 2009,
alone.
18. Although Plaintiffs admitted to being "profitable" at that time, they have offered no
Case No: 2013-017885-CA-01 Page 4 of32
explanation fo r w hy they stopped m aking m ortgage paym ents.
19 . O n e o f th e p r in c ip a ls o f R o s e w a s im p lic a te d in th e in f a m o u s "B -G irl" crim inal
fr a u d rin g , in w h ic h h e c o n s p ir e d to ille g a lly b r in g g ir ls fr o m o th e r c o u n trie s , th e n
tr a in e d a n d re c r u ite d th e m to "lu r e v ic tim s " a t C h a k r a , a m o n g o th e r M ia m i B e a c h
v e n u e s , in to p u r c h a s in g e x o r b ita n tly -p r ic e d a lc o h o l w ith o u t th e ir k n o w le d g e , a n d
th e n th r e a te n in g th e m if th e y d id n o t p a y th e ta b .
2 0 . A n n a K ili m a to v a , o n e o f th e B -G ir l c r im in a l d e fe n d a n ts im p lic a tin g R o s e a n d
C h a k r a in th e s c h e m e , is in c lu d e d a s a p a y e e in th e "D o lc e -C h a k r a " c h e c k in g
a c c o u n t re c or d s.ll
2 1 . O n A u g u s t 1 0, 2 0 1 O , th e h o ld e r o f th e B a llo o n N o te in itia te d m o rt g a g e fo re c lo s u r e
p r o c e e d in g s a g a in s t th e C o n d o O w n e r .
2 2 . In s te a d o f p a y in g th e m o rt g a g e , in 2 0 1 1 , T u r g m a n p a id h im s e lf a lm ost $100,000
fo r "s h a r e h o ld e r lo a n s " fro m th e C lu b 's o p e r a tin g a c c o u n t, a n d p a id h im s elf and
h is w ife te n s o f th o u s a n d s o f d o lla r s in "c a s h " fro m th e C lu b 's re c e ip ts .
2 3 . D u r in g th e fo r e cl o s u r e c a s e , P la in tiff s n e ith e r c la im e d th at the Balloon Note w as
n o t in d e fa u lt , p a id th e o u ts ta n d in g m o rt g a g e a r r e a r a g e , a tt e n d e d th e fo r e cl o s u r e
s a le , n o r a tt e m p te d to re d e e m th e C lu b P r o p e r ty .
2 4 . T u r g m a n c la im s h e w a s u n a b le to d e a l w ith th e "w h o le [fo r e cl o s u r e ] p ro c e d u r e ,"
in cl u d in g b id d in g a t th e fo r e cl o s u r e s a le o r re d e e m in g th e p ro p e r ty , b e c a u s e h e
w a s "in th e h o s p ita l" a n d "s ic k " d u r in g th a t tim e .
2 5 . A s a re s u lt, th e B a llo o n N o te h o ld e r c o m p le te d th e fo r e c lo s u r e a n d to o k title to th e
C lu b P ro p e rt y fo ll o w in g th e M a y 3 1 , 2 0 1 2 ju d ic ia l s a le . T h e fo r e c lo s u r e ju d g m e n t
e s ta b lis h e d th e to ta l a m o u n t o w e d b y th e C o n d o O w n e r , a s o f M a y 2 0 1 2 , to b e
$6 ,5 6 6 ,8 2 4 .1 1 .
2 6 . A t th e tim e , th e C o n d o O w n e r 's fi n a n c ia l re c o r d s v a lu e d th e C lu b P r o p e r ty ,
in cl u d in g im p r o v e m e n ts , a t $3 ,2 6 0 ,7 8 4 .
Case No: 2013-017885-CA-0 I Page 5 of32
II. P la in tiff s' othe r le g a l an d fin a n c ia l tro u b le s.
2 7 . B e fo re a n d du rin g the fo re clo su re pro ce e d in g s, P la in tiff s e xp e rie n ce d nu m e ro u s
o th e r le g al and financial troubles, both corporately and personally.l?I
28. On August 22, 2009, Chakra defaulted on, and was then sued to foreclose, the
loan it secured to purchase a liquor license. Chakra made no payments on that
loan from August 22, 2009 through March 21, 2011, the date of the judgment
foreclosing the license. After entry of the judgment, Turgman personally went to
the Clerk's Office to pay the $88,358.67 judgment in order to avoid losing
Chakra's liquor license.
29. Within the same month, on March 4, 2011, Turgman and Chakra signed a
Settlement Agreement with the City to pay over $32,000 in delinquent resort
taxes, interest and penalties that had accrued since 2009. Within days of signing
the Settlement Agreement, Turgman and Chakra defaulted on it by using funds
promised to the City to instead pay off the liquor license judgment. Neither
Turgman nor Chakra has ever paid the remaining tax debt owed to the City per
the Settlement Agreement.
30. Several final judgments were entered against Chakra in lawsuits for unpaid debts
initiated in 2009, 201 O, and 2012, including a lawsuit by one of Chakra's attorneys
for non-payment of legal fees.
31. Beginning in March 201 O, Turgman stopped making mortgage payments on his
Coconut Grove home. On September 11, 2012, Turgman's home lender obtained
a final judgment of foreclosure against Turgman and his wife for $1,128,893.09.
32. For three years, from May 31, 2012- the date of the Chakra foreclosure sale
through 2015, Turgman was unemployed and did "nothing."
33. In 2015, Turgman signed a lease to operate a new "turnkey" restaurant on Coral
Case No: 2013-017885-CA-O I Page 6 of32
Way in Miami called "Blue Lamb Cuisine."
34. Within only "a few months," that venture failed and he had to close down the
restaurant.
35. That failed business venture resulted in a default judgment being entered against
Turgman, personally, for failing to pay and deposit rent monies into the court
registry per court order. Turgman has been litigating that case for over four years.
Ill. The alleged post-May 20, 2009 procedural due process violations.
36. Plaintiffs have identified three bases for their procedural due process claim
against the City: (i) the issuance of five allegedly unjustified citations; (ii) alleged
"harassing" inspections not resulting in "a written ticket, fine or citation"; and (iii)
illegal bribes paid by the FBI to seven fired City employees.
A. The alleged unjustified citations.
37. Plaintiffs identified five allegedly "unjustified" written citations that were issued to
Chakra after May 20, 2009:
Date Reason for citation
November I, 2009 Fire code violations (11 violations)
April 19,2010 Unlawful flyers
May 30, 2010 Displaying a prohibited advertisement
March 8, 2011 Littering
March 26, 2011 Failure to maintain fire alarm
38. Each of these citations provided Plaintiffs with the ability to challenge them
through a two-step appeal process before any fine must be paid: first, to a special
master and second, to the Circuit Court. City of Miami Beach Code §§ 30-71 (b);
Case No: 2013-017885-CA-01 Page 7 of32
B.
58-233.
39. Turgman either corrected the violations identified in the citations, rendering them
moot, or successfully appealed the citations to a special master.
The alleged harassment not resulting in "a written ticket, fine or citation."
40. Plaintiffs claim that they were harassed by City inspectors "each time" that the
Club opened its doors, and "there was never a night where the Club was open
and was not harassed with inspections."
41. According to Plaintiffs, "[t]he harassment included telling guests to leave, shutting
down the Club, and/or fabricating non-existent code violations," as well as telling
"prospective patrons" seeking permits for photo shoots or holding events "that the
Club was no longer in business and that they should contract with another entity."
Plaintiffs further claim that "code inspectors would conduct their inspections of the
Club during peak operating hours and hold the door to prevent additional
customers from entering while they inspected the premises, which lasted up to 45
minutes."
42. However, as reflected in Turgman's affidavit and testimony, this harassment
occurred years prior to the May 20, 2009 limitations period.
43. Moreover, Plaintiffs:
• cannot identify a single date, time or circumstance when the alleged harassing
"inspections" or "visits" occurred (let alone all of them), or the names of the
inspectors or City officials;
• cannot "identify the specific dates the Club was open" or operating, or its revenue
for any given day;
• were not present when City officials purportedly spoke to "prospective patrons"
about the Club, and cannot identify the patrons, the City officials, or the dates when
Case No: 2013-017885-CA-01 Page 8 of32
such statements occurred; and
• cannot provide any "records reflecting contemporaneous daily or weekly operations
for the Club" before it closed.
C. The bribes.
44. There is no dispute that seven former employees in the City's Code Compliance
and Fire Departments solicited illegal bribes from Turgman during a six-month
period from June 2011 through December 2011.
45. Plaintiffs never paid any bribes. Instead, Turgman properly reported the extortion
to the FBI. The FBI set up a sting operation to pay the bribes, resulting in the City
employees' arrest, conviction and incarceration.
46. The Club was not cited, harassed or closed as a result of the bribes. Plaintiffs
admit that all the alleged harassment stopped when the FBI became involved.
47. The City fired the seven employees once it was made aware of the bribes.
48. The bribes occurred more than a year and a half after Plaintiffs stopped making
the Balloon Note mortgage payments.
49. Plaintiffs' sole damages claim arising from the City's alleged procedural due
process violations is to recover the market value of the Club Property, including
the nearly $7 million assessed against the Condo Owner in the foreclosure
judgment.
50. Plaintiffs dropped all claims relating to "lost profits," "loss of business" and other
compensatory damages.
51. As Plaintiffs admitted, they "do not have in their possession, custody or control
records reflecting contemporaneous daily or weekly operations for the Club during
the period of June 2009 through closure in April 2012."
52. Plaintiffs submitted the Expert Report of Andrew Kaplan (the Kaplan Report"),
Case No: 2013-017885-CA-O I Page 9 of32
w h ic h o p in e s th a t th e C ity's pu rp o rte d ha ra ssm e n t "in te rfe re d w ith th e [C h a kra ]
C lu b 's a b ility to ge n e ra te re ve n u e to th e po in t tha t P la in tiff s w e re no lo n g e r a b le to
sa tisfy th e ir m o rt g a g e o b lig a tio n s a n d m a in ta in po sse ssio n a n d o w n e rsh ip o f th e
C lu b p ro p e rty , w h ic h re s u lte d in fo re cl o s u re a n d P la in tiff s ' lo ss o f th e C lu b
pro p e rty a t a u ctio n in M a y 20 12."
53. Kaplan did not consider any other factors contributing to, or possible causes of,
the Club's failure, including Plaintiffs' own mismanagement, nearby competition,
market forces or trends, the average lifespan of a nightclub comparable to Chakra
(or in any jurisdiction), Turgman's personal financial difficulties, or the Great
Recession of 2008.
54. Moreover, Kaplan's analysis "primarily" relies on the impact of alleged
harassment occurring before May 20, 2009, outside the limitations period.
55. Plaintiffs seek to recover from the City the full appraised value of the Club
Property without setting off the foreclosure judgment indebtedness or any other
costs.
SUMMARY JUDGMENT STANDARD
"[T]he only proper question when deciding summary judgment is whether 'there is
sufficient evidence favoring the nonmoving party for a jury to return a verdict for that
party."' Mobley v. Homestead Hospital, Inc., 291 So. 3d 987, 993-994 (Fla. 3d DCA 2019)
(Logue, J., concurring) (emphasis added) (noting a summary judgment motion is similar to a
"pre-trial" directed verdict motion); see a/so The Fla. Bar v. Greene, 926 So. 2d 1195, 1200
(Fla. 2006) (noting summary judgment "is designed to test the sufficiency of the evidence to
determine if there is sufficient evidence at issue to justify a trial or formal hearing on the issues
raised in the pleadings."). Asking if there exists a "scintilla of evidence," "slightest doubt," or
"merest possibility" is based on "out-of-date ideas that distort Florida's summary judgment
Case No: 2013-017885-CA-O I Page 10 of32
st an dar d." Mobley, 291 So. 3d 994l%I
Assuming that the non-moving party presents "sufficient evidence" to justify a trial on
the claims or defenses, summary judgment should be granted where there are no genuine issues
of material fact and the movant is entitled to judgment as a matter of law. See Fla. R. Civ. P.
1.51 O; Volusia Cty. v. Aberdeen at Ormond Beach, L. P., 760 So. 2d 126, 130 (Fla. 2000).
"A summary judgment motion triggers evidentiary burdens on both the moving and opposing
party." Delgado v. Laundromax, Inc., 65 So. 3d 1087, 1088 (Fla. 3d DCA 2011)."[O]nce
[the movant] tenders competent evidence to support his motion, the opposing party must come
forward with counterevidence sufficient to reveal a genuine issue. It is not enough for the
opposing party merely to assert that an issue does exist." Landers v. Milton, 370 So. 2d 368,
370 (Fla. 1979.
The non-moving party may not raise paper issues. See Landers v. Milton, 370 So. 2d
368, 3 70 (Fla. 1979). Issues of nonmaterial facts are irrelevant to the summary judgment
determination; only material facts that are essential to the resolution of the legal questions are
relevant. See Continental Concrete, Inc. v. Lakes at La Paz Ill Ltd. P'ship, 758 So. 2d 1214
(Fla. 4th DCA 2000).
CONCLUSIONS OF LAW
To prove that the City violated their right to procedural due process, Plaintiffs must
present evidence establishing, among other things, "(1) a deprivation of a constitutionally-
protected liberty or property interest; (2) state action; and (3) constitutionally-inadequate
process." Chakra 5, Inc., 254 So. 3d at l 070. Plaintiffs must identify a specific deprivation of
federal rights and the government policy or custom that "caused" such a deprivation. Bd. of the
Cnty. Comm'rs v. Brown, 520 U.S. 397, 404 (1997); Indigo Room, Inc. v. City of Fort
Myers, 589 Fed. Appx. at 949 (11th Cir. 2014). Plaintiff can satisfy the "policy or custom"
Case No: 2013-017885-CA-0I Page 11 of32
requ irem ent by show ing pro perty deprivations resulting fr om : (I) an express policy of the local
government; (2) a custom or practice so well-settled and pervasive it assumes the force of law; or
(3) the actions of an official with final policymaking authority. Cuesta v. Sch. Bd. of Miami-
Dade Cnty., 285 F.3d 962, 966 (11th Cir. 2002). Whether an official has final policymaking
authority is a question oflaw. Brown v. City of Ft. Lauderdale, 923 F.2d 1474, 1480 (11th Cir.
199t./7I
"[I]ndividuals whose property interests are at stake due to government actions are entitled
to notice of the proceedings and an opportunity to be heard." Mesa Valderrama v. U. S, 417
F.3d 1189, 1196 (11th Cir. 2005); N. C. v. Anderson, 882 So. 2d 990, 993 (Fla. 2004). Notice is
that which is "reasonably calculated, under all the circumstances, to apprise interested parties of
the pendency of the action and afford them an opportunity to present their objections." Mesa,
417 F .3d at 1196-97 ( quotation and internal citation omitted).
However, "a local government may not be sued under Sec. 1983 for an injury inflicted
solely by its employees or agents." Monell v. Dep't of Soc. Servs. of N. Y., 436 U.S. 658, 694
(1978). Instead, a local government is only liable for the unconstitutional acts of its employees if
its policies or procedures caused, or acted as "the moving force[,] of the constitutional
violation." Id. at 695. The plaintiff may not simply put forth vague and conclusory allegations
alleging the existence of an official policy. Moore v. Miami-Dade Cnty., No. 06-22705, 2007
WL 4644629, at *3 (S.O. Fla. Dec. 1 O. 2007); see also Grier v. State of Fla., No. 04-914J2,
2005 WL 1073932 at *3 (M.O. Fla. April 18, 2005) (dismissing § 1983 claim where plaintiff
failed to allege "any specific policy or custom of the city that led to the alleged violation").
Plaintiffs argue that the City's procedures were inadequate because: (i) the City was
constitutionally required to provide pre-deprivation procedural safeguards to prevent the
harassment and bribes from happening; and (ii) the City's post-deprivation procedures were
inadequate to remedy the wrongs because they do not provide for damages. But Plaintiffs have
Case No: 2013-017885-CA-0I Page 12 of32
presented no evidence of a pro perty deprivation, m uch less that they w ere deprived of
constitutional !y-adequate pro cess.
I. THE CITY HAD CONSTITUTIONALLY-ADEQUATE PROCEDURES TO
ADDRESS THE ALLEGED WRONGS.
A. The alleged unjustified citations.
The City's procedures provide for a hearing on a citation before any fine must be paid.
See City of Miami Beach Code§§ 30-71(b), 30-77; 58-233; City ofMiami Beach Code Ch. 14
(providing appeal procedure for Chakra's November 1, 2011 citation for fire code violations). It
is undisputed that no fine or penalty was assessed against Chakra for four of the five "unjustified
citations" because Turgman immediately corrected the cited code violations without the need for
review or appeal. Thus, there was no property deprivation arising from those citations.
Turgman also successfully appealed the fifth citation (for littering) to a special master,
who upheld the violation but reduced the fine. Turgman could have challenged that ruling in
Circuit Court, but he elected not to do so. See id. Thus, Plaintiffs were afforded more than an
adequate opportunity to contest the citations and to expose any harassment to a neutral arbiter.
B. The alleged harassment not resulting in "a written ticket, fine or
citation."
The alleged "harassing inspections" are even more problematic for Plaintiffs, who cannot
identify "the specific dates the Club was open" or operating, the date(s) when the alleged
Case No: 2013-017885-CA-0l Page 13 of32
"inspections" or "visits" occurred, or the nam es of the inspectors or City offi cials that supposedly
hara ssed them . See Brown, 520 U.S. at 404 (noting that a § 1983 plaintiff must identify a
specific deprivation of a federal right and pinpoint the local government policy or custom that
caused that deprivation). In fact, Plaintiffs present no competent evidence that any alleged
harassment actually occurred after May 20, 2009, within the statute of limitations period.
Neither Turgman's affidavit nor any of Plaintiffs' summary judgment evidence documents a
single inspection-let alone a closure of the Club-after May 20, 2009. Moreover, Plaintiffs
were not present when City officials purportedly discouraged "prospective patrons" from doing
business with Chakra, and they have not identified the patrons or the dates when such statements
were allegedly made.
Averred facts "must be based on personal knowledge" and must be "admissible
evidence" at trial to defeat a summary judgment. See Gonzalez v. Citizens Prop. Ins. Corp.,
273 So. 3d I 031, 1036 (Fla. 3d DCA 2019) (noting "party should not be put to the expense of
going through a trial, where the only possible result will be a directed verdict.") ( citing Perez-
Rios v. Graham Cos., 183 So. 3d 4 78, 4 79 (Fla. 3d DCA 2016).
Importantly, harassment through excessive inspections does not equate to a
property deprivation. Plaintiffs have not identified any authority holding that alleged
unreasonable inspections, not resulting in any citation, fine, or ticket, are actionable under a
procedural due process theory. Rather, these claims potentially raise a Fourth Amendment
unlawful search and seizure claim, which Plaintiffs failed to plead and present evidence in
support, even after the Third District offered them the opportunity to amend the Amended
Complaint. See, e.g., Estates of Ft. Lauderdale Prop. Owners' Ass'n, 492 So. 2d at 1342
(recognizing claim for selective and arbitrary enforcement under the Fourth Amendment); Indigo
Room, 589 F. App'x at 945 (recognizing Fourth Amendment claim to curb excessive
inspections); Chmielewski, 2016 WL 761032 (city liable for allowing public to traverse
Case No: 2013-017885-CA-0l Page 14 of32
p la in tiff's pro perty constituting an unr easonable, meaningfu l interference with their possessory
in tere sts in v io la tio n o f th e F o u rth Am endm ent).
R e g a rd le s s , th e C ity p ro v id e s m u ltip le le v e ls o f re v ie w fo r u n w arranted code
in s p e c tio n s . T h e C ity C o d e specifically requires code inspectors to obtain from the City
M anager's designee or assistant a written notice setting out the tim e and date of any building
co d e in s p e ction. See City of Miami Beach Code § 58-230 ("The enforcing agency is hereby
authorized and directed to make inspections after written notice by the city manager's designee
or assistants setting forth the time and date inspection is to be made to determine the condition of
all buildings and premises"). A supervisor must always review the time and manner of an
inspection-and approve the inspection in advance. Id.
The City Code also provides for a hearing before a special master on an issued citation if
a person refuses to allow inspectors onto private property for an inspection. See City of Miami
Beach Code§§ 58-230; 58-233. Thus, Plaintiffs could have refused the code inspectors entry to
their Club and then challenged the legality of the inspection in a hearing before a special master.
See City of Miami Beach Code§§ 58-230, 58-231, 58-233.
Plaintiffs also had the opportunity to report any harassment to, and file a complaint with,
a department supervisor, assistant City manager, the internal affairs office of the City's police
department, or the state attorney's office. Plaintiffs also had the ability to seek judicial redress
via injunctive relief or otherwise to stop the alleged harassment. But they failed to do so.
A procedural due process claim "will not be cognizable under§ 1983 if the state provides
a means by which to remedy the alleged deprivation." Foxy Lady, Inc. v. City of Atlanta, Ga.,
347 F.3d 1232 1238 (11th Cir. 2003) (no procedural due process claim where club failed to seek
certiorari review of revocation of liquor license). The "process a state provides is not only that
employed by the board, agency, or other governmental entity whose action is in question, but
Case No: 2013-017885-CA-0I Page 15 of32
a ls o in cl u d e s th e r e m e d ia l p ro c e s s s ta t e c o u rt s c o u ld p ro v id e if a s k e d ." Horton v. Bd. of County
Comm'rs, 202 F.3d 1297, 1300 (11th Cir. 2000) (citing McKinney v. Pate, 20 F.3d 1550, 1163
(11th Cir. 1994) (en banc).
"Because [plaintiffs] failed to take advantage of available state remedies, [they] cannot
show that [they were] denied procedural due process." Doe v. Valencia College, 903 F.3d
1220, 1234 (11th Cir. 2018) (no due process claim where student failed to seek certiorari review
of disciplinary decision). See also McKinney v. Pate, 20 F .3d 1550, 1565 (11th Cir. 1994)
(plaintiff s failure to use state remedies "does not constitute a sign of their inadequacy)bl sa
result, they lack standing to challenge the process afforded to them. See Georgia Electronic
Life Safety & System Assoc., Inc. v. City of Sandy Springs, Ga., 965 F.3d 1270, 1278
(11th Cir. 2020) (holding that plaintiff's failure to utilize review processes waived its right to
challenge them, amounting to an absence of causation, damages and standing as a matter of law).
C. The bribes.
An individual officer's intentional misconduct, including extorting bribes in exchange for
favorable enforcement of the law, is not actionable as a procedural due process claim. See, e.g.,
Pujul v. City of Opa-Locka, 2017 WL 9471716, at *5 (S.D. Fla. Oct. 1 O, 2017) (allegation that
city extorted payments to eliminate code violations did not state claim for procedural due
process); Parratt v. Taylor, 451 U.S. 527 (1981); Hudson v. Palmer, 468 U.S. 517 (1984);
King v. Newman, 2011 U.S. Dist. LEXIS 54652, at *2-*4 (E.D. Tex. Feb. 8, 2011); Smithies
v. Bialoglowy, 2001 WL 1793757, at 2-+3 (D. Conn. Dec. 19, 2001); Seay v. Hutto, 483 F.
App'x 900, 902 (5th Cir. 2012); Hall v. Fed. Bureau of Prisoners, 2016 WL 4500881, at *2
(E.D. Mich. Aug. 29, 2016).
Moreover, Plaintiffs' did not pay any bribes and, therefore, did not suffer a property
Case No: 2013-017885-CA-O I Page 16 of32
deprivation. T hey even adm it that any alleged hara ssm ent by C ity in sp ectors stop ped w hile the
F B I w as paying the bribes. Indeed, P laintiffs availed them selves of the m o st effectiv e rem ed y
w hen confr onted w ith an ille gal extort ion schem e th ey w ent to law enfo rcem ent. B ut, even if
they had not done so, they could have sim ply refu sed to be extort ed and chall en g ed any resu lting
citations befo re the special m aster as the pro duct of an ill egal brib ery sch em e. C ity of M iam i
B each C ode §§ 30-7 1(b); 58-233.
T hus, there is no record evidence of any pro perty deprivation w itho ut an op po rtu n ity fo r a
pre-deprivation hearing . P lain tiffs had the opportunity to challen ge an y ill eg al citatio n s or
expose the hara ssm ent and bribery at a hearing before any fines or remedial measures were
imposed by the City. The Constitution requires nothing more.
Plaintiffs do not dispute they had the opportunity to report the alleged harassment and
bribes to the City's special master, but claim that the review processes were "inadequate"
because they do not provide for the recovery of damages. First, the due process clause does not
require local governments to award "damages," like those being sought in this case, in an
administrative proceeding. "Procedural due process requires only an opportunity to be heard 'at a
meaningful time and in a meaningful manner."' Bush, 888 F.3d at 1196-97. Even if "state
remedies may not provide [the Club] with all the relief which may have been available if[it]
could have proceeded under § 1983, that does not mean that the state remedies are not adequate
to satisfy the requirements of due process." Parratt, 451 U.S. at 544 (state remedy adequate
though it prohibited suit against employees, punitive damages, and trial by jury).lI
Second, to recover the type of damages that Plaintiffs seek, they could have sued under
the Fourth Amendment for alleged excessive and arbitrary enforcement of the City Code, but
elected not to. There is simply no competent evidence that Plaintiffs were denied a
constitutionally-adequate process.
Case No: 2013-017885-CA-0 I Page 17of32
11. THE CITY IS NOT REQUIRED TO PREVENT THE ALLEGED HARASSMENT
AND BRIBES.
Plaintiffs claim that they have evidence that the City was on notice since 2004 that its
code enforcement officials may be harassing and extorting property owners. Therefore, they
claim that the City is liable for not implementing better policies and procedures to prevent the
harassment and bribes from occurring. Similarly, Plaintiffs claim that the City's pre-deprivation
review procedures were constitutionally inadequate because they did not make Plaintiffs whole
by awarding them damages. In fact, when the Court asked Plaintiffs' counsel to explain the due
process violation upon which the claims were based, the answer focused on the mere fact that the
harassment and bribes occurred- not on the adequacy of the City's review processes:
MR. LIFSHITZ: ... So 2006 when Mr. Turgman opened his business,
and they are there knocking on the door every single night shutting him
down two or three times a night that's part one. Part one we get Mr.
Turgman to a point that he knows his business is not going to make it
unless he plays ball with us.
THE COURT: So that's [sic] part one analysis what is the
procedural due process violation?
MR. LIFSHITZ: The violations, Judge, are each time Mr. Turgman
has his business disrupted by the City, each specific instance is a
violation. It forms a pattern. The culmination of the harassment was his
inability to satisfy his mortgage ....
THE COURT: Go back to [what] you're saying that these actions by the
City began in 2006 shortly after he opened. I asked the question
because I would like you to answer it. What is the procedural due
Case No: 2013-017885-CA-0I Page 18 of32
p ro c e s s violation in Phase One as you characterize it?
MR . LI FSHI T Z : All of the due process violations are coming to the
business and either giving him a ticket or not giving him a ticket and
just harassing him in either shutting the C lub dow n fo r a period of tim e
or fo r the rem ainder of the night. ...
H rg. at p. 34, 36 (em phasis added).
H ow ever, the due pro cess cl ause requires only that pro cedur es be available to persons to
seek redress fo r harm s; it does not require intern al govern m ent policies to prevent crim e or
corru ption. It is w ell-settled that intentional or negligent deprivations of pro perty by a state
em ployee do not give rise to a due pro cess cl aim if a m eaningfu l post-deprivation rem edy is
available. See Hudson v. Palmer, 468 U.S. 517,535 (1984); Parratt v. Taylor, 451 U.S. 527,
541 (1981 )). [ 1 O] In order to establish that a pre-deprivation hearing w as required, Plaintiffs have
to show that it w ould have been feasible to have a pre-deprivation hearing before any of the
hara ssm ent or unlaw fu l bribes occurr ed. Id. H ere, '"[i]t is diffi cult to conceive of how the [C ity ]
could pro vide a m eaningfu l hearing" befo re its offi cers hara ssed or extorted the C lub. See
Zinermon, 494 U .S. at 128-29. E ven if the C ity knew , genera lly, that em ployees m ight act
corru ptly, "it certainly 'cannot predict precisely w hen the loss w ill occur ."' See Zinermon, 494
U .S. at 136 (quoting Parratt, 451 U .S. at 541 (em phasis added)). T he very nature of bribery
m akes such crim inal acts "ra ndom and unauthorized." Id. at 129. "[T]he State cannot be required
constitutionally to do the im possible[.]" Id.
For these reason, courts have w idely applied the Parratt/Hudson doctr ine to hold that
pre-deprivation hearings are not feasible w hen a state agent engages in extortion or solicits
bribes. See, e.g., Hall v. Federal Bureau of Prisoners, 2016 WL 4500881, at 2 (E.D. M ich.
A ug. 29, 2016) (noting the "illegal bribing of a prisoner by a guard is unpredictable and
unauthorized" and "as an ill egal theft, inherently there w as no pre-deprivation pro cess
available"); Seay v. Hutto, 483 F. A pp'x 900, 902 (5th C ir. 20 12) (holding that
Case No: 2013-017885-CA-0I Page 19 of32
Parratt/Hudson barred a prisoner's due process claim against officials who extorted money
from him in exchange for protection from prison gangs, ruling that due process did not require
the state to offer pre-deprivation remedies that "would have been impossible or impotent to
counter" the extortion); Smithies v. Bialoglowy, 2001 WL 1793757, at* 1 (D. Conn. Dec. 19,
200 I) (holding Palmer/Hudson doctrine barred procedural due process claim based on police
officer extorting a payment from plaintiff to avoid arrest, because the plaintiff has an adequate
post-deprivation remedy to sue).''I
Ill. PLAINTIFFS CANNOT ESTABLISH LIABILITY UNDER MONELL FOR ROGUE
EMPLOYEES' ACTIONS.
Even if Plaintiffs could establish a procedural due process violation from the rogue
employees' misconduct, they cannot establish the City's liability under Monell v. Department
of Social Services of New York, 436 U.S. 658, 694 (1978). According to Plaintiffs, the City is
vicariously liable for the employees' action under Monell because "the City was deliberately
indifferent to corruption within its government" beginning in 2004 and, therefore, failed to
implement pre-deprivation procedural safeguards to prevent the alleged harassment and
corruption from happening.
But an alleged history of corruption within the City is not the correct focus. "[U]nder
Monell, the relevant inquiry concerns whether an employee's conduct is sufficiently connected
to a policy or custom to warrant imposition of liability at the government level." Rittenhouse
v. DeKalb Cty., 764 F.2d 1451, 1454-55 (11th Cir. 1985) (emphasis added). In other words, the
City is not liable for its employees' wrongdoing unless Plaintiffs present evidence that the City
had an established policy or custom that "caused ... the constitutional violation." Monell, 436
U.S. at 694 (emphasis added). Plaintiffs' constitutional claim is an alleged procedural due
process violation, not bribery. Accordingly, the remaining inquiry is, at best, as to any deliberate
Case No: 2013-017885-CA-0I Page 20 of32
in d ifference by the City tow ards the process for addressing alleged wrongful code violations
and harassment by City employees. See, e.g., Connick v. Thompson, 563 U.S. 51, 54 (2011)
(discussing whether prosecutors were deliberately indifferent to the risk of a procedural Brady
violation); Hoefling v. City of Miami, 811 F.3d 1271, 1280 (11th Cir. 2016) (plaintiffs stated a
procedural due process claim under Monell alleging the city deliberately disregarded state
procedures for removing derelict vessels).
Plaintiffs have not offered any evidence that the City acted with deliberate indifference to
procedural due process rights or that the City caused, or acted as "the moving force[,] of the
constitutional violation," as they must under Monell. Plaintiffs simply seek to hold the City
vicariously liable for the unlawful actions of certain rogue City employees. "[T]he law is clear
that a municipality cannot be held liable for the actions of its employees under § 1983 based on a
theory of respondeat superior." Griffin v. City of Opa-Locka, 261 F .3d 1295, 1308 (11th Cir.
2001); Monell, 436 U.S. 694 ([A] local government may not be sued under Sec. 1983 for an
injury inflicted solely by its employees or agents.").
As the Supreme Court cautioned, "[w ]here a court fails to adhere to rigorous
requirements of culpability and causation, municipal liability collapses into respondeat superior
liability." Bd. of the Cnty. Comm'rs v. Brown, 520 U.S. 397, 415 (1997) ("As we recognized
in Monell and have repeatedly reaffirmed, Congress did not intend municipalities to be held
liable unless deliberate action attributable to the municipality directly caused a deprivation of
federal rights.·».HI2I
The City is entitled to summary judgment on Plaintiffs' procedural due process claim.
IV. PLAINTIFFS' DAMAGES ARE NOT RECOVERABLE,
Even if Plaintiffs could establish a procedural due process violation, as a matter of law,
Case No: 2013-017885-CA-O I Page 21 of32
the dam ages they seek are not recovera ble. Plaintiffs request the unprecedented rem edy of being
aw arded the fu ll market value of the fo reclosed C lub Property al m ost 11 years after the Club
Ow ner stopped making m ortgage paym ents, alm ost 1 O years after the mortgage foreclosure case
was filed, and eight years after the Club Property was auctioned at the judicial sale.
First, Plaintiffs have provided no authority in any jurisdiction awarding a plaintiff
such extraordinary damages for a § 1983 procedural due process violation. Such a remedy, if
supported by competent evidence, might conceivably be pursued under the Fourth Amendment,
but it is not cognizable for a procedural due process claim under the Fourteenth Amendment.
See, e.g., Estates of Ft. Lauderdale Prop. Owners' Ass'n, Inc. v. Kalet, 492 So. 2d 1340,
1342 (Fla. 4th DCA 1986) (recognizing claim for selective and arbitrary enforcement under the
Fourth Amendment); Indigo Room, Inc. v. City of Ft. Myers, 589 F. App'x 938, 945 (11th Cir.
2014) (recognizing Fourth Amendment claim to curb excessive inspections); Chmielewski v.
City of St. Pete Beach, 2016 WL 761032 (M.O. Fla Feb. 26, 2016) (city liable for allowing
public to traverse plaintiffs property constituting an unreasonable, meaningful interference with
their possessory interests in violation of the Fourth Amendment)_ [ t 3] Plaintiffs have never
asserted a Fourth Amendment claim - in this or any court.
Second, the damages are impermissibly based on conjecture and speculation. Plaintiffs
dropped their lost profits and loss of business claims because they had no competent evidence of
their revenue or expenses for any particular day or time, much less in connection with any
specific City action. If Plaintiffs have no evidence demonstrating lost profits resulting from the
City's alleged actions, they certainly cannot prove that the same actions somehow caused
unsubstantiated lost revenue which then purportedly caused the Club Property's foreclosure.
Moreover, the bribe payments occurred more than a year and a half after the Condo Owner
stopped making mortgage payments.
Only "actual injury" that is proven to be "proximately" or legally caused by the alleged
Case No: 2013-017885-CA-01 Page 22 of32
pro cedura l due pro cess violation is com pensable. Carey v. Piphus, 435 U.S. 247, 259 (1978);
Trask v. Franco, 446 F.3d 1036, 1046 (10th Cir. 2006); Horn by Parks v. Madison County
Fiscal Court, 22 F.3d 653, 659 (6th Cir. 1994) ("[A] violation of federally secured right is
remediable in damages only upon proof that the violation proximately caused injury."). The
"actual" injury flowing from the violation cannot be presumed; it must be proven. Carey, 435
U.S. at 259; see generally Gooding v. University Hosp. Bldg., Inc., 445 So.2d I 015, 1018
(Fla. 1984) (noting proof of causation cannot be based on a "mere possibility," speculation or
conjecture).
Plaintiffs' damages case is based on speculation and conjecture. Proving that lost profits
were proximately caused by an unlawful action must also account for all external factors
affecting revenue and expenses. See Whitby v. Infinity Radio, Inc., 951 So. 2d 890, 898-99
(Fla. 4th DCA 2007) (holding that trial court erred in allowing jury to consider expert's
speculative testimony on lost profits because expert failed to account for external variables
impacting profits, such as market conditions); Stensby v. Effjohn Oy Ab, 806 So. 2d 542, 544
(Fla. 3d DCA 200 I) (loss revenue claim cannot be predicated on a string of hypothetical "what
ifs"); Levitt-ANSCA Towne Park P'ship v. Smith & Co., Inc., 873 So. 2d 392 (Fla. 4th DCA
2004 (anticipated profits of business ventures are almost always considered too speculative and
therefore are rarely, if ever, recovered by parties). Merely because Plaintiffs had an ongoing
business is insufficient to prove the ability to generate revenue. See Sostchin v. Doll Enters.,
Inc., 847 So. 2d 1123, 1128 (Fla. 3d DCA 2003) ("[T]he loss of profits must be shown with
reasonable certainty, and the mere existence of a leasehold interest for six and half years
following the fire does not establish that profits would have been realized for that entire time");
N. Dade Cmty. Dev. Corp. v. Dinner's Place, Inc., 827 So. 2d 352, 353 (Fla. 3d DCA 2002)
Case No: 2013-017885-CA-O I Page 23 of32
(noting plaintiff's requested damages equates to "an unsupported wish list" of what it may have
hoped to occur in the remaining years of the lease).
M oreover, in § 1983 cases, any intervening or "superseding cause" relieves a defendant
o f lia b ility :
Even if a factfinder concludes that the residential search was unlawfu l, the
o ffi c e rs o n ly "would be liable for the harm 'pro xim ately' or 'legally'
caused by their tortious conduct." Bodine v. Warwick, 72 F.3d 393, 400
(3d Cir. 1995). "They would not, however, necessarily be liable for all of
the harm caused in the 'philosophic' or but-for sense by the illegal
entry." Id. In civil rights cases, a superseding cause, as we traditionally
understand it in tort law, relieves a defendant of liability.
Trask v. Franco, 446 F .3d 1036, I 046 (10th Cir. 2006).
Numerous intervening factors break the chain of causation linking any deprivation of
Plaintiffs' rights or property with the loss of the Club Property to foreclosure, including:
• The Club Owner entering into an $4,000,0000 Balloon Note with an exorbitant 12%
interest rate that required full repayment of the principal in less than four years;
• The lack of evidence, or even an allegation, that the Condo Owner had the ability to
pay the $4,000,000 (not just the interest-only monthly payments) by March 2011
"but-for" the alleged procedural due process violations;
• Plaintiffs' election to pay an indicted fraudster, multiple celebrities, dancers,
promotional and marketing vendors, and numerous other costs for over two
years from November 2009 through March 2012 - instead of making mortgage
payments;
• Multiple external factors that could have affected Chakra's revenue, including
market conditions, nearby competition, and Turgman's own mismanagement;
• Turgman's admission that he did not deal with the "whole [foreclosure] procedure,"
including bidding at the foreclosure sale or redeeming the property, because he
Case No: 2013-017885-CA-0l Page 24 of32
was "in the hospital" and "sick" during that time;
• Turgman's lack of experience in the entertainment and nightclub industry,
particularly in the City;
• Turgman's other legal and financial troubles, including personal default judgments
and the foreclosure of his home.
Here, the undisputed facts demonstrate multiple factors, having nothing to do with the
City, that caused the loss of the Club Property in foreclosure. Without proof of proximate or
legal causation, or where there is evidence of an intervening cause, summary judgment is
warranted. See Del Risco v. Jem Constr. Corp., 452 So. 2d 54 (Fla. 3d DCA 1984)
(affirming summary judgment where injury was proximately caused by other factors); Valdes v.
Miami Herald Pub. Co., 782 So. 2d 4 70, 4 71 (Fla. 3d DCA 200 I) (noting "the question of
proximate cause is one for the court where there is an active and efficient intervening cause")
(citing National Airlines, Inc. v. Edwards, 336 So. 2d 545, 547 (Fla. 1976); McCray v. Myers,
614 So. 2d 587, 590 (Fla. I st DCA 1993) (noting "the mere possibility" that an act "may cause a
particular consequence is not sufficient to support recovery" as a matter of law); Gonzalez v.
Citizens Prop. Ins. Corp., 273 So. 3d I 031, I 036 (Fla. 3d DCA 2019) (affirming summary
judgment for absence of competent proof of causation).
Plaintiffs claim that causation is a jury question. However, causation can be resolved by
the courts where a plaintiff fails to "provide evidence from which a jury could reasonably
conclude that, more likely than not ... the conduct of the defendant was a substantial factor in
bringing about the result." Mount Sinai Med. Ctr. of Greater Miami, Inc. v. Gonzalez, 98 So.
3d 1198, 1202 (Fla. 3d DCA 2012). Indeed, the "mere possibility of causation is not enough; and
when the matter remains one of pure speculation or conjecture, or the probabilities are at best
evenly balanced, it becomes the duty of the court to direct a verdict for the defendant." Id.
Case No: 2013-017885-CA-0l Page 25 of32
(quoting Gooding v. Univ. Hosp. Bldg., Inc., 445 So. 2d 1015, 1018 (Fla. 1984)).
Plaintiffs argue, without citation to the record, that there are numerous financial records
supporting their procedural due process claim. They cannot refer generally to financial records
without showing which specific records create a genuine dispute of a material fact. See
Lacourse v. Def. Support Servs. LLC, 2019 WL 8165261, at *3 (N.D. Fla. Aug. 29, 2019)
(emphasis in original). Plaintiffs also cite generally to the declaration of the Club's accountant,
Steven Siegelaub. Siegelaub's declaration, however, makes no connection between the Club's
financial condition and the alleged inspections, harassment, citations, or extortion. Even if
Siegelaub identified some connection, the records are unreliable because he reconstructed tax
returns for the years 2008 to 2012, more than seven years after the fact, and recreated financial
statements after June I, 2009.
Plaintiffs also argue that they can establish causation by borrowing the "before and after
theory" from the lost profits test, and relying on the Expert Report of Andrew Kaplan (the
"Kaplan Report"). However, the Kaplan Report, which merely accepts Plaintiffs' conclusory
allegations as ipse dixit truths, does not save Plaintiffs by creating a genuine fact issue regarding
causation. "The principle that no weight may be accorded to an expert opinion which is totally
conclusory in nature and is unsupported by any discernible, factually-based chain of underlying
reasoning applies with equal force in the context of summary judgment motions." Gonzalez v.
Citizens Prop. Ins. Corp., 273 So. 3d 1031, 1037 (Fla. 3d DCA 2019) (internal citations and
quotations omitted) (citing Div. of Admin. v. Samter, 393 So. 2d 1142, 1145 (Fla. 3d DCA
1981) and Panzera v. O'Neal, 198 So.3d 663, 665 (Fla. 2d DCA 2015) (noting speculative
opinion testimony is not admissible evidence and cannot be relied on to create a material issue of
fact to defeat summary judgment).
Moreover, Kaplan's analysis primarily relies on the impact of alleged harassment
occurring before May 20, 2009, outside the statute of limitations period. See Linn v.
Case No: 2013-017885-CA-01 Page 26 of32
F o s s u m , 946 So. 2d 1032, 1036-41 (Fla. 2006) (noting expert's testimony cannot serve as a
conduit for otherwise inadmissible evidence).
V. PLAINTIFFS LACK STANDING TO CLAIM DAMAGES RESULTING FROM THE
FORECLOSURE OF THE CLUB PROPERTY.
Only the Club Owner held title to the Club Property, and it was the only named "owner"
in the foreclosure proceedings. Chakra was not a party in that case, and although Turgman was a
guarantor of the Balloon Note, no deficiency proceedings were prosecuted against him. See Fla.
Stat. § 95.11 (2)(b). As a result, the foreclosure only harmed the Club Owner's interests.
Although Turgman, as the sole shareholder of the Condo Owner, and Chakra, as the
operating entity of the nightclub operated in the Club Property, may have been harmed
"derivatively" by the foreclosure, as a matter of law, such derivative harm is deemed too
"remote" to confer standing. See, e.g, Dinuro lnvs., LLC v. Camacho, 141 So. 3d 731, 735
(Fla. 3d DCA 2014) (discussing how shareholders do not have standing to sue for harm to a
corporation or for derivative harm to themselves that might arise from a tort or other wrong);
Holmes v. Securities Investor Prat. Corp., 503 U.S. 258, 268-69 (1992) (noting that "a
plaintiff who complain[s] of harm flowing merely from the misfortunes visited upon a third
person by the defendant's acts [is] generally said to stand at too remote a distance to recover.")
(citation omitted). Any allegedly unlawful act can cause "ripples of harm" extending to various
persons, but only those harms that are direct, proximate, and not remote are actionable. Holmes,
503 U.S. at 266 n.10 (quotation and citation omitteay.ll
Because Plaintiffs only seek the value of the Club Property lost in foreclosure and, as a
matter of law, only the Club Owner is deemed harmed by those foreclosure proceedings,
summary judgment is appropriate against Turgman and Chakra for lack of standing.
Case No: 2013-017885-CA-0I Page 27 of 32
M oreover, although the C lub Ow ner is the only party that suffered any alleged loss from
the fo recl osure, only C hakra th e operating nightclu b w as alle gedly denied due pro cess as a
result of the ci tations and alleged hara ssm ent. So neither Turgm an nor the Club O w ner has
standing to assert pro cedura l due pro cess violations against the City .
WH ERE FO R E, it is hereby ORD ERE D and AD G U D G ED that:
1. The City's Motion for Final Summary Judgment is GRANTED.
2. This Court reserves the right to enter Final Judgment against Plaintiffs, Haim
Turgman, Chakra 5, Inc., and 1501 Ocean Drive LLC on both counts of the
Amended Complaint pending either the resolution of Plaintiffs' petition for writ of
certiorari currently pending in the Third District Court of Appeal, or guidance from
the Third District as to the Court's jurisdiction to enter Final Judgment pending that
petition.
With the exception of the City's entitlement to attorneys' fees, if any, all other matters pending in this
Court are moot.
~ Plaintiffs used different names for their nightclub and entertainment venue, including
"Chakra Lounge" and "Dolce Ultra Lounge," but it shall be referred to herein as "Chakra" or the
"Club."
[2] During discovery, Plaintiffs dropped their other damages claims, including lost profits.
[>l q#e Amended Complaint never mentions the words "procedural due process."
ll q#e check is reflected as having been voided.
~ Without objection, the Court grants the City's request for judicial notice of the judgments and
court files in the other lawsuits to which Plaintiffs were parties. Fla. Evid. Code§ 90.202(6).
[ 61 Effective May 1, 2021 and consistent with the Third District Court of Appeal's current
decisions endorsing Florida's "up-to-date" summary judgment standard, see Mobley, 291 So.
3d 994, n.5 (citing cases) Rule 1.51 O will be formally amended to adopt the federal summary
judgment. See In re Amendments to Fla. Rule of Civil Procedure 1.510, 309 So. 3d 192
(Fla. 2020).
Case No: 2013-017885-CA-0I Page 28 of32
[7] Plaintiffs allege in Count li of the Com plaint that the "city code inspectors fu nctioned as final
policym akers." However, lower-level offi cials are not final policym akers unless it is "clear" that
their "discretionary decision was not constra ined by offi cial policies and was not subject to
review ." Raben-Pastai v. City of Coconut Creek, 573 So. 2d 298,301 (Fla. 1990) (city's
chief building official was not final policymaker because his refusal to lift stop-work order could
be appealed to board). Here, Plaintiffs had the ability to appeal any of the code inspectors'
citations, and higher-ranking City officials could review the inspector's other actions. See City
of Miami Beach Code Ch. 30-71; City of Miami Beach Charter§ 4.02.
~ "The existence and adequacy of the remedies provided by state statutes is a question of law,
not of fact." Gudema v. Nassau Cty., 163 F.3d 717, 724 (2d Cir. 1998).
ll see also Econ. Dev. Corp. of Dade Cty., Inc. v. Stierheim, 782 F.2d 952, 955 (11th Cir.
1986) (state remedies adequate even though plaintiff could not receive punitive damages). See
Crocker v. Pleasant, 778 So. 2d 978, 991 (Fla. 2001) ("[A] state does not deny procedural due
process simply by granting reasonable tort immunity to state entities and officials."); Anthony v.
City of Naples, 2:16-CV-543, 2016 WL 7010949, at *5 (M.D. Fla. Dec. I, 2016) (state
procedures not inadequate because they allowed only damages, not injunctive relief); Hilst v.
Bowen, 874 F .2d 725, 728 ( I 0th Cir. 1989) (no due process claim existed for wrongful
suspension from Medicare program because appeal process was adequate, "(a]lthough [it] does
not provide Hilst with consequential damages arising from defendant's unconstitutional
conduct").
[ 1 O] Compare Barr v. Johnson, 777 F. App'x 298, 301-03 (11th Cir. 2019) (holding that it was
feasible to provide a pre-deprivation hearing before closing the plaintiffs business for failing to
have a business license, because the city had a procedure for closure that could accommodate
notice and a hearing); Zinermon v. Burch, 494 U.S. 113, 137 (1990) (holding that it was
feasible to provide a pre-deprivation hearing before committing patients to a mental health
institution because the state's admission procedures could accommodate notice and a hearing).
Contrary to Plaintiffs' contention, neither case stands for the proposition that procedural due
process requires local governments to implement policies or procedures to prevent misconduct
by City officials. Rather, they stand for the unremarkable proposition that, when the government
takes liberty or property pursuant to an established procedure, it should incorporate a pre-
deprivation hearing where feasible.
~ Importantly, unlike the deprivations in the Parratt/Hudson line of cases where, for
example, a plaintiffs mail package had already been lost by prison officials (leading to a post-
deprivation remedy), Plaintiffs were offered pre-deprivation hearings for each of the five
citations actually issued, or for citations potentially issued if Plaintiffs had either refused the
inspections or refused to pay the bribes solicited in 2011. The constitutionally-recognized
deprivation occurs when Plaintiffs would have had to pay any fine, not when a citation was
issued that was subject to review by an unbiased special master.
[I?l The problem with Plaintiffs' arguments is that they conflate the "established state
procedure" principle under Parratt/Hudson with the policy and custom element of Monell.
Case No: 2013-017885-CA-OI Page 29 of32
Parratt/Hudson addresses the circumstances in which due process requires a pre-deprivation
hearing. Monell, on the other hand, addresses the circumstances in which a City may be held
liable for the unconstitutional acts of its employees. As the Eleventh Circuit explained: "We
distinguish 'policy or custom' as the term was used in Monell ... from the 'established state
procedure' that presents an exception to Parratt." Rittenhouse v. DeKalb Cy., 764 F.2d 1451,
1456 n.5 (11th Cir. 1985).
[il g the Chmielewski court noted, "[a]n 'unreasonable seizure' of property, in violation of
the Fourth Amendment, "occurs when there is some meaningful interference with an individual's
possessory interests in that property." 2016 WL 761032, at *2.
[14] For the first time in this eight-year lawsuit, Plaintiffs claim a fact issue remains as to
whether Chakra and Turgman acted within a "joint venture" with the Club Owner. Plaintiffs also
claim that Chakra and Turgman would be entitled to nominal damages even if they were not
harmed by the foreclosure. Neither the ''joint venture" theory nor nominal damages was pleaded
and, therefore, cannot be used to defeat summary judgment at this late stage.
DONE and ORDERED in Chambers at Miami-Dade County, Florida on this 30th day of March,
2021.
201..3-01~/2-~0-2021 J.(
2013-017885-CA-01 03-30-2021 10:38 PM
Hon. Mark Blumstein
CIRCUIT COURT JUDGE
Electronically Signed
No Further Judicial Action Required on T H IS M O TI O N
CLERK TO R E C L O S E CASE IF POST JUDGMENT
Electronically Served:
Alan Rosenthal, ARosenthal@carltonfields.com
Alan Rosenthal, BSWilliamson@carltonfields.com
Alan Rosenthal, miaecf@cfdom.net
Aleksandr Boksner, AleksandrBoksner@miamibeachfl.gov
Aleksandr Boksner, AleksandrBoksnerEService@miamibeachfl.gov
Aleksandr Boksner, paulsaca@miamibeachfl.gov
Ana M Davide, ana@anadavidelaw.com
Case No: 2013-017885-CA-01 Page 30 of32
A n a M D avide, adavide@ aol.com
A na M D avide, legal@ anadavidelaw .com
A n a M D avide, adavide@ aol.com
A n a M D avide, legal@ anadavidelaw .com
A n a M . D avide, ana@ anadavidelaw .com
C and ace D . C ro nan, candace@ entinlaw .com
D av id A rn old K arp, dkarp@ carltonfields.com
D av id A rn old K arp, m iaecf@ cfd om .net
D av id A rn old K arp, m baskerville@ carltonfi elds.com
D w ay ne A . R obinson, dro binson@ kttlaw .com
D w ayn e A . R obinson, em s@ ktt law .com
E nr iq u e D . A ra na, eara na@ carltonfi elds.com
E nr iqu e D . A ra na, cpra tt@ carltonfi elds.com
E nr iq u e D . A ra na, dkatz@ carltonfi elds.com
H arley S. T ro pin E sq., hst@ ktt law .com
H arley S. T ro pin Esq., sf@ ktt law .com
Ja m es Sam uel C zodli, jczodli@ carltonfi elds.com
Ja m es Sam uel C zodli, iabay@ carltonfi elds.com
Ja so n P atrick K aira lla, jasonkaira lla@ gm ail.com
Ja v ier A . L opez E sq., jal@ ktt law .com
Ja v ier A . L opez E sq., ya@ ktt law .com
Ja v ier A . Lopez E sq., fs r@ ktt law .com
Jo sh ua M . Entin, Jo sh@ entinlaw .com
Jo sh u a M . Entin, L aura c@ entinlaw .com
M aria D . G arcia, m garcia@ ktt law .com
M ich ael G . Z ilber, m zilber@ carltonfi el ds.com
M ichael G . Z ilber, bsw ill iam son@ carltonfi elds.com
M ichael Lorigas, m lorigas@ ktt law .com
M ich ael R. Lorigas, Esq., m lorigas@ kttlaw .com
M ichael R. L origas, Esq., ga@ kttlaw .com
M ich ael R obert Lorigas, m lorigas@ kttlaw .com
M ich ael R obert Lorigas, ga@ ktt law .com
M ig u el D el A guila, del aguilalaw @ aol.com
M ig u el D el A guila, del aguilalaw @ aol.com
M ig u el D el A guila, delaguilalaw @ aol.com
N atalie J. C arlos, ncarlos@ carltonfi el ds.com
N atalie J. C arl os, bsw illiam son@ carltonfields.com
R ichard J. O velm en, ro vel m en@ carltonfields.com
Case No: 2013-017885-CA-O I Page 31 of32
R ic h a rd J . O v e lm e n , m a k k o y u n lu @ c a rlto n fi e ld s.c o m
R ic h a rd J.O v e lm e n ,m ia e c f@ c fd o m .n e t
R o b e rt F . R o s e n w a ld Jr., ro b e rtro se n w a ld @ m ia m ib e a ch fl .g o v
R o b e rt F . R o s e n w a ld Jr.,y a m ile x m o ra le s@ m ia m ib e a c h fl .g o v
R o b e rt F . R o s e n w a ld Jr., b e nja m in b ra u n @ m ia m ib e a ch fl .g o v
S a m u e l C.C o z z o ,s c o z z o @ c o z z o la w fir m .c o m
S te p h a n ie M o n c a d a , sm o n c a d a @ k tt la w .c o m
T a l J L ifsh itz , tjl@ k tt la w .c o m
T a l J L ifsh itz , y a @ k tt la w .c o m
T h o m a s R o n z e tt i, tr@ tu c k rla w .c o m
T h o m a s R o n z e tt i, m ia @ k tt la w .c o m
Physically Served:
Case No: 2013-017885-CA-0I Page 32 of32