HomeMy WebLinkAboutR-78-0700ESOLUTION AUTHORIZING THE DIRECTOR OF FINANCE
TO PAY TO MARLENE FRAGOS AND OTHERS THE SUM OF
FIFTY THOUSAND DOLLARS (S50,000.00) UNDER '1'IIE
TERMS AND CONDITIONS AGREED UPON IN FULL AND COM-
PLETE SATISFACTION OF THE JUDGMENT ENTERED IN THE
CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT,
IN AND FOR DADE COUNTY, FLORIDA, IN FAVOR OF
MARLENE FRAGOS AND OTHERS AND AGAINST CITY OF
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WHEREAS, on August:'
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Unger Buildi EM1"f.QTis
in the City of Miami killing eight (8) persons and injuring twenty-four
(24) others; and
WHEREAS, Marlene Fragos, as representative for Nicholas
Fragos, deceased, and others similarly situated, filed suit against
the City of Miami in 1974 for damages arising out of alleged negligence
by City of Miami Building Inspectors: and
WHEREAS, all thirty-two (32) claims were consolidated for
which was had before a jury in 1977 and
WHEREAS, said jury found the City of Miami and others
negligent and a legal cause of the collapse of the
Unger Building;' and
WHEREAS, the liability of the City of Miami was found: to be
ono -third (1/3) of ;:all ,judgments rendered; and
WHEREAS, said damages were judged to be in excess
Thirty -Five Million Dollars (S35,000,000.00); and
WHEREAS, the City of Miami was insured by Midland Insurance
for Five Million Dollars (S5,(I00,000.00) with a Fifty,.
Thousand Dollar (S50,000.00) deductible clause; and
WHEREAS, the Plaintiffs collectively agreed to accept
a total settlement from the City of Miami of Two Million Dollars
($2,000,000.00) in full and complete satisfaction of the judgment
against the City; and
WHEREAS, the first Fifty Thousand Dollars (S50,000,00)
of'said settlement is not covered by insurance; and
WHEREAS, it is advantageous to the City of Miami to pay
this sum to avail itself of its insurance, coverage and to avoid
the:existence of further claims for damages;
NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE
OF MIAMI , FLORIDA:
CITY COMMISSION
MEETING OF
NOV 3 1978
AFAR WN 11D. 7 8 7 }
KE WIRK>k .......... .
Section 1, The Ditector of finance is hereby ditetted to
td MatleneFragos and others the sum of Fifty Thousand Dollats
($S0,000,00) under such terms and conditions as he deems most ben=
eficial., in full and complete satisfaction of the judgments enteted
in the Circuit Court in favor of Marlene Fragos and others,
PASSED AND ADOPTED this
ATTEST:
RALPH G
PREPARED AND APPROVED BY:
CLINTON J.
9th day of November
MAURICE A FERRE
MAUIRICE A. FERRE, :HAYOl.
1TTS, ASSISTANT CITY ATTORNEY.
APPROVED AS TO FORM ANI) CORRECTNESS:
GEOR(ylI F. KNOX, JR. ,
1.978.
"SUPPOPTAT
DOCUIWEN TS
VL ,, .
tNTE OFFICE MEMORANDUM
Honorable Members of the
City Commission
'17(
F. Kno
lttorne
bVd ►1,er 9., 1978
Marlene G. Fragos, et, al,
V National Properties; lt►d,
City, etc: et. al.
.Case No. 75-2009
This memorandum is to present to the City Commission an offer of
settlement in the above -styled law suit which was commenced in 1974,
In order that this Honorable Commission may fully apprise itself of
the advisability of this offer, there is presented below a history
of the proceedings and breakdown of the settlement terms.
HISTORY
On August 5, 1974, the Unger Building, which was serving as the office
facility of the Federal Drug Enforcement Agency, collapsed killing
eight (8) persons and injuring twenty-four (24) others. Later, there
were thirty-two (32) suits filed in the Circuit Court of Dade County,
Florida, for damages resulting from this building collapse. For admin-
istrative conveniences, the Court consolidated the case for the purposes
of liability under the name of the first case filed, Marlene Fragos
v. National. Properties, City of. Miami, et. al.
The suit alleged that the City of Miami was on notice as to certain
serious defects in the structure of the Unger Building. The suit
further alleged that despite this knowledge the City failed to take
measures to insure proper inspection and repair of this building, which
was owned by National Properties. Trial was had in July 1977, and the
following facts were found by the .jury:
1) National Properties was grossly negligent in its
maintenance of the Unger Building:
That certain other defendants who were the engineers
and contractors who had renovated the Unger Building
prior to its collapse were grossly negligent:
That the City of Miami through its building department
was on actual notice that the Unger Building was unsafe
and it was negligent for failing to take measures
to insure the safety of the persons occupying that
building.
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ltoftobab1e Membets
November 9, 1978
Page Two
tl:y. `Goan
The jury returned the verdict finding the City of Miami one-third
(1/3) negligent and awarded Thirty-five Million Dollars ($35,000,000.00)
in punitive damages against the various defendants. The Court held
that the City while not liable for punitive damages, it would be
held responsible for thirty-three percent (33%) of all actual damages.
Midland Insurance Company, who maintained a
($5,000,000.00) general liability policy on
time of the collapse, came forward to offer
The terms of the policy placed the first Fif
(S50,000.00) of any claim as the respnnsibil
claims in excess of the Fifty Thousand Dolla
covered by the policy to a total of Five Mil
Five Million Dollar
the City of Miami at the
coverage at this time.
tv Thousand Dollars
itv of the City. Any
rs (S50,000.00) were
limn Dollars ($5,000,000.00).
After lengthy negotiations with counsel for the Plaintirfs, agreement
was reached wherein the City of Miami's total liability to the
two (32) Plaintiffs would he settled at Two Million Dollars of
Two Million Dollars, One Mi l 1 ion Nine Hundred Fifty Dollars
($1,95(1,000.00) would he paid by Midland Insurance Company upon the
adoption of a resolution by this Commission authorizing the payment
of the first Fifty Thousand Dollars ($50,000,00) of the damage claim.
thirty -
this
SETT1EMFNT PROPOSAL
The City is presented with two alternatives concerning this settlement
proposal. The first alternative is the acceptance of the tentative
agreement as outlined above. The other alternative is to reject the
settlement offer and seek an individual determination of damages as to
each person killed or injured in the collapse of the Unger Bui_1ding.
Of each such determination the City would be liable for thirty-three
percent (33Z).
If the City were to follow the second option, it would be necessary
to have thirty-two (32) separate actions as each individual Plaintiff'
actual damages would require a separate determination. It would seem
likely that with ei,ht. (2) of those thirty-two (32) actions being for
wrongful death, that the aggregate liability in those thirty-two (32)
claims would exceed Fifty Thousand Dollars (550.000.00). There is
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Honorable Members cif the Cit. 6ftithiBMidti
November 94 1978
Page Three
also the further possibility that the insurance would attetnpt to
deny coverage which would require a separate action to enforce that
contract.
CONCLUSION
For the foregoing reasons, the City Attorney's Office respectfully
recommends this settlement offer as being in the best interest of
the City.
GFK:JBA: PLia