HomeMy WebLinkAboutmemo - 2CITY OF MIAMI
CITY ATTORNEY'S OFFICE
MEMORANDUM
TO: Mayor and Members of the ' ty ' ommission
FROM: Alejandro Vilarello
DATE: May 6, 2004
RE:
Proposed Settlement — City Commission Agenda — May 6, 2004
City of Miami v. Bench Ads America, Inc.
Dade Circuit Court Case No. 01-14785 CA (32)
Claim No. 012/POL2001027
This counterclaim for breach of contract, brought against the City of Miami by Bench
Ads America, Inc. ("Bench Ads"), arises out of the City's termination of its agreement with
Bench Ads for bus benches and seeks damages for lost profits over the remaining term of the
agreement.
The bus bench agreement was terminated for lack of payment on December 5, 2000. On
March 29, 2001, Bench Ads tendered payment of all arrearages and a letter of understanding was
issued purporting to reinstate the agreement. On May 10, 2001, the City Commission directed
the City Attorney to initiate litigation seeking a declaratory judgment that any contract with
Bench Ads was terminated. This counterclaim followed.
At the time of termination, approximately 48 months were left on the agreement. Gross
revenues were approximately $30,000/month, and Bench Ads' profit margin was approximately
65%. Accounting for year-to-year growth in revenues of three percent, the increased overhead
arising from early termination, the cost of accelerated removal and storage of the benches, and
attorney fees brings total potential damages to approximately $1,171,000. Discounting this
amount at six percent interest yields a present value of $925,090 as the City's potential exposure.
The parties have reached a tentative agreement in the amount of $301,016 plus the return
of security deposits held by the City. The City does not have sovereign immunity limits in this
contract matter, therefore I recommend a settlement in this amount.
The attached proposed Resolution seeks authorization for the settlement of all claims
against the City of Miami, without admission of liability, in the amount of $301,016.00, plus the
return of security deposits held by the City, payable to Bench Ads America, Inc. The settlement
would discharge all obligations of both parties. The City Attorney's Office has investigated and
evaluated this case and has approved the recommendation of this settlement. Funds in the
amount of $301,016.00 will be allocated from the Insurance and Self -Insurance Trust Fund (?),
Index Code No.
Mayor and Members of the City Commission
May 6, 2004
Page 2
AV/jhv
cc: Joe Arriola, City Manager
Dania F. Carrillo, Risk Management Administrator
Stepanie N. Grindell, Director of Public Works
JHV/Memo/ Mayor&CityComm