Corruption Opportunity Prevails in Miami Beach


Series: The Fire Sprinkler Case


Rod Eisenberg’s Civil Rights Case Summarily Dismissed

February 24, 2014

MIAMI MIRROR by David Arthur Walters

South Beach—In a surprising and humiliating defeat for Rod Eisenberg, who sued the City of Miami Beach in federal court for shutting down his historic Sadigo Court Apartment Hotel in South Beach’s Collins Park area, throwing his guests onto to the street and arresting him in alleged retaliation for his complaints about the corruption and negligence of city officials, U.S. District Court Judge Cecilia M. Altonaga, in an Order dated 16 December 2014, summarily dismissed his complaint on a technicality using what appears to be erroneous reasoning just as his attorneys were preparing to go to trial in January after surviving the city’s previous motion for summary dismissal. City attorneys had managed to get four of the seven counts dismissed in a previous motion for dismissal, and then moved in for the kill at the last moment with a motion for final summary judgment fatal to the remaining three counts. Eisenberg, anticipating a trial, might have been surprised by the sudden motion, but it is part of the summary motion game ever popular in federal courts, where complaints may be hacked to death piece by piece because the objective of the summary judgment procedure is to “pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.”

According to Rule 56 of the Federal Rules of Civil Procedure, “A party may move for summary judgment, identifying each claim or defense — or the part of each claim or defense — on which summary judgment is sought. The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. The court should state on the record the reasons for granting or denying the motion.”

Altonaga concluded that, as a matter of law, the “city cannot be held liable under section 1983 where the challenged fire safety enforcement decisions made by the City Fire Marshal were subject to meaningful administrative review by County and State authorities. As this issue — and the absence of evidence showing the existence of an unconstitutional City policy or custom — are dispositive, the Court need not address the City’s remaining argument.”

I shall challenge that conclusion elsewhere. It is my opinion that that question of municipal liability in this type of case is of far greater importance than the merits of Eisenberg’s case, that it is of national import, and, if he had the wherewithal to do so, he should have appealed to the highest court in the land.

According to Eisenberg’s complaint, the pretext for the city’s allegedly thuggish treatment of him in regard to his ownership of vintage 1936 Sadigo was that it would have to be reclassified from its state licensed use as a transient apartment lodging to a hotel because it had built a cold-food preparation area, duly permitted by the building department, in the interior courtyard, so that area would now have to be designated a “restaurant,” therefore the apartment hotel was now a hotel.

The quibbling between whether or not the Sadigo Court Apartment Hotel should be classified as an apartment or a hotel compatible with the zoning code is rather mind-boggling to someone not familiar with the tangle of city processes that lawyers will be glad to untangle for a fee. Eisenberg stated to the media in August 2011 that the real problem was not public safety, it was just paperwork. After all, he said, the Sadigo had been serving tourists for 70 years. He vowed to fight the city to the end, claiming that his was a case of big hotels versus family operations. “This is definitely David versus Goliath,” he was quoted as saying.

The Sadigo Courtyard Apartment Hotel, purchased by Eisenberg in 1988, does indeed lie within the Museum District within the Residential Multifamily Medium Intensity District (RM-2) for which the main uses permitted by Sec. 142-212 of the Miami Beach Code of Ordinances are “residential multifamily, medium intensity district are single family detached dwellings; town homes; apartments; apartment-hotels; and hotels,” the only exceptions being the Palm View and West Avenue Corridors distant from the historic Museum District. (Emphasis added).

If the Sadigo had been operating as a transient apartment building since 1936 without any questions asked, and then obtained a state transient apartment license in 2006, and, shortly thereafter, a city certificate of occupancy and business tax license for that use thereafter, we must ask how the occupancy was certified and business taxes paid prior to 2006, and what triggered the filing in 2006, and why a certificate was granted, if that were the first one granted for transient apartment use, without the installation of fire sprinklers, which should have been required at that time, sprinklers being required for transient uses including multifamily apartment buildings and hotels, with nebulous “equivalency” exceptions for “contributing” historic structures such as the Sadigo.

This series of essays is entitled “The Fire Sprinkler Case” because the fire sprinkler requirement is at the root of the dispute. Unsurprisingly, there have been a number of such disputes involving historic structures throughout the nation with the advent of the fire sprinkler requirement. Common sense dictates that fire sprinklers equal fire sprinklers, that there is no equivalent to their ability to prevent injury and save lives.

In standard-setting National Fire Protection Association’s 2013 report on fire sprinklers, John Hall wrote that some type of fire sprinkler system was present in only 6% of reported home structure fires in 2007-2011. When wet pipe sprinklers were present, the death rate per 1,000 fires was 82% lower compared to home fires with no automatic extinguishing equipment at all. And 12% of deaths were caused by smoke that impaired victims’ vision of escape routes, smoke that could have been suppressed by sprinklers. Life saving smoke suppression would be Miami Beach Fire Marshal Sonia Machen’s main argument for the necessity of installation of automatic sprinklers at the Sadigo; she supposed that short-term guests would not know where to escape without them.

However, fire safety is a cost/benefit issue for which certain “tradeoffs” are made. For example, one jurisdiction accepted the installation of two fire doors in a historic theatre, the reduction of the numbers of seats therein, along with other changes as an “equivalent” to fire sprinklers; meaning that the objective, the reduction of injuries and saving of lives, would be equivalent to that obtained prior to the changes if sprinklers had been installed. In that case and others, the installation of fire sprinklers would have destroyed some of the historic character of a building, not to mention cause the structure to be closed permanently due to the extraordinary cost. So the determination of what constitutes a lifesaving system “equivalent” to automatic fire sprinklers is left up to local officials and experts, and the determination of equivalency is more of an art than a science. Unfortunately, art leaves considerable latitude, like other discretionary issues, for misunderstandings as to motives, and moral and criminal corruption.

Notwithstanding the refusal of all parties involved to answer questions at this time, we shall attempt to get a further explanation from Eisenberg and city officials as to why they went for broke in this case instead of arriving at a compromise. Apparently the same city attorneys have been feuding with Eisenberg for many years hence pursued the instant issue as a matter of “principle.” For all we know, this may be a just another instance of where action taken to correct the usual ineptitude, negligence, and mismanagement of Miami Beach officials is misinterpreted as retaliation. “They said I could do this, and now they are picking on me, and that must be because I gave them a bad time. All they had to do was change the paper to read hotel instead of apartment.”

Anyway, Eisenberg applied for a certificate of occupancy for use as a hotel, but it was denied because now, insisted city officials, it would need the fire protection system applicable to “brand new hotel structures.” City attorneys argued in court that a universal law mandated fire sprinklers in his case. Eisenberg maintained that the city attorneys knew better, that his kind of historic structure was excepted from the rule by state law. In other words, they lied in court, where, it is said, more lies are told than anywhere else in the world.

According to the findings in the state case (11-22415 CA 01) previously brought in the Eleventh Judicial Circuit Court for Miami Dade County by Eisenberg against his former attorneys, Jeffrey Bercow and Bercow, Radell & Fernandez, for failing persuade the city to allow him to operate a transient lodging without fire sprinklers, the sprinkler requirement is the same for transient apartments and hotels because it is assumed, or so said Fire Marshall Sonia Machen, that short-term tenants i.e. tourists are less familiar with the premises they occupy hence would be placed in greater danger than long-term tenants because they would not be aware of escape routes. Circuit Court Judge Daryl E. Trawick dismissed the complaint with prejudice on June 2, 2014, ruling that it was a sham because the facts clearly demonstrated that the law firm was not responsible for Eisenberg’s losses.

Judge Trawick recounted in the dismissal document that ‘Mr. Eisenberg subsequently sought a temporary injunction against the City in this, the Eleventh Judicial Circuit Court, in Eisenberg Development Corp. v. The City of Miami Beach, case no. 11-20234 CA 15. On January 5-6, 2012, Judge John Thornton heard two days of testimony, including testimony from Mr. Eisenberg and his experts, as well as various engineers, and the City Fire Marshal.

“Judge Thornton took note of the testimony of Richard Lorberg, the City’s Planning Director, who specifically conceded that the Sadigo was at least zoned to operate on a transient basis. The court nevertheless concluded – consistent with testimony at the hearing – that the Fire Marshal had jurisdiction to interpret the Fire Prevention Code and to otherwise insist upon the presentation of an acceptable “equivalency report,” in order to protect the public safety, health and welfare. Ultimately, Judge Thornton concluded that the Sadigo had failed to properly challenge the findings of the Fire Chief regarding the need for a sprinkler system and that the “life safety considerations of protecting the innocent public in a non-code compliant building” outweighed any prospective loss of profit of good will to Sadigo.’

The jurisdiction of the Fire Marshal would be a crucial issue in the federal case as to the identity of the policymaker in respect to the interpretation of the fire code; the federal judge held that the city was not the policymaker because the fire marshal’s decisions could be appealed to an authority higher than her employer, the city, something that Eisenberg had done to no avail, yet still had not exhausted his options including further appeals.

The federal complaint alleges that Eisenberg continued, from 2006 to 2011, to rent his transient apartments out on a short-term basis as before despite being harassed with violation notices and cease-and-desist orders. The building official insisted that a sprinkler system be installed, refusing to accept an engineer’s equivalency report.

Eisenberg addressed the city commission in 2011, arguing against the hotel reclassification. “The Mayor, City Commissioners, City Manager, and City Attorney were indifferent and the City Fire Chief took offense to Plaintiffs’ claims of unfair treatment,” reads one of the plaintiff’s court filings, drafted by Smolker, Bartlett, Schlossler, Loeb and Hines, a Tampa law firm.

Indeed, the city commission’s after-action report for Jan. 19, 2011, states that “Rod Eisenberg explained that he has been trying to do a change of occupancy from R2 to R1 for three years on an apartment building which is an existing historic structure and explained the barriers he encountered throughout this period of time and his efforts to resolve the issue. Eric Yuhr, Fire Chief, responding to Mr. Eisenberg allegations and for the record, stated that to have someone stand before this Commission and characterize the ethics of the Fire Marshal is offensive and out of line. This Fire Marshal works day and night in trying to uphold the code. He added that he resents the implication that the Fire Marshal engages in harassment or in a retaliatory manner and added that it is unacceptable.”

The state circuit court dismissal discloses that Eisenberg hired an engineer, then an architect, and then another engineer, recommended by his lawyer, to come up with a design that did not include fire sprinklers. They all desisted, one by one, at which point Eisenberg fired the last one along with his lawyer, whom he sued, calling the professionals “shills” i.e. decoys for the city, con men posing as his experts. His lawyer Bercow alleged that he advised Eisenberg that the special exceptions to the fire code for historical structures might be an avenue he could pursue, but he should not count on the results.

Eisenberg’s federal complaint alleged that “Plaintiffs believe the City Fire Marshall [Sonia Machen] told the Sadigo’s mortgagee the Sadigo was illegally operating as a hotel. On January 21, 2011, the Sadigo’s mortgagee advised it would not renew its loan after previously encouraging Plaintiffs to renew the Sadigo’s loan. Plaintiffs were left with no choice but to refinance the Sadigo at a higher interest rate — an enormous additional cost.”

“In April 2011,the City informed the Sadigo’s longstanding client, the Art Basel Foundation, the Sadigo was illegally operating as a hotel. The Foundation then severed its business relationship with Plaintiffs. In June 2011, the City sent undercover police officers to the Sadigo to verify the Sadigo was renting to transient guests. After observing transient rental activity, the City’s police officers shut down the Sadigo for noncompliance with City fire codes, evicting the Sadigo’s tenants and guests. This shutdown caused the Sadigo’s largest client, responsible for over $100,000 in annual revenue, to sever its business relationship with Plaintiffs.

“In December 2011, fifteen police offers, ten code enforcement officers, including [Jose] Alberto, and five fire officials forcibly shut down the Sadigo for a second time for violations of City fire codes. The shut down occurred while the Sadigo was hosting the ‘Pool Art Fair’ during the renowned Art Basel Miami Beach art show, forcing guests to vacate the premises in one hour. Alberto [Jose Alberto, later convicted and imprisoned for corruption elsewhere] offered to solve Eisenberg’s problems ‘by using ‘his people,’ insinuating a bribe would be due from Eisenberg. When Eisenberg refused by stating he already had legal counsel working on it, Alberto stated . . . Eisenberg would not get far using legal means. Eisenberg was then arrested. In April 2012, Alberto and other code compliance officers and fire department inspectors were arrested for bribes they accepted in June 2011. Since these arrests, the Sadigo has not received any further code compliance notices or violations.”

America’s beloved mobster Al Capone, who kept a gambling hideaway at the Clay Hotel on Espanola Way, where the current mayor’s friend and partner Scott Robins has run an transient apartment hotel without a certificate of use and business tax receipt license for several years, would probably call city officials pansies for taking so long to close down the Sadigo and for not making shark bait of its owner for exposing the corrupt “good old boy network” to investigators and the media.

According to Eisenberg’s suit, he had discovered that the city’s bid selection process was corrupt in 1993 after bidding to rent space at the old city hall building. That motivated him to take city officials to task on other matters.

“He learned the winning bidder was receiving free rent in the Old City Hall during the bid challenge. He also discovered a City commissioner and his son had received what amounted to an illegal brokerage commission on a $10 million real estate transaction. He subsequently disclosed these instances of City corruption to the media. As a result of his disclosures, a scandal ensued which ultimately led to the City manager resigning, and the City attorney being forced out, The Florida Department of Business and Professional Licensing subsequently brought an eleven-count administrative complaint against the City commissioner’s son, the son’s company, and the winning bidder agreed to pay the fines.

“In 1995, Eisenberg challenged the City and Miami-Dade County’s creation of a redevelopment area related to the Miami Beach Convention Center…. Between 2004 and 2009, Plaintiffs and others in the neighborhood voiced many complaints about the health and safety risks and Code compliance violations of an abandoned hotel in the neighborhood. The City investigated some of these complaints but did not resolve the problems with the building….

“Between 2006 and 2012, multiple City officials were investigated and prosecuted for corruption. In 2006, a City electrical inspector was arrested for soliciting bribes in 2008, a City fire protection analyst was fired after reporting suspicions of kickbacks. Also in 2008, a City planner, examiner, and inspector were all caught accepting bribes. In 2012, City procurement director, Gus Lopez, was charged with sixty-three felony counts, including racketeering, bid-tampering, and illegal compensation, And also in 2012, seven City Code compliance and fire department inspectors, including the City’s lead code compliance officer, Jose Alberto (“Alberto”), were arrested for extortion and accepting bribes in June 2011 to bypass city code enforcement inspections and fines.”

As far as old timers are concerned, all that is government business as usual on Miami Beach. Official negligence is commonplace. Many ordinances, obscure to most residents not doing business on the beach, are ignored unless someone complains about specific violations, often for purposes of retaliation or simply to make trouble for someone they do not like. Selective enforcement is also a feature of widespread moral and criminal corruption, where the labyrinthine codes are mainly applied to outsiders or unsupportive people. The laws themselves may not be discriminatory, yet they are applied in discriminatory fashion if not randomly to create the appearance that officials are doing their duty here and there from time to time.

Many informed people like it that way or go along with it to get along. That is, until they are personally offended, as was unlucky Rod Eisenberg when he wanted to rent space at city hall and it was corruptly let out to someone else. Instead of waiting for the next draw of the cards, he shot his mouth off to media, filed failed lawsuits, and then he refused to pay off the right people when officials retaliated against him. Well, the overwhelming majority of people who respond to polls in paradise believe the city government is doing a great job. Lawsuits against the city to be defended at taxpayer expense are not appreciated. Eisenberg is damned fool to those who would in Rome do as Romans do. And he is a quixotic hero for those who actually believe that every individual should or can ever be equal under the laws of human nature.

Attorneys must tell a compelling tale if they are to win their cases. The subheadings of the original complaint filed by Eisenberg’s attorneys outline his story of woe: The Parties, Jurisdiction, and Venue; The Sadigo Court Property; The City’s Culture of Corruption Unjustly Ensnares Mr. Eisenberg; The City’s Culture of Corruption Continues; The City Arbitrarily and Maliciously Deems the Historic Sadigo Court a Hotel to Prevent the Plaintiffs from Renting Its Apartments to Transient Guests; The City Arbitrarily and Maliciously Deems the Historic Sadigo Court a New Hotel to Prevent Plaintiffs from Renting Its Apartments to Transient Guests By Imposing Unreasonable and Unnecessary Fire Protection Renovation Requirements; The City’s Culture of Corruption Unjustly Ensnares Mr. Eisenberg Again; The City’s Application of Its Unwritten Customs, Policies, and Practices; The Consequences of the City’s Arbitrary and Malevolent Actions.

The remedies provided by law are then claimed, count by count. Eisenberg wanted relief and damages under federal and state constitutions for the violation of his civil right to equal protection of law, freedom of speech, and due process.

Furthermore, he wanted the court to declare that the city’s use of fire regulations in respect to the types of occupation and zoning of historic hotels violates state law and is therefore invalid, and to provide attorneys fees and whatever other relief is available. And he asked the court to clear up the confusion as to the difference between a transient apartment and a hotel, and declare what local ordinances properly comply with state and federal law so that all interested parties may know their rights and duties in that regard.

Finally, the plaintiff asked that the case be tried by a jury. If the facts as given in the complaint alone were true, we would draw inferences based on our disaffection with government hence most likely grant him the relief and remedies he desired. But we are not judges, and the law in the hands of cavilers is something other than what it seems to say to laymen. After looking at the facts offered, the judge dismissed the case, supposedly as a matter of law, yet also substituting herself as a jury considering the facts by citing Channa Imps., Inc. v. Hybur, Ltd. (2008) as a legal standard: “A factual dispute is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” So there will be no jury of the people to hear all the evidence and hold the city accountable if necessary. Wherefore, with this bestowal of immunity on the municipality, the opportunity for corruption prevails.

Now that he has had his federal case dismissed, we wonder if Eisenberg will sue his new set of lawyers for malpractice, and try to get the case reopened by alleging new facts or fraud on the court.

And now the city may claim federal suit was just as much a sham as his state suit. The city has asked the court for $30,000 in court costs and wants attorney fees of $800,000 to boot, thus putting pressure on Eisenberg to blame his attorneys again. And so on ad infinitum. We estimate Eisenberg’s own legal fees at $600,000 all told. His total damages including legal costs and fees, closures and refinancing, from fighting city hall may well exceed $4,000,000. If he were not a man of principle, he would rue the day that he chose not to install sprinklers at a cost of $100,000. As a man of principle, he may wish that he had not folded his cards instead of mounting an appeal on the issue dismissed, that municipalities are not liable in his type of situation; a win there would at least redeem him with a national merit badge.

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