Insurance runs the Bert Harris show

On the brink of trial in the case of Bob and Ellen McCaffrey versus the city of Holmes Beach, both sides are looking at the big picture — with the city’s insurer in the middle.

Now set for a three-day trial starting Wednesday, Aug. 15, the McCaffreys’ case is widely considered a Bert Harris test case in the 12th Circuit Court.

The McCaffreys claim $341,000 in damages against the city for enacting ordinances and preventing the profitable redevelopment of their home.

The city, on the other side, is looking to defend the rule of law in Holmes Beach.

The city is relying on the Florida League of Cities’ insurance arm, the Florida Municipal Insurance Trust, and its assigned legal representatives, the Clearwater firm of Trask Daigneault.

The city is on the hook for costs and damages not covered by the FMIT annual $1-$1.5 million general liability policies.

The policies include coverage since 2015 for claims filed under the Bert J. Harris Jr. Private Property Rights Protection Act, including $300,000-$1 million aggregate limits and $5,000 deductibles.

The act gives owners the right to sue the city for permanently devaluing their property.

Stakes are high with some $6 million alleged in 15 pending court cases against the city.

There are about 40 claims received by the city that could be filed as lawsuits, as the playing field to file the lawsuits is open until Oct. 1.

Under the 2014-15 FMIT policy, the insurer paid attorneys’ fees to defend Bert Harris cases without implicating policy limits, according to Holmes Beach treasurer Lori Hill.

Beginning in October 2015, attorney fees were deducted from the amount allotted for Bert Harris coverage, she wrote in a February 2017 email.

A $75,544 net premium was paid for the $1.5 million 2016-17 general liability policy, including the Bert Harris coverage.

For the city’s 2017-18 policy, the premium rose and Bert Harris coverage decreased to $300,000.

“I will verify the city paid $105,228 for a $1 million general liability insurance policy for Oct. 1, 2017-Sept. 30, 2018, which includes Bert Harris claim coverage,” Hill wrote in a June email.

Asked in July why the city paid $20,000 more for the 2017-18 policy, Hill wrote, “Our insurance rates increase every year based on raising costs and claims.”

In a budget meeting July 9, Hill proposed to city commissioners that a new Bert Harris fund be established with $500,000 from a rollover fund.

Insurance representatives say the Bert Harris claims filed thus far are spread over two policy years, 2016-17 and 2017-18.

The McCaffrey case will be the first to go to trial challenging the 2013-16 measures aimed at a burgeoning stock of vacation houses after residents pleaded to commissioners to address noise, parking, garbage and crime concerns.

The McCaffreys — represented by attorney Fred Moore of Blalock Walters in Bradenton — allege the city, using six of these ordinances, destroyed their reasonable investment-back expectations and retirement.

Their claim also includes allegations of a “systematic approach to significantly restrict development rights within the R-2 zoning district.”

The city denies the allegations.

“It looks like they’re letting the insurance company run the show,” Bob McCaffrey said in June.

“That’s all right, but they will have to face reality one way or another, because, in my case anyway, after looking at the property values of homes surrounding me, there’s no question the city obviously destroyed my property value,” he added.

The testimony of Holmes Beach building official Jim McGuinness and developer Shawn Kaleta was discussed at an Aug. 13 pre-trial hearing.

Daigneault told the court McGuinness had torn his rotator cuff and was not working, but Moore said he expects his testimony, with the trial possibly extended after the third day.

Moore said he expects to call Kaleta as a rebuttal witness.

The trial will begin at 9 a.m. Aug. 15 at the Manatee County Judicial Center, 1051 Manatee Ave. W., Bradenton. Judge Lon Arend will preside.

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