City of Miami could settle harassment lawsuit from Ball & Chain owners for $12.5M
Miami could pay $12.5 million to settle a lawsuit brought by multiple Little Havana businesses over claims of harassment and unfair treatment, the latest turn in a winding legal saga stemming from the bad blood between local nightclub owners, City Hall and Commissioner Joe Carollo.
The lawsuit, brought by a company that owns Ball & Chain and Taquerias el Mexicano, was first filed in federal court in September 2021. The businesses accused city administrators of wrongfully issuing code violations, slow-walking permits and launching raid-style inspections, sometimes during busy hours, even though violations were not always found. The suit also accused Carollo of spearheading a City Commission vote to create new noise restrictions that specifically targeted Ball & Chain.
The Mad Room LLC, the owner of both establishments, claimed $27.9 million in damages tied to the harassment. City commissioners on Thursday will decide if they want to authorize City Manager Art Noriega’s administration to work out a settlement for less than half of that amount. A portion of the settlement could come from city reserves, with another part coming from a city insurer.
Looming over this week’s proposal is a separate case in which Carollo was found personally liable for violating the free speech rights of two Little Havana businessmen affiliated with Ball & Chain, Bill Fuller and Martin Pinilla, after they supported Carollo’s opponent in the city’s 2017 election. In June 2023, a jury awarded Fuller and Pinilla $63.5 million after finding that Carollo tried to destroy the men’s reputations and pushed city cops and code enforcement officers to target their properties.
The commissioner has spent the last year defending against the seizure of his Coconut Grove home and garnishment of his city wages to satisfy part of the judgment. So far, he’s successfully guarded his city pay from garnishment, and a magistrate judge has recommended that his home should be protected from seizure.
While appealing the $63.5 million judgment, Carollo also scored another legal win in recent days: A judge dismissed a separate lawsuit from Fuller and Pinilla that sought to have him removed from office.
In the Mad Room lawsuit, the city administration is accused of being complicit, putting taxpayers on the hook for any judgment against the city.
QBE Specialty Insurance Company has agreed to “fund a portion of the settlement of the Mad Room Lawsuit,” according to the resolution. The proposal does not say specifically how much the insurer would pay.
In May, QBE sued the city to recoup $5 million that the insurer paid for Carollo’s legal defense in the lawsuit he lost. The settlement that will be discussed Thursday does not involve the May litigation, according to Commissioner Manolo Reyes’ office, which was briefed by the city’s administration.
Commissioner Damian Pardo’s office told the Miami Herald that the insurance company would pay about $4 million of the $12.5 million settlement being considered in the Mad Room case, and about $8.2 million would come from city reserves. The remaining $300,000 involves liens against the businesses that came about as a result of code violations, the total of which would be wiped out as part of the settlement agreement.
