Attorney Client Session 8/11/2016 SOUTH FLORIDA WATER MANAGEMENT DISTRICT GOVERNING BOARD SESSION AGENDA ITEM 42 3301 Gun Club Road West Palm Beach, Florida Thursday, August 11, 2016 12:59 p.mJ 1:51 p.m. GOVERNING BOARD MEMBERS: Daniel O'Keefe, Chairman Kevin Powers, Vice Chair Sam Accursio Frederick Barber Sandy Batchelor Clarke Harlow Mitchel James Moran Melanie Peterson IN ATTENDANCE: Peter Antonacci, Executive Director Brian Accardo, General Counsel Carlyn Kowalsky, District Attorney Abe Cooper, District Attorney Page 1 Florida Court Reporting 561-689?0999 Electronically signed by Susan Kruger (301 -D13-329-91 61) Attorney Client Session 8/11/2016 Page 2 1 BE IT REMEMBERED that the following 2 attorney/client session was held at 3301 Gun Club Road, 3 West Palm Beach, Florida, on Thursday, August 11, 2016, 4 beginning at 12:59 with attendees as hereinabove 5 noted, to wit: 5 a 7 CHAIR Let?s go ahead and start. 8 hereby open the attorney/client session. The 9 attorney/client sessiOn is to commence. A list of all 10 persons present has been provided to the court 11 reporter. 12 It?s your show, Brian. 13 MR. ACCARDO: All right. This is the Lake 14 Point litigation. I want you all to know I read the 15 attorney/client tranScript from the last time you all 16 met on this. That was last October 2015. So I won't 17 cover everything again, but I?ll hit some 18 preliminaries. 19 Also, I want to let you know that at this. 20 briefing I?m going to tell you right up front there's 21 good, there's bad and there?s ugly in this briefing. 22 And I'm telling you that because I think the best way 23 to go through it is chronologically, and if you?re like 24 me, you're going to be really irritated with some of 25 what I say. If you stick with me, as we get closer to Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 3 1 the end, there?s going to be some good stuff. 2 So the Lake Point project, I?ll acquaint you 3 all on this map right here. The Lake Point project is 4 on the shores of Lake Okeechobee right by the 5 canal here on the border between Martin and Palm Beach 6 County. And there?s two illustrations in front of you. 7 First is just, again, that's the property, about 2,200 8 acres. 9 And the second is the concept, the project 10 concept. And it takes water from Lake Okeechobee into 11 these storm water lakes. Those storm water lakes are 12 where the Lake Point company is mining or intending to 13 mine. And then it is circulated through STAs, and it 14 can be put into the it can be put back into the 15 lake after some phosphorus has been removed. There's 16 also an option to send some treated water down the 17 There?s a piece of property up here where the 18 County, Martin County was going to have that donated to 19 them. We were to have all of this land donated to us 20 at the conclusion of the mining activity. 21 The District's investment was about $12 22 million in infrastructure, pumps and finishing off the 23 STAS because they were going to be rough dug for us. 24 But other than that and then ongoing Operations. 25 But other than that, this was land that was going to be- Florida Court Reporting 561-689?0999 Electronically signed by Susan Kruger (301-013~329-9161) Attorney Client Session 8/11/2016 Page 4 1 given to the District because the Lake Point company 2 would not have otherwise been permitted to mine at that 3 location. 4 Pertinent agreements, there are two. There 5 is the agreement between the District and Lake Point. 6 That's what we call our what do we call that, Abe? 7 MR. COOPER: Development Agreement. 8 MR. ACCARDO: Development Agreement. And 9 then there's the agreement between the District and 10 Martin County. That's the Interlocal Agreement, and in 11 November of 2008 is when that was executed. And then 12 right at the beginning of 2013, Lake Point filed suit. 13 They filed suit against the District, they filed suit 14 against Martin County, they filed against Martin County 15 Commissioner Maggie Hurchalla. 16 They allege against the District that we have 17 breached our Development Agreement, the agreement 18 between the District and Lake Point. They allege that 19 ?the County has breached the Interlocal Agreement, and 20 that was the agreement between the District and Martin 21 County. They also allege that the County tortiously 22 interfered with the Development Agreement, and they 23 alleged that Commissioner Hurchalla tortiously 24 interfered with those agreements as well. So that's 25 the beginning of 2013. Florida Court Reporting 561?689?0999 Electronlcally signed by Susan Kruger (301-013-329u9161) Attorney Client Session 8/11/2016 Page 5 In 2014 Lake Point added a new claim. That 2 was the claim that that agreement, the Development 3 Agreement that Lake Point said the District breached, 4 they claim that that also had a component to it 5 where Lake Point was to be able to capture this water 6 and sell it for profit. So that was 2014. 7 October of 2015 is when you had your briefing 8 on this. You know I started in January of 2016. And 9 in about April of 2016 things really started to heat 10 up. And so I?m going to focus my discussion on the 11 four months, April of 2016 through today, actually, 12 there's a lot going on today, and as we prepare for the 13 trial, which is set for next month, the beginning of 14 next month, a two week trial set in Martin County. 15 So I mentioned April and 16 CHAIR Jury trial? 17 - MR. ACCARDO: Jury trial, yes, sir. 18 In April I received a call from the Martin 19 County attorney. And the Martin County attorney was 20 very concerned that the District had was in cahoots 21 with Lake Point, that maybe we had agreed to some sort 22 of settlement or that we had some other arrangements 23 with Lake Point contrary to Martin County's interests. 24 And they had those concerns for two reasons that they 25 expressed to me. Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329-91 61) Attorney Client Session 8/11/2016 Page 6 1 First reason was that there was a lot of 2 chatter from former District employees I think 3 you've heard some of this, former District employees 4 saying, oh, yes, the District was on board with Lake 5 Point selling that water out of Martin County and 6 selling it for profit. 7 I think you heard at the last meeting that 8 former District Executive Director Carol Wehle Howard 9 was a witness for Lake Point in the case, both as an 10 expert and with her engineering capacity, talking about 11 the likelihood of she didn't confirm it, but also as 12 a fact witness, alleging that the agreement that the 13 District entered into did contemplate water sales. So 14 the County was concerned about that. 15 The County was also concerned that we weren't 16 defending the case diligently or strongly enough. They 17 pointed to two things. They said, well, they?ve 18 incurred a lot of expense. And they have outside 19 counsel, that's the de la Parte Gilbert firm, Ed de 20 la Parte. They're lead counsel. 21 And they?ve employed lots of experts, 22 specifically experts that pertain to damages, because 23 you might recall Lake Point was saying, well, there?s 24 $100 million worth of damages here. And so Martin 25 County was retaining experts to contradict that. The Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329-91 6'1) Attorney Client Session 8/11/2016 Page 7 1 District wasn't participating. 2 And then the second reason the County felt 3 the District wasn't putting forth a strong defense was 4 that we had ignored the mining claims. We were 5 focusing so strongly on the water claim, the absurdity 6 of that agreement contemplating water sales, that we 7 weren't actively defending the claim that the District 8 breached its agreement and interfered with Lake Point's 9 ability to mine and its mining those storm water lakes. 10 So I took that information in, and you know, 11 I was skeptical, because they're co?defendants, but 12 they have different interests. Martin County's 13 interest is to have us in this case. Particularly when 14 people start talking about $100 million worth of 15 damages, it's nice to have somebody sitting?next to you 16 that maybe, you know, they might have to share those 17 damages. So 1 was certainly skeptical, but I did 18 investigate. 19 I received a briefing from counsel, pretty 20 much the same briefing you all received last October. 21 And after all of that, I found that there were five 22 things the District needed to focus on, five concerns. 23 The first is we need to file that summary 24 judgment, motion for summary judgment claiming that the 25 Development Agreement did not contemplate water sales. Florida Court Reporting 561?689-0999 Electronically signed by Susan Kruger (301-013?329-9161) Attorney Client Session 8/11/2016 Page 8 1 We'll talk about all of these in a second, but five of 2 them. File the summary judgment on the water claim. 3 We needed to make an offer of judgment in the 4 case. I'll come back to that. 5 We need to evaluate whether we had any 6 counterclaims against Lake Point. 7 We need to start preparing for a mining 8 defense. 9 And we needed to attack those damage claims 10 the same way that Martin County was. Okay, so that's 11 five things. 12 The first thing, the summary judgment on the 13 water claim. 80 the concern there was the timing. So 14 summary judgment means that there's no disputed facts 15 or facts relative to making the decision, so the Court 16 can make the decision. It's a matter of law. You all 17 had heard this before, that if you read the four 18 corners of the Development Agreement, there is no 19 mention of water sales. 20 So we wanted to move for that as soon as 21 possible, all right? There was no discovery, no 22 depositions that needed to be taken. We were only 23 introducing the four corners of that agreement. 24 So we needed to get that done, because so 25 long as that wasn't in and the judge wasn't ruling on Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/20l6 Page 9 1 that, well, we had uncertainty, right? We had an 2 uncertainty of whether we were going to win that 3 motion, and of course, we're moving closer and closer 4 to trial, and we have uncertainty as to whether that 5 motion would be_diSpositive of the entire case. 6 And that goes to the concern that maybe there 7 was a mining claim against us. Also, we're incurring 8 costs. There are 88 depositions in this case. We?ve 9 spent over $50,000 on deposition transcripts to date, 10 so we need to cut that off. We need to know whether we 11 need to prepare for trial on water or on mining. 12 And again, it wasn't certain that we were 13 going to win that claim. I know it?s correct, it's 14 what we all think, is that there was no way that that 15 Development Agreement contemplated Lake Point selling 16 water, but Lake Point had witnesses. Lake Point had 17 former Executive Director Carol Wehle Howard, and Lake 18 Point had former Assistant Executive Director Bob 19 Brown. 20 Now, Lake Point gets to argue that case and 21 says, no, there's plenty of mention of water in the 22 agreement. And there is, but it?s the District's 23 water. And Lake Point gets to argue and say, well, 24 Carol Howard was here when the agreement was 25 negotiated, and she says they intended to include water Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 10 1 sales for Lake Point. 2 Bob Brown got to say he was here after the 3 agreement was signed and the way well, 1 was here 4 after the agreement was signed, and the way the 5 District conducted itself was clear that the District 6 did agree to allow Lake Point to sell water. 7 So there was doubt. We needed to get in 8 front of the judge on that. We did get in front of the 9 judge on that. That happened the day before the last 10 Board meeting, and we won that claim. So that's good 11 news, right? So a very large portion of Lake Point's 12- claim goes away. The flip side of that is the case? 13 isn't over. We still have the mining claim. 14 Okay, the second thing that I had mentioned 15 is we need to get the offer of judgment in. So I'm 16 going through the materials and I had, coincidentally, 17 the exact same questions that Mr. Chair and Mr. Moran 18 had at the last meeting, which was are there prevailing 19 party attorney fees in the agreement, meaning if we 20 win, can we get our attorney fees back. There was not. 21 And then if there is not, can we file an offer of 22 judgment in the case. 23 And so there's a high level. There's a law 24 that says if you make a good faith offer to the 25 opposing party to settle the case and they either Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 11 1 reject it or they don't respond within 30 days, if you 2 win on the case, more or less, if there was a judgment 3 within 25 percent of your offer, but the point is all 4 your costs going forward, your attorney costs, if 5 they?re reasonable attorney fees, can be recovered. So 6 we needed to get that in, and we did, in fact, get that 7 in as soon as we could, either in late May or early 8 June. We got those two things done. 9 Then we turned to the counterclaims. Now, 10 'the issue there was there's nothing in Lake Point's 11 Complaint or our response or Martin County's response 12 that would give us relief. So let's say we win the 13 case. We win the case, we did not breach, there was no 14 damages. We're still in a contractual relationship 15 with these folks, right? 16 These are folks that are obviously litigious. 17 They are, you know, they're not the most trustworthy 18 folks. I mean the principal of Lake Point, he has a 19? criminal record, right?. If you all didn't know, he had 20 been convicted of insurance fraud for killing his 21 horses. 22 And it was apparent at that point in time 23 that they were not going to complete the project. They 24 were not progressing building these STAs, but they were 25 mining. They were mining their portion of the land, Florida Court Reporting 561w689-O999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 12 1 but they were not building the STAs. So you're left 2 with, well, we're still in if this lawsuit goes 3 through without a counterclaim, we're still in business 4 with these folks. 5 So at this point in time we brought more 6 people into the case, brought Jim Nutt in, Abe Cooper 7 supporting, and another attorney, Julia Lomonico, and 8 we asked the judge to file a motion for leave to amend 9 our answers so that we can have counterclaims. That 10 was heard this morning. So it was filed in Junefor hearing this erning, and I'll get to 12 that. 13 And then the last two things, right, were we 14 needed to address the mining claim and we needed to 15 address the issue of damages. With respect to the 16 mining claim, it became apparent pretty quick that we 17 needed outside counsel, we needed help. We could 18 not we were getting too close to trial, and we were 19 too far behind because we had not been proceeding as 20 though there was a mining claim_for us to handle that 21 appropriately in-house. 22 So we wanted to look at outside counsel. We 23 wanted to have a pretty good cross?section of the type 24 of firms we could get. So we wanted to find one local 25 litigation boutique, and we did. That's the Critton Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 13 1 Luttier Coleman firm. We wanted to find one firm that 2 dealt with this subject matter. 3 And I know it's a breach of contract case, 4 but there was those water use claims still, there was 5 mining claims in there. So we looked at the Hopping 6 Green Sams law firm. They do this type of work. And 7 that was really what the County did too when they went 8 with that de la Parte. He's one of the prominent water 9 attorneys in the state. 10 And we wanted to go look at a larger law firm 11 that had all those bases covered. And so we looked at 12 the Carlton Fields firm here, local in West Palm where 13 there's a very good litigator that Jim knows. 14 And so Jim interviewed those folks, and what 15 we found was the smaller litigation boutique felt like 16 they couldn't dedicate the resources in the amount of 17 time that we had. The larger firm, Carlton Fields, 18 they weren't as interested. They weren?t moving with 19 the same sense of urgency that we were. 20 And the Hopping firm, talking specifically to 21 the lawyers that would be working the case, they were 22 available, they were interested, and we were able to 23 negotiate good rates. So we brought them on on an 24 outside counsel contract not to exceed $150,000. We 25 got them working on the mining portion, and we also got Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/20l6 Page 14 1 them looking at the damages. 2 So I mentioned earlier that Martin County had 3 experts for damages, and we were relying on those. But 4 that was extremely and still is extremely risky for us, 5 because Martin County was actively trying to settle 6 this case. Martin County has made offers to Lake Point 7 to settle this case. Had they nmde offers to settle 8 the case, those expert witnesses would have gone away 9 with them. Lake Point has really good attorneys, and 10 the Lake Point attorneys would have made sure that was 11 a condition, that those experts would have been 12 conflicted out of working with the District. 13 And Martin County also had a very good legal 14 basis to file a summary judgment claim. They said, 15 hey, Lake Point wasn't a party to that Interlocal 16 Agreement. Lake Point said, hey, Martin County, you 17 breached that Interlocal Agreement. Martin County said 18 you werenlt even a party. 19 That is very significant, because if they?re 20 not a party to that contract, then the only liability 21 Martin County could have is tort liability. And 22 therels a tort cap in Florida, a sovereign immunity 23 tort cap of $300,000, and Martin County was very 24 willing to pay $300,000 to make the case go away. So 25 if Martin County would have been successful on saying Florida Court Reporting 561w689?0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/20l6 Page 15 1 Lake Point wasn?t a party to the contract, that case 2 would have settled immediately. 3 So those were our issues. We got counsel on 4 board and we proceed now into July. So in July we?re 5 in front of the judge. We?ve got our summary judgment 6 motion being heard. That?s on the water claim. Martin 7 County has their summary judgment motion being heard. 8 That's on whether or not Lake Point has contractual 9 rights. And then there were a few others that I don?t 10 think are quite as important.l You know, Commissioner 11 Hurchalla's in there saying they haven't proved up her 12 tortious intent. 13 So again, we were successful on our water 14 claim. Martin County was unsuccessful on their claim 15 that Lake Point was e~ they were unsuccessful in 16 proving that Lake Point was not a party to that 17 contract. So Martin County is now in the case and on 18 the hook for contractual damages as well. 19 That was the day before our Governing Board 20 meeting. Then the day of our Governing Board meeting 21 when we were here until 6:00 at night, there was 22 mediation going on in Martin County with the parties. 23 What was clear at that mediation is that Martin County 24 and Lake Point 25 Florida Court Reporting 561*689-0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 16 16 . But we?re feeling pretty good that our 17 summary judgment claim for water was granted. We don?t 18 hate that liability. We're going to focus on mining, 19 we're going to focus on trying.to get our counterclaim 20 in so we can start talking abOut whether or not we can 21 rescind this contract. 22- So that takes us forward to today, right? So 23 that happened at the last Governing Board meeting. 24 Well, coincidentally again, today there?s a hearing in 25 Martin County. The hearing in Martin County today is Florida Court Reporting 561-689?0999 Electronically nod by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 17 1 whether or not we're going to be entitled to file a 2 counterclaim. When Jim got involved back in May, we 3 notified the judge we would likely amend to file them. 4 But it wasn?t a slam dunk it was going to be allowed. 5 The reason why is in 2015 the District made 6 representation to the Court that, hey, we?re going to 7 file this counterclaim. The counterclaim didn?t come. 8 This is very late in the game to amend your pleadings. 9 So I was up all last night, I mean because if we cannot 10 file a counterclaim, then we cannot terminate this 11 contract. 12 Okay, good news, right? I get an e?mail 13 message at 9:30, the judge has allowed us to file that 14 counterclaim. So we?re basically going to say: Lake 15 Point, you breached the agreement. You didn?t donate 16 the land. You didn't do the prep work on STAs, and 17 A worse than that, you didn?t subordinate all those 18 mortgages to our interest. There's an impossibility of 19 you performing, giving us what we want, so the remedy 20 would be either rescission or cancellation of the 21 contract. We're going to get to put those claims 22 forward. As a matter of facttoday, those claims will be filed. 24. That leaves the next time that we're in front 25 of the judge, which is on August 18. On that date Florida Court Reporting 561-689?0999 Electronically signed by Susan Kruger (301 3-329-9161) Attorney Client Session 8/11/2016 Page 18 1 we're going to be arguing for leave to amend to file 2 another summary judgment motion. This is our first 3 opportunity to maybe get out of these mining claims. 4 That summary judgment motion is going to say, 5 all right, let's assume we breached the way that they 6 said we breached. Well, those breaches aren't related 7 to damages. They said we didn't act expeditiously 8 enough in approving certain works, but those works went 9 to the STAs. And Lake Point was not mining the STAs, 10 so how there's damages they owe us money. We made 11 it easier on them. 12 And then the other thing that we're going to 13 argue is that they don't they haven't tied any 14 damages to what they have also maintained, which is 15 that we've interfered with them selling their rock, and 16 that basically, in a nutshell, they say you were 17 bad?mouthing our rock, and because you were .18 bad?mouthing our rock, no one wanted to buy it,_so 19 you've, you know, you?ve damaged me. 20 I don?t think that there has been expert 21 testimony put in to quantify that, so we're hopeful 22 that maybe we can get the case thrown on that summary 23 judgment motion, if the judge lets us file it, which 24 we'll find out eight days from now, or seven days from 25 now. Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 19 1 We have another chance to still get out of 2 this case, and that is on August 30th. The County 3 filed a timely motion for summary judgment, claiming 4 that all of the damages Lake Point alleged were 5 speculative, and therefore, you know, the judge can 6 decide as a matter of law that there?s not a case here. 7 We are co~movants on that, so we?re, you know, we?re in 8 there, but that's thanks to the good work of Martin 9 County. 10 So to recap on that, we're still proceeding 11 to go into trial on the mining claim. We've got one 12 way to possibly get out if the judge lets us file our 13 own motion for summary judgment that they can't tie the 14 purported damages to our alleged breaches. We've got 15 the second way we might be able to get out, which is 16 Martin County?s motion that all these damages are too 17 speculative. 18 And then we've got this last way that we 19 might get out. The simple fact that we can now file 20 those counterclaims, we?ve got Lake Point's attention. 21 I mean it just happened, right, so no phone calls have 22 been made. But Lake Point needs to be really worried 23 now, because if we win that they breached our contract, 24 well, then the Development Agreement goes away, and if 25 the Development Agreement goes away, the Interlocal Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 20 1 Agreement goes away, and there can be no damages or 2 they can't mine. And they want to mine, and they can 3 no longer mine because that Interlocal Agreement is 4 what allows them to mine, and that Interlocal Agreement 5 will fail if there's no Development Agreement. So 6 we're going to have Lake Point's attention. 7 So that leads me to three discussion points I 8 want to talk about here. How do you feel about 9 settling this case? If they come to us tomorrow and 10 say: All right, you got your counterclaims in, good 11 job. How about we just dismiss you from the case and 12 we go our separate ways? The problem.with that is the 13 contract is still valid. How do you feel about that? 14 Do you want to be in business with these folks? 15 I?ll tell you the three issues, and then we 16 can come back to them individually. 17 The second issue that I want to talk about 18 is, well, if the County Florida Court Reporting 561?689~0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 21 8 And then last of the three things I need to 9 discuss with you all today concerns that contract for 10 outside counsel. It was a not to exceed $150,000, 11 which has been delegated to me to do thattrial, and as we proceed, I might pop above 150, 13 and I need your authorization to do it. 14 So that was a lot; that was an absolute lot, 15 I know it. Do we want to go back and talk about the 16 discussion items, or were there any questions about 17 what has happened to date in the case? 18 MS. PETERSON: Can I just ask a question? I 19 have flown over this and seen it in operation. With 20 all your scenarios, what happens to this in all those 21 ?scenarios? If you cancel the contract, what happens 22 when ?u 23 MR. ACCARDO: Cancel the contract, you don't 24 get that unless Martin County 25 Florida Court Reporting 561?689?0999 Electronlcally signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 22 3 MS. PETERSON: How much did we invest in this 4 piece of land that we don't own and we can probably 5 have a contract with them? 6 MR. ACCARDO: I don?t know that we've 7 invested in that land. I 8 MS. PETERSON: The infrastructure though 9 MR. ACCARDO: Right. We haven?t put our 10 $12 million of investment in there yet. 11 MR. ACCURSIO: My question is at the 12 beginning you were talking about the sale of the water. 13 They had two witnesses that worked at the District that 14 stated that the intention of the District was for them 15 to sell the waterthat? What 16 did we present to get us 17 MR. ACCARDO: The agreement itself, sir. 18 Their goal, right, was to make it as confusing as 19 possible so that the judge had to say I?m going to let 20 a jury decide, right? That was their goal. So that's 21 why they bring in these insiders, right, these friends 22 of the District, these insiders to say, oh, yes, that?s 23 What the District intended to do. Our goal, which we 24 Were successful in, was saying: None of that matters. 25 Read the contract. Please, Judge, read the contract. Florida Court Reporting 561~689?0999 Electronically signed by Susan Kruger (301 4313-3329-9161) Attorney Client Session 8/11/2016 Page 23 1 You will not see the sale of water in there. We were 2 successful. 3 MR. BARBER: Is there any validity to the 4 interference with their of sale of the rock? 5 MR. ACCARDO: Factual issue. Probably a 6 little; probably a little. Whether that led to 7 damages, I?m going to say no. I'm going to stick with 8 no on that. But did we are there factual disputes 9 about what we did or didn't say about their rock? Yes; 10 CHAIR What can you say about 11 somebody's rock that?s going to -- 12 VICE CHAIR POWERS: Doesn't meet the 13 standards. 14 MR. ACCARDO: Doesn't meet the specs. And in 15 fact, we have rejected Lake Point rock on some of our 16 projects for not meeting testing specifications. 17 Conversely, we?ve accepted Lake Point rock as recently 18 as, I think, two months ago. The folks came to my 19 office and said: What do we do? They're the low 20 bidder. And as much as I wanted to say, you know, bad 21 rock, I'm not going to fund their litigation against 22 me, balance that out with we'll award it to you, but 23 you need to pass all these testing specifications. So 24 things like that. 25 MR. BARBER: And did they? Florida Court Reporting 561-689-0999 Electronically signed by Susan Kruger (301?013-329-9161) Attorney Client Session 8/11/2016 Page 24 1 MR. ACCARDO: I don't know; I do not know. 2 MR. ACCURSIO: Well, we used it. They must 3 have. 4 MR. ACCARDO: Well, I don?t know that that mm 5 that contract was, say, two Board meetings ago, and 1 6 don't know that it's happening, whether 7 MR. ACCURSIO: And again, point it out on 8 that map where it?s at. 9 MR. ACCARDO: Right up here. 10 MS. PETERSON: Right next to the lake. 11 IMR. ACCARDO: Part of the Lake Point 12 strategy, their financial business model was, all 13 right, there's going to be a lot of dike repairs, and 14 I?m going to sell that rock. Obviously, I'm not an 15 expert on lime rock, but the further away you are, your 16 pit is away from the source, right, the less 17 economically viable it is. Well, they?re right there. 18 So they're thinking they?re going to supply rock to the 19 District, to the Army Corps for all of these 20 MR. BARBER: Projects. 21 MR. ACCARDO: these projects. 22 MR. MORAN: How can Martin County entertain 23. 24 25 Florida Court Reporting 561-689?0999 Electronlcally signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page MR. MORAN: And finally, no matter what kind 24 of agreement we come to or Court decision, is part of 25 our goal to be completely out of contract with these Florida Court Reporting 561?689?0999 Ele ctronlcaily signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 26 1 folks? 2 MR. ACCARDO: So that brings us back to the 3 first discussion item, what is our goal. My 4 recommendation is yes, right? I can?t fathom how we 5 continue to do business with these people, proven 6 they're willing to be litigious on maybe even technical 7 breaches like did we interfere with their mining. 8 Maybe. Technical breach. No damages. Be litigious. 9 They're backed by a billionaire, right? They're 10 politically motivated in Martin County to and that's 11 why Commissioner Hurchalla is being sued, right, to 12 make a point. So do we want to be in business with 13 those folks? 14 MR. ACCURSIO: Is the gain for the rock, 15 could it possibly be substantial for the District, or 16 are we talking about $100,000 worth of fill, or are we 17 talking millions that we can gain by staying in 18 contract with these people? 19 MR. ACCARDO: We do not profit from their 20 rock sales. The only thing we according to their 21 agreement, they are entitled to 100 percent of those 22 profits. We only and I say only, but it?s 23 something. We get the land, right? We get 2,200 acres 24 when they're done mining it. And theoretically, we 25' would get our STAs roughly constructed. That?s -- Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 27 1 there's that. 2 But the experts, the Martin County experts, 3 you know, have done the financial analysis and don't 4 believe that Lake Point can ever make enough money to 5 pay off the $60 million that's tied to that land. So I 6 think it's a very small chance that we will, if we 7 stayed in it, that we would ever see 8 MR. ACCURSIO: Our benefit 9 MR . ACCARDO: Right . 10 MR. ACCURSIO: Yes, the 2,200 acres. There's 11 a small chance of getting the 2,200 acres. 12 ACCARDO: Well, okay, there might be a 13 better than small chance of getting the 2,200 acres, 14 but a very small chance of getting it with STAs and in 15 a position that you could invest 12 million and then 16 run the project. 17 MR. ACCURSIO: Then I want to distance myself 18 from them. 19 MR. HARLOW: So there?s a $60 million loan, 20 and we value this land at roughly 15 million? 21 MR. ACCARDO: That sounds, right, yes, sir. 22 MR. HARLOW: So who loaned that money? You 23 asked the question, but - 24 MR. ACCARDO: Yes. 25 CHAIR Brian, can I I think Florida Court Reporting 561?689?0999 Elec?ronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 28 1 $15 million was talking about the value once all the 2 rock had been removed, as opposed to the value 3 MR. ACCURSIO: I want to go to their loan 4 department. 5 MR. MORAN: The loan is on the pit. Is that 6 right? 7 MS. PETERSON: But your point though, if 8 they're under contract to extract all of that rock 9 out 10 MR. ACCARDO: Right. 11 MS. PETERSON: then how could they 12 leverage the rock for the mortgage in the first place 13 when there would be no long?term value with the 14 property gone 15 MR. HARLOW: Is this from a bank or is this a 16 private 17 MS. PETERSON: they were already in 18 contract. 19 CHAIR Yes, I mean and I don?t know 20 the terms of the loan and 21 MR. They're personal guarantees. 22 CHAIR every ton of rock that 23 gets sold, the loan gets paid down and 24 MR. ACCARDO: Right. So now, again, I'm 25 speculating, but educated. Loans against the value of Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 29 1 the rock that they claim, they were always claiming 2 this was 50, 60, 100 million, right? Loans against 3 that, and then there are personal guarantees of the 4 billionaire. 5 MS. PETERSON: Gotcha. 6 MR. HARLOW: Okay, that helps. 7 MR. To what extent what are 8 their claims about the mining damages? Is it just 9 simply that we slow?rolled permitting on the STAs, 10 which have not encumbered that, that's the only claim? 11 MR. ACCARDO: That and our interference with 12 them selling by us bad?mouthing the rock. 13 IMR. And by bad-mouthing, all we 14 have or think we've done is it hasn?t measured up to a 15 written standard, or have we gone beyond, or have they 16 claimed that we've gone beyond just saying it doesn't 17 meet the written standard? 18 MR. COOPER: Not sure. 19 MR. ACCARDO: Not sure. Buried in the 88 20 depositions that we have been pursuing because it was 21 related to a mining claim. 22 MR. I'm trying to understand the 23 connection between us and Martin County. So it seems 24 like there are some issues where we are jointly aligned 25 with Martin County. Are there other issues that Martin Florida Court Reporting 561~689?0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 30 1 County has exposure and we do not? 2 MR. ACCARDO: There are some public records, 3 you know, disputes. No, it's breach. It's those 4 interfering with their ability to mine. Interfering 5 with their ability to sell water, we've disposed of 6 that. What Martin County has alleged to have done is, 7 I think, more substantial than what the District is 8 alleged to have done. 9 MR. And then to just put a finer 10 point on the question about the contract, we don't 11 think, based on where they?re at in their excavation 12 and progress towards the STAs, that we would ever get 13 the benefit from the agreement out of the agreement. 14 ACCARDO: That is our assessment. We 15 should have already seen some progress on STAs, and we 16 have not. And therels obviously no financial 17 motivation for the Lake Point corporation to prepare l8 STAs for us. 19 CHAIR Brian, cost incurred to date 20 when we hire Hopping Green, and how much have they 21 incurred so far? 22 MR. ACCARDO: Okay, so that was in June. And 23 we get weekly updates, and I think the last weekly 24 update was around $80,000. 25 CHAIR So if one of the actions that Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013~329-9161) Attorney Client Session 8/11/2016 Page 31 1 you?re asking for is authorization to spend more than 2 the $150,000 cap, if we go to trial, I don?t think we. 3 have any choice. I mean we have to spend what it is to 4 have the best representation and put forth our best 5 case, because we?re talking about serious dollars here. 6 And I kind of agree with Sam that the chances of us 7 getting a fully functioning STA at a very discounted 8 price because of the deal structure are not high, and I 9 would prefer to allege the termination and walk away 10 from this thing. 11 MR. MORAN: I agree. 12 MR. Yes, I agree. 13 MS. PETERSON: I agree. It sounds like a bad 14 deal all around. 15 CHAIR And if we can do an offer of 16 judgment where maybe we can recapture some of our costs 17 incurred, is that 18 MR. ACCARDO: We have done the offer of 19 judgment. 20 CHAIR Does that give us the 21 potential to also recapture internal costs, or is it 22 only third party costs? 23 MR. ACCARDO: Internal costs, reasonable 24 attorney fees. 25 MR. ANTONACCI: From the point of time of the Florida Court Reporting 561?689-0999 Eiectronically signed by Susan Kruger (301 -01 3~329-91 61) Attorney Client Session 8/11/2016 Page 32 1 offer. 2 MR. ACCARDO: From the point of time of the 3 offer. And it will be 30 days after the offer, because 4 they didn't formally reject it. 5 MR. ACCURSIO: How deep are they digging, 6 because they must have had it in a specification for 7 the STA. 8 MR. COOPER: It's like 20 feet for the lakes. 9 MR. ACCARDO: For the lakes. 10 MR. ACCURSIO: And that hasn't been monitored 11 at all since we're feuding, to see what they?re really 12 doing out there? 13 MR. COOPER: I think the County has been 14 monitoring. I 15 MR. ACCURSIO: Maybe the feds will take it 16 over. 17 MR. HARLOW: What's our relationship with 18 them now? 19 MR. ACCARDO: The Lake Point folks? 20 . MR. HARLOW: We do a lot of work with them, 21 don?t we? 22 MR. ACCARDO: No, no. The Lake Point folks, 23 I hesitate to say it because, you know, I don't know 24 half the history there, but I think it was a one?off. 25 I don't think we do business with the people. Now, the Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 33 1 people they're affiliated with, their engineers, their 2 experts, their consultants, yes, do a lot of business 3 with those folks. But the Lake Point entity, I don't 4 think so. 5 MR. ACCURSIO: Well, the Vibe I'm getting, it 6 sounds like we really don't want to do business with 7 these people. 8 MR. HARLOW: I'd agree. 9 MR. ACCURSIO: That's the feeling I'm getting 10 in this room. 11 MR. Well, in taking it a step 12 beyond that, I mean I think the I'm not as 13 concerned, but still concerned about Martin County 14 stepping into that role and utilizing, you know, State 15 dollars to acquire the land and then come to us and 16 say, hey, we want to do the same deal. I think that?s 17 equally problematic. And so I mean that's a direction 18 that I don't think I would consider pursuing. 19 MR. ACCARDO: I don't know what our role will 20 be to stop it. 21 MR. BARBER: That's what I was going to say. 22 How do you control what Martin County does? We can't. 23 MR. Well, if the Development 24 Agreement goes away, then the Interlocal Agreement goes 25 away, correct? Florida Court Reporting 561-689-0999 Electronically signed by Susan Kruger (301 -01 3-329-91 61) Attorney Client Session 8/11/2016 Page 34 1 MR. ACCARDO: Right. So, okay, that's a very 2 good point, Mr. If Martin County would 3 come back to us and say let's do our own agreement, and 4 then so your concern is, well, would we do that 5 agreement with Martin County. 6 MR. Because I would argue the 7 Lake Okeechobee Service Area almost, in my 8 interpretation, precludes the water sale if that water 9 has been moved onto the budget to sell it for public 10 water supply. 11 MR. ACCARDO: I don?t think Martin County 12 would come to me and say would you be okay if we sell 13 this water. We did discuss that, well, you know, we 14 own this land. Maybe sometime in the future, you know, 15 that that but Lake Point's idea wasn't so bad, it's 16 just, you know, they didn't have the legal right don't know if what we're contemplating 19 is if we were going to operate this with Martin 20 County, would we want to put some sort of limitation in 21 there that there would be no water sales. 22 CHAIR Brian, I will make a point 23 that it seems like it would have been very advantageous 24 if at the onset of this agreement we recorded our 25 interest in the remainder of the property coming back Florida Court Reporting 561w689m0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 35 1 to us with a recorded document that would be superior 2 to a loan that Lake Point took out in the future, 3 because then I think our assessment, it would be 4 definite to say, hey, we?re going to get 2,200 acres, 5 it's a great location, you know, and could be very 6 helpful coming off the there. 7 MR. ACCARDO: Do you have any historical 8 perspective 9 MR. COOPER: Well, the agreement doesn't. 10 But they have to convey the land without any 11 encumbrances or mortgages. So they're in breach. 12 CHAIR Right, but normally you would 13 put in a provision that says you have to convey it free 14 and clear, and then you would record something 15 MR. COOPER: Right. Yes, correct. 16 CHAIR That's disappointing. 17 Any other direction you need from.the Board 18 at this point? 19 MR. ACCARDO: Okay, so the 150. Now, this is 20 an interesting perspective, because we are absolutely 21 .entitled to confidentiality on our litigation 22 expenditures discussion. But I've got to go back out 23 there and get the vote in the sunshine that I'm allowed 24 to deviate from our delegation policy. So I absolutely 25 understand where we're at, and we've been managing the Florida Court Reporting 561e689?O999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page-36 1 costs the absolute best we could. We did not turn 2 outside counsel loose on everything. We kept it, you 3 know, tailored to what we knew we needed to do at the 4 time. 5 But when I go out there, because I don?t want 6 to be talking about $150,000, that might make us look 7 weak or whatever, I just wanted to ask for a motion 8 that and I'll write it down before I do it so I?m 9 very concise, but that authorizes the general counsel 10 to contract on the Lake Point matter with recognition 11 to that policy 18?55 or whatever it is. I don?t want 12 to go out there and say 13 MS. PETERSON: (Inaudible.) 14 MR. ACCARDO: Right. But obviously, you 15 know, direction, I'll take it. But that's we?re in 16 a very odd situation, because that's what these 17 meetings are for, is for us to talk about what we are 18 willing to spend or not willing to spend. But I have 19 to go get an exception to the delegation out there. 20 MR. ACCURSIO: Do you think we're going to 21 exceed it before the next meeting? 22 MR. ACCARDO: It's possible, sir. It?s 23 really it really is possible. 24 MR. ANTONACCI: Once the trial starts, the 25 meter really starts running. Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 37. 1 MR. ACCARDO: And again, we're still having 2 to prepare for the trial. That was a fundamental flaw 3 from the get?go, is yes, we like our summary judgment 4 claim on water. I like our summary judgment claim on 5 mining and damages, but that motion's going to be heard 6 on the 30th, and trial starts two weeks after. I have 7 to prepare as though the motion is going to be denied 8 and I show up ready for trial. 9 MR. ACCURSIO: So how do attorneys bill? Do 10 they bill by the lawsuit or by the work done? 11 CHAIR Depends_?- 12 MR. MORAN: What's the likelihood we'll 13 prevail on the motion for summary judgment? 2 14 MR. ACCARDO: I thought we were going to lose 15 the water summary judgment, sir, and not because we 16 were wrong, but because it would have been very easy 17 for the judge to say you've been in this case for four 18 years, we're fixing to go to trial, you've introduced 19 nothing other than what you could have done on day one. 20 I fully expected us to lose the water claim. So it's 21 hard for me to handicap the mining claim. 22 MR. MORAN: Although the water claim sets a 23 good precedent. 24 MR. ACCARDO: It does. And the judge this 25 morning allowing us to file a counterclaim, that?s good Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 38 1 too, I mean because he could have denied that and said 2 you told the Court in 2015 you were going to file this 3 counterclaimtrial we're going 4 to do this? 5 MR. MORAN: Who is it before? 6 MR. ACCARDO: Who was what? 7 MR. MORAN: The case, who's the judge? 8 MR. ACCARDO: Oh, the judge is McManus. 9 MR. ANTONACCI: But you have to remember the 10 case isn't going to be decided by the judge. 11 MR. MORAN: Well, if he grants our motion for 12 summary judgment, it will be, and it's over. 13 MR. ANTONACCI: This guy is retiring at the 14 end of December, so I think he's, as a service to his 15 colleagues, I think he's trying to get rid of this 16 difficult case before passing it off to some other poor 17 schlub that has to come in and learn about it. 18 CHAIR I'm very comfortable if you 19 come up'with some kind of a motion that we delegate 20 that authority to you to authorize expenditures as 21 reasonably necessary. And you know, we've got a finite 22 amount of time, and it's going to cost some money, but 23 I don't see what the alternative is. And what's their 24 hourly rate on this? 25 MR. ACCARDO: The partner rate is 325, and we Florida Court Reporting 561?689?0999 Electronlcally signed by Susan Kruger (301-013-329-916?1) Attorney Client Session 8/11/2016 Page 39 1 restricted it to two very specific partners, Doug Smith 2 and Timothy Riley. Doug Smith is their trial expert, 3 their civil litigation specialist, and Timothy is their 4 mining guy. 325 was a very good rate. And then where 5 associates are needed, it's at 190, 1 think, either 190 6 or 195. 7 CHAIR That's good; that's very 8 good. 9 MR. ACCARDO: Tallahassee rates, sir. And 10 that was the one good thing. It wasn't local, but you 11 know, they're doing a lot of work from their office at 12 a lower rate. 13 CHAIR All right, what other 14 direction do you need from us? 15 . MR. ACCARDO: So if Lake Point calls me 16 tomorrow and says: Good job getting your counterclaims 17 in. How about we just dismiss this case? Do we stay 18 in it, stay in it because we want em we need to 19 terminate this agreement? It costs more money to keep 20 fighting it, but at the same time, if we dismiss the 21 case, we?re still in business with them. 22 MR. MORAN: Make a condition of the dismissal 23 that we terminate the contract. 24 MR. ACCARDO: If they would do that, yes. 25 CHAIR They.won't do that. Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301 4113-1329-9161) Attorney Client Session 8/11/2016 Page 40 1 MR. ACCARDO: I would take that. 2 MS. PETERSON: Would we do a condition of the 3 dismissal that we alter the existing contract? 4 MR. ACCARDO: Alter the existing contract, so 57 like we still do business with them? 6 MS. PETERSON: Well, if you?re saying that if 7 we do the dismissal, they're not going to let us out of 8 contract as a condition of the dismissal, but if we 9 were to dismiss the case, can we alter the agreement if 10 we stay in business with them? 11 VICE CHAIR POWERS: But new performance 12 standards? 13 MS. PETERSON: Yes. 14 CHAIR And you know, I think looking 15 at something like that makes sense, because you?re not 16 going to like everybody you're in business with. It 17 doesn?t mean that it?s not for the better of our 18 District, and it might you know, the project may end 19 up being a great return on investment from the Water 20 Management District's standpoint. You know, if we can 21 get out, right, but if we've got to stay in, can we 22 improve the, you know, the agreement and get some level 23 of confidence or certainty that they're actually going 24 to be able to perform with a $60 million mortgage out 25 there. Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329?9161) Attorney Client Session 8/11/2016 Page 41 1 MR. ACCARDO: Would it change your opinion if 2 I told you that our new Director of Construction is not 3 as confident as our old Director that it?s a good water 4 project? 5 CHAIR New facts. 6 MR. ACCARDO: Yes. So Mr. Mitnik doesn't 7 think that this project will work as well as it was 8 sold to us. It?s very technical, you know, something 9 about seepage, but 10 MR. ACCURSIO: What is their advantage to 11 stay partnered with us? 12 MR. ACCARDO: What is their advantage? 13 MR. ACCURSIO: Yes. 14 MR. ACCARDO: They get to mine; they get to 15 mine. 16 MR. ACCURSIO: Oh, they get to keep mining, 17 okay. So when we disappear off the contract, their 18 mining operation stops. 19 MR. ACCARDO: And they have no revenue 20 MS. PETERSON: That?s why I don't think a 21 chance of them allowing us to get out of this contract 22 by hook or crook is going to happen, and that?s even 23 with the information about Mitnik. But I think we have 24 to have contingencies in place. Obviously, I think we 25 all agree that we'd like to be out of business with Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 42 1 these people, and now knowing that Mitnik doesn?t have 2 confidence in the project, but if we can't get out, 3 then we need to have Something that protects us. 4 MR. ACCURSIO: The location is outstanding 5 for our, you know, projects. 6 MR. BARBER: And this is a DEP mining permit? 7 MR. ACCARDO: Yes, sir. 8 CHAIR Well, because that question 9 is not before us yet, let's cross that bridge when we 10 get there. 11 MR. ACCURSIO: Were they building the STAs 12 for us, or we were going to come in after? 13 MR. ACCARDO: They were doing like 90 percent 14 of the work. 15 MR. HARLOW: What does an STA of that size 16 cost if we're going to do it ourselves? 17 MR. COOPER: I think it's another 20 million. 18 And we were going to put about 14 million into 19 CHAIR But for 2,200 acres in that location and do all the work is 21 going to cost us way more than 20 million. 22 MS. PETERSON: Way more. 23 CHAIR I would think that it would 24 be a 100 million plus number. 25 MR. ACCURSIO: Well, right now if you go to Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301 -01 3-329-91 61) 7 Attorney Client Session 8/11/2016 Page 43 1 this property, they are digging right now. 2 MR. ACCARDO: Yes, sir. 3 MR. ACCURSIO: Because this must be an old 4 aerial, because it looks like it's_cut up into ag. 5 MR. ACCARDO: Yes, I believe these were 6 the 7 MR. ACCURSIO: Or are they still is there 8 ag still going on 9 MS. PETERSON: No. I flew over that a month 10 ago. 11 MR. ACCURSIO: Okay. So it's 2,200 acres, 12 juSt they're going at it. 13 MS. PETERSON: It actually has water on it, 14 and you can almost see some of the flow. There is 15 water flowing on there. It actually looks a little bit 16 like this from the air, it's just not as pretty. 17 MR. HARLOW: We have to stay in this deal if 18 we can't get out. How long until these STAs are 19 operational? 20 MR. ACCARDO: Well, they originally had 20 21 years to turn them over to us. And it was a 2008 22 contract, so theoretically, 15 more years, you know. 23 But again, they're behind, right? They haven't started 24 -permitting STAs, they haven't started roughing it out. 25 VICE CHAIR POWERS: Well, if we get this Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 44 1 resolved though and everyone's moving forward, trying 2 to be friendly 3 MR. ACCARDO: Twenty years. 4 VICE CHAIR POWERS: 15, 20 years. 5 MR. ACCARDO: Yes. 6 MS. PETERSON: What's the chance of them 7 trying to sue us again? 8 MR. ACCARDO: Well, the next time we goof up 9 on something. 10 MS. PETERSON: Again, hopefully if we have to 11 stay in with them, we Can leverage, you know, 12 strengthening our side of the deal. 2008 was a bad 13 year for deals. 14 VICE CHAIR POWERS: Does their timeline stop 15 while it's being litigated? 16 MR. ACCARDO: Under the agreement? No, I 17 mean there's nothing that contemplates that. You know, 18 they say the agreement?s in effect other than we've 19 breached it and we owe them damages. But they you 20 know, we?re going -- that goes back to our 21 counterclaim. They're not going to be able to perform 22 under the agreement anymore. All right, so 23 MR. ANTONACCI: Brian, if there's some 24 settlement overture that the staff can?t process, the 25 'Board can have an emergency hearing by phone to talk Florida Court Reporting 561~689-0999 Electronically signed by Susan Kruger (301-013?329-9161) Attorney Client Session 8/11/2016 Page 45 1 about strategy and settlement. So there?s no reason to 2 wring ourselves out on the potentiality today, because 3 we have no idea what the other side's going to offer. 4 MR. ACCARDO: Okay, that's good. And like I 5 said, we've got another hearing on the 18th, and that's 6 whether we can file our independent summary judgment 7 motion on mining. 8 On August 30th, that's when we're in there 9 with the County saying that these damages are entirely 10 too speculative. Again, we win that well, actually, 11 we win that, and then we have our counterclaims, and 12 you know, there's that, right, because we will now be 13 on the offense saying we need to terminate this. But I 14 don't know that it's necessarily a jury question. 15 Well, no, their possibility of performance might be. 16 We can cross that bridge too in the future. 17 CHAIR Congratulations on the 18 victory on the water issue. That was 19 MS. PETERSON: Yes. 20 . MR. ACCARDO: Jim Nutt, he did phenomenal. 21 It was a huge lift. Again, I was pessimistic. mean 22 that's pretty powerful when you?ve got the staff saying 23 that the agreement says what Lake Point says, and it 24 would have been so easy for that judge to say we?ll let 25 a jury sort it out. So very big victory. Florida Court Reporting 561~689?0999 Electronlcally slgned by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page 46 CHAIR Okay, the attorney/Client 2 session is concluded. We will commence in the 3 Governing Board chambers. 4 (Whereupon, at 1:51 p.mi, the proceedings 5 were concludedFlorida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Page THE STATE OF FLORIDA 5 COUNTY OF PALM BEACH 6 7 8 1, Susan S. Kruger, do hereby certify that 9 I was authorized to and did report the foregoing 10 proceedings at the time and place herein stated, and 11 that the foregoing pages comprise a true and correct 12 transcription of my stenotype notes taken during the 13 proceedings. 14 IN WITNESS WHEREOF, I have hereunto set my 15 hand this 22nd day of August, 2016. 16 17 18 19 21 iamiw/f 7 .- Su?an S. Kruger 22 23 24 25 Florida Court Reporting 561?689?0999 Electronically signed by Susan Kruger (301-013-329-9161) Attorney Client Session 8/11/2016 Florida Court Reporting 561?689?0999 Attorney Client SessiOn 8/11/2016 Florida Court Reporting 561?689?0999 Attorney Client Session 8/11/2016 Florida Court Reporting 561?689?0999 Attorney Client Session 8/11/2016 Florida Court Reporting 561?689?0999 Attorney Client Session 8/11/2016 Florida Court Reporting 561?689?0999 Attorney Client Session 8/11/2016 Florida Court Reporting 561?689?0999 Attorney Client Session 8/11/2016 Florida Court Reporting 561?689?0999 Attorney Client Session 8/11/2016 Florida Court Reporting 561?689?0999 Attorney Client Session 8/11/2016 Florida Court Reporting 561?689m0999 Attorney Client Session 8/11/2016 Florida Court Reporting 561?689~0999