SUBJECT/RECOMMENDATION:
Title
Request for authority to settle case of Crum Properties II, LLC v. Community Redevelopment Agency of the City of Clearwater, Florida, Case No. 23-008557-CI.
Body
SUMMARY:
On September 29, 2023, Crum Properties II, LLC filed a two-count Complaint against the City and the CRA. The Complaint was based on the City’s and the CRA’s alleged breach of contract (Count 1) and breach of contractual indemnification (Count 2) in a Development Agreement.
In 1998, the CRA entered into the Development Agreement with Information Management Resources, Inc. (“IMR”) for sale of real property located in the City of Clearwater (the “Property”). The CRA owned the Property and agreed to sell the Property to IMR. In 2004, Crum acquired the Property from CGI Information Services and Management Consultants, Inc. (“CGI”) which acquired the Property from IMR. It assigned its rights under the Development Agreement to Crum.
African American gravesites were discovered on the Property in 2020. Crum alleged that the Development Agreement contained false warranties that 1) the Property did not presently include human remains from any cemetery, and 2) that the cemetery had been previously transferred from the Property and all human remains associated therewith were transferred. The gravesites were from an African American cemetery established by St. Matthews Baptist Church in the early 1900’s, which was later sold to private parties in 1955. In the 1960s, a Montgomery Ward store was constructed and operated on the Property. In the 1980s, the City acquired the Property and remodeled it into municipal offices. The City conveyed the Property to the CRA in 1998.
The City demanded that the Complaint be dismissed because it was not a party to the Development Agreement. On March 22, 2024, Crum filed a Notice of Voluntary Dismissal Without Prejudice as to the City; therefore, the City was no longer a party to the litigation. The litigation continued with the CRA as the sole defendant.
On June 27, 2024, Crum filed a five-count Amended Complaint alleging as follows:
Count I - Breach of Contract
Count II - Common Law Breach of Warranty
Count III - Contractual Indemnification
Count IV - Negligent Misrepresentation
Count V - Fraudulent Inducement
On March 20, 2025, the Court entered an Order denying the CRA’s Motion for Summary Judgment. On March 31, 2025, the Court entered an Order granting Crum’s Motion for Partial Summary Judgment on Counts I, II, and III.
With regard to the damage claims for breach of contract, (Counts I, II and III of the Amended Complaint), there is no sovereign immunity cap. With regard to Counts IV and V of the Amended Complaint, tort damages are subject to the monetary limitations of Section 768.28, F.S.
Authority is being sought to settle this case for Seven Million, Five Hundred Thousand Dollars ($7,500,000.00), in exchange for which the CRA and the City will receive a full release, and the pending civil action will be dismissed with prejudice.
APPROPRIATION CODE AND AMOUNT:
The appropriation cost code for this expenditure is 1889311-534000. A future budget amendment for the transfer of monies from various CRA capital projects to the CRA operating fund will fund this appropriation.