Confidential

OSM-1, LLC vs VIERA EAST CDD
Meeting on 01/08/2020

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CERTIFIED COPY

CONFIDENTIAL

V IERA	EAST COMMUNITY DEVELOPMENT DISTRICT
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CLOSED ATTORNEY-CLIENT SESSION
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OSM-1 , LLC v .	V I ERA	EAST CDD
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January 8, 2020
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	MULTI-PU RPOSE ROOM FAITH LUTHERAN CHURCH
5550 Faith Drive
Viera, Florida	32955
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Margaret Eddy Sheffield, Court Reporter
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OSM-1, LLC vs VIERA EAST CDD
Meeting on 01/08/2020	Page 2

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MEETING ATTENDEES

BOARD MEMBERS PRESENT

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Paul McCarthy, Chair
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David Bedwell, Vice Chair
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William II Bill 1 1 Oakley, Secretary
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Melinda Thomsen, Assistant Secretary
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Jo Walsh, Treasurer
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District Manager Jason Stowe
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Outside Counsel Jack C. McElroy
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0S1\!1-l, LLC vs VIERA EAST COD
Meeting on 01/08/2020	Page 3

VIERA, FLORIDA; January 8, 2020
WHEREUPON:
MR. McCARTHY:	We are now going into
attorney-client session to discuss litigation
titled OSM-1, LLC versus Viera East Community
Development District.	Case number
7	05-2019-CA-057538.
It is estimated the attorney-client session
will last 30 minutes.
The attorney-client session will be
attended by Paul McCarthy, Dave Bedwell, William
Oakley, Jo Walsh, Melinda Thomsen, Jason Showe
and Jack McElroy and a court reporter pursuant
to Section 286.001{8) of Florida Statutes.
All others shall be excluded.	Upon
conclusion of the attorney-client session we 1 ll
reopen the public meeting and I will announce
the termination of the attorney-client
session.
MR. SHOWE:	Recorder 1 s off.
MR. McELROY:	Again, for the record, my
name's Jack McElroy.
I don1 t have to read the script again.
This is -- you remember your instructions
regarding the shade session instructions that I

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OSM-1, LLC -.,,s VIERA EAST CDD
Meeting on 01/08/2020	Page 4

gave you 30 minutes ago.
Does everyone remember that?

BOARD MEMBERS (in unison)
MR. MCELROY:	Yes?

Yes.

All right.	Okay.	As to the OSM case.
Jack Spira.	As everyone knows, Mr. Spira is
is an attorney, long-time attorney here in
B	Brevard County.	He owns the company OSM-1,
LLC.	And he filed a second lawsuit which is
pending here in Brevard County in Circuit Court
but is here in front of a different judge down
here in Viera, not up in -- not up in

Titusville.
For various reasons we decided not to
consolidate those two cases.	And we've	you
know, we decided just to -- strategically it
made more sense because of the case that we've
got going on and where it 1 s at and how far along
it is up in Titusville to let that case continue
on its own and let's get that case resolved.

It will be helpful to us

if summary

judgment's entered on the 7th it would help us
in this OSM case.	So we want to do that.
Mr. Spira is	you know, the complaint
that was drafted was a better-drafted complaint

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OS.M-1, LLC vs VIERA EAST CDD
Meeting on 01/08/2020	Pages

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than the
MS. WALSH,	Yes.
MR. McELROY,	(Cont'd.)	First case.
He -- and -- and he has -- you know, you -­ you heard his story at the public meeting as to why he thinks he has a claim.
We still believe that you	again, it
comes down to did you have substantial, competent evidence to support your decision on the -- both the benefit and the methodology.	I believe you still do.	So we 1 re	-- we 1 re still comfortable with your case.
His big issue is the clubhouse.	He is -­
because he believes -- it 1 s his theory of his case that what you 1 re doing is you 1 re subsidizing a restaurant with the -- the improved -- the planned improvements to the clubhouse and that that restaurant is going to be a competitor to him -- competitor to him.
He owns commercial property and contends and I guess it 1 s going to be a -- a shopping center I believe.	And one of the tenants would be a restaurant.
And so he 1 s saying:	What you're doing is
you 1 re	--

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OSJ.\lwl, LLC vs VIERA EAST COD
Meeting on 01/08/2020	Page6

His claim is:	You are -- you 1 re
subsidizing what will be a competitor to one of
my tenants and you're using my money to do it.
And so I 1 m having -- and I 1 rn having -- you
know, my tenant is -- I 1 m going to get -- I'm
going to get less rent because you 1 v e got that
competitor who 1 s being subsidized.	And,
therefore, I'm paying for it on -- on both ends.
r 1 m -- 1 1 m paying for it in my assessments that
I'm paying.	And r 1 m paying for it in the amount
of rent I 1 m able to obtain because of what he --
he says is unfair competition.
So I do believe that -- that the offer of
reducing money in the clubhouse; I think that
that's something that he's going to be willing
to talk about to settle the case.
So we could -- we may be able to get this
case settled with OSM in those discussions even
if we can 1 t settle it with -- with the other
plaintiffs.	We can at least get rid of one of
these.
He has -- he 1 s -- he 1 s active in the
litigation.	Unlike the other side, he has
demanded discovery.	He has documents and he 1 s
scheduled Dr. Fishkind's deposition for the 14th

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OSM-1, LLC vs VIERA EAST CDD
l\foeting on 01/08/2020	Page 7

,-s
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which is next week.
And we 1 ll have to see how Dr. Fishkind does
at his deposition.	But I 1 ve seen him -- I've
seen and heard of his reputation in depositions S		before.	He 1 s -- he 1 s pretty good about -- he 1 s
very good at being able to answer questions and
parry any attacks that attorneys make on him.
B	So I'm not -- not too worried about that.
9	That litigation; what we would do is we 1 d
probably set that one for summary judgment,
The thing about -- the other reason why we
wanted to keep the two cases separate is because
the judge down here has a much more open
calendar.	We can get -- we can get hearings in
front of this judge easier than we could in
front of Judge Paulk,
If he -- we consolidate those cases it
would have slowed down the case up in
Titusville.	And getting hearings were -- it was
going to be further out before we could get

hearings because of his calendar.	So that1 s
another reason why we wanted to keep those two
cases separate.
But we would	we anticipate that we would
have -- if we 1 re not able to settle that we'll

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Meeting on 01/08/2020	Page 8

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have a motion for summary judgment teed up.	And
-- well, we'll have the motion for summary judgment ready to have for hearing in -­ sometime in late February, early March.
So we don't need to go into the settlement because the settlement discussions with him would be the same as the settlement discussions with the others.
MR. BEDWELL:	So you could go ahead and
proceed with that.	With him.
MR. McELROY:	Yes.	Yeah.	I	mean I	--	r 1 m
going to proceed with it	with both of them -- MR. BEDWELL:	Yeah.		I know.
MR. MCELROY:	Try and resolve it, yes. MR. BEDWELL:	But he might --
MR. MCELROY:	Okay.	Any questions about
the OSM litigation or --
MS. WALSH:	Are -- are we hoping that once we get it to summary judgment if it 1 s in our favor that this will -- will cause OSM want to take a step back?		Or ...
MR. McELROY:	Well, we can have the
settlement negotiations with him now.	If he has
-- and I will -- as part of those settlement negotiations I want to know what Jack is going

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OSM-1, LLC vs VIERA EAST COD
Meeting on 01/08/2020	Page 9

to say about the case at the hearing on the
motion to continue.
I'll make sure he 1 s aware of this.	And he
knows.	He's -- again, been a practicing lawyer
for quite some time.	He knows that if summary
judgment 1 s granted in that case that his chances
of winning go down.
MS. WALSH:	Right.
MR. McELROY:	So, you know, I could make --
I could make -- have some negotiations with him
now and we wouldn't settle.	And then it would
after Judge Paulk rules, if Judge Paulk rules
in our favor and gives us summary judgment then
Spira can always come back to me and say:	Yeah.
I 1 m willing to settle on those grounds now.
And then -- and I	don't think -- I	don't
think that 1 s going to change your calculus.

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MR. BEDWELL:	No.
MR. McELROY:	I think you're still willing

MR. BEDWELL:	Yeah.
MR. McELROY:	(Speaking simultaneously.)

Settlement -- even if you win at summary
judgment you 1 re willing -- you 1 re still willing
to do that settlement to not have the ordeal and
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OSM-1, LLC vs VIERA EAST CDD
l\.'lecting on 01/08/2020	Page 10

1	to	not have this case - -	other case pending.	
2		MS. WALSH:	Right.	
3		MR. BEDWELL:	Yeah.	
4		MR. McELROY:	Okay.	
5		Any questions?	Comments?	Suggestions?	
6		MR. BEDWELL:	No.	
7		MR. SHOWE:	Is there any action you think	
the board needs to take outside of the shade
session to formalize --
MR. MCELROY:	Yes.	We'd go outside the
shade session.	We don1 t have to -- you don1  t
have to formalize what you 1 ve just -- you 1 ve
just given me -- all you 1 ve done is given me
authority to talk.
The only thing we need to do once we go
outside the shade session is set new shade
sessions.

MR. STOWE:	Okay.
MR. McELROY:	Okay?
MR. OAKLEY:	The only

the only question

that I have I think, Jack, is when you 1 re
negotiating a settlement with these folks you
said you 1 re not going to start with a nine.
Where are you going to start?	Any idea?

MR. McELROY:

I think that I'd probably

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0S1\-1-1, LLC vs VIERA EAST CDD
Meeting on 01/08/2020	Page II

start with knocking -­
MS. WALSH,	Half.

MR. McELROY,

(Cont'd.)

A million off.

MR. OAKLEY,	Because any -- anything -- as
Jo pointed out, anything that, you know, we can
get.	Because we don 1 t know what the other
things are going to come up with

MR. MCELROY,
MR. OAKLEY,

sure. (Cont'd. I

As far as

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expenditures and stuff.	And we don 1 t want to cut ourselves short if we don 1 t have to.
MS. WALSH:	Yeah.	Those bathrooms alone are going to cost us a fortune.
MR. OAKLEY,	Yeah.

MR. McELROY,

So -- yes.

I think I'd start

-- I think I 1 d start at cutting off -- you know,
reducing it by a million.
MR. OAKLEY,	Okay.
MR. McELROY,	And then knowing that I could
get up to -- to two million if I need to.
MS. THOMSEN:	So in your estimation from
what you read on Spira 1 s paper, if he was again
-- not against the existence of the restaurant,
even though it's been here for years.

MR. McELROY,

I -- I think that this

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Meeting on 01/08/2020	Page 12

this is based more on Brett 1 s discussions with
Spira.	Because Brett has talked to him a couple
of times about getting discovery scheduled and a
summary judgment.
And in those discussions that Brett has had
with him  he has talked to him:	What 1 s your
You know:	What's your big hang-up on this.
MS. THOMSEN:	Uh-huh.
MR. McELROY:	What's the big problem.
And he has gotten the impression that the
big problem	and -- and based on his comments
that he had at the public hearing -- his  big
problem, his big hang-up is doing what he
considers to be a Taj Mahal fix for this
clubhouse that 1 s going to benefit a
competitor.
MS. THOMSEN:	So the -- it seems logical to
you to cut down the amount.	And that makes him
feel better about his competition?

MR. MCELROY:	Yes.
MS. THOMSEN:	Okay.
MS. WALSH:	His restaurant will be

bigger.
MR. OAKLEY:	Yeah.	And if our restaurant
Jack, if our restaurant stayed exactly at the
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Meeting on 01/08/2020	Page 13

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same physical size as it is right now it really shouldn't be that much of a competition to him.
I mean I've drawn up some internal changes which --

MR, McELROY:	Okay,

So that's the other

thing that we can -- that I can say to him,
That the restaurant will stay the same size it
is -- as it is now.
MR, OAKLEY:	Right,
MR. McELROY:	And it won't be -­
Is	it --

MR, OAKLEY:
restaurant --

The footprint of the

MS, WALSH:	Right,	I 1 d	like a little
outdoor space.	But
MR. McCARTHY:	And the other thing is is
that that money that 1 s left over from that
estimate is not all going into the restaurant.
It's going to be spread out through the --
MR, BEDWELL:	Yeah,
MR, McCARTHY:	(Cont'd,)	The pro shop and 22
MR. BEDWELL:	Painting.	New carpet.
MR, McCARTHY:	Other things that Tim has in

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mind.

So that 700- or 900,000 --

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OSM-1, LLC vs VIERA EAST CDD
Meeting on 01/08/2020	Page 14

MS. WALSH:	Is not going
MR. McCARTHY:	(Cont'd.)	That 1 s left over

3	is not going into the restaurant.	The 900,000
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MR. McELROY:	Yes.	Those are -- those are
other -- yeah.	That's -- so what we 1 re going to

be doing

and what I can tell him is that the

the vast majority of the money that 1 ll be cut

is going to come out of our

if you're --

we're at a million, I can tell him all the money
that we're going to cut out is coming out of the
food and beverage line item.
MR. McCARTHY:	Yeah.
But Jo makes a good point.	Because the
bathrooms are terrible.	They 1 r e 27 years old.

MR. McELROY:	Yeah.	Uh-huh.
MR. McCARTHY:	And you really don't want to
go in them.
MR. OAKLEY:	You can tell him the majority
of the money is going to be spent on remodeling
the bathrooms and the CDD offices.
MR. STOWE:	Yeah.
MR. BEDWELL:	You'll see there was two big
expansions to the restaurant, Jack.	The kitchen

and then a bigger dining area.

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OSM-1, LLC vs VIERA EAST COD
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MR. OAKLEY:	Plus an outside area.
MR. BEDWELL:	Plus an outside area.
MS. THOMSEN:	As long as we maintain that

the original redo was going to be under the same

roof.	Is that not correct?
MR. BEDWELL:	No.	We were going
MR. McCARTHY:	No.	We were going to build

another building.	There was two buildings on
the
MS. THOMSEN:	Where the oven -- where --
where the cook area is now going to be outside.
Remember?	With the kitchen?	The actual kitchen
was going to be outside?	Or was it going to be 14

BOARD MEMBERS:
MR. BEDWELL:

(Speaking simultaneously.) Yeah.	Extended roofline for

the kitchen.

Extended roofline for the deck.

MS. THOMSEN:

I -- I didn 1 t have that

understanding.	So
MR. OAKLEY:	What I 1 ll do for you folks is 21
I 1 v e shown the drawings to Tim.	I'll get

each one of you a set of the copies of what I 1 ve
done.	And you can take them home and take a
look at them and peruse them around.	I'll bring
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Meeting on 01/08/2020	Page 16

them to the next meeting.
Is that okay, Jack, if we do that?
MR. McELROY:	Yeah.	That's part of the
that1 ll be part of settlement negotiations.
MR. OAKLEY:	Okay.	And those are all open
to interpretation by	the architect.	So
MR. McELROY:	Just don1 t have any
discussions before the next meeting.

MS. WALSH:	Yup.
MR. McCARTHY:	Okay.

So we 1 ve given you

some options which is a good thing.
MR. MCELROY:	Yes.
MR. McCARTHY:	And we can see where we go
from here.
And I would not like to see it last for
eight or nine months.

MS. WALSH:	No.
MR. McCARTHY:

Is my feeling.

So whatever we can do to ...
MR. MCELROY:	We'll -- we 1 ll do our best -­
MR. McCARTHY:	Okay.

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away.

MR. MCELROY:	(Cont'd.)

To make it go

MR. McCARTHY:	All right.
Any other questions for Jack?

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OSM-1, LLC vs VIERA EAST CDD
:Vleeting on 01/08/2020	Page 17

BOARD MEMBERS:	(No response.)
MR. McCARTHY:	I think we're all set then. MR. STOWE:	We got to close this one?	Or

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do we --
MR. McELROY:	Let 1 s close the shade.
MR. STOWE:	All right.	The shade session
will be closed.
(Whereupon, the attorney-client session was concluded.)

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OSM-1, LLC vs VIERA EAST CDD
Meeting on 01/08/2020	Page 18

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I, Margaret Eddy Sheffield, Court Reporter, do
hereby certify that I was authorized to and did report

the foregoing proceedings, and that pages 3 through 17
is a true and correct record of my stenographic notes.

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10	Dated this l7th day of January, 2020.

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Margaret Eddy Sheffield, Court Reporter
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