City settling Kaleta lawsuit out of court

Kaleta federal settlement
Attorneys Aaron Thomas and Randolph Smith represented Shawn Kaleta in a federal lawsuit filed against the city of Anna Maria. - Joe Hendricks | Sun

ANNA MARIA – Developer Shawn Kaleta and the city of Anna Maria have brokered a settlement that, when finalized, will alleviate the need for the city to defend itself in federal court.

The settlement is in response to a federal lawsuit filed with United States District Court for the Middle District of Florida in February 2016. The suit, filed on behalf of Kaleta and his Beach to Beach Bay Construction company, named the city and Mayor Dan Murphy as defendants.

The lawsuit accuses city officials of making unwritten and erroneous interpretations of city codes, policies and practices that were applied solely to Kaleta and Beach to Bay and intended to prevent the future construction of vacation rentals. The suit alleges the actions of city officials damaged Kaleta regarding lost business, reduced property values and impairment of reputation.

Kaleta’s attorneys sought financial damages, the reimbursement of attorney fees and a declaratory judgement stating that the city’s actions violated Kaleta’s rights to free speech, due process and equal protection.

The lawsuit also asked the federal court to order city officials to stop making false and slanderous statements and issue a public apology. This request pertained in part to a statement Murphy made about Kaleta in a story published in The Sun in 2015.

“I’m unilaterally revoking his building privileges in the city of Anna Maria immediately, and any affiliated businesses he’s associated with,” Murphy said at the time.

Settlement terms

The settlement terms include an undisclosed monetary payment negotiated by the Florida League of Cities attorneys that represented the city, to be paid by an insurer the city is covered by through the League of Cities.

The non-monetary settlement terms were negotiated by City Attorney Becky Vose and Kaleta’s legal team. On Thursday, Oct. 12, Vose presented the non-monetary settlement agreement to the city commission in the form of Resolution 17-731, which the commission approved unanimously.

“The settlement does not admit any fault on the part of the city, but will resolve conflicts involved and will avoid a trial,” the resolution states.

“The city of Anna Maria hereby retracts any and all statements made by any city officials that Mr. Shawn Kaleta and/or Beach to Bay Construction and its affiliates were ever banned from obtaining building permits. The ban simply never occurred,” it says.

The city also retracted any statements made by any city officials about Kaleta and Beach to Bay repeatedly performing unpermitted work that endangered the city and its citizens.

“The city recognizes these statements may have harmed Mr. Kaleta and his business, and such statements should have been retracted at the time they were made. The city looks forward to a positive relationship with Mr. Kaleta and Beach to Bay now and into the future.”

The resolution requires the city to relocate gumbo limbo trees recently planted in front of 101 Willow Ave. and trim Australian pines and sea grape trees at that location after the sea turtle nesting season ends Oct. 31.

The city also agrees to implement a written policy for handling building permit applications in a non-discriminatory manner for all building permit applications received by the city.

Speaking on behalf of Kaleta on Monday, attorney Louis Najmy said, “Assuming that everything is completely finalized, we are very pleased with the settlement. We have learned that the city leaders collectively and correctly feel Shawn Kaleta is a valuable member of the community, and he and the city should work together to make the city even better.”

Najmy also said Lakeland resident Ratnamani Lingamallu dropped the county lawsuit she filed in March accusing Kaleta of fraudulent business practices involving a rental property they were developing at 109 Pine Ave.