Miami Commissioner Joe Carollo leaves federal court in downtown Miami, on March 1, 2024.
Alexia Fodere
for The Miami Herald
The city of Miami appears close to reaching a settlement in the final remaining lawsuit stemming from accusations that former Miami Commissioner Joe Carollo weaponized city resources against two Little Havana businessmen. But the recent disqualification of several witnesses — including the former police chief and deputy city manager — could threaten to derail an agreement.
The allegations in the lawsuit, filed by Bill Fuller and Martin Pinilla in November 2023, closely parallel the case that the two men won against Carollo in June 2023, when jurors awarded Fuller and Pinilla $63.5 million. Fuller and Pinilla alleged that Carollo mobilized a “government machine” against them and a slew of their businesses that caused a loss of over $60 million and that he did so in retaliation for them supporting Carollo’s opponent in the 2017 election.
In a Friday filing in federal court, Jeffrey Gutchess, an attorney for the plaintiffs, wrote that a settlement agreement was “imminent” following a Feb. 26 closed-door meeting, known as a “shade” meeting, that took place at City Hall between commissioners and the city’s attorneys. Unlike mediation, the city’s shade meetings do not involve the opposing side.
The proposed settlement amount is in the $12 million to $20 million range, according to a source. That’s on par with the $12.5 million settlement that the City Commission approved in 2024 in a related lawsuit.
The city of Miami, however, pushed back on Gutchess’ claims. In a Feb. 27 filing, attorneys for the city wrote that “a settlement is not imminent” and that Gutchess’ claims about a settlement raise “serious concerns pertaining to the disclosure of privileged conversations between City officials and the City’s lawyers which occurred during the confidential shade meeting.”
“How plaintiffs could have obtained any information from the February 26, 2026 shade meeting casts additional ethical concerns regarding communications with a represented party,” the city’s lawyers wrote.
In a Sunday filing, Gutchess doubled down. He wrote that on Feb. 25 — the day before the shade meeting — a “solid majority of commissioners supported an instruction to the City’s counsel to settle this case broadly on terms that were acceptable to Plaintiffs.” Gutchess did not elaborate on why he believes that, nor did he say which commissioners supported the settlement.
“Either there is an obvious ‘disconnect’ between the City of Miami, the party in this action, and its counsel, or counsel for the City of Miami has not been ‘candid’ with this Court,” Gutchess wrote in the filing.
Attorney Jeff Gutchess talks to reporters outside federal court downtown Miami on March 1, 2024. Alexia Fodere for The Miami Herald
On Monday, attorney Jack Flagg, who also represents Fuller and Pinilla, requested that Judge Federico Moreno order two city commissioners to attend a mediation session “to assist with finalizing a settlement in this case.” The request entails making an exception to the state’s Sunshine laws that prohibit elected officials from meeting privately to discuss legislative matters.
Reached for comment Monday, Gutchess declined to say why the plaintiffs want two city commissioners present for mediation, nor did he say if there are two commissioners in particular that his team hoped would attend. Carollo, who was termed out at the end of last year, has since been replaced as the District 3 commissioner by political newcomer Rolando Escalona, a Carollo critic whose election night watch party took place at the Tower Hotel, which is owned by Fuller and Pinilla.
“There should be imminent settlement discussions in this case for the City to avoid a judgment in excess of 100 million dollars,” Gutchess said in an email to the Miami Herald. “We are not at liberty to discuss the range of any settlement or whether there will be any further mediation, or if so, who would attend.”
Former police chief, deputy city manager barred from testifying
The situation was further complicated Monday when several witnesses did not show up to federal court to give depositions. Those witnesses included former Miami Police Chief Art Acevedo, former Deputy City Manager Joe Napoli and former Assistant Building Director Jose Regalado.
The three were among six witnesses that Moreno had said should be deposed at the Wilkie D. Ferguson Jr. federal courthouse on Monday.
“If a witness fails to appear, the Plaintiffs will have elected not to use that witness,” Moreno wrote in a February order.
Gutchess seemingly tried to get ahead of the matter when he filed a motion Friday asking the court to defer the depositions, writing that his team had learned that the city had not served deposition subpoenas to at least two witnesses, including Acevedo, “nor even asked the counsel for these witnesses if they would accept service of subpoenas.”
The other witnesses who were supposed to testify Monday were Andy Perez, a building inspector for the city; Ricardo Franqui, a member of the code compliance department; and Maurice Pons, a senior building official, according to court filings.
None of the six showed up. Moreno ordered Monday that “since Plaintiffs did not produce the witnesses or announce why none of the witnesses could come to court,” those witnesses “are not permitted to testify at trial.”
Reached by phone, Regalado and Napoli both said they had not been informed about the scheduled depositions and that they learned about them when contacted by the Herald on Monday afternoon.
The City Attorney’s Office did not respond to questions on the matter, nor did it say whether it was the city’s responsibility to subpoena the witnesses for Monday’s depositions.
Gutchess asked the judge for an extra week “to provide the parties sufficient time to coordinate to either finalize an imminent settlement or properly ensure the attendance of nonparty witnesses outside of Plaintiffs’ control … in light of an expected settlement.”
The city responded that Gutchess’ request was “woefully untimely,” denied that a settlement was “imminent” and said it has “expended significant time and resources preparing for the Court-ordered depositions.”
Moreno sided with the city Monday, ruling that the six witnesses cannot testify at trial because the city “would be prejudiced by being precluded from deposing the witnesses.”
That ruling could deal a blow to Fuller and Pinilla’s side, either by eliminating important witnesses if the case were to go to trial or by handing the city additional leverage in settlement discussions.
The witnesses Former Miami Deputy City Manager Joseph Napoli
Napoli was the deputy to then-City Manager Emilio González, a Carollo critic who recently ran for mayor and lost in a December runoff. In a December filing regarding the plaintiffs’ witnesses, Gutchess wrote that Napoli would testify that he left his job at the city “because of the ‘toxic environment’ created by Carollo, including the targeting of Plaintiffs.”
Regalado is the brother of Miami-Dade County Commissioner Raquel Regalado and the son of Miami-Dade County Property Appraiser and former Miami mayor Tomás Regalado. The Regalado family has long had bad blood with Carollo. Jose Regalado left his job with the city last year when he ran for the open District 4 seat, losing in a June special election to Ralph Rosado, whose campaign was bankrolled by Carollo and former Mayor Francis Suarez. Rosado and Carollo have since had a falling out.
Acevedo was ousted as police chief in 2021. In a sworn declaration signed last month, Acevedo said he “personally witnessed” the city, including former City Manager Art Noriega and former City Attorney Victoria Méndez, “execute a well-known and, in my view, notorious unconstitutional custom and policy of political retaliation on behalf of Commissioner Joe Carollo against Mr. Bill Fuller.”
Acevedo also wrote that he witnessed Noriega and the assistant police chief — now current Miami Police Chief Manuel Morales — “personally supervising the targeting operation against Mr. Fuller, which involved numerous police officers and code enforcement officers who were knowingly carrying out political retribution against him.”
Former Miami Police Chief Art Acevedo Pedro Portal pportal@miamiherald.com
Acevedo has been embroiled in his own legal battle against the city. In 2022, he filed a lawsuit against the city, Carollo, former City Manager Art Noriega, former City Commissioner Alex Díaz de la Portilla and the late City Commissioner Manolo Reyes, alleging that the parties violated his First Amendment rights and illegally retaliated against him for “speaking out against corruption and abuse of power by the City of Miami Commission.”
In July 2024, a federal judge ruled that the case can move forward, but there hasn’t been any activity in the case since April, according to the court docket. Attorneys for Acevedo did not respond to a request for comment.
Reached by phone Monday, Carollo declined to comment on the latest updates in Fuller and Pinilla’s case. He has long denied the allegations against him.
Carollo was initially named as a defendant in the lawsuit, along with Noriega, Méndez and various other city employees. All individual defendants have since been dismissed, leaving the city of Miami as the last remaining defendant in the case.
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Tess Riski covers Miami City Hall. She joined the Miami Herald in 2022 and has covered local politics throughout Miami-Dade County. She is a graduate of Columbia Journalism School’s Toni Stabile Center for Investigative Journalism.