Concerns raise over city's insurance coverage on Brett's

The Fernandina Beach City Commission will wait and consult the city attorney before taking action regarding insurance on Brett's Waterway Cafe, a city-owned building that city officials have said is unsafe.

The building is leased to Bryan Simpson's Centre Street Restaurant Group, which subleases it to Brett Carter and Robert Fisher, owners of the restaurant. That lease is set to expire in December 2025. The safety of the structure, which is built on pilings over the river, has been questioned. City Engineer Charlie George deemed the structure unsafe and put the restaurant on notice that it would have to close unless significant repairs were completed. The owners appealed that decision, and after some back and forth between them and the city, the matter went before Circuit Court Judge Steven Fahlgren, who stayed - or halted - the decision by city officials to close it.

At the Jan. 17 city commission meeting, Commissioner Chip Ross expressed reservations about insurance on the building. He said the restaurant remains open despite the unsafe building notice, and that while the city has liability coverage, Brett's is not listed on that policy or the city's application for insurance. He said Centre Street Restaurant Group does have liability insurance, but that it is unknown if it informed its insurance carrier about the unsafe building notice.

The city's attorney, Tammi Bach, is on vacation and so was not at the commission meeting; local attorney Harrison Poole was standing in for her. He said that while, "in our litigious society" city commissioners could be named in a lawsuit if there were action brought in the event that someone was harmed by the condition of the building, the commissioners would not be liable due to qualified and absolute immunity.

Poole did say, however, that there is potential for the city to be liable.

"You've got knowledge of unsafe condition of a property that's owned by the city," Poole said. "If a catastrophic event were to happen, there is a potential for liability. The defendants in that would be the city, the operator and the tenant. It would be problematic if there was no insurance coverage."

Mayor Bradley Bean said he believes the city should wait until Bach returns from vacation to address the matter, as did Commissioner David Sturges.

However, Ross was not ready to let the issue to wait two weeks. He said the city is "going bare" of liability insurance, and "if you think that's a good idea for your business, that's fine; I don't think we should wait two weeks for the city attorney to come back."

"Do we know we're bare?" Bean asked. "That's the question I want to ask, that's why I want to wait for Tammi (Bach) because only she can tell us we are or are not running without insurance. We do have policies that cover Brett's. That's a question for an attorney. I am going to err on the side that we do, because we have some great comprehensive policies."

Ross said Poole could do the research into matter instead of waiting for Bach's return, and Bean pointed out that Poole is paid by the hour, and said he does not want to pay him to clarify something "that we're pretty sure we do know the answer, and lawyers aren't cheap." Poole said the matter would take time to research, and that the appropriate time to come to the commission about the matter would be at the next city commission meeting, when Bach would be back.

Shaun Woleshin, the city's insurance broker, said that from a liability perspective, Brett's is not a "designated premises policy."

"We (the city) have a lot of common areas, sidewalks, a lot of common areas where we have injuries on those properties," Woleshin said. "We don't have to designate all the common areas of the city for there to be liability coverage to respond to one of those claims."

He said the city has no property coverage on Brett's since that coverage is transferred in the lease to the lessee, but his opinion is that the city does have liability coverage for the building.

Ross asked if the insurance company is aware that the building has been declared unsafe, and Woleshin said, "Not that I know of." Woleshin said an insurance company could deny coverage if there was "misrepresentation in application," but disclosure of the unsafe building notice was not required in the application for insurance.

"Would it be prudent to tell (the insurance company about the notice)?" Ross asked.

"I would leave that to every individual client," Woleshin replied. "If that's the directive of the commission of city staff to impose that question, we certainly would. It's prudent if we have solutions, if there are potential solutions to mitigate the risk. We represent our clients and try to get the best outcome for our clients, and so I wouldn't want to bring something to the carrier's attention without a game plan to manage it."

"I think this has been all cleared up," Bean said. "Asking and questioning if there is insurance doesn't make the insurance disappear. I think the insurance has been here, and it seems like it has. I think we are covered, based on our experts we can talk to."

A county business operator asked the city commission to look into policies of the Building Department. Larry Hogan, owner and operator of Access America, said building official Jimmy Parr is not conforming to state laws governing the use of private building inspectors.

"Jimmy Parr in the building department has chosen to ignore law requiring him to accept the use of private providers in situations where a property owner or contractor submits their plans and then, after the plan review is done, choose to use a private provider for inspections," Hogan said. "Florida state statutes are clear, there's no gray area, that as long as it requested, two business days before the first inspection is required, it has to be accepted. It isn't my opinion, we have an ordinance and state statute, and he has chosen to ignore that, do it his way. Along with that, he has audited me more than four times per month, which is also against state statute. I'd like to see if that's common, or is he just creating a complicated environment for my company and the people that I service?" Hogan also asked the commission to look into the discrepancy between permit fees in the city and in unincorporated Nassau County.

"What's your transparency showing why you are charging $20, 000 for a base permit for your inspections?" Hogan asked. "The total cost of your average permits is $56, 000. If you have a house on one side of the street (not in city limits, but in unincorporated Nassau County), you are paying $14, 000, and the other side of the street (in the city), you are paying $56, 000. Why is it costing the building department so much?" Mayor Bean said he also wanted to look into the issues and scheduled a workshop about the building department for the second Tuesday in February.

In other business, the city commission: · Proclaimed Jan. 20 Florida Arbor Day; · Proclaimed Jan. 16 Martin Luther King Jr. Day; · Authorized the city attorney to work with the city claims administrator to defend the city of Fernandina Beach in the matter of Main Beach Sojourn LLLP and Compass Group, Inc. v. City of Fernandina Beach; · Approved a change order totaling $83, 971 to Western Specialty Contractors of America for the Peck Center brick restoration project; · Approved the designation of Protected Heritage Tree to five private and one public tree; · Approved a work order amendment with Passero Associates in the amount of $73, 000, as a result of additional construction administration services for the fire station at the airport; · Approved the purchase of medical supplies and equipment from Bound Tree Medical, LLC, by renewing a piggyback purchase in an amount not to exceed $110, 880; · Amended, on first reading, the Land Development Code for waterfront development and marinas as previously directed by the city commission; · Amended, on first reading, the Land Development Code for accessory structures and accessory dwelling units; · Amended, on first reading, the Land Development Code related to overnight parking and temporary portable structures; · Amended, on first reading, the Land Development Code to create a canopy road designation program; · Changed, on first reading, the dates of the city's general and runoff elections to coincide with the state primary and general election dates, by a 4-1 vote, with Commissioner Ross casting the dissenting vote; · Approved on second reading, the amended master fee schedule consisting of the stormwater, wastewater and water for Fiscal Year 2022-23. jroberts@fbnewsleader.com