Town Commission
Settles Legal Cases
Mayor Hails Settlement Offers With Homeowners, Synagogues As Victory

“I’m proud to be part of a commission that rights that kind of wrong.”

By Evan Berkowitz

The Surfside Town Council passed a resolution approving an amendment to the legal settlement agreement with property owners Jose Maranon, Lina Maranon, Marco Arboleda and Enriquita Arboleda during its Dec. 12 meeting.

The Maranons and the Arboledas owned houses at 9249 and 9255 Abbot Ave. and had been involved in litigation with the municipality for several years over fines levied by the previous town administration’s Code Enforcement Department. Allegations of property encroachment and other issues eventually led to liens of approximately $700,000 on both houses.

The new town government, elected last March, came to power on a political platform of changing Surfside’s attitude about code enforcement and lawsuits, and Mayor Charles Burkett and the new commission had been highly critical of the previous administration’s actions under mayors Tim Will and Paul Novack.

Back at the Aug. 15 meeting the Surfside Town Commission voted to accept a settlement deal that would allow The Maranons and the Arboledas to keep their houses. According to Michael S. Popok, Surfside’s attorney for this case, five separate lawsuits and appeals, including bankruptcy court proceedings, had arisen out of this dispute. Popok said he and the owner’s attorneys came to a “simple solution to the problem”: Have the town act as the mortgage holders and allow the owners to pay off their debts to the town. Surfside agreed to pay the two banks, who were the mortgage holders, approximately $360,000 for both houses, preventing foreclosure proceedings.

The liens resulted in the town taking title to the 9255 house, the smaller of the two properties. A key element of the settlement deal is the owners temporarily giving the town the deed to 9249, the second property, as collateral. Surfside would then allow them two years to pay off the debt or get new financing for $360,000. Commissioner Mark Blumstein, an attorney, said at the time that the “nature of the proposal” was that the town would become a “lender” or “bank,” which he thought inappropriate.

Popok said he did not think the terms Blumstein used were accurate. “The deed in lieu of foreclosure mechanism that we have put into the agreement,” Popok said, “is an extraordinary remedy.” He said the settlement provided the town a great deal of security with the two houses being worth much more than the amount loaned. He also pointed out that if the Maranons and Arboledas defaulted, there would be no need for expensive or lengthy foreclosure proceedings because the town already possessed the deeds; the titles would be held in escrow.

According to the Surfside Gazette, code violation notices were written for the house at 9249 Abbott encroaching onto the lot of 9255. The owners bought 9255 to avoid the encroachment issue, but this did not satisfy the previous Surfside government. Fines in the amount of $4,350 per day were levied. Commissioner Marc Imberman sympathized, saying at the August meeting that Maranon and Arboleda had been “brutalized by the town.”

According to Popok, the new Dec. 12 resolution amendment to this legal settlement agreement related to the “collateralization” of the two separate properties, particularly details involving what would occur if either home were sold. It passed 4-1 with Blumstein dissenting.

Another resolution regarding this case also passed that evening, approving the stipulation for the settlement with Bank of America, the bank that held the mortgage on the larger of the two properties, 9249. That bank now agreed to accept $170,000 for the debt. It passed 4-1 with Blumstein again with dissenting.

Mayor Charles Burkett said citizens should not lose their homes over code enforcement issues. “I’m proud to be part of a commission that rights that kind of wrong,” he said in August.

Also discussed at the recent meeting were legal fees accrued from Surfside’s several years of litigation with two synagogues, Midrash Sephardi and Young Israel of Bal Harbour. The original dispute concerned the religious organizations’ right to hold services in an area of town not zoned for that purpose. The case involved new federal statutes, with Surfside, at one time, trying to take the matter to the U.S. Supreme Court. The synagogues won the case because it was determined that the town had violated their constitutional right to freedom of worship. The synagogues are entitled to receive reimbursement for lawyer fees from Surfside. In the settlement that passed unanimously, the town agreed to pay Young Israel Synagogue lawyers approximately $150,000 and Midrash’s $645,000.

Surfside had a policy with Coregis Insurance that covered the damages in the case. The town sued the company over the issue of coverage. The company refused to pay out what Surfside saw as the fair amount. The policy was for $1 million. By August, the company had paid the town only $494,000. In the new settlement, Coregis is willing to tender the $506,000 owed the town, which can be used in its new settlements on the synagogue legal fees cases.

To applause, Burkett announced this as the end of Surfside’s ongoing costly lawsuits that he virulently campaigned against. “This is a very big moment for this town,” he said, adding that in approximately eight months time they had stopped multimillion-dollar legal liabilities facing the town. “All the lawyers’ clocks have stopped ticking,” he said.

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