An insurance company that has paid out millions of dollars to the city of Miami to cover Commissioner Joe Carollo’s legal fees in a series of lawsuits is suing the city in federal court to claw back those funds.
QBE Specialty Insurance Co. filed the lawsuit May 13 in the Southern District of Florida, alleging that the company has no obligation to defend individuals named in multiple lawsuits against Carollo and the city filed in the past six years by Little Havana property owners.
William Fuller and Martin Pinilla II, along with some additional plaintiffs, filed multiple lawsuits that allege Carollo violated their individual rights by engaging in a retaliation campaign against the business owners after Fuller and Pinilla supported a Carollo election opponent. Ultimately, Fuller and Pinilla won a damages award of $63 million against Carollo last year over free-speech violations, and they are also urging a state court to remove the commissioner from office.
“This action seeks a declaration that QBE has no duty under the POL (public officials liability) policies or the LEL (law enforcement liability) policies to defend the city, Carollo or any of the other individuals who are defendants in the underlying lawsuits,” the lawsuit states.
QBE is seeking a court declaration that it is under no obligation to indemnify any insured in any of the lawsuits in question, which include both federal and state litigation.
“The amount in controversy includes the cost of such defense, which exceeds $10 million to date, and the cost of indemnifying a judgment entered against Carollo in the Fuller I lawsuit (the 2018 case of Fuller and Pinilla v. Joe Carollo),” the complaint says.
The lawsuit indicates the application of the law enforcement liability insurance policies in question require a “wrongful act” that occurs while the defendant is conducting law enforcement activities and results in a personal injury.
The underlying lawsuits are based on allegations of “deliberate” conduct by Carollo or the city to harm the plaintiffs’ reputations and deprive them of the use of their property, according to the QBE lawsuit. Such conduct would be uninsurable as a matter of public policy and in turn cannot be covered under the provisions of the city’s liability policies, according to the complaint.
The underlying lawsuits accused Carollo of directing the city’s code-enforcement officials, firefighters and police officers to take actions to shut down their business operations.
“As of Oct. 26, 2018, the alleged ongoing scheme of retaliation that lies at the heart of all the underlying lawsuits was well known to the city and to the individual defendants that are alleged to be involved in it,” the lawsuit says. “As of that date, there was a substantial probability that the city would suffer a loss, which in fact it did suffer in the form of paying millions of dollars in legal expenses for Carollo’s team of defense attorneys. …”
Benedict Kuehne, Carollo’s attorney, did not respond directly to the QBE lawsuit but said Carollo was concentrating on his official duties.
“Commissioner Carollo remains attentive to serving the public interest as an elected member of the City of Miami Commission,” Kuehne said in an email to the Florida Record. “He continues to focus his time and efforts to advance all residents, citizens and businesses in the city, fully in compliance with his official duties.”
He is also pursuing an appeal of the $63 million damages award handed down in 2023 in the Southern District of Florida, he said.
“Commissioner Carollo’s federal appeal of the erroneous jury verdict underscores the legal errors that infected the case,” Kuehne said. “He remains confident that the federal appellate court will validate his service to the community.”