City pushing back on Fish House fee

Article Courtesy of The Pensacola News Journal

By Will Isern    

Published July 29, 2016


The homeowners associations were able to stop Civix Sunrise from developing a golf course adjacent to their properties, but were denied the award of attorneys' fees after the appeals court found that, while they were beneficiaries of Civix's lease of the golf course, they were not parties to it.

Along those lines, the city of Pensacola's lawyer, Nix Daniel, is arguing that Merrill's companies Merrill Land and Great Southern Restaurant Group, which owns the Fish House, were not parties to Russenberger's Seville Harbour lease and therefore aren't eligible to receive attorneys fees. Merrill Land subleases the portion of land the Fish House is on from Seville Harbour.


"We don't agree we owe any of them," Daniel said. "The language of the contract, we contend, is restrictive. And the way Seville proceeded took them outside the scope of attorneys' fees, so we contest that. And we contest Merrill Land and Great Southern because they're not a party to the contract at all. If you're not a party to the contract, you can't be awarded attorneys' fees."

Merrill's lawyers, however, argue that the Civix Sunrise case doesn't adequately address the questions raised in the Fish House suit, and instead point to the second case Duncan raised for review: North American Clearing Inc. v. Brokerage Computer Systems Inc. Unlike the Civix case, Russenberger's lease from the city contains no language restricting the award of attorneys fees to parties of the lease.

"Instead," Great Southern lawyer Charles Beall wrote in his memo to the court, "As in North American, they included broad language providing for fees to the prevailing party. Thus, as the prevailing party in the legal action initiated against it by the City, Great Southern is entitled to recover its attorney’s fees — precisely as the City would have been entitled to fees against Great Southern if it had prevailed."

In November, the city sent a notice of default to businessmen Collier Merrill and Ray Russenberger, threatening to evict the men if they did not deliver on more than $5 million in disputed lease payments on The Fish House site.

To be clear, it was Merrill and Russenberger that sued the city in 2014 after the city tried to claim in late 2013 that Merrill owed some $5 million in unpaid rent and that Russenberger had not properly renewed his lease. Duncan found those claims to be incorrect in his April ruling, and the fight over attorneys fees since has ensued.

Pensacola Mayor Ashton Hayward said it's the city's obligation to fight the fee claims in the interest of taxpayers.

"Obviously we were sued, and we have to defend the citizens," Hayward said. "Unfortunately in a lawsuit you have fees, and it's our position that we don't owe them."

How much may be at stake for city taxpayers should the city be ordered to pay isn't immediately clear. The cost will continue to rise the longer the case drags on. Merrill estimated months ago that his side has spent somewhere near $800,000 on attorneys, but Daniel said he believes that number is overblown.

"I don't think that's remotely close," Daniel said. "Way high."

Merrill was traveling and could not be reached Tuesday, but his communications manager, Maria Goldberg, said even if Merrill and Russenberger are awarded attorneys fees, the damage done to the Fish House name has been irrevocable.

"Certainly we feel we are entitled to the fees," Goldberg said. "This wasn't our choosing to be involved in this. But even if we are compensated financially, we will never be whole ever again."