Flagler County government today filed a federal suit against Cynthia d’Angiolini, the lone remaining obstacle to a dune-rebuilding project intended to protest 2.6 miles of shore and State Road A1A in Flagler Beach, asking the court to revoke the discharge from bankruptcy d’Angiolini secured only a few weeks ago.
The move, the first formal legal action the county has taken against d’Angiolini in two years of negotiations, appears to be a tactical attempt to get her to sign a pair of documents that have no relation to her bankruptcy, in which, ultimately, the county has no interest.
The move occurs as other steps are severely complicating–and darkening–d’Angiolini’s posture against the county, including a motion today by her bankruptcy attorney to stop representing her.
D’Angiolini’s bankruptcy and the U.S. Army Corps of Engineers’ plan to rebuild the beach also have nothing to do with each other, but now may have everything to do with each other.
The county argues that d’Angiolini three years ago deceived the court, creditors and Flagler County to seek her discharge from bankruptcy, which enabled her to write off $37,000 in debt while paying her creditors and attorney just $5,400 over the past three years. Her payments were calculated on assets she owned. Critically, she did not disclose to the court that she owned the two beach-side parcels for which the county has been attempting to get easements. The county needs those easements to allow the dune-rebuilding project to proceed.
By not disclosing that ownership, the county argues to the court, d’Angiolini undervalued her assets, and therefore paid her creditors less than she should have, making her three-year Chapter 13 bankruptcy agreement fraudulent.
Flagler County has been negotiating with d’Angiolini, through her attorney, for two years to get her signature on the two easements. But her behavior toward the court showed “bad faith,” in the words used in the lawsuit, filed on behalf of the county by Flagler Beach bankruptcy attorney Scott Spradley.
D’Angiolini “omitted the disclosure of, if not intentionally concealed, substantial assets from her creditors and from this Court from the moment she filed this case, until three years later,” the complaint reads. “All the while, the Debtor had other legal counsel seeking to negotiate the payment for easement rights on property hidden from the Bankruptcy Court.” D’Angiolini, the complaint concludes, “should not be permitted to disobey the mandatory provisions of the Bankruptcy Code and then profit from her own disobedience.”
So the county is now fighting on two fronts. It is using the federal lawsuit to increase pressure on d’Angiolini to sign the easements, all the while continuing (or hoping to continue) to negotiate with her over those easements, as it has for two years, presumably with the willingness to cease legal proceedings once the signature is secured.
The easements are not a taking of the land. They are only formal permission for the U.S. Army Corps of Engineers to use the land to dump sand and rebuild dunes on a critically eroded stretch of beach south of the pier, including along d’Angiolini’s property. Property owners have signed 139 easements. Only d’Angiolini has resisted.
“The Army Corps is reluctant to construct the project at such great expense while leaving two holes in the sand/dune renourishment that will be armoring the beach,” the lawsuit states. D’Angiolini’s two parcels “are not contiguous and thus not restoring them will leave two potential breach points. This situation creates a long-term vulnerability that is not acceptable to the Army Corps or the other agency partners, or the property owners of the community. The project simply cannot proceed without these two remnants, and the offshore sand source likewise will not be available for beach repair and restoration.”
For most of the past two years it was not clear why d’Angiolini was resisting signing the easements. Errant revelations by the county’s attorneys at public meetings and in court pleadings now make clear that d’Angiolini was holding out for money. A figure was never disclosed. But the county made clear that she was asking for a substantial sum, even though all but a handful of the other property owners signed the easements at no charge. Some received up to $5,000 from a private group of Flagler Beach volunteers who raised money as “incentives” for a dozen previous hold-outs to sign. Clearly, d’Angiolini was negotiating for more than that.
The county apparently knew that she was in bankruptcy. But it did not know until earlier this month–it had not noticed in her filings’ fine print–that she had not declared ownership in the two, small beach-side parcels, or remnants.
That the county did not notice the lack of disclosure for two years is irrelevant to the allegation of fraud on d’Angiolini’s part: in the eyes of the court, what the county discovered and argued as fraud starting earlier this month would have been just as fraudulent at the time d’Angiolini filed for bankruptcy in 2019, and it would have been so whether she omitted the disclosure intentionally or by mistake.
The county discovered the alleged fraud two weeks ago. It then used it as leverage against d’Angiolini, hoping to convince her that now she had no choice but to come clean on the value of the parcels and pay her creditors the corrected amount–money the county was willing to pay for her, as she herself has said since that she would have to borrow the balance due.
Instead, d’Angiolini appears to have gone to war against the county even as the federal court’s bankruptcy trustee revoked a key step that would have allowed d’Angiolini’s bankruptcy case to close, and today filed a motion disputing d’Angiolini’s right to amend her bankruptcy disclosures “at this stage in the case.”
Still, d’Angiolini has not folded. First, she continues to fight the county on the easements. Second, d’Angiolini’s attorney, before she filed her request to withdraw from the case, filed an amended document disclosing the two parcels’ vales as assessed by the Flagler County Property Appraiser in 2019 (not currently), and saying d’Angiolini would pay what’s owed. Third, she filed a motion seeking to exclude the county from being an “interested party” in the bankruptcy proceedings by arguing that the county has no standing.
It is impossible to know the substance, if any, of ongoing negotiations between the county and d’Angiolini and her attorneys (she had two of them: one for the bankruptcy case, one for her informal case against the county over the easements, which could turn into an eminent domain case and yet another lawsuit against d’Angiolini). But the county’s rapid moves in the last two weeks, through a series of pleadings in the Middle District of Florida, strongly suggests that the two sides are either at war or positioning themselves for maximum benefit ahead of a settlement.
If it’s just war, then d’Angiolini is using court proceedings as leverage against the county, which is under a severe time constraint to get the easements all signed for the Corps to proceed. The Corps set several deadlines, allowing each to lapse in turn for going on three years, with $17.6 million in secured funding at stake, and double that when in-kind values of sand are calculated. The Corps’ last deadline was Dec. 31. Last Thursday, County Attorney Al Hadeed told the Flagler Beach City Commission that even that deadline may now lapse, without killing the project, as long as the Corps sees that the county is in hard negotiations (or proceedings) with d’Angiolini.
D’Angiolini by her own admission has little money. She earns about $5,000 a month from a combined nursing job and Social Security. So it would be difficult for her to defend herself on yet another front, possibly at considerable expense. And the county still has one more weapon in its arsenal: a lawsuit in circuit court, on eminent domain grounds.
Meanwhile, the Corps of Engineers’ project is delayed another day, another week, another month, every delay bringing the nexy hurricane season closer to a beach still unprotected.