HomeMy WebLinkAboutAllianz Global Risks US Insurance Company; 2010-10-13;SETTLEMENT AGREEMENT AND GENERAL RELEASE
This Settlement Agreement and General Release ("Agreement") is entered into by and
between the City of Carlsbad ("City") and Carlsbad Municipal Water District ("CMWD")
and Allianz Global Risks U.S. Insurance Company ("Allianz"). The City, CMWD, and
Allianz are referred to collectively as the "Parties."
1. RECITALS:
1.01 Allianz issued insurance policies to the City and/or CMWD, including policy
nos. GLA 502179, GLA 505367, GLA 500278, GLA 502093, GLA 505291, GLA 507056,
AU 5000105 and AU 5000106 (collectively referred to hereinafter as the "Policies").
1.02 The Policies obligated Allianz, under certain conditions and subject to their
terms, to defend the City and/or CMWD against third party lawsuits and to indemnify the
City for, among other things, sums that it became legally obligated to pay for bodily injury or
property damage.
1.03 In 2005 and 2006, the City and/or CMWD were named as defendants or cross-
defendants in certain lawsuits arising out of damage to the La Costa de Marbella
condominium complex in Carlsbad, CA (collectively, the "Underlying Lawsuits"), including:
1.03.1 Lindley v. La Costa de Marbella HOA, et al., San Diego Superior Court
Case No. GIC849880;
1.03.2 La Costa de Marbella HOA v. City of Carlsbad et al.. San Diego
Superior Court Case No. GIC850408;
1.03.3 Whitehead v. City of Carlsbad. San Diego Superior Court Case
No. GIC860333;
1.03.4 Uldricks v. La Costa de Marbella HOA, et al., San Diego Superior
Court Case No. GIC862785;
1.03.5 Pacific Bell Telephone Co. v. City of Carlsbad, et al., San Diego
Superior Court, North County Judicial District Case No. 37-2007-00051729-CV-PO-NC;
1.03.6 Stewart v. Dr. Ronald Bills, et al.. San Diego Superior Court, North
County Judicial District Case No. GIC842442; and
1.03.7 WIR Holdings. LLC v. La Cost de Marbella Homeowners Corp. et al..
San Diego Superior Court, North County Judicial District Case No. GIN045127.
1.04 The City and CMWD notified Allianz of the Underlying Lawsuits and sought a
defense and indemnity under the Policies. Allianz opened claim no. L01044051 with respect
to the claims of the City and CMWD for a defense and indemnity with respect to the
Underlying Lawsuits (the "Claim").
1.05 On July 10, 2007, the City and CMWD entered into a settlement agreement
with respect to the Underlying Lawsuits. In total, the City and CMWD agreed to pay
$12,500,000 to settle the claims alleged in the Underlying Lawsuits. .
1.06 On August 2, 2007, the City and CMWD filed the instant action entitled, City
of Carlsbad v. Insurance Company of the State of Pennsylvania, et al., Case No. 37-2007-
00072351-CU-IC-CTL (the "Action"). In the Action, the City and CMWD alleged causes of
action against Allianz for breach of contract and breach of the implied covenant of good faith
and fair dealing. The City and CMWD alleged that Allianz breached its duty to defend and
indemnify it against the Underlying Lawsuits. Allianz disputes the City's and CMWD's
claims in the Action and asserted various affirmative defenses thereto.
1.07 On or about August 18, 2010, Allianz paid the City and CMWD $700,000 to
resolve, in whole or in part, issues related to Allianz's alleged breach of the duty to defend
the City and CMWD in the Underlying Lawsuits.
1.08 The Parties now desire to fully and finally resolve all asserted and unasserted
claims or disputes arising from the Underlying Lawsuits, the Claim, the Action, and the
Policies pursuant to the following terms and conditions.
2. SETTLEMENT AND RELEASE:
2.01 The City and CMWD will provide Allianz with an executed Request for
Dismissal of the entire Action, with prejudice, as to Allianz, within five (5) days of receiving
the payments referenced in paragraph 2.03 below.
2.02 The City and CMWD fully and forever discharge and release all claims and
causes of action, whether known or unknown, arising out of, in any manner connected with,
or relating to the Policies, that they may now have, have had, or that may hereafter accrue,
against Allianz, and/or its representatives and affiliates, including, without limitation, its
agents, attorneys, employees, servants, directors, assigns, administrators, franchisors, parents,
affiliated entities, subsidiaries and successors, arising out of, in any manner connected with,
or relating to the Underlying Lawsuits, the Claim and/or the Action.
2.03 In consideration for this Agreement, including but not limited to the City's and
CMWD's dismissal and the releases referenced in paragraph 2.02 above, Allianz will issue a
check for $4,000,000 payable to the City of Carlsbad, Carlsbad Municipal Water District, and
Levine and Miller Law Offices. Said payment represents alleged damages for alleged injuries
sustained by the City and CMWD as follows and in the following amounts:
1. $2,000.000 to partially indemnify the City and CMWD for sums they
became legally obligated to pay because of property damage alleged in
the Underlying Lawsuits;
2. $2,000.000 representing payment of interest under California Civil
Code sections 3287, et seq., and attorney's fees.
The Parties acknowledge and agree that the foregoing allocation of funds has been made in
good faith by the parties dealing at arm's length.
2.04 The Parties expressly waive all rights under California Civil Code
section 1542. Section 1542 of the California Civil Code reads as follows:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.
2.05 Unless otherwise stated herein, each of the Parties shall bear its own attorneys'
fees and court costs.
3. WARRANTY AND AGREEMENT TO HOLD HARMLESS AGAINST
ASSIGNMENT AND LIENS:
3.01 The City and CMWD represent that Lisa Hildabrand as City Manager of the
City of Carlsbad and Executive Director of CMWD is their authorized representative and can
legally enter into this Agreement on their behalf.
3.02 The City and CMWD represent and warrant that they are the sole and '
exclusive owners of the claims directly or indirectly connected with or related to the Action
and of the rights and claims released herein, and that they have not heretofore assigned or
transferred or purported to assign or transfer to any other person or entity any payments,
obligations, rights, claims, or causes of action referenced or released in this Agreement. The
City and CMWD agree to defend, indemnify, and hold harmless Allianz from any and all
liability, including any and all costs of defense (including costs, expert fees and attorneys'
fees) that Allianz may incur in response to any claim by any person or entity claiming any
interest in the payments, obligations, claims, or rights referenced or released in this
Agreement, or if any of the representations in this provision are inaccurate, or if there is a
breach of this provision.
4. GENERAL PROVISIONS
4.01 This Agreement shall inure to the benefit of the Parties and to their assignees,
predecessors, successors, heirs, executors, supervisors, administrators, officers, directors,
employees, servants, insurers, privies, attorneys and agents.
4.02 This Agreement supersedes and replaces all prior contemporary oral and
written agreements, negotiations and discussions regarding the settlement of the Action.
4.03 Any provisions of Evidence Code § 1152.5 notwithstanding, this Agreement
may be enforced by any of the Parties by a motion under Code of Civil Procedure § 664.6 or
by any other procedure permitted by California law.
4.04 If any provision of the Agreement is found to be unenforceable, the remaining
provisions thereof shall, nevertheless, be carried into effect.
4.05 The terms of the Agreement have been negotiated, and any statute or rule of
construction that ambiguities are resolved against the drafting party shall not be employed in
the interpretation of this Agreement.
4.06 This Agreement has been negotiated and executed in the State of California,
and shall be construed and enforced in accordance with the laws of the State of California.
4.07 This Agreement may be executed in counterparts, each of which will be
deemed an original. A copy of a signature of any of the Parties will be effective as if it were
an original signature.
IN WITNESS HEREOF, the undersigned have executed this Settlement Agreement
and General Release Agreement as of the date hereinafter appearing.
DATED:
CITY OF CARLSBAD
Namef Lisa Hildabrand
Title: City Manager
CARLSBAD MUNICIPAL WATER DISTRICT
DATED:10/te/ (0
DATED:
By:
Name: Lisa Hildabrand
Title: Executive Director
ALLIANZ GLOBAL RISKS U.S. INSURANCE
COMPANY
By:
Name: Greg Worthington
Title: Senior Claims Specialist
4.06 This Agreement has been negotiated and executed in the State of California,
and shall be construed and enforced in accordance with the laws of the State of California.
4.07 This Agreement may be executed in counterparts, each of which will be
deemed an original. A copy of a signature of any of the Parties will be effective as if it were
an original signature.
IN WITNESS HEREOF, the undersigned have executed this Settlement Agreement
and General Release Agreement as of the date hereinafter appearing.
CITY OF CARLSBAD
DATED: .JO//^//Q By:
Name: Lisa Hildabrand
Title: City Manager
CARLSBAD MUNICIPAL WATER DISTRICT
DATED: fOte/ 10 By:
Name: Lisa Hildabrand
Title: Executive Director
ALLIANZ GLOBAL RISKS U.S. INSURANCE
COMPANY
DATED: / 0 ~ t?~ / Q By:
Name: Greg^worthington
Title: SeniofClaims
APPROVED AS TO FORM:
DATED:By:^
//Ronald R. Ball
^ City Attorney to City of Carlsbad and
General Counsel for CWMD
/ /
DATED:
Levine & Miller
By:
Craig A.jMiller
Attorneys for Plaintiffs
City of Carlsbad, Carlsbad Municipal Water
District
DATED:
Luce, Forward, Hamilton & Scripps LLP
By:
idal Crispen
Attorneys for Defendant
Allianz Global Risks U.S. Insurance
Company
101311048.1