HomeMy WebLinkAboutReal Estate Collateral Management Inc; 2008-09-24;224-544-2000 HSBC 02:24:00 p.m. 05-26-2008 . 2/7
AGREEMENT BETWEEN CITY OF CARLSBAD AND REAL ESTATE COLLATERAL
MANAGEMENT. INC. REGARDING PRESERVATION OF LITIGATION RIGHTS
This Agreement ("Agreement") is made and entered into effective as of the date of
the latest signature below by and among Real Estate Collateral Management, Inc. ("RECM") on
the one hand, and the City of Carlsbad ("City") on the other hand, (individually, a "Party";
collectively, the "Parties") with reference to the following facts:
RECITALS
A. In March 2005, a slope located behind Claimants' real property located at 7550
Agua Dulce Court and 7551 Agua Dulce Court (the "Homes") slid, causing a landslide (the
"Landslide") which damaged both Homes, and which Landslide the City subsequently caused to
be repaired (the "Slope Stabilization Earthwork and Subdrainage Installation").
B. RECM and the City allege that the Landslide was caused by natural events,
including unusually heavy rains.
C. Owners of the Homes have alleged that RECM, and the City, among others,
may have collectively been responsible for some of the conditions which contributed to the
damages to the Homes caused by the Landslide.
D. Each Party disputes any such allegations.
E. Owners of the Homes did not file litigation, but the Parties, along with others,
entered into a settlement agreement pursuant to which RECM paid settlement monies and the
Parties released each other as set forth in an executed Settlement Agreement. ("Settlement
Agreement")
F. As a result of the Landslide, the City caused certain repairs to be made On the
slope behind the Homes, and received certain reimbursements of funds spent on those repairs from
the Federal Highway Administration ("FHWA"). The primary reason the City agreed to release
RECM pursuant to the Settlement Agreement, was the City's receipt of the FHWA reimbursement
monies. Effective March 7,2008, RECM and its insurance carrier agreed to pay nine hundred
ninety eight thousand dollars ($998,000) to the Owners of the Homes pursuant to the Settlement
Agreement. The City paid no money to the Owners of the Homes under the Settlement Agreement.
G. City represents and warrants that it has, to date, complied with all
administrative requirements set forth by FHWA, and the City further represents and warrants that
it has had successful audits to date by FHWA and has been commended for its construction
contract administration by FHWA in relation to the FHWA reimbursement program, known as the
FIRE Program established via FHWA Order 45601 A,
H. This Agreement is now entered into between the Parties solely in order to
preserve the City's right to make claims against RECM, as to the cause of the Landslide, despite
the releases set forth in the Settlement Agreement, in the event FHWA demands that the
reimbursement monies be returned to FHWA.
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NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Settlement Agreement and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound by the terms of
this Settlement Agreement, the Parties do hereby expressly agree as follows:
AGREEMENT
Section 1,01. City represents, warrants and agrees to continue to comply with all
administrative requirements associated with the reimbursements by FHWA, City presently has no
reason to believe that any of the reimbursement monies will be requested by FHWA to be returned
to FHWA. A breach of this provision by the City is a material breach of this Agreement and a
complete defense to any claims, pursuant to Section 1.02 below, by the City against RECM
associated with the Landslide or any required reimbursement of FHWA funds by the City.
Section 1.02. RECM hereby agrees that in the event City is required to return the
reimbursement monies to FHWA, City may make claims against, and may file any appropriate
legal action against RECM concerning, or related in any way to, the cause of the Landslide, and the
respective fault, responsibility, and/or liability of the Parties as to the cause of the Landslide.
In the event that the City makes any claims against RECM related to the Landslide or any
refund of FHWA monies, RECM may make any claims against, and may file appropriate legal
action against, the City concerning, or related in any way to the Landslide, the cause of the
Landslide,the respective fault, responsibility and/or liability of the Parties as to the cause of the
Landslide and any of the City's actions or remedial work associated with the Landslide, including,
without limitation, whether such work was necessary, reasonable and performed in a cost efficient
manner
For this purpose, and under the conditions set forth above only, the Parties hereby
waive their rights to assert any defenses based upon any otherwise applicable statute of limitations
or any defense based upon the lapse or passage of tune. All of the Parties defenses other than those
based upon statutes of limitations or the lapse or passage of time are otherwise preserved and may
be asserted in the event of any such claim and/or litigation relating to or concerning the Landslide.
Section 1.03. Within 5 business days from the date the Parties execute this
Agreement, the City agrees to release RECM's bond SP 7978 in the original amount of $3,262,529
and of the current amount of $1,631,265, and within seven business days from the the date the
Parties execute this agreement to return to RECM, with any interest due, RECM's cash deposit of
$10,000
GENERAL PROVISIONS
Section 2.01. Attorneys Fees and Costs. All Parties shall bear their own fees and
costs associated with the preparation of this Agreement, except as provided under separate
agreements between diem.
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Section 2.02. Successors and Assigns: Third-party Beneficiaries.
(i) Except as otherwise expressly limited herein, the provisions hereof
shall inure to the benefit of, and be binding upon, the successors and assigns of the Parties hereto,
(ii) Except as otherwise expressly provided herein, nothing in this
Agreement is intended to confer upon any party other than the Parties and their respective
successors and assigns any rights, remedies, obligations, or liabilities under of by reason of this
Agreement.
Section 2.03, Covenant Not to Sue. The Parties hereby covenant that they have
not filed (other than the Arbitration and the Lawsuit) and shall not file, prosecute, pursue or assist
others in pursuing any claim, lawsuit or other proceeding against the other Party on their own
behalf or in a representative capacity on behalf of any other person or entity with respect to the
claims released herein.
Section 2.04. Attorneys' Fees for Enforcement Action. In the event any action is
filed to enforce, defend or interpret this Agreement, the prevailing party in such action shall be
entitled to, in addition to any other damages or relief available to them, an award of reasonable
attorneys' and paralegals' fees and costs incurred in connection with such action, including in any
bankruptcy or appellate proceeding,
Section 2,05. Ad vice, of. Counsel. In executing this Agreement, each Party hereto
acknowledges that it has consulted with and has had the advice of counsel of its own choosing in
negotiations for and preparation of this Agreement and has been fully advised by counsel with
respect to all rights which are affected by this Agreement Each Party hereto acknowledges that its
counsel played a role in drafting this Agreement and that this Agreement should be construed
neutrally as if jointly drafted by all the Parties, and not be construed in favor of or against any Party
based on the origin of the language used.
Section 2.06. Choiceof Law. This Agreement is made and entered into in the
State of California and shall in all respects be interpreted, enforced, and governed under the laws
of the State of California as if entirely performed within the State of California, California law
shall apply without regard to any conflict of laws. The language in all parts of this Agreement
shall hi all cases be construed as a whole according to its fair meaning and not strictly for or against
any of the Parties.
Section 2.07. Pre-Litigation Non-Binding Mediation. Any dispute, claim or
controversy arising out of or relating to this Agreement or the breach, termination, enforcement,
interpretation or validity thereof, including the determination of the scope or applicability of this
agreement to mediate, shall be first be, as a mandatory pre-requisite to filing any action in the
Superior Courts of this State, submitted by the Parties to a mediation before a mediator agreed
upon by the Parties. If the Parties cannot mutually agree to the selection of a mediator, they agree
that, upon request by either Party, a mediator shall be appointed by JAMS from the JAMS panel of
jurists/mediators with construction industry experience. The fees of the mediator shall be paid in
equal Shares by the Parties. As soon as practicable after the mediator is selected or appointed, the
Parties shall participate in good faith in said mediation. If the mediator, in his/her discretion, after
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diligent efforts towards voluntary resolution, determines that the parties to the mediation are
unable to agree on & resolution, the mediator shall make a recommendation, in writing, as to a
suggested resolution. The mediator's suggested resolution shall be non-binding, and
notwithstanding and without regard to such recommendation, any party shall be entitled to
commence an action in the nature described in section 1.02 above.
Section 2.08. After-Acquired Facts. The Parties acknowledge mat they might
hereafter discover facts different from or in addition to those they now know or believe to be true
with respect to a claim or claims released herein, and they expressly agree to assume the risk of
possible discovery of additional or different facts, and agree that this Agreement shall be and
remain effective in all respects regardless of such additional or different discovered facts, or any
change in circumstances,
Section 2,09. Authority. Each of die Parties represents, warrants and covenants
that it has the power to settle and release fully and completely all claims, causes of action, demands,
charges and liabilities asserted against the other Party. The Parties have not assigned, subrogated
or in any other way transferred to anyone else any portion of any claim they have or had against
each other.
Section 2.10. Review of Agreement. Each Party to this Agreement certifies that it
has read all of this Agreement and fully understands all of the same.
Section 2.11. Cooperation in Implementation. Each Party to this Agreement will
cooperate and diligently perform any further acts, deeds and things and execute and deliver any
documents that may from time to time be reasonably necessary or otherwise reasonably required to
consummate, evidence, confirm and/or carry out the intent and provisions of this Agreement, all
without undue delay or expense and without further consideration.
Section 2.12. Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be (1) mailed by registered or certified mail,
postage prepaid, (2) delivered by reliable overnight courier service, or (3) otherwise delivered by
hand or by messenger, addressed as follows:
(i) RECM
Stuart Richter, Esq.
Katten Muchin Rosenman, LLP
2029 Century Park East, Suite 2600
Los Angeles, California 90067-3012
Tel: 310-788-4582
Fax: 310-812-8434
stuart.richter@kattenlaw.coin
(ii) The City
Ronald Kemp, Esq.
Office of the City Attorney
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1200 Carlsbad Village Drive
Carlsbad, CA 92008
Tel: 760-434-2891
Fax: 760-434-8367
rkemp @ ci.carlsbad.ca.us
Mitchell D. Dean, Esq.
Daley & Heft
462 Stevens Ave., Suite 201
Tel: 858-755-5666
Fax: 858-755-7870
mdean® daley-heft.com
Section 2.13. Counterparts and Facsimile. This Agreement may be executed in
counterparts and via facsimile with the same force and effect as if executed in one complete
document. Any Party executing this Agreement by facsimile shall provide the other Party with an
originally executed Agreement within five (5) calendar days.
Section 2.14 Severability. If any clause or provision of this Agreement is held to
be illegal, invalid or unenforceable under any law applicable to the terms hereof, then the
remainder of this Agreement shall not be affected thereby.
~~ Section 2.15. No Waiver. Failure to insist on compliance with any term, covenant
or condition contained in this Agreement shall not be deemed a waiver of that term, covenant or
condition, now shall any waiver or relinquishraent of any right or power contained in this
Agreement at any one time or more times be deemed a waiver or relinquishment of any right or
power at any other time or times.
Section 2.16. Binding Effect This Agreement shall be binding upon and inure to
the benefit of the Parties hereto and their respective representatives, successors and assigns;
provided, however, the foregoing shall not be deemed or construed to confer any right, title,
benefit, cause of action or remedy upon any person or entity not a party hereto, which such party
would not nor did not otherwise possess.
Section 2.17 Authority to Bind Party. Each person or entity executing this
Agreement on behalf of any Party or entity individually represents and warrants that they are duly
authorized to execute this Agreement on behalf of such Party,
IN WITNESS WHEREOF, the parties have executed this Agreement.
RECM
company
Its
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APPROVED AS TO FORM:
RONALD R. BALL
BY:
Deputy City Attorney
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