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HomeMy WebLinkAbout1988-02-16; City Council; 9295; Settlement AgreementCY OF CARLSBAD - AGENr" BILL 4B#q;7s- --=% HTG. 2/16/88 IEPT. CA I I SETTLEMENT AGREEMENT BE EN CITY OF CARLSBAD AND A & S C 2F STRUCTION ClTYA -/ COMPANY IN THE LAWSUIT ENTITLED PETER C. DAVID CO. V. CITY OF CARLSBAD If Council concurs, your action is to adopt Resolution No. ITEM EXPLANATION Peter C. David Co. filed suit against the City of Carlsbad on January 21, 1987 alleging the City had breached its written contract by failing to make final payment due of $29,072.87. The City had accepted the central business storm drain on which Peter C. David Company was the prime contractor as complete on July 8, 1986. When final payment for that contract was made the sum of $29,072.87 was paid directly to a subcontractor, A & S Construction Company, Inc:, pursuant to its previously filed stop notice. Although this procedure may have been in error, Peter C. David had failed to previously disclose the identify of any subcontractors or that any of them were unlicensed as required by the Subletting and Subcontracting Act. In this case, we believe the subcontractor performed the work representing the payment now claimed by Peter C. David Company, however, discovery in the lawsuit has proven that the subcontractor is out of business and was unlicensed at the time of this job. present the subcontractor's offsets without a formal assignment of them to the City. In addition, since the subcontractor is out of business, it may be unwilling or unable to present these off sets. A legal technicality may make it difficult to Based on these facts, the City has reached a partial settlement of this case with the subcontractor whereby it will assign its rights from its subcontract with Peter C. David to the City, pay the City the sum of $2,250 in the event of judgment against the City in that amount and agree to a judgment against it for the difference, if any, upon trial. Complete copies of the settlement agreement and assignment are attached to the resolution. FISCAL IMPACT There is no fiscal impact to the settlement at this time. The remaining liability, if any, to Peter C. David Company will be determined at trial. Resolution No. pf -3 7 2 3 4 5 6 7 8 9 10 11 12 9 5 18 19 20 21 22 23 24 25 26 2'1 28 RESOLUTION NO. 88-37 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA APPROVING A SETTLEMENT AGREEMENT AND ASSIGNMENT OF RIGHTS BETWEEN THE CITY OF CARLSBAD AND A & S CONSTRUCTION IN THE LAWSUIT PETER C. DAVID CO. V. CITY OF CARLSBAD The City Council of the City of Carlsbad, California, does hereby resolve as follows: 1. That certain settlement agreement between the City of Carlsbad and A & S Construction Company, Inc., parties in the lawsuit entitled Peter C. David Co. v. City of Carlsbad, marked Exhibit A and made a part hereof, is hereby approved. 2. That the Mayor of the City of Carlsbad is hereby authorized and directed to execute said agreement for and on behalf of the City of Carlsbad. PASSED, APPROVED AND ADOPTED at a Regular Meeting of th City Council of the City of Carlsbad on the 16th , 1988, by the following vote, to wit: day of February AYES: Council Members Lewis, Pettine, Mamaux and Larson NOES: None ABSENT: Council Member Kulchin LaUDE A. LEWIS, Mayor ATTEST : A A- ALETHA L. RAUTENKRANZ, City CAerk (SEAL) SETTLEMENT AGREEMENT This agreement is entered into as of the date set forth below by and between the CITY OF CARLSBAD, a local public entity (hereinafter "CITY"), and A & S CONSTRUCTION COMPANY, INC. a California corporation (hereinafter "A & SIf). Reci ta 1s WHEREAS, PETER C. DAVID COMPANY, a partnership (hereinafter "DAVID" ) , brought suit against CITY in the Superior Court of the State of California for the County of San Diego, Case No. N 36001, alleging payments to be due on the storm drain project No. 3085; and WHEREAS, CITY then sued A & S on a cross-complaint; and WHEREAS, A & S then answered the cross-complaint and cross-complained against both DAVID and CITY; and WHEREAS, A & S and CITY now wish to bring this litigation to a halt without resort to further court action; NOW, THEREFORE, CITY and A & S stipulate and agree as follows: Aqreements 1. In conjunction with this settlement, A & S shall fully assign to CITY its right to equitable set-off against DAVID. (See Exhibit "A". 1 2. A & S shall deposit $2,250.00 in trust with its attorney, Cary Richard Bond of the law firm of Hillyer & Irwin. Said amount shall be held by the law firm pending the final resolution of this matter from which no appeal or motion is filed. Following trial or other final settlement of this matter between DAVID and CITY, Tom Scheuveiller of A & S and Ronald Ball, on behalf of CITY, shall submit to the law firm of Hillyer & Irwin the judgment in the above-referenced matter. In the event of a judgment against A & S and/or CITY in excess of $2,250.00, then the direction shall be for the law firm to submit all $2,250.00 by way of a check to CITY. In the event of a judgment for less than $2,250.00, then the law firm shall issue a check to CITY for the amount of the judgment. For example, if the law firm receives a final judgment from A & S and CITY that DAVID recovered $1,000.00, then the law firm shall issue a check to CITY for $1,000.00. To the extent of any judgment against A & S and/or CITY in excess of $2,250.00, CITY shall be fully responsible -2- to DAVID. CITY may $2,250.00 To the extent of any such payment by CITY, enter judgment against A & S only, minus the already contributed on behalf of A & S. CITY voluntarily and knowingly waives its right to recover said judgment from the corporation. CITY further voluntarily and knowingly waives its right to attempt to collect said amount from Tom Scheuviller. CITY agrees not to pursue collection of the judgment against A & S, if any, against Tom Scheuveiller on any legal theory, including but not limited to, fraud, successor in interest, alter ego or single employer. CITY acknowledges that it is waiving its rights, if any, to pursue Tom Scheuveiller in any and all of his different capacities, including but not limited to, as an individual, as a sole proprietor of A & S Construction, as a partner of A & S Construction and/or as an officer, shareholder and/or director of A & S Construction. CITY further agrees that it shall not in any way transfer, for value or otherwise, any judgment taken against A & S to any third party or related party. 3. CITY and A & S agree that they will enter into a stipulated judgment whereby CITY can take judgment against A & S for the amount of any judgment rendered in favor of DAVID minus $2,250.00, which has already been paid in as provided in paragraph 2. (See Exhibit "B".) 4. Tom Scheuveiller, as a representative of A & S, agrees to cooperate freely and under reasonable terms with CITY in preparation of CITY'S defense and cross-complaint against DAVID. Tom Scheuveiller agrees to produce documents as requested by CITY, to the extent they are in his possession. Tom Scheuveiller agrees further to testify in this matter if called by CITY as a witness. Mr. Scheuveiller's address is 413 Crystal Place, Seal Beach, California 90740, telephone (213) 430-7962. 5. The parties to this agreement hereby declare that in executing the same, they have received full and independent advice of legal counsel. 6. In the event of a dispute, claim or litigation based upon, arising out of or relating to a breach of or an enforcement of any provision of this agreement, the prevailing party in such dispute, claim or litigation shall be entitled to recover its actual attorneys' fees, costs and expenses which are reasonably incurred, from the non-prevailing party. 7. If any portion of this agreement is declared by a court of competent jurisdiction to be invalid or I. -3- unenforceable, such portion shall be deemed severed from this release, and the remaining part shall remain in full force and effect as if no such invalid or unenforceable provision had been part of this agreement. 8. It is understood and agreed that this agreement is not an admisison of liability on the part of any party or their agents, and is in compromise of a disputed claim. 9. This agreement shall be governed by and construed in accordance with the laws of the State of California and the laws of the United States of America prevailing in the State of California. 10. Each party executing this agreement hereby warrants to all other signatory parties hereto that it has heretofore obtained the necessary approval of its Board of Directors, president, trustee, City Council or other authorized personnel of such party necessary to make this agreement binding upon it. 11. Each party executing this agreement hereby certifies that it has read all of this agreement and fully understands the same. 12. This agreement may be executed in counterparts, but shall only be effective when executed and delivered by all the parties hereto. When each of the parties hereto has signed and delivered a counterpart, each such counterpart shall be deemed an original, and taken together, shall constitute one and the same agreement and shall be binding and effective on all the parties hereto. February Dated: dek~btw 17 I 1988 CITY OF CARLSBAD , Its 'CLAUDE A. LEWIS, Mayor Dated: January , 1988 A & S CONSTRUCTION CO., INC. ASS I GNMENT This assignment is entered into by and between CITY OF CARLSBAD ("CITY") and A & S CONSTRUCTION COMPANY, INC. ("A & S") as of the date signed below. For good and valuable consideration received, A & S hereby assigns to CITY any and all of its right of set-off against PETER C. DAVID COMPANY arising out of those transactions and occurrences giving rise to the action in the Superior Court of the State of California, County of San Diego, Case No. N 36001. February Dated: &fmmamy /7 I 1988 CITY OF CARLSBAD , Fa Dated: January 2 , 1988 A & S CONSTRUCTION CO., INC. EXH I 8 I T A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HILLYER 8 IRWIN A PROFESSIONAL CORPORATION AlTORNEYS AT LAW CALIFORNIA FIRST BANK BUILDING 530 B STREET- 14" FLOOR SAN DIEGO, CALIFORNIA 92101 CRB/ba TELEPHONE 234-6181 8649.2 (Area Code 619) Attorneys for Cross-Def endant A & S CONSTRUCTION CO. (SPACE BELOW FOR FILING STAMP ONLY) SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SAN DIEGO PETER C. DAVID COMPANY, a 1 Case No. N 36001 partnership, 1 1 v, 1 1 CITY OF CARLSBAD, a local 1 public entity, 1 1 Defendant. 1 1 STIPULATED JUDGMENT; Plaintiff, 1 AND ORDER THEREON AND RELATED CROSS-ACTIONS 1 COMES NOW Defendant/Cross-Complainant CITY OF CARLSBAD ("CITY"), by and through the Deputy City Attorney, Ronald R. Ball, and Cross-Defendant A & S CONSTRUCTION Coot INC. ("A & S"), by and through its attorney, Cary Richard Bond of the law firm of Hillyer & Irwin, and stipulate to judgment against A & S as follows: 1. It is agreed that to the extent that Plaintiff PETER C. DAVID COMPANY takes judgment against CITY in the above-referenced matter, CITY shall in turn take' judgment against A & S to the same extent, minus $2,250.00, which sum has already - - ,, . -1- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 been contributed on behalf of A & S toward the satisfaction of any judgment. DATED: January I 1988 CITY OF CARLSBAD BY Its DATED: January I 1988 A & S CONSTRUCTION CO. BY Its d as to form and content. /. 24- S’S ard Bond- Ronald R. Ball ORDER It is so ordered. DATED : Judge of the Superior Court -2-