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HomeMy WebLinkAbout1989-07-11; City Council; 10118; Settlement AgreementiB# '0; 118 MTG- 7/11/89 IEPT. CA ., DEPT. HD. CITY MGR. TITLE: SETTLEMENT OF H&A CONSTRUCTION V. CITY CASE NO. N36096 RECOMMENDED ACTION: That the City Council adopt Resolution No. &?-2%5 approving a settlement of H&A Construction v. City of Carlsbad and authorizing the payment from both the Park Development Fund and the Public Facilities Fee Construction Fund of $113,000 to the Pacific Inland Bank. ITEM EXPLANATION The case of H&A Construction v. City of Carlsbad arose out of a grading dispute with the contractor for Stagecoach Park. The Finance Department has been holding $120,360, the remaining balance in the project construction account, pending resolution of this case. The contractor asserted a claim in excess of $300,000 for moving unanticipated large quantities of soil in order to construct the park. Experts have been retained by both the contractor and the City. A series of settlement conferences have been held. H&A Construction is bankrupt and their claim has been assigned to the Pacific Inland Bank. An overall settlement has been reached with other parties to the construction project paying $10,000 and the City paying $113,000. The settlement has been reviewed by the City Manager and the responsible departments who join in my recommendation that the settlement is a fair resolution of the dispute. If the Council concurs your action is to adopt Resolution No. f2Ja- which will approve the settlement agreement and authorize the payment of $113,000 from both the Park Development Fund and the Public Facilities Fee Construction Fund tothe Pacific Inland Bank. EXHIBIT Resolution No. ~9-a25 '. . $. 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 RESOLUTION NO. 89-225 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA AUTHORIZING THE EXPENDITURE OF FUNDS FOR SETTLEMENT OF THE LAWSUIT ENTITLED H&A CONSTRUCTION V. CITY WHEREAS, after recommendation of the City Attorney the City Council of the City of Carlsbad, California has determined that it is in teh City's best interests to settle the case entitled H&A Construction v. City; and WHEREAS, there are sufficient funds available in the project reserve account to pay the settlement, NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. That the above recitations are true and correct. 2. That the City Council approves the settlement agreement attached as Exhibit A and authorizes disbursement of $113 , 000 from the project reserve accounts number 330-840-1824-3197 and 320-840-1824-3191. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 11th day of July 1989, by the following vote, to wit: AYES: Council Members Lewis, Kulchin, Pettine, Mamaux and Lars01 ATTEST: (SEAL) AGREEMENT OF COMPROMISE, BETTLEMENT AND RELEABE 1. PARTIES The parties to this Agreement of Compromise, Settlement and Release are as follows: (a) H & A CONSTRUCTION COMPANY, DONALD H. BROOKSHIRE and PACIFIC INLAND BANK (hereinafter cumulatively referred to as 1VPlaintiffs1') . (b) CITY OF CARSLBAD, DONALD E. DONOVAN, RAYMOND PATCHETT, JAMES McLEAN, RICHARD ALLEN, JR., MARK STEYAERT, MARTY ORENYAK and DAVID BRADSTREET (hereinafter cumulatively referred to as llCitytl) . (c) RECREATION SYSTEMS, INC. and RONALD PAIGE (hereinafter cumulatively referred to as I1RSX1l). (d) RAY LEWIS and LEWIS AND ASSOCIATES (hereinafter cumulatively referred to as tlLewislg). (e) GEOCON, INC. (hereinafter referred to as "Geocon") . (f) RICK ENGINEERING COMPANY (hereinafter referred to as llRicklt). 2. RECITALS This Agreement is entered into with reference to the following facts: (a) On or about April 17, 1987, H t A Construction Company and Donald Brookshire filed their First Amended Complaint in the Superior Court of the State of California, County of San Diego, North County branch, Case No. N36096, against the City and Lewis arising from a claim for extra grading work allegedly performed by H & A Construction Company during the grading phase of the construction of Stagecoach Park, 1ocated.in the City of Carslbad, California. The allegations set forth in that Complaint are incorporated by this reference into this Agreement. (b) Thereafter, the City and Lewis answered said amended complaint, and denied the material allegations of the action and denied they had any liability. (c) In addition, the City and Lewis filed cross-complaints against each other for implied and express indemnity. Furthermore, the City and Lewis filed cross-complaints for indemnity against other third parties, including, but not limited to, RSI, Geocon and Rick (d) The City, Lewis, RSI, Geocon, and Rick answered those cross-complaints in which they were served and denied the material allegations of the cross-complaints and denied they had any liability arising from the allegations or damages claimed in the anended complaint or cross-complaints. (e) On February 21, 1989, Plaintiffs dismissed the fifth and sixth causes of action of their First Amended Complaint without prejudice. On March 7, 1989, the attorneys for Plaintiffs stipulated by letter that Plaintiffs did not seek damages for lost profits as to any defendant. (f) On July 15, 1986, the causes of action by H & A Construction Company and Donald H. Brookshire were assigned in their entirety to Pacific Inland Bank, which presently is the sole owner of those claims and causes of action. (9) Plaintiff's First Amended Complaint and any cross- 2 complaints filed in this action shall be collectively referred to herein as the 3. PO ADHISSION In making this Agreement, no party is admitting the sufficiency of any claims, allegations, assertions, contentions or positions of any other party, or the sufficiency of any defenses to any such claims, allegations, assertions, contentions or positions. Each party expressly denies the claims alleged herein. All parties to this Agreement desire to resolve their portions of the action in order to buy their peace and pursuant to Code of Civil Procedure Section 877, & m., have entered into this Agreement in good faith and with the desire to forever settle between them the action and cross-actions and to execute a release as set forth in Paragraph 7, below. 4. PAYMENT (a) The total sum to be paid to Plaintiffs is One Hundred Twenty-Five Thousand Dollars ($125,000.00). Payment will come from certain parties as follows: 1. city - $113 , 000.00 2. RSI - 4,000.00 3. Geocon - 4,000.00 4. Rick - 4 , 000.00 (b) No money contribution will be made by Lewis. Lewis agrees to a mutual dismissal and release with or on behalf of all remaining parties herein from any and all liabilities relating to the Action as further specified in paragraphs 5 and 7, below. 3 (c) Upon execution of the Release, settlement checks in the above amounts will be made payable to: "Pacific Inland Bank and the John L. Smaha Client Trust Account". Checks will be sent directly to the law offices of John L. Smaha. 5. PXBMIBBAL (a) Concurrently with the execution of this Agreement, and the payment of sums as set forth herein, all parties shall cause to be filed a request for dismissal with prejudice of all actions and cross-actions filed in this litigation. (b) Except for payments and waivers as set forth herein and provided in this Agreement, each of the parties hereto agree to bear their own costs and attorney's fees with respect to the entire litigation, including all actions and cross-actions, and each party hereby waives any statute, rule of court or other law or provision awarding costs, fees or expenses. 6. EXECUTION OF ADDITIONAL DOCUMENTS The parties hereto agree to execute and deliver such additional documents as are necessary to effectuate the dismissals with prejudice of the settled litigation and to implement the other terms of this Agreement. 7. RELEABE In consideration of the terms and provisions of this Agreement, each party to this Agreement for itself and its collective and respective agents, employees, officers, shareholders, directors, parent, subsidiary and affiliated corporations, predecessors, successors, attorneys, assigns, 4 partners, other related entities, insurers, sureties and the heirs and personal representatives of their respective estates ("Affiliated Partiestt) of each party to this Agreement shall and do hereby relieve, release and discharge all other parties to this Agreement and their respective Affiliated Parties from any and all claims, debts, liabilities, demands, obligations, promises, acts, agreements, costs, expenses (including but not limited to attorneys' fees), damages, actions and causes of action of whatsoever kind or nature, including claims of malicious prosecution, based on, arising out of, or in connection with the Action, or Stagecoach Park Project which any of the foregoing parties giving such release may now or hereinafter have or claim to have against any of the foregoing parties for whose benefit the release is given, except only those obligations described in this Agreement. Except, however, the City does not release its claims relating to any latent defect or express warranties concerning the work as described or relating to the Action or Stagecoach Park. Each party agrees to indemnify, defend and hold each released party herein and their respective Affiliated Parties harmless from and against any and all liability and/or claims thereof which they may sustain in connection with any of the above released claims. 8. REPRESENTATIONS AND WARRANTIES The parties hereto, and each of them, represent and warrant to each other and agree as follows: (a) Each of the parties hereto has received independent legal advice from attorneys of his own choice with respect to the 5 advisability of making the settlement and releases provided for herein, and with respect to the advisability of executing this Agreement, and prior to the execution of this Agreement by each party, that the parties' attorneys reviewed this Agreement to indicate that said attorneys approved this Agreement as to form and substance. (b) In negotiating this Agreement, each party and his attorney have made various statements and representations to other parties and their attorneys. Nevertheless, each party specifically does not rely upon any statements, representations, legal opinions or promises of any other party in executing this Agreement or in making the settlement provided for herein, except as is expressly stated in this Agreement. (c) There have been no other agreements or understandings between the parties hereto, except as is set forth in this Agreement. (d) Each party, together with his attorney, has made such investigation of the facts and of the law pertaining to this settlement and this Agreement, and of all the matters pertaining thereto, as he deems necessary. (e) The terms of this Agreement are contractual, not a mere recital. This Agreement is the result of the negotiation between the parties, each of whom has participated in the drafting hereof, through their respective attorneys. (f) This Agreement has been carefully read by, the contents thereof are known and understood by, and it is signed freely by 6 each person executing this Agreement, (9) This Agreement is intended to be final and binding as to the specific allegations and theories of law as they arise from the facts of this litigation contained in the amended cornplaint and cross-complaint between and among the parties hereto, including their heirs, successors and assigns, and is further intended to be effective as a full and final accord and satisfaction between and among the parties hereto. Each party relies on the said finality of this Agreement as a material factor inducing that party's execution of this Agreement. (h) Each party hereto agrees that such party will not take any action that would interfere with the performance of this Agreement by any other party hereto or which would adversely affect any of the rights provided for herein. (i) Each party expressly and completely withdraws any and all allegations of the amended complaint and cross-complaints on file herein. 9. RELEASE OF UNKNOWN CLAIMS (a) The parties hereto specifically and fully waive any right or benefit available under the provisions of Section 1542 of the California Civil Code which provides that: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIKE OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. /// 7 The parties hereto understand and acknowledge the significance and consequences of such specific waiver of Section 1542 and nevertheless elect to and do release those claims described herein, known or unknown, which they may have or in the future may have against any other party hereto and further elect to and assume all responsibility for those claims described herein, known or unknown, that they may incur now or in the future except as specifically provided otherwise in paragraph 7 hereof. 10. @UB8EOUENT ATTORNEYS' FEES (a) In the event that any aciton, suit or other proceeding is instituted to remedy, prevent or obtain relief from a breach of this Agreement, or arising out of a breach of this Agreement, the prevailing party shall recover all of such party's attorneys' fees incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. (b) As is used herein, attorneys' fees shall be deemed to mean "reasonable attorneys' fees" as is defined in any statute or rule of law. 11. MODIFICATION OF AGREEMENT This Agreement shall not be modified by any oral representation made before or after the execution of this Agreement. All modifications must be in writing and signed by the parties and each of them. 12 AUTHORITY The parties hereto, and each of them, represent and warrant that this Agreement has been or shall be approved by any and all a corporate boards of directors, committees, shareholders, partners or principals whose approval is required to effect this Agreement and bind the parties, and each of them, to the obligations set forth herein. The parties hereto, and each of them, agree to fully defend, indemnify and hold harmless all other parties hereto for any and all damages, cause, attorneys' fees or other liabilities or expenses of any nature whatsoever which any such party may sustain or incur in consequences of any breach of the aforesaid representation or warranty. Each person or entity executing this Agreement in a representative capacity is empowered to do so on behalf of itself or its employees or agents, or former employees or agents 13, INTEGmTf ON This agreement constitutes a single, integrated written contract expressing the entire agreement of the parties hereto relative to the subject matter hereof. No covenants, agreements, representations or warranteis of any kind whatsoever have beenmade by any party hereto, except as is specifically set forth in this Agreement. All prior discussions and negotiations have been and this are merged and integrated into, and Agreement. 14 SEVERABILITY In the event that any provision o are superseded by, this Agreement shou d be held to be void, voidable or unenforceable, the remaining portions hereof shall remain in full force and effect. /// 9 15. GOVGRNINQ LAW This Agreement shall be construed in accordance with and be governed by the laws of the State of California. 16. BEIRS, 8UCCE880RS AND A 88IGN8 This Agreement shall inure to the benefit of and shall be binding upon the heirs, successors and assigns of the parties hereto, and each of them. This Agreement is intended to release and inure to the benefit of each corporate party's present and former affiliated corporations, predecessors, parent corporations, subsidiaries, divisions, operating companies, officers, directors, agents, employees, administrators, representatives, shareholders, accountants and attorneys, individually as well as in the capacity indicated. However, except as expressly provided herein, this Agreement is not for the benefit of any person or entity not a party hereto or specifically identified as a beneficiary herein, and is not intended to constitute a third party beneficiary contract. 17. EXECUTION IN COUNTERPARTS This Agreement may be executed and delivered in one or more counterparts, each of which, when so executed and delivered, shall be an original, but such counterparts shall together constitute but one and the same instrument and Agreement. This Agreement shall be deemed to be executed on the last day any such counterpart 1s executed. /// /// 10 -. 18. 8URVIVAL OF WARRANTI E8 AWD REPRESENTATION8 The warranties and representations of this Agreement are deemed to survive the date of execution hereof. 19. pz PRESENTATIVE CAPACITY Each person or entity executing this Agreement in a repre- sentative capacity is empowered to do so on behalf of itself or its employees or former employees. 2 0 . CONFIDENTIALITY Each party hereto agrees to use his, her or its best effort to prevent any involuntary publication or disclosure of any aspect of this Agreement, or any of the negotiations in connection therewith, except as required by any court of competent juris- diction or any statute. Further, there shall be no voluntary disclosure of any of the negotiations or discussions preceding the execution of this Agreement, by any party hereto, their attorneys, agents or employees. The parties may disclose the terms of this Agreement to their attorneys, accountants and tax advisors, provided that any party making such a disclosure shall advise the attorney, accountant or tax advisor of the confidential nature of the information and shall obtain the Agreement of such attorney, accountant or tax advisor to keep such information confidential. The parties may also disclose the terms.of this Agreement upon written request of any regulatory agency. 19. PO AS8IGNMENT All parties represent and warrant that other than already referenced in this Agreement, no rights, claims, liabilities or 11 obligations as they may exist in this litigation have been or will be assigned. IN WQITNESS WHEREOF, the parties hereto and their respective attorneys have each approved and executed this Agreement on the dates set forth opposite their respective signatures. authorized representatives or trustee DATED: 6 -F6 , 1989 MNALD H. BROOKSHIRE DATED : , 1989 Authorized representative, PACIFIC INLAND BANK DATED : , 1989 DATED: , 1989 DATED: , 1989 by: Authorized representative on behalf of the CITY OF CARLSBAD, DONALD E. DONOVAN, RAYMOND PATCHETT, JAMES MCLEAN, RICHARD ALLEN, JR., MARK STEYAERT, MARTY ORENYAK and DAVID BRADSTREET by: Authorized representative, RECREATION SYSTEMS, INC. RONALD PAIGE 12 - , .I#. , . . obligations as they may exist in this litigation have been or will be assigned. IN WITNEBB WBZREOI, the parties hereto and their respective attorneys have each approved and executed this Agreement on the dates set forth opposite their respective signatures. DATED: , 1989 by: H & A CONSTRUCTION, or its authorized representative$ or trustee DATED: , 1989 DATEO: -A ” I 1989 DATED: 4 1989 DATED: , \\1L)LO 27- , 1989 DATED: sw z7 I 1989 DONALD -K%~ROOKSHIRE a by : PACIFIC INLAND BANK Authorized representative, by: Authorized representative on behalf OF the CITY OF CARLSBAD, DONALD E, DQNOVAN, RAYMOND ALLEN, 3R. I kIARx: STEYAERT, MARTY ORENYAK and DAVID BRADSTREET PATCXETT, JAMES MCLEAN, RICHARO by: Authorized representative , 7 nn RECREATION SYSTEMS, INC. $1 jJ- RONALD PAIGE v 12 DATED: %)C(flP -* , 1989 & ASSOCIATES DATED , 1989 DATED: , 1989 by: Authorized representative, GEOCON, INC. DATED: , 1989 by: Authorizedrepresentative, RICK ENGINEERING COMPANY Approved as to form and content: DATED: , 1989 JOHN L. SMAHA & ASSOCIATES BY: John L. Smaha, Attorney for PLAINTIFFS DATED: , 1989 DALY & HEFT BY: NEAL S. MEYERS, Attorney for the CITY DATED : , 1989 MURTAUGH, MILLER, MEYER & NELSON BY : BENJAMINTRACHTMAN, Attorney for RSI 13 DATED : , 1989 DATED: , 1989 Approved as to form 2nd content: DATED: f 1989 CATED : I 1989 DATE 0 ; I 1989 - - by: Authorized representative, LEWIS & ASSOCIATES -~ RAY LEWIS by: Authorized representative, GEOCON, INC. ENGINEERING COMPANY JOHN L. SVMA & ASSOCIATES BY: John L. Smzha, Attorney fcr PLAIElTI F FS DALY & HEFT BY; NEAL S. MEYERS, Attorney €or the CITY NL7RTAUGHf NILLER, l<E'IER & NELSOIJ BY: BENJAMIN TRACHTXAN, Attorney for RSI 13 -- A DATED: I 1989 DATED: , 1989 DATED: , 1989 DATED: , 1989 Approved as to form and content: DATED: i, I t~ ICS , 1989 DATED : , 1989 DATED: I 1989 by: Authorizedrepresentative, LEWIS L ASSOCIATES RAY LEWIS -.A - Authorized representative, GEOCON, INC. by: Authorizedrepresentative, RICK ENGINEERING COMPANY JOHN L. Sh 61 A &A 0 ATES BY : DALY t HEFT BY: NEAL S. MEYERS, Attorney for the CITY MURTAUGH, MILLER, MEYER b NELSON BY: BENJAMINTRACHTMAN, Attorney for RSI 13 DATED: , 1989 MCINNIS, FITZGEFALD, REES, SHARKEY & MCINTYRE BY: ROBERT SCOTT DREHER, Attorney for GEOCON, INC. RICK ENGMEERING COMPANY BY: , Attorney for RICK ENGINEERIKG - ZE3fA.N 41 SONMENSCHEIN BY: LARRY S. ZEMAPI, Attorney for LEWIS 14 DATED: I 1989 MCINNIS, FITZGERALD, REES I SHARKEY & McINTYRE BY: ROBERT SCOTT DREHER, Attorney for GEOCON, INC. DATED: I 1989 DATED: 2 b 1989 RICK ENGINEERING COMPANY BY: DENNIS STRYKER, Attorney for RICK ENGINEERING 14