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Home My WebLink About1990-03-06; City Council; 10517; SettlementCIT-OF CARLSBAD - AGEND~ILL LCI @ iB# /d, s/ '7 IIITGm 3/6/90 IEPT. CA TITLE SETTLEMENT OF "WOODBINE-TRIESTE DRIVE'DEPT. HD.- SUBSIDENCE CASES KOOKER V. STANDARD PACIFIC, ET AL. RECOMMENDED ACTION: That the City Council approve the settlement of the "Woodbine subdivision land subsidence cases" by adoption Resolution No. TL'f? which also appropriates $46,250 from the liability self insurance reserve as the City's contribution to the settlement. ITEM EXPLANATION This office has been involved since 1979 with a land subsidence problem in Standard Pacific's l1Woodbinel1 subdivision along Trieste Drive. The dispute ultimately resulted in 12 separate superior court actions brought by homeowners against all of the parties involved in the development. The City of Carlsbad was brought in by way of cross-complaint by Standard Pacific who alleged that the City water, sewer and storm drain lines in the area contributed to the problem. The alleged damages occurred over a ten year period during which the City was insured by four different insurance companies and covered by our self insurance program. Although the case is essentially one of no liability, this kind of litigation is extremely complex and expensive to defend. We have almost exhausted our self insurance retention. We have reached agreement with the City's insurance carriers to share in equal amounts in a ''global settlement" of the 12 cases currently active against the City. After the amount necessary to exhaust the City's self insurance retention, the insurance companies will be paying 75% of the settlement. This case represents an exception to our general rule of never making llcost of defense" settlements. Unless we have real liability exposure our approach to liability lawsuits is to vigorously defend them. I am recommending this exception because of the substantial contribution from the insurance companies and, more importantly, because of the extremely high cost in attorneys and expert witness fees involved in defending this kind of land subsidence case. For instance, we are facing the cost of taking the depositions of 32 expert witnesses already designated by the parties. The City's contribution to this settlement is substantially less then it would cost us in attorneys fees and expenses to continue to participate in defending the actions. The settlement agreement is attached. Also attached is Resolution No. 78-49 which approves it and appropriates $46,250 from the liability self insurance reserve. If the Council concurs, your action is to adopt Resolution No. 5% -L/9 EXHIBIT Resolution No. %9- f4 1 2 c: 4 c - € 7 a 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 90-49 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA AUTHORIZING THE EXPENDITURE OF FUNDS FOR SETTLEMENT OF THE LAWSUIT ENTITLED KOOKER V. STANDARD PACIFIC WHEREAS, after recommendation of the City Attorney thc City Council of the City of Carlsbad, California has determine( that it is in the City's best interest to settle the case entitle( Kooker v. Standard Pacific and WHEREAS, there are sufficient fupds available in thc liability self-insurance reserve account to pay the settlement, NOW, THEREFORE, BE IT RESOLVED by the City Council of thc City of Carlsbad, California, as follows: 1, That the above recitations are true and correct. 2, That the City Council approves the llSettlemeni Agreement and Full Release of All Claims" attached as Exhibit A an( authorizes disbursement of $46,250 from the liability self. insurance reserve account. 3. That the Mayor of the City of Carlsbad is hereb: authorized and directed to execute said agreements for an on behalf of the City of Carlsbad. .*. ..* ..* .*. ... ..* ... ... ... , 1 2 3 4 5 6 7 a 9 10 11 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a Regular Meeting of thc City Council of the City of Carlsbad on the 6th day of March 1990, by the following vote, to wit: AYES: Council Members Lewis, Kulchin, Pettine, and Larson NOES: None ABSENT: Council Member Mamaux ATTEST: (SEAL) SETTLEMENT AGREEMENT AND FULL RELEASE OF ALL CLAIMS 1. PARTIES. The parties to this Settlement Agreement are the CITY OF CARLSBAD, a municipal corporation, duly organized and existing under the laws of the State of California and situated in the County of San Diego (hereinafter glCITY1l) and STANDARD PACIFIC, L.P., a Delaware limited partnership, by its managing general partner, StanPac Corp, a Delaware corporation (hereinafter IISTANDARD PACIFICgg) . 2. RECITALS. (a) CITY is a certain defendant, cross-complainant and cross-defendant in San Diego Superior Court Consolidated Civil Action No. N30635 (hereinafter the glACTION1l). and cross-complainant in the ACTION and was one of the developers of the IIWoodbine-El Camino Portalg1 Subdivision. (b) STANDARD PACIFIC is a defendant, cross-defendant (c) The consolidated Action is comprised of the following cases: Kooker v. Standard Pacific of San Dieao, et al. Superior Court Case No. N30635; Ferauson, Smilde and Pontarelli (Allstate Intervention] v. Standard Pacific of San Dieao, et al. Superior Court Case No. N34055: FramDton and Buescher v. Standard Pacific of San Dieao, et al. Superior Court Case No. N38546; Grove v. Standard Pacific of San Dieao, et al. Superior Court Case No. N38551; State Farm v. Standard Pacific of San Dieao, et al. (Pashby) Superior Court Case No. N30885; State Farm v. Standard Pacific of San Dieso, et al. (Roger) Superior Court Case No. N30887; Roqer, et al. v. Standard Pacific of San Dieao, et al. Superior Court Case Nos. 540283/N34705; 559225; Gordon v. Standard Pacific of San Dieao (glGordon Igg) Superior Court Case No. N37950; Gordon v. Brittinsham (IIGordon IIII) Superior Court Case No. N38619; Larsen v. Standard Pacific of San Dieso Superior Court Case No. 574508; Davies v. Standard Pacific of San Dieso Superior Court Case No. N32505. The Action generally involves claims of construction defect and improper maintenance of public utilities and improvements involving the IIWoodbine - El Camino Portaln1 Subdivision, C.T. 73- 36 project, located at Trieste Drive, and La Portalada Drive, in the City of Carlsbad, County of San Diego. 3. INTENT. (a) By entering into this Settlement Agreement and Full Release of All Claims (hereinafter glAGREEMENTgg), the parties intend to settle and resolve the claims and disputes involved in the ACTION, as those claims and disputes exist among and between the parties to this Settlement Agreement involving the above- described cases in Paragraph 2(c) above. (b) By entering into this Settlement Agreement, the parties agree that this includes all claims which the named plaintiffs may have had against the CITY for those existing -1- damages alleged in their Complaints and STANDARD PACIFICtS Cross- Complaints, including breach of mandatory duty, inverse, negligence and indemnity. (c) By entering into this Settlement Agreement, the parties agree that to the extent defendant Sommers Development Corporation (hereinafter ttSOMMERStt) has outstanding claims against the CITY this AGREEMENT includes those claims as alleged in its Cross-Complaint filed against the CITY should STANDARD PACIFIC'S pending appeal in Case No. 4 Civil No. DO09263 be successful in the Fourth District Court of Appeal in the State of California. (d) By entering into this AGREEMENT, it is expressly understood and agreed that no party is admitting any liability whatsoever to any other party known or unknown. enter into this AGREEMENT to compromise disputed claims and solely to avoid the expense, delay, inconvenience, and uncertainty of further litigation and buy their peace. with several other San Diego County Superior Court actions. It is contemplated that, upon consummation of this AGREEMENT, the CITY will no longer be a party to the consolidated actions. It is further contemplated, however, that STANDARD PACIFIC will remain a party to the consolidated actions. By entering into this AGREEMENT, it is expressly understood and agreed that STANDARD PACIFIC is not admitting any liability whatsoever to any plaintiff, cross-complainant, or cross-defendant in the consolidated actions. The parties 4. CONSOLIDATED ACTIONS. The ACTION has been consolidated 5. COURT CONFIRMATION. STANDARD PACIFIC and CITY shall jointly seek a hearing confirming this settlement with the San Diego Superior Court if either party so requests. 6. SETTLEMENT PAYMENTS. (a) The CITY agrees to pay STANDARD PACIFIC the total sum of One Hundred Twenty-Five Thousand Dollars ($125,000). (b) Such payment shall be made in full pursuant to the terms of this AGREEMENT to STANDARD PACIFIC immediately upon approval by the Carlsbad City Council, but no later than March 14, 1990. 7. NO REPRESENTATIONS. It is expressly understood that none of the parties hereto are making any representations to any other party concerning the condition or value of the property. None of the parties are hereby adopting the reports or opinions of any expert witness retained by any of the other parties with respect to the condition or value of the property. 8. MUTUAL FULL RELEASE OF ALL CLAIMS. (a) In consideration of the promises and covenants of the parties hereto, STANDARD PACIFIC, and each of its partners, -2- 1. divisions, subsidiaries, parent corporations, insurers, related companies, predecessors, successors, assigns, and affiliated companies and each of such entities past, present and future, officers, directors, shareholders, agents, lawyers, employees, and representatives hereby fully releases and discharges the CITY and each of its partners, divisions, related companies, predecessors, successors, assigns, and affiliated companies and each of such entities past, present and future, officers, directors, shareholders, agents, lawyers, employees, representatives, appointed or elected officials and its insurers, from any and all claims, demands, actions, causes of action in law or in equity whether statutory, constitutional or otherwise, and rights arising from the claims in those cases described above in Paragraph 2 (c) . (b) In consideration of the promises and covenants of the parties hereto, the CITY, and each of its partners, divisions, subsidiaries, parent corporations, insurers, related companies, predecessors, successors, assigns,.and affiliated companies and each of such entities past, present and future, officers, directors, shareholders, agents, lawyers, employees, and representatives hereby fully releases and discharges STANDARD PACIFIC and each of its partners, divisions, related companies, predecessors, successors, assigns, and affiliated companies and each of such entities past, present and future, officers, directors, shareholders, agents, lawyers, employees, representatives, and its insurers, from any and all claims, demands, actions, causes of action in law or in equity whether statutory, constitutional or otherwise, and rights arising from the claims in those cases described above in Paragraph 2(c). 9. NO ADMISSION OF LIABILITY. It is further understood and agreed that this AGREEMENT represents the settlement and release of disputed claims. Neither the payment of any sums of money nor the acceptance of this Agreement shall constitute or shall be construed as an admission of liability whatsoever in any amount or percentage by any of the parties hereto or by any of their officers, directors, agents, servants, employees, divisions, subsidiaries or affiliated companies, or any of them. 10. WAIVER. It is expressly understood and agreed that all rights under section 1542 of the Civil Code of the State of California are hereby waived with respect to the releases set forth in this Agreement. Such section provides as follows: A general release does not extend to claims which.the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor. Each party hereto understands and acknowledges the significance and consequences of such specific waiver of section 1542 and hereby assumes full responsibility for any injuries, damages, losses, rights of rescission, claims or liabilities of or to such party that hereafter occur or become known to such party -3- notwithstanding that such injuries, damages, losses, or liabilities may presently be unknown to such party. 11 All Cla parties . NO REPRESENTATION. This AGREEMENT and Full Release of ims incorporates the entire understanding among the and recites the sole consideration for the promises exchanged herein. In reaching this AGREEMENT, no party has relied upon any representation of promise except those expressly set forth herein. 12. DISMISSAL OF CROSS-COMPLAINTS. Upon payment of the amount described in paragraph 6(a)(b), STANDARD PACIFIC shall dismiss its Cross-Complaints with prejudice as to the CITY in each and every one of the cases listed in paragraph 2 of this AGREEMENT suma. The City shall dismiss its Cross-Complaints with Prejudice as to STANDARD PACIFIC and assign all its rights to STANDARD PACIFIC. 13. ASSIGNMENT OF RIGHTS AND COOPERATION. By this AGREEMENT the CITY will and does hereby assign tu STANDARD PACIFIC all claims, rights, and causes of action asserted by the CITY in this action regarding the real property as against the plaintiffs, defendants, cross-defendants and any and all other third-parties who are not parties to this Settlement Agreement. This assignment of claims, rights, and causes of action is made to the full extent permitted by law. Further, CITY will cooperate in good faith to reasonably assist in asserting claims and defenses available to the CITY to an extent mutually agreeable by both parties including making documents, property and witnesses reasonably available. 14. COSTS. The parties hereto shall each bear their own costs in the action. 15. EXECUTION AND COUNTERPART. The parties hereto and their respective counsel may execute this Agreement in counterparts. This Agreement shall become binding and effective upon execution hereof whether or not in counterparts by all parties and their respective counsel. DATED: 3/7/90 CITY By: Its: Mavor DATED : C-'! /' .), 'I() STANDARD PACIFIC, L.P., a Delaware Limited Partnership, by StanPac "/ +- Corp., a Delaware Corporation, its -4- APPROVED AS TO FORM: DATED: rxlm- 9/6/90 By : Matthew P. ROCCO Attorneys for CITY OF CARLSBAD DATED: JENNINGS, ENGSTRAND & HENRIKSON, A Professional Law Corporation By : $&;,$. Eljzabeph Claire Eldridge d" Atkprgdys for I STANDARD PACIFIC L.P. -5-