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HomeMy WebLinkAbout1990-12-18; City Council; 10962; Settlementc RB# '4 %A MTG. 12/18/90 DEPT. A. Clr" OF CARLSBAD - AGENC- BILL TITLE CITY A SETTLEMENT OF LAWSUIT ENTITLED VARGAS V. CITY OF CARLSBAD, N45773 RECOMMENDED ACTION: If Council concurs, adopt Resolution No. ITEM EXPLANATION Special counsel, the City Attorney, the City Manager and the Risk Manager jointly recommend that the Council approve the attached settlement agreement in the above referenced action. It would resolve the individual claims of German Vargas and German Vargas as guardian ad litem for his three children. Although we believe this tragic accident was caused by Mrs. Vargas, an unlicensed, inexperienced, uninsured driver who was driving much too fast for the conditions and crossed the center line, the possibility exists of some assignment of fault to the City because of the condition of Rancho Santa Fe Road. If that were to occur, an award against the City is possible in an amount substantially in excess of the recommended settlement figure. The settlement is recommended as being in the best interests of the City. FISCAL IMPACT There are sufficient funds in the liability account to cover the settlement. EXHIBITS Resolution No. 4&53 Settlement Agreement and Release . 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 90-453 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA AUTHORIZING THE EXPENDITURE OF FUNDS FOR SETTLEMENT OF THE LAWSUIT ENTITLED VARGAS V. CITY OF CARLSBAD CASE NO. N45773 WHEREAS, on recommendation of the City Attorney the City Council of the City of Carlsbad, California has determined that a settlement in the case entitled Varsas v. Citv of Carlsbad is in the public interest; and WHEREAS, there are sufficient funds available in the liability self-insurance 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. 3. That the City Council approves the settlement and authorizes disbursement of $95,000 from the liability self- insurance reserve account for Varsas v. City of Carlsbad. 3. That the Mayor is authorized to sign the Settlement Agreement and Release which is hereby approved. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 18th day of December , 1990, by the following vote, to wit: AYES: Council Members Lewis, Larson, Stanton and Nygaard NOES: None ABSENT: Council Mem ATTEST: &?La!# dR& ALETHA L. RAUTENKRANZ, City gerk BETTLEMENT AGREEMENT AND RELEASE This Settlement Agreement and Release (the "Settlement Agreement") is made and entered into this 14th day of December , 1990, by and between the following individuals and entities: GERMAN VARGAS, individually, and as Guardian ad Litem for MICHELLE VARGAS, CHRISTIAN VARGAS and ALLAIN VARGAS (hereinafter referred to as "Claimants"); THE CITY OF CARLSBAD (hereinafter "Defendant"). RECITALS A. On or about November 13, 1988 at approximately 3:25 p.m., Claimants' decedent Teresa Vargas was critically injured in an automobile accident which occurred on Rancho Santa Fe Road approximately .1 miles north of Cadencia Street in the City of Carlsbad. She was taken to Palomar Hospital where she died on November 20, 1990 as a result of injuries sustained in the automobile accident. Claimants allege the accident and resulting physical and personal injuries and all other damages arose out of certain alleged negligent acts or ommissions by Defendant and have made a claim seeking monetary damages on account of those injuries which is the subject of a lawsuit on file in the Superior Court of the State of California, North County of San Diego, bearing case number N45773, entitled German Vargas, et a1 v. City of Carlsbad, et al. B. The parties desire to enter into this Settlement Agreement in order to provide for certain payments in full settlement and discharge of all claims which have or might be made, by reason of the incident described in Recital A above, upon the terms and conditions set forth below. C. The parties declare that the provisions, terms and conditions set forth herein are the result of comprehensive, thorough negotiations undertaken in good faith. Further, the parties recognize and declare that each other's actions in prosecuting or defending the suit mentioned hereinabove were undertaken in good faith as well. AGREEMENT The parties agree as follows: 1.0 Release and Discharge 1.1 In consideration of the payments set forth in Page 1 of 7 t c L.-- I Section 2, Claimants hereby completely release and forever discharge Defendant from any and all past, present or future claims, demands, obligations, actions, causes of action, wrongful death claims, rights, damages, costs, losses of services, expenses and compensation of any nature whatsoever, whether based on a tort, contract or other theory of recovery, which the Claimants now have, or which may hereafter accrue or otherwise be acquired, on account of, or may in any way grow out of the incident described in Recital A above, including, without limitation, any and all known or unknown claims for bodily injury and personal injuries to Claimants, or any future wrongful death claim of Claimants' representatives or heirs, which have resulted or may result from the alleged acts or omissions of the Defendant, 1.2. This release and discharge shall also apply to Defendant's past, present and future officers, directors, stockholders, attorneys, agents, servants, representatives, employees, subsidiaries, affiliates, partners, predecessors and successors in interest, and assigns and all other persons, firms or corporations with whom any of the former have been, are now, or may hereafter be affiliated. 1.3 This release, on the part of the Claimants, shall be a fully binding and complete settlement among the Claimants, the Defendants, and their heirs, assigns and successors. 1.4 Claimants further understand and agree that in consideration of said payments, the Claimants will indemnify and save harmless Defendant and all other persons, firms, or corporations of and from any and every claim, lien, or demand of every kind or character which has been or may ever be asserted by way of subrogation or any other proceeding by reason of said injuries, property damage or other loss or damage or the effects or consequences thereof by the Claimants or their heirs or assigns or any other person, natural or artificial, claiming to be damaged thereby. incurred as a result of payments or benefits provided to Claimants as a result of this incident. This specifically includes but is not limited to any payment or benefits provided to Claimants or Claimants' decedent Teresa Vargas by Medi- Cal/Medi-Care. This applies only to damages which are 1.5 The Claimants acknowledge and agree that the release and discharge set forth above is a general release, Claimants expressly waive and assume the risk of any and all claims for damages which exist as of this date, including those claims which the Claimants do not know or suspect to exist, whether through ignorance, oversight, error, negligence, or otherwise, and which, if known, would materially affect Claimants' decision to enter into this Agreement. Claimants further agree that Claimants have accepted payment of the sums specified herein as a complete compromise of matter involving Page 2 of 7 --\ 1. disputed issues of law and fact. the facts or law may be other than Claimants believe. understood and agreed to by the parties that this settlement is a compromise of a doubtful and disputed claim, and the payments are not to be construed as an admission of liability on the part of Defendant, by whom liability is expressly denied. agree to waive all rights and benefits which they now have or in the future may have under and by virtue of the terms of Section 1542 of the Civil Code of the State of California, which section reads as follows: Claimants assume the risk that It is 1.6 The Claimants further understand and expressly 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. 2.0 Payments In consideration of the release set forth above, the Defendant agrees to pay to the individuals named below ("Payee(s)") the sums outlined in this Section 2 below: 2.1 Payments due at the time of settlement as follows: A single cash payment in the sum of $50,000.00 shall be paid to German Vargas and Monguia & Monguia, his attorneys. 2.2 Periodic payments made as follows: (a) To Christian Vargas (date of birth: 12/31/79) a payment of $10,000.00 at age 21; a payment of $15,000.00 at age 25; and a payment of $28,900.00 at age 30; (b) To Allain Vargas (date of birth: 9/26/81) a payment of $13,000.00 at age 21; a payment of $18,000.00 at age 25; and a payment of $29,500.00 at age 30; and (c) To Michelle Vargas (date of birth: 6/18/86) a payment of $20,000.00 at age 21; a payment of $25,000.00 at age 25; and a payment of $40,000.00 at age 30. All sums set forth herein constitute damages on account of personal injuries and sickness, within the meaning of Section 104(a)(2) of the Internal Revenue Code of 1986, as amended. Page 3 of 7 t 3.0 Claimants' Rights to Payments Claimants acknowledge that the Periodic Payments cannot be accelerated, deferred, increased or decreased by the Claimants; nor shall the Claimants have the power to sell, mortgage, encumber, or anticipate the Periodic Payments, or any part thereof, by assignment or otherwise. 4.0 Claimants' Beneficiary Any payments to be made after the death of any Payee pursuant to the terms of this Settlement Agreement shall be made to such person or entity as shall be designated in writing by Claimants to Safeco Life Insurance Company or its Assignee. If no person or entity is so designated by Claimants, or if the person designated is not living at the time of the Payee's death, said payments shall be made to the estate of the Payee(s). No such designation, nor any revocation thereof, shall be effective unless it is in writing and delivered to Safeco Life Insurance Company or its Assignee. 5.0 Consent to Qualified Assignment 5.1 Claimants acknowledge and agree that the Defendant may make a "qualified assignment," within the meaning of Section 130(c) of the Internal Revenue Code of 1986, as amended, of the Defendant's liability to make the Periodic Payments set forth in Section 202 to SAFECO ASSIGNED BENEFITS SERVICE COMPANY ("the Assignee"). Periodic Payments shall be no greater than that of Defendant (whether by judgment or agreement) immediately preceding the assignment of the Periodic Payments obligation. The Assignee's obligation for payment of the 5.2 Any such assignment, if made, shall be accepted by the Claimants without right or rejection and shall completely release and discharge the Defendant from the Periodic Payments obligation assigned to the Assignee. The Claimants recognize that, in the event of such an assignment, the Asignee shall be the sole obligor with respect to the Periodic Payments obligation, and that all other releases with respect to the Periodic Payments obligation that pertain to the liability of the Defendant shall thereupon become final, irrevocable and absolute. 6.0 Right to Purchase an Annuity The Defendant itself or through its Assignee, reserves the The Defendant or the Assignee shall be the sole owner right to fund the liability to make the Periodic Payments through the purchase of an annuity policy from Safeco Life Insurance Company. of the annuity policy and shall have all rights of ownership. The Defendant or the Assignee may have Safeco Life Insurance Company mail payments directly to the Payee(s). The Claimants shall be responsible for maintaining a current mailing address Page 4 of 7 h for Payee(s) with Safeco Life Insurance Company. 7.0 Discharge of Obligation The obligation of the Defendant and/or Assignee to make each Periodic Payment shall be discharged upon the mailing of a valid check in the amount of such payment to the designated address of the Payee(s) named in Section 2 of the Settlement Agreement. 8.0 Attorney's Fees Each party hereto shall bear all attorney's fees and costs arising from the actions of its own counsel in connection with this Settlement Agreement, the matters and documents referred to herein, and all related matters. 9.0 Representation of Comprehension of Document In entering into this Settlement Agreement the Claimants represent that Claimants have relied upon the advice of their attorneys, who are the attorneys of their own choice, concerning the legal and income tax consequences of this Settlement Agreement; that the terms of this Settlement Agreement have been completely read and explained to Claimants by their attorneys; and that the terms of this Settlement Agreement are fully understood and voluntarily accepted by Claimants. 10.0 Warranty of Capacity to Execute Agreement Claimants represent and warrant that no other person or entity has, or has had, any interest in the claims, demands, obligations, or causes of action referred to in this Settlement Agreement, except as otherwise set forth herein; that Claimants have the sole right and exclusive authority to execute this Settlement Agreement and receive the sums specified in it; and that Claimants have not sold, assigned, transferred, conveyed or otherwise disposed of any of the claims, demands, obligations or causes of action referred to in this Settlement Agreement. 11.0 Delivery of Dismissal with Prejudice Concurrent with the execution of this Settlement Agreement, counsel for Claimants will execute and deliver to counsel for the Defendant an executed Dismissal with Prejudice of the civil action described in Recital A above. Claimants have authorized their attorneys to execute this dismissal on their behalf and hereby authorize counsel for the Defendant to file said dismissal with the court and enter it as a matter of record. 12.0 Confidentialitp The parties agree that neither they nor their attorneys nor representatives shall reveal to anyone, other than as may be Page 5 of 7 mutually agreed to in writing, any of the terms of this Settlement Agreement or any of the amounts, number or terms and conditions of any sums payable to Payee(s) hereunder. 13.0 Governing Law This Settlement Agreement shall be construed and interpreted in accordance with the laws of the State of California. 14.0 Additional Documents All parties agree to cooperate fully and execute any and all supplementary documents and to take all additional actions which may be necessary or appropriate to give full force and effect to the basic terms and intent of this Settlement Agreement. 15.0 Entire Agreement and successors in Interest This Settlement Agreement contains the entire agreement between the Claimants and the Defendant with regard to the matters set forth in it and shall be binding upon and enure to the benefits of the executors, administrators, personal representatives, heirs, successors and assigns of each. 16.0 Effectiveness This Settlement Agreement shall become effective immediately follwing execution by each of the parties. Dated: j2 -14- , 1990 claimant: [/i4 &A GERMAN VARGAS Dated: /<A 4 /c/ I 1990 claimant: through her Guardian ad Litem, GERMAN VARGAS Dated: /a- /4 , 1990 Claimant: through her Guardian ad Litem, GERMAN VARGAS Page 6 of 7 Dated: /J - /y , 1990 Claimant : [/!!*d?O CHElISTIAN VARGAS,ch minor, by and through her Guardian ad Litem, GERMAN VARGAS Dated: , 1990 Claimant's Attorney: MONGUIA t MONGUIA By: Dated: . , 1990 Claimant's Attorney: Bv : John Serrano Dated: /<//! , 1990 Defendant's Attorney: NEIL, DYMOTT , PERKINS, BROWN & FRANK B Page 7 of 7