HomeMy WebLinkAbout2001-04-03; City Council; 16146; Lawsuit Settlement Sierra Pacific & Taylor BallCITY OF CARLSBAD - AGENDA BILL 0 M
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DEPT. CA
--...ENT OF LAWSUIT ENTITLED S/ERR,4 PAC/F/C
YETENTION CORP. V. TAYLOR BALL OF EARTH I
CALIFORNIA, /NC., CASE NO. N81303 REGARDING THE n DOVE LIBRARY CITY MGR.
DEPT. HD.
Adopt Resolution No. a60/ - /D 7 authorizing the Mayor to execute the Settlement
Agreement.
ITEM EXPLANATION:
In 1997, the City awarded a public works construction contract to Taylor Ball to build the Dove
Library. During the course of that construction, disputes arose between the parties as to which
entity was responsible for claimed delays, disruptions, and inefficiencies. Taylor Ball submitted
a claim for approximately $1 million and, when that claim was denied, filed a lawsuit in the Vista
Superior Court seeking additional compensation. The City answered Taylor Ball’s complaint
and filed a cross-complaint against it for breach of this construction contract in violation of the
False Claims statutes.
Trial of the matter was commenced and prior to its completion, with the Court’s assistance, it
was settled which resulted in the attached Settlement Agreement. The Settlement Agreement
resolves all issues between the parties arising from the construction of the library. Under the
terms of the Settlement Agreement, Taylor Ball agrees to pay the City $250,000 for delayed
completion of the library and agrees to a five year “cooling off” period during which time Taylor
Ball will not bid on any Carlsbad public works projects. Each party agrees to bear its own costs
and attorneys fees in prosecuting these actions and reaching this settlement.
FISCAL IMPACT:
The contractor agrees to pay the City $250,000 for the delay associated with the completion of
the library as explained above.
EXHIBITS:
1. Resolution No. AOO/ - 10 7
2. Settlement Agreement
RESOLUTION NO. 2001-107
2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, AUTHORIZING THE
3 SETTLEMENT OF THE LAWSUIT ENTITLED SIERRA
PACIFIC EARTH RETENTION CORP. V. TAYLOR BALL OF 4 CALIFORNIA. INC., CASE NO. N81303
5 WHEREAS, upon recommendation of the City Attorney, the City Council
6 of the City of Carlsbad, California has determined that a settlement in the case entitled
7
Sierra Pacific Earth Retention Corp. 8 v. Tavlor Ball of California, Inc. is in the public
9 interest; and
10 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
11 Carlsbad, California, as follows:
12 2 m" 1. That the above recitations are true and correct. mua 32-7 13 %X$! 2. That the City Council approves the settlement and authorizes the OWgj duo
a::$
14
cqjq Mayor to sign the Settlement Agreement, which is hereby approved. 9 nu 15 &$Z
8&- 16 3. That the City Council authorizes and consents to the dismissal of this
pa a$$? g-5 l7 action.
G 18 PASSED, APPROVED AND ADOPTED at a regular meeting of the City
19 Council of the City of Carlsbad held on the 3rd day of April ,200l by the
20 following vote, to wit:
21 AYES: COUnCil Members Lewis, Kulchin, Finnila, Nygaard and Hall. 22
NOES: None. * '
23
24 ABSENT: None.
25
216
27 &
28 OD, City Clerk
h
COMPROMISE SETTLEMENT AND MUTUAL RELEASE AGREEMENT
This Agreement, made and entered into by and between the CITY OF CARLSBAD
(“CITY”), and TAYLOR BALL OF CALIFORNIA, INC. (“TAYLOR BALL”), a California
corporation, is a Compromise Settlement And Mutual Release Agreement whereby the above-
mentioned parties hereby extinguish their mutual rights and claims arising from their differences
and disputes with regard to that certain work of improvement commonly known as the Carlsbad
Public Library (“Project”).
RECITALS
A. In or about December 1997 the CITY and TAYLOR BALL entered into a contract
(“Contract”) for the construction of the Project.
B. During the course of construction disputes arose between the parties regarding, @
al& delays, disruptions and inefficiencies which allegedly caused the Project to be completed
beyond the time duration set forth in the Contract.
C. On or about May 6, 1999 Sierra Pacific Earth Retention Corporation, a subcontractor
to TAYLOR BALL on the Project, tiled suit in San Diego Superior Court, Case No. N81303 (the
“Action”), against TAYLOR BALL, the CITY and others claiming amounts remained due but
unpaid for work it performed on the Project.
D. On or about July 30, 1999 TAYLOR BALL filed its cross-complaint in the Action
against Sierra Pacific, the CITY and others, seeking damages for breach of contract, indemnity,
negligence and declaratory relief.
E. On or about February 10,200O the CITY answered said cross-complaint, and filed its
own cross-complaint for breach of contract, violations of the California False Claims Act, and
violations of the CITY’s false claims ordinance.
F. Trial commenced on the above-mentioned causes on or about January 12,200l
in Department 24 of the San Diego Superior Court, North County Branch, the Honorable David B.
Moon presiding. Prior to completion of the trial the parties to this Agreement reached a settlement,
the terms of which are set forth herein. By this Agreement, and except as provided otherwise herein,
the parties intend to settle and fully dispose of any and all of the parties’ respective claims,
demands, and causes of action arising out of, connected with or incidental to the Project’s design
and construction, including without limitation, any and all claims, demands and causes of action
asserted in the Action.
NOW, THEREFORE, the CITY and TAYLOR BALL agree as follows:
1. Concurrent with the full execution of this Agreement, the CITY and TAYLOR
BALL shall dismiss with prejudice as against each other their respective cross-complaints filed in
the Action.
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2. There presently exists an escrow account containing the contract retention accrued
during the course of construction of the Project. The parties agree the funds remaining in said
escrow account shall be released as follows:
A. $250,000.00 to the CITY;
B. The balance to TAYLOR BALL.
TAYLOR BALL and the CITY agree to execute forthwith all documentation necessary to
effectuate the release of the escrowed funds as set forth above.
3. The parties have agreed to a five-year “cooling off’ period. As a result, TAYLOR
BALL agrees not to bid either as a general contractor or a subcontractor on any public works
projects for the CITY, CMWD, Carlsbad Public Financing Authority and the City of Carlsbad
Housing and Redevelopment Commission for a period of five years from the date of its execution of
this Agreement. In the event TAYLOR BALL inadvertently becomes a plan holder for any public
work of the CITY during said five-year period, the CITY agrees to notify TAYLOR BALL that said
five-year period has not expired, and provide an opportunity for TAYLOR BALL to withdraw as a
plan holder prior to declaring TAYLOR BALL to be a non-responsible bidder. Nothing contained
herein shall prevent TAYLOR BALL fi-om performing work for other owners in the City of
Carlsbad and the CITY shall issue building permits or perform other administrative processes for
the benefit of TAYLOR BALL for work TAYLOR BALL is otherwise performing within the City
of Carlsbad for any other owner, public or private. The CITY’s agents, employees, representatives,
subdivisions, elected officials, affiliates, assigns, subrogees, successors-in-interest, and attorneys
shall not make any derogatory or negative statements, comments or innuendo about TAYLOR
BALL, its subcontractors, the quality and timeliness of work on the Project, any claims that were
submitted or any matter that was or could have been raised in the Action, and the CITY shall inform
its construction managers, consultants, subconsultants, architects and engineers that the CITY does
not want any such statements made by any of them.
4. Except as to rights or claims created by this Agreement or reserved in paragraph 7E,
below, TAYLOR BALL agrees to defend and indemnify the CITY, its agents, employees,
representatives, sudivisions, elected officials, affiliates, assigns, subrogees, successors-in-interest,
attorneys, insurers, construction managers, consultants, subconsultants, architects and engineers,
and each of them, from and against any and all claims that may be asserted against the CITY by or
on behalf of TAYLOR BALL’s subcontractors, materialmen or suppliers.
5. The parties agree to bear their own attorneys’ fees and costs.
6. The parties agree that this Agreement affects the settlement of claims and disputes
that are denied and contested, and that nothing contained herein shall be construed as an admission
by any party hereto of any liability of any kind whatsoever to any other party. The parties deny any
and all liability in connection with any and all claims and disputes, and further intend hereby solely
to avoid further litigation and buy their peace.
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7. In consideration of the terms and conditions contained herein, and for other good and
valuable consideration, the receipt of which is acknowledged by each party hereto, TAYLOR BALL
and the CITY promise, agree and release as follows:
A. Except as to such rights or claims as may be created by this Agreement, and
as reserved in paragraph 7E hereinbelow, and conditioned upon receipt of the sum set forth
in paragraph 2A above, the CITY hereby releases TAYLOR BALL and its respective agents,
employees, representatives, officers, directors, divisions, subsidiaries, affiliates, assigns,
subrogees, heirs, successors-in-interest, shareholders, partnerships, general and limited
partners, attorneys, sureties, subcontractors and materialmen from any and all claims,
liabilities, demands and causes of action concerning the Project, including but not limited to
those that are or could have been set forth in the Action as of the date of this Agreement, and
including but not limited to any and all claims for delay, disruption, and false claims.
B. Except as to such rights or claims as may be created by this Agreement, and
as reserved in paragraph 7E hereinbelow, and conditioned upon receipt of the sum set forth
in paragraph 2B above, the TAYLOR BALL hereby releases the CITY and its respective
agents, employees, representatives, subdivisions, elected officials, affiliates, assigns,
subrogees, successors-in-interest, attorneys, insurers, construction managers, consultants,
subconsultants, architects and engineers, and each of them from any and all claims,
liabilities, demands and causes of action concerning the Project, including but not limited to
those that are or could have been set forth in the Action as of the date of this Agreement, and
including but not limited to any and all claims for delay, disruption, inefficiency, proprietary
specifications, and additional compensation resulting from extra or changed work.
C. Each party warrants that in executing this Agreement, they do so with full
knowledge of any and all of their rights in the matters released and agreed upon herein.
D. Each party hereby assumes the risk of any mistake of fact in connection with
the true facts involved in the instant controversy or in connection with any facts which are
unknown to it. Except as reserved in paragraph 7E hereinbelow, each party to this
Agreement expressly waives the benefits and provisions of Section 1542 of the Civil Code
of the State of California, which 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.
E. The disputes which are the subject of this Agreement arise out of demands
for payment on a construction project. It is the intent of the parties to settle their dispute
concerning their respective claims for payment and/or offsets, and for this Agreement to
reach all elements of their present dispute. However, the parties hereto understand that the
Contract contains covenants, duties and warranties concerning the rights and duties of the
parties should latent defects or presently unknown deficiencies arise which would survive
contract completion and final payment. It is not the intention of the parties to this Agreement
to discharge, waive or otherwise negate such covenants, duties and warrantees, or their
3
rights with respect to any claims or defenses regarding any such covenants, duties or
warranties. Furthermore, it is not the intention of the parties that this Agreement discharge,
waive or otherwise negate any claims, rights, or defenses concerning contractual or
indemnity obligations for property damage and/or personal injury which may survive
contract completion and final payment.
8. Each of the parties to this Agreement has made an investigation of the facts
pertaining to the provisions of this Agreement, and of all the matters pertaining thereto, as it deems
necessary.
9. No party (nor any officer, agent, employee, representative, or attorney of or for any
party) has made any statement or representation to any other party regarding any fact relied upon in
entering into this Agreement, and each party does not rely upon any statement, representation or
promise of any other party (or of any officer, agent, employee, representative, or attorney for any
other party) in executing this Agreement, or in making the settlement provided for herein, except as
expressly stated in this Agreement.
10. Each party has received or has been given full opportunity to receive independent
legal advice from its attorneys with respect to the advisability of making the settlement provided for
herein, with respect to the advisability of executing this Agreement, and with respect to the meaning
of California Civil Code Section 1542.
11. Each of the parties hereto and the individual executing this Agreement on their
behalf hereby represent and warrant that he or she and it are duly authorized to enter into this
Agreement in the capacities stated.
12. No party has assigned, transferred, hypothecated, or granted, or purported to assign,
transfer, hypothecate, or grant, any of the claims, demands, causes of action or rights of appeal
disposed of by this Agreement.
13. Each term of this Agreement is contractual and not merely a recital.
14. Each party is aware that it may hereafter discover claims, defenses or facts in
addition to or different from those it now knows or believes to be true with respect to the matters
settled and released herein. By executing this Agreement, the Parties intend to fully, finally, and
forever settle such matters, and all claims, demands and causes of action relative thereto, which may
exist, or heretofore have existed between them. In furtherance of the parties’ intent, the releases
given herein shall be and remain in effect as full and complete releases of all such matters,
notwithstanding the discovery or existence of any additional or different claims, defenses or facts
relative thereto.
15. The parties agree to perform all acts and execute and deliver all documents that may
reasonably be necessary to carry out the provisions of this Agreement.
16. This Agreement is the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior and contemporaneous oral and written agreements
and discussions. This Agreement may be amended only by an agreement executed in writing.
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17. This Agreement is binding upon and shall inure to the benefit of the Parties hereto,
their respective agents, employees, representatives, offricers, directors, divisions, subsidiaries,
affiliates, assigns, subrogrees, successors-in-interest, shareholders, partnerships, general and limited
partners, attorneys, joint power administrators, and insurers.
18. This Agreement is being voluntarily entered into and executed by the parties.
19. The waiver of any term, condition or covenant by party, or breach thereof, shall not
constitute a waiver with respect to that term at any future time or with respect to any other term,
condition or covenant, or breach thereof, except as otherwise provided herein.
20. Should any part, term, or provision of this Agreement be decided or declared by the
Courts to be, or otherwise found to be, illegal or in conflict with any laws of the State of California
or the United States, or otherwise be rendered unenforceable, or ineffectual, the validity of the
remaining parts, terms, portions, or provisions shall be deemed severable and shall not be effected
thereby, providing such remaining parts, terms. portions or provisions can be construed in substance
to constitute the agreement that the Parties hereto intended to enter into in the first instance.
21. This Agreement is the product of negotiation and preparation by and among each
party and their respective attorneys. The parties acknowledge and agree that this Agreement shall
not be deemed prepared or drafted by one party or the other.
22. Should any action or proceeding be brought arising out of, relating to or seeking the
interpretation or enforcement of the terms of this Agreement, the prevailing party thereto, as
decided by the Court, shall be entitled to reasonable attorneys’ fees and costs incurred.
23. In the event of litigation relating to this Agreement, California law shall govern.
Venue shall be in San Diego County, California.
24. This Agreement, consisting of eight pages, is made and entered into on and as of the
last date executed herein, and is effective as of that date.
25. This Agreement may be signed in counterparts.
Dated: April 5, 2001
Print Name: CLAUDE A. LEWIS, Mayor
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Dated: 3-g&a/ TAYLOR BALL OF CALIFORNIA, INC.
APPROVED AS TO FORM AND CONTENT:
Dated: 3-&-o /
Dated:
MARKS & GOLrA, LLP
By:
Robert J. M&z
RAMSEYER & KUHLMAN
By:
Ml 3531228.027.jdt
RONALD R. BALL
CITY AlTORNEY
JANE MOBALDI
ASSISTANT CITY ATTORNEY
DAMIEN 8. BROWER
DEPUTY CITY AlTORNEY
CINDIE K. McMAHON
DEPUTY CITY AlTORNEY
CITY OF CARLSBAD
1200 CARLSBAD VILLAGE DRIVE
CARLSBAD, CALIFORNIA 92008-1989
(760) 434-2891
FAX: (760) 434-6367
RANDEE HARLIB
SECRETARY TO CITY ATTORNEY
ARDIS SEIDEL
LEGAL SECRETARY/PARALEGAL
April 6,200l
Craig Ramseyer, Esq.
Ramseyer and Kuhlman
9255 Town Center Drive
Suite 255
San Diego, CA 92121
RE: SIERRA PACIFIC V. TAYLOR BALL, AND TAYLOR BALL V. CITY OF
CARLSBAD AND RELATED CROSS-COMPLAINTS, N813093 FOR THE
CONSTRUCTION OF THE DOVE LIBRARY
Dear Mr. Ramseyer:
Enclosed, please find two certified copies of City Council Resolution No. 2001-107
executed by the Mayor as approved by the City Council at its regular meeting of April 3,
2001. The original of the Settlement Agreement will be retained on file in the office of
the City Clerk.
As soon as it is available, please send me a copy of the dismissal of this case for my
files.
It has been a pleasure working with you on this case and the fine results you obtained
were truly consistent with all of your hard work and diligent preparation of this case
through and including its trial. It is indeed remarkable when a general contractor can
make a claim for almost $1 million against a city in a construction dispute and instead of
collecting any money on its claim ends up paying the City a quarter of a million dollars
in settlement.
I know that it is probably a hope in vain that the City will never get embroiled in another
construction dispute with a general contractor over the construction of any of its
numerous future capital improvement projects but the results in this case should be
seen in the contracting community as a warning that such litigation, unless meritorious,
will be met with a vigorous defense and vigorous offense when appropriate.
I appreciate all of the efforts you have expended on this case.
Vemy yours,
RONALD R. BALL
City Attorney
rmh
enclosures
c: Mayor and City Council
City Manager
Municipal Projects Director
City Clerk