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HomeMy WebLinkAbout2001-04-03; City Council; 16146; Lawsuit Settlement Sierra Pacific & Taylor BallCITY OF CARLSBAD - AGENDA BILL 0 M AB# lb: I+’ TITLE: SETTLEM! MTG. 413101 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. 1 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. 2 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. 4 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 5 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