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Home My WebLink About2007-09-25; City Council; 19175; Settlement terms Bubalo v. City of CarlsbadCITY OF CARLSBAD - AGENDA BILL AB# 19,175 MTG. 09/25/07 DEPT. CA REPORTING OUT THE TERMS AND CONDITIONS OF THE GENERAL RELEASE AND SETTLEMENT IN BUBALO V. CITY OF CARLSBAD, DEPT. HEAD CITYATTY. £^U CITY MGR. IJL/^ RECOMMENDED ACTION: There is no action the Council needs to take. ITEM EXPLANATION: The parties have now settled this claim under the authority given to the City Attorney by the City Council at its closed session meeting of July 17, 2007. This item satisfies the Brown Act requirement to report the fact of a settlement of a claim approved in a prior closed session, and makes the terms and conditions of the settlement available to the public. The General Release and Settlement of Claims is attached. FISCAL IMPACT: The settlement amount is $725,000. EXHIBITS: |,General Release and Settlement DEPARTMENT CONTACT: Ronald R. Ball, (760) 434-2891 rball@ci.carlsbad.ca.us FOR CITY CLERKS USE ONLY. COUNCIL ACTION: APPROVED DENIED CONTINUED Sf H D WITHDRAWN D AMENDED D CONTINUED TO DATE SPECIFIC D CONTINUED TO DATE UNKNOWN D RETURNED TO STAFF D OTHER-SEE MINUTES D 08/1S/2B07 12:3& 9498515014 MARKHARGAN PAGE 02/18 MUTUAL COMPROMISE AND SETTLEMENT AGREEMENT THIS MUTUAL COMPROMISE and SETTLEMENT AGREEMENT ("Agreement") is entered into this 17th day of July, 2007 ("Effective Date") by and between STEVE BUBALO CONSTRUCTION CO. (hereinafter "SBCC") and the CITY OF CARLSBAD (hereinafter "CITY") with reference to the following facts: RECITALS WHEREAS: A. On January 29, 2001 SBCC entered into a written contract with the CITY, wherein SBCC agreed to construct and the CITY agreed to pay for the construction of a public works project in the City of Carlsbad, California known as the Vista/Carlsbad Interceptor Sewer and South Carlsbad Storm Drain Projects - Contracts Nos. 3182,3528, 3667 (hereinafter, "PROJECT"). SBCC completed all work to be performed on the PROJECT and on April 18,2003 the CITY certified substantial completion of the PROJECT. B. On September 3, 2004, SBCC filed a Complaint against the CITY in the Superior Court of the State of California, County of San Diego, Vista Branch, Case Number GIN 039324 for Breach of Contract and Breach of Implied Warranty to recover monies for work performed by SBCC allegedly due and unpaid by the CITY on the PROJECT (hereinafter referred to as the "COMPLAINT"). On or about October 22,2004 the CITY filed an Answer to the COMPLAINT and a Cross-Complaint against SBCC for False Claims (hereinafter, "CROSS-COMPLAINT"). The COMPLAINT and CROSS-COMPLAINT are hereinafter jointly referred to as the "LAWSUIT". C. Pursuant to a stipulation between SBCC and the CITY, on or about February PAGE 2I10'RCVDA«OQ712:19:01 PM[P»^^ 08/16/2097 12:36 9498515314 MARKHARGAN PAGE 03/10 16, 2005 the LAWSUIT was transferred, to the Superior Court of the State of California, County of Riverside and assigned case number RIC 425788, D. The parties hereto have reached a settlement of the LAWSUIT in its entirety and intend this Agreement to formally memorialize their settlement. NOW, THEREFORE, pursuant to the Recitals, which are incorporated herein by reference and for good and valuable consideration the parties hereto agree as follows: 1. In consideration of the mutual releases herein, dismissals of the COMPLAINT and CROSS-COMPLAINT and the other obligations of the parties herein, the CITY shall pay to SBCC the sum of $725,000.00 within 14 days of the execution of this Agreement by all parties hereto. 2. The check for $725,000.00 shall be made payable to "Steve Bubalo Construction Co." and delivered to the Law Offices of Mark C. Hargan, 19900 MacArthur Blvd. Suite 950, Irvine, CA 92612. Upon receipt of the check SBCC shall cause to be filed a Dismissal of the COMPLAINT with prejudice and at the same time the CITY shall cause to be filed a Dismissal of the CROSS-COMPLAINT with prejudice. 3. Each party hereto shall bear its own attorney's fees and cost in regard to the LAWSUIT. 4. It is further agreed by the parties that the Superior Court for the County of Riverside shell retain jurisdiction over this matter to enforce the terms and conditions of this Agreement pursuant to C.C.P. 664.6. 5. RELEASE BY SBCC: Subject to the conditions of this Agreement, SBCC on behalf of itself, its agents, servants, employees, assignees, transferees, principals, partners, officers, directors, subsidiaries, parents, successors, attorneys and representatives does hereby ioHMfciw 08/16/2897 12:36 9498515014 MARKHARGAN PAGE 04/10 release and forever discharge the CITY and the City of Vista, and their respective assignees, transferees, principals, partners, officers, directors, employees, servants, subsidiaries, parents, successors, agents, attorneys and representatives from any and all claims, demands, damages, debts, liabilities, obligations, contracts, agreements, causes of action, suits and costs of whatever nature, character or description, whether known or unknown, anticipated or unanticipated, which it may have or claim to have arising out of the Recitals herein, the PROJECT, the COMPLAINT, the CROSS-COMPLAINT and the LAWSUIT, 6. RELEASE BY THE CITY: Subject to the conditions of this Agreement, and except as set forth in paragraph 7 herein below, the CITY on behalf of itself, its agents, servants, employees, assignees, transferees, principals, partners, officers, directors, subsidiaries, parents, successors, attorneys and representatives docs hereby release and forever discharge SBCC and its respective assignees, transferees, principals, partners, officers, directors, employees, servants, subsidiaries, parents, subcontractors, successors, agents, sureties, attorneys and representatives from any and all claims, demands, damages, debts, liabilities, obligations, contracts, agreements, causes of action, suits and costs of whatever nature, character or description, whether known or unknown, anticipated or unanticipated, which it may have or claim to have arising out of the Recitals herein, the PROJECT, the COMPLAINT, the CROSS-COMPLAINT and the LAWSUIT, 7. The parties to this Agreement understand the contracts contain certain covenants, duties and warranties, express and implied, concerning the rights and duties of the parties thereto should latent defects or presently unknown deficiencies arise which normally survive contract completion and final payment. Notwithstanding any other provision of this Agreement, it is not the intention of the parties that this Agreement release, discharge, waive or otherwise negate 08/16/2607 12:36 9498515011 MARKHARGAN PAGE 05/10 such covenants, duties or warranties with respect to the work that SBCC performed under the contracts, including any indemnity provisions should claims of personal injury arise subsequent to the execution of this Agreement. Furthermore, not withstanding any other provisions herein the parties are not waiving rights to express and implied indemnity against each other or third parties in the event of a claim for latent defect. 8. INTENTION OF THE PARTIES. Except as set forth in paragraph 7 hereinabove, it is the intention of the parties that this Agreement shall be effective as a MI and final accord and satisfaction of each and every matter released under this Agreement. In furtherance of this intention, the parties acknowledge that each is familiar with Section 1542 of the Civil Code of the State of California, which provides as follows ("Section 1542"): "A general release does not extend to claims which a creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her, must have materially affected his or her settlement with the debtor," The panics hereto waive and relinquish any rights and benefits, which they may have under Section 1542. The parties acknowledge that they may hereafter discover facts in addition to or different from those which they now know or believe to be true with respect to the matters released herein, but except as set forth in paragraph 7 hereinabove, it is their intention to fully, finally and forever settle and release any and all matters, disputes and differences known or unknown, suspected or unsuspected, which do now exist, may exist or heretofore have existed between them in respect to the matters released herein. In furtherance of this intention, the release herein shall remain in effect as a full and complete specific release notwithstanding the discovery or existence of any such additional or different facts. The panics warrant and represent to one another that the effect and impprtance of the provision of Section 1542 has been fully explained to them by their attorneys. PAGE 5110' RCVD AT 81161200712:19:01 PM [Pacific Daylight Time]«SVR:RIGHTFAXI2' DNIS:5402' CSDMIBISOU' DURATION (mm-ss):03-12 08/16/2007 12:36 9498515014 MARKHARGAN PAGE 06/13 9. OWNERSHIP OF CLAIMS. The Parties warrant and represent that they are the only persons or entities which have any interest in any of the matters herein released, and that none of such claims, causes of action, costs or demands, or any part thereof, have been assigned, granted or transferred in any way to any other person. 10. NO ADMISSION. This Agreement affects a settlement of claims, which are contested and denied. Nothing herein shall be construed as an admission by any party of any liability of any kind to the other party or panics except as created or referred to herein. To that end the parties hereto specifically agree that there were no False Claims established as alleged in the CITY'S CROSS-COMPLAINT. 11. NON-DISPARAGEMENT: The parties further agree not to disparage the reputation of the other to any third party. The CITY affirms that SBCC completed all work on the PROJECT according to the terms of the contract. The CITY further agrees to instruct its employees and independent contractors to limit any statement to a third party inquiring about the performance of SBCC on the PROJECT to, "SBCC completed all work on the PROJECT according to the terms of the contract.1' 12. ENTIRE AGREEMENT. This Agreement contains the entire understanding and agreement between the parties hereto with respect to the matters referred to herein. No other representations, covenants, undertakings or other prior or contemporaneous agreements, oral or • written, respecting such matters, which are not specifically incorporated herein, shall be deemed in any way to exist or bind any of the parties hereto. This is an integrated Agreement. 13. BINDING ON SUCCESSORS. This Agreement and the covenants and conditions contained herein shall apply to, be binding upon and inure to the administrators, executors, legal representatives, assignees, successors, agents and assigns of the parties hereto. PAGE 5110 * RCVD AT 811612007 12:19:01 PM [Pacffic Daylight lime]' SVR:RIGHTFAX12 SDNIS;5402'C3ID:9498515DW'DURATION (mm4s):03-12 (j 08/15/2007 12:36 9498515014 MARKHARGAN PAGE 07/18 14. CONSTRUCTION. This Agreement shall not be construed against the party preparing it, but shall be construed as if al) parties jointly prepared this Agreement and any uncertainty and ambiguity shall not be interpreted against any one party. 15. MODIFICATION, No party shall modify this Agreement by oral representation made before or after the execution of this Agreement. All modifications must be in writing and signed by all parties, 16. ATTORNEY'S FEES. Should a lawsuit be brought to enforce or interpret any part of this Agreement, the prevailing party shall be entitled to recover hs reasonable attorney's fees and costs of suit. 17. FURTHER DOCUMENTS. The panics shall execute and deliver all documents and perform alt further acts that may be reasonably necessary to effectuate the provisions of this Agreement. 18. COUNTERPARTS AND FACSIMILE SIGNATURES. This Agreement may be signed in multiple counterparts and by fax copy, each of which shall be an original and all of which shall constitute one in the same instrument. 19. ADVICE OF COUNSEL. The parties acknowledge that they have been represented by counsel of their own choice in the negotiations leading up to the execution of this Agreement and that they have read this Agreement and have had it fully explained to them by their counsel. < 2007 STEVE BUBALO CONSTRUCTION CO. BY: , President PAGE 7110 * RCVD AT {116/200712:19:01 PM [Pacific Daylight Time]' SVR:RIGHTFAX/2' DNIS:M02* CSID:9498515014 * DURATION (mm-ss):03-12 Dated:,2007 APPROVED AS TO FORM: DATKD: July , 2007 LAW OFFICES OF MARK C. HARGAN (Signatures continue on page 7) BY: MARK C. HARGAN, Attorney for STEVE BUBALO CONSTRUCTION CO. 08/16/2087 12:36 9498515014 MARKHARGAN PAGE 08/1e Dated: July ,2007 APPROVED AS TO FORM: Mt^uDATED; JWy_/Cf, 2007 THE CITY OF CARLSBAD BY: _____ LAW OFFICES OF MARK C. HARGAN BY: MARK C. HARGAN, Attorney for STEVE BUBALO CONSTRUCTION CO. (Signatures continue on page 7) PAGE 8/10«RCVDAT8J»712;19:01PM [Pacific Daylight Time]'SVRiRIGHTFAWZ'DNIS^OZ'CSID^SJSISOU* DURATION (mm-ss);03-12 88/16/2007 12:36 9498515014 MARKHARGAN PAGE 09/18 ^^^ DATED: July /£_. 2007 MONTELEONE & MCCRORY JOSEPH MILLER, Attorney for STEVE BUBADO CONSTRUCTION CO. V..,- DATED: July ,2007 PROCOPIO, CORY, HARORAVES & SAVITCH, LLP BY: CRAIG A. RAMSEYER, Attorney for THE CITY OF CARLSBAD PAGE 9/10'RCVDAT8/16/200712;19:B1PM [Pacific Daylight Timel' DATED: July.,2007 MONTELEONE & MCCRORY BY: JOSEPH MILLER, Attorney for STEVE BUBALO CONSTRUCTION CO. fl DATED: fe<y- <9yU007 PROCOPIO, CORY, MARGRAVES & SAWTCH, LL CRAIG A. MAMSEYER, Attorney for THE CITY 0>F CARLSBAl