HomeMy WebLinkAbout2008-08-05; City Council; 19530; Reporting Out the Terms and Conditions of Setllement Agreement in City of Carlsbad v. Time Warner Cable IncCITY OF CARLSBAD - AGENDA BILL
AB#
MTG.
DEPT.
19,530
08/05/08
CA
REPORTING OUT THE TERMS AND
CONDITIONS OF THE SETTLEMENT
AGREEMENT IN
CITY OF CARLSBAD V. TIME WARNER
CABLE INC.
DEPT. HEAD
CITY ATTY. 6^-
CITYMGR. UA_
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 June 10, 2008. This item satisfies the Brown
Act requirement to report the fact of a settlement approved in a prior closed session, and
makes the terms and conditions of the settlement available to the public. The Settlement
Agreement and Mutual Special Release is attached.
FISCAL IMPACT:
The fair market value of the equipment from Time Warner Cable Inc. for use in City's cable
broadcasting of City Council meetings.
EXHIBITS:
1. Settlement Agreement and Mutual Special Release
DEPARTMENT CONTACT: Ronald R. Ball, (760) 434-2891 rball@ci.carlsbad.ca.us
FOR CITY CLERKS USE ONLY.
COUNCIL ACTION: APPROVED
DENIED
CONTINUED
WITHDRAWN
AMENDED
X'D
D
D
D
CONTINUED TO DATE SPECIFIC
CONTINUED TO DATE UNKNOWN
RETURNED TO STAFF
OTHER -SEE MINUTES
D
D
D
D
SETTLEMENT AGREEMENT AND MUTUAL SPECIAL RELEASE
1 PARTIES: The parties to this Settlement Agreement and Mutual Special
Release ("AGREEMENT") are TIME WARNER CABLE INC. and TIME WARNER NY
CABLE LLC (collectively, "TIME WARNER"), on the one hand, and CITY OF CARLSBAD
("CARLSBAD"), on the other.
2 RECITALS: This AGREEMENT is made with reference to the following facts:
2.1 TIME WARNER CABLE INC. is a corporation organized and existing
under the laws of the State of Delaware and TIME WARNER NY CABLE LLC is a limited
liability company organized and existing under the laws of the State of Delaware.
2.2 CARLSBAD is a municipal corporation organized and existing under the
laws of the State of California.
2.3 On or about October 18,1977, CARLSBAD granted to Daniels Properties,
Inc. and La Costa Community Antenna Systems, Inc. cable television franchises, which
franchises authorized the operation of cable television systems within CARLSBAD (the
"CABLE FRANCHISE"). The CABLE FRANCHISE was subsequently transferred to Daniels
Cablevision, Inc. and then combined into a single franchise and subsequently transferred to
Highland Carlsbad Operating Subsidiary, Inc., which was managed by Adelphia
Communications Corporation. The term of the CABLE FRANCHISE was extended through
November 19, 2006.
2.4 On or about March 21,2006, CARLSBAD approved the transfer of the
CABLE FRANCHISE to TIME WARNER NY CABLE LLC; certain of the obligations of TIME
WARNER NY CABLE LLC under the CABLE FRANCHISE were guaranteed by TIME
WARNER CABLE INC. On or about August 1,2006, TIME WARNER NY CABLE LLC
became a cable television franchisee in CARLSBAD pursuant to the CABLE FRANCHISE.
2.5 After TIME WARNER NY CABLE LLC became the franchisee in
CARLSBAD, a dispute developed between TIME WARNER and CARLSBAD as to the parties'
rights, duties and obligations under the CABLE FRANCHISE, including whether the term of the
CABLE FRANCHISE was extended beyond November 19, 2006, pursuant to the provisions of
the Digital Infrastructure and Video Competition Act of 2006 ("DIVCA") (California Public
Utilities Code §§5800, etseq.).
2.6 On or about August 20,2007, CARLSBAD filed a complaint in the United
States District Court, Southern District of California, in an action entitled City of Carlsbad,
Municipal Corporation, Plaintiff, v. Time Warner NY Cable LLC and Time Warner Cable Inc.,
Defendants, Case No. 07CV01638W(LSP) and on or about October 10, 2007, TIME WARNER
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answered the complaint and filed counterclaims against CARLSBAD (collectively, the
"ACTION").
2.7 The parties now wish to resolve any disputes between them regarding the
ACTION and, without either party admitting liability, wrongdoing or fault, to agree to the terms
and conditions set out in the AGREEMENT in order to settle and dispose of, fully and
completely, any and all claims arising therefrom.
3 TIME WARNER'S OBLIGA TIONS:
3.1 EQUIPMENT: TIME WARNER shall transfer its right, title and interest
in the equipment identified on Exhibit A attached hereto (the "TRANSFERRED EQUIPMENT")
to CARLSBAD; such transfer of TIME WARNER'S right, title and interest shall be effective at
the same time that the TRANSFERRED EQUIPMENT is delivered to CARLSBAD as provided
hereinbelow. The TRANSFERRED EQUIPMENT shall be delivered to CARLSBAD at a
location at City Hall to be determined by CARLSBAD within ten business days of
CARLSBAD'S written notice to TIME WARNER that it is prepared to accept delivery of the
TRANSFERRED EQUIPMENT. The target date by which CARLSBAD shall accept delivery of
the TRANSFERRED EQUIPMENT is October 17, 2008; however, the absolute deadline by
which CARLSBAD shall accept delivery of the TRANSFERRED EQUIPMENT shall be no later
than December 31, 2008 The cost of delivering the TRANSFERRED EQUIPMENT to
CARLSBAD shall be paid by TIME WARNER, and the cost of installing the TRANSFERRED
EQUIPMENT at City Hall shall be paid by CARLSBAD; provided, however, that TIME
WARNER shall provide technical oversight regarding such installation at City Hall, although
TIME WARNER shall have no responsibility or liability in connection with such oversight.
TIME WARNER warrants that at the time the TRANSFERRED EQUIPMENT is
delivered to CARLSBAD, such TRANSFERRED EQUIPMENT shall be functional and if
properly installed by CARLSBAD and used in conjunction with properly functioning equipment
owned by CARLSBAD as of the date of this AGREEMENT, CARLSBAD will be able to
cablecast City Council meetings in a manner and quality consistent with the cablecasts of
CARLSBAD'S City Council meetings produced by TIME WARNER immediately prior to the
date of this AGREEMENT. Other than the representations set forth hereinabove, CARLSBAD
acknowledges that the TRANSFERRED EQUIPMENT is used, not new, equipment, that it is
delivered free and clear of any and all warranties, expressed or implied, and that after the
TRANSFERRED EQUIPMENT is transferred to CARLSBAD pursuant to the terms of this
AGREEMENT, TIME WARNER will have no further responsibility or obligation f§t the
condition of such TRANSFERRED EQUIPMENT.
3.2 TRAINING: TIME WARNER shall continue to provide staffing to
cablecast CARLSBAD's City Council meetings for such period as such staffing is requested by
CARLSBAD, through December 31, 2008. During the time that TIME WARNER provides such
staffing, its staff members shall allow CARLSBAD's employees or representatives to observe
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their cablecasting of CARLSBAD's City Council meetings and shall assist CARLSBAD's
employees or representatives to become trained during such cablecasts to learn how to perform
the cablecasting themselves. CARLSBAD hereby expressly agrees that TIME WARNER will
not be required to incur any additional out of pocket costs in connection with such training, and
further expressly agrees that after such time as CARLSBAD desires to perform itself the
cablecasting of its City Council meetings, and no later than January 1, 2009 in any event, TIME
WARNER will have no further responsibility or obligation related to the cablecasting of
CARLSBAD's city council meetings except for its obligation to carry such cablecasts on its
cable system.
4 SPECIAL RELEASES AND PROMISES:
4.1 Release of TIME WARNER: Except with respect to the obligations
created by or arising out of this AGREEMENT, CARLSBAD hereby releases and absolutely and
forever discharges TIME WARNER CABLE INC. and TIME WARNER NY CABLE LLC and
their respective parent, subsidiary and affiliated companies, their respective officers, directors,
shareholders, partners, agents, contractors, employees, attorneys, predecessors, successors and
assigns, and each of them, from any and all claims, demands, grievances, liabilities, debts,
accounts, obligations, costs, expenses, liens, actions and causes of action, of every kind and
nature whatsoever, existing on the effective date of this AGREEMENT, whether known or
unknown, anticipated or unanticipated, suspected or unsuspected, which CARLSBAD has or
claims to have, now or hereafter, against TIME WARNER CABLE INC. and TIME WARNER
CABLE NY CABLE LLC or their respective parent, subsidiary or affiliated companies, their
respective officers, directors, shareholders, partners, agents, contractors, employees, attorneys,
predecessors, successors and assigns, and each of them, arising out of or in connection with the
effectiveness or term of the CABLE FRANCHISE, the ACTION, the prosecution or defense of
the ACTION or the negotiation and documentation of this AGREEMENT.
4.2 Release of CARLSBAD: Except with respect to the obligations created by
or arising out of this AGREEMENT, TIME WARNER CABLE INC. and TIME WARNER NY
CABLE LLC, and each of them, hereby release and absolutely and forever discharge
CARLSBAD and its City Council members, agents, contractors, employees, attorneys,
predecessors, successors and assigns, and each of them, from any and all claims, demands,
grievances, liabilities, debts, accounts, obligations, costs, expenses, liens, actions and causes of
action, of every kind and nature whatsoever, existing on the effective date of this AGREEMENT,
whether known or unknown, anticipated or unanticipated, suspected or unsuspected^which
TIME WARNER CABLE INC. and TIME WARNER NY CABLE LLC, and each ofthem, have
or claim to have, now or hereafter, against CARLSBAD or its City Council members, agents,
contractors, employees, attorneys, predecessors, successors and assigns, and each ofthem, arising
out of or in connection with the effectiveness or term of the CABLE FRANCHISE, the
ACTION, the prosecution or defense of the ACTION or the negotiation and documentation of
this AGREEMENT.
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4.3 Exclusion from Settlement: The parties hereto agree that excluded from
the releases provided in paragraphs 4.1 and 4.2 are any claims regarding the financial obligations
of the parties to the other, including overpayments and underpayments of franchise fees and
access fees under the CABLE FRANCHISE or DIVCA. Without limiting the foregoing,
CARLSBAD and TIME WARNER expressly acknowledge that CARLSBAD is not releasing
any claims for additional franchise fees or access fees owed by TIME WARNER, and TIME
WARNER is not releasing any claims that it has paid excessive franchise fees or access fees or
that such fees were disbursed or expended by CARLSBAD contrary to the provisions of federal
or state law.
4.4 Inapplicability of Civil Code §1542: Each of the parties to this
AGREEMENT acknowledges and agrees that the releases contained in this AGREEMENT are
special releases and that §1542 of the Civil Code of the State of California is not applicable. If
and to the extent it should be determined that the releases contained in this AGREEMENT are
not special releases, contrary to the parties' acknowledged intention and agreement, each party
specifically waives the benefit of the provisions of §1542 of the Civil Code of the State of
California, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE 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.
4.5 Waiver of Unknown Claims: Each party hereby acknowledges that such
party is aware that such party may later discover facts in addition to or different from those which
such party now knows or believes to be true with respect to the subject matter of this
AGREEMENT and that it is such party's intention, notwithstanding, to fully, finally and forever,
settle and release all of the claims released by this AGREEMENT, known or unknown, suspected
or unsuspected, which now exist, may exist or previously existed between the parties. In
furtherance of such intention, the releases given in this AGREEMENT shall be and shall remain
in effect as a full and completed release, notwithstanding the discovery or existence of any such
additional or different facts. The parties, further, accept and assume the risk that such facts may
turn out to be different from the facts now known or believed to be true by the parties and agree
that the releases given in this AGREEMENT shall remain in all respects effective ana shall not
be subject to termination or rescission by reason of any such difference in fact.
5 DISMISSAL OF ACTION. TIME WARNER and CARLSBAD agree to instruct,
and hereby do instruct, their respective attorneys of record to execute and deliver a Stipulation
for Dismissal with prejudice of the ACTION concurrently with the execution of this
AGREEMENT; provided, however, such Stipulation shall provide that the United States District
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5
Court, Southern District of California, shall retain jurisdiction to enforce the terms of this
AGREEMENT. The Stipulation for Dismissal shall be filed within three business days after this
AGREEMENT is fully executed by the parties hereto. Each party shall pay its own attorneys'
fees and costs in connection with the ACTION; provided, however, nothing herein shall limit the
rights of the United States Magistrate Judge as provided in the Consent to Exercise of Settlement
Jurisdiction by United States Magistrate Judge and Order of Reference, which was executed by
the parties on June 30, 2008.
6 REPRESENTATIONS AND WARRANTIES:
6.1 Non-Assignment: Each of the parties to this AGREEMENT hereby
represents and warrants that such party has not heretofore assigned or transferred, or purported to
assign or transfer, to any person whomsoever any of the claims, demands, grievances, liabilities,
debts, accounts, obligations, costs, expenses, liens, actions or causes of action released by the
terms of this AGREEMENT. Each party to this AGREEMENT further agrees to indemnify and
hold harmless any other party from and against the assertion by any third party of any such
claims, demands, grievances, liabilities, debts, accounts, obligations, costs, expenses, liens,
actions or causes of action, including reasonable attorneys' fees and costs incurred, arising out of
or in connection with any such assignment or transfer by such party.
6.2 Authority: Each person executing this AGREEMENT on behalf of a
corporation or other legal entity warrants that he or she holds the position indicated beneath his
or her signature and that he or she has been duly authorized by said corporation or other legal
entity to execute this AGREEMENT on its behalf.
7 SEVERABILITY: In the event that any covenant, condition or other provision of
this AGREEMENT is held to be invalid, void or unenforceable, in whole or in part, by an
arbitrator or any court of competent jurisdiction, the same shall be deemed severable from the
remainder of this AGREEMENT and shall in no way affect, impair or invalidate any other
covenant, condition or provision contained in this AGREEMENT. If any such covenant,
condition or other provision shall be deemed invalid due to its scope or breadth, such covenant,
condition or other provision shall be construed so as to be limited to the maximum scope or
breadth permitted by law.
8 NOTICES: Any notice that is required or permitted under this AGREEMENT
may be given by mail, courier, facsimile or hand delivery addressed as follows:
3
If to TIME WARNER:
Time Warner Cable
8949 Ware Court
San Diego, California 92121
Attn: Government/Public Affairs
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0
with copies to:
Time Warner Cable
Corporate Headquarters
290 Harbor Drive
Stamford, Connecticut 06902
Attn: General Counsel
If to CARLSBAD:
City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, California 92008
Attn: City Attorney
with copies to:
Kenneth A. Brunetti, Esq.
Miller & Van Eaton, LLP
580 California Street
Suite 1600
San Francisco, California 94104
9 MISCELLANEOUS:
9.1 Independent Advice: Each party to this AGREEMENT acknowledges and
agrees that such party has been represented throughout the negotiation and documentation of this
AGREEMENT by attorneys of the party's choice and has been advised by such attorneys with
respect to this AGREEMENT and the effect of the releases given in this AGREEMENT. Each
party to this AGREEMENT further acknowledges and agrees that such party has read this
AGREEMENT, knows the contents of this AGREEMENT and, in executing this AGREEMENT,
has relied solely on the party's own judgment, belief and knowledge, and the advice and
recommendations of the party's attorneys, concerning this AGREEMENT, and has not been
induced to enter into this AGREEMENT by any representation or statement of any other party
not expressly contained in this AGREEMENT.
9.2 Successors and Assigns: This AGREEMENT shall be bindirtg upon and
shall inure to the benefit of the parties to this AGREEMENT and their respective, affiliates,
agents, representatives, heirs, spouses, successors and assigns.
9.3 Integration: This AGREEMENT sets forth the entire agreement between
the parties relating to the subject matter of this AGREEMENT. All agreements, covenants,
representations and warranties, express or implied, oral or written, of the parties with regard to
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the subject matter hereof are incorporated in this AGREEMENT and the documents referred to
herein which constitute the entire contract between the parties. No other agreements, covenants,
representations or warranties, express or implied, oral or written, have been made by any party to
any other party with respect to the subject matter of this AGREEMENT. All prior and
contemporaneous conversations, negotiations, possible and alleged agreements, representations,
covenants and warranties with respect to the subject matter hereof are waived, merged in this
AGREEMENT and superseded by it. This AGREEMENT is an integrated agreement, its terms
are intended by the parties as a final expression of their agreement with respect to the subject
matter and may not be contradicted by evidence of any prior agreement or contemporaneous oral
agreement. The parties further intend that this AGREEMENT and the documents referred to
herein constitute the complete and exclusive statement of its terms and that no extrinsic evidence
whatsoever may be introduced in any judicial or arbitration proceeding, if any, involving this
AGREEMENT.
9.4 No Admission of Liability: Each party acknowledges and agrees that this
AGREEMENT accomplishes the compromise of disputed claims and is not intended to
constitute an admission of liability, wrongdoing or error on the part of any party or their
respective employees, agents, attorneys, representatives, or parent, subsidiary or affiliated
companies. Any liability, wrongdoing or error is expressly denied by each party to this
AGREEMENT.
9.5 Additional Documents: hi addition to the documents to be delivered as
provided in this AGREEMENT, each of the parties agrees to execute and deliver such additional
documents and take such other action as may be reasonably required to carry out the terms of this
AGREEMENT.
9.6 Titles and Captions'. Titles and captions contained in this AGREEMENT
are inserted as a matter of convenience and for reference, and are not intended and shall not be
construed to define, limit, extend or otherwise describe the scope of this AGREEMENT or any
provision of this AGREEMENT.
9.7 Waiver: No breach of any provision of this AGREEMENT can be waived
unless in writing. Waiver of any one breach of this AGREEMENT shall not be deemed to be a
waiver of any other breach of that or any other provision of this AGREEMENT.
9.8 Modification and Amendment: No modification or amendment of any of
the terms or provisions of this AGREEMENT shall be binding upon any party to thi^*
AGREEMENT unless made in writing and signed by such party or by a duly authorized
representative or agent of such party.
9.9 Agreement to be Governed by California Law: This AGREEMENT shall
be governed by and construed in accordance with the internal laws of the State of California
applicable to contracts entered into and wholly performed within said state.
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9.10 No Construction: No party to this AGREEMENT or such party's attorney
shall be deemed to be the drafter of this AGREEMENT for purposes of interpreting or construing
any of the provisions of this AGREEMENT. This AGREEMENT shall be interpreted in
accordance with the fair meaning of its language and not strictly for or against any of the parties
to this AGREEMENT.
9.11 Execution in Counterparts: This AGREEMENT may be executed in any
number of copies by the parties to this AGREEMENT on separate counterparts and will become
effective upon signature by all parties upon one or more of such counterparts.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
AGREEMENT as of July jj, 2008.
CITY OF CARLSBAD, A MUNICIPAL TIME WARNER CABLE INC.
CORPORATION
> fg.^g^'•--••,,___"S ST. V.P. amrpT-rmiPnt- Relations
TIME WARNER NY CABLE LLC
Relations
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°l
Time Warner-owned equipment assets to be given to the City of Carlsbad 7/9/2008
Qty
1
1
1
1
1
1 pair
1
1
1
1
1
1
1
1
Make
Sony
Sony
Nova
Shure
Model
SEG-2550A
VO-9800
810
M367
Videonics TM3000
Bose
Crown
JVC
JVC
JVC
JVC
Sony
Radiant
Radiant
Roommate II
D-75
TM-A101G
TM-A101G
TM-A101G
TM-A101G
CDP-XE500
Communications
Communications
Serial #
10552
77601
16108
9H00907561
337054
n/a
44721
1296
08702651
08702310
08702503
8112349
VAB705R-S-UA3
Description
8-input video switcher
3/4" U-matic videotape recorder
Time Base Corrector
6-input microphone mixer
Character generator
Powered audio speakers
Audio amplifier
9" 2-input video monitor
9" 2-input video monitor
9" 2-input video monitor
9" 2-input video monitor
CD player
2003 46 045 Fiber optic receiver
Fiber optic transmitter
City-owned equipment assets on loan to Time Warner to be returned to the City of Carlsbad
Qtv
1
1
1
1
1
Make
Grass Valley
Panasonic
Panasonic
Panasonic
Hotronic
Model
SCB-100N
AG-1730
AG-1730
AG-1730
AP-41
Serial #
366017
A1KN00691
A1KN00233
LOKN01415
50039
Description
Master Sync generator
VMS videocassette recorder
VMS videocassette recorder
VHS videocassette recorder
Time Base Corrector
EXHIBIT A 10