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HomeMy WebLinkAbout05 - Law Office of Owen & Bradley Service RetainmentNovember 8, 1999 Agenda Item No. 5 CITY OF NEWPORT BEACH ADMINISTRATIVE SERVICES DEPARTMENT Resource Management Division November 8,1999 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Dennis Danner, Administrative Services Director ,D 9, SUBJECT: RESOLUTION FOR THE RETAINMENT OF SERVICES FROM THE LAW OFFICE OF OWEN & BRADLEY BACKGROUND: The City has formed Special Assessment Districts pursuant to the Municipal Improvement Act of 1913 and issued bonds pursuant to the Improvement Bond Act of 1915, as amended, and has levied special assessments on property within these assessment districts as described in a Resolution of Intention. These assessments have been levied primarily for the undergrounding of overhead utilities and for other public improvements. The City has the responsibility to levy and collect special taxes and assessments each year in order to meet debt service payments. In August of each year, these levys are forwarded to Orange County and the special taxes are placed on the County's tax bills. The City is also responsible to collect tax assessments in accordance with the foreclosure covenants as listed below. The City has covenanted, for the benefit of the owners of the Bonds, that it will review assessment records of the County no later than August 1 of each year to determine the amount of assessments collected in the prior fiscal year. If assessments are delinquent the City, through its assessment district administrator MuniFinancial, will send a reminder letter, demand letter, and finally a foreclosure letter. If there is still no response, MuniFinancial will remove (strip) delinquent assessments from the County Tax Roll and commence foreclosure proceedings. MuniFinancial has confirmed the removal of the assessments from five parcels that have not responded to collection efforts. FISCAL IMPACT: If approved, there will be no fiscal impact to the City General Fund with the proceeding of foreclosure action on these five parcels. Fees for all foreclosure services will be recovered through the judicial foreclosure process in the case of district- wide benefits. Delinquency management, assessment apportionment, and other costs associated with a specific parcel(s) will be reimbursed by the individual property owner(s). RECOMMENDATION: Staff recommends the adoption of the attached Resolution ordering foreclosure actions and approving the special counsel agreement between the City and Owen & Bradley, a professional corporation. 0 0 Ll . RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ORDERING FORECLOSURE ACTIONS AND APPROVING SPECIAL COUNSEL AGREEMENT WHEREAS, the City Council of the City of Newport Beach ( "CITY ") has heretofore undertaken proceedings pursuant to the "Improvement Bond Act of 1915 ", being Division 10 of the Streets and Highways Code of the State of California, commencing with section 8500 and the Mello -Roos Community Facilities Act, being Chapter 2.5 of the Government Code of the State of California, commencing with section 53311 ( "ACTS "), and has levied certain special assessment and/or special tax installments ( "INSTALLMENTS ") upon lands within special assessment districts and/or community facilities districts located within the CITY ( "DISTRICTS ") described in Resolutions of Intention previously adopted for said DISTRICTS; and WHEREAS, said proceedings provided for the issuance of limited obligation improvement bonds and/or special tax bonds ( "BONDS ") pursuant to the ACTS and said BONDS were previously issued; and WHEREAS, collection of all INSTALLMENTS levied pursuant to said DISTRICT proceedings were and are intended to provide timely payment of all amounts of principal and • interest due and payable pursuant to the terms of the above- referenced BONDS; and WHEREAS, certain properties within the DISTRICTS have become delinquent due to the nonpayment of said INSTALLMENTS, said INSTALLMENTS now being delinquent, thereby making desirable the timely institution of judicial foreclosure actions with respect to such parcels in order to assure compliance with the CITY's covenant to the bondholders; and WHEREAS, the City Manager, City Administrator, City Attorney or City Finance Director of the CITY shall each, individually, be deemed a CITY "OFFICIAL" for purposes of this Resolution, and shall be individually authorized to take all actions necessary or desirable to implement the purposes of this Resolution. NOW, THEREFORE, it is hereby resolved as follows: Section 1. That the above recitals are true and correct. Section 2. That it is hereby ordered that all delinquent INSTALLMENTS be collected by an action brought in the Superior Court to foreclose the lien thereof in accordance with the ACTS; this order is made pursuant to California Streets and Highways Code sections 8830, et seq., with respect to assessment districts and California Government Code sections 5336.1, et seq., with respect to community facilities districts. • Section 3. That a CITY OFFICIAL or other CITY agent or representative shall cause all • such delinquent INSTALLMENTS to be sued upon to be removed from the County tax roll, in accordance with California Law, and may request that the appropriate County department place a notation on the County tax roll, where appropriate, indicating that such INSTALLMENTS have been so removed and giving the name, address and telephone number of special counsel being retained to prosecute such foreclosures. Upon removal of such delinquent INSTALLMENTS from the County tax roll, a CITY OFFICIAL or other CITY agent or representative shall provide written notice of such removal and a Notice to Proceed to the CITY's special counsel, specifying the tax year and amount of each such INSTALLMENT to be sued upon. Section 4. That it is hereby further ordered, pursuant to the above referenced sections of the ACTS, that in the event that any INSTALLMENTS levied in the future within any of the DISTRICTS become delinquent, such INSTALLMENTS shall be collected in the same manner and a CITY OFFICIAL or other CITY agent or representative shall provide written notice of removal of such delinquent INSTALLMENTS from the County tax roll and a Notice to Proceed to the CITY's special counsel, specifying the tax year and amount of each such INSTALLMENT to be sued upon. Section 5. That the special counsel agreement ( "AGREEMENT ") relating to such actions, dated the date hereof, submitted concurrently herewith and incorporated herein by this reference as though set forth in full, is hereby approved and the appropriate officers of the CITY are hereby authorized to execute the same on behalf of the CITY. Passed, approved and adopted this 80s day of November, 1999. CITY OF NEWPORT BEACH Title: Mayor "ATTEST" By: City Clerk • AGREEMENT FOR PROFESSIONAL • SERVICES BY AND BETWEEN CITY OF NEWPORT BEACH AND OWEN & BRADLEY, A PROFESSIONAL CORPORATION THIS AGREEMENT ( "Agreemene) is entered into this 8h day of November, 1999, by and between the City of Newport Beach, a California Municipal Corporation ( "CITY ") and Owen & Bradley, a Professional Corporation ( "COUNSEL "). RECITALS WHEREAS, CITY has conducted proceedings for the formation of various community facilities districts and/or assessment districts ( "DISTRICTS "), and has previously issued limited obligation improvement bonds and/or special tax bonds ('BONDS "), payment on which is secured by the special taxes or special assessments levied with the DISTRICTS; and WHEREAS, certain property owners have become delinquent on the payment of special tax or special assessment installments levied within the DISTRICTS; and WHEREAS, in keeping with certain covenants made in connection with the issuance of the BONDS, CITY is desirous of instituting legal actions to judicially foreclose on the parcels represented by such delinquencies in accordance with Streets and Highways Code section 8830 and Government Code section 53356.1, as appropriate; and WHEREAS, CITY has, by resolution, ordered, or is ordering and ratifying concurrently with the approval of this Agreement, the institution of such actions to enforce the remedies of the CITY, for the benefit of the owners of the BONDS, regarding delinquent special taxes and delinquent special assessments within the DISTRICTS; and WHEREAS, CITY is desirous of retaining the services of COUNSEL for purposes of instituting such actions. NOW, THEREFORE, THE PARTIES DO HEREBY MUTUALLY AGREE AS FOLLOWS: SECTION 1. CONDITIONS This Agreement will not take effect, and COUNSEL will have no obligation to provide legal services, until CITY returns an executed copy of this Agreement to COUNSEL, and provides copies of all pertinent BOND transcripts, written evidence of the amount of all delinquencies to be sued upon, written evidence that such delinquent installments have been properly removed from the county tax rolls and written authorization to proceed. • SECTION 2. SCOPE OF SERVICES Upon receipt of the items specified in Section 1 above, COUNSEL shall review all • records of delinquencies, appropriate BOND documents, and evidence of removal of such delinquencies from the COUNTY tax roll, each of which are to be provided to COUNSEL by CITY, and thereafter, upon instruction from a public official of the CITY shall provide all owners of property represented by delinquent special taxes and/or delinquent special assessments, (as such ownership is shown on the last equalized assessment roll or as otherwise known to COUNSEL), with written notice, mailed first class, postage prepaid, that proceedings in judicial foreclosure are being commenced. It is understood that such a mailing is not legally required and that any failure, or irregularity in such notice, shall not affect the validity of any other actions taken by COUNSEL or CITY in legal proceedings relating to the delinquencies. COUNSEL shall also proceed to order and receive informal title reports and/or litigation guarantees and, if such parcels are not cured immediately, thereupon prepare complaints and related documentation pertaining to the legal proceedings in judicial foreclosure in the appropriate superior court for the collection of delinquent special taxes and/or delinquent special assessments within the DISTRICTS. COUNSEL shall perform all legal services necessary to complete said actions, unless directed otherwise by CITY. In the event that special taxes and/or special assessments not yet due become delinquent in the future, COUNSEL shall perform such services to collect such future delinquencies upon receipt of a Notice to Proceed from a public official of the CITY. To the extent that CITY has already commenced any foreclosure actions and wishes to substitute COUNSEL as attorney of record in any case(s), COUNSEL shall not be responsible for the actions of prior counsel. Unless CITY and COUNSEL make a different agreement in writing, this Agreement will govern all future services COUNSEL may perform for CITY. Under the terms of this Agreement. COUNSEL is not obligated to provide and will not provide. representation in any matter subject to the iurisdiction of any United States Bankruptcy Court or any other federal court if any defendant should remove any case from the superior court. Accordingly, in the event that any owner of property being foreclosed, or the property being foreclosed, becomes subject to the jurisdiction of any United States Bankruptcy Court or other federal court, CITY will make different arrangements for its representation in such court and COUNSEL shall have no obligations with respect thereto. SECTION 3. CITY'S DUTIES CITY agrees to cooperate with COUNSEL, to keep COUNSEL informed of developments (specifically includine attempts by moverty owners or others to oav delinquencies directly to the CITY which should not be accepted by CITY without prior notification to COUNSEL), to abide by this Agreement, to pay COUNSEL's bills on time, and provide COUNSEL with any necessary information in a timely manner. • SECTION 4. LEGAL FEES AND BILLING PRACTICES . A. Fees for Basic Legal Services The following "Basic Legal Services," as described in the following table's footnotes, will be billed at the following flat rate amounts for each specified task: • Servics Description 1 Parcellf District 1 Parcel/Multiple Multiple Parcels/ ultl le Per Owne r DisMcta 1 D/stHct ParceltzrMuR101e Districts Demand Letter, $150 $150 +$75 per $150 +$75 per $150 +$75 per additional district additional district additional district + $75 per additional parcel Pre'Complaint $50 $50 + $25 per $50 + $5 per $50 + $25 per Pay -off Letter= additional district additional parcel additional district+ $5 Per additional Parcel Post - Complaint Pay -off $150 $150 + $25 per $150 + $25 per $150 + $25 per Leuer' additional district additional parcel additional district+ $25 per additional parcel Stipulated Payment $150+ $50 per $150 + 50 per $150 + $50 per $150 + $50 per Plan (assumes no installment installment + $25 per installment + $5 per installment + $25 per action filed: timely additional district additional parcek additional district +$5 a ents)° Per additional parcel Complaint. Summons, $300 $300 +$200 per $300 +$50 per $300 + plus $200 per Lis Pendens' additional district additional parcel additional district + $50 per additional parcel ' Includes review of bond transcript, setting up file and preparation and mailing of letter advising property owner (as shown on tax will that this firm has been retained to foreclose. Also includes processing and accounting for payments received in Aj=response to later. t Includes receipt of request for payoff amount. researching case, preparation and mailing of payoff letter (only delinquent amounts -trot prepayment letter). Also includes processing and accounting for payments received in 4thRLMsponse to later. 3 Includes same as No. 2 above. C Includes receipt of request, researching can, calc"ng amounts owing and amortizing of payments, preparing Stipulation, correspondence to obtain execution of Stipulation and ongoing administration of payment plan, forwarding all installments to City with cover letters explaining status of each payment. 5 Includes drafting, copying and preparing for filing, the Summons. Complaint, Lis Pendens and any Certificates required by loaf rules m be filed Concurrently. Also includes preparation of Lis Pendens for recordation and certified mailing of Lis Pendens. Piling, recording and service of process are billed separately as a oast item, as sdch items are performed by an outside attorney service. Service Description 1 Parce!/1 District 1 ParceUMWtlple MWNple Parcela/ MWN e Per Owns r Dlstricta 9 OlatNct pa 1, 29-Mt Stipulated Payment $200 +$50per $200 +$50per $200 +$50per $200 +$50 Per Plan (assumes action installment installment +S25 per installment +S25 per installment + $25 per filed -6 installments or additional district additional parcel additional district+ less; dimly payments)" $25 per additional parcel Entry of Default $50 $50 + $25 per $50 + $25 per $50 + $25 per additional district additional parcel additional district+ $25 per additional parcel Request for Entry of $100 $100 +$50per $100 +$50per $100 +$50per Dismissal/Withdrawal additional district additional parcel additional district+ of Lis Pendenss $50 per additional arcel Disclaimer of Interest $50 $50 + $25 per $50 + $25 per $50 + $25 per additional district additional parcel additional district+ $25 per additional parcel Order for Publication $450 $450 + $50 per $450 +$50 per $450 + $50 per of Summons"' additional district additional parcel additional district+ $50 per additional parcel Order for Service of $450 $450 —+$50 per $450 + $50 per $450 + $50 per Process on Secretary of additional district additional parcel additional district+ state" $50 per additional parcel • b Includes receipt of request, researching case, calculating amounts owing and amortizing of payments, preparing Stipulation, correspondence to obtain execution of Stipulation and ongoing administration of payment plan, forwarding all installments to City with cover letters explaining status of each payment. 7 Includes review of file, preparation and sending out for filing of Request to Enter Default a Includes review of file, confirmation that case paid in full, or that defendants disclaimer is filed, drafting and preparing for filing a Request for Dismissal (partial or complete), and drafting and preparing for recordation a Withdrawal of Lis Pendens (partial or complete). 9 Includes drafting and providing to defendant(s) for execution, a Disclaimer of Interest form, and forwarding same for filing. to Includes review of file and declarations of diligence; preparation of Application. Points and Authorities, proposed Order, and any other documents required by local rule; filing of papers and one cant appearance; receipt of signed order and provision of same to newspaper with instructions to publish; receipt and filing of proof of publication; preparation and filing of Proof of Service by Publication. I Includes review of file, preparation for filing of Application, Points and Authorities and proposed Order; one court appearance and follow up service on the Secretary of State; receipt (and/or preparation) and riling of Proof of Service on Secretary of State. J 0 Service Desonkfto t Parcel/t District f ParceUMulticle Multicle Parcels/ M ffl per Owner Districts 1 District Parceftwultiole Districts Entry of Default $750 $750 + $50 per $750 + $50 additional $750 + $50 per Judgment" additional parcel parcel addition] district+ $50 per additional parcel (With a cap of $2,000) B. Fees for Extraordinary Legal Services All services provided by COUNSEL which are not specifically described above are referred to herein as "Extraordinary Legal Services" and will be billed on an hourly rate basis at the following hourly rates, depending upon the person performing the work: Attorneys: Partner /Supervising Attorney $175 /per hour Senior Associate Attorney $165 /per hour Associate Attorney $150 /per hour Any other Associate Counsel Assisting $150 /per hour SuDDort Staff: Paralegal hourly rate $75 /per hour Computer Technician hourly rate $50 /per hour Title Officer hourly rate $45 /per hour Secretarial/word processing hourly rate $20 /per hour In computing fees for Extraordinary Legal Services, all time spent by individuals holding the specified positions will be included at the hourly rates shown above; provided, however, that COUNSEL reserves the right to reduce its legal fees at any time. Unless instructed otherwise by a public official of the CITY, COUNSEL shall collect all such fees, as well as all principal, interest, penalties, costs, and other amounts referred to in section 8833.5 of the California Streets and Highways Code, or section 53356.5 of the California Government Code, from the property owner or other persons redeeming any delinquent special taxes and/or delinquent special assessments. C. Costs and Other Charges COUNSEL will incur various costs and expenses in performing legal services under this Agreement. The costs and expenses commonly include process servers' fees, fees fixed by law or assessed by the court and other agencies, court reporters fees, messenger and other delivery fees, costs of obtaining title searches or litigation guarantees, postage, legal research 12 Includes review of file: preparation for filing of Request to Enter Default Judgment, Points and Audtoritiea where required and proposed Order, dismissal of Doe defendants: return of original Summons: and filing of any necessary proofs of service. Does not include any court appearance as some courts require an appearance and some do not. 5 on the computer and other similar items. All costs and expenses will be charged at COUNSEL's cost. CITY agrees to pay for these costs and expenses in addition to the hourly • fees. SECTION 5. BILLING STATEMENTS COUNSEL will submit Billing Statements in accordance with the following: A. Basic Legal Services and Extraordinary Legal Services: COUNSEL works on a deferred fee basis, not a contingent fee basis. All attorney fees from each action, whether they be on account of Basic Legal Services or Extraordinary Legal Services, shall be billed to CITY and due and payable to COUNSEL upon the earlier of: (I) obtaining of a judgment ordering the sale of the property or other conclusion of the case; (ii) settlement of the action with CITY's consent, (iii) redemption of the delinquency in full as contemplated herein, (iv) the property becoming subject to the jurisdiction of any United States Bankruptcy Court, or (v) the case being removed to a federal court by any defendant. Except as otherwise provided herein upon termination of COUNSEL's services, attorney fees will not be due and payable, or billed, prior to such times. Unless instructed otherwise by CITY, when an individual indicates an intent to pay any delinquency and its associated fees and costs, whether as a fiill reinstatement of the property or as part of a settlement approved by the CITY, COUNSEL will request the individual to make two checks payable as follows: one payable to the CITY for the amount of the principal, penalties; interest, authorized administrative expenses and attorney costs already billed to the CITY; and one payable, directly to COUNSEL for the amount of the attorney fees and costs not previously billed to CITY. B. Costs and Expenses: AD eostaand expenses incurred by COUNSEL in the performance of the obligations imposed upon it pursuant to this Agreement shall be billed to CITY and due and payable to COUNSEL on a monthly basis (i.e. Costs and expenses incurred in May will be invoiced in June). C. Payment of All Bills and Invoices: C]TY agrees to pay all such attorney fees, costs and expenses to COUNSEL within twenty (20) days of receipt of an invoice. therefore. SECTION 6. DISCHARGE AND WITHDRAWAL CTTY may discharge COUNSEL at any time. COUNSEL may withdraw with CITY's • 6 consent or for good cause. When COUNSEL's services conclude, whether by termination, • withdrawal, or mutual agreement, all such attorney fees, costs and expenses not previously paid shall become immediately due and payable. After COUNSEL's services conclude, COUNSEL will, upon CITY's request, deliver to CITY or any individual designated by CITY, all pertinent files, along with any funds or property of CITY's in COUNSEL's possession. SECTION 7. DISCLAIMER OF GUARANTEE Nothing in this Agreement and no statements by COUNSEL to you will be construed as a promise or guarantee about the outcome of any matter which is the subject of this Agreement. COUNSEL makes no such promises or guarantees. COUNSEL's comments about the outcome of any matter which is the subject of this Agreement are expressions of COUNSEL's opinion only. SECTION 8. EFFECTIVE DATE This Agreement will take effect on the day and year first written above but its effective date will be retroactive to the date COUNSEL first performs any services under this Agreement. The date at the beginning of this Agreement is for reference only. SECTION 9. ATTORNEY FEES In the event of any dispute concerning the attorney fees or costs incurred pursuant to the terms of this Agreement, the prevailing party shall be entitled to collect its reasonable attorney fees incurred in connection with such dispute. SECTION 10. SEVERABILITY If any provision, phrase, clause, sentence, or paragraph of this Agreement is determined by a court of competent jurisdiction to be void or otherwise unenforceable, the parties agree that such provision, phrase, clause, sentence, or paragraph of this Agreement may be severed from the balance of the Agreement and that the balance of the Agreement shall be fully enforceable as if the provision, phrase, clause, sentence, or paragraph of this Agreement was not included herein. SECTION 11. INTERPRETATION This Agreement shall be interpreted in accordance with the laws of the State of California. u 7 WHEREFORE, THE PARTIES HAVE DULY EXECUTED THIS AGREEMENT EFFECTIVE THE DATE FIRST HEREIN ABOVE WRITTEN. • OWEN & BRADLEY ROBERT A. OWEN, President CITY OF NEWPORT BEACH m Title: Mayor E •