HomeMy WebLinkAboutC-6348 - Settlement Agreement and Mutual Release of ClaimsSETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS
This Settlement Agreement and Mutual Release of Claims ("Agreement") is
entered into by and between: NBCC, LLC, a California limited liability company
("NBCC") on the one hand, and City of Newport Beach, a California municipal
corporation and charter city ("City") on the other hand. NBCC and City may be referred
to singularly as "Party" and collectively in this Agreement as "Parties."
RECITALS
A. NBCC is located in Newport Beach, California and receives recycled
water to irrigate the grass and plant material at its property. This water originates from
the Orange County Water District ("OCWD").
B. On August 12, 2014, a completed water rate study ("Water Rate Study")
by HF&H Consultants, LLC ("HF&H") was presented to the City Council and a public
hearing was conducted that concluded a forty-five (45) day public comment period in
compliance with Proposition 218. The HF&H study recommended a revised rate structure
that included a fixed fee component consistent with the amount generally paid by water
users in the City, a commodity charge, and a pump station charge if the recycled water is
provided by a pump station that is maintained by the City. In the absence of a majority
protest from recycled water customers pursuant to Proposition 218, the City Council
agreed that the recommended rate structure should be implemented, and the City Council
introduced Newport Beach Municipal Code ("NBMC") Chapter 14.13 "Recycled Rates
Established" and adopted the Ordinance on September 9, 2014.
C. On October 9, 2014, the recycled water rates in the City were lowered to
those determined in the study results, based upon the City Council's adoption of
Resolution 2014-78 A Resolution of the City Council of the City of Newport Beach
Adding Recycled Water Rates to the City's Master Schedule of Fees, that removed the
existing recycled water commodity rate and added the approved adjusted rates. Thus, the
water rates charged to NBCC from October 9, 2014 onward are established in NBMC
Chapter 14.13, or any successor statute.
D. NBCC acknowledges the appropriateness of the charges in NBMC Ch.
14.13.
E. City's analysis of the Water Rate Study and ensuing adoption of new
recyclyed water rates resulted in a reduction of the rate being charged to NBCC.
Previously, NBCC paid City for recycled water at 80% of the potable water variable rate,
thus, NBCC claims it was overcharged for recycled water to the date the reduction was
implemented by the City in October 2014.
VAN' THEREFORE, for and in consideration of the mutual promises,
representations, covenants and understandings contained herein. and for other good and
valuable consideration, the receipt and adequacy of which is hereby acknowledged, and
intending to be legally bound, the Parties agree as follows:
AGREEMENT AND RELEASE
1. C'ontidcration.
a. The City Council of City shall consider, at a duly noticed
public hearing, this Agreement to resolve any and all
potential clahns by NBCC involving the rate charged by City
in supplying recycled water to NBCC prior to the date hereof
("Released Claims").
b. If the City Council, in the exercise of its discretion,
approves this Agreement, the City agrees to pay NBCC the
total amount of One Hundred Ninety Thousand One
Hundred Sevenh, Nine Dollars and 00/100 ($190.179.00)
("Settlement Amount") within fifteen (15) business days of
the City Council approval. The Settlement Amount i, based
upon adjustments that would refund the appropriate funds to
equal a nineteen and one-half (19 %) month settlement by
subtracting the amount paid for water use and fixed charges
from the middle of March 2013 to the end of October 2t!14
against the use and fixed rates established in the City's
analysis of the Water Rate Study.
C. If' the City Council, in the exercise of its discretion, dues
not approve this Agreement, all terms of this Agreement
shall be null and void.
2. Effective Date. The Effective Date of this Agreement shall be the date that this
Agreement has been signed by all the Parties.
3. Mutual Release of Claims.
In exchange for the consideration set forth in this Agreement, the Parties, on
behalf of themseh es and any associated persons or entities, their successors and assigns,
current and former emplo%e directors. officers, agents. representative, insurers,
subrogors, and subrogees, do fully and £ureter release and discharge one another and
their respective representatives, predecessors, and successors in interest, heirs. assigns,
and their past, present and future principals. officers, directors. shareholders, servants,
members, partners, subsidiaries, affiliated companies, insurers, agents, former and current
employees, employers, assignees, devisees, representatives, experts and attorneys from
the any claims known or unknown related to the City's supplying of recycled water, and
relinquish any arid all known, unknown, and or currently existing claims, demands,
obligations, consequential damages, general damages, express or implied obligations,
indemnity, liabilities, costs, losses, expenses, and compensation, whether based on tort,
contract, or other legal or equitable theories of recover} arising from or relating in any
way, known or unknown, asserted or unasserted, contingent or non -contingent, suspected
or unsuspected that the Parties had or may acquire, arising out of the City's supplying of
recycled water.
Waiver of California Civil_Code Section 1542. The Agreement includes a release
of future and unknown damages arising out of or related to the City's supphing_itf
recycled water. The Parties represent, acknowledge, and agree that they have been
informed of, ha\ e read, are familiar with, understand, and do hereby expressly wait,:,all
rights that they have or may have under Section 1.542 of the California Civil Code.
Section 1542 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 HI.R MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR.
In waiving all riots and protections affordcd by California Civil Cade Section
1542 and similar rights, the Parties acknowledge that, after the date of this Agreement,
they may discover facts different from or in addition t_ the facts they now know or
believe to be true with respect to an} of the righk, being waived under this Agreement.
The Parties agree that these releases shall be and remain in effect as complete, general
and mutual releases, notwithstanding anN such different or additional facts. Further, the
Parties expressly acknowledge that thorc is a risk drat they have or may have claims or
causes of action against a Party of which the}' are currently unaware, and that they may
incur, puffer or sustain injury, loss, damage, costs, attomeys' fees, expenses. or any of
these. as a result of actions or omissions of a Party which are currently unknown or
unanticipated at the time this Agreement is executed, or which are not presently capable
of being ascertained. The Partic:, further acknowledge that there is a risk that the
damages that are presently known ma} become mora �erious than they now expect or
anticipate. Nc\ ertheless, the Parties expressly ackno%% ledge t`_:tt oris Agreement has been
negotiated and agreed upon in light of those realirati-n, and that the general releases
prey ided and waiver of all rights under California Cit-il God, Section 1542 is an essential
and material term of this Agreement. Each Party has had the opportunity to confer with
legal counsel concerning this waiver, and knowingly and voluntarily waives its rights as
set forth herein.
4. No Admission of Liability. In entering into this Agreement, no admission of
liability, responsibility or wrongdoing of any kind is made or should be inferred with
respect to the Parties related to this action. In making this Agreement, the Parties to this
Agreement do not admit the sufficiency of ani: claims, allegations, assertions, contentions
or positions of any other part}', or the sufficiency of any defenses to any such claims,
allegations, assertions. contentions or positions. In making this Agreement, the Parties
agree that the covenants and releases comprising this Agreement are not intended to be
admissions or concession of any liability whatsoever on the part of the Parties. This
Agreement is and represents a compromise of any past, present, or fixture claims related
to recycled water supplied by the City bt and between the Parties. and their execution of
thin Agroement is not intended to and shall never constitute nor be construed as an
4dmis6ion of wrongdoing or liahility by any Part}. Any such wrongdoing or liability is
expressly denied by each Party.
5. No Assignment. Each Party represents and warrants that they are the legal
owners of the rights in this Agreement and that they have the authority to release those
rights with respect to and on be!,alf of their predecessors, heirs, executors, administrators,
successors and assigns. Each Party further represents and warrants that no right has been
conveyed, assigned or otherwise transferred to any third party, including by way of
subrogation or operation of late or otherwise, and that it is the legal and beneficial owner
of all rights. In the event that any claim should be made or instituted against a Released
Parti hereto because of any such purported or actual assignment, subrogation, or transfer.
or any such purported or actual claim not stated herein, each Party agrees to indemnify
and hold harmless the released Patty against such released right, including necessary and
reasonable expenses of investigation and attorneys' fees and costs.
6. Binding Effect. This kgreement shall be binding upon and shall inure to the
benefit of the Parties hereto, and each of their respective executors, administrators,
representatives, successors, assigns, devisees, partners, parents, subsidiaries, affiliated
and related entities, officers, directors, principals, and agents.
?. GoverninL; Law. This Agreement shall be construed in accordance wish and
governed in all respects by the laws of the State of California without regard ro ontlict of
law principles. Venue shall be in the County of Orange.
S. Irate rag tion. This Al-reemcnt constitutes a single, integrated written contract
expressing the entire agreement of tl,r Parties hereto relative to the subject matter hereof.
No covenants, agreements, r: presentations or warranties of any kind whatsoct cr have
been made by any Party hereto tt hich have been relied upon b) any other Parte or which
acted as an inducement for any other Party- to enter into this Ageement. All prior
discussions, negotiation, and agreements, whether written or oral, have been and are
merged and integrated into, and are superseded by, this Agreement.
9. Modification. No modification or amendment of this Agreement shall be of any
force or effect unless in writing and executed by each Party that would be affected by the
modification or amendment.
10. Counterparts. This Agreement may be executed in one (I ) or more counterparts,
each of which shall b: deemed an original and all of which shall constitute one and the
sane instrument. A signature page transmitted by email (as a PDF attachment) or
facsimile shall be deemed and treated as an original for all purposes.
11. Incorporation of Recitals. The recitals set forth above are incorliorated in this
Agreement as if fully set forth herein.
12. No Attorneys' Fees, In the event of any dispute or legal action arising under this
Agreement, the prevailing party shall not be entitled to attorneys' fees.
13. Representation bN Counsel. Each Party acknowledges and agrees that it has had a
reasonable opportunity to discuss this Agreement with its counsel. Each Party further
represents and warrants that it has the authority and capacity to execute this Agreement,
docs so knowingly and voluntarily, and does so in the absence of any mistake, duress or
coercion. Each Party also acknowledges and agrees that the provisions of this :Agreement
have been fully negotiated by the Parties and their counsel, and no statute or rule of
interpretation requiring constriction against the drafter of the contract shall apply to this
Agreement.
14. Authority. Each of the individuals executing this Agreement represents and
warrants that he or she has the authority to enter into this Agreement on behalf of the
entities below.
15. Set crab ilit_v. In the trent that any pro%ision of this Agreement (other than
Section 1) or the application thereof is held invalid, the invalidity shall not affect the
remaining provisions of this Agreement that can be given effect without the invalid
provisions, which shall remain in full force and effect.
16. Joint Product. ,I'his Agreement is
negotiations between the Parties and their
against any Party or its representative(s).
the product of bargained -for, amts -length
counsel, and shall not be construed for or
17. Signature on Behalf of a Corporation. Any corporation signing this Settlement
Agreement represents and warrants that such execution is in compliance with any
required resolution of its Board of Directors, duly adopted at a meeting of such Board of
Directors. Any individual signing this Settlement Agreement on behalf of another
individual, a corporation or a partnership represents and warrants that he or she has full
authoritv to do so.
1 �. Sole Holder of Claims. The Parties represent and warrant that they are the sole
holder of the claims released in this Agreement and that this representation constitutes a
material inducement for Parties to enter into this Agrecrnent.
19, Representations. The Parties represent that they have not sold, transferred,
conveyed, assigned; hypothecated and or subrogated any of the rights or claims released
herein.
20. Good Faith Settlement, The Parties acknowledge, stipulate, and agree that this
Agreement has been entered into in good faith, as defined in Code of Civil Procedure
Section 877.6, without any fraud, collusion or duress.
21. No Third Party Beneficiaries. No 1hird party beneficiaries, with exception to
those identified as `Parties" in this Agreement, are created or intended to be created by
the provisions of this Agreement, and any such intention is expressly disclaimed by the
Parties.
22. No Other Lawsuits or Complaints. The Parties � erify that they have not filed any
civil claims against arch other as of the date of signing this :agreement. In addition, the
Parties promise never to initiate, request or file any future claims, actions, lawsuits or any
other legal proceeding with any court or tribunal or to file any charge or complaint with
any government agency against each other, asserting any claim that is released in this
Agreement.
PLEASE READ THIS AGREENIENr CAREFULLY. IT CONTAINS A
RELEASE AND WAIVER OF UL KNOaa N AND I NkNOWN CLAIMS. THE
SETTLING PARTIES ACKNOWLEDGE THAT THEY HAVE RE kD THIS
AGREEMENT, UNDERSTAND IT :AND ARE VOLUNTARILY ENTERING
INTO IT.
1N WITNESS WHEREOF, the undersigned have executed this Agreement and
mutual release on the date affixed by their signatures.
Dated: October ----.2015 City of Newport Beach, a California municipal
corporation and charter city
By: ° —
Eward D. Selich
Mayor
Dated: October_, 2015 NBCC, a California limited liability company
By:
Name: Kevin Martin
Its: Chief Executive Officer
By: ,i2
Name: Gerald T. Johnson
Its: Chief Financial Officer
APPROVED AS TO FORM
CITY" Of NEWPORT BEACH:
Dated: October Z S . 2015
ATTEST:
CITY OF NEWPORT BEACH
Dated: October It 2015
By:
Aaron C. arp :hM 101Kly�
City Attorney for City of Newport Beach
By: )-NNK—,--
Leila-ni
I. Brown
City Clerk for City of Newport Beach
Dated: October 2015 NBCC, a Caliornia limitedithwcompany
By: �� �
Name: Kev N'arfi
Its: Chief Executive Officer
Name: Gerald T. Johnson
Its: Chief Financial Officer