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HomeMy WebLinkAboutIV.B. - Settlement Agreement - NBCCSETTLEMENT 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. October 27, 2015 Closed Session NOW 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 l. Consideration. a. The City Council of City shall consider, at a duly noticed public hearing, this Agreement to resolve any and all potential daims 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 Seventy Nine Dollars and 00/100 ($190,179.00) ("Settlement Amount") within fifteen (15) business days of the City Council approval. The Settlement Amount is based upon adjustments that would refund the appropriate funds to equal a nineteen and one-half ( 19 12) month settlement by subtracting the amount paid for water use and fixed charges tram the middle of March 2013 to the end of October 2014 against the use and fixed rates established in the City's analysis ofthe Water Rate Study. c. If the City CounciL in the exercise of its discretion, does not approve this A,brreement, all tenns of this Agreement shall be null and void. 2. Effective Date. The Effective Date of this Agreement shall be the date that thi s 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 themselves and any associated persons or entities, their successors and assigns, current and former employees, directors, officers, agents, representative, insurers, subrogors, and subrogees, do fully and forever release and discha rge 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, subsidiaties, affi liated companies, insurers, agents , fmmer and cun·ent 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 and all kno'rvn, unknown, and/or cunently existing claims, demands , obligations , consequential damages , general damages , express or implied obligations , indemnity, liabilities, costs, tosses, expenses, and compensation, whether based on tort, contract , or other legal or equitable theories of recovery 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 supplying of recycled water. The Parties represent, acknowledge, and agree that they have been infmmed of, have read , are familiar with, understand , and do hereby expressly waive, all rights that they have or may have under Section 1542 of the California Civil Code. Section 1542 provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAilVIS \VHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIJVIE OF EXECUTING THE REI_.EASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT \VITH THE DEBTOR. In waiving all rights and protections afforded by California Civil Code Section 1542 and similar rights, the Parties acknowledge that, after the date of this Agreement, they may discover facts different from or in addition to the facts they now know or believe to be true with respect to any of the rights being waived under this Agreement The Parties agree that these releases shall be and remain in effect as complete, general and mutual releases, notwithstanding any such different or additional facts. Further, the Parties expressly acknowledge that there is a risk that they have or may have claims or causes of action against a Party of which they are cunently unaware, and that they may incur, suffer or sustain injury, loss, damage, costs, attorneys' fees. expenses , or any of these, as a result of actions or omissions of a Pa1iy which are currently unknown or unanticipated at the time this Agreement is executed , or which are not presently capable of being ascertained. The Parties further ackno\vledge that there is a risk that the damages that are presently known may become more serious than they now expect or anticipate. Nevertheless , the Parties expressly acknowledge that this Agreement has been negotiated and agreed upon in light of those realizations and that the general releases provided and waiver of all rights under California Cil·il Code 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 any claims, allegations, assertions, contentions or positions of any other party, or the sufficiency of any defenses to any such claim s, allegations, assertions, contentions, or positions. [n making this Agreement, the Parties agree that the covenants and releases comprising this Agreement are not intended to b e 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 future claims related to recycled water supplied by the City by and between the Parties, and their execution of this Agreement is not intended to and shall never co nstitute nor be construed as an admission of wrongdoing or liability by any Party. 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 re lease those rights with respect to and on behalf of their predecessors, heirs, executors, admini strators, successoi·s and assigns. Each Party further represents and warrants that no tight has been conveyed, assigned or otherwise transfen-ed to any third party, including by way of subrogation or operation of law or otherwise, and that it is the legal and beneficial owner of all tights. In the event that any claim should be made or instituted against a Released Party 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 hatmless the released Party agai nst such released right, including necessary and reasonable expenses of investigation and attomeys ' fees and costs. 6. Binding EfTect This Agreement shall be binding upon and shall inure to the benetlt of the Parties hereto, and each of their respective executors, administrators, representatives, successors, assigns, devisees, partners , parents , subsidiaries , aft! I iated and related entities, officers, directors , principals , and agents. 7. Governing Law. This Agreement shall be construed in accordance with and govemcd in all respects by the laws of the State ofCalifomia without regard to conflict of law principles. Venue shall be in the County of Orange. 8. Integration. This Agreement constitutes a single, integrated vvritten contract expressing the entire agreement of the Parties hereto relative to the subject matter hereof. No co venants, agreements, representations or warranties of any kind whatsoever have been made by any Party hereto which have been relied upon by any other Party or which acted as an inducement for any other Party to enter into this Agreement. All prior discussions, negotiatiOns and agreements. whether written or oral, hav e 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 for ce or effect unless in writing and executed by each Party that would be affected by the modification or amendment. 10. COLmterparts. This Agreement may be executed in one (I) or more counterparts, each of which shall be deemed an miginal and all of which shall constitute one and the same instrument. A signature page transmitted by email (as a PDF attachment) or facsimile shall be deemed and treated as an otiginal for all purposes. 11. Incorporation of Recitals. The recitals set forth above are incorporated in this Agreement as if fully set forth herein. 12. No Attomevs' 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 by Counsel. Each Party acknowledges and agrees that it has had a reasonabl e opportunity to discuss this Agreement with its counsel. Each Party furiher represents and warrants that it has the authority and capacity to execute this Agreement, does so knowingly and voluntarily, and docs so in the absence of any mistake, duress or coercion. Each Party also acknmvledges and agrees that the provisions ofthis Agreement have been fully negotiated by the Parties and their counsel, and no statute or rule of interpretation requiling construction 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. Severability. In the event that any provrsron 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. This Agreement is the product of bargained-for. arms -length negotiations between the Parties and their counsel , and shall not be construed for or against any Party or its representative(s). 17. Signature on Behalf of a Corporation. Any corporation signing this Settlement Agreement represents and wanants 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 partnershi p represents and warrants that he or she has full authority to do so. !8. 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 Agreement. 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 Abrreement 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 Benef1ciaries. No third 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. ?? No Other Lawsuits or Complaints. The Parties verify that they have not filed any civil claims against each other as of the date of signing this Agreement. In addition, the Parties promise never to initiate, request or me 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 AGREEMENT CAREFULLY. IT CONTAINS A RELEASE AND \VAIVER OF ALL KNOWN AND UNKNOWN CLAIMS. THE SETTLING PARTIES ACKNOWLEDGE THAT THEY HAVE READ THIS AGREEMENT, UNDERSTAND IT AND ARE VOLUNTARILY ENTERING INTO IT. IN 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 C~i.~?d~c _ E'a ward D. Selich Mayor Dated: October_, 2015 NBCC, a California limited liability company By: Name: Kevin Martin Its: Chief Executive Officer By: b ) q-~ Name: Gerald T. Johnson z::::=::> Its: ChiefFinancial Officer APPROVED AS TO FORM CITY OF NE\VPORT BEACH: Dated: Octob e r ? &. , 2015 ATTEST: CITY OF NE\VPORT BEACH Dated: October ~ , 2015 Bv: ~~ft -Aaronc:i'I'arp '-"M lOl~'>h\ C ity Attorney for City of Newport Beach By ~JHN1~ Leilani L Brown City Clerk for City ofNewport Beach Dated: October_, 2015 Chief Executive Officer By : Name: Gerald T. Johnson Its: Chief Financial Officer