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HomeMy WebLinkAbout00 - Closed Session Report - Settlement AgreementSETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS Woody's Group, Inc., dba Woody's Wharf, et al., v. City ofNewport Beach, et al. Orange County Superior Court Case No. 30-2013-00687091 This global Settlement Agreement and Mutual Release of Claims ("Agreement") is entered into by and between: Petitioners/Plaintiffs/Cross-Defendants/Cross-Complaints Woody's Group, Inc., a California corporation, dba Woody's Wharf, Chris Pappas, Greg Pappas, Mark Serventi and Ralph Nudo (collectively, "Petitioners") on the one hand, and Respondent/Defendant/Cross-Complainant/Cross-Defendant City of Newport Beach, a California municipal corporation and charter city ("Respondent City") and Respondent/Defendant Michael Henn (hereinafter sometimes referred to collectively as "Respondents") on the other hand. Petitioners and Respondent are referred to collectively in this Agreement as the "Parties," and individually as "Party." RECITALS A. Petitioners are the owners of Woody's Wharf Restaurant in Newport Beach. In 2012, Petitioners filed an application for a conditional use permit ("CUP") seeking, among other things, permission to i) extend the closing hour of the outdoor dining area from 11:00 p.m. to 2:00 a.m., ii) allow patron dancing, and iii) remove tables and chairs within the restaurant dining area on an as-needed basis to allow patron dancing. The Newport Beach Planning Commission ("Planning Commission"), on November 8, 2012, gave their approval, in part, to Petitioners' application, but denied the extension of the closing hours of the outdoor dining area, the removal of the tables and chairs and the patron dancing. On November 26, 2012, Petitioners appealed the decision of the Planning Commission to the City Council. Before the appeal hearing. Petitioners notified City of their desire to modify the CUP application to construct a patio cover over the outdoor dining area in order to address noise concerns raised at the Planning Commission hearing. Consequently, the City Council remanded the matter back to the Planning Commission for its consideration of the revised application. At the conclusion of the second public hearing before the Planning Commission held on September 5, 2013, the Planning Commission issued its approval of the CUP, including extending the closing hour of the outdoor dining area from 11:00 p.m. to 2:00 a.m. on weekends, allowing patron dancing within the interior of the restaurant on weekends, and allowing the removal of tables and chairs within the outdoor patio area on weekends. On September 9, 2013, Respondent Henn filed a written call for review of the Planning Commission's September 5 decision with the City Clerk. On October 8, 2013, the City Council held a public hearing on Respondent Henn's call for review. Following the public hearing, on November 12, 2013, the City Council adopted Resolution 2013-75, that allowed for an earlier opening time for the restaurant, relaxed the valet parking requirements, and approved a variance to construct the enclosure over the outdoor dining area, but in all other respects, overturned the Planning Commission decision, including allowing patron dancing, allowing the outdoor dining area to be open until 2:00 a.m., and allowing the removal of tables and chairs from any section of the restaurant after 10:00 p.m. ("City Council Decision"). Settlement Agreement and Release Page 1 of 8 Received After Agenda Printed October 13, 2015 Closed Session Report B. Respondent City, through its Code Enforcement Division, issued a number of administrative citations and imposed fines thereunder to the owner of Woody's Wharf Restaurant as a result of certain activities taking place at the business ("Administrative Citations and Fines"). C. On November 13, 2013, Plaintiff filed a petition and complaint ("Petition") in the Superior Court for the State of California, County of Orange ("Court") in an action entitled JVoody's Group, Inc., dba Woody's Wharf, et al, v. City of Newport Beach, et ai. Case No. 30- 2013-00687091 ("Action"), asserting causes of action for petition for writ of administrative mandamus and damages pursuant to 42 U.S.C. Section 1983. D. On December 20, 2013, Respondent City filed a cross-complaint for injunction and declaratory relief ("City's Cross-Complaint"). E. On January 23, 2014, Petitioners filed a cross-complaint, alleging a cause of action for damages pursuant to 42 U.S.C. Section 1983 against Respondent City ("Petitioners' Cross-Complaint"). F. On May 19, 2014, Judge Derek Hunt issued an order denying Petitioners' Petition for Administrative Mandamus. G. On May 19, 2014, Petitioners filed a Notice of Appeal from the May 19, 2014 order of Judge Hunt, and from the April 8, 2014 order of Judge Hunt granting Petitioner City of Newport Beach's motion for preliminary injunction ("Appeal"). H. On January 29, 2015, the California Court of Appeal, Fourth Appellate District, Division 3, in a published opinion, reversed the decision of the trial court, and held that the City Council Decision was void. I. It is the intent of the Parties to fully and finally settle and terminate all differences, disputes, and disagreements between them, in accordance with the terms and conditions set forth in this Agreement. 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 1. Consideration. a. The City Council of Respondent City shall consider, at a duly noticed public hearing, the application of Petitioners for an amended conditional use permit ("Amended CUP") for the Woody's Wharf restaurant. Settlement Agreement and Release Page 2 of 8 b. If the City Council, in the exercise of its discretion, approves the Amended CUP the Chief of Police shall use his discretion to consider the issuance of an Operator License to Petitioners pursuant to Newport Beach Municipal Code Chapter 5.25. c. If the City Council, in the exercise of its discretion, approves the Amended CUP and the Chief of Police in the exercise of his discretion approves the Operator License, i) the City agrees to pay Petitioners the total amount of Three Hundred Fifty Five Dollars ($355,000.00) ("Settlement Amount") within seven (7) business days of the latter date of the City Council and Chief of Police approval. d. If the City Council, in the exercise of its discretion, does not approve the Amended CUP, or if the Chief of Police in the exercise of his discretion does not approve an Operator License, all terms of this Agreement shall be null and void and the Parties shall proceed with the litigation which is the subject of this Agreement. 2. Dismissal. Within five (5) business days after the receipt of full payment of the Settlement Amount as set forth in Section 1(c), the Parties will jointly file requests for dismissal of the Action, the City's Cross-Complaint and the Petitioners' Cross-Complaint and any other associated actions with prejudice. Additionally, within five (5) business days after receipt of full payment of the Settlement Amount as set forth in Section 1(c), Respondent City shall dismiss and waive all the pending Administrative Citations and Fines. The Parties shall issue a joint press release announcing the settlement of this matter, in a form that is mutually agreeable to the Parties. 3. Effective Date. The Effective Date of this Agreement shall be the date that this Agreement has been signed by all the Parties. 4. 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 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, and relinquish, any and all known and/or currently existing claims, demands, obligations, personal injuries, water damages, administrative citations and fines, consequential damages, general damages, express or implied obligations, indemnity, express or implied warranties, contribution, liabilities, costs, losses, 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 unassorted, contingent or non-contingent. Settlement Agreement and Release Page 3 of 8 suspected or unsuspected, that the Parties had or may acquire, arising out of or related to the design, construction, manufacture, supply of materials, installation and maintenance of the Subject Property and/or the Action and/or the Claims, and referred hereto as "Released Claims". Waiver of California Civil Code Section 1542. The Agreement includes a release of future and unknown damages arising out of or related to the Released Claims. The Parties represent, acknowledge, and agree that they have been informed 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 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. In waiving all rights and protections afforded by 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 the Released Claims. 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 currently 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 Party 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 acknowledge 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 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. 5. No Admission of Liabilitv. 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 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 disputed claims by and between the Parties, and their execution of this Agreement is not intended Settlement Agreement and Release Page 4 of 8 to and shall never constitute nor be construed as an admission of wrongdoing or liability by any Party. Any such wrongdoing or liability is expressly denied by each Party. 6. No Assignment. Each Party represents and warrants that they are the legal owners of the Released Claims and that they have the authority to release those claims with respect to and on behalf of their predecessors, heirs, executors, administrators, successors and assigns. Each Party further represents and warrants that no Released Claim has been conveyed, assigned or otherwise transferred 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 Released Claims. In the event that any Released 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 harmless the released Party against such Released Claims, including necessary and reasonable expenses of investigation and attorneys' fees and costs. 7. Binding Effect. This Agreement 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. 8. Governing Law. This Agreement shall be construed in accordance with and governed in all respects by the laws of the State of California without regard to conflict of law principles. 9. Integration. This Agreement constitutes a single, integrated written contract expressing the entire agreement of the Parties hereto relative to the subject matter hereof. No covenants, 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, have been and are merged and integrated into, and are superseded by, this Agreement. 10. 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. 11. Counterparts. This Agreement may be executed in one (1) or more counterparts, each of which shall be deemed an original 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 original for all purposes. 12. Incorporation of Recitals. The recitals set forth above are incorporated in this Agreement as if fully set forth herein. 13. Attornevs' Fees and Costs. Each Party agrees that it shall bear its own attorneys' fees and costs incurred in the prosecution, defense, settlement, and dismissal of the Action and the preparation of this Agreement. Settlement Agreement and Release Page 5 of 8 14. Representation bv Counsel. Each Party acknowledges and agrees that it has been represented by counsel and 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, does 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 construction against the drafter of the contract shall apply to this Agreement. 15. Authoritv. 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. 16. Severabilitv. In the event that any provision of this Agreement 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. 17. 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). 18. 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 authority to do so. 19. 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. 20. Representations. The Parties represent that they have not sold, transferred, conveyed, assigned, hypothecated and/or subrogated any of the rights or claims released herein. 21. 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 and settles all disputes between the Parties. 22. No Third Party Beneficiaries. 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. 23. No Other Lawsuits or Complaints. Other than the claims identified above, the Settling Parties verify that they have not filed any other civil claims against each other as of the date of signing this Agreement. In addition, the Settling Parties promise never to initiate, request or file any future claims, actions, lawsuits or any other legal proceeding with any court or Settlement Agreement and Release Page 6 of 8 tribunal or to file any charge or complaint with any government agency against each other, asserting any claim that is released in this Agreement. The Settling Parties may, however, enforce their rights with respect to any breach by the other party of any term of this Agreement, in accordance with Code of Civil Procedure Section 664.6. PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS A RELEASE AND WAIVER 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: lOf |3. 2015 Dated:,2015 City of Newport Beach, I 2 Name: ^ 0 S t \ i r Its: ^ y a ^ p 6 ^ ^ g Ci \^y' of /Ir Jl W ^ Woody's Group, Inc., a California corporation, dba Woody's Wharf By: Name: Its: By: Name: Its: Dated:,2015 Chris Pappas Settlement Agreement and Release Page 7 of 8 INBOUND NOTIFICATION : FAX RECEIVED SUCCESSFULLY •** TIME RECEIVED REMOTE CSID DURATION PAGES STATUS August 5, 2015 11:51:53 AM POT 94967591489496759148 38 1 Received Aug 05 2015 11:52 HP FaxWoodys Wharf 94967591489496759148 page 1 Dated:,2015 Greg Pappas Dated:,2015 Mark Serventi Dated;,2015 Ralph Nudo Approved as to form: Roger JofilDiamond APPROVED AS TO FORM aiY OF NEWPORT BEACH: {od-i Dated: ,2015 ATTEST: CITY OF NEWPORT BEACH Dated Aaron C. Harp City Attorney for City ofNewpon Beach Leilanl 1. Brown ^ City Clerk for City of Newport Beach Settlement agreement and Release Page8 OF S BZi .2015 Dated;^2015 Greg Pappas Mark Serventi Dated:.,2015 Ralph Nudo Approved as to form Roger Jo^jDiamond ^PROVED AS TO FORM CITY OF NEWPORT BEACH: Dated: ,2015 ATTEST: OTY OF NEWPORT BEACH Dated:.,2015 Aaron C. Harp City Attorney for Chy of Newport Beach Leilani I. Brown City Clerk for City of Newport Beach SEiTLEMEhrr Agreement AND Release Page«of8 20 30Vd T0228T26t76 LZ'Zl 9I0S/S0/80 ** INBOUND NOTIFICATION : FAX RECEIVED SUCCESSFULLY ** TIME RECEIVED REMOTE CSID DURATION PAGES STATUS August 10, 2015 11:00:08 AM PDT 94967591489496759148 38 1 Received Aug 10 2015 11:01 HP FaxWoodys Wharf 94967591489496759148 page 1 Dated;,2015 Greg Pappas Dated:1k 2015 Mark Serventi Dated:,2015 Ralph Nudo Approved as to form: j.RogerJo^iamond APPROVED AS TO FORM CITY OF NEWPORT BEACH: Dated:2015 ATTEST: CITV OF NEWPORT BEACH Aaron C. Harp City Attorney for City of Newport Beach Dated:,2015 Leilani 1. Brown City Clerk for City of Newport Beach Settlement Agreement and Release PageSofS 2015-08-0514:55 » CityOfNewportBeach P2/2 Dated:,2015 Greg Pappas Dated:,2015 Mark Serveoti Dated; ,2015 Ralph Nud^ Approved as to form: ^ r Jo^iamRoger JonlDiamond APPROVED AS TO FORM CITY OF NEWPORT BEACH: (O/li Dated: ,2015 ATTEST: CITY OF NEWPORT BEACH Dated: lo rn 2015 Aarbn C. Harp City Attorney for City ofNewport Beach Leilani I. Brown City Clerk for City ofNewport Beach Scttlement Agreement and Release Pace 8 OP 8