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HomeMy WebLinkAboutThe Don Chapin Company - Sports Park - Settlement Agreement and Release of Claims SETILEMENT AGREEMENT AND RELEASE OF CLAIMS This Settlement Agreement and Release of Claims ("Agreement ") is entered into by and between the City of Gilroy ("Gilroy''), The Don Chapin Company, Inc., a California corporation "Contractor''), and Harris & Associates, Inc, a California corporation (''Harris''). RECITALS This Agreement is made with reference to the following facts: A. On or about November 1, 2004, Gilroy and Contractor entered into a written contract for the City of Gilroy Sports Part Improvements, Phases I and II, City Project No. 05- CDD-I08 ("Contract'') pursuant to which the Contractor agreed to construct a new recreational sports park facility in Gilroy, California as more fully described in the Contract ("Project''). B. During the course of the Project, certain disputes and disagreements arose between Gilroy and Contractor regarding (a) the cause of damage to the concrete pavement in the parking lot and vehicular pathway at the Project and whether the Contractor should be compensated for the cost of repairing that damage, (b) the cause of cracked asphalt on the bike trial on the Uvas Creek Levee and whether the Contractor should be compensated for certain additional costs associated with that work, (c) the equipment rates charged by Contractor for work performed on the Project, (d) the amount of a credit to which the City was entitled for a change in the scope of the work performed by Contractor, and (e) the amount to which the Contractor was entitled for a change in the scope of work related to the storm drain crossing and changes to the signage for the Project (collectively referred to as the ''Disputed Issues''). C. On January IS, 200S Contractor submitted a claim under Section 900 et. seq. of the California Government Code related to the foregoing Disputed Issues ("Claim''), which was denied by the City. D. On or about November 4, 200S Contractor filed a Third Amended Complaint against Gilroy and Harris in the Santa Clara County Superior Court entitled The Don Chanin Company. Inc. v. City of Gilrov. et. aL Action No. 108-CV-112653 ("Action'') seeking damages from Gilroy and Harris related to the Disputed Issues. All Complaints, and amendments thereto filed in the Action will collectively be referred to as the "Complaint". E. Gilroy and Harris each filed answers to the Complaint denying any and all responsibility to Chapin with respect to the Disputed Issues, the Action and the Complaint. F. Gilroy, Contractor and Harris wish to avoid the expense of further litigation and therefore agree as follows: AGREEMENT 1. Incolporation of Recitals. Paragraphs A through. E of the Recitals are incorporated as though. fully set forth herein. -1- ~ 1RLC\792350.1 "'. ."" h4-H\1'.ftft 2. . Tenns of Settlement. (a) PaVlllent by Gilroy. In exchange for the promises, conditions and covenants lDldertaken by Contractor in this Agreement, Gilroy shall pay Contractor the swn of $150,000.00 not later than July 31, 2009 by check made payable to "The Don Chapin Company, Inc. and delivered to Robert L. Leslie, Esq., at McInerney & Dillon, P.C., 1999 Harrison Street, 17th Floor, Oakland, CA 94612-4700. (b) Payment by Harris. In exchange for the promises, conditions. and covenants undertaken by Contractor in this Agreement, Harris shall pay Contractor the sum of $75,000.00 not later than July 31,2009 by check made payable to ''The Don Chapin Company, Inc. and delivered to Robert L. Leslie, Esq., at McInerney & Dillon, P.C., 1999 Harrison Street, 17th Floor, Oakland, CA 94612-4700. (c) Dismissal of Action. Within ten (10) business days of receiving the payments described in paragraphs 2 (a) and 2 (b) above, Chapin will dismiss the Action, with prejudice, as to all parties, and all causes of action. 3. Mutual Release. 3.1 By Contractor. Except for the obligations of Gilroy and Harris under this Agreement, and in exchange for the releases provided by Gilroy and Harris in Paragraphs 3.2 and 3.3 below and the obligations lDldertaken by Gilroy and Harris in this Agreement, Contractor on behalf of itself, its representatives, insurers, attorneys, successors, predecessors, affiliates, assignees, assignors, joint venturers, partners, parents or affiliated entities, subsidiaries, agents, employees, officers, directors, shareholders, owners or alter egos, subcontractors, suppliers, or sureties (collectively referred to as the "Contractor Related Parties''), does hereby release, remise and forever discharge Gilroy, Harris and their Related Parties (as defined below) from any and all claims, liens, demands, obligations, actions, causes of actions, damages, liabilities, losses, costs or expenses, of any nature whatsoever, known or unknown, past, present or future, ascertained or unascertained, suspected or unsuspected, existing or claimed to exist, which Contractor or the Contractor Related Parties or any of them, have had, now have or may hereafter have against any party hereto, which arise out of or relate to the construction of the Project, the Contract or any amendments thereto, the Complaint, Action, the Disputed Issues, or any of the matters referred to in Recitals A through E above. Provided, however,that this release does not extend to and does not include any claims, losses, expenses, costs, obligations or liabilities Contractor or its Related Parties incurs by reason of Gilroy's or Harris' future or subsequent breach or failure to perform any of their obligations, covenants, or agreements contained in this Agreement 3.2 By Gilroy. Except for the obligations of Contractor and Harris under this Agreement, and in exchange for the releases provided by Contractor in Paragraph 3.1 above and Harris in Paragraph 3.3 below, and the obligations undertaken by Contractor, Harris, the Contractor Related Parties, and the Harris Related Parties in this Agreement, Gilroy on behalf of itself and its representatives, insurers, attorneys, successors, predecessors, affiliates, assignees, assignors, joint venturers, partners, parents or affiliated entities, subsidiaries, agents, employees, officers, directors, shareholders, owners or alter egos (collectively referred to as the "Gilroy Related Parties'') does hereby release. remise and forever discharge Contractor, the Contractor Related Parties, Harris, and the Harris Related Parties from any and all claims. liens, demands. -2- ~ \RLC\792350.1 "r.."'" ".~...""' obligations, actions, causes of actions, damages, liabilities, losses, costs or expenses, of any nature whatsoever, known or unknown, past, present or future, ascertained or unascertained, suspected or unsuspected, existing or claimed to exist, which Gilroy or the Gilroy Related Parties or any of them, have had, now have or may hereafter have against Contractor, the Contractor Related Parties, Harris, or the Harris Related Parties which arise out of or relate to the construction of the Project, the Contract or any amendments thereto, the Complaint, Action, the Disputed Issues, any of the matters referred to in Recitals A through E above, and any latent defects in the concrete or the bike path at the Project and/or any indemnity obligations which arise out of or relate to the issues raised in the Complaint, Action or the Disputed Issues. Provided, however, that this release specifically excludes, and Gilroy shall retain, any rights, claims, demands, causes of action, or damages Gilroy now has or may have in the future, whether based in contract, tort, or otherwise, related to (a) latent defects in the construction of the Project other than latent defects in the concrete or bike path, and/or (b) any indemnity obligations owed by Contractor, Harris or their respective Related Parties.to Gilroy with respect to the Project other than those which arise out of or relate to the issues raised in the Complaint, Action or the Disputed Issues. Provided, further, that this release does not extend to and does not include any claims, losses, expenses, costs, obligations - or liabilities Gilroy or its Related Parties incur by reason of Contractor's or Harris' future or subsequent breach or failure to perform any of their obligations, covenants, or agreements contained in this Agreement. 3.3 Bv Harris. Except for the obligations of Contractor and Gilroy under this Agreement, and in exchange for the releases provided by Contractor in Paragraph 3.1 above and Gilroy in Paragraph 3.2 above, the obligations undertaken by Contractor and the Contractor Related Parties in this Agreement, and the obligations undertaken by Gilroy and the Gilroy Related Parties in this Agreement, Harris on behalf of itself and its representatives, insurers, attorneys, successors, predecessors, affiliates, assignees, assignors, joint venturers, partners, parents or affiliated entities, subsidiaries, agents, employees, officers, directors, shareholders, owners or alter egos (collectively referred to as the ''Harris Related Parties'') does hereby release, remise and forever discharge Contractor, the Contractor Related Parties, Gilroy and the Gilroy Related Parties from any and all claims, liens, demands, obligations, actions, causes of actions, damages, liabilities, losses, costs or expenses, of any nature whatsoever, known or unknown. past, present or future, ascertained or unascertained, suspected or unsuspected, existing or claimed to exist, which Harris or the Harris Related Parties or any of them, have had, now have or may hereafter have against Contractor, the Contractor Related Parties, Gilroy and the Gilroy Related Parties, which arise out of or relate to the construction of the Project, the Contract or any amendments thereto, the Complaint, Action, the Disputed Issues, or any of the matters referred to in Recitals A through. E above, any latent defects in the concrete or the bike path at the Project, and/or any indemnity obligations which arise out of or relate to the issues raised in the Complaint, Action or the Disputed Issues. Provided, however, that this release specifically excludes, and Harris shall retain, any rights, claims, demands, causes of action, or damages Harris now has or may have in the future, whether based in contract, tort, or otherwise, related to (a) latent defects in the construction of the Project other than latent defects in the concrete or bike path, and/or (b) any indemnity obligations owed by Contractor, Gilroy or their respective Related Parties to Harris with respect to the Project other than those which arise out of or relate to the issues raised in the Complaint, Action or the Disputed Issues. Provided, however, that this release does not extend to and does not include any claims, losses, expenses, costs, obligations or liabilities Harris or its Related Parties incur by reason of Contractor's or Gilroy's future or subsequent breach or failure to perfonn any of their obligations, covenants, or agreements contained in this Agreement. -3- IRLC\792350.1 "....Aft nIl1""."'" <:P 4. Waiver of Future Claims. This Agreement is a full and final release by Contractor, Harris and Gilroy solely as to the matters referenced in Paragraph 3 above (collectively referred to as the "Released Matters"). With respect to those matters covered by the above releases, the parties hereto, for themselves and thcir Related Parties, expressly waive any righ.t or claim of any right to assert hereafter that any Released Matters have, through ignorance, oversight or error, been omitted from the terms of this Agreement and expressly waive any righ.t or claim of right they may have under the provisions of California Civil Code Section 1542, which they understand 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 hinettlement with the debtor. 5. Covenant not To Sue. Gilroy, Contractor and Harris agree to refrain from proceeding in any way against one another, or their Related Parties with respect to the Released Matters as defined in Paragraph 3 above. 6. Fees and Costs. Gilroy, Contractor and Harris agree to be responsible for their own attorneys' fees and costs incurred with respect to the Released Matters. Provided, however, that if any party to this Agreement commences any proceeding, at law or in equity. against the other party, which proceeding relates to the enforcement of this Agreement or the performance of their respective duties and obligations under this Agreement, the non-prevailing party in such proceeding shall pay to the prevailing party the prevailing party's reasonable attorneys' fees and other legal fees, expert and consultant fees and other costs and expenses incurred in connection with such proceeding and those incurred in connection with the enforcement of any resulting judgment or order. Such post judgment right to receive attorneys' fees and other legal fees, expert and consultant fees and other costs and expenses shall be specifically provided in such judgment or order. 7. Reoresentations and Warranties. As an integral and material part of this Agreement each party represents and warrants to the other party that they are the sole owners of the Released Matters and that they have not sold, transferred, conveyed, assigned or hypothecated any of the Released. Matters arid that this Agreement as. so executed constitutes a legal, valid and binding contractual obligation enforceable against them. 8. Understandin2 of A2reement. Each party to this Agreement expressly agrees and understands that it participated in drafting this Agreement. This Agreement is the product of arm's-length negotiations between the Parties and is not to be interpreted in favor of one party or the other in any later interpretation or enforcement. The drafting, negotiation, execution and delivery of this Agreement have not been induced by any representations, statements, warranties or agreements, except as otherwise expressly provided in this Agreement. Any ambiguity or uncertainty contained in this Agreement shall not be interpreted against any party by reason of the rule of contract interpretation that ambiguities or uncertainties are constmed against thc party responsible for the ambiguity or uncertainty. 9. Execution of All Documents. The parties to this Agreement agree to execute any -4- \RLC\792350.1 "...."" ".~."" ~ and all documents necessary to effectuate the terms, conditions, purposes and aims of this Agreement. 10. Conflict/Amendment. Except as modified by this Agreement, the terms of the Contract sha1I remain in full force and effect. In the event of any conflict between this Agreement and the Contract, this Agreement shall govern and control the intent of the parties. This Agreement may be amended, or any right or condition hereunder waived, only by a written instrument signed by the party against whom such an amendment or waiver is sough.t to be enforced. 11. CounteIpart Signatures. This Agreement may be executed in any number of counterparts, with the same effect as if all parties have signed the same document, and each such executed counterpart shall be deemed to be an original instrument. All such executed counterparts together shall constitute one and the same instrument. True and correct copies may be used in lieu of the original. 12. Benefit of Agreement Each and every tenn of this Agreement shall be binding upon and inure to the benefit of Gilroy, Contractor and Harris, their successors and assigns and shall bind and inure to the benefit of those persons and entities described in Paragraph 3 above, which persons are intended to be beneficiaries of this Agreement. 13. Aoolicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. 14. No Admission. This Agreement is the settlement of a disputed claim, and is not an admission ofliability by any party hereto. 15. Time of the Essence. Time is of the essence in the performance of and compliance with each of the provisions and conditions of this Agreement 16. Invaliditv. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be valid under applicable law, but, if any provisions of this Agreement shall be invalid or prohibited thereunder, such invalidity or prohibition shall be construed as if such invalid or prohibited provisions bad not been inserted herein and shall not affect the remainder of such provision or the remaining provisions of this Agreement. 17. Entire Aszreement. This Agreement constitutes and is intended to constitute the entire agreement of the parties hereto concerning the subject matter of this Agreement; Provided, however, that except as modified herein, all contractual relationships between Gilroy and Harris shall remain unaffected. No covenants, agreements, representations or warranties of any kind whatsoever have been made by any party hereto except as specifically set forth herein. All prior discussions and negotiations with respect to the subject matter hereof are superseded by this Agreement. This Agreement may not be changed, amended, or modified except by a writing signed by the Parties. 18. Representation by Counsel. The Parties acknowledge and agree that each was represented by counsel of their own choosing in the drafting and execution of this Agreement or has voluntarily participated herein without such counsel. Each of the Parties has entered into this Agreement freely and voluntarily and after having consulted with that party's counsel (or 1RLCI565215.1 091302.mS18005 IRLC\792350.1 "'...."'" ft.~~",,^ -5- ~ voluntarily foregoing same) and having had the terms contained in this Agreement explained to each of them by counsel. The Parties understand the tenns contained in this Agreement and are fully satisfied with the settlement set forth herein. The Parties expressly represent and warrant that this Agreement is executed voluntarily and with full knowledge of its significance. 19. Authority to Execute Agreement. Each individual and entity executing this Agreement hereby represents and warrants that he, she or it has the capacity set forth on the signature pages hereofwith full power and authority to bind the party on whose behalf he, she or it is executing this Agreement to the terms hereof. The parties have read and understand this Agreement and have had the opportunity to consult with counsel with respect hereto IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year as indicated below. Dated: June ~ 2009 Dated: June el2009 HARRIS & ASSCOCIATES, INC. Dated: June ~ 2009 By: Marian Ross Its: Chief Financial Officer APPROVED AS TO FORM AND CONTENT: Attorneys for Gilroy ROBERT L. CHORTEK Berliner Cohen IRLC\565215.1 091302.(17618005 IRLC\792350.1 I\C'.."" ".~."" -6- ~ .. voluntarily foregoing same) and having had the terms contained in this Agreement explained to each of them by counsel. The Parties understand the terms contained in this Agreement and are fully satisfied with the settlement set forth herein. The Parties expressly represent and warrant that this Agreement is executed voluntarily and with full knowledge of its significance. 19. Authority to Execute Agreement. Each individual and entity executing this Agreement hereby represents and warrants that he, she or it has the capacity set forth on the signature pages hereof with full power and authority to bind the party on whose behalf he, she or it is executing this Agreement to the terms hereof. The parties have read and understand this Agreement and have had the opportunity to consult with counsel with respect hereto IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year as indicated below. CITY OF GILROY, a municipal corporation Dated: June..........J 2009 By: Thomas J. Haglund Its: City Administrator THE DON CHAPIN COMPANY, INC. Dated: June _,2009 By: Donald J. Chapin, Jr. Its: President Dated: JuneJ!t 2009 7@;=~Z By: Marian Ross Its: Chief Financial Officer APPROVED AS TO FORM AND CONTENT: Attorneys for Gilroy ROBERT L. CHORTEK Berliner Cohen \RLC\565215.1 091302-07618005 \RLC\792350.1 -6- . .._..____.._____ .__ .._ __ _...._ .__.._ ._.__...._ .o_______._.__.__._.___._____._.___.._.__~__.__. ,_._,'h_ _....._._ _____.._ _.____...._~_._______._.__. .-,..-. ... 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JNC. 0IIId:.. -J 2009 By: MIIiID.. ltI: ClMfJR--i1l 0fIIcIr AlbM)'lb 0iIIDy I.OBBR.T L CIIOllTllt s.u.CabIIl ~1 ...,.. --- -6- ~ . t ' AND CONTENT: APPROVED AS TO FORM AND CONTENT: Attorneys for Chapin ROBERT L. LESLIE McInerney & Dillon, P.c. \RLCI565215.1 091302-07618005 \RLC\792350.1 -7- . I . APPROVED AS TO FORM AND CONTENT: Attorneys for Harris DAVID W. LIVELY Hopkins & Carley APPROVED AS TO FORM AND CONTENT: Attorneys for ROBERT L. LESLm McInemey& Dillon, P.C. 1RLCI565215.1 D91302.m618005 1RLCI792350.1 ",r.."" ".'W\P.~ -7M ~