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HomeMy WebLinkAboutGolden Bay Construction - Settlement Agreement SETTLEMENT AGREEMENT This Settlement Agreement dated May\!L, 2010 ("Agreement") is entered into by and between GOLDEN BAY CONSTRUCTION, INC., a California corporation ("Golden Bay") and the CITY OF GILROY, a California municipal corporation ("Gilroy"). RECITALS This Agreement is made with reference to the following facts: A. On or about February 21, 2006, Gilroy and Golden Bay entered into a written contract entitled "Monterey Streetscape Improvement Project, Phase III, Project No. 06-CDD- 119, Federal Project No. CML-5034 (012) as modified by Addenda Nos. 1,2 and 3 ("Contract") pursuant which Golden Bay agreed to complete the work shown on the plans dated November 8, 2005 and as described in the specifications entitled City of Gilroy Specifications for Monterey Streetscape Improvement Project, Phase III, Federal Project No. CML-5034 (012) City Project No. 06-CDD-119 ("Project"). B. During the course of the Project, certain disputes arose between Gilroy and Golden Bay regarding various delays and disruptions. Golden Bay alleges that its work had been subject to delay, disruption and interference from circumstances beyond its control and for which Gilroy is responsible. Golden Bay further alleges that it has incurred additional costs, expenses, losses and various inefficiencies as a result of this delay, disruption and interference in an amount exceeding $240,000.00. Gilroy disputes that it is responsible for delays, disruption or interference. C. Gilroy contends that Golden Bay has not diligently prosecuted the work and is responsible for various delays on the Project. Accordingly, Gilroy has informed Golden Bay that it may be assessed liquidated damages for 75 calendar days at the rate of $3,500.00 per day for each calendar day the Project is delayed, and possibly more. Gilroy also contends that the concrete work performed by Golden Bay does not meet Project requirements in that (a) Gilroy contends the curing compound applied to the concrete sidewalks allegedly gives the concrete an uneven, mottled appearance when viewed under certain conditions, (b) the color of adjacent concrete panels allegedly does not match as closely as the City desires, and ( c) there allegedly are minor cracks in the concrete at certain locations. Golden Bay disputes that it is responsible for delays to the Project and that its work materially deviates from the requirements for the Project. D. follows: Gilroy and Golden Bay wish to avoid potential litigation and therefore agree as AGREEMENT 1. Incorporation of Recitals. Paragraphs A through C of the Recitals are incorporated as though fully set forth herein. IRLC1700924.5 -1- 091206-04706114 2. Terms of Settlement. (a) Power Washing of Monterey Street. Every six months, beginning in December, 2010, and continuing for a period of 10 years (for a total of 20 times) Golden Bay will pressure wash/steam clean the concrete, brick, aggregate surfaces, benches, trash cans and lamps on both sides of Monterey Street beginning from the South side of the Fourth Street intersection to the North side of the Eighth Street intersection, in Gilroy, California. Golden Bay will use a minimum of 3,000 PSI water, heated to 180 degrees Fahrenheit to clean the surfaces of dirt, grime, oils, grease, organic growth and other surface debris. Golden Bay shall use a metal scraper to assist in the removal of gum. Golden Bay shall clean as aggressively as possible without damaging the surface of the concrete, brick, aggregate, benches, trash cans or lamps, and the quality of its work shall equal or exceed the quality of a professional power washing company. Golden Bay shall not use cold water machines or "turbo nozzles". Gilroy shall have the right to direct Golden Bay to power wash/steam clean more frequently than every six months, but Golden Bay shall not be obligated to power wash/steam clean more than a total of 20 times. Golden Bay will give Gilroy seventy-two hours advance notice of the completion of the power washing so a Gilroy representative can be onsite to review the power washing upon completion. Golden Bay Construction will perform additional power washing at any areas that are not done to the City of Gilroy's satisfaction during the same visit. (b) Payment of Contract Balance by Gilroy. Within ten (10) business days of this Agreement being approved by the City Council, Gilroy will pay Golden Bay the sum of $21,408.00. (c) Replacement of Grout/Caulking Along Monterev Street. Golden Bay, either directly or through a subcontractor, will remove and replace the existing concrete grout and caulk between the bricks and between the bricks and the concrete flatwork along Monterey Street with Gray Sonneborn SL2, from the north side of the Fourth Street intersection to the north side of the Sixth Street intersection. The work will be limited to the joint that runs parallel to Monterey Street at the back of the brick park strip between the concrete sidewalk and the bricks on both sides of Monterey Street beginning from the South side of the Fourth Street intersection to the North side of the Eighth Street intersection, in Gilroy, California. The work will be performed at no cost to Gilroy. All transverse joints and the joint between the back of the curb and the bricks, and locations between the curb and brick, are excluded from the scope of work. (d) Release of Security in Lieu of Retention. Within ten (10) business days of this Agreement being approved by the City Council, Gilroy will authorize the release of the funds being in Escrow No. 161762 at Heritage Bank of Commerce pursuant to the Escrow Agreement for Deposit of Securities in Lieu of Cash Retention on Public Works Project dated March 16,2006 between the City of Gilroy, Golden Bay Construction, Inc., and Heritage Bank of Commerce. (e) Indemnification by Golden Bav. Golden Bay will defend, indemnify and hold Gilroy and its Related Parties (as defined below) harmless from and against any and all claims, liens, stop notices, demands, obligations, actions, causes of actions, damages, liabilities, losses, costs or expenses, of any nature whatsoever, which are now asserted or which may be IRLC1700924.5 091206-04706114 -2- asserted in the future, in whatever manner and in whatever forum, by Golden Bay, its owners, shareholders, alter egos, affiliates, assignees, employees, agents, subcontractors or suppliers, or by any other subcontractor, supplier, materialmen, company or person, for labor, materials, overhead and profit, delay, disruption, loss of efficiency and any and all other direct and/or indirect costs or expenses, or any cost and time impacts, which are now asserted or which may be asserted in the future, in whatever manner and in whatever forum, based on facts or circumstances which exist as of the Effective Date of this Agreement, and which arise out of or relate to the work performed by Golden Bay on the Project, regardless of the merits of such claims. (f) Warranty Period. The parties agree that the one-year warranty period under the Contract Documents has expired except as to any work expressly required by this Agreement that has not yet been performed. 3. Mutual Release. 3.1 By Gilroy. Subject to the limitations in this paragraph, and the other covenants and obligations under this Agreement, Gilroy, 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 (collectively referred to as the "Gilroy Related Parties"), releases Golden Bay and the Golden Bay Related Parties (as defined below) from claims, demands, causes of actions, or liabilities which arise out of or relate to the facts set forth in the Recitals, Contract, or the work performed by Golden Bay on the Project. Provided, however, that this release specifically excludes any rights, claims, demands, causes of action, liabilities, or damages (hereinafter "Claims") Gilroy now has or may have in the future, whether based in contract, tort, or otherwise, relating to (a) latent defects in the work performed by Golden Bay on the Project that are not known by Gilroy to exist as of the Date of this Agreement, (b) any indemnity obligations owed by Golden Bay to Gilroy with respect to the Project, to the extent such indemnity obligations actually exist, and/or (c) any Claims which arise because of a breach of any term of this Agreement by Golden Bay. 3.2 By Golden Bay. Subject to the limitations in this paragraph, Golden Bay, 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 "Golden Bay Related Parties"), hereby releases Gilroy and all of the Gilroy Related Parties from any and all claims, liens, demands, obligations, actions, causes of action, 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 Golden Bay now has or may hereafter have against Gilroy or the Gilroy Related Parties, arising out of or related to the Contract or the Project. Provided, however, that this release specifically excludes (a) any defenses Golden Bay may have to any Claim asserted by Gilroy, including without limitation, a Claim for any alleged latent defects in the work performed by Golden Bay on the Project that are not known by Gilroy to exist as of the Date of this Agreement; and/or (b) any Claims which arise because of a breach of any term of this Agreement by Gilroy. IRLC1700924.5 091206-04706114 -3- 4. Waiver of Unknown Claims. This Agreement is a full and final release by Golden Bay 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 their Related Parties, expressly waive any right 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 right 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 his or her settlement with the debtor. It is understood and agreed that the waiver of unknown claims applies only as to those matters for which a waiver and release has been given, and not to those matters outside the scope of any waiver and release. 5. Remaining Contract Terms Unmodified. Except as modified by this Agreement, the Contract shall 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 and agreement of the parties. 6. Fees and Costs. Both Golden Bay and Gilroy agree to be responsible for their own attorneys' fees and costs incurred in connection with the facts and circumstances leading up to this Agreement. 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. Representations 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 their Released Matters and that they have not sold, transferred, conveyed, assigned or hypothecated any of their Released Matters and that this Agreement as so executed constitutes a legal, valid and binding contractual obligation enforceable against them. 8. Understanding of Agreement. Each party hereto affirms and acknowledges that each has both read this Agreement and all attachments hereto and thereto (together the "Documents") and has had an opportunity to have the Documents fully explained by counsel of choice, that each fully understands and appreciates the words and terms used in the Documents and their effect, that this is a full and final compromise, release and settlement of the Released Matters, and that each signs this Agreement of his or her own free will. Each party, and its respective attorneys, have carefully and fully reviewed and revised, or have had an opportunity IRLC1700924.5 091206-04706114 -4- to revise, the Documents. Accordingly, the normal rule of construction that any ambiguities are to be resolved against the drafting party shall not be utilized in the interpretation of any of the Documents. 9. Execution of All Documents. The parties to this Agreement agree to execute any and all documents necessary to effectuate the terms, conditions, purposes and aims of this Agreement. 10. Amendment. 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 sought to be enforced. 11. Counterpart 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 or facsimile transmittals of the executed original may be used in lieu of the original. 12. Benefit of Agreement. Each and every term of this Agreement shall be binding upon and inure to the benefit of Golden Bay and Gilroy, 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. Applicable Law. This Agreement shall be governed by and construed m 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 of liability by any party hereto. In particular, and without limitation, neither party admits that it delayed the Project or that it is responsible for or liable for delay or disruption damages or liquidated damages in the absence of this Agreement. II II II II II II II II II IRLC1700924.5 091206-04706114 -5- . . , IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year as indicated below, the last of which shall be the "Effective Date". Dated: May ~ 20 1 0 TRUCTION, INC., Dated: May{ '3, 2010 CITY OF GILROY, a California municipal corporation ~ ~~ By: Thomas. Haglund Its: City Administrator IRLC1700924.5 091206-04706114 -6-