HomeMy WebLinkAboutSUPPTL INFO - PM24255 Release Securities DRAINAGE AND RELATED IMPROVEMENTS
REIMBURSEMENT AND MUTUAL RELEASE AND SETTLEMENT AGREEMENT
BY AND BETWEEN THE CITY OF PALM DESERT AND MONTEREY 170, LLC
This REIMBURSEMENT AND MUTUAL RELEASE AND SETTLEMENT
AGREEMENT ("Agreement") is effective as of this nineteenth (19th) day of April, 2007
("Effective Date") by and between CITY OF PALM DESERT, a Charter City ("City") and
MONTEREY 170, LLC, a California limited liability corporation ("Monterey") (collectively
referred to as "the Parties"), with reference to the following facts:
RECITALS
A. Monterey constructed certain drainage and related improvements, including,
without limitation, an unlined drainage channel (collectively, "Initial Drainage Improvements"),
in the City of Palm Desert, County of Riverside, pursuant to a Subdivision Improvement
Agreement dated as of November 20, 2003 and recorded in the official records of the County of
Riverside as Instrument No. 2003-956-460 (the "Subdivision Improvement Agreement"). In
accordance with the terms of the Subdivision Improvement Agreement, the Initial Drainage
Improvements were dedicated by Monterey to the City upon completion thereof, which occurred
on or around November 18, 2004.
B. The City claims that the Initial Drainage Improvements are defectively designed.
Monterey disagrees with the City that the Initial Drainage Improvements are defective. The
Parties desire to fully and finally resolve and release any and all claims related to the Initial
Drainage Improvements and enter into an agreement under which Monterey will repair and
reconstruct the drainage and related improvements as described in more detail in Exhibit "A"
attached hereto and incorporated herein ("Drainage Improvements").
C. The City will benefit from the Drainage Improvements because of improved
drainage and water diversion on City-owned property.
D. As a condition to the City's approval of Parcel Map No. 24255 (the "Map") and in
accordance with the terms of the Subdivision Improvement Agreement, the City required that
Monterey install sidewalks (the "Sidewalk Work") on the individual lots within the Subdivision
fronting Dinah Shore Drive.
E. Monterey claims that the City prevented Monterey from performing the Sidewalk
Work and the City disagrees with such claim. The parties desire to fully and finally resolve and
release any and all claims related to the Sidewalk Work by releasing Monterey from the
obligations under the Map and Subdivision Improvement Agreement to perform the Sidewalk
Work.
F. The Parties hereby desire to enter into this Agreement to (i) provide for the City's
reimbursement to Monterey for one-half(1/2) of the costs incurred for the design, permitting and
construction of the Drainage Improvements and to set forth, in consideration of such payment,
the mutual release and settlement of any and all claims relating to the Initial Drainage
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Improvements, including the design and construction of such improvements, and (ii) release
Monterey from any obligation to perform the Sidewalk Work and return to Monterey the "Cash
Security" (as defined below) Monterey posted with the City as security for its obligation to
perform the Sidewalk Work.
NOW, T�-IEREFORE, the Parties agree as follows:
1.0 DRAINAGE IMPROVEMENT REPAIR PLANS
l.l Preparation of Plans. Plans and specifications (the "Plans") for the Drainage
Improvements were prepared by MSA Consulting at the request of the City and Monterey in
conformance with the applicable City standards and such Plans are more fully described on
Exhibit "B" attached hereto and incorporated herein. Prior to the date hereof, the City approved
the Plans and issued or is irrevocably and unconditionally prepared to issue all necessary
building permits (the "Permits")required for the Drainage Improvements to be constructed.
1.2 Liability for Desi�n Defects. Neither the City nor Monterey shall be liable for any
defects, errors or omissions (collectively, "Design Defects") in or relating to the Plans and in no
event shall Monterey have any obligation or responsibility to make any repairs or replacements
to the Drainage Improvements as a result of any Design Defects.
2.0 CONSTRUCTION
2.1 Compliance with Applicable Laws. Monterey and its contractors and subcontractors
shall comply with all laws and regulations applicable to the construction of the Drainage
Improvements.
2.1.1 In connection with the improvements originally made by Monterey pursuant to
the Subdivision Improvement Agreement(including, without limitation, the Initial
Drainage Improvements and the Sidewalk Work [which has not yet been
completed and will not be completed by Monterey]), Monterey previously posted
with the City certain letters of credit as security for Monterey's obligations under
the Subdivision Improvement Agreement. On or around December 3, 2005, the
City drew down on the letters of credit and is currently holding cash security in
thc aggregate amount of $626,040.80 (the "Cash Security"). Notwithstanding
anything to the contrary contained in the Subdivision Improvement Agreement
and/or the conditions of approval to the Map, (a) from and after the Effective
Date, the Cash Security shall be held by the City solely as security to assure
faithful performance of Monterey's obligations under this Agreement, and to
secure payment to any contractor, subcontractor, persons renting equipment, or
furnishing labor and materials for the improvements required to be constructed
and installed pursuant to this Agreement, and (b) within thirty (30) days after the
City's acceptance of the Drainage Improvements in accordance with the terms of
Section 2.3 below, the City shall release the remaining portion of the Cash
Security to Monterey, and (c) from and after the Effective Date Monterey is
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forever released and discharged from any further obligations and/or liabilities
with respect to the design and/or construction of the Sidewalk Work.
2.1.2 Except for the City's reimbursement obligation set forth below, the City shall not,
nor shall any officer or employee of the City, be liable for any portion of the
expense of the aforesaid work or for the payment of any labor or materials
furnished in connection therewith.
2.1.3 If applicable, Monterey shall comply with all applicable laws, ordinances, codes
and regulations of the federal, state and local government. California Labor Code
sections 1720 et seq. and 1770 et seq., as well as California Code of Regulations,
Title 8 section 16000 et seq. ("Prevailing Wage Laws"), require the payment of
prevailing wage rates and the performance of other requirements on certain
"public works" and "maintenance" projects. Monterey agrees to fully comply
with and to require its contractors and subcontractors to fully comply with such
Prevailing Wage Laws, if applicable. Monterey hereby agrees to indemnify and
hold the City harmless for any and all claims arising from or relating to
compliance with the Prevailing Wage Laws by Monterey or its contractors and
subcontractors, if such Prevailing Wage Laws are applicable to the Drainage
Improvements.
2.1.4 By its signature hereunder, Monterey certifies that it is aware of the provisions of
Section 3700 of the California Labor Code which require every employer to be
insured against liability for Worker's Compensation or to undertake self-
insurance in accordance with the provisions of that Code, and agrees to comply
with such provisions before commencing the performance of the Services.
Monterey shall ensure that its contractors and subcontractors also fully comply
with all applicable Labor Code requirements, including but not limited to Section
3700 of the Labor Code.
2.2 Time for Completion. Subject to force majeure delays and/or delays caused by the City,
Monterey shall use its diligent efforts to complete the Drainage Improvements pursuant to the
Plans within 180 days after the mutual execution and delivery of this Agreement.
2.3 Acceptance of Draina�e Improvements and Filin�of Notice of Completion. Acceptance
of the Drainage Improvements on behalf of City shall be made by the City Council upon
recommendation of the Director of Public Works after final completion and inspection of the
Drainage Improvements. The City Council shall act upon the Director of Public Works'
recommendation within thirty (30) days from the later of (a) the date the Director of Public
Works receives final unconditional lien releases from the general contractor installing the
Drainage Improvements and (b) the date the Director of Public Works certifies that the Drainage
Improvements have been finally completed. Following its acceptance of the Drainage
Improvements, which shall be deemed to constitute completion of the Drainage Improvements,
ownership of the Drainage Improvements (excluding the retention basin) shall vest in the City
and Monterey shall file a Notice of Completion with the Office of the County Recorder.
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2.4 Warranty of Work. Monterey shall, and hereby does, guarantee all work in connection
with the construction of the Drainage Improvements for a period of one (1) year from the date of
the filing of the Notice of Completion and shall repair or replace any and all such work, together
with any other work which may be displaced in so doing, that may prove defective in
workmanship and/or materials (but not Design Defects) within a one (1) year period from the
date of the filing of the Notice of Completion without expense whatsoever to the City, ordinary
wear and tear, casuaity, unusual abuse, or neglect (including, without limitation, the City's
failure to properly maintain the Drainage Improvements in accordance with Section 2.5 below)
excepted.
2.5 Maintenance of Drainage Improvements. Except for any maintenance or repairs which
are required to be performed by Monterey pursuant to Section 2.4 of this Agreement, from and
after the City's acceptance of the Drainage Improvements in accordance with Section 2.3 above,
the City shall solely be responsible, at its sole cost and expense, to maintain, repair and/or
replace the Drainage Improvements.
3.0 REIMBURSEMENT BY THE CITY
3.1 Reimbursement by the City.
3.1.1 Total Project Costs Defined. "Total Project Costs" means the actual, out-of-
pocket design, permitting and construction costs incurred by Monterey in
designing and constructing the Drainage Improvennents pursuant to and based
upon the Plans, and any modifications thereto. As of the Effective Date, the
Total Project Costs are estimated to be One Million One Hundred Four Thousand
Six Hundred Forty Six and 51/100 Dollars ($1,104,646.51) (the "Cost Estimate").
Attached hereto as Exhibit "C" is a schedule of the Cost Estimate. The City
acknowledges and agrees that Monterey does not guaranty or warranty that the
Total Project Costs will not exceed the Cost Estimate. Notwithstanding the
foregoing to the contrary, Total Project Costs shall only include costs incurred by
Monterey 170 in excess of the Cost Estimate ("Excess Costs") if such Excess
Costs are approved in writing by the City prior to Monterey 170 incurring such
Excess Costs, which approval shall not be unreasonably withheld, conditioned or
delayed.
3.1.2 Satisfaction of Required Payments. Monterey warrants to the City that Monterey
will fully pay the Total Project Costs to Monterey's contractor, subcontractors and
material suppliers, as such costs are incurred.
3.1.3 City's Reimbursement Obligation. The Parties agree that the fair share of parcels
immediately adjacent to the Drainage Improvements ("Channel Parcels"),
according to the benefit received by the Channel Parcels from the design and
construction of the Drainage Improvements, is one-half(1/2) of the Total Project
Costs ("Channel Parcels Fair Share"). Pursuant to this Agreement, City assumes
the obligation of collecting the Channel Parcels Fair Share from the Channel
Parcels, and reimbursing Monterrey that amount (i.e., one-half(1/2) of the actual
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Total Project Costs). The City's obligation to reimburse Monterrey the Channel
Parcels Fair Share is not contingent on the City's collection of that amount from
the Channel Parcels. This amount shall include the sum for the settlement and
mutual release of claims for the Initial Drainage Improvements as set forth in
Sections 4.1 and 4.2 below. Within sixty (60) days after the City's acceptance of
the Drainage Improvements in accordance with the terms of Section 2.3 above,
the City shall deliver to Monterey the Channel Parcels Fair Share. The City shall
not be obligated to reimburse Monterey for more than the Channel Parcels Fair
Share unless otherwise agreed to in a writing signed by the Parties.
3.1.4 Costs Collected by the City. Any amounts recouped by the City from private
property owners benefited by the Drainage Improvements shall be retained by the
City. The City agrees not to collect any amounts from private property owners of
any parcels benefited by the Drainage Improvements other than the Channel
Parcels.
3.2 Payment Date. The City shall make payment to Monterey, in full, for the amount specific
in Section 3.1.3 above, to the address set forth in Section 3.4 below in accordance with the terms
of Section 3.1.3 above.
3.3 Audit. Monterey shall maintain complete and accurate written records of Total Project
Costs and payments thereof, including invoices, contractor billings and disbursements, and
reasonable supporting information evidencing such costs (collectively, "Project Documents") for
a period of two (2) years following the completion of the Drainage Improvements. The City
shall have the right to inspect, audit and make copies of such Project Documents during business
hours at Monterey's offices at the address set forth in Section 5.13 below upon reasonable
advanced written notice to the Monterey authorized representative. Notwithstanding the
foregoing to the contrary, Monterey shall promptly deliver to the City copies of all Project
Documents upon Monterey's receipt of the same.
3.4 Pa. ment. Payment shall be deemed received only upon actual delivery to:
MONTEREY 170, LLC
501 Spectrum Circle
Oxnard, California 93030
Attn: Daniel Rosenthal
4.0 MUTUAL RELEASE AND SETTLEMENT OF CLAIMS
4.1 Mutual Release.
4.1.1 Releases. Except for the rights and obligations of the parties set forth by this
Agreement, the City and Monterey and their respective predecessors, successors,
assigns, principals, directors, members, managers, officers, agents, employees,
contractors, and representatives, hereby release and forever discharge each other
and all of their individuals, predecessors, successors, assigns, principals, directors,
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members, managers, officers, agents, emp�oyees, contractors, representatives,
attorneys, bonding companies and insurers from any and all liability, demands,
causes of action, or responsibility of any kind for the Sidewalk Work, the Initial
Drainage Improvements and/or claims which relate to the allegations that were
made or could have been made in connection with the Initial Drainage
Improvements, inctuding, without limitation, that the Initial Drainage
Improvements were defectively designed and/or constructed.
4.1.2 Civil Code Section 1542. With respect to the releases described in this Section 4.1
of this Agreement, the Parties expressly waive all rights with respect to the Initial
Drainage Improvements under California Civil Code Section 1542 which
provides that a general release does not extend to unknown or unsuspected claims
which, if known, would have materially affected the settlement. California Civil
Code Section 1542 provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDTTOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
�-l!' ��5�/ Initials
4.2 Discover�of Additional Facts. The Parties acknowledge that they may hereafter
discover facts different from, or in addition to, those which they now believe to be true with
respect to the release of claims related to the Initial Drainage Improvements and agree that this
Agreement shall remain effective in all respects, notwithstanding such different or additional
facts, or the discovery thereof, except as set forth herein.
4.3 Exclusions. The Parties agree that specifically excluded from the City's Release in
Sections 4.1 and 4.2 above are any liabilities, demands, claims and causes of actions which arise
from or relate to the obligations of Monterey under this Agreement. The Parties agree that
specifically excluded from the Monterey's Release in Sections 4.1 and 4.2 above are any
liabilities, demands, claims and causes of actions which arise from or relate to the obligations of
the City under this Agreement.
4.4 No Admission of Liabilitv. The Parties understand and agree that this Agreement is not
to be construed as an admission of liability whatsoever on the part of any of them, and that the
release is made solely for the purpose of avoiding the burden which would be imposed upon
them by any litigation.
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5.0 GENERAL PROVISIONS
5.1 Assi�nment. `I'he Parties shall have the right to assign their rights and obligations
hereunder upon delivery of written notice to the other Parties, including an assignment for
security purposes to the Parties' lender or lenders. Any such assignee, other than an assignee for
security purposes, shall assume the obligations of the Parties hereunder in writing.
5.2 Attornevs' Fees. If any party commences legal proceedings for any relief against the
other part arising out of this Agreement, the losing party shall pay the prevailing party's legal
costs ands expenses, including, but not limited to, reasonable attorneys' fees and costs as
determined by the court. The prevailing party shall be that party receiving substantially the relief
sought in the proceeding, whether brought to final judgment or not.
5.3 Counterparts. 1'his Assignment may be executed in multiple copies, each of which shall
be deemed an original, but all of which shall constitute one Agreement after such party has
signed such a counterpart.
5.4 Entire Agreement. This Agreement, together with all exhibits attached hereto and other
agreements expressly referred to herein, constitutes the entire agreement between the parties with
respect to the subject matter hereof. All prior or contemporaneous agreements, understandings,
representations, warranties and statements, oral or written, are superseded. Additionally, none of
the terms and provisions of the Subdivision Improvement Agreement apply to the design and/or
construction of the Drainage Improvements —it being understood that this Agreement supersedes
and replaces the Subdivision Improvement Agreement in its entirety as it relates to the Drainage
Improvements.
5.5 Exhibits. AII exhibits refened to herein are attached hereto and incorporated herein by
reference.
5.6 Force Majeure. If either party is delayed in performing any act required hereunder by
reason of strikes, lock-outs, labor problems, inability to procure materials, failure of power or
other utilities, restrictive governmental laws or regulations, riots, insurrection, war or other
reason of a like nature (excluding economic conditions or financial inability) outside the
reasonable control of the party so affected, then the time for performance of such act shall be
extended to the extent necessary as a result of such event; however, this section shall not excuse
a party's obligation to pay monetary amounts payable hereunder in the manner and by the time
deadlines specified herein.
5.7 Further Assurances. The parties agree to perform such further acts and to execute and
deliver such additional documents and instruments as may be reasonably required in order to
carry out the provisions of this Agreement and the intentions of the parties.
5.8 Governin�Law. This Agreement shall be governed, interpreted, construed and enforced
in accordance with the laws of the State of Caiifornia.
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5.9 Headin�s. The captions and paragraph headings used in this Agreement are inserted for
convenience of reference only and are not intended to define, limit or affect the construction or
interpretation of any term or provision hereof.
5.10 Modification or Waiver. No modification, waiver, amendment or discharge of this
Agreement shall be valid unless the same is in writing and signed by each party. The waiver by
a party of the performance of any covenant, condition or term of this Agreement, or any deadline
for performance, shall not invalidate this Agreement or constitute a waiver of any other
covenant, condition or term, or a waiver of the deadline for performance of any other or
subsequent act.
5.11 Consultation With Legal Counsel. The Parties represent that they have consulted legal
counsel prior to the execution of this Agreement and have executed this Agreement with full
knowledge of its meaning and effect.
5.12 Execution of Terms of Agreement. The Parties agree to perform any reasonable acts and
execute any reasonable documents consistent with the terms and conditions of this Agreement
which may be needed, desired or required to effectuate the terms, conditions and provisions
hereof.
5.13 Notice. Notice to any party shall be in writing and either personally delivered, overnight
delivery or sent by certified mail, postage prepaid, return receipt requested, addressed to the
party to be notified at the address specified herein. Any such notice shall be deemed received on
the date of personal delivery to the party (or such party's authorized representative) or three (3)
business days after deposit in the U.S. Mail, as the case may be.
City's Address for Notice: Monterey's Address for Notice:
City of Palm Desert MONTEREY 170, LLC
73-510 Fred Waring Drive 501 Spectrum Circle
Palm Desert, CA 92260 Oxnard, California 93030
Attn: Director of Public Works Attn: Daniel Rosenthal
Any party may change its address for notice by delivering written notice to the other parties as
provided herein.
5.14 Successors. All terms of this Agreement shall be binding upon, inure to the benefit of,
and be enforceable by the parties hereto and their respective heirs, legal representatives,
successors, and assigns.
5.15 Authority to Execute. The Parties and signatories hereby each represent, covenant and
warrant that they are authorized (individually or by their respective principals) to enter into and
execute this Agreement and that they have not previously assigned any claims released or
assigned in this Agreement, in whole or in part, or taken any other steps which would adversely
affect the rights which are the subject of this Agreement. Additionally, the City represents and
warrants that it has obtained all consents andlor approvals required to execute this Agreement
and perform its obligations hereunder. In the event that any of the above
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representations/warranties are breached or any of the representations and/or warranties contained
in this subparagraph prove false, the breaching/misrepresenting party hereby agrees to defend,
indemnify and hold the other party harmless from all damages, loss, liability, costs and attorneys'
fees resulting from said breach/misrepresentation.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
CITY OF PALM DESERT MONTEREY 170, I,LC
By: By: � �����
Title: Title: �'�/>•-� �� r�
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Exhibit "A"
Description of Drainage Improvements
That certain unlined drainage channel identified as Lot H of Parcel Map No. 24255, recorded as
Instrument Number 2003-955915 in the Official Records of the County of Riverside
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Exhibit"B"
Drainage Improvements Plans
Drawings by MSA Consulting, Inc.
Number: Title Date
1 of 7 Title Sheet 9/19/06
2 of 7 Storm Channel Lining Plans 9/19/06
3 of 7 Storm Channel Lining Plans 9/19/06
4 of 7 Storm Channel Lining Plans 9/19/06
5 of 7 Storm Channel Lining Plans 9/19/06
6 of 7 Storm Channel Lining Plans 9/19/06
7 of 7 Storm Channel Lining Plans 9/19/06
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Eachibit"C"
Cost Estimate
[See Attached]
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EXHIBIT "C"
PAGE ]
MEMORANDUM
To: Robert Hargreaves, Esq.
From: Tom Noble
RE: Channel Lining, P.M. No. 24255
Date: Apri15, 2007
CC: Dan Rosenthal, Robert Solomon, Esq., R. P. Wages, Inc. (w/o attachments)
The following sets forth a summary of the costs anticipated for the referenced work, Back-up
material for each component is included.
We have included a contingency of 5% of the project's hard costs. Also, the Grading/Earthwork
factor of the R. P. Wages contract dated 3/27/07 includes a $40,000 "allowance" to deal with
potential, but currently unknown, grading problems. A copy of that contract is being sent
herewith for your review. Should there be extra costs beyond fhe contingency and aliowance
amounts, they will be shared equally by Monterey 170, LLC and Palm Desert. Each party
would, of course, have the right to review and approve any such extra cost request.
Amounts Expended as of 3/30/07
1. Plan Check Fee $ 938.00
2. Inspection Fees 9,458.00
3. P.M. 10 Deposit * 10,330.00
4. Soil Sealant 600.00
5. Hydrology, Engineering & Design 69,834.51
$91,160.51
Remaining Costs
1. R.P. Wages Contract $972,783.00
2. Contingency (5% of hard costs) 40,703.00
$1,013,486.00
Anticipated Total Costs 1.104.646.51
*P.M. 10 Deposit will be credited equally to the parties (Monterey 170, LLC and Palm Desert)
when and if refunded.
EXHIBIT "C"
PAGE 2
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1425 Park Ave—Redlanda,CA 92373 March 26, 2007
phone(909)798-3333�fax(sos)3o�-23ss Site Area 132,600 Sq.Ft.
N/A
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09-000 General Conditions 54,600 0.41 - $54,600.00
02-050 PM 10 10,000 0.08 - $10,000.00
02-200 Grading/Earthwo�C 253,000 1 91 ;; �r ;� ' $253,OOO.aO
02-530 On-Site Concrete 544,957 411 ' � ��� �-� '� $544,957.00
02-600 Pipelines-Storm water/Sewer 16,100 012 �t x ;� �� 3°�' $16,100.00
_ 02-821 Conshuction Staking 25,500 019 ,�� � ; :� �; $25,500.00
Sub-Total $904,157 $6.82 $0 $904,157
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Sub-Total $917,719 $6.92 $0 $917,719
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Fee- (6.00% � 55,063 0.42 0 $55,063
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