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HomeMy WebLinkAboutMULLIGAN VS CITY OF HUNTINGTON BEACH REDEVELOPMENT AGENCY - 2003-11-03LL= IY t:F Jim 2CCl f rS n P CITY OF HUNTINGTON BEACH INTERDEPARTMENTAL COMMUNICATION TO: JOAN L. FLYNN, City Clerk FROM: JENNIFER McGRAT1-i, City Attorney DACE: February 22, 2005 SUBJECT: Mulligan v. City of"Huntington Beach Redevelopment Agency Settlement Agreement and Mutual Release I am fonvarding the attached original Settlement Agreement and Mutual Release for the above -referenced case, as authorized by City Council on October 20, 2003. in closed session. This agreement is subject to release to public upon request pursuant to Government Code Section 6254(b). JENNIFER McGRATI-I City Attorney J M P/ab Attachment: Original Executed Settlement Agreement and Mutual Release jmp105mcmo/V1-,nn iC Mulligan 2-22-05 SETTLEMENT AGREEMENT AND MUTUAL RELEASE This settlement agreement and mutual release ("Agreement") is entered into as of December 1, 2003, by and between Loren Johnson, M.D. ("Johnson"), Gary Mulligan ("Mulligan") and Mulligan & Johnson, Inc., dba Pergs, a California corporation ("Pergs"), on the one hand, and the City of Huntington Beach Redevelopment Agency ("Agency") on the other. RECITALS A. Johnson, Mulligan and Pergs filed an inverse condemnation action against the Agency, entitled Guru Mulligan, et al. v. CitY of Huntington Beach Redevelopment Agency, Orange County Superior Court Case No. 750099, on December 16, 1994. On April 16, 2001, Judgment on special verdict was entered in that proceeding. B. On April 27, 2001, the Agency appealed from the Judgment. On June 15, 2001, Johnson, Mulligan and Perqs cross -appealed. The appeal and cross -appeal, consolidated as Fourth District Civil No. G028990, has been fully briefed and the Court of Appeal has set the matter for oral argument, to be heard on November 17, 2003. C. It is the intention and desire of the Parties to this Agreement to settle, compromise and resolve all the differences, disagreements and disputes which exist or may exist between them, relating to the disputes which are the subject matter of the inverse condemnation proceeding, the appeal and cross -appeal. i • AGREEMENT NOW THEREFORE, in consideration of the mutual promises, covenants and conditions contained in this Agreement and the valuable consideration to be paid hereunder, the sufficiency of which is acknowledged, the Parties agree as follows: 1. Recitals. The above Recitals A through C are incorporated herein as a material part of this Agreement. 2. Payment of Settlement Funds. On or after November 22, 2003, the Agency shall deliver to the attorneys of record for Johnson, Mulligan and Perqs a cashier's check in the amount of One Million Five Hundred Thousand Dollars and No Cents ($1,500,000.00) made payable to Palmieri, Tyler, Wiener, Wilhelm & Waldron LLP Client Trust. The payment shall be delivered to: Palmieri, Tyler, Wiener, Wilhelm & Waldron LLP 2603 Main Street, Suite 1300 Irvine, CA 92614-6228 Attn: Michael H. Leifer, Esq. 3. Vacation of Judgment and Dismissal of the Appeal and Cross -Appeal. The Parties, concurrently with signing this Agreement, will execute the stipulation for reversal of the Judgment in the inverse condemnation proceeding, Orange County Superior Court Case No. 740099, under Code of Civil Procedure section 128, subdivision (a)(8), a copy of which is attached hereto as Exhibit A. 4. Mutual Release. Except for the rights and obligations arising from this Agreement. Gary Mulligan, Loren Johnson, M.D. and Mulligan & Johnson. Inc. on the one hand, and the City of Huntington Beach Redevelopment Agency on the other hand. do hereby • C. 1 mutually release and discharge the other (including their officers, directors, servants, employees, agents, representatives, descendants, heirs, executors, administrators, assigns, and attorneys) of and from any and all clairns, causes of action, or demands, of whatever nature, anticipated or unanticipated, known or unknown, which exist or may exist on or before the date of execution of this Agreement by the parties hereto, which are contained in, may arise out of or be in any way connected with or related to that certain inverse condemnation action filed in the Orange County Superior Court, bearing Docket No. 740099 in the files of said court, and entitled, Gary Mulligan, et al. vs. City of Huntington Beach Redevelopment Agency. 5. Waiver of Unknown Claims. It is understood and agreed that the Parties' release set forth the above extends to all claims of every kind, nature and description whatsoever, known or unknown, and any and all rights under provisions of the Civil Code section 1542 are hereby waived. The Parties expressly acknowledge that they are familiar with and expressly waive and relinquish every right or benefit they have or may have under Civil Code section 1542 which reads as follows: "A general release does not extend to claims which the creditor 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." 6. Entire Agreement. This Agreement contains the sole, complete and entire agreement and understanding of the Parries concerning the matters contained in this Agreement and may not be altered, modified or changed in any manner except by a writing signed by the Parties and acknowledging it as an alteration. modification, or change of this Agreement. None -3- • i of the Parties is relying on any representation other than those expressly set forth in this Agreement. All prior discussions and negotiations have been and are merged and integrated into, and superseded by, this Agreement. Warranties. The Parties, and each of them, warrant: (1) that no other person or entity had or has or claims any interest in any of the claims, demands, causes of action, obligations, damages, or liabilities covered in this Agreement; (n) that they, and each of them, have the sole right and exclusive authority to execute this Agreement.. and (Ili) that they have not i sold, assigned, transferred, conveyed or otherwise disposed of any claim, demand, causc�of I action, obligation, damage or liability covered in this Agreement. 8. Successors and Assigns. The terms and provisions of this Agreement shall inure to the benefit of and be binding, upon the respective successors and assigns of the Parties, and each of them. 9. Counsel. In executing this Ag*rcement, each of the Parties acknowledges that they have consulted with and have had the advice and counsel of attorneys duly licensed to practice law in all the courts of the State of California. 10. Further Assurances. Each of the Parties shall promptly execute, as appropriate, and deliver to the other party any and all additional papers, documents and other assurances, and shall promptly do any and all acts and things reasonably necessary in connection with the performance of their obligations and agreements as expressed in this Agreement. 11. headings. The headings of this Agreement are for reference purposes only and shall not limit or define the meaning of the provisions of this Agreement. -4- 12. Interpretation. This Agreement is made and entered into in the State of California and shall in all respects be interpreted, enforced and governed under the laws of the State of California. Each party has cooperated in the drafting and preparation of this Agreement; hence, this Agreement shall not be construed against any particular party. 13. Notices. Any notification or communication between the Parties relating to this Agreement shall be made to the respective party's attorneys of record, as follows: If to Johnson, Mulligan or Perqs: Michael H. Leifer, Esq. Palmien, Tyler, Wiener, Wilhelm & Waldron LLP 2603 Main Street, Suite 1300 Irvine, CA 92614-6228 (949) 851-7294 If to the Agency: Jennifer McGrath, Agency Counsel City of Huntington Beach Redevelopment Agency 2000 Main Street Box 3 Iuntington Beach, CA 92648 (714)536-5555 14. No Admission. Nothing contained in this Agreement shall be construed as an admission of liability by any party. F.ach party acknowledges that the other party denies any liability. 15. Attorney's Fees In any action arising. out of this Agreement, the prevailing party shall be entitled to recover from the unsuccessful party all of its costs, expenses, and reasonable attorney's fees incurred (including costs, expenses and attorney's fees in any appeals). -5- 16. Costs. The Parties agree that they will each bear their own costs and attorney's fens in connection with the Agreement - IN WITNESS WHEREOF, the Parties have executed this Agreement so that it may be effective as of the date first written above. Loren J3. Johnson. M.D. A - Gary Mulligan Mulligan & Johnson, Inc., dba Perqs, a California Corporation I0 Gary Mulligan Its: President Gary Mulligan Its: Secretary Redevelopment Agency of the City of Huntington Beach Executive Director Agency Counsel 10 1.1 ?E-2003 C9-Ham .:rm-FALUIFP' 'YLE.R.'wIEMEA-W:',-E:414AL0RON A9 794 01 1' T-34_ P OOTAOE :-135 lb. ; Usts. The Pasaies agree that they will each be their 0,vn cOs:5 and attorrey's fens to :.onnecticn with the Agreement - IN NN'ITN. FSS WHEREOF, the uartics have cxeeLted this Agreemeril so that it may be effective as of the date firs: wriven above. I_o:er. D. Johnson. KD. -- G >- 'Mulligan Vc]ligan & J0 Or a California Corporaue,r B: Crary. Iulli ?�Y� It,: President M raft Mui:. Its: Secreta!' t Redeveloptreir. Agency of -he City 0f Huntington lr t=h B y. F..xer.Mve Director A ;ency Counsel -h- n u 16. Costs. The Parties agree that they will each bear their own costs and attorney's fess in connection with the Agreement. 1N WITNESS WHEREOF, the Parties have executed this Agreement so that it may be effective as of the date first written above. Loren D. Johnson, M.D. Gary Mulligan Mulligan & Johnson, Inc., dba Perqs, a California Corporation wo Gary Mulligan Its: President Gary Mulligan Its: Secretary Redevelopment Agency of the City of Huntington Beach By:�� ExecutKe Director By: 1 fAgenev _ unsel -6- DEC-01-2003 15:29 CITY OF HUNTINGTON BEACH 714 374 1590 P.OB APPROVED AS TO FORM: For Gary Mulligan, Loren Johnson and Mulligan & Johnson, Inc., dba Pcrqs: PALNIlEIU. TYLER, WIENER, WMHELM & WALDRON LLP By: ( U 41"- Michael H. Leifer For the Rcdevclopmrnt Agency of the City of Huntington Beach WCHARDS, WATSON & GERSHON A Professional Corporation By �z' Mitchell E. Abbott, Agency Counsel &2 TOTAL P.OB Received Dec-01-03 03.23Pm From-714 374 1590 To-PALNIERITYLER Page 00 APPROVED AS TO FORM: For Gary Mulligan, Loren Johnson and Mulligan & Johnson. Inc., dba Perqs: PAI..MIERI. TYLER, WIENER. WILHELM & WALDRON LLP Michael I -I. Leifer For the Redevelopment Agency of the City of Huntington Beach RICHARDS, WATSON.& GERSHON A Professional Corporation By Mitchell E. Abbott, Agency Counsel -7- Council/Agency Meeting Held // - 3 -AO03 Deferred/Continued to= 500�&C)2� 'Approved ❑ Conditionally Approved ❑ Denied LvOa 7-/ City er 's ignatur Council Meeting Date: November 3, 2003 Department ID Number- ED 2003-30 CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCY MEMBERS SUBMITTED BY: RAY SILVER, Executive Director Re .� c a r_ PREPARED BY: DAVID C. BIGGS, Deputy Executive Director CDJENNIFER MCGRATH, Agency General Counse N.) J -7)CD� SUBJECT: Appropriate Funds for Settlement to Mulligan Litigation -p n�z� Statement of issue, Funding Source, Recommended Action, Alternative Action(s). Analysis, Environmental Status, tachrWt(s) Statement of Issue: The case of Mulligan v_ Redevelopment Agency (Orange County Superior Court Case No. 740099) resulted in an adverse judgment against the Redevelopment Agency_ The case was appealed by the City and is currently pending before the Court of Appeals. Settlement discussions are on -going and an appropriation of funds may be needed if the case does settle_ Funding Source: Redevelopment Agency Fund Balance Recommended Action: Appropriate $1,500,000 from Redevelopment Agency Fund Balance. Alternative Action(s): Do not appropriate funds which would preclude a settlement and await a decision from the Court of Appeals. Analysis: The Mulligan v_ Redevelopment Agency case initially arose out of a property damage claim. Ultimately, the Redevelopment Agency lost this case at the trial court level with an award to the Plaintiffs of $2,162,651. The Redevelopment Agency also has additional exposure of the Plaintiffs' attorney fees and costs, plus interest accrual since the date of judgment, which brings the current estimated total amount of the judgment to approximately $2 8 million_ The Redevelopment Agency appealed the case to the Court of Appeals where it is currently pending Concurrently with the pending appeal, the Redevelopment Agency Board has been providing direction on court -ordered appellate settlement discussions_ It is requested that the Redevelopment Agency Board appropriate $1.5 million in the event a settlement can be reached in order to effectuate a timely conclusion of the matter_ REQUES%OR REDEVELOPMENT AGENCY ACTION MEETING DATE: November 3, 2003 DEPARTMENT ID NUMBERED 2003-30 Any ultimate settlement terms will require specific approval of the Redevelopment Agency Board in closed session with an announcement of closed session action when appropriate, if any_ Environmental Status: NIA Attachment(s): RCA Author: D. Biggs, ext. 5909 GIDavid1RCASWulligan appropriation doc -2- 10127/2003 4:11 PM Fiscal Impact Statement ATTACHMENT #1 • • CITY OF HUNTINGTON BEACH INTERDEPARTMENTAL COMMUNICA TION To: Ray Silver, City Administrator From: Clay Martin, Director Of Administrative Services Subject: FIS 2004-06 Appropriate Funds for Settlement of Mulligan, et al, Litigation Date: October 27, 2003 As required by Resolution 4832, this Fiscal Impact Statement has been prepared for "Appropriate Funds for Settlement of Mulligan, et al, Litigation." If the City Council approves this request (total year appropriation $1,200,000), the estimated unappropriated, undesignated fund balance of the Redevelopment Agency's Capital Project Fund at September 30 _2004 will be reduced to $1,220,338. Clay Martin Directorzf Administrative Services 0 0 RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: Appropriate Funds for Settlement of Mulligan, et al, Litigation COUNCIL MEETING DATE: November 3, 2003 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Not Applicable Resolution (wlexhibits & legislative draft if applicable) Not Applicable Tract Map, Location Map and/or other Exhibits Not Applicable Contract/Agreement (w/exhibits if applicable) (Si ned in full by the City Attome) Not Applicable Subleases, Third Party Agreements, etc (Approved as to form by Cq Attome) Not Applicable Certificates of Insurance (Approved by the City Attome) Not Applicable Financial Impact Statement (Unbud et, over $5,000) Attached Bonds (If applicable) Not Applicable Staff Report (If applicable) Not Applicable Commission, Board or Committee Report (If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FORWARDED Administrative Staff ) ) Assistant City Administrator Initial ) City Administrator Initial ) 0?/v ) [City Clerk ( ) 6- EXPLANATION FOR RETURN OF ITEM: REQUEST FOR LATE SUBMITTAL {To accompany RCA's submitted after Deadline Department: Economic Dev Council Meeting Date: 1113/03 Subject appropriate Funds for Settlement of Mulligan Litigation i Date of This Request: October 27, 2003 i REASON (Why is this RCA being submitted late?): We only recently learned that Plaintiff has accepted the Agency recent settlement offer with a short time line associated with the settlement acceptance. EXPLANATION (Why is this RCA necessary to this agenda?): The Agency Board will be Asked to approve the final settlement in closed session on November V as well. Payment Is due the week of November 20'". CONSEQUENCES How shall delay of this RCA adversely impact the City?): Inability to Comply with the settlement terms exposes the Redevelopment Agency to $1.3 million Of increased cost. Signature: zdw a , Depa ment Head approved 0 Denied �A� Ray Silver City Administrator Document4 07114194 FIB CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION 4 a i TO: HONORABLE MAYOR AND o z MEMBERS OF THE CITY COUNCIL N o ` •, W Z-<r. FROM: JENNIFER McGRATH, Agency Counsel co _r A c DATE: October 20, 2003 c.,., c7 Cr n SUBJECT: Report of Action Taken Pursuant to Government Code Section 54957.1 October 20, 2003, City Council/Agency Closed Session On Monday, October 20, 2003, the City Council convened in closed session to discuss the matter of Mulligan v. Redevelopment Agency, Orange County Superior Court Case No. 740099: Court of Appeal No. G028980. The Agency voted to authorize the Chairperson to sign and the Agency Secretary to attest to the Agreement settling all claims by Abdelmuti for $112,000_ The Agency previously authorized the Agency Counsel to settle this dispute for up to $115,000 on July 1, 2002. The Council voted as follows- 6 Ayes: 1 Noes, 0 Abstentions. Ayes: Boardman, Coerper, Cook, Green, Hardy, and Houchen_ No: Dave Sullivan. JENNIFER McGRATH City Attomey cc* Ray Silver, Executive Director Connie Brockway, Agency Clerk Closcd/Rcport/Blank CONDITIONAL SETTLEMENT AGREEMENT I. RECITALS 1. The parties to this Conditional Settlement Agreement are the Redevelopment Agency of the City of Huntington Beach ("Agency") and Abdelmuti Development Company ("Abdelmuti"). 2. On December 16, 1994, Gary Mulligan, Loren Johnson, M.D., and Mulligan & Johnson, Incorporated, dba Perqs, (collectively, "Mulligan") filed a lawsuit in inverse condemnation against Agency (Orange County Superior Court Docket No. 740099)(the "Mulligan Litigation"), alleging, inter aliu, that the redevelopment of Abdelmuti's property (adjacent to Mulligan's property) resulted in damage to the Mulligan property which caused or contributed to the inverse condemnation of Mulligan's property. 3. On August 16, 1996, Agency filed a cross -complaint for indemnity against Abdelmuti in the Mulligan Litigation. Thereafter, on September 1, 2000, Agency filed its first amended cross -complaint (the operative cross - complaint) against Abdelmuti, alleging causes of action for express indemnity, breach of contract, implied contractual indemnity, implied indemnity, contribution, and declaratory relief. On September 22, 1999, Abdelmuti tiled its answer to the first amended cross -complaint, denying all the material allegations. 4. A legal issues trial began on December 13, 1999, and resulted in a Statement of Decision, filed March 1, 2000, which determined that Abdelmuti had no liability to Agency on the indemnity agreement with respect to any damages claimed by Mulligan, including but not limited to inverse condemnation. Among other things, the trial court in its statement of decision found that: "The evidence was that the damage to the plaintiffs wall was caused by Abdelmuti's contractor. The damage may have been unavoidable, or it may have been the result .- . negligence. In any event, the damage was not repaired 123 54100021708E 77. G by Abdelmuti. A full trial of the issues of causation and duty to repair might result in a finding of liability against Abdelmuti. It does not appear that the damaging of plaintiffs' wall was a necessary element of a public project. On the facts presented at trial, the court finds the agency has no liability for any incidental damage to plaintiffs' wall. The court is not making any determination of the issue of liability or damage as between plaintiffs and Abdelmuti. In view of the foregoing findings the court determines that Abdelmuti has no liability to the Agency on the indemnity agreement with respect to any damages claimed by plaintiffs, including but not limited to inverse condemnation claims." 5. Judgment was thereafter entc-.red on March 21, 2001, in favor of Abdelmuti and against Agency on all causes of action and decreeing that the Agency take nothing by way of its first amended cross -complaint. Notice of Entry of Judgment was served on April 20, 2001. 6. The case proceeded to trial by jury on the issue of damages. A Judgment on Special Verdict was entered on April 16, 2001, awarding damages in favor of Mulligan and against Agency. Notice of Entry of Judgment was served on April 19, 2001. 7. On April 27, 2001, Agency filed a notice of appeal from the Judgment on Special Verdict entered on April 16, 2001. Thereafter, on June 15, 2001, Mulligan filed a notice of cross -appeal from the judgment. 8. Thereafter, Agency and Abdelmuti each filed post -trial motions for an award of attorney's fees and costs. The trial court ordered Agency to pay Abdelmuti $210,364 (consisting of $153,682 in attorney's fees, 47,171 in expert witness fees, and $9,511 in costs). The trial court also ordered Abdelmuti to pay Agency $61,920 (consisting of $58,000 in attorney's fees and $3,920 in costs). 235410002V08677.6 2 9. On December 31, 200 1, Agency filed a notice of .appeal from the post -judgment order awarding attorney's fees and costs. On January 25, 2002, Abdelmuti filed a notice of cross -appeal from the order awarding attorney's fees and costs. 10. Because of the uncertainty and costs associated with the appeal and cross -appeal, it is now the mutual desire of Agency and Abdelmuti to compromise and conditionally settle the disputes between them and to resolve the pending appeal and cross -appeal without any concession or admission by either party that the contentions of the other party are correct. 11. There may be other unrelated pending matters between Agency and Abdelmuti. Further, Agency and Abdelmuti are parties to a certain Owner Participation Agreement ("OPA") dated May 13, 1991. Nothing in this Settlement Agreement is intended to affect the rights and/or responsibilities of either Agency or Abdelmuti in the unrelated pending matters, if any, or the OPA. H. CONDITIONAL SETTLEMENT AND RELEASE Now, therefore, in view of the recitals and in consideration of the conditional settlement contained herein, the parties and each of them agree and covenant as follows: 1. Concurrently upon execution of this conditional settlement agreement, Agency and Abdelmuti shall execute and deliver to counsel for Agency a stipulation for abandonment of the pending appeal and cross -appeal, in the form attached hereto as Exhibit A. Each party agrees to bear its own fees and costs to the date of this agreement, except as provided in the following paragraph. 2. Concurrently upon execution of this conditional settlement agreement, Agency shall deliver to counsel for Abdelmuti a check payable to Nationwide Indemnity Company in the amount of $1 12,000. 12354100021708677_0 3 3. Concurrently upon receipt of the check referred to in the preceding paragraph, Abdelmuti shall execute and deliver to counsel for Agency an Acknowledgment of Satisfaction of Judgment, in the form attached hereto as Exhibit B. 4. Upon the happening of each and all of the acts specified in paragraphs 1 through 3, inclusive, and excepting only the covenants and obligations herein set forth, as to this case, and only this case, Agency and Abdelmuti do hereby forever and fully release, acquit, and discharge each other and their respective officers, directors, stockholders, partners, employees, agents, representatives, successors, heirs, assigns, affiliates, and attorneys, and each of them, of and from the claims, demands, liabilities, losses, costs, damages, expenses, debts, accounts, controversies, agreements, claims for indemnity and causes of action whatsoever, arising from or in any way related to the Mulligan litigation and appeals described herein, or any matter, fact, or transaction whatsoever occurring prior to the date of this agreement, PROVIDED, HOWEVER, that in the event the cross -appeal filed by Gary Mulligan, et al., results in a reversal of the judgment on the issue of the Agency's liability for damage to plaintiffs' wall (as set forth in paragraph I(4), supra), Agency intends to file or re -file a claim or cross -complaint against Abdelmuti for indemnity. The purpose of this provision is to allow for the settlement of claims as set forth in this agreement while preserving such rights as Agency may presently have in the event the Mulligan cross -appeal is successful. Abdelmuti is not assenting to any right of Agency to fi!-. or refile any action against Abdelmuti for indemnity or any other causes of action. Abdelmuti asserts and will continue to assert that Agency is not entitled to file any future indemnity action against Abdelmuti, at any time, because the right to indemnity has been finally adjudicated and no appeal was taken therefrom. Thus, Abdelmuti's defenses on the grounds of res judicata, collateral estoppel and/or waiver, or some such similar defense theories, are not waived or compromised by entering into this settlement agreement. Agency disputes Abdelmuti's position with respect to such defenses. REPRESENTATIONS AND WARRANTIES In making and executing this conditional settlement agreement, it is the express understanding of each of the parties hereto, and each of them does 12334100021708677.6 4 hereby represent, warrant, and agree as follows: 1. Each of the parties hereto does hereby agree that this conditional settlement agreement shall apply to all unknown or unanticipated results of the matters, claims, and controversies specified in the Mulligan Litigation, as well as those known and anticipated, and upon the advise of legal counsel, each of the parties hereto does hereby waive any and all rights under California Civil Code Section 1542, which section has been explained, and which provides as follows: "A general release does not extend to claims which the creditor 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." 2. This conditional settlement agreement is the result of a compromise of doubtful and disputed claims between the parties and shall not at any time or for any purpose be considered as an admission of liability or responsibility on the part of any party, or as an admission or concession to the truth of any claim, allegation or statement of fact which is the subject of the maters, claims, and controversies specified herein. 3. The advice of legal counsel has been obtained by each of the parties prior to the execution of this conditional settlement agreement. Each of the parties hereby executes this conditional settlement agreement voluntarily and with full knowledge of its significance, and with the express intention of effecting the extinguishment of any an all obligations, liabilities, or claims arising out of the matters, claims, and controversies specified herein, subject to the rights reserved in paragraph II(4), supra. 4. Each of the parties has made such investigation of :he facts and the law pertaining to the matters described herein and to this conditional settlement agreement as it deems necessary and neither party has relied nor does rely on any promise or representation by the other party with respect to any such matters. 1235 M00021708677.6 5 5. In making and executing this conditional settlement agreement, the parties hereto, and each of them, do not rely and have not relied upon any statement or representation, oral or written, made by any of the other parties to this release with regard to any of the facts involved in any dispute or possible dispute between or among any of the parties hereto, or with regard to the advisability of making and executing this release. 6. Each of the parties hereto represents and warrants that no portion of any claim, right, demand, action, or cause of action which it has or might have arising out of the matters, claims, and controversies specified herein, nor any portion of any recovery or settlement to which each party might be entitled has been assigned or transferred to any other person, firm, or corporation not a party to this release, in any manner, including by way of subrogation or operation of law or otherwise. 7. Each of the parties hereto has read and understands the contents of this conditional settlement agreement. 8. This conditional settlement agreement shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors, and assigns of the respective parties hereto and to any parent, subsidiary, or affiliated entity of each of such parties. 9. Each of the parties to this agreement, and their respective attorneys, hereby represent, warrant, and agree, each to the other, that they have full power and authority to execute this limited mutual release and settlement agreement, to file the stipulation for abandonment of appeal and cross -appeal, to file the acknowledgment of satisfaction of judgment, and to do any and all things reasonably required to effectuate the terms of this conditional settlement agreement. 10. Any controversy or claim arising out of or relating to this conditional settlement agreement, or any breach thereof, shall be settled by binding arbitration in accordance with the California Aroitration Act, Code of Civil Procedure Section 1280, et seq., and judgment upon the award rendered by the arbitrator may be entered in any Court having jurisdiction thereof. The obligation to arbitrate shall extend to all past, present, and future employees, officers, 12354W021708677.6 6 directors, managers, or agents of either of the parties to this conditional settlement agreement. The arbitrator shall be a member of the State Bar of California and shall be a retired Judge of the Superior Court or a retired Justice of the Court of Appeal or of the Supreme Court of the State of California, selected by agreement of the parties. If the parties cannot agree on an arbitrator, the court may appoint a qualified arbitrator, pursuant to the provisions of Code of Civil Procedure Section 1281.6, et seq. The prevailing party in any such arbitration shall be entitled to recover from the other party its attorney's fees and costs incurred in : onnection therewith. WHEREFORE, the parties hereto have executed this conditional settlement agreement on the dates set forth opposite their respective signatures. Dated: dGf 5 oa , 2003 REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH v By ?am4a0t..0 Chair of the Governing iiody ATTEST: [SEAL] By _ Zoo'L;, 4g& ao= �°ey� Gove ing Body Dated: ✓ I , 2003 ABDELMUTI DEVELOPMENT COMPANY By (Ql,.-..4 � AiRdn�= /ts/Athoiized Agent M Its Authorized Agent 12354\0002\708677.6 7 • E APPROVED AS TO FORM AND CONTENT: RICHARDS, WATSON & GERSHON A Professional Corporation MITCHELL E. ABBOTT PATRICK K. BOBKO SONALI S. JANDIAL r-- By Mitchell E. Abbott Attorneys for Redevelopment Agency of the City of Huntington Beach BALESTRERI, PENDLETON & POTOCKI MARY B. PENDLETON By a B. Pendleton Attorne r Abdelmuti Development Company 235410002V08677.6 8 CITY OF HUNTINGTON BEACH '> INTERDEPARTMENTAL COMMUNICATION TO: Scott Fields, Assistant City Attorney FROM: Connie Brockway, City Clerk RE: Attached DATE: February 12, 2003 memoV2003cbmertVdxeadsteylDASt 3-doc Brockway, Connie 2 ` To: Field, Scott Scott could you advise me of the status of the Mulligan Settlement agreement that was reported out of closed session on 10116/02. There was a typo and you wanted to update it. Will it becoming to me soon_ Connie I �cat)rN 1 btu 1 •iSG��tr,P�re� •0 f P CITY OF HUNTINGTON BEACH 1j , Z2 Inter -Department Communication TO: Chairperson and Members of Redevelopment Agency Agency Clerk FROM: Gail Hutton, Agency Counsel DATE: October 16, 2002 SUBJECT: Reporting Out Pursuant to Government Code § 54957.1 of Partial Settlement in the Case Entitled Mulligan v. Redevelopment Agency of the City of Huntington Beach, Court of Appeal Case No. G028980 By a 7-0 vote, the Agency authorized the Agency Counsel in closed session on July 1, • 2002, to negotiate a partial settlement of the Agency's appeal in Mulligan v. Redevelopment Agency of the City of Huntington Beach, Court of Appeal Case No. G028980. The settlement resolves the cross -appeals of the Agency and Abdelmuti, and provides that the Agency is to pay Abdelmuti $112,000. The cross -appeals arose out of the Agency's claim that it was entitled to indemnification from Abdelmuti for Mulligan's inverse condemnation claim against the Agency. Pursuant to the authority established in closed session, the Agency Chairperson is to sign and the Agency Clerk is to attest the attached agreement. � c GAIL HUTTON City Attomey v c Attachment Cc: Ray Silver, City Administrator ti William Workman, Assistant City Administrator Connie Brockway, City Clerk * &COW GAFIELM2002 htemos�Jkfulligan doc OCT-17-2002 t-5:4a =nc* TO 1? #4159a COT)[DIIJONAL SETTLEMENT AGREEIMEN L RECITALS 1. The parties to this Conditional Settlement Agreement are the Redevelopment Agency of the City of Huntington Beach ("Agency") and Abdelmuti Development Company ("Abdelmuti"). P.C5i2? • 2. On December 16, 1994, Gary Mulligan, Loren Johnson, M.D., and Mulligan & Johnson, Incorporated, dba Perqs, (collectively, "Mulligan") filed a lawsuit in inverse condemnation against Agency (Orange County Superior Court Docket No. 740099), alleging, inter alia, that the redevelopment of Abdelmuti's property (adjacent to Mulligan's property) resulted in damage to the Mulligan property which caused or contributed to the inverse condemnation of Mulligan's property. 3. On August 16, 1996, Agency filed a cross -complaint for indemnity against Abdelmuti. Thereafter, on September 1, 2000, Agency filed its first amended cross -complaint (the operative cross -complaint) against Abdelmuti, alleging causes of action for express indemnity, breach of contract, implied contractual indemnity, implied indemnity, contribution, and declaratory relief. On September 22, 1999, Abdelmuti filed its answer to the first amended cross - complaint, denying all the material allegations, 4. A legal issues trial began on December 13, 1999, and resulted in a Statement of Decision, filed March 1, 2000, which determined that Abdelmuti had no liability to Agency on the indemnity agreement with respect to any damages claimed by Mulligan, including but not limited to inverse condemnation, Among other things, the trial court in its statement of decision found that: "The evidence was that the damage to the plaintiffs Kull was caused by Abdelmuti's contractor. The damage may have been unavoidable, or it may have been the result of negligence. In any event, the damage was not repaired 12354100021708677.3 L DRAFT 10/17/02 14:18 • 0 94% n o=z OCT-17-2ee2 15=41 FRW TO 17143741550 P.n,j by Abdelmuti. A full trial of the issues of causation and duty to repair might result in a finding of liability against Abdelmuti. It does not: appear that the damaging of plaintiffs' wall was a necessary element of a public project. On the facts presented at trial, the court finds the agency has no liability for any incidental damage to plaintiffs' wall. The court is not malting any determination of the issue of liability or damage as between plaintiffs and Abdelmuti. In view of the foregoing findings the court determines that Abdelmuti has no liability to the Agency on the indemnity agreement with respect to any damages claimed by plaintiffs, including but not limited to inverse condemnation claims." 5. Judgment was thereafter entered on March 21, 2001, in favor of Abdelmuti and against Agency on all causes of action and decreeing that the Agency take nothing by way of its first amended cross -complaint. Notice of Entry of Judgment was served on April 20, 2001. 6. The case proceeded to trial by jury on the issue of damages. A Judgment on Special Verdict was entered on April 16, 2001, awarding damages in favor of Mulligan and against Agency. Notice of Entry of Judgment was served on April 19, 2001. 7. On April 27, 2001, Agency filed a notice of appeal from the Judgment on Special Verdict entered on April 26, 2001. Thereafter, on June I5, 2001, Mulligan filed a notice of cross -appeal from the judgment. 8. Thereafter, Agency and Abdelmuti each filed post -trial motions for an award of attorney's fees and costs. The trial court ordered Agency to pay Abdelmuti S210,364 (consisting of $153,692 in attorney's fees, 47,171 in expert witness fees, and $9,511 in costs). The trial court also ordered Abdelmuti to pay Agency $61,920 (consisting of S58,000 in attorney's fees and $3,920 in costs). 9. On December 31, 2001, Agency filed a notice of appeal from the post judgment order awarding attorney's fees and costs. On January 25, 2002, 123 54100021705677.3 2 DRAF 7 10/17102141S 94% P_Ok OCT-17-2ee2 15:41 FP.00 TO 17G_5!:-Z P.07i27 ' s Abdelmuti filed a notice of cross -appeal from the order awarding attorney's fees . and costs. 10. Because of the uncertainty and costs associated with the appeal and cross -appeal, it is now the mutual desire of Agency and Abdelmuti to compromise and conditionally settle the disputes between them and to resolve the pending appeal and cross -appeal without any concession or admission by either party that the contentions of the other party are correct. IT. CONDITIONAL SETTLEMENT AND RELEASE Now, therefore, in view of the recitals and in consideration of the conditional settlement contained herein, the parties and each of them agree and covenant as follows: 1. Concurrently upon execution of this conditional settlement agreement, Agency and Abdelmuti shall execute and deliver to counsel for.Agency a stipulation for abandonment of the pending appeal and cross -appeal, in the form attached hereto as Exhibit A. Each party agrees to bear its own fees and costs to the date of this agreement, except as provided in the following paragraph. 2. Concurrently upon execution of this conditional settlement agreement, Agency shall deliver to counsel for Abdelmuti a check payable to Abdelmuti Development Company in the amount of $112,000. 3. Concurrently upon receipt of the check referred to in the preceding paragraph, Abdelmuti shall execute and deliver to counsel for Agency an Acknowledgment of Satisfaction of Judgment, in the form attached hereto as Exhibit B. 4. Upon the happening of each and all of the acts specified in paragraphs I through 3, inclusive, and excepting only the covenants and obligations herein set forth, Agency and Abdelmuti do hereby forever and fully release, acquit, and discharge each other and their respective officers, directors, stockholders, partners, employees, agents, representatives, successors, heirs, assigns, affiliates, is 1235A00021708677.3 3 DRAFT 10/17/02 14:18 ' DCT-1-7-2202 15:41 F=�'7 � T(I ? �? G j7G r=, �'��2 � and attorneys, and each of there, of and from any and all claims, demands, liabilities, losses, costs, damages, expenses, debts, accounts, controversies, agreements, claims for indemnity and causes of action whatsoever, of whatever kind or nature, known or unknown, or which may later develop or be discovered, including the effects or consequences thereof and all causes of action therefor, arising from or in any way related to the litigation and appeals described herein, or any matter, fact, or transaction whatsoever occurring prior to the date of this agreement, PROVIDED, HOWEVER, that in the event the cross -appeal filed by Gary Mulligan, et a/., results in a reversal of the judgment on the issue of the Agency's liability for damage to plaintiffs' wall (as set forth in paragraph 1(4), supra), Agency intends to file or re -file a claim or cross -complaint against Abdelmuti for indemnity. The purpose of this provision is to allow for the settlement of claims as set forth in this agreement while preserving such rights as Agency may presently have in the event the Mulligan cross -appeal is successful. Abdelmuti is not assenting any right of Agency to file or ref le any action against Abdelmuti for indemnity or any other causes of action. Abdelmuti asserts and will continue to assert that Agency is not entitled to file any future indemnity action against Abdelmuti, at any time, because the right to indemnity has been finally adjudicated and no appeal was taken therefrom. -Thus, Abdelmuti's defenses on the grounds of res judicata, collateral estoppel and/or waiver, or some such similar defense theories, are not waived or compromised by entering into this settlement agreement. Agency disputes Abdelmuti's position with respect to such defenses. REPRESENTATIONS AND WARRANTIES In making and executing this conditional settlement agreement, it is the express understanding of each of the parties hereto, and each of them does hereby represent, warrant, and agree as follows: l . Each of the parties hereto does hereby agree that this conditional settlement agreement shall apply to all unknown or unanticipated results of the matters, claims, and controversies specified herein, as well as those known and anticipated, and upon the advise of legal counsel, each of the parties hereto does hereby waive any and all rights under California Civil Code Section . 1542, which section has been explained, and which provides as follows- 1235C00021708677.3 DRAFT 10/17M 14:18 OCr-17--2222 15:42 FROJO TO _'?04-1 SSO 45;i27 "A general release does not extend to claims which the • creditor 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." 2. This conditional settlement agreement is the result of a compromise of doubtful and disputed claims between the parties and shall not at any time or for any purpose be considered as an admission of liability or responsibility on the part of any party, or as an admission or concession to the truth of any claim, allegation or statement of fact which is the subject of the maters, claims, and controversies specified herein. 3. The advice of legal counsel has been obtained by each of the parties prior to the execution of this conditional settlement agreement. Each of the parties hereby executes this conditional settlement agreement voluntarily and with full knowledge of its significance, and with the express intention of effecting the extinguishment of any an all obligations, liabilities, or claims arising out of the matters, claims, and controversies specified herein, subject to the rights reserved in . paragraph 11(4), supra. 4. Each of the parties has made such investigation of the facts and the law pertaining to the matters described herein and to this conditional settlement agreement as it deems necessary and neither party has relied nor does rely on any promise or representation by the other party with respect to any such matters. 5. In making and executing this conditional settlement agreement, the parties hereto, and each of them, do not rely and have not relied upon any statement or representation, oral or written, made by any of the other parties to this release with regard to any of the facts involved in any dispute or possible dispute between or among any of the parties hereto, or with regard to the advisability of making and executing this release. 6. Each of the parties hereto represents and warrants that no portion of any claim, right, demand, action, or cause of action which it has or might have arising out of the matters, claims, and controversies specified herein, nor any portion of any recovery or settlement to which each party might be entitled has 12354100M70S677.3 5 DRAFT 10!17/02 14:18 101 .. OCT—:7-2202 15:42 FRO• O _'�a437415S�2 r - • . been assigned or transferred to any other person, firm, or corporation not a party to this release, in any manner, including by way of subrogation or operation of law or otherwise. • 7: Each of the parties hereto has read and understands the contents of this conditional settlement agreement. 8. This conditional settlement agreement shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors, and assigns of the respective parties hereto and to any parent, subsidiary, or affiliated entity of each of such parties. 9. Each of the parties to this agreement, and their respective attorneys, hereby represent, warrant, and agree, each to the other, that they have full power and authority to execute this limited mutual release and settlement agreement, to file the stipulation for abandonment of appeal and cross -appeal, to file the acknowledgment of satisfaction of judgment, and to do any and all things reasonably required to effectuate the terms of this conditional settlement agreement. 10. Any controversy or claim arising out of or relating to this conditional settlement agreement, or any breach thereof, shall be settled by binding arbitration in accordance with the California Arbitration Act, Code of Civil Procedure Section 1280, et seq., and judgment upon the award rendered by the arbitrator maybe entered in any Court having jurisdiction thereof The obligation to arbitrate shall extend to all past, present, and future employees, officers, directors, managers, or agents of either of the parties to this conditional settlement agreement. The arbitrator shall be a member of the State Bar of California and shall be a retired Judge of the Superior Court or a retired Justice of the Court of Appeal or of the Supreme Court of the State of California, selected by agreement of the parties. if the parties cannot agree on an arbitrator, the court may appoint a qualified arbitrator, pursuant to the provisions of Code of Civil Procedure Section 1281.6, et seq. The prevailing party in any such arbitration shall be entitled to recover from the other party its attorney's fees and costs incurred in connection therewith. 123 S 410062'%70857 7.3 DRAFT 10n7102 14:18 0CT--1?-2QZ2 15: 42 FRO16 TO 1?W41553j F.111zro I@] NVEEREFORE, the parties hereto have executed this conditional settlement agreement on the dates set forth opposite their respective signatures. Dated: October—, 2002 REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By Chair of the Governing Body ATTEST: [SEAL] By Secretary of the Governing Body Dated: October--_, 2002 ABDELMUTI DEVELOPMENT COMPANY 12354=02MS677.3 By Its Authorized Agent By Its Authorized Agent 7 DRAFT 10117/02 14:13 • W • OCT-1?-2ee2 15:4? 94% P.11 ?CT-17-2002 15:42 FF* 70 1?1437415E0 • APPROVED AS TO FORMI AND CONTENT: u RICHARDS, WATSON & GERSHON A Professional Corporation MITCHELL E. ABBOTT PATRICK K. BOBKO SONALY S. JAT°DIAL By Mitchell E. Abbott Attorneys for Redevelopment Agency of the City of Huntington Beach BALESTRERI, PENDLETON & POTOCKI MARY B. PENDLETON By Mary B. Pendleton Attorneys for Abdelmuti Development Company i 123 5 4'.0002X 70 8 67 7.3 8 DRAFT 1011710214.18 FW: Mulligan • . Page I of I Brockway, Connie From, Field, Scott Sent: Monday, December 09, 2002 4-26 PM To: Brockway, Connie Subject: FW. Mulligan Connie, we are waiting for Abdelmuti's attorney to have it signed_ As you can see from our attorney, Mitch Abbott's reply, it may take till year-end to wrap it up_ Thanks for reminding me. -----Original Message ----- From: Mitchell E. Abbott [mailto:MAbbott@rwglaw.comj Sent: Monday, December 09, 2002 12:08 PM To: 'Field, Scot Subject: RE: Mulligan Scott, I received a voice -mail message from Mary Pendleton last week saying she had one minor revision to the settlement agreement before having it signed- I am waiting for her to fax me the revision. I have no idea why this has taken so long, but assume we will wrap it up by the end of the year Mitch -----Original Message ----- From: Field, Scott [mailto:sfield@surfcity-hb.org] Sent: Monday, December 09, 2002 10:55 AM To: Mitchell E. Abbott Subject: FW: Mulligan Mitch, the Cleric is asking me about the settlement with Abdelmuti, which is an excellent question. Where are we on that final document? Scott -----Ongmal Message--.._ From: Brockway, Connie Sent: Saturday, December 07, 2002 11:22 AM To: Field, Scott Subject: Scott could you advise me of the status of the Mulligan Settlement agreement that was reported out of closed session on 10/16102. There was a typo and you wanted to update it_ Will it becoming to me soon. Connie NOTICE: This communication may contain privileged or other confidential information_ If you are not the intended recipient of this communication, or an employee or agent responsible for delivering this communication to the intended recipient, please advise the sender by reply email and immediately delete the message and any attachments without copying or disclosing the contents. Thank you. l 2/9/2002 Unofficial Copy Office of the City Clerk Records Please contact the City Clerk's Office for official copies Key words = Mulligan Alpha Category Entered Status Doc No/Type Expires Box ID Label 320.45 07/13/2001 Active 16865 Unbudgeted Expenditure - $200,000 from Redevelopment Agency into Legal Services Operating Account - Hyatt Grand ResorVCIM/Mulligan/S.E. Area Plan131 Acres -Pacific City 5/7101 600.30 12/03/2002 Pending 18721 11/28/02 R. Bruce Tepper - Law Corporation - Legal Services Regarding Mulligan ET AL V. Redevelopment Agency of the City of Huntington Beach, ET AL., OCSC, Case No. 740099 $50,000 X� 713/04 600 30 11/19/2002 Pending 18709 8/26/02 Richards Watson & Gershon legal services Mulligan V. to Redevelopment Agency & other related services X 12/31/04 CU 600,30 01/25/2001 Inactive 396 15937 REDEVELOPMENT AGENCY - CURTIS-ROSENTHAL LLC Agreement for Appraisal Services Re: Mulligan v Redevelopment Agency No 74 00 99 12/18/00 SA 600,30 09/27/2000 Inactive 396 15654 REDEVELOPMENT AGENCY - SANLI PASTORE and HILL INC- Amend #1 Professional Servi Contract Business & Goodwill Loss Valuation Re: Mulligan v. Redev - OCCSC #74 00 99 -Agrmt - executed by Exec Dir 9/18/00 650.50 12/05/1997 Active 9911 Eminent Domain proceedings never held -Main -Pier Ph II Redev Proj- Cracchlolo/Costa/Alfonso/D raper/W oods/Sarrabere/Goodman/Lane) Mase/Bagstad/Mulligan/Johnson/Geilim 1989-92 Total Records Selected: 6 December 9, 2002 238 PM Page 1 of 1