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HomeMy WebLinkAbout01/10/2017 06F Yakima Air Terminal Settlement Agreement ri pi BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDASTATEMENT Item No. 6.F. For Meeting of: January 10, 2017 ITEM TITLE: Resolution authorizing a settlement agreement entered into by the City of Yakima, Yakima County, and Yakima Air Terminal — McAllister Field and their insurers to resolve and settle lawsuits involving the Yakima Air Terminal litigation SUBMITTED BY: Jeff Cutter, City Attorney SUMMARY EXPLANATION: The matter for consideration is a Resolution authorizing the City Manager to consent to a settlement entered into by the City of Yakima, Yakima County, and Yakima Air Terminal — McAllister Field and their insurers to resolve and settle the lawsuits brought by various parties which are listed in the attached Settlement Agreement. The payment terms are listed in Section 1 in the Settlement Agreement. A total of $912,500 is to be paid, with $612,500 paid to the Lockwood plaintiff and $300,000 to the Langdon plaintiff. Of this total amount of$912,500, $893,750 is to be paid by the insurers for the parties in the litigation. The balance of $18,750 is to be split between Yakima County and City of Yakima, with each paying half or a total of $9,375. ITEM BUDGETED: NA STRATEGIC PRIORITY: Public Trust and Accountability APPROVED FOR SUBMITTAL: City Manager STAFF RECOMMENDATION: Adopt Resolution BOARD/COMMITTEE RECOMMENDATION: ATTACHMENTS: Description Upload Date Type D IResollution 1/412017 IResollutlion D Settlement Agreement 1/.4./2017 IBackup Mater all RESOLUTION NO. R-2016- A RESOLUTION authorizing the City Manager of the City of Yakima to consent to and execute a settlement agreement entered into by the City of Yakima, Yakima County, and Yakima Air Terminal — McAllister Field and their insurers to resolve and settle lawsuits involving the Yakima Air Terminal litigation. WHEREAS, lawsuits are pending in various cases involving the Yakima Air Terminal — McAllister Field as listed in the attached settlement agreement, including but not limited to Yakima County Superior Court Cause No. 10-2-00989-1, Yakima County Superior Court Cause No. 14-2-00967-3, and Yakima County Superior Court Cause No. 15-2-00357-6; and WHEREAS, a settlement has been reached by the City of Yakima, Yakima County, and Yakima Air Terminal — McAllister Field and their insurers to resolve and conclude all claims in the lawsuits; and WHEREAS, in the settlement agreement, liability for all such claims is denied by the entities being released; and WHEREAS, the majority of the settlement is to be paid by the insurers for the parties and the balance by City of Yakima and Yakima County; and WHEREAS, the City Council of the City of Yakima deems it to be in the interest of the City to authorize the City Manager to consent to and execute a settlement agreement entered into by the City of Yakima, Yakima County, and Yakima Air Terminal — McAllister Field and their insurers to resolve and conclude the lawsuits involving Yakima Air Terminal litigation; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager of the City of Yakima is authorized to consent to and execute the attached settlement agreement entered into by the City of Yakima, Yakima County, and Yakima Air Terminal — McAllister Field and their insurers to resolve and settle the lawsuits involving the Yakima Air Terminal litigation. ADOPTED BY THE CITY COUNCIL this 10th day of January, 2017. ATTEST: Kathy Coffey, Mayor Sonya Claar Tee, City Clerk SETTLEMENT AGREEMENT This settlement agreement is made between the settling parties involved in the following litigation: Yakima Air Terminal—McAllister Field v. M.A. West Rockies Corporation, Yakima County Superior Court Cause No. 10-2-00989-1 (referred to below as the "M.A. West lawsuit"); Byron &Alice Lockwood Foundation v. MA. West Rockies Corp., et al., Yakima County Superior Court Cause No. 14-2-00967-3 (referred to below as the "Lockwood lawsuit"); Yakima Air Terminal—McAllister Field v. Lyon Weigand& Gustafson, P.S., et al., Yakima County Superior Court Cause No. 15-2-00357-6 and the appeal of the summary judgment dismissal of that lawsuit pending in Division III of the Washington Court of Appeals under Cause No. 341461 (referred to below as the "LWG lawsuit"); and Byron &Alice Lockwood Foundation v. MA. West Rockies Corporation et al, Benton County Superior Court Cause No. 15-2-00235-7 (referred to as the "Benton County Litigation"). The settling parties are the following: The CITY OF YAKIMA, a municipal entity in the State of Washington, YAKIMA COUNTY, a County located in the State of Washington, and YAKIMA AIR TERMINAL—MCALLISTER FIELD, a former joint agency of the City of Yakima and Yakima County(collectively referred to as "Yakima"); The BYRON AND ALICE LOCKWOOD FOUNDATION("Lockwood"), a Washington nonprofit corporation; M.A. WEST ROCKIES CORPORATION ("M.A. West"), a dissolved Nevada corporation, by and through JOHN TOUSLEY, the court-appointed general receiver with regard to M.A. West in the Benton County Litigation. DANIEL LANGDON and CYNTHIA LANGDON, in their individual, marital, and representative capacities; LANGDON FAMILY REVOCABLE TRUST, a trust believed to be formed and existing under the laws of the State of Washington, YAKIMA AIRPORT LAND COMPANY, LLC, a Washington limited liability company; YAKIMA AIRPORT HOLDINGS, LLC, a Washington limited liability company; and LAKEWOOD LAND COMPANY, a Washington limited liability company(collectively"Langdon"); and RUSSELL GILBERT et ux and LYON WEIGAND & GUSTAFSON P.S., a Washington Professional Services corporation, including all current and former officers, directors, shareholders and employees (collectively"LWG"). The aforementioned settling parties (collectively"the Parties") agree to settle their respective disputes in the M.A. West lawsuit, the Lockwood lawsuit, the Benton County Settlement Agreement- Litigation and the LWG lawsuit under the terms identified below. For the consideration described below, the Parties further agree to fully release all claims they have or may have against each other arising from the subject matter of the afore-mentioned lawsuits, including any appeals therefrom, and dismiss all such lawsuits and/or appeals,provided Lockwood shall retain any collateral benefits which it has, or may be later discovered and may foreclose upon the same provided it shall take no monetary judgment against any of the Parties to this settlement agreement, except to the extent such monetary judgment already exists between Lockwood and M.A. West. RECITALS In March 2010 Yakima Air Terminal —McAllister Field initiated eviction proceedings in the M.A. West lawsuit, alleging that M.A. West had violated the terms of its lease with Yakima and was subject to eviction from the leased premises. Although the trial court ruled that M.A. West was in unlawful detainer under the terms of the lease and authorized M.A. West's eviction from the leased premises, in December 2013 the Washington Court of Appeals reversed that decision and remanded to the trial court for a determination of damages allegedly sustained by M.A. West as a result of the eviction. Langdon, M.A. West's alleged assignee, asserted counterclaims against Yakima in the M.A. West lawsuit. Lockwood filed the Lockwood lawsuit, in which it asserted rights under the lease as M.A. West's mortgagor and secured creditor. It also asserted other claims, including claims against Langdon and other M.A. West creditors. That lawsuit was consolidated with the M.A. West lawsuit under Yakima County Superior Court Cause No. 10-2-00989-1. Yakima subsequently filed the LWG lawsuit. That lawsuit was dismissed on summary judgment and Yakima appealed; that appeal is still pending. John Tousley, the court-appointed receiver for M.A. West, has obtained court approval to sign this settlement agreement on behalf of M.A. West, under the terms and conditions of the Order Approving Release of Claims, Distributions and Settlement entered by the Benton County Superior Court in the Benton County Litigation on December 9, 2016. The Parties are aware of, and wish to avoid, the uncertainties of further litigation, the delays associated therewith, and the costs and attorney fees they could incur if litigation were to continue. They have therefore agreed to resolve this matter as discussed below without any admission of liability. AGREEMENT The Parties agree as follows: 1. Payment. LWG, or its insurers, shall pay to Yakima the sum of$158,750. Payment shall be due within 30 days upon the full execution of this Agreement by all signatories. Settlement Agreement-2 Yakima, or its insurers, shall pay to Lockwood the sum of$612,500. Payment shall be due within 30 days upon the full execution of this Agreement by all signatories. Yakima, or its insurers, shall pay to Langdon the sum of$300,000. Payment shall be due within 30 days upon the full execution of this Agreement by all signatories. 2. Release. For the consideration described above, the Parties agree to fully release all claims they have or may have against each other that relate to the litigations described above or any other transactions, occurrences, acts or omissions or any loss, damages or injuries whatever, known or unknown, suspected or unsuspected, resulting from any act or omission by or on the part of any of them, committed or omitted prior to the date of this agreement, whether those claims be known or unknown, including any claim against all current, former and future Yakima City Council Members, all current, former and future Yakima County Commissioners, all current, former and future Yakima city or county elected or appointed officials, officers, agents, attorneys, insurers, employees, representatives, successors and assigns, and all current, former and future officers, directors, shareholders and employees of the parties hereto (and their marital communities), in said capacities and individually. This is a full and general release, with no claims reserved. Without limiting the generality of the foregoing, such claims include all claims under state or federal law that(1)were or could have been asserted in the litigation described above or(2) are related in any manner to the eviction of M.A. West from the property it leased from Yakima or(3) are related in any manner to the Lockwood foreclosure claims. This release also includes any alleged claims under the Public Records Act, and the parties agree to withdraw any current requests made to the City of Yakima, Yakima County, or Yakima Air Terminal— McAllister Field under the Public Records Act. Notwithstanding the foregoing, Lockwood shall retain the right to collect upon its judgments and liens against M.A. West and/or any assets of M.A. West which may exist; provided, that Lockwood shall take no monetary judgment against any of the Parties to this settlement agreement, except solely as may be taken against M.A. West and to the extent such monetary judgment already exists between Lockwood and M.A. West. 3. Warranty of non-transfer of released claims. Each of the Parties represents that they have not assigned or transferred to any person or entity any claim against any of the Parties that are being released as described above, and each of the Parties agrees that they shall defend, indemnify and hold harmless any of the other Parties against which any claim is made that arises out of any such assignment or transfer by the assigning or transferring party, including the payment of attorneys' fees and costs regardless of whether litigation is commenced. 4. Dismissal of lawsuits. Within 10 days of payment of the amounts described above, the Parties shall cause the litigation described above, including any appeals, to be dismissed with prejudice in their entireties and without costs or attorneys' fees awarded to any party thereto. Settlement Agreement-3 5. Compromise of disputed claims. This Agreement is strictly and solely for the purpose of compromising disputed claims and avoiding the expense and risk of further litigation. It is not, and shall not be construed or characterized as, an admission of any fact, issue, liability, or wrongdoing on the part of any party. 6. Counterparts. This Agreement may be executed in any number of identical counterparts with the same effect as if all the Parties had signed the same concurrently, notwithstanding that all Parties have not signed the same counterpart. All counterparts shall be construed as and shall constitute one and the same Agreement. 7. Electronic signatures. Signatures and copies of signatures on this Agreement transmitted through e-mail, facsimile, or other electronic means shall have the same effect as original signatures. 8. Time. Time is of the essence with regard to the Parties' respective duties hereunder. The Parties shall cooperate in preparing court stipulations and orders to effectuate the teens and conditions of this Agreement. 9. Binding effect. This Agreement and the releases contained herein shall bind and inure to the benefit of the Parties hereto and to each of their respective successors, representatives, affiliates, managers, members, directors, elected or appointed officials, officers, shareholders, principals, agents, assigns, employees,partners, trustees, creditors, insurers, attorneys, family members, relatives, heirs, legatees, and devisees. 10. Power and authority. The Parties to this Agreement represent and warrant that they have the power and actual authority to enter into this Agreement, and to incur and perform the obligations and duties under this Agreement and that all conditions precedent to their signature have been met. All persons signing this agreement on behalf of a party represent and warrant to all other parties that they have full authority to bind the party on whose behalf they are signing. 11. Mutual drafters. The Parties acknowledge and agree that all Parties equally and mutually negotiated, recommended, and set forth the terms and conditions of this Agreement, and that no party shall Settlement Agreement-4 be considered the "drafter"of this document for purposes of interpreting ambiguities against the drafter as a principle of contract construction. Furthermore, each party hereto acknowledges that 1) the party has been represented in the negotiations for and in the preparation and/or review of this Agreement by counsel of their respective choosing; 2)the party has read and understands this Agreement; 3) the party has had this Agreement fully explained to that party by such counsel; and 4)the party is fully aware of the contents of this Agreement and its legal effect. 12. Severability. If for any reason any provision of this Agreement is determined by a tribunal of competent jurisdiction to be legally invalid or unenforceable, the validity of the remainder of the Agreement will not be affected and such provision will be deemed modified to the minimum extent necessary to make such provision consistent with applicable law and, in its modified form, such provision will then be enforceable and enforced. 13. Merger; Integration. This Agreement constitutes the entire agreement of the Parties with respect to the subject matter of this Agreement and supersedes any prior negotiations, contracts, agreements or understandings with respect thereto. Any amendment to this Agreement must be by a written document duly executed by all parties. 14. Arbitration in event of dispute regarding terms of this agreement. Any dispute under the terms of this Agreement shall be resolved through binding arbitration by Terrence Carroll, who served as mediator. The threshold costs of such arbitration shall be paid by the party pursuing the dispute, provided that the prevailing party shall be entitled to reasonable attorney's fees and costs of arbitration, including the fees of Terrence Carroll. Any decision rendered will be final, binding, and non-appealable. The Parties to this Agreement hereby waive any and all claims of bias or prejudice arising out of Terrence Carroll's prior service as mediator of the disputes between the Parties. 15. Agreement is not evidence and is not an admission of liability. This Agreement resolves all issues between the Parties relating to any alleged violation by Yakima of Yakima policies or procedures or any state or federal law or regulation. This Agreement does not constitute an adjudication or finding on the merits and it is not, and shall not be construed as, an admission by Yakima of any violation of policies, procedures, state or federal laws or regulations, or any other wrongdoing of any kind. Moreover, neither this Agreement nor anything in this Agreement shall be construed to be or shall be admissible in any proceeding as evidence of or an admission by Yakima of any violation of policies, procedures, state or federal laws or regulations, or any other wrongdoing of any kind. This Agreement may be introduced in any proceeding to enforce the Agreement. Settlement Agreement-5 IN WITNESS WHEREOF, the parties, acting on their own behalf or through authorized representatives, cause this Agreement to be executed on the date shown on each signature pages following this page. Settlement Agreement-6 CITY OF YAKIMA ATTEST: By: Cliff Moore, City Manager By: Sonya Claar Tee, City Clerk Date: Date: YAKIMA COUNTY M.A.WEST ROCKIES Rand Elliott By: John Tousley, Receiver Chairman, Yakima Board of County Commissioners Date: Date: BYRON AND ALICE LOCKWOOD FOUNDATION By: Paul Cressman, President Date: DANIEL LANGDON and CYNTHIA LANGDON in their individual, marital, and representative capacities; LANGDON FAMILY REVOCABLE TRUST; YAKIMA AIRPORT LAND COMPANY, LLC; YAKIMA AIRPORT HOLDINGS, LLC; LAKEWOOD LAND COMPANY By: Daniel Langdon, individually and on behalf of Cynthia Langdon, individually and his marital community, Trustee of Langdon Family on behalf of her marital community Revocable Trust, Managing Member of Yakima Airport Land Company LLC and Yakima Airport Holdings LLC, Date: and President of Lakewood Land Company Date: Settlement Agreement- 7 LYON WEIGAND & GUSTAFSON P.S. By: J. Patrick Shirey, Vice President By: Russell Gilbert, individually and on behalf of his marital community Date: Date: Settlement Agreement-8