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HomeMy WebLinkAboutR-2014-062 Lawsuit Settlement Agreement with BergerABAM, Inc. RESOLUTION NO. R- 2014 -062 A RESOLUTION authorizing and directing the City Manager of the City of Yakima to execute a Mutual Release and Settlement Agreement entered into by the City of Yakima and BergerABAM, Inc. to resolve and settle the lawsuit brought by the City of Yakima against BergerABAM, Inc. WHEREAS, on December 4, 2012, a lawsuit was filed by the City of Yakima in Yakima County Superior Court No. 12 -2- 04102 -3 entitled City of Yakima v. BergerABAM, Inc.; and WHEREAS, the lawsuit arises out of the City's claim that BergerABAM breached its contract obligations, acted negligently in performing engineering services on behalf of the City and that it owed a duty of indemnification to the City related to the site investigation, geotechnical analysis, design and construction of the Lincoln Avenue grade separation project; and WHEREAS, the City filed the lawsuit in an effort to recover construction cost over -runs on the Lincoln Avenue grade separation project for losses that the City believed were the result of BergerABAM's breach of contract and negligence for which BergerABAM, Inc. owed the City indemnification, and WHEREAS, in the litigation the City pursued extensive discovery, document investigation, review and cataloging, conducted numerous depositions, participated in several motion hearings in the Yakima County Superior Court and took part in a mediation; and WHEREAS, after the mediation that did not resolve the case, the City engaged in further discussions with BergerABAM, Inc. in an attempt to resolve the lawsuit through negotiated settlement prior to engaging in a ten -day jury trial scheduled to begin on June 9, 2014 and as a result of those efforts the parties have now reached a mutually agreeable resolution of the disputed issues; and WHEREAS, the negotiated settlement, subject to the approval of the Yakima City Council, will resolve all claims in the matter pursuant to the terms of the agreement, resulting in settlement proceeds of $1,350,000 paid by BergerABAM to the City; 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 execute the attached Mutual Release and Settlement Agreement to resolve and conclude the lawsuit; 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 sign the attached Mutual Release and Settlement Agreement entered into by the City of Yakima and BergerABAM, Inc. to resolve and settle the lawsuit brought by the City against BergerABAM, Inc., by which settlement BergerABAM, Inc. shall pay the City of Yakima $1,350,000, pursuant to the terms of the Mutual Release and Settlement Agreement. ADOPTED BY THE CITY COUNCIL this 6 day of May, 2014. Micah awl , Mayor EST: ylt. City Clerk ` � �- r as h'- * v Jr MUTUAL RELEASE AND SETTLEMENT AGREEMENT This Mutual Release and Settlement Agreement ( "Agreement "), effective as of the last date entered by a party below upon signing (the "Effective Date "), is made and entered into by and between the City of Yakima ( "Yakima ") and BergerABAM, Inc. ( "BergerABAM "). 1. Settlement and Mutual Release of Claims. For and in consideration of BergerABAM's payment of the Settlement Amount of One Million Three Hundred and Fifty Thousand Dollars ($1 ,350,000), Yakima and their agents, owners, insurers, bonding companies, funding partners, successors and assigns (hereinafter collectively the "Yakima Parties "), hereby release and forever discharge BergerABAM, its subconsultants and its and their agents, representatives, officers, partners, insurers (including but not limited to AIG/Lexington Insurance Company), attorneys, assigns and employees (the "BergerABAM Parties "), from any and all claims, demands, damages, costs, expenses, attorney's fees, court awarded fees and sanctions, or causes of action, whether known or unknown, accrued or unaccrued, past, present or future, except for latent defects which were unknown and could not have been known as of the date of this Agreement (hereafter referred to s - the "Yakima Claims "), in any way related to or arising out of the design and construction of the akima Railroad Grade Separation ( "Project ") and The City of Yakima v. BergerABAM. Inc., akima County Superior Court, Cause No. 12 -2, 04102 -3 ( "Lawsuit "). The definition of Project i. limited to the Lincoln Ave. and Martin Luther King Jr. Blvd. underpasses. The Yakima Parties a knowledge that they have specifically contemplated and bargained for the extinguishment of the Yakima Claims. The Yakima Parties assign any Project- related claims they may have against Sha non & Wilson, if any, to BergerABAM. Payment of thr Settlement Amount shall be made within 30 calendar days of the Effective Date. The City is enti led to 1% interest per month in the event payment of the Settlement Amount is not made within 31 calendar days of the Effective Date. Upon the payment of the Settlement Amount, Yakima will ause the Lawsuit to be dismissed with prejudice and without attorney's fees or costs. 2. No Ad issions. The Parties vigorously deny liability or responsibility for any and all of the claims in th- Lawsuit, and the Parties to this Agreement understand that, by execution of this Agreement, no Pa y acknowledges or admits to any liability, culpability or responsibility for any acts or omissions 'concerning the subject herein, and that this Agreement is entered into solely for the purpose of resolving disputes without resort to litigation and is in no way to be construed, and is in fact not, an admission of liability or responsibility of any Party hereto. 3. Additional Documents and Actions. The Parties agee to cooperate fully and execute any 'and all supplementary documents and take all additional actions that may be necessary or appropriate to give full force and effect to the terms and intent of this Agreement. 4. Enforcement. This Agreement shall be construed and enforced in accordance with, and governed by, the laws of the State of Washington. This Agreement has been drafted jointly by the Parties following negotiations between them. It shall be construed according to its terms and not for or against any Party. If any provision of this Agreement is deemed by law to be void, invalid or inoperative for any reason, or any phrase or clause within such provision is deemed by law to be void, invalid or inoperative, that phrase, clause or provision shall be deemed modified to the extent necessary to make it valid and operative, or if it cannot be so modified, then such phrase, clause or provision shall be deemed severed from this Ageement, with the remaining phrases, clauses and provisions continuing in full force and effect as if the Agreement had been signed with the void, invalid or inoperative portion so modified or eliminated. In the event that any Party hereto shall institute proceedings to enforce any provision hereto, venue for any such proceeding shall be the Superior Court for Yakima County, State of Washington, and the substantially prevailing party or parties shall be entitled to be reimbursed for reasonable costs, expenses, expert witness fees and attorneys' fees incurred. 5. Authority. The Parties acknowledge and represent that they are effecting this settlement and executing this Agreement after having received full legal advice as to their rights from legal counsel, and hereby warrant that they have the sole right and exclusive authority to execute this Agreement and receive the benefits specified herein, and that no other person or entity has or has had any interest in the Yakima Claims, nor have any of the Yakima Claims referred to herein been sold, assigned, transferred, conveyed or otherwise disposed of. The Parties acknowledge that they have carefully read this Agreement and know the contents thereof, including the fact that this Agreement is a release of claims, that no promise or agreement not expressed in this Agreement has been made, and that they have signed this Agreement as a free act. This Agreement incorporates and supersedes any and all prior understandings, contains the entire agreement between the Parties, and shall be binding upon and inure to the benefit of the representatives, successors and assigns of each. Any amendments of this Agreement shall be by written agreement between the Parties. 6. Counterparts. This Agreement may be executed in any number of counterparts, and each such counterpart hereof, or copies or electronic versions of the same, shall be deemed to be an original instrument, but all such counterparts shall constitute one agreement. 7. Yakima City Council Approval. This Agreement is subject to a condition precedent and shall not be binding upon or enforceable against either party unless and until approved by the Yakima City Council. Such approval is expected to occur on May 6, 2014. CITY OF YAKIMA_ __- _._ -- __. -- -------- BERGERABAM_- B � B /'d Y Y s C Its ,6 e:t/ Its 1/!e' Pe lQ F "- Date 5 ( O (Li t Date 5 jz /eoP74 CITY CONTRACT NO: O /41-9 RESOLUTION NO: n�a � p y p l. 1 A. 'w.;, ?' •tea BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. For Meeting of: 5/6/2014 ITEM TITLE: Resolution authorizing execution a Mutual Release and Settlement Agreement entered into by the City of Yakima and BergerABAM, Inc. to resolve and settle the lawsuit brought by the City of Yakima against BergerABAM, Inc. SUBMITTED BY: Jeff Cutter, City Attorney / 575 -6030 SUMMARY EXPLANATION: This matter is brought before the City Council for consideration of a Resolution authorizing and directing the City Manager of the City of Yakima to execute a Mutual Release and Settlement Agreement entered into by the City of Yakima and BergerABAM, Inc. to resolve and settle the lawsuit brought by the City against BergerABAM. The lawsuit was filed in Yakima County Superior Court on December 4, 2012 under Cause No. 12- 2- 04102 -3, entitled City of Yakima v. BergerABAM, Inc. The lawsuit arises out of a contract dispute wherein the City of Yakima alleged that BergerABAM breached its contract duties to the City when carrying out the obligations and responsibilities associated with the contract requirements. The final settlement agreement is still being executed by the defendant and will be provided at the City Council meeting. The City also alleged that BergerABAM was negligent in its performance owed to the City by failing to exercise the degree of care, skill and knowledge reasonably expected of a prudent engineer acting in the same or similar circumstances. The City further alleged BergerABAM owed the City the duty of indemnification for damages experienced by the City as a result of the engineer's breach and negligence. As part of the litigation process the City conducted extensive document review and assembly, compiling, sorting and reviewing thousands of pages of information accumulated over more than ten years of process leading up to and during the actual construction on the project. The City conducted numerous depositions of key participants involved in the site investigation, design analysis and design production, as well as those involved in the actual construction efforts. Expert witnesses were, obtained for the City and the defendant's experts were deposed. There were several motion hearings conducted before Yakima Superior Court Judge Michael McCarthy, as well as a mediation between the parties. This Mutual Release and Settlement Agreement is the outcome of continued negotiations to reach a settlement following the initial mediation and before final trial preparation took place for the trial that was set to begin on June 9, 2014, scheduled as a ten day jury trial. Subject to City Council approval, the parties have resolved the lawsuit through a payment from BergerABAM, Inc. to the City in the amount of $1,350,000. The City's attorney fees and costs expended in pursuing the lawsuit will be recovered from this amount. The remaining funds will be used for highway projects within the City. Resolution: X Ordinance: Other (Specify): Contract: Contract Term: Start Date: End Date: Item Budgeted: Amount: Funding Source /Fiscal Impact: Strategic Priority: Public Trust and Accountability Insurance Required? No Mail to: Phone: APPROVED FOR SUBMITTAL: City Manager RECOMMENDATION: Adopt Resolution. ATTACHMENTS: Description Upload Date Type BercierABAM Settlement 4/30/2014 Resolution