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
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City Clerk `
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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_-
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CITY CONTRACT NO: O /41-9
RESOLUTION NO: n�a
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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