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HomeMy WebLinkAbout2015 CON SA City of National City - Rosenow Spevacek - Settlement ArbitrationNOTE TO FILE 01-16-18 IN THE MATTER OF: Resolution of the Board of the Successor Agency to the Community Development Commission as the National City Redevelopment Agency authorizing the Chairman to execute a Settlement Agreement between the Successor Agency to the Community Development Commission as the National City Redevelopment Agency and Rosenow Spevacek Group, Inc., to resolve the pending arbitration proceeding. Please note the following: A FULLY EXECUTED ORIGINAL SETTLEMENT AGREEMENT WAS NEVER FILED WITH THE OFFICE OF THE CITY CLERK. A COPY OF THE FULLY EXECUTED AGREEMENT WAS PROVIDED. ORIGINATING DEPARTMENT: NTF _ CDC Housing & Grants X City Attorney Human Resources City Manager MIS Community Svcs. Planning _ Engineering Police Finance Public Works Fire SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE OF ALL CLAIMS THIS SE'1"1'LEMENT AGREEMENT AND MUTUAL GENERAL RELEASE OF ALL CLAIMS (hereinafter "Agreement") is made and entered into by and between the parties hereto, namely, THE CITY OF NATIONAL CITY and what was formerly the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY and is now the SUCCESSOR AGENCY TO THE COMMUNITY DEVELOPMENT COMMISSION AS THE NATIONAL CITY REDEVELOPMENT AGENCY (collectively the "CITY") on the one hand and ROSENOW SPEVACEK GROUP, INC. ("RSG"), on the other hand. CITY and RSG are sometimes hereinafter referred to collectively as the "Parties". RECITALS This agreement is made with reference to the following facts: A. In or about 2011, CITY commenced arbitration proceedings against RSG arising out of work performed by RSG pursuant to its contract with the Community Development Commission of the City of National City dated February 20, 2007 (the "Arbitration Proceedings") . B. In the Arbitration Proceedings, CITY alleged that RSG negligently performed its contractual obligations and that in the result, the San Diego Superior Court invalidated National City's Redevelopment Plan in an action filed by Community Youth Athletic Center and others (collectively "CYAC") against the City of National City and National City Community Development Commission (collectively "CDC") (hereinafter the "Underlying Action"). The Superior Court's judgment invalidating the Page 1 of 10 Redevelopment Plan in the Underlying Action was affirmed by the Court of Appeal in 2013. C. In the Arbitration Proceedings, CITY sought compensatory damages from RSG , representing (1) attorney fees totaling $2,016,249.87 awarded against CDC and in favor of CYAC and other Interested Parties in the Underlying Action; (2) attorney's fees totaling $1,064,574.62 incurred by the CDC in defending the Underlying Action; (c) attorney's fees totaling $110,029.49 as of February 28, 2015, with additional attorney's fees incurred but not yet paid by CITY to prosecute the Arbitration Proceedings; and (4) compensatory damages representing (a) loss of revenues caused by disruption of improvement and development within the City which was dependent upon validation of the Redevelopment Plan Amendment, in the form of increased sales tax revenue, increased property tax revenue, the value of developer -provided infrastructure improvements, etc., of no less than $20,000,000.00; and (b) additional expenses incurred by CITY related to bonding expenses caused by the invalidation proceedings in the amount of no less than $9,100,000.00. RSG denied liability for all of the claims and damages alleged by CITY. D. Following a period of due diligence and formal discovery, it was determined that RSG was insured by National Union Fire Insurance Company of Pittsburgh, PA under Miscellaneous Professional Liability Policy No. 042923310 (the "National Union Policy") with aggregate policy limits of $2,000,000.00 reduced by claims expenses. The legal fees and costs incurred by RSG in defending the Arbitration Proceedings, have been paid from the proceeds of the National Union Policy, thereby reducing the available policy limits. That diligence and discovery by CITY revealed that it is in the best interest of CITY to settle and resolve the dispute on the terms contained herein. Page 2 of 10 E. During the pendency of the Arbitration Proceedings, the Parties engaged in two lengthy negotiations conducted at two mediation sessions over many months, The Parties have agreed to settle the disputes between them subject to the terms and conditions set forth in the agreement. NOW THERE,. -ORE and in consideration of the foregoing facts and the mutual covenants, conditions, promises and agreements contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows: 1. AGREEMENT: 1.1 Settlement Payment: CITY shall be paid the balance of the $2,000,000 policy limits in the National Union Policy that remain after payment has been made of all legal fees and costs incurred by RSG in connection with the defense and settlement of the Arbitration Proceedings. Payment shall be made to CITY within 45 days after signature of this agreement by all Parties, or within 14 days after all governmental approvals to this settlement agreement have been procured, whichever event occurs last. The amount of the settlement proceeds is presently estimated to be slightly more than $1,830,000, but the final amount of the settlement proceeds will be confirmed by RSG within 10 days after signature of this agreement. RSG shall, if requested, provide satisfactory proof of the legal fees and costs incurred in connection with the defense of the arbitration proceedings, but shall not be required to waive the attorney -client privilege with respect to the contents of its attorneys' invoices. Page 3 of 10 1.2 Conditional Settlement: This settlement is conditional upon approval of all of its terms and conditions by all necessary governmental bodies or agencies, including, but not limited to, CITY, the Oversight Board, and the California Department of Finance. 1.3 Dismissal of the Arbitration with Prejudice: The Parties agree that upon payment of the settlement proceeds, CITY shall immediately dismiss the arbitration proceedings against RSG with prejudice. 1.4 Costs of Litigation: It is further agreed that the Parties to this agreement shall assume and bear their own costs and attorneys' fees as a result of, or in connection with, the arbitration and this settlement agreement. 2. MUTUAL RELEASE PROVISIONS: 2.1 CITY'S Release of RSG: In consideration respectively of the agreements referred to in Section 1 hereof, CITY does hereby forever release and discharge RSG and any and all of its parent companies, affiliates, subsidiaries, agents, heirs, attorneys, servants, employees, predecessors, successors, assigns, and assignors, and its insurers and reinsurers, from any and all actions, causes of action, obligations, costs, expenses, attorneys' fees, damages, losses, claims, liabilities, and demands of whatsoever character, nature and kind, known or unknown, suspected or unsuspected, other than as may arise out of or relate to the breach of this settlement agreement by RSG. 2.2 RSG Release of CITY: In consideration, respectively, of the agreements referred to in Section 1 hereof, RSG does hereby forever release and discharge CITY, and all of its agents, heirs, Page 4 of 10 attorneys, servants, employees, predecessors, successors, assigns, and assignors, from any and all actions, causes of action, obligations, costs, expenses, attorneys' fees, damages, losses, claims, liabilities, and demands of whatsoever character, nature and kind, known or unknown, suspected or unsuspected, other than as may arise out of or relate to the breach of this settlement agreement by CITY. 2.3 Waiver of Civil Code Section 1542: It is the intention of the Parties that the foregoing mutual releases shall be effective as a bar to all actions, causes of action, obligations, costs, expenses, attorneys' fees, damages, losses, claims, liabilities, and demands of whatsoever character, nature and kind, known or unknown, suspected or unsuspected herein above specified to be so barred; in furtherance of this intention the parties expressly waive any and all rights and benefits conferred upon them by provisions of Section 1542 of the California Civil Code, which are as follows: A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. The Parties hereby acknowledge that the foregoing waiver of the provisions of Section 1542 of the California Civil Code was separately bargained for. The Parties expressly consent that this release shall give the same full force and effect to unknown and unsuspected claims, demands, and causes of action, if any, as to those terms and provisions relating to claims, demands, and causes of action herein above specified. Page 5 of 10 3. MISCELLANEOUS: 3.1 Compromise: The Parties acknowledge that this Agreement constitutes a compromise and settlement of disputed claims and nothing in this Agreement is or shall be treated, or construed or deemed as an admission by any Party of any liability or fault. 3.2 Further Assurances: The Parties hereby agree to execute such other documents and to take such other action as may reasonably be necessary to implement the terms of this Agreement. 3.3 Law: This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of California. 3.4 Benefit and Burden: This Agreement shall be binding upon and inure to the benefit of the Parties and their respective representatives, successors, and assigns. 3.5 Waiver and Amendment: No breach of any provision hereof can be waived unless in writing. Waiver of any one breach shall not be deemed to be a waiver of any other breach of the same or any other provision hereof. This Agreement may be amended or modified only by a written agreement executed by all of the Parties. 3.6 Counterparts: This Agreement may be executed in counterparts by the Parties and will become effective and binding upon the Parties only at such time as all of the signatories hereto have signed a counterpart of this Agreement. All counterparts so executed shall constitute one Agreement binding on all the Parties, notwithstanding that all Parties are Page 6 of 10 not signatory to the original or the same counterpart. Each of the Parties shall sign a sufficient number of counterparts so that each Party will receive a fully executed original of this Agreement. The Parties agree that a facsimile signature shall bear the same force and effect as an original signature, thus enabling the Parties to expeditiously obtain signatures of all Parties and their counsel. In the event, however, that a facsimile signature is used by any Party, that Party shall ensure that all other Parties receive the original document bearing that Party's original signature within five (5) days. 3.7 Gender and Tense: Whenever required by the context hereof, the singular shall be deemed to include the plural, and the plural shall be deemed to include the singular, and the masculine, feminine, and neuter genders shall be deemed to include the other. The term "person" shall include corporation, firm, joint venture, partnership, trust, or estate. 3.8 Entire Agreement: This Agreement constitutes the entire agreement between the Parties pertaining to the subject matter hereof, fully supersedes all prior understandings, stipulations, representations, warranties, and agreements between the Parties, or any of them, pertaining to the subject matter hereof, and may be modified only by written agreement signed by all of the Parties hereto. 3.9 Captions and Interpretation: Paragraph titles or captions contained herein are inserted as a matter of convenience and for reference, and in no way define, limit, extend, or describe the scope of this Agreement or any provision hereof. No provision in this Agreement is to be interpreted for or against any Party because that Party or its legal representative drafted such provision. Page 7 of 10 3.10 Independent Advice of Counsel: The Parties, and each of them, represent and declare that in executing this Agreement they rely solely upon their own judgment, belief, and knowledge, and the advice and recommendations of their own independently selected counsel, concerning the nature, extent, and duration of their rights and claims, and that they have not been influenced to any extent whatsoever in executing the same by any representations or statements covering any matters made by any other Party or by any person representing such other Party. 3.11 Voluntary Agreement The Parties, and each of them, further represent and declare that they have carefully read this Agreement and know the contents thereof and that they sign the same freely and voluntarily. 3.12 Authority to Execute Agreement: CITY and RSG and each of them, each warrant and represent that the individual persons executing this agreement are duly authorized to execute this agreement on behalf of the respective parties and in their respective capacities as indicated below. 3.13 Assignment: Each of the parties hereby warrants, represents and agrees that it is the sole and lawful owner of all right, title, and interest in and to all of the respective claims which are referenced in the releases set forth above and they have not hereto voluntarily, by operation of law or otherwise, assigned or transferred or purported to assign or transfer to any person whomsoever, any such claims or any part or portion thereof. Each of the parties agree to indemnify and hold each of the other parties, harmless from any claim, demand, damage, liability, action, or cause of action, based on or connected with or arising in any manner out of any such assignment or transfer. Page 8 of 10 3.14 Incorporation of Recitals: The Recitals to this Settlement Agreement are hereby incorporated into this Settlement Agreement by this reference. 3.15 Further Assurances. All Parties agree to cooperate fully and execute any and all supplementary documents and take additional actions which may be necessary or appropriate to give full force and effect to the basic terms and intent of this Settlement Agreement. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date and year written below. CLAIMANTS: Dated: May , 2015 CITY OF TIONAL CITY (Please see additional signature block at end of document) RESPONDENT: Dated: Maya 2015 By Ron Morrison, Mayor Its ROSENOW SPEVACEK GROUP, INC. Page 9 of 10 APPROVED AS TO FORM: Dated: May , 2015 Dated: May .21 2015 Dated: June , 2015 MAZZARELLA & MAZZARELLA, LLP By: Daral B. Mazzarella Attorney for Claimant CITY OF NATIONAL C3TY LEWIS BRISBOIS BISGAARD & SMITH LLP By: Ernest Slome Attorney for Respondent ROSENOW SPEVACEK GROUP, INC. SUCCESSOR AGENCY TO THE COMMUNITY DEVELOPMENT COMMISSION AS THE NATIONAL CY REDEVELOPMENT AGENCY By Ron Morrison, Chairman Page 10 of 10 s RIYlN81t11 \v ��.. April 3, 2017 City of National City Office of the City Clerk 1243 National City Blvd., National City, CA 91950-4397 Michael R. Dalla — City Clerk (619)336-4226 (619) 336-4229 TO: Ginny Miller FROM: Michael Dalla SUBJECT: Incomplete 2015 Contract Documents RECEIVED APR 0 4 �017 City of National City City Attorney's Office Please note the contract on the attached contract list from 2015 for which our office has not received a fully executed original agreement. If your Department has, or is able to produce or acquire, a fully executed original document, please provide it to us. After April 15th, we will insert a "Note to File" in the respective contract folder indicating that a fully executed original agreement was never received by our office. r 2015 CONTRACTS Waiting For Fully Executed Original Contract SUCCESSOR AGENCY MEETING DATE AGENDA ITEM # ORIGINATINGY� DEPARTMENT VENDOR / DESCRIPTION CONTRACT FILE # 04-07-15 3 Finance Urban Futures - Financial Advisory Services C2010-41 06-16-15 2 City Attorney Rosenow Spevacek Group - Settlement Agreement C2015-23 4717)7 7/6/2016 RESOLUTION # 2015-63 2015-66 ITEM/S NEEDED Fully executed original Agreement Fully executed original Agreement ACTION/ DATE 06-23-15 - Forwarded to Ginny Miller (City Atty) 1 partially executed original agreement to process for signature f//f Z haves nerd cop • 1 hJive_ -i�1e oripri.Q c,vcts sent fo SGs ct-4+6rn-eiLv MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF NATIONAL CITY AND THE SUCCESSOR AGENCY TO THE COMMUNITY DEVELOPMENT COMMISSION AS THE NATIONAL CITY REDEVELOPMENT AGENCY This Memorandum of Understanding is entered into this 20th day of October, 2015, by and between the City of National City ("City") and the Successor Agency to the Community Development Commission as the National City Redevelopment Agency ("SA"). RECITALS A. In 2011, the CITY and SA commenced arbitration proceedings against Rosenow Spevacek Group, Inc. ("RSG") arising out of work performed by RSG pursuant to its contract with the Community Development Commission of the City of National City dated February 20, 2007 (the "Arbitration Proceedings") . B. In the Arbitration Proceedings, the CITY and SA alleged that RSG negligently performed its contractual obligations resulting in invalidation of the 2007 Redevelopment Plan Update in an action filed by Community Youth Athletic Center and others (collectively "CYAC"). The Superior Court's judgment invalidating the Redevelopment Plan in the underlying action was affirmed by the Court of Appeal in 2013. C. In the Arbitration Proceedings, the CITY and SA sought compensatory damages from RSG, representing (1) attorney fees totaling $2,016,249 awarded in the underlying action; (2) attorney's fees totaling $1,064,574 incurred by the CITY ($277,074) and SA ($787,500) in defending the underlying action; (3) attorney's fees exceeding $110,000 to prosecute the Arbitration Proceedings; and (4) compensatory damages representing (a) loss of revenues caused by disruption of improvement and development within the City which was dependent upon validation of the Redevelopment Plan Amendment, in the form of increased sales tax revenue to the CITY ($18,000,000), increased property tax/tax increment revenue to the SA ($12,640,000), the value of developer -provided infrastructure improvements to the CITY ($2,500,000), etc.; and (b) additional expenses incurred by the SA related to increased bonding expenses caused by the invalidation proceedings ($9,148,840). The damages alleged were approximately $24,702,589 for the SA and approximately $20,777,074 for the CITY. 1 D. Following a period of due diligence and formal discovery, it was determined that RSG was insured by National Union Fire Insurance Company of Pittsburgh, PA with aggregate policy limits of $2,000,000.00 reduced by claims expenses. RSG denied liability for the claims and damages alleged by CITY and SA. RSG incurred legal fees and costs to defend the Arbitration Proceedings, which have been paid from the proceeds of the National Union Policy, thereby reducing the available policy limits. Due diligence and discovery by CITY and SA revealed that RSG is likely unable to satisfy a judgment or award in favor of CITY and SA substantially in excess of its available insurance policy limits. E. During the pendency of the Arbitration Proceedings, the Parties engaged in two lengthy negotiations conducted at two mediation sessions over many months. The Parties agreed to settle the disputes between them for approximately $1,800,000 subject to the terms and conditions set forth in the settlement agreement, which was subject to California Department of Finance ("DOF") approval. F. The DOF sought review of the settlement agreement, and stated it could not approve the Oversight Board action regarding the settlement agreement until DOF receives documentation delineating the breakdown of the estimated $1,800,000 between the SA and the City. G. This Memorandum of Understanding ("MOU") is intended to document the distribution of the estimated $1,800,000 between the SA and the CITY. NOW, THEREFORE, the SA and the CITY agree as follows: 1. The amount of proceeds received by RSG from the settlement of the RSG Arbitration Proceedings shall be distributed as follows: a. Prior to distribution between the CITY and SA, the attorneys' fees due to Mazzarella and Mazzarella shall be paid, pursuant to and as obligated by the Agreement for Legal Services previously approved by DOF; and, b. After the attorneys' fees due to Mazzarella and Mazzarella have been paid, the balance of the proceeds shall be distributed between the CITY and SA reflective of their damages described in the recitals above, as follows: SA shall receive 54% of the balance remaining; and, ii. CITY shall receive 46% of the balance remaining. 2 2. This MOU shall be effective upon approval by the parties, the Oversight Board, and the California Department of Finance. IN WITNESS WHEREOF, the parties have executed this MOU on the date and year first written above. CITY OF NATIONAL CITY on Morrison, Mayor ?P)ROVED AS TO FORM: udia G. Silva City Attorney SUCCESSOR AGENCY TO THE COMMUNITY DEVELOPMENT COMMISSION AS THE NATIONAL CITY REDEVELOPMENT AGENCY B on Morrison, Chairman PROVED �.:; TO FORM: Claudia G. Sil a General Coun el 3 Esther Clemente From: Ginny Miller Sent: Thursday, April 06, 2017 8:30 AM To: Mike Dalla; Esther Clemente Subject: RSG Settlement Agreement Attachments: RSG - Fully Executed Settlement Agreement.pdf Good morning! I found a PDF of the missing Settlement Agreement. I will be looking in the file for an original today, put at least we have this one for now. :o) 4,14,K,MLLl.er Executive Assistant to the City Attorney Ext. 4223 1 SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE OF ALL CLAIMS THIS SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE OF ALL CLAIMS (hereinafter "Agreement") is made and entered into by and between the parties hereto, namely, THE CITY OF NATIONAL CITY and what was formerly the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY and is now the SUCCESSOR AGENCY TO THE COMMUNITY DEVELOPMENT COMMISSION AS THE NATIONAL CITY REDEVELOPMENT AGENCY (collectively the "CITY") on the one hand and ROSENOW SPEVACEK GROUP, INC. ("RSG"), on the other hand. CITY and RSG are sometimes hereinafter referred to collectively as the "Parties". RECITALS This agreement is made with reference to the following facts: A. In or about 2011, CITY commenced arbitration proceedings against RSG arising out of work performed by RSG pursuant to its contract with the Community Development Commission of the City of National City dated February 20, 2007 (the "Arbitration Proceedings") . B. In the Arbitration Proceedings, CITY alleged that RSG negligently performed its contractual obligations and that in the result, the San Diego Superior Court invalidated National City's Redevelopment Plan in an action filed by Community Youth Athletic Center and others (collectively "CYAC") against the City of National City and National City Community Development Commission (collectively "CDC") (hereinafter the "Underlying Action"). The Superior Court's judgment invalidating the Page 1 of 10 Redevelopment Plan in the Underlying Action was affirmed by the Court of Appeal in 2013. C. In the Arbitration Proceedings, CITY sought compensatory damages from PSG , representing (1) attorney fees totaling $2,016,249.87 awarded against CDC and in favor of CYAC and other Interested Parties in the Underlying Action; (2) attorney's fees totaling $1,064,574.62 incurred by the CDC in defending the Underlying Action; (c) attorney's fees totaling $110,029.49 as of February 28, 2015, with additional attorney's fees incurred but not yet paid by CITY to prosecute the Arbitration Proceedings; and (4) compensatory damages representing (a) loss of revenues caused by disruption of improvement and development within the City which was dependent upon validation of the Redevelopment Plan Amendment, in the form of increased sales tax revenue, increased property tax revenue, the value of developer -provided infrastructure improvements, etc., of no less than $20,000,000.00; and (b) additional expenses incurred by CITY related to bonding expenses caused by the invalidation proceedings in the amount of no less than $9,100,000.00. RSG denied liability for all of the claims and damages alleged by CITY. D. Following a period of due diligence and formal discovery, it was determined that RSG was insured by National Union Fire Insurance Company of Pittsburgh, PA under Miscellaneous Professional Liability Policy No. 042923310 (the "National Union Policy") with aggregate policy limits of $2,000,000.00 reduced by claims expenses. The legal fees and costs incurred by RSG in defending the Arbitration Proceedings, have been paid from the proceeds of the National Union Policy, thereby reducing the available policy limits. That diligence and discovery by CITY revealed that it is in the best interest of CITY to settle and resolve the dispute on the terms contained herein. Page 2 of 10 E. During the pendency of the Arbitration Proceedings, the Parties engaged in two lengthy negotiations conducted at two mediation sessions over many months. The Parties have agreed to settle the disputes between them subject to the terms and conditions set forth in the agreement. NOW THEREFORE and in consideration of the foregoing facts and the mutual covenants, conditions, promises and agreements contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows: 1. AGREEMENT: 1.1 Settlement Payment: CITY shall be paid the balance of the $2,000,000 policy limits in the National Union Policy that remain after payment has been made of all legal fees and costs incurred by RSG in connection with the defense and settlement of the Arbitration Proceedings. Payment shall be made to CITY within 45 days after signature of this agreement by all Parties, or within 14 days after all governmental approvals to this settlement agreement have been procured, whichever event occurs last. The amount of the settlement proceeds is presently estimated to be slightly more than $1,830,000, but the final amount of the settlement proceeds will be confirmed by RSG within 10 days after signature of this agreement. RSG shall, if requested, provide satisfactory proof of the legal fees and costs incurred in connection with the defense of the arbitration proceedings, but shall not be required to waive the attorney -client privilege with respect to the contents of its attorneys' invoices. Page 3 of 10 1.2 Conditional Settlement: This settlement is conditional upon approval of all of its terms and conditions by all necessary governmental bodies or agencies, including, but not limited to, CITY, the Oversight Board, and the California Department of Finance. 1.3 Dismissal of the Arbitration with Prejudice: The Parties agree that upon payment of the settlement proceeds, CITY shall immediately dismiss the arbitration proceedings against RSG with prejudice. 1.4 Costs of Litigation: It is further agreed that the Parties to this agreement shall assume and bear their own costs and attorneys' fees as a result of, or in connection with, the arbitration and this settlement agreement. 2. MUTUAL RELEASE PROVISIONS: 2.1 CITY'S Release of RSG: In consideration respectively of the agreements referred to in Section 1 hereof, CITY does hereby forever release and discharge RSG and any and all of its parent companies, affiliates, subsidiaries, agents, heirs, attorneys, servants, employees, predecessors, successors, assigns, and assignors, and its insurers and reinsurers, from any and all actions, causes of action, obligations, costs, expenses, attorneys' fees, damages, losses, claims, liabilities, and demands of whatsoever character, nature and kind, known or unknown, suspected or unsuspected, other than as may arise out of or relate to the breach of this settlement agreement by RSG. 2.2 RSG Release of CITY: In consideration, respectively, of the agreements referred to in Section 1 hereof, RSG does hereby forever release and discharge CITY, and all of its agents, heirs, Page 4 of 10 attorneys, servants, employees, predecessors, successors, assigns, and assignors, from any and all actions, causes of action, obligations, costs, expenses, attorneys' fees, damages, losses, claims, liabilities, and demands of whatsoever character, nature and kind, known or unknown, suspected or unsuspected, other than as may arise out of or relate to the breach of this settlement agreement by CITY: 2.3 Waiver of Civil Code Section 1542: It is the intention of the Parties that the foregoing mutual releases shall be effective as a bar to all actions, causes of action, obligations, costs, expenses, attorneys' fees, damages, losses, claims, liabilities, and demands of whatsoever character, nature and kind, known or unknown, suspected or unsuspected herein above specified to be so barred; in furtherance of this intention the parties expressly waive any and all rights and benefits conferred upon them by provisions of Section 1542 of the California Civil Code, which are as follows: A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. The Parties hereby acknowledge that the foregoing waiver of the provisions of Section 1542 of the California Civil Code was separately bargained for. The Parties expressly consent that this release shall give the same full force and effect to unknown and unsuspected claims, demands, and causes of action, if any, as to those terms and provisions relating to claims, demands, and causes of action herein above specified. Page 5 of 10 3. MISCELLANEOUS: 3.1 Compromise: The Parties acknowledge that this Agreement constitutes a compromise and settlement of disputed claims and nothing in this Agreement is or shall be treated, or construed or deemed as an admission by any Party of any liability or fault. 3.2 Further Assurances: The Parties hereby agree to execute such other documents and to take such other action as may reasonably be necessary to implement the terms of this Agreement. 3.3 Law: This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of California. 3.4 Benefit and Burden: This Agreement shall be binding upon and inure to the benefit of the Parties and their respective representatives, successors, and assigns. 3.5 Waiver and Amendment: No breach of any provision hereof can be waived unless in writing. Waiver of any one breach shall not be deemed to be a waiver of any other breach of the same or any other provision hereof. This Agreement may be amended or modified only by a written agreement executed by all of the Parties. 3.6 Counterparts: This Agreement may be executed in counterparts by the Parties and will become effective and binding upon the Parties only at such time as all of the signatories hereto have signed a counterpart of this Agreement. All counterparts so executed shall constitute one Agreement binding on all the Parties, notwithstanding that all Parties are Page 6 of 10 not signatory to the original or the same counterpart, Each of the Parties shall sign a sufficient number of counterparts so that each Party will receive a fully executed original of this Agreement. The Parties agree that a facsimile signature shall bear the same force and effect as an original signature, thus enabling the Parties to expeditiously obtain signatures of all Parties and their counsel. In the event, however, that a facsimile signature is used by any Party, that Party shall ensure that all other Parties receive the original document bearing that Party's original signature within five (5) days. 3.7 Gender and Tense: Whenever required by the context hereof, the singular shall be deemed to include the plural, and the plural shall be deemed to include the singular, and the masculine, feminine, and neuter genders shall be deemed to include the other, The term "person" shall include corporation, firm, joint venture, partnership, trust, or estate. 3.8 Entire Agreement This Agreement constitutes the entire agreement between the Parties pertaining to the subject matter hereof, fully supersedes all prior understandings, stipulations, representations, warranties, and agreements between the Parties, or any of them, pertaining to the subject matter hereof, and may be modified only by written agreement signed by all of the Parties hereto. 3.9 Captions and Interpretation: Paragraph titles or captions contained herein are inserted as a matter of convenience and for reference, and in no way define, limit, extend, or describe the scope of this Agreement or any provision hereof. No provision in this Agreement is to be interpreted for or against any Party because that Party or its legal representative drafted such provision. Page 7 of 10 3.10 Independent Advice of Counsel: The Parties, and each of them, represent and declare that in executing this Agreement they rely solely upon their own judgment, belief, and knowledge, and the advice and recommendations of their own independently selected counsel, concerning the nature, extent, and duration of their rights and claims, and that they have not been influenced to any extent whatsoever in executing the same by any representations or statements covering any matters made by any other Party or by any person representing such other Party. 3.11 Voluntary Agreement The Parties, and each of them, further represent and declare that they have carefully read this Agreement and know the contents thereof and that they sign the same freely and voluntarily. 3.12 Authority to Execute Agreement: CITY and RSG and each of them, each warrant and represent that the individual persons executing this agreement are duly authorized to execute this agreement on behalf of the respective parties and in their respective capacities as indicated below. 3.13 Assignment: Each of the parties hereby warrants, represents and agrees that it is the sole and lawful owner of all right, title, and interest in and to all of the respective claims which are referenced in the releases set forth above and they have not hereto voluntarily, by operation of law or otherwise, assigned or transferred or purported to assign or transfer to any person whomsoever, any such claims or any part or portion thereof. Each of the parties agree to indemnify and hold each of the other parties, harmless from any claim, demand, damage, liability, action, or cause of action, based on or connected with or arising in any manner out of any such assignment or transfer. Page 8 of 10 3.14 Incorporation of Recitals: The Recitals to this Settlement Agreement are hereby incorporated into this Settlement Agreement by this reference. 3.15 Further Assurances. All Parties agree to cooperate fully and execute any and all supplementary documents and take additional actions which may be necessary or appropriate to give full force and effect to the basic terms and intent of this Settlement Agreement. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date and year written below. CLAIMANTS: June 16, 2015 Dated; ni'/77/, (Please see additional signature block at end of document) RESPONDENT: Dated: May , 2015 CITY OF bI TIONAL CITY By. Ron Nbrrison, Mayor Its ROSENOW SPEVACEK GROUP, INC. Page 9 of 10 APPROVED AS TO FORM: Dated: !O.12.ci. 2015 Dated: May %% 2015 Dated: June 17, 2015 MAZZARELLA & 1VIAZZARELLA, LLP By: Daral B. Mazzarella Attorney for Claimant CITY OF'KIATIONAL CITY LEWIS BRISBOIS BISGAARD & SMITH LLP By: Ernest Slome Attorney for Respondent ROSENOW SPEVACEK GROUP, INC. SUCCESSOR AGENCY TO THE COMMUNITY DEVELOPMENT COMMISSION AS THE NATIONAL S','Y REDEVELOPMENT AGENCY By Ron Morrison, Chairman Page 10 of 10 RESOLUTION NO. 2015 — 66 RESOLUTION OF THE BOARD OF THE SUCCESSOR AGENCY TO THE COMMUNITY DEVELOPMENT COMMISSION AS THE NATIONAL CITY REDEVELOPMENT AGENCY AUTHORIZING THE CHAIRMAN TO EXECUTE A SETTLEMENT AGREEMENT BETWEEN THE SUCCESSOR AGENCY TO THE COMMUNITY DEVELOPMENT COMMISSION AS THE NATIONAL CITY REDEVELOPMENT AGENCY AND ROSENOW SPEVACEK GROUP, INC., TO RESOLVE THE PENDING ARBITRATION PROCEEDING WHEREAS, On February 20, 2007, the former Community Development Commission of the City of National City ("CDC") entered into an Agreement with Rosenow Spevacek Group, Inc. (RSG) for the 2007 Redevelopment Plan Amendment; and WHEREAS, the 2007 Redevelopment Plan Amendment was prepared by RSG and eventually adopted in July of 2007; and WHEREAS, on or about September 2007, the 2007 Redevelopment Plan Amendment was challenged by the Community Youth Athletic Center (the CYAC matter). In addition to the reverse validation challenge to the 2007 Redevelopment Plan Amendment, the CYAC matter alleged violations of the public records act, due process, and takings; and WHEREAS, the CYAC matter was dismissed, appealed, remanded, tried, appealed, and remanded over the years between 2007 and 2015; and WHEREAS, the appellate court affirmed the invalidation of the 2007 Redevelopment Plan Amendment, and found a violation of the Public Records Act based upon records not being furnished by RSG for disclosure; and WHEREAS, In April 2015, the trial court entered judgment in the CYAC matter, awarding fees in the amount of $2,016,249.87; and WHEREAS, in or about 2011, the City and CDC commenced arbitration proceedings seeking damages against RSG arising out of work performed by RSG pursuant to its contract with the CDC (the Arbitration Proceedings); and WHEREAS, during the pendency of the Arbitration Proceedings, the parties engaged in two lengthy negotiations conducted at two mediation sessions over many months; and WHEREAS, RSG has agreed to pay the City and CDC the balance of their $2,000,000 policy limits that remain after payment has been made of all legal fees and costs incurred by RSG in connection with the defense and settlement of the Arbitration Proceedings, currently estimated at about $1.8M; and WHEREAS, these actions require Oversight Board approval and DOF approval before they are final. NOW, THEREFORE, BE IT RESOLVED that the Board of the Successor Agency to the Community Development Commission as the National City Redevelopment Agency hereby authorizes the Chairman to execute the Settlement Agreement between the Successor Agency to the Community Development Commission as the National City Redevelopment Agency and Rosenow Spevacek Group, Inc., to resolve the pending Arbitration Proceeding. Resolution No. 2015 — 66 Page Two PASSED and ADOPTED this 16th day of June, 2015. Ron Morrison, Chairman ATTEST: Michael R. Dalla, City Clerk as Secretary to the Successor Agency PPROVED AS TO F ` ' M: udia Gac ua Sil Succei or As ency Counsel Passed and adopted by the Successor Agency to the Community Development Commission as the Redevelopment Agency of the City of National City, California, on June 16, 2015 by the following vote, to -wit: Ayes: Boardmembers Cano, Mendivil, Morrison, Rios, Sotelo-Solis. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: RON MORRISON Chairman of the Successor Agency to the Community Development Commission as the Redevelopment Agency of the City of National City, California /1 ity Clerk Serving as Secretary to the Successor Agency By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2015-66 of the Successor Agency to the Community Development Commission as the Redevelopment Agency of the City of National City, California, passed and adopted on June 16, 2015. City Clerk Serving as Secretary to the Successor Agency By: Deputy SUCCESSOR AGENCY TO THE COMMUNITY DEVELOPMENT COMMISSION AS THE NATIONAL CITY REDEVELOPMENT AGENCY AGENDA STATEMENT MEETING DATE: June 16, 2015 Ca0‘5-a3 yob-'0-13 AGENDA ITEM NO. 12 ITEM TITLE: Resolution of the Board of the Successor Agency to the Community Development Commission as the National City Redevelopment Agency authorizing the Chairman to execute a Settlement Agreement between the Successor Agency to the Community Development Commission as the National City Redevelopment Agency and Rosenow Spevacek Group, Inc., to resolve the pending arbitration proceeding. PREPARED BY: PHONE: EXPLANATION: Claudia Gacitua Silva DEPARTMENT: 336-4222 Please see attached staff report. APPROVED BY: FINANCIAL STATEMENT: ACCOUNT NO. N/A ENVIRONMENTAL REVIEW: N/A ORDINANCE: INTRODUCTION: FINAL ADOPTION: APPROVED: APPROVED: Finance MIS STAFF RECOMMENDATION: N/A BOARD / COMMISSION RECOMMENDATION: N/A ATTACHMENTS: Staff report Settlement Agreement Proposed resolution LvI\4V1 N0. 'd015- GG Staff Report BACKGROUND On February 20, 2007, the former Community Development Commission of the City of National City ("CDC") entered into an Agreement with Rosenow Spevacek Group, Inc. (RSG) for the 2007 Redevelopment Plan Amendment. The 2007 Redevelopment Plan Amendment was prepared by RSG and eventually adopted in July of 2007. On or about September 2007, the 2007 Redevelopment Plan Amendment was challenged by the Community Youth Athletic Center (the CYAC matter). In addition to the reverse validation challenge to the 2007 Redevelopment Plan Amendment, the CYAC matter alleged violations of the public records act, due process, and takings. The CYAC matter was dismissed, appealed, remanded, tried, appealed, and remanded over the years between 2007 and 2015. Overall, the appellate court affirmed the invalidation of the 2007 Redevelopment Plan Amendment and found a violation of the public records act based upon records not being furnished by RSG for disclosure. The court reversed the trial court's due process findings, affirmed the trial court's ruling regarding the other denied causes of action (upon which CYAC had cross -appealed), and remanded the matter back to the trial court to re -hear the attorneys fees in light of the ruling. In April 2015, the trial court entered judgment in the CYAC matter, awarding fees in the amount of $2,016,249.87. In or about 2011, the City and CDC commenced arbitration proceedings seeking damages against RSG arising out of work performed by RSG pursuant to its contract with the CDC (the Arbitration Proceedings). THE LAWSUIT In the Arbitration Proceedings, the City and CDC (collectively, City) alleged that RSG negligently performed its contractual obligations which resulted in compensatory damages in excess of $30,000,000. More specifically, the invalidation of the 2007 Redevelopment Plan Amendment (as well as the public record act violations) in the CYAC matter resulted in compensatory damages for the expended and awarded attorneys' fees amounting to over $3,000,000; compensatory damages representing the loss of revenues which were dependent upon validation of the 2007 Redevelopment Plan, in the form of increased sales tax to the City, increased property tax to the City, and the value of developer -provided infrastructure improvements, amounting to no less than $20,000,000; and, the related damages amounting to no less than $9,000,000 from the reduced bonding capacity (2011 bonds). RSG denied liability for all of the claims and damages alleged by the City. Moreover, RSG alleged the damages were speculative and non-compensable. During the course of the litigation, extensive discovery was undertaken by the parties. The City determined that RSG was insured with an aggregate policy limit of $2,000,000, reduced by claim expenses. The Arbitration Proceedings defense costs have been paid from the insurance policy proceeds, thereby reducing the available policy limits. The principals present and involved in the 2007 Redevelopment Plan Amendment are no longer active with the company. RSG, prior to the dissolution of redevelopment, based much of their business on redevelopment. During the pendency of the Arbitration Proceedings, the parties engaged in two lengthy negotiations conducted at two mediation sessions over many months. The parties have agreed to the proposed settlement, contingent upon approval by the Oversight Board and Department of Finance. THE SETTLEMENT RSG has agreed to pay the City and CDC the balance of the $2,000,000 policy limits that remain after payment has been made of all legal fees and costs incurred by RSG in connection with the defense and settlement of the Arbitration Proceedings. Currently, the amount is estimated at about $1.8M. RECOMMENDATION Staff recommends authorizing the Chairman to execute the settlement agreement, and perform actions necessary in settlement of this litigation. These actions would require Oversight Board approval and DOF approval before they are final. The settlement agreement contains these contingencies. This item is on the Oversight Board agenda for June 17, 2015. SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE OF ALL CLAIMS THIS SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE OF ALL CLAIMS (hereinafter "Agreement") is made and entered into by and between the parties hereto, namely, THE CITY OF NATIONAL CITY and what was formerly the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY and is now the SUCCESSOR AGENCY TO THE COMMUNITY DEVELOPMENT COMMISSION AS THE NATIONAL CITY REDEVELOPMENT AGENCY (collectively the "CITY") on the one hand and ROSENOW SPEVACEK GROUP, INC. ("RSG"), on the other hand. CITY and RSG are sometimes hereinafter referred to collectively as the "Parties". RECITALS This agreement is made with reference to the following facts: A. In or about 2011, CITY commenced arbitration proceedings against RSG arising out of work performed by RSG pursuant to its contract with the Community Development Commission of the City of National City dated February 20, 2007 (the "Arbitration Proceedings") . B. In the Arbitration Proceedings, CITY alleged that RSG negligently performed its contractual obligations and that in the result, the San Diego Superior Court invalidated National City's Redevelopment Plan in an action filed by Community Youth Athletic Center and others (collectively "CYAC") against the City of National City and National City Community Development Commission (collectively "CDC") (hereinafter the "Underlying Action"). The Superior Court's judgment invalidating the Page 1 of 10 Redevelopment Plan in the Underlying Action was affirmed by the Court of Appeal in 2013. C. In the Arbitration Proceedings, CITY sought compensatory damages from RSG , representing (1) attorney fees totaling $2,016,249.87 awarded against CDC and in favor of CYAC and other Interested Parties in the Underlying Action; (2) attorney's fees totaling $1,064,574.62 incurred by the CDC in defending the Underlying Action; (c) attorney's fees totaling $110,029.49 as of February 28, 2015, with additional attorney's fees incurred but not yet paid by CITY to prosecute the Arbitration Proceedings; and (4) compensatory damages representing (a) loss of revenues caused by disruption of improvement and development within the City which was dependent upon validation of the Redevelopment Plan Amendment, in the form of increased sales tax revenue, increased property tax revenue, the value of developer -provided infrastructure improvements, etc., of no less than $20,000,000.00; and (b) additional expenses incurred by CRY related to bonding expenses caused by the invalidation proceedings in the amount of no less than $9,100,000.00. RSG denied liability for all of the claims and damages alleged by CITY. D. Following a period of due diligence and formal discovery, it was determined that RSG was insured by National Union Fire Insurance Company of Pittsburgh, PA under Miscellaneous Professional Liability Policy No. 042923310 (the "National Union Policy") with aggregate policy limits of $2,000,000.00 reduced by claims expenses. The legal fees and costs incurred by RSG in defending the Arbitration Proceedings, have been paid from the proceeds of the National Union Policy, thereby reducing the available policy limits. That diligence and discovery by CITY revealed that it is in the best interest of CITY to settle and resolve the dispute on the terms contained herein. Page 2 of 10 E. During the pendency of the Arbitration Proceedings, the Parties engaged in two lengthy negotiations conducted at two mediation sessions over many months. The Parties have agreed to settle the disputes between them subject to the terms and conditions set forth in the agreement. NOW THEREORE and in consideration of the foregoing facts and the mutual covenants, conditions, promises and agreements contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows: 1. AGREEMENT: 1.1 Settlement Payment: CITY shall be paid the balance of the $2,000,000 policy limits in the National Union Policy that remain after payment has been made of all legal fees and costs incurred by RSG in connection with the defense and settlement of the Arbitration Proceedings. Payment shall be made to CITY within 45 days after signature of this agreement by all Parties, or within 14 days after all governmental approvals to this settlement agreement have been procured, whichever event occurs last. The amount of the settlement proceeds is presently estimated to be slightly more than $1,830,000, but the final amount of the settlement proceeds will be confirmed by RSG within 10 days after signature of this agreement. RSG shall, if requested, provide satisfactory proof of the legal fees and costs incurred in connection with the defense of the arbitration proceedings, but shall not be required to waive the attorney -client privilege with respect to the contents of its attorneys' invoices. Page 3 of 10 1.2 Conditional Settlement: This settlement is conditional upon approval of all of its terms and conditions by all necessary governmental bodies or agencies, including, but not limited to, CITY, the Oversight Board, and the California Department of Finance. 1.3 Dismissal of the Arbitration with Prejudice: The Parties agree that upon payment of the settlement proceeds, CITY shall immediately dismiss the arbitration proceedings against RSG with prejudice. 1.4 Costs of Litigation: It is further agreed that the Parties to this agreement shall assume and bear their own costs and attorneys' fees as a result of, or in connection with, the arbitration and this settlement agreement. 2. MUTUAL RELEASE PROVISIONS: 2.1 CITY'S Release of RSG: In consideration respectively of the agreements referred to in Section 1 hereof, CITY does hereby forever release and discharge RSG and any and all of its parent companies, affiliates, subsidiaries, agents, heirs, attorneys, servants, employees, predecessors, successors, assigns, and assignors, and its insurers and reinsurers, from any and all actions, causes of action, obligations, costs, expenses, attorneys' fees, damages, losses, claims, liabilities, and demands of whatsoever character, nature and kind, known or unknown, suspected or unsuspected, other than as may arise out of or relate to the breach of this settlement agreement by RSG. 2.2 RSG Release of CITY: In consideration, respectively, of the agreements referred to in Section 1 hereof, RSG does hereby forever release and discharge CITY, and all of its agents, heirs, Page 4 of 10 attorneys, servants, employees, predecessors, successors, assigns, and assignors, from any and all actions, causes of action, obligations, costs, expenses, attorneys' fees, damages, losses, claims, liabilities, and demands of whatsoever character, nature and kind, known or unknown, suspected or unsuspected, other than as may arise out of or relate to the breach of this settlement agreement by CITY. 2.3 Waiver of Civil Code Section 1542: It is the intention of the Parties that the foregoing mutual releases shall be effective as a bar to all actions, causes of action, obligations, costs, expenses, attorneys' fees, damages, losses, claims, liabilities, and demands of whatsoever character, nature and kind, known or unknown, suspected or unsuspected herein above specified to be so barred; in furtherance of this intention the parties expressly waive any and all rights and benefits conferred upon them by provisions of Section 1542 of the California Civil Code, which are as follows: A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. The Parties hereby acknowledge that the foregoing waiver of the provisions of Section 1542 of the California Civil Code was separately bargained for. The Parties expressly consent that this release shall give the same full force and effect to unknown and unsuspected claims, demands, and causes of action, if any, as to those terms and provisions relating to claims, demands, and causes of action herein above specified. Page 5 of 10 3. MISCELLANEOUS: 3.1 Compromise: The Parties acknowledge that this Agreement constitutes a compromise and settlement of disputed claims and nothing in this Agreement is or shall be treated, or construed or deemed as an admission by any Party of any liability or fault. 3.2 Further Assurances: The Parties hereby agree to execute such other documents and to take such other action as may reasonably be necessary to implement the terms of this Agreement. 3.3 Law: This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of California. 3.4 Benefit and Burden: This Agreement shall be binding upon and inure to the benefit of the Parties and their respective representatives, successors, and assigns. 3.5 Waiver and Amendment: No breach of any provision hereof can be waived unless in writing. Waiver of any one breach shall not be deemed to be a waiver of any other breach of the same or any other provision hereof. This Agreement may be amended or modified only by a written agreement executed by all of the Parties. 3.6 Counterparts: This Agreement may be executed in counterparts by the Parties and will become effective and binding upon the Parties only at such time as all of the signatories hereto have signed a counterpart of this Agreement. All counterparts so executed shall constitute one Agreement binding on all the Parties, notwithstanding that all Parties are Page 6 of 10 not signatory to the original or the same counterpart. Each of the Parties shall sign a sufficient number of counterparts so that each Party will receive a fully executed original of this Agreement. The Parties agree that a facsimile signature shall bear the same force and effect as an original signature, thus enabling the Parties to expeditiously obtain signatures of all Parties and their counsel. In the event, however, that a facsimile signature is used by any Party, that Party shall ensure that all other Parties receive the original document bearing that Party's original signature within five (5) days. 3.7 Gender and Tense: Whenever required by the context hereof, the singular shall be deemed to include the plural, and the plural shall be deemed to include the singular, and the masculine, feminine, and neuter genders shall be deemed to include the other. The term "person" shall include corporation, firm, joint venture, partnership, trust, or estate. 3.8 Entire Agreement: This Agreement constitutes the entire agreement between the Parties pertaining to the subject matter hereof, fully supersedes all prior understandings, stipulations, representations, warranties, and agreements between the Parties, or any of them, pertaining to the subject matter hereof, and may be modified only by written agreement signed by all of the Parties hereto. 3.9 Captions and Interpretation: Paragraph titles or captions contained herein are inserted as a matter of convenience and for reference, and in no way define, limit, extend, or describe the scope of this Agreement or any provision hereof. No provision in this Agreement is to be interpreted for or against any Party because that Party or its legal representative drafted such provision. Page 7 of 10 3.10 Independent Advice of Counsel: The Parties, and each of them, represent and declare that in executing this Agreement they rely solely upon their own judgment, belief, and knowledge, and the advice and recommendations of their own independently selected counsel, concerning the nature, extent, and duration of their rights and claims, and that they have not been influenced to any extent whatsoever in executing the same by any representations or statements covering any matters made by any other Party or by any person representing such other Party. 3.11 Voluntary Agreement The Parties, and each of them, further represent and declare that they have carefully read this Agreement and know the contents thereof and that they sign the same freely and voluntarily. 3.12 Authority to Execute Agreement: CITY and RSG and each of them, each warrant and represent that the individual persons executing this agreement are duly authorized to execute this agreement on behalf of the respective parties and in their respective capacities as indicated below. 3.13 Assignment: Each of the parties hereby warrants, represents and agrees that it is the sole and lawful owner of all right, title, and interest in and to all of the respective claims which are referenced in the releases set forth above and they have not hereto voluntarily, by operation of law or otherwise, assigned or transferred or purported to assign or transfer to any person whomsoever, any such claims or any part or portion thereof. Each of the parties agree to indemnify and hold each of the other parties, harmless from any claim, demand, damage, liability, action, or cause of action, based on or connected with or arising in any manner out of any such assignment or transfer. Page 8 of 10 3.14 Incorporation of Recitals: The Recitals to this Settlement Agreement are hereby incorporated into this Settlement Agreement by this reference. 3.15 Further Assurances. All Parties agree to cooperate fully and execute any and all supplementary documents and take additional actions which may be necessary or appropriate to give full force and effect to the basic terms and intent of this Settlement Agreement. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date and year written below. CLAIMANTS: Dated: May , 2015 CITY OF NATIONAL CITY By Its RESPONDENT: �c Dated: Mays , 2015 ROSENOW SPEVACEK GROUP, INC. Page 9 of 10 APPROVED AS TO FORM: Dated: May , 2015 MAZZARELLA & MAZZARELLA, LLP By: Daral B. Mazzarella Attorney for Claimant CITY OF NATIONAL CITY Dated: May -2 1 , 2015 LEWIS BRISBOIS BISGAARD & SMITH LLP By: Ernest Slome Attorney for Respondent ROSENOW SPEVACEK GROUP, INC. Page 10 of 10 RESOLUTION NO. 2015 — RESOLUTION OF THE BOARD OF THE SUCCESSOR AGENCY TO THE COMMUNITY DEVELOPMENT COMMISSION AS THE NATIONAL CITY REDEVELOPMENT AGENCY AUTHORIZING THE CHAIRMAN TO EXECUTE A SETTLEMENT AGREEMENT BETWEEN THE SUCCESSOR AGENCY TO THE COMMUNITY DEVELOPMENT COMMISSION AS THE NATIONAL CITY REDEVELOPMENT AGENCY AND ROSENOW SPEVACEK GROUP, INC., TO RESOLVE THE PENDING ARBITRATION PROCEEDING WHEREAS, On February 20, 2007, the former Community Development Commission of the City of National City ("CDC") entered into an Agreement with Rosenow Spevacek Group, Inc. (RSG) for the 2007 Redevelopment Plan Amendment; and WHEREAS, the 2007 Redevelopment Plan Amendment was prepared by RSG and eventually adopted in July of 2007; and WHEREAS, on or about September 2007, the 2007 Redevelopment Plan Amendment was challenged by the Community Youth Athletic Center (the CYAC matter). In addition to the reverse validation challenge to the 2007 Redevelopment Plan Amendment, the CYAC matter alleged violations of the public records act, due process, and takings; and WHEREAS, the CYAC matter was dismissed, appealed, remanded, tried, appealed, and remanded over the years between 2007 and 2015; and WHEREAS, the appellate court affirmed the invalidation of the 2007 Redevelopment Plan Amendment, and found a violation of the Public Records Act based upon records not being furnished by RSG for disclosure; and WHEREAS, In April 2015, the trial court entered judgment in the CYAC matter, awarding fees in the amount of $2,016,249.87; and WHEREAS, in or about 2011, the City and CDC commenced arbitration proceedings seeking damages against RSG arising out of work performed by RSG pursuant to its contract with the CDC (the Arbitration Proceedings); and WHEREAS, during the pendency of the Arbitration Proceedings, the parties engaged in two lengthy negotiations conducted at two mediation sessions over many months; and WHEREAS, RSG has agreed to pay the City and CDC the balance of their $2,000,000 policy limits that remain after payment has been made of all legal fees and costs incurred by RSG in connection with the defense and settlement of the Arbitration Proceedings, currently estimated at about $1.8M; and WHEREAS, these actions require Oversight Board approval and DOF approval before they are final. NOW, THEREFORE, BE IT RESOLVED that the Board of the Successor Agency to the Community Development Commission as the National City Redevelopment Agency hereby authorizes the Chairman to execute the Settlement Agreement between the Successor Agency to the Community Development Commission as the National City Redevelopment Agency and Rosenow Spevacek Group, Inc., to resolve the pending Arbitration Proceeding. Resolution No. 2015 — Page Two PASSED and ADOPTED this 16th day of June, 2015. Ron Morrison, Chairman ATTEST: Michael R. Dalla, City Clerk as Secretary to the Successor Agency APPROVED AS TO FORM: Claudia Gacitua Silva Successor Agency Counsel en CITY OF NATIONAL CITY Office of the City Clerk 1243 National City Blvd., National City, California 91950-4397 619-336-4228 Michael R. Dalla, CMC - City Clerk ROSENOW SPEVACEK GROUP Settlement Arbitration Ginny Miller (City Attorney) Forwarded Settlement Arbitration to Rosenow Spevacek Group.