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HomeMy WebLinkAboutMINUTES - 08091994 - 1.6 (2) TO: BOARD OF COMMISSIONERS OF HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA FROM: COUNTY COUNSEL DATE: August 4, 1994 SUBJECT: Settlement of Litigation against Western Roofing Services and ASC Pacific, Casa De Serena Senior Housing Project, Bay Point Area SPECIFIC REQUEST(S) OR RECOMMENDATIONS) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS 1. APPROVE settlement of litigation against Western Roofing Service and ASC Pacific for $80, 000; 2 . APPROVE settlement agreement and AUTHORIZE execution by Board Chair; and 3 . AUTHORIZE County Counsel's Office to take other actions necessary to consummate settlement. FISCAL IMPACT $80, 000 in monies payable to the Housing Authority. BACKGROUND/REASONS FOR RECOMMENDATIONS The Casa De Serena Senior Housing Project at 1016-1065 Clearland Drive in Bay Point was reroofed in 1991 by Western Roofing Service ("Western") . The reroofing work was done with metal roof panels and flashings manufactured by ASC Pacific, Inc. ("ASC") . After the reroofing work was completed, the Housing Authority started to receive complaints from residents of leaks and condensation. Notice of these problems was given to Western and its bonding company, and Western was requested to f ix the problems. Despite several repair attempts by Western, the leaks and condensation continued. To determine the cause of the problems, the Housing Authority hired a specialist (Thomas K. Butt, AIA, Interactive Resources) . Through his investigation, it was determined that the leaks were caused by inadequate bracing and improper installation of flashings and that the condensation was caused by the lack of a continuous vapor barrier. In July 1993, the Housing Authority hired another contractor (PMC Roofing) to perform the remedial work and to install certain upgrades (e.g. , gutters and downspouts) . The total cost of the remedial work and upgrades was approximately $281, 000, which was covered by federal funding (HUD) . CONTINUED ON ATTACHMENT: X YES SIGNATURE I &�� �A wwaA,l _ RECOMMENDATION OF COUNTY ADMINISTRATOR _ RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON ,w.�. Q l 9 APPROVED AS RECOMMENDED _ OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY OF AN ACTION TAKEN UNANIMOUS (ABSENT ) AND ENTERED ON THE MINUTES OF THE BOARD AYES: NOES: OF SUPERVISORS ON THE DATE SHOWN. ABSENT: ABSTAIN: QJ"�. 9 , 199 +19 ATTESTED PHIL B TCHELOR, CL K OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR Orig: County Counsel 1 cc: Richard J. Martinez, Executive Director, Housing Authority BY , C� l ))EPUTY 1 BACKGROUND/REASONS FOR RECOMMENDATIONS (cont'd) In November 1993, the Housing Authority filed a lawsuit against Western, its bonding company and ASC (Housing Authority of the County of Contra Costa v Western Roofing Service, et al. ; Contra Costa Superior Court Case No. C93-04948) . As a result of settlement negotiations, Western and ASC have offered $80, 000 to settle the case. Under the proposed settlement, Western would pay $70,000 and ASC would pay $10, 000. The County Counsel's Office has discussed the settlement offer with the Executive Director of the Housing Authority. Considering the amount offered, the possibility that Western would not be responsible for certain items and the cost of bringing this case to trial, the Executive Director recommends that the settlement be accepted. CONSEQUENCES OF NEGATIVE ACTION The lawsuit would proceed at additional expense to the Housing Authority. The net amount that would eventually be recovered by the Housing Authority could possibly be less than the amount now offered, depending upon the evidence that comes out during discovery and the litigation expenses incurred by the Housing Authority. For the most part, the Housing Authority would have to bear its own litigation expenses, and these expenses could not be recovered from Western and the other defendants. So far, litigation expenses have been minimal because efforts have focused on reaching a negotiated settlement. 2 MUTUAL RELEASE OF ALL CLAIMS AND SETTLEMENT AGREEMENT 1. For the consideration stated herein, the Housing Authority of the County of Contra Costa ("Authority") shall release and forever discharge Western Roofing Service ("Western") , ASC Pacific, Inc. ("ASCII) , and Safeco Insurance Company of America ("Safeco") , their officers, agents, employees, directors, shareholders" partners, joint venturers, agents, attorneys and insurers from any and all liability, claims, obligations and causes of action (including without limitation any claim for attorneys, fees or costs) , whether based on tort, contract, statute or otherwise, which relate to or are in any manner connected with: (1) the facts alleged in the complaint filed by Authority in the litigation entitled Housing Authority of the County of Contra Costa v. Western Roofing Service, et al. , Contra Costa County Superior Court Case No. C93-04948; (2) the labor, service, equipment or materials furnished by Western or ASC for the remedial metal roofing project at the Casa de Serena public housing complex in ' West Pittsburg, which was performed by Western in 1991 (the "project") ; and (3) performance bond and payment bond no. 5630346 dated March 19 Al 1991, which were submitted by Western for the project (the "bonds") . 2 . For the consideration stated herein, Western shall release and forever discharge Authority, ASC, and Safeco, their governing boards, officers, agents, employees, directors, shareholders, partners, joint venturers, agents, attorneys and insurers from any and all liability, claims, obligations and causes of action (including without limitation any claim for attorneys' fees or costs) , whether based on tort, contract, statute or otherwise, which relate to or are in any manner connected with: (1) the facts alleged in the complaint filed by Authority in the litigation entitled Housing Authority of the County of Contra Costa v. Western Roofing Service, et al. , Contra Costa County Superior Court Case No. C93-04948; (2) the labor, service, equipment or materials furnished by ASC for the project; (3) the bonds; and (4) Authority's withholding of construction contract retention for the project. 3 . For the consideration stated herein, ASC shall release and forever discharge Authority, Western, and Safeco, their governing boards, officers, agents, employees, directors, shareholders, partners, joint venturers, agents, attorneys and insurers from any and all liability, claims, obligations and causes of action (including without limitation any claim for attorneys' fees or costs) , whether based on tort, contract, statute or otherwise, which relate to or are in any manner connected with: (1) the facts alleged in the complaint filed by Authority in the litigation entitled Housing Authority of the County of Contra Costa v. Western Roofing Service, et al. , Contra Costa County Superior Court Case No. C93-04948; (2),. the labor, service, equipment or materials furnished by Western for the project; and (3) the bonds. 4. Notwithstanding the provisions of paragraph 1, the standard manufacturer's warranty provided by ASC, a copy of which is attached to this agreement, shall remain in effect so long as Authority complies with the terms of the warranty. 5. Concurrently with the execution of this agreement, Western shall pay to Authority the sum of $37,554.80. In addition, as additional payment to Authority, Western agrees that Authority shall retain the sum of $32,445. 20, which Authority has previously withheld from the contract funds payable to Western for the project. 6. Concurrently with the execution of this agreement, ASC shall pay to Authority the sum of $10, 000. 00, receipt of which is acknowledged by Authority. 7 . Upon receipt of the payments specified in paragraphs 5 and 6, Authority shall promptly dismiss with prejudice in its entirety the action described in paragraph 1. 8. As soon as the dismissal provided for in paragraph 7 has occurred, no party to this agreement shall thereafter initiate or prosecute any litigation relating in any manner to the project or the bonds. 9. Each of the undersigned. parties expressly waives the benefits and protections of Section 1542 of the Civil Code, which statute reads as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor. " 10. The parties to this agreement acknowledge that the consideration given in connection with this agreement is a compromise of disputed claims and litigation and does not constitute, and shall not be construed as, an admission of liability on the part of any party for any purpose whatsoever. 11. This agreement is binding upon each of the parties, their successors in interest, agents and assigns. 12. If any legal action, arbitration or other proceeding is brought to enforce the terms of this agreement, the prevailing party shall be entitled to recover reasonable attorneys ' fees and other costs incurred in that action, arbitration or proceeding in addition to any other relief to which the prevailing party might be entitled. The attorneys' fees shall be recoverable as costs under Section 1021 of the Code of Civil Procedure. -2- 13 . This agreement and all or any of its terms and provisions, as well as the rights and duties of the parties, shall be interpreted and construed pursuant to and in accordance with the laws of the State of California. However, the rule of interpretation that any ambiguity in an agreement is interpreted against the party that drafted it shall be inapplicable; this agreement shall be interpreted as if it was drafted jointly by all parties. 14 . Each party warrants that the individuals) executing this agreement on that party's behalf has/have full authority and capacity to execute this agreement and to bind the party to the agreement. 15. The undersigned acknowledge that they have read this agreement and understand all of its terms and conditions and execute this agreement voluntarily and with full knowledge of its significance. 16. This agreement may be executed in multiple counterparts, which, when executed by all parties, shall constitute a single agreement. August 9 Dated: ffm= 1994 WESTERN ROOFING SERVICE HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA By: Title: By: Chair , Board of ASC PACIFIC, INC. Commissioners ATTEST: Phil Batchelor, Clerk of the Board of Supervisors and By:-4 County Administrator Title: ` By: Deputy -3- MUTUAL RELEASE OF ALL CLAIMS AND SETTLEMENT AGREEMENT 1. For the consideration stated herein, the Housing Authority of the County of Contra Costa ("Authority") shall release. and forever discharge Western Roofing Service ("Western") , ASC Pacific, Inc. ("ASC") , and Safeco Insurance Company of America ("Safeco") , their officers, agents, employees, directors, shareholders, partners, joint venturers, agents, attorneys and insurers from any and all liability, claims, obligations and causes of action (including without limitation any claim for attorneys' fees or costs) , whether based on tort, contract, statute or otherwise, which relate to or are in any manner connected with: (1) the facts alleged in the complaint filed by Authority in the litigation entitled Housing Authority of the County of Contra Costa v. Western Roofing Service, et al. , Contra Costa County Superior Court Case No. C93-04948; (2) the labor, service, equipment or materials furnished by Western or ASC for the remedial metal roofing project at the Casa de Serena public housing complex in West Pittsburg, which was performed by Western in 1991 (the "project") ; and (3) performance bond and payment bond no. 5630346 dated March 19 , 1991, which were submitted by Western for the project (the "bonds") . 2 . For the consideration stated herein, Western shall release and forever discharge Authority, ASC, and Safeco, their governing boards, officers, agents, employees, directors, shareholders, partners, joint venturers, agents, attorneys and insurers from any and all liability, claims, obligations and causes of action (including without limitation any claim for attorneys' fees or costs) , whether based on tort, contract, statute or otherwise, which relate to or are in any manner connected with: (1) the facts alleged in the complaint filed by Authority in the litigation entitled Housing Authority of the County of Contra Costa v. Western Roofing Service, et al. , Contra Costa County Superior Court Case No. C93-04948; (2) the labor, service, equipment or materials furnished by ASC for the project; (3) the bonds; and (4) Authority's withholding of construction contract retention for the project. 3 . For the consideration stated herein, ASC shall release and forever discharge Authority, Western, and Safeco, their governing boards, officers, agents, employees, directors, shareholders, partners, joint venturers, agents, attorneys and insurers from any and all liability, claims,. obligations and causes of action (including without limitation any claim for attorneys' fees or costs) , whether based, on tort, contract, statute or otherwise, which relate to or are in any manner connected with: (1) the facts alleged in the complaint filed by Authorityin the litigation entitled Housing Authority of the County of Contra Costa v. Western Roofing Service, et al. , Contra Costa County Superior Court Case No. C93-04948; (2) the labor, service, equipment or materials furnished by Western for the project; and (3) the bonds. 4. Notwithstanding the provisions of paragraph 1, the standard manufacturer's warranty provided by ASC, a copy of which is attached to this agreement, shall remain in effect so long as Authority complies with the terms of the warranty. 5. Concurrently with the execution of this agreement, Western shall pay to Authority the sum of $37, 554.80. In addition, as additional payment to Authority, Western agrees that Authority shall retain the sum of $32,445.20, which Authority has previously withheld from the contract funds payable to Western for the project. 6. Concurrently with the execution of this agreement, ASC shall pay to Authority the sum of $10, 000. 00, receipt of which is acknowledged by Authority.' 7. Upon receipt of the payments specified in paragraphs 5 and 6, Authority shall promptly dismiss with prejudice in its entirety the action described in paragraph 1. 8. As soon as the dismissal provided for in paragraph 7 has occurred, no party to this agreement shall thereafter initiate or prosecute any litigation relating in any manner to the project or the bonds. 9. Each of the undersigned parties expressly waives the benefits and protections of Section 1542 of the Civil Code, which statute reads as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor. " 10. The parties to this agreement acknowledge that the consideration given in connection with this agreement is a compromise of disputed claims and litigation and does not constitute, and shall not be construed as, an admission of liability on the part of any party for any purpose whatsoever. 11. This agreement is binding upon each of the parties, their successors in interest, agents and assigns. 12. If any legal action, arbitration or other proceeding is brought to enforce the terms of this agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and other costs incurred in that action, arbitration or proceeding in addition to any other relief to which the prevailing party might be entitled. The attorneys' fees shall be recoverable as costs under Section 1021 of the Code of Civil Procedure. -2- 13 . This agreement and all or any of its terms and provisions, as well as the rights and duties of the parties, shall be interpreted and construed pursuant to and in accordance with the laws of the State of California. However, the rule of interpretation that any ambiguity in an agreement is interpreted against the party that drafted it shall be inapplicable; this agreement shall be interpreted as if it was drafted jointly by all parties. 14. Each party warrants that the individuals) executing this agreement on that party's behalf has/have full authority and capacity to execute this agreement and to bind the party to the agreement. 15. The undersigned acknowledge that they have read this agreement and understand all of its terms and corditions and execute this agreement voluntarily and with full knowledge of its significance. 16. This agreement may be executed in multiple counterparts, which, when executed by all parties, shall constitute a single agreement. August 9 Dated: xTmime , 1994 WESTERN ROOFING SERVICE HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA By: Title:rent By: Chair , Board of ASC PACIFIC, INC. Commissioners ATTEST: Phil Batchelor, Clerk of the Board of Supervisors and By: County Administrator Title: By: AJ Deputy -3-