HomeMy WebLinkAboutMINUTES - 12192006 - C.29 TO: BOARD OF SUPERVISORS
FROM: John Cullen, County Administrator ,•� y;°t :,_.��� CONTRA
COSTA
DATE: December 19, 2006 COUNTY
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SUBJECT: Final Settlement of Claim Y _:; X
COUIl
Susan Williams v. Contra Costa County
WCAB No: SFO 048-04892
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS:
Receive this report concerning the final settlement of Susan Williams and authorize payment
from the workers' compensation trust fund in the amount of$45,000 less permanent disability
advances.
BACKGROUND/REASONS FOR RECOMMENDATION:
Mary Jo Castruccio, Assistant Risk Manager, Workers' Compensation, has advised the
County Administrator that within authorization, an agreement has been reached settling the
workers' compensation claim of Susan Williams v. Contra Costa County.
The Board's December 5, 2006 closed session vote was Supervisors Gioia, Piepho, Uilkema
and Glover—Yes, Supervisor DeSaulnier—Absent.
This action is taken so that terms of this final settlement and the earlier December 5, 2006
closed session vote of this Board authorizing its negotiated settlement are known publicly.
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CONTINUED ON ATTACHMENT: YES SIGNATURE:
L--RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMUJO
.APPROVE —OTHER
SIGNATURE(S).
ACTION OF 7
AR ONDG04**?F d60?! & ,.91-d4 APPROVED AS RECOMMENDED OTHER
VOTE OF SUPERVISORS
(VA DIST. 11 - 1 HEREBY CERTIFY THAT THIS IS A
TRUE AND CORRECT COPY OF AN
4)ES--------- NOUS:---=-===----- ACTION TAKEN AND ENTERED
46SEN'T-_-=-----==,4 BST T4 IN. ON MINUTES OF THE BOARD OF
SUPERVISORS ON THE DATE SHOWN.
Contact: Ron Harvey(335-1443)
CC: County Administrator
Risk Management ATTESTED .
Auditor-Controller JOHN CULLEN,CLERK OF
THE BOARD OF SUPERVISORS
AND COUNTY ADMINISTRATOR
BY UTY
H:WIy Documents\Board 0rders\602006\B0-SWmsWC.doc
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C . ,29(��
TO: Board of Supervisors
FROM: Silvano B. Marchesi, County Counsel
Attn: David F. Schmidt, Deputy County Counsel
DATE: December 19, 2006
' SUBJECT: Final settlement of S&K Metal Fabricators, Inc. v. Tinney Construction Corp., et al.
First & Second Floor Remodel and Parking Lot Expansion at 1650 Cavallo Road, Antioch for
Employment and Human Services Department (WH457B)
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATION(S)
RECEIVE report concerning the final settlement of S&K Metal Fabricators, Inc. v. Tinney
Construction Corp., et al. and CONFIRM authorization for County Counsel, or designee, to execute
Settlement Agreement and Release to finalize settlement.
FINANCIAL IMPACT
No impact to the General Fund. Settlement will be paid from contract funds withheld from the
general contractor.
BACKGROUNDIREASONS FOR RECOMMENDATIONS
In July 2003, the County awarded a $2.4 million construction contract to Tinney Construction
Corporation ("Tinney") for the above project in Antioch. The project, which involved remodeling a
two-story building purchased by the County, was supposed to take 180 days. Due to some
structural changes and extra work, the completion date was later extended to March 30, 2004.
Starting in February 2004, the County started to receive stop notices filed by subcontractors and
suppliers who had not been paid by Tinney. This continued throught the remainder of the project.
As a result of the stop notices and chronic payment problems, the project work, which was done
almost entirely by subcontractors, suffered delays and long periods of inactivity. Tinney ended up
completing the project, except for a few items, on April 19, 2005-385 days late. To cover the delay
and other expenses incurred by the County, the County withheld from Tinney $761,000 in contract
funds.
Towards the end of the job, various subcontractors filed suit on their stop notices. Eventually, the
stop notice lawsuits were settled by Tinney's bonding company (Travelers), which filed suit against
CONTINUED ON ATTACHMENT: X YES SIGNATURE I
APPROVE OTHER f
SIGNATURE(S):
APPROVED AS RECOMMENDED
OTHER
VOTE OF SUPERVISORS- _._,.,_.._...._.__ .. __. I HEREBY CERTIFY THAT THIS IS A TRUE
x 'L!iVrl:Vjf�1OL%S'(I AC'AN7) DIST. �I''.,: ' -- - -- -- - - ---------- - . AND CORRECT COPY OF AN ACTION TAKEN
AND ENTERED ON THE MINUTES OF THE BOARD
--==_-. , VOES:.'--=-= -�---- > — -- OF SUPERVISORS ON THE DATE SHOWN.
:4BSE.N'T::=---==-===ABBY II, ':-_=-=_ == _ ATTESTED:JOHN CULLEN,CLERK OF THE BOARD OF
- --- --'
MEDIA CONTACT: David F.Schmidt,(335-1816) SUPERVISORS AND COUNTY ADMINISTRATOR
Originating Dept.: County Counsel
cc: General Services Dept.(Rob Lim,Capital Projects Mgmt.)
Employment and Human Services Dept.(Mike Jameyson/Larry Jones)
County Administrator BY DEPUTY
County Auditor-Controller
Final settlement of S&K Metal Fabricators, Inc. v. Tinney Construction Corp., et al.
December 19, 2006
the County to recover the withheld contract funds ($761,000), additional compensation for extended
general conditions and extra work, interest, and attorney's fees. Tinney also filed suit against the County
for unspecified damages, claiming that the County was responsible for the project delays. Recently,
Travelers took over Tinney's claims against the County and is now asserting them in addition to Travelers'
own claims.
On December 13, 2006, a mediation was held before John Bates, an experienced construction mediator in
San Francisco, and a settlement was reached. Under the settlement, the County would retain $244,000 in
liquidated damages (244 days) for the delays in completing the project and $207,000 for the expenses
incurred by the County. The remaining contract funds, which total $310,000 (includes $87,238 previously
deposited with the court), would be released to Travelers. The settlement amount is within the range
previously approved the Board.
A written Settlement Agreement and Release (copy attached) has been prepared to finalize the
settlement. The County Counsel's Office, the General Services Department, and the Employment and
Human Services Department recommend that the Board receive this report and confirm authorization for
the County Counsel, or his designee, to sign the Settlement Agreement and Release.
CONSEQUENCES OF NEGATIVE ACTION
Pending litigation would continue at additional expense to the County. Depending on the outcome of a
jury trial, the County could recover less than the $451,000 provided under the settlement and would face
potential exposure to Travelers for more than the $310,000 provided under the settlement.
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release("Agreement") is made and entered into by and
between Travelers Casualty and Surety Company of America("Travelers") and the County of
Contra Costa ("County"). Travelers and the County shall collectively be referred to as the
"Parties."
RECITALS
This AGREEMENT is entered into with reference to the following facts:
A. On or about May 3, 2003 Tinney Construction Corporation("Tinney") entered into a
written construction contract with the County for the renovation and exterior site improvements
at the Employment and Human Services Building, located at 1650 Cavallo Road,Antioch,
California("Project") ("Contract").
B. In connection with the Project, Travelers, as surety, issued public works Payment and
Performance Bond No. 104073231 on behalf of Tinney, as principal, in the penal sum of
$2,413,000 (the"Payment Bond"and the "Performance Bond,"respectively).
C. Several of Tinney's subcontractors and suppliers filed stop notices with the County in
connection with the Project.
D. Travelers has been assigned and is subrogated to all of the rights and interests, including
stop notice rights, of Alcal/Arcade Contracting, Inc. dba Alcal Roofing & Insulation; Strange&
Chalmers, Inc.; Green Growth Industries, Inc.; American Asphalt Repair and Resurfacing Co.,
Inc.; Fashion Drapery, Inc.; Dana Kitchens & Associates, Inc.; Global Steel Products Corp.;
Delta Wireless, Inc. dba Delta Network Solutions; S&K Metal Fabrications dba Aden Steel
Co.; Pader Plumbing, Inc. dba Champion's Plumbing& Heating, Inc.; and California Glass and
Panel, Inc. in connection with or related to the Project.
E. Travelers has been assigned and is subrogated to all of the rights and interests of Tinney
in connection with the Project and the Contract.
F. Certain disputes have arisen between Travelers and the County concerning the Project
and the Contract, such disputes contained within the consolidated action entitled S&KMetal
Fabricators dba Allen Steel v. Tinney Construction Company, Inc. et al. currently pending in
the Contra Costa County, California, Superior Court, and denoted as Civil Action No. C05-
01034 ("Action").
G. The Parties now desire to enter into this final Agreement to resolve their disputes and
the Action pursuant to the terms and conditions agreed-to herein.
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AGREEMENT
NOW, THEREFORE, for and in consideration of the Recitals,which are intended to be and
therefore made a part of this Agreement, and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the Parties, and each of them, hereby agree as
follows:
-..._ . .._ . . ...........
1. Effectiveness of Agreement. This Agreement shall be effective upon the full
execution by the Parties (the "Effective Date"), subject to certain conditions stated below.
a. Approval by County_ The effectiveness of this Agreement is conditioned
upon approval of the Agreement by the County Board of Supervisors. County.Counsel shall
recommend this settlement to the County Board of Supervisors.
2. Settlement Payments. In consideration of the Recitals stated herein,and in reliance
on the Parties' releases contained herein,and in consideration of the full and timely performance
of the terms of this Agreement, and in full and final settlement of the Action, the County has
agreed to pay to Travelers the amount of Three Hundred and Ten Thousand Dollars($310,000.00)
("Settlement Payment"). Such payment, less $142,084,which is 125%of the stop notice filed by
OWR Mechanical,Inc. dba Monarch Mechanical("Monarch Stop Notice"), shall.be made within
ten(10)business days from County approval as provided for in paragraph 1(a)above. The balance
of the Settlement Payment shall be made within ten(10)business days from receipt by the County
of either(a) a statutory release of the Monarch Stop Notice and a statutory unconditional release
upon final payment from Monarch, or(b) a statutory stop notice release bond from Travelers for
the Monarch Stop Notice.
3. Release.
3.1 Mutual Release Between the Parties. Except for the rights, duties and
obligations created by this Agreement,each Party,on behalf of itself and its respective heirs, legal
successors, assigns, grantees, agents, representatives, attorneys, officers, directors, partners,
affrliatos, subsidiaries, employees, and associates, does hereby forever release and discharge the
other Party and its respective heirs, legal successors, assigns, grantees, agents, representatives,
attorneys, officers,directors,partners,affiliates,subsidiaries,employees,and associates from any
and all claims, including but not limited to, demands, actions, causes of action, obligations,costs,
expenses, attorneys' fees, expert witness or consultant fees,damages,interest,losses and liabilities
of whatsoever nature, character or kind, whether known or unknown, suspected or unsuspected,
matured or contingent, which concern or relate in any way to the Project, Contract, Action, the
Payment Bond or the Performance Bond. This release shall not affect any obligation of Travelers
under the Payment Bond to third party claimants. Nothing in this mutual release between the
Parties shall release any claim or cause of action that either Party may have against Tinney,Aiden
Tinney, or Christy Tinney.
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3.2 Dismissal Each Party shall within ten (10) business days from County
approval as provided for in paragraph 1(a) above execute and file a Request for Dismissal with
Prejudice dismissing all of their respective claims in the Action, and shall thereafter deliver a file-
endorsed copy of the dismissal to the other Party.
4. Waiver of Civil Code &1542. The Parties acknowledge that they are familiar with
California Civil..Code § 1542, which provides 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 they are aware that they and/or their attorneys may hereafter
discover claims or facts in addition to or different from those which they now know or believe to
exist with respect to the Project, Contract, Action and the Performance Bond. Nevertheless, and
with full knowledge and understanding of the potential of the risks,the Parties expressly waive and
relinquish any and all rights and benefits which they may have under the provisions of Civil Code
§ 1542 with respect to the Project,Contract,Action and the Performance Bond to the fullest extent
that they may lawfully waive such rights.
5. Cooperation. Travelers shall cooperate with the County and shall not oppose the
County's efforts to obtain the funds interplead by the County in the Action.
6. Compromise. The Agreement contained'herein affects the compromise and
settlement of disputed and contested claims and nothing contained herein shall be construed as an
admission by any party hereto of any liability of any kind to any other party. Each of the Parties
hereby expressly denies that they are in any way liable or indebted to any other party to this
Agreement.
7. Benefit and Burden. This Agreement shall be binding upon and shall inure to the
benefit of the Parties hereto and their heirs,executors,administrators,representatives,successors,
assigns, agents, servants, employees, attorneys, predecessors, assignors, officers, directors,
shareholders, partners, parent companies, subsidiary companies, insurance companies and
affiliates.
8. Attorneys' Fees and Costs. The Parties agree that each shall bear its own attorneys'
fees, expert witness fees and costs incurred in connection with the Action up to and including the
date of the execution of this Agreement.
9. 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
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same or any other provisions hereof. This Agreement may be amended only by a written
agreement executed by the parties in interest at the time of the modification.
10. Governiniz Law. This Agreement and any other documents referred to herein shall
be governed by, construed and enforced in accordance with,the laws of the State of California.
11. Entire Agreement This Agreement is intended to resolve all of the claims between
the Parties hereto. All agreements,covenants,representations and warranties,express and implied,
oral and written, of the Parties hereto concerning the subject matter of this Agreement are
contained herein. No other agreements, covenants, representations or warranties, express or
implied, oral or written, have been made by any party hereto to any other party concerning the
subject matter hereof. All prior and contemporaneous conversations, negotiations, possible and
alleged agreements,representations,covenants and warranties concerning the subject matter of this
Agreement are merged herein. This is an Integrated Agreement.
12. Construction. Each of the Parties and counsel for each of the Parties have reviewed
and revised this Agreement, and the normal rule of construction to the effect that any ambiguities
in this Agreement are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement.
13. Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, and will become effective and binding upon the parties 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 the Parties hereto,
notwithstanding that the Parties hereto shall sign a sufficient number of counterparts so that each
party will receive a fully executed original of this Agreement. Facsimile copies of this Agreement
shall be deemed to constitute original documents.
14. Understanding_. The parties hereto,and each of them,represent,warrant and agree
as follows:
14.1 They have received independent legal advice from their attorneys with
respect to the advisability of making the settlement provided for herein with respect to the
advisability of executing the Agreement.
14.2 They have made such investigation of the facts pertaining to the
settlement and the release of all matters pertaining hereto as they deem necessary or desirable.
14.3 That each person signing this Agreement on behalf of a party has the
requisite power and authority to sign on behalf of such party and that when this Agreement is so
executed and delivered, it will be a binding obligation of, and enforceable against, such party in
accordance with its terms.
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15. VoluntarAgreement. The parties hereto,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.
16. Severability. If any part of this Agreement is found void or unenforceable for any
reason,that part shal l be considered as excised, and the remainder of this Agreement shall be given
full force and effect. .
17. Enforcement. The Parties specifically authorize the Superior Court of the State of
California in and for the County of Contra Costa to retain jurisdiction for purposes of enforcement
and interpretation of this Agreement. In accordance with Code of Civil Procedure §664.6, any of
the Parties, upon motion, may request the Court to enter judgment pursuant to the terms of this
Agreement. In any such motion to enforce this Agreement,the prevailing party shall be entitled to
reasonable attorneys' fees and costs.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date and year written below.
Travelers Casualty and Surety Company of
America
B .
Dated: 14?A Tit
County of Contra Costa
B
Dated: , �3 Title: C e p
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APPROVED AS TO FORM:
SEDGWICK TE T, M T &ARNOLD, LLP
By:
Dated: 12 - 1 r Attorneys for Travelers Casualty and Surety
Company of America
OFFICE OF THE COUNTY COUNSEL , COUNTY
OF CONTR COSTA
Dated: �� ' l�'0 By:
/11 Z�/14.1
Attorneys for Coun y o Contra Costa
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