HomeMy WebLinkAboutMINUTES - 03212006 - C.19 C.19
REVISED ITEM
TO: Board of Supervisors
FROM: Silvano B. Marchesi, County Counsel
By: David F. Schmidt, Deputy County Counsel
DATE: March 21, 2006
SUBJECT: Settlement of Litigation — County of Contra Costa v. Arntz Builders, et al-; Alameda County
Superior Court Case No. RG05197179
Juvenile Hall Addition project, Martinez
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATION(S)
A. APPROVE Settlement Agreement and Mutual Release,which provides for a global settlement of
the above litigation filed by the County, including all general contractor,subcontractor,and surety
claims against the County;
B. AUTHORIZE the County Administrator,ordesignee,to sign the agreement on the County's behalf;
C. AUTHORIZE the County Counsel,ordesignee,to take all steps necessaryto finalize the settlement;
and
D. DIRECT the County Auditor-Controller to issue all payments required under the agreement.
FINANCIAL IMPACT
No impact on the General Fund. The settlement will be covered by funds budgeted for the Juvenile Hall
Addition project and bond proceeds.
BACKGROUND/REASONS FOR RECOMMENDATION(S)
On November 18,2003,the County terminated Arntz Builders,the original contractor on the above
project. In response to the County's demand that Arntz's bonding company (Travelers)take over the
project and provide a replacement general contractor,the County and Travelers entered into a Takeover
Agreement on March 12, 2004. Under the Takeover Agreement, Travelers provided a replacement
general contractor(Flintco, Inc.)and agreed to pay all costs of completing the work. The project finally was
completed in June 2005.
On January 20, 2004, the County filed a lawsuit against Arntz Builders in Contra Costa County
(County of Contra Costa v. Arntz Builders, et al.; Contra Costa County Superior Court Case No. C04-
00101. On Arntz's motion,the case laterwas transferred to Alameda County,where it was assigned Case
No. RG05197179 and consolidated with other cases brought by various subcontractors on the project.
In addition to the subcontractor claims,the case also involves claims byArntz and Travelers against the
County and the County's claims against Travelers.
CONTINUED ON ATTACHMENT: X YES SIGNATURE
X RECOMMENDATION OF COUNTY ADMINISTRATOR _ RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURE(S):
ACTION OF BOARD ON MARCH Y I 700h APPROVED AS RECOMMENDED OTHER
VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE
AND CORRECT COPY OF AN ACTION TAKEN
AND ENTERED ON THE MINUTES OF THE BOARD
X UNANIMOUS(ABSENT III ) OF SUPERVISORS ON THE DATE SHOWN.
AYES: NOES: MARCH 21 2006
ABSENT: ABSTAIN: ATTESTED: JOHN CULLED, CLERK OF THE BOARD OF
SUPERVISORS AND COUNTY ADMINISTRATOR
Contact: David F.Schmidt,(925)335-1816
Orig.Dept.: County Counsel
cc: County Administrator BY DEPUTY
Auditor/Controller
Farella,Braun&Martel LLP(via County Counsel)
11.
Settlement of Litigation — County of Contra Costa v. Arntz Builders, et al.
March 21, 2006
Page 2
BACKGROUND/REASONS FOR RECOMMENDATION(S) (continued)
Following a two-day mediation session in January 2006 and weeks of extended mediation, the
mediator, Randy Wulff issued a mediator's proposal on March 3,2006. The mediator's proposal,which
is memorialized in a written Settlement Agreement and Mutual Release,involves the following main points:
► The County will release to Arntz $1,470,953.52 in contract retention
► The County will pay$490,000 to Lawson(mechanical subcontractor),$360,000 to Transbay
(fire sprinkler subcontractor), $300,000 to Flintco (replacement general contractor); and
$100,000 to McCray (plastering subcontractor)
► The County will pay$328,330.44 by joint checks to Flintco and various post-termination
subcontractors that are not parties to the above lawsuit
Arntz will pay$225,000 to Helix(electrical subcontractor)and$50,000 to McCray(plastering
subcontractor)and will assume responsibility for claims by pre-termination subcontractors
that are not parties to the above lawsuit
The above litigation will be dismissed with prejudice,and all parties will beartheirown legal
costs
► The parties will mutually release all claims against one another except for possible future
claims for latent defects, personal injuryor property damage to third-parties,and warranty
repairs i
► The County's previous termination of Arntz (i.e., Arntz's right to perform) will be withdrawn
CONSEQUENCES OF NEGATIVE ACTION
If the settlement is not approved, the above litigation would proceed to trial at continuing expense and
potential exposure to the County.
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