SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release (“Agreement”) is made and entered into effective as of November 6, 2024, (“Effective Date”) by and between the City of Anaheim (“City”) and EBS General Engineering, Inc. (“EBS”). When referred to in this Agreement, City and EBS are referred to collectively as the “Parties” and individually as a “Party”.
RECITALS
A. Following a competitive bidding process, on or about on October 18, 2021, the City, as owner, and EBS, as general contractor, entered into a written Agreement for EBS to provide all necessary labor, equipment and materials needed to construction a public work of improvement known as the Northeast Anaheim Colony Sabina Neighborhood Improvements Phase III located in the City of Anaheim, California for the bid sum of $5,317,919.39), before adjustment for actual bid quantities installed and change orders (‘the Project”).
B. Certain disputes arose between the Parties regarding delays and alleged extra work which culminated in EBS filing a Complaint on October 23, 2023, in the Orange County Superior Court, naming the City as defendant, titled EBS General Engineering, Inc. v. City of Anaheim, et al. and designated as Case No. 30-2023-01358864-CU-BC-NJC ("the Lawsuit"). On January 16, 2024, City answered the Complaint denying the allegations.
C. The Parties participated in a mediation with Eileen Diepenbrock, Esq. on November 6, 2024, which resulted in a settlement as detailed herein.
D. The Parties now desire to settle and compromise certain claims and disputes that arise out of the Agreement and the Project.
NOW, THEREFORE, in consideration of the foregoing Recitals which are an integral part of this Agreement and incorporated herein as though set forth in full, and in consideration of the mutual covenants, releases, conditions and promises contained herein, the payment referred to herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
AGREEMENT
1. Within thirty (30) calendar days after the execution of this Agreement by all Parties and the receipt of the documents set forth in Paragraph 2 herein below, the City shall pay to EBS the total sum of $290,000.00 as full and final settlement of any and all claims related to the Project, inclusive of retention and any claims for delay, extra work and change orders (“Settlement Payment”).
2. Prior to and as a condition of the payment of the Settlement Payment pursuant to Paragraph 1 of this Agreement, counsel for EBS will deliver to counsel for City, Mary A.
Salamone, Esq., to be held in trust and not be relied upon, recorded, used, or otherwise effective until EBS confirms the negotiability of the Settlement Payment, the following documents: (a) an executed Unconditional Waiver and Release on Final Payment with no exceptions and otherwise meeting the requirements of California Civil Code §8138; and (b) an executed Request for Dismissal with prejudice of the Lawsuit.
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3. Except as to the specific rights and obligations set forth herein or created or reserved in this Agreement, the Parties hereby agree to release and forever discharge each other and their respective principals, agents, servants, employees, attorneys, insurers, representatives, predecessors , successors, assigns and assignors, officers, directors, shareholders, members, parent companies, subsidiary companies, related companies and any and all entities in which any of them holds an ownership interest, and each of them, from any and all claims, demands, actions, causes of action, obligations, costs, expenses, penalties, interest, attorneys’ fees, damages, losses and liabilities of whatsoever nature, character or kind, whether known or unknown, suspected or unsuspected, matured or contingent, which concern, arise out of, or are in any way connected with the Lawsuit and/or the Project, including without limitation, any claims or demands which pertain or relate to in any way the Agreement.
4. The Parties acknowledge that they are familiar with California Civil Code §1542 which provides as follows:
A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.
The Parties waive and relinquish any of the rights and benefits which each may have under, or which may be conferred upon them by, the provisions of California Civil Code §1542. In connection with such waiver and relinquishment, the Parties hereby acknowledge that they are aware that it or its attorneys may hereafter discover claims or facts in addition to or different from those which it now knows or believes to exist with respect to the subject matter of this Agreement, but that it is the intention of the Parties to hereby fully, finally and forever settle and release all the claims that it has against each other whether known or unknown, suspected or unsuspected, which concern, arise out of, or are in any way connected with the Agreement and/or the Project. The Parties acknowledge that the foregoing waiver of the provisions of California Civil Code §1542 was separately bargained for.
5. Notwithstanding any provisions within this Agreement, nothing contained herein shall be deemed to release any Party from the following: (a) rights of indemnity pursuant to the Agreement including, but not limited to, any third party claims or cross-claims arising from property damage, bodily injury, personal injury sickness, disease or death as it relates to the Project; (b) any claims for latent deficiencies, as that term is defined in California Code of Civil Procedure §337.15(b); (c) any warranty or guaranty obligations for any workmanship, equipment and/or materials installed or furnished by EBS on the Project, which are neither enhanced nor diminished by this settlement; (d) breach of any of the terms, covenants, representations, warranties or provisions of this Agreement; and (e) any and all continuing obligations pursuant to the Agreement including, but not limited to, insurance and indemnity obligations.
6. EBS agrees to defend, indemnify, and hold the City harmless from any claims for non-payment for labor, services, equipment and/or materials furnished to the Project by any consultant, subcontractor and/or supplier to EBS.
7. All agreements, covenants, representations and warranties, whether express or implied, oral or written, of the Parties hereto concerning the subject matter hereof are contained 2 128594-00000007/8792037.1
herein. No other agreements, covenants, representations or warranties, whether 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 between the Parties concerning the subject matter hereto are merged herein and superseded hereby.
8. This Agreement is in settlement of disputed claims, and nothing herein shall be deemed or construed to be an admission or concession of any liability or fault with respect to any of the allegations made or which could have been made by or against any of the Parties hereto for any purpose.
9. This Agreement shall be binding upon each of the Parties and its respective representatives, successors, assigns, sureties, and shall inure to the benefit of each of said Parties and its respective representatives, successors, and assigns.
10. The Parties agree that no third-party beneficiary to this Agreement exists and that nothing contained herein shall be construed as giving any other person or entity third party beneficiary status.
11. Each of the Parties represents and warrants that it has full power and authority to enter into and perform this Agreement, and that the person executing this Agreement on behalf of each of the Parties has been properly authorized and empowered to enter into this Agreement and to bind each of the Parties hereto.
12. Each of the Parties hereby acknowledges that it has been represented by independent legal counsel of its own choice in connection with all negotiations preceding this Agreement, and that this Agreement is executed with the consent and upon the advice of such independent counsel.
13. Each of the Parties represents and warrants that it has not assigned or transferred any claim, promise or similar right of action released in this Agreement.
14. Each of the signatories to this Agreement warrants that he/she has, through his/her representatives, carefully read and understood the terms and conditions of this Agreement and that he/she has not relied upon the representations or advice of any other Party, or any attorney not his/her own. This Agreement, and the terms and conditions thereof, were determined in arm’s length negotiations by and between each of the Parties to this Agreement and/or its respective counsel.
15. No modification, waiver or amendment of this Agreement shall be valid unless the same is in writing and executed by each of the Parties hereto. Waiver of any one provision shall not be deemed to be a waiver of any other provision herein. If any provision in this Agreement is found to be unenforceable, all other provisions will remain fully enforceable.
16. If any party to this Agreement becomes involved in a dispute or controversy, including, but not limited to, arbitration, or litigation, arising out of this Agreement, or the performance of it, then the prevailing party in such dispute or controversy, or in a separate suit, shall be entitled to their reasonable costs and expenses incurred in connection with such dispute or 3 128594-00000007/8792037.1