1 Developer Indemnity and Reimbursement Agreement - Caltrans Permit
DEVELOPER INDEMNITY, REIMBURSEMENT, AND AGENCY AGREEMENT
FOR CALTRANS ENCROACHMENT PERMIT / CONSTRUCTION
AUTHORIZATION
This Developer Indemnity, Reimbursement, and Agency Agreement (“Agreement”) is entered into as of June ___, 2026 (“Effective Date”), by and between the City of Laguna Beach, a California municipal corporation (“City”), and Dune Drifter LLC, a Delaware Limited Liability Company (“Developer”). City and Developer are sometimes referred to individually as a “Party” and collectively as the “Parties.”
RECITALS
A. Developer proposes to design and construct certain improvements associated with the Pacific Edge Hotel parking structure project, including work within, under, adjacent to, or affecting State Route 1 / Coast Highway and related Caltrans facilities, easements, or right-of-way, as more particularly described in Exhibit A (the “Project” or “Work”).
B. The Work may include the construction, removal, replacement, protection, shoring, monitoring, repair, or modification of footings, retaining-wall support improvements, structural support elements, temporary works, traffic control, and other related work shown in plans reviewed or approved by City and to be approved by Caltrans.
C. Caltrans has required City to be the applicant, permittee, or local public agency sponsor for the Caltrans encroachment permit, permit rider, consent, or other construction authorization for the Work (collectively, the “Caltrans Permit”), while Developer or its engineer will be identified as City’s authorized agent, engineer, representative, contractor, or applicant contact for purposes of the Caltrans application and administration of the Caltrans Permit. However, nothing in this Agreement shall be construed to create an employer-employee relationship between Developer (or any of its employees, agents, engineers, etc.) and the City. Each Party's personnel shall at all times remain solely the employees or agents of that Party, and that Party shall retain exclusive responsibility for the supervision, direction, compensation, benefits, withholding of taxes, and all other obligations arising from such employment. Neither Party shall represent or hold out any employee, agent, or representative of the other Party as its own employee for any purpose whatsoever.
D. City is willing to allow its name to be used as applicant or permittee and to authorize Developer to act as City’s limited agent for the Caltrans Permit solely to facilitate the Project and only on the terms stated in this Agreement. City will not fund, design, or construct the Work. City will not own, operate, or maintain any Project improvements except to the extent expressly required by the Caltrans Permit or a City-signed document, and, as between City and Developer, Developer will assume the Project-related obligations allocated to Developer under this Agreement.
E. Developer is the party requesting and benefiting from the Work. Developer agrees to perform or cause the Work to be performed at its cost, to comply with the Caltrans Permit and applicable law, to reimburse City for the reasonable City costs described in this Agreement, and to defend and indemnify City to the extent provided in this Agreement and permitted by law.
F. This Agreement allocates responsibilities and risk between City and Developer. It is not intended to amend, release, relocate, or expand any recorded easement, right-of-way, Caltrans property right, City property right, or other real-property interest. Any such change must be made by a separate written instrument executed by the parties holding the affected property interests.
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are acknowledged, the Parties agree as follows:
Attachment 1
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Developer Indemnity and Reimbursement Agreement - Caltrans Permit
1. Definitions.
1.1. “Caltrans” means the State of California, acting by and through the California Department of Transportation, and its directors, officers, officials, employees, agents, contractors, consultants, inspectors, and representatives.
1.2. “Caltrans Permit” means each Caltrans encroachment permit, permit application, permit rider, consent, authorization, condition, general provision, special provision, plan approval, field directive, notice, or other Caltrans document or requirement that applies to the Work.
1.3. “City Indemnitees” means City and its elected and appointed officials, officers, employees, agents, attorneys, consultants, engineers, inspectors, and representatives, but only while acting in their official capacities for City in connection with the Project, Work, Caltrans Permit, or this Agreement.
1.4. “Claims” means third-party claims, demands, causes of action, suits, proceedings, damages, losses, liabilities, judgments, penalties, fines, liens, stop-payment notices, assessments, and reasonable costs, fees, and expenses, including reasonable attorneys’ fees, consultant costs, and expert costs, to the extent arising out of or relating to the Project, Work, Caltrans Permit, or a breach of this Agreement. “Claims” also includes amounts Caltrans or another governmental agency requires City to pay because of the Work. “Claims” do not include City overhead or consequential damages except to the extent expressly reimbursable under this Agreement or asserted by a third party.
1.5. “Developer Parties” means Developer and Developer’s owners, members, managers, partners, officers, directors, employees, agents, representatives, consultants, engineers, design professionals, contractors, subcontractors, suppliers, successors, assigns, and other persons acting under Developer’s direction or control in connection with the Work or the Caltrans Permit.
2. Limited Agency and Caltrans Application.
2.1. City authorizes Developer and Developer’s designated engineer or representative to act as City’s limited agent solely for preparing, submitting, processing, revising, and administering the Caltrans Permit application and related technical submittals for the Work. Developer’s agency is limited to the Project and does not authorize Developer to bind City to any obligation, waiver, settlement, property conveyance, easement amendment, indemnity, maintenance obligation, or expenditure unless City has approved the obligation in writing.
2.2. Developer shall prepare the Caltrans application package, plans, calculations, reports, environmental materials, insurance certificates, bonds, letters, fees, and other submittals required by Caltrans or reasonably required by City for its role as applicant or permittee. City may reasonably review, approve, condition, reject, or require changes to application materials before submission to Caltrans.
2.3. Developer shall provide City with complete copies of all submittals to and correspondence with Caltrans, and shall promptly provide City with all Caltrans comments, notices, conditions, permits, field directives, invoices, inspection reports, notices of non-compliance, and notices of completion related to the Work.
2.4. City may revoke or suspend Developer’s agency authority upon written notice if Developer materially fails to comply with this Agreement, the Caltrans Permit, City requirements, or applicable law.
3. Developer Responsibility for the Work.
3.1. Developer shall perform, or cause to be performed, all Work at Developer’s sole cost and expense and in accordance with all approved plans, the Caltrans Permit, City approvals, applicable laws, professional standards, and the requirements of all agencies with jurisdiction. 4 3
Developer Indemnity and Reimbursement Agreement - Caltrans Permit
3.2. Developer shall not commence Work unless and until all required City approvals, Caltrans approvals, permits, insurance, bonds, traffic-control approvals, shoring approvals, utility clearances, and preconstruction meeting requirements have been obtained and satisfied.
3.3. Developer shall use licensed and insured contractors, subcontractors, design professionals, inspectors, and consultants. Developer shall ensure that each person or entity performing Work complies with the Caltrans Permit and this Agreement.
3.4. Developer shall be responsible for construction means and methods, site safety, traffic control, temporary support, shoring, excavation safety, protection of the highway, protection of the public, worker safety, utility protection, environmental compliance, stormwater compliance, hazardousmaterials compliance, and repair of damage to the extent caused by the Work or by a Developer Party.
Developer is not responsible under this Agreement for pre-existing conditions, City-furnished design defects, or the active negligence or willful misconduct of City or Caltrans, except to the extent Developer or a Developer Party exacerbates such condition or the obligation is expressly assumed by Developer under this Agreement.
3.5. City’s review, approval, signature, inspection, or acceptance of any application, plan, permit, certificate, work product, or completed Work shall not, by itself, make City responsible for the design, construction, means and methods, safety, legality, adequacy, or performance of the Work, and shall not reduce Developer’s obligations under this Agreement except to the extent caused by City’s active negligence, willful misconduct, or City-furnished defective design.
4. Assumption of Permit Obligations and Pass-Through of Caltrans Requirements.
4.1. As between City and Developer, Developer assumes the obligations, costs, liabilities, and responsibilities imposed on City as applicant, permittee, local public agency, or sponsor under the Caltrans Permit to the extent arising out of or relating to the Project, the Work, Developer’s requested use of City as applicant or permittee, or the acts or omissions of any Developer Party. Developer does not assume obligations to the extent they arise from City’s unrelated municipal activities, City-owned facilities not modified or affected by the Work, if any, City-furnished defective design, or City’s active negligence or willful misconduct.
4.2. Developer shall comply with, and shall cause the Developer Parties to comply with, all Caltrans Permit general provisions, special provisions, lane-closure requirements, insurance requirements, contractor authorization forms, quality-assurance requirements, testing requirements, field directives, and final acceptance requirements.
4.3. If Caltrans requires City to sign a contractor authorization form, letter of authorization, encroachment permit rider, maintenance undertaking, notice of completion, or similar document, Developer shall provide all supporting information reasonably requested by City and shall reimburse and indemnify City for Project-related obligations assumed by City to the extent provided in this Agreement. City shall provide Developer a reasonable opportunity to review any such document before signature if it imposes a material obligation on City or Developer, except when Caltrans requires immediate signature or the document is materially consistent with the approved Caltrans Permit and this Agreement.
4.4. Developer shall not represent to Caltrans or any third party that City has accepted responsibility for Developer’s construction, maintenance, repair, restoration, or funding obligations except as expressly stated in a City-signed document. Any Project-related City obligation arising solely because Caltrans requires City to be applicant or permittee shall be assumed and reimbursed by Developer under this Agreement, except to the extent prohibited by law or expressly excluded by this Agreement.
4.5. City shall reasonably cooperate with Developer in processing the Caltrans Permit and related approvals, including timely signing applications, letters, and permit documents that are consistent with 5 4
Developer Indemnity and Reimbursement Agreement - Caltrans Permit this Agreement and reasonably required by Caltrans. City may condition its cooperation on Developer’s compliance with this Agreement, but City shall not unreasonably withhold, condition, or delay signatures or approvals needed for the Project.
5. Reimbursement of City Costs.
5.1. Developer shall reimburse City for reasonable, documented costs incurred by City in connection with the Project, the Caltrans Permit, this Agreement, or any Claim, including staff time at City’s adopted or customary billing rates, City Attorney costs, special counsel costs, engineering review, inspection, consultants, risk-management review, permit fees, Caltrans charges, public-records responses, administrative costs, emergency response, enforcement, and amounts City is required to pay to Caltrans or another agency because of the Work. Reimbursable costs do not include City’s general overhead, unrelated municipal costs, or costs caused by City’s active negligence, willful misconduct, or breach of this Agreement.
6. Indemnity.
6.1. Developer shall defend, indemnify, and hold harmless the City Indemnitees from and against Claims to the extent arising out of, pertaining to, or relating to: (a) the Project or Work; (b) the Caltrans Permit or City’s role as applicant, permittee, local public agency, sponsor, or signatory for the Project; (c) Developer’s role as City’s authorized agent, engineer, representative, contractor, or application contact; (d) the design, engineering, construction, shoring, excavation, support, inspection, testing, monitoring, maintenance, repair, removal, replacement, existence, operation, condition, failure, or use of the Work; (e) any act, omission, negligence, willful misconduct, breach, violation, or default by any Developer Party; (f) bodily injury, death, property damage, economic loss, loss of use, interference with access, business interruption, traffic impacts, or damage to Caltrans, City, public, private, or utility property caused by the Work or a Developer Party; (g) environmental, hazardous-materials, stormwater, ADA, labor, employment, stop-payment notice, mechanic’s lien, prevailing-wage, or worker-safety matters related to the Work; (h) any failure by Developer or a Developer Party to comply with the Caltrans Permit, this Agreement, approved plans, applicable law, or agency requirements; (i) any claim by Caltrans or another governmental agency for indemnity, reimbursement, field work, inspection, repair, restoration, penalties, permit charges, or other costs related to the Work; (j) any claim or damage as a result of any claim, allegation or investigation regarding Developer’s employees, agents, engineers, etc. being employees of the City.
6.2. Developer’s duty to defend shall arise upon City’s written tender of a potentially covered Claim and City’s delivery of information reasonably available to City regarding the Claim. Developer may defend under a reservation of rights and may seek allocation or reimbursement for uncovered matters as provided in this Agreement and applicable law.
6.3. Developer shall not be required to defend or indemnify a City Indemnitee to the extent a Claim is caused by the active negligence, sole negligence, or willful misconduct of that City Indemnitee, by a design defect furnished by City, or by matters for which indemnity or defense is prohibited by Civil Code Section 2782 or other applicable law.
6.4. If a Claim includes both covered and uncovered matters, Developer shall defend the covered portions of the Claim and pay a reasonable allocated share of defense costs on an ongoing basis, subject to later adjustment after final resolution. City shall be responsible for defense costs allocated to uncovered matters, including matters caused by City’s active negligence, willful misconduct, or City-furnished 6 5
Developer Indemnity and Reimbursement Agreement - Caltrans Permit defective design. Developer shall not settle any Claim in a manner that imposes liability, admission, obligation, restriction, or payment on City without City’s prior written consent, not to be unreasonably withheld, conditioned, or delayed.
6.5. Developer may control the defense of a covered Claim with counsel reasonably acceptable to City.
City may participate with separate counsel at City’s expense. Developer shall pay for City’s separate counsel only to the extent reasonably necessary because of an actual conflict of interest, requested injunctive or mandamus relief against City, potential criminal or regulatory exposure of City, or a material uncovered exposure that makes joint defense inappropriate. City may control the defense of any Claim seeking non-monetary relief against City or involving City’s police powers, public records obligations, legislative discretion, or governmental immunities, but Developer shall be responsible only for reasonable defense costs to the extent the Claim is covered by this Agreement.
6.6. Developer’s indemnity and defense obligations are independent of, and shall not be limited by, insurance coverage, policy limits, bonds, security, deposits, workers’ compensation laws, or any approval, inspection, acceptance, or participation by City or Caltrans. The obligations in this Section survive expiration, completion, suspension, revocation, termination, final acceptance, and abandonment of the Project or Work for so long as Claims may be asserted under applicable law or the Caltrans Permit, but only as to matters covered by this Agreement.
7. Insurance.
7.1. Before City submits or signs the Caltrans Permit application and before any Work begins, Developer shall provide insurance certificates and endorsements reasonably acceptable to City and, where required, Caltrans. The required coverages shall be commercially reasonable for the Work and no less than the limits required by Caltrans and City’s standard risk-management requirements for comparable private development work in or near public right-of-way. Unless City approves different limits in writing, the coverages shall include: (a) commercial general liability, including contractual liability, products/completed operations, explosion/collapse/underground coverage, and broad-form property damage, with limits of not less than $__________ per occurrence and $__________ aggregate; (b) automobile liability of not less than $__________ per accident; (c) workers’ compensation as required by law and employer’s liability of not less than $__________; (d) professional liability for design professionals of not less than $__________; (e) contractors pollution liability of not less than $__________ if excavation, hazardous materials, contaminated soil, dewatering, or stormwater risk is present; and (f) umbrella or excess liability as needed to meet the required limits.
7.2. All liability policies, except workers’ compensation and professional liability, shall name the City Indemnitees as additional insureds for ongoing and completed operations on ISO forms CG 20 10 and CG 20 37, or equivalents reasonably acceptable to City. Policies shall be primary and noncontributory to any City insurance or self-insurance, include waiver of subrogation where commercially available, and provide that coverage shall not be cancelled or materially reduced without at least thirty (30) days’ prior written notice to City, to the extent commercially available.
7.3. Developer shall require each contractor, subcontractor, engineer, consultant, and supplier performing material on-site Work to maintain insurance appropriate to its scope. Developer shall require additional-insured coverage for the City Indemnitees and, where required, Caltrans and the State of California, to the extent applicable to the party’s insurance and commercially available. Developer shall provide copies of such insurance documents upon reasonable request.
7.4. Insurance coverage does not limit Developer’s liability or obligations under this Agreement. If any required insurance is unavailable on commercially reasonable terms, Developer shall notify City before starting Work, and the Parties shall meet and confer regarding commercially reasonable alternative risk controls. City may reasonably require additional security, revised limits, or other risk 7 6
Developer Indemnity and Reimbursement Agreement - Caltrans Permit controls as a condition to proceeding, but such requirements shall be proportionate to the unavailable coverage and Project risk.
8. Bonds, Security, Liens, and Stop-Payment Notices.
8.1. Developer shall provide any performance bond, payment bond, maintenance bond, letter of credit, cash deposit, or other security required by Caltrans and any additional security reasonably required by City based on the nature of the Work and City’s role as permittee. City-required security shall be commercially reasonable, proportionate to the Project risk, and not duplicative of security already provided to Caltrans or City. Unless City waives the requirement in writing, bonds shall be issued by a surety admitted in California and rated not less than A-VII by A.M. Best, in forms reasonably acceptable to City.
8.2. Developer shall keep City and City property free from mechanic’s liens, stop-payment notices, bond claims, and similar claims arising from the Work. Developer shall cause any such claim affecting City to be released, bonded around, otherwise discharged, or contested in good faith with security reasonably acceptable to City within thirty (30) days after notice from City, or within ten (10) days if the claim creates an immediate risk to City property, public safety, or the Caltrans Permit.
9. Repair, Restoration, Maintenance, and Latent Defects.
9.1. Developer shall promptly repair, restore, or replace, at Developer’s cost, City, Caltrans, public, private, or utility property to the extent damaged, disturbed, or adversely affected by the Work or a Developer Party, whether the damage is discovered before, during, or after completion.
9.2. Developer shall be responsible for latent defects, warranty obligations, maintenance obligations, monitoring obligations, and corrective work to the extent arising from the Work for the longer of: (a) the period required by the Caltrans Permit; (b) the period required by City approvals, if any; (c) any warranty period required by Developer’s construction contracts; or (d) the period provided by applicable law. Developer is not assuming general City maintenance obligations or obligations unrelated to the Work.
9.3. If Developer fails to perform required repair, restoration, maintenance, monitoring, or corrective work after written notice and a reasonable opportunity to cure, City may perform or cause the work to be performed and Developer shall reimburse City for reasonable costs on demand. The cure period shall be ten (10) business days unless a longer period is reasonably required and Developer commences and diligently pursues cure. In an emergency, or where public safety or highway operations are at risk, City may act without prior notice but shall notify Developer as soon as reasonably practicable.
10. Default and Remedies.
10.1.Developer is in default if Developer materially fails to comply with this Agreement, the Caltrans Permit, City approvals, applicable law, insurance requirements, security requirements, payment obligations, or indemnity obligations and fails to cure within ten (10) days after written notice for monetary defaults or within thirty (30) days after written notice for non-monetary defaults. If a nonmonetary default cannot reasonably be cured within thirty (30) days, Developer is not in default if it begins cure within that period and diligently pursues cure to completion.
10.2.Upon default after any applicable notice and cure period, City may exercise available remedies reasonably necessary to protect City, Caltrans, the public, or the Project, including suspension or revocation of agency authority, notice to Caltrans, withholding of City approvals related to the Work, use of deposits or security, demand for cure, performance of corrective work at Developer’s expense, specific performance, injunctive relief, and recovery of damages, attorneys’ fees, and costs. City shall not obtain a duplicative recovery.
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Developer Indemnity and Reimbursement Agreement - Caltrans Permit
11. Records, As-Builts, and Completion.
11.1.Developer shall maintain complete records of the Work, including plans, permits, correspondence, field changes, inspection records, testing reports, monitoring data, RFIs, submittals, daily reports, claims, notices, and as-built drawings.
11.2.Before final completion, Developer shall provide City and Caltrans with as-built plans, certifications, warranties, releases, notices of completion, lien releases, monitoring reports, maintenance manuals, and other closeout documents required by City or Caltrans.
12. Notices.
12.1.All notices under this Agreement shall be in writing and delivered personally, by overnight courier, by certified mail, or by email with confirmation of receipt, to the following addresses, or to any changed address provided by notice:
City Developer
Address: ____________________ Address: ____________________ Attn: ____________________ Attn: ____________________
Email: ____________________ Email: ____________________
13. Assignment; Successors. Developer shall not assign this Agreement, the Caltrans Permit, or its agency authority without City’s prior written consent, which shall not be unreasonably withheld, conditioned, or delayed and may be conditioned on assumption by the assignee, evidence of financial capacity, and replacement insurance and security. No City consent is required for an assignment to an affiliate or project successor that assumes this Agreement in writing and provides City with substantially equivalent financial capacity, insurance, and security; provided that the Caltrans Permit may not be assigned or transferred except as allowed by Caltrans. This Agreement binds Developer and its permitted successors and assigns.
14. Third-Party Beneficiaries. This Agreement is for the benefit of City and the City Indemnitees.
Caltrans and the State of California are intended third-party beneficiaries only to the limited extent required by the Caltrans Permit or to enforce provisions that expressly require Developer to insure, reimburse, defend, indemnify, or protect City from Caltrans or State claims or obligations arising from the Work. No provision is intended to expand Developer’s obligations to Caltrans or the State beyond the Caltrans Permit and this Agreement. No other third party has enforceable rights under this Agreement.
15. Governing Law; Venue; Attorneys’ Fees. This Agreement shall be governed by California law.
Venue for any action arising out of this Agreement shall be in the Superior Court of the County of Orange, unless exclusive jurisdiction lies elsewhere. In any action to enforce this Agreement, the prevailing Party shall recover its reasonable attorneys’ fees and costs, in addition to any other available relief.
16. Interpretation; Severability. This Agreement shall be interpreted as if drafted jointly by the Parties.
If any provision is held invalid or unenforceable, the remaining provisions shall remain in effect, and the invalid provision shall be reformed to the maximum extent permitted by law to effect the Parties’ intent.
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Developer Indemnity and Reimbursement Agreement - Caltrans Permit
17. Entire Agreement; Amendment; Counterparts. This Agreement contains the entire agreement between City and Developer concerning its subject matter and supersedes all prior understandings on that subject. This Agreement may be amended only by a written instrument signed by both Parties.
The Agreement may be executed in counterparts and by electronic signature, each of which shall be deemed an original.
18. Authority. Each person signing this Agreement represents that he or she has authority to execute the Agreement on behalf of the Party identified and to bind that Party to the Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
CITY: CITY OF LAGUNA BEACH, a California municipal corporation By: ________________________________________________
Name: ________________________________________________
Title: ________________________________________________ Date: ________________________________________________
Approved as to
form:
________________________________________________
DEVELOPER: DUNE DRIFTER LLC, a Delaware Limited Liability Company By: ________________________________________________
Name: ________________________________________________
Title: ________________________________________________ Date: ________________________________________________
Approved as to
form:
________________________________________________
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Developer Indemnity and Reimbursement Agreement - Caltrans Permit
EXHIBIT A
PROJECT / WORK DESCRIPTION
Project Name: Pacific Edge Hotel Parking Structure.
Project Location: 647 South Coast Highway.
Caltrans Facility: State Route 1 / Coast Highway; Post Mile: ORA 8.993.
Caltrans Permit / CEPS Tracking No.: ____________________.
Summary of Work: Construction associated with parking-structure footings and related highway-support footing work, including temporary support, shoring, excavation, demolition, removal, replacement, restoration, monitoring, traffic control, and all related work shown on plans approved by City and Caltrans.
Plans and Technical Documents: The plans, calculations, geotechnical reports, shoring plans, traffic-control plans, and related documents for the Project.
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Developer Indemnity and Reimbursement Agreement - Caltrans Permit
EXHIBIT B
FORM OF CITY AUTHORIZATION LETTER TO CALTRANS
__________, 2026
Caltrans District 12
Encroachment Permits Office
1750 East 4th Street, Suite #100
Santa Ana, CA 92705
Re: Authorization of Developer / Engineer as City Agent for Caltrans Permit Application - Pacific Edge Hotel Parking Structure Project
The City of Laguna Beach authorizes Dune Drifter LLC and its designated project manager, Danielle Foley, to act as City’s limited authorized agent for purposes of preparing, submitting, revising, and processing the Caltrans permit application package for the Pacific Edge Hotel Park Structure project, located at 647 South Coast Highway. This authorization is limited to the application and administration of the Caltrans permit for the project and does not authorize the agent to bind City to any property conveyance, easement amendment, maintenance obligation, funding obligation, waiver, settlement, indemnity, or other obligation unless separately approved and signed by City.
The City requests that Caltrans copy both City and the agent on all permit correspondence, invoices, conditions, permit riders, notices, and approvals. This authorization may be revoked by City upon written notice to Caltrans.
If you have any questions, please contact me at 949-464-6688 or [email protected].
Sincerely,
Thomas Perez
City Engineer
City of Laguna Beach
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