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MUTUAL RELEASE AND SETTLEMENT AGREEMENT
THIS MUTUAL RELEASE AND SETTLEMENT AGREEMENT (“Agreement”) is entered into by and between W.E. LYONS CONSTRUCTION COMPANY, a Corporation (hereinafter “LYONS”) and CITY OF PACIFICA, a Public Entity (hereinafter “CITY”) on the dates set forth below based upon the following understandings and agreements. Collectively, LYONS and CITY are hereinafter referred to as “Parties.”
RECITALS
A. LYONS supplied and furnished certain labor, equipment and materials to and performed certain work for CITY, as owner, pursuant to a written contract between the Parties dated April 25, 2022 (hereinafter “the Contract”) for the performance of the work of improvement known as Civic Center Campus Facilities Project in Pacifica, California (hereinafter the “Project”).
B. LYONS achieved substantial completion of the Project on June 26, 2024.
C. Disputes arose between the Parties which concerned unpaid contract balances, delays, delayed completion of the Project, liquidated damages, time extension requests and various unreimbursed extra work claims (hereinafter collectively “Disputes”). With respect to those Disputes, each Party made claims against the other. No litigation with respect to the Disputes has been commenced by either party.
D. All of the Parties to this Agreement deny any liability in connection with the various claims alleged by the Parties hereto.
E. The Parties to this Agreement pursuant to a mediation between the Parties that took place on June 18, 2025, reached a full and final settlement of the respective Disputes subject to the approval by the CITY Council and the terms and conditions set forth below.
F. NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated into and made a part of this Agreement, and the mutual covenants, agreements and representations set forth hereinbelow, the Parties hereby agree as follows:
TERMS AND CONDITIONS
1. This Agreement shall be promptly signed by the CITY upon ratification by its Council at its next regularly scheduled meeting on July 14, 2025.
2. CITY shall pay LYONS the sum of Five Hundred Twenty Thousand Dollars and no Cents ($520,000.00) (hereinafter “the Settlement Sum”) which consists of LYONS’ contract 4933-3579-9633 v2 2
retention in the amount of $309,000.15 and $210,999.85 for all of LYONS’ claims for extended general conditions and extra work. Said payment shall be made within fourteen (14) days from the date of the City Council’s execution of this Agreement.
3. The Parties agree that LYONS timely achieved substantial completion of the Project on June 26, 2024, and that the City has accepted the Project as timely completed as of July 14, 2025, subject to the reservations set forth in paragraphs 9, 10 and 11.
4. LYONS shall defend and indemnify the CITY from and against any and all claims for nonpayment by LYONS’ subcontractors and suppliers on the Project, of any tier, except to the extent such claims arise out of the CITY’s failure to perform its payment obligation pursuant to this Agreement.
5. The Parties further agree that after the CITY’s payment of the Settlement Sum that no further Contract or Project obligation and responsibilities of either Parties exists or will occur with respect to Contract, the Project and/or the Disputes except as may be provided in paragraphs 4, 9, 10, and 11 hereinbelow.
6. The Parties acknowledge that all matters arising out of the Contract, Project and Disputes set forth above are fully compromised and settled.
7. Excepting only the obligations and reservations of this Agreement, the Parties hereby release, discharge, and covenant not to sue each other, and their respective officers, council members, directors, shareholders, employees, representatives, successors, affiliated companies, subsidiaries, subcontractors, subconsultants, and LYONS’ surety, Liberty Mutual Insurance Company, from any and all claims, demands, actions, liabilities, damages, actual delay damages, liquidated damages, consequential damages and causes of action, including costs and attorneys’ fees, in regard to or in any way arising from or relating to the Contract, the Project, and/or the Disputes. The Parties understand that, with the exception of the obligations and reservations set forth in this Agreement, this release extends to any and all claims, demands, actions, liabilities, damages, actual delay damages, liquidated damages, consequential damages and causes of action of any and every kind or nature whatsoever, contractual, tortious, or otherwise, past, present or future, known or unknown, contemplated or uncontemplated.
8. The releases described above are full and final releases applying to all losses, including but not limited to damages, costs, expenses, and attorneys’ fees, incurred by said Parties, arising out of or in any way connected with the above-described matters. It is the 4933-3579-9633 v2 3
intention of the Parties, in executing this Agreement, that the same shall be effective as a bar to each and every claim, demand, and cause of action, by said Parties based upon the abovedescribed matters, and said Parties knowingly, voluntarily, and expressly waive any and all rights and benefits otherwise conferred by the provisions of section 1542 of the California Civil Code which states at 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 to this Agreement expressly consent that, notwithstanding section 1542 of the California Civil Code, this Agreement shall be given full and final effect according to each and all of its express terms and conditions, including those related to unknown and unsuspected claims, demands, and causes of action. The Parties acknowledge and agree that this waiver is an essential and material term of this Agreement and without such waiver, this Agreement would not have been entered into.
9. Notwithstanding anything in this Agreement to the contrary, the rights, claims, defenses and obligations of the Parties released herein with respect to one another for future and presently unknown claims from third parties for personal injury and/or property damage are excepted and reserved from the mutual release provisions of this Agreement, and those rights, claims, defenses and obligations shall survive as they would have existed in the absence of this Agreement. The Parties represent and warrant that they are not aware of any known facts or threatened claim triggering or that could trigger this clause as of the date this Agreement is signed.
10. Notwithstanding anything in this Agreement to the contrary, the rights, claims, defenses and obligations of the Parties released herein with respect to one another for future and presently unknown claims arising from unexpired warranties and/or latent defects in the work performed and/or equipment or materials supplied by or for LYONS for the Project are excepted and reserved from the mutual release provisions of this Agreement, and those rights, claims, defenses and obligations shall survive as they would have existed in the absence of this Agreement. The Parties represent and warrant that they are not aware of any known facts or 4933-3579-9633 v2 4
threatened claim triggering or that could trigger this clause as of the date this Agreement is signed.
11. Notwithstanding anything in this Agreement to the contrary, the rights, claims, defenses and obligations of the Parties released herein with respect to claims arising from the electrical power outage that occurred at City Hall and the P+P Building starting on or about June 3, 2025 and traceable to the Switchgear installed by LYONS’ subcontractor, McKee and Company Electric are excepted and reserved from the mutual release provisions of this Agreement, and those rights, claims, defenses and obligations shall survive as they would have existed in the absence of this Agreement.
12. Liability for the matters included in this Agreement is disputed and this Agreement shall not be construed as an admission thereof by either Party.
13. By signing below, each Party acknowledges that it has had the opportunity to be advised and represented by legal counsel of its own choice and has executed this Agreement after having been so advised or represented. Each Party further acknowledges that it and its counsel have had an adequate opportunity to make whatever investigation or inquiry it may deem necessary or desirable in connection with the subject matter of this Agreement. Each Party further acknowledges that, prior to execution of this Release, it has read, understood, and approved the language of this Agreement, with the assistance and advice from its legal counsel.
14. This Agreement is binding upon all of the Parties, as well as their past and present subsidiaries, parents, divisions, affiliates, partners, successors, assigns, officers, directors, agents, servants, employees, attorneys, representatives, and beneficiaries.
15. If legal action is necessary to interpret and/or enforce this Agreement, the prevailing Party shall be entitled to recover all reasonable attorneys’ fees and costs from the other Party. The Parties agree that any Party may enforce the terms of this Agreement as a Stipulation for Judgment by a motion made pursuant to Section 664.6 of the California Code of Civil Procedure.
16. This Agreement shall be construed and enforced in accordance with the laws of the State of California. The Superior Court of San Mateo County shall have jurisdiction, and be the appropriate venue, for the resolution of any disputes in connection with this Agreement.
17. This Agreement contains the entire agreement between the Parties hereto. The terms of this Agreement are contractual in nature and not a mere recital. This Agreement is executed without reliance upon any representation by any person concerning the nature or extent 4933-3579-9633 v2 5
of damages or legal liability therefor, and the signer of this Agreement has carefully read and understood the contents of this Agreement and signs the same as his or her own free act.
18. Other than the dispute resolution process identified in paragraph 10, hereof, the prevailing Party in any such proceeding shall be entitled to be awarded its reasonably incurred attorneys’ fees and costs. Should any dispute arise hereunder, this Agreement shall be governed by and interpreted pursuant to California law, with venue in the San Mateo County Superior Court.
19. This Agreement may be executed in counterpart originals, and a facsimile signature shall be acceptable and treated as an original for all purposes.
IN WITNESS WHEREOF, the parties hereto have executed this five (5) page Agreement including signature pages as of the day, month and year below written.
DATED: _________________, 2025 W.E. LYONS CONSTRUCTION COMPANY BY _______________________________
Its_____________________________
BY _______________________________
Its_____________________________
DATED: _________________, 2025 CITY OF PACIFICA
BY _______________________________
Its_____________________________
APPROVED AS TO FORM
BY _______________________________
Michelle Marchetta Kenyon, City Attorney
ATTEST
BY _______________________________
Sarah Coffey, City Clerk