Settlement and Release Agreement
City of Patterson and VOP North, LLC
4900-9969-2647, v. 1
SETTLEMENT AND RELEASE
THIS SETTLEMENT AND RELEASE AGREEMENT (“Agreement”) is made and entered into between the City of Patterson (“City”), a California municipal corporation and VOP North, LLC, a California limited liability company (“VOP North”). The City and VOP North may each be referred to herein individually as a “Party” or collectively as the “Parties.” There are no other parties to this Agreement.
RECITALS
A. On December 12, 2006, the Patterson City Council adopted Resolution No. 2006- 122 approving a Combined Preliminary and Final Development Plan (the “Development Plan”) and other entitlements for the project known as The Villages of Patterson, which is comprised of approximately 692 gross acres located south of Eucalyptus Avenue, east of State Highway 33, west of Sycamore Avenue and north of Walnut Avenue (the “Project”).
B. On December 19, 2006, the City Council adopted Ordinance No. 681 approving a Development Agreement for the Project (the “DA”).
C. The DA divides the Project into four (4) quadrants, with the southeastern quadrant of the Project located south of Olive Ave., west of Sycamore Ave, east of Hartley St., and north of Walnut Ave. (“VOP Area 1”).
D. Within the bounds of VOP Area 1 is that property most commonly known as Assessor’s Parcel Number 047-031-013 and referred to herein as the “Mejia Property.” E. The DA requires developers, including VOP North, to participate in the construction of public facilities improvements as defined by the DA and listed in Exhibit D-1 attached thereto (the “Public Facilities Improvements”) which benefit VOP Area 1.
F. Section 3.2 of the DA obligates the City to take all actions reasonably necessary to allow the formation of one or more financing districts for the purpose of financing the Public Facilities Improvements.
G. In accordance with the obligations under the DA, on October 16, 2018, the City formed “CFD 2018-1” to finance construction of certain improvements and facilities that are required to serve the Project.
H. The construction of certain public improvements for development of the Mejia Property has been completed by KB Home North Bay, LLC (“KB”), as further described in Exhibit A attached and incorporated hereto (the “Mejia Improvements”).
I. KB and VOP North entered into an agreement wherein the parties agreed that KB would construct the Mejia Improvements and VOP North would retain its right to the CFD 2018- 1 funds which would be paid for the construction thereof. In accordance with the agreement between KB and VOP North, VOP North has submitted a request to the City, along with all required documentation, to be reimbursed for the costs of the Mejia Improvements.
Settlement and Release Agreement
City of Patterson and VOP North, LLC
4900-9969-2647, v. 1
J. VOP North maintains that it has satisfied its obligation under the DA, and it is therefore entitled to payment of its portion of funds owed to it from CFD 2018-1 as reimbursement for VOP North’s construction of the Mejia Improvements (the “Reimbursement Obligation”).
K. The City acknowledges its Reimbursement Obligation but disputes any interpretation of the DA that requires payment of the CFD funds within a specific timeframe, or prior to the issuance of bond proceeds from CFD 2018-1, which is the reimbursement mechanism the City intends to utilize for payment (the “Reimbursement Dispute”).
NOW, THEREFORE, in consideration of the foregoing recitals, the promises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged by each Party, each Party to this Agreement hereby agrees as follows:
AGREEMENT
1. Recitals. The recitals set forth above are incorporated herein by this reference and made part of this Agreement. In the event of any inconsistencies between the recitals and Sections 1 through 21 of this Agreement, Sections 1 through 21 of this Agreement will prevail.
2. Effective Date. This Agreement shall become effective on the date that this Agreement has been executed by both the City and VOP North (the “Effective Date”).
3. Payment of the Reimbursement Obligation
(a) Payment. The City shall pay VOP North a total sum of Two Hundred Seventy-Seven Thousand Eight Hundred Six and 39/100 Dollars ($277,806.39) (“Reimbursement Payment”). The Reimbursement Payment is based on the total cost of the Mejia Improvements ($437,500.00), reduced by the outstanding funding account balance of VOP North owed to the City ($159,693.61) (i.e., $437,500.00 - $159,693.61 = $277,806.39). The Reimbursement Payment shall constitute payment of the full CFD 2018-1 monies owed to VOP North for the Mejia Improvements.
(b) City Approval of Costs. The City acknowledges and agrees that VOP North has already provided documentation of all actual costs and proof of payment associated with the Mejia Improvements subject to reimbursement. The City further acknowledges and agrees that such costs and proof of payment have been reviewed and approved by the City Engineer. As such, the City shall issue payment of the Reimbursement Payment within thirty (30) days of the Effective Date.
(c) The City’s payment of the Reimbursement Payment pursuant to the terms of this Agreement shall constitute full consideration, satisfaction, release and discharge of any claims against the City arising out of, relating to, or Settlement and Release Agreement
City of Patterson and VOP North, LLC
4900-9969-2647, v. 1
otherwise concerning the City’s reimbursement obligations to VOP North for the Mejia Improvements.
(d) The City’s use of the funding account deduction as a component of the Reimbursement Payment does not waive VOP North’s right to dispute any invoiced balance established through the funding agreement for the Project.
VOP North expressly reserves the right to challenge the invoiced amounts used to determine the Reimbursement Payment as a result of the funding account deduction described herein.
4. Assignment of Right to Recover the Reimbursement Obligation from CFD 2018-1 to City. For and in consideration of the City’s payment of the Reimbursement Payment to VOP North, VOP North irrevocably grants, transfers, assigns and delivers to the City, without recourse to VOP North, all of VOP North’s right, title, and interest in and to a sum equal to the Reimbursement Payment from CFD 2018-1 (the “CFD Assignment”). The City hereby irrevocably assumes and accepts all of VOP North’s rights, title, and interest in and to the CFD Assignment.
VOP North represents and warrants to the City that VOP North (a) is duly organized and validly existing under the laws of its jurisdiction of organization or incorporation; (b) is in good standing under such laws; (c) has full power and authority to execute, deliver, and perform its obligations under this Agreement; and (d) has not previously conveyed, assigned, or transferred any rights and duties assigned by VOP North pursuant to this Agreement.
VOP North and the City hereby covenant that they will, upon reasonable request of the other Party, take, do, execute, acknowledge, or deliver any other acts, documents, or instruments as may be necessary or advisable in order to complete, effect, or perfect the assignment to the City of the right, title and interest in the CFD Assignment contemplated by this Agreement.
5. Satisfaction and Release.
(a) Satisfaction of Reimbursement Dispute. Performance of the mutual obligations provided in this Agreement, specifically timely payment by the City to VOP North of the Reimbursement Payment, as provided herein shall fully satisfy any and all obligations the Parties may owe to each other related to the Mejia Improvements.
(b) Full Release Effective Upon VOP North’s Receipt of the Reimbursement Payment in Full. For and in consideration of the City’s payment of the Reimbursement Payment to VOP North, VOP North, including its employees, officers, agents, directors, and elected and appointed officials, agree to release, hold harmless, acquit and discharge the City from any and all past, present, or future claims, demands, liens, obligations, rights, actions, causes of action, loss of profits, or damages arising from the Reimbursement Dispute.
Settlement and Release Agreement
City of Patterson and VOP North, LLC
4900-9969-2647, v. 1
6. No Admission by Signatory Parties. Each Party affirms that entry into this Agreement is not an admission of liability or fault in reference to any alleged or asserted facts, legal contentions, and occurrences in any way related to the Reimbursement Dispute. Neither this Agreement, nor any information contained in or submitted under this Agreement, nor any action taken by any Party pursuant to this Agreement shall constitute, be interpreted, construed, or used as evidence of any admission of liability, law, or fact, against any Party by any other Party as amongst themselves or by any person or entity not a Party, except that this Agreement may be used to enforce the terms of this Agreement.
7. Waiver of Unknown Claims. Each Party acknowledges that it may hereafter discover facts different from or in addition to those it now knows or believes to be true with respect to the matters released herein and agrees that all of the terms of this Agreement shall and will remain effective in all respects, regardless of such different or additional facts which may be learned. Subject to the rights and obligations of the Parties set forth in this Agreement, each Party understands and acknowledges that California Civil Code section 1542 speaks in terms of general releases. Civil Code section 1542 provides:
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 DEBTOR OR RELEASED PARTY.
To the extent that Civil Code section 1542 may be applicable to special or specific releases, each Party hereby expressly waives any and all rights it may have under Civil Code section 1542. The Parties specifically do not waive any continuing rights, duties, or obligations related to this Agreement or unrelated to the subject of this Agreement, and do not waive any claims arising from matters outside the scope of this Agreement, or other contract, relationship, or obligation between the Parties.
Each Party understands that upon the City’s timely payment to VOP North and VOP North’s receipt of the Reimbursement Payment, each Party is releasing all claims and causes of action relating to the damages arising out of the Reimbursement Dispute, and the claims and allegations that gave rise to it, in any and every way, including those unknown or unforeseeable at this time, which each Party has now or may arise in the future. Each Party hereby declares and represents that the losses, damages or injuries sustained are or may be permanent or progressive and that recovery therefrom is uncertain and indefinite in making this Agreement. Accordingly, each Party relies wholly upon its individual judgment, belief and knowledge of the nature, extent and duration of said injuries and liability therefor, and it is further understood and agreed that this Agreement is made without reliance upon any statement or representation of the Parties hereby released or their representatives.
___________________ _________________
City’s Initials VOP North’s Initials
Settlement and Release Agreement
City of Patterson and VOP North, LLC
4900-9969-2647, v. 1
8. Authority. All Parties executing this Agreement warrant and represent that they have the power and authority to enter into this Agreement on behalf of the Parties. Each Party has participated fully in the review of this Agreement. Each Party acknowledges that it has entered into this Agreement voluntarily, on the basis of their own judgment and without coercion, and not in reliance on any promises, representations, or statements made by the other Party other than those contained in this Agreement. The Parties agree that they each have had the opportunity to participate in the preparation, negotiation, review, and approval of this Agreement fully and equally. The terms of this Agreement will be construed as if prepared by all Parties.
9. Faithful Performance. The Parties agree to execute any additional documents and communications reasonably necessary to effectuate the intent and purpose of this Agreement without unreasonable delay.
10. Binding Effect. This Agreement shall be binding upon and inure to the benefit of each Party’s respective heirs, successors, and assigns.
11. Assignment. Each Party’s rights under this Agreement may not be assigned without the express written consent of the other Party, which consent may be given only in accordance with applicable law.
12. Noninterference. Neither Party shall do anything to interfere with or inhibit the ability of the other to comply with their respective obligations under the terms of this Agreement.
13. Time of Essence. Time is of the essence for this Agreement and each section contained within and each section is made and declared to be a material, necessary, and essential part of this Agreement.
14. Modifications. All modifications of this Agreement must be in writing and signed by each Party or an authorized representative of each Party.
15. Severability of Agreement. In the event that any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this Agreement are declared invalid or unenforceable by a valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this Agreement, including the payment by the City to VOP North of the Reimbursement Payment, which are hereby declared as severable and shall be interpreted to carry out the intent of the Parties herein.
16. Equitable Remedies. The Parties agree that the rights, privileges, and interests that fall within this Agreement are unique, and any violation of this Agreement may result in irreparable harm and injury to the other Party. The Parties specifically agree that the either Party may enforce the terms of this Agreement through appropriate injunctive relief, specific performance, or other equitable relief.
Settlement and Release Agreement
City of Patterson and VOP North, LLC
4900-9969-2647, v. 1
17. Entire Agreement. This Agreement constitutes the final, complete, and exclusive statement of the terms of the agreement between the Parties pertaining to the Reimbursement Dispute in its entirety and supersedes any other prior or contemporaneous oral or written understandings and agreements of the Parties. No Party has been induced to enter into this Agreement by, nor is any Party relying on, any representation or warranty except those expressly set forth in this Agreement. The Parties hereby merge and integrate into this Agreement their prior and contemporaneous conversations, negotiations, and possible or alleged agreements regarding the Reimbursement Dispute and any part of it since its inception.
18. Notices. Any notice or communication required hereunder between the City and VOP North must be in writing, and may be given either personally, by registered or certified mail (return receipt requested), or by Federal Express, UPS, or other similar couriers providing overnight delivery. If personally delivered, a notice shall be deemed to have been given when delivered to the Party to whom it is addressed. If given by registered or certified mail, such notice or communication shall be deemed to have been given and received on the first to occur of (a) actual receipt by any of the addressees designated below as the Party to whom notices are to be sent, or (b) five (5) days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar courier, a notice or communication shall be deemed to have been given and received on the date delivered as shown on a receipt issued by the courier. Any Party hereto may at any time, by giving ten (10) days’ written notice to the other Party hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be given to the Parties at their addresses set forth below:
If to the City: City of Patterson
1 Plaza
P.O. Box 667
Patterson, CA 95363
Attn: City Manager
with copy to: White Brenner LLP
1608 T Street
Sacramento, CA 95811
Attn: Nubia I. Goldstein
If to VOP North: Willie Traina
P.O. Box 157
Patterson, CA 95363
Email: [email protected]
David Polatick
660 Third Street, Suite 150
San Francisco, CA 94107
Email: [email protected]
Settlement and Release Agreement
City of Patterson and VOP North, LLC
4900-9969-2647, v. 1
with copy to: Newman-Romano, LLC
1034 12th Street
Modesto, CA 95354
Email: [email protected]
19. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of California.
20. Venue. If any action at law or in equity, including action for declaratory relief, is brought to enforce or interpret sections of this Agreement, venue for all such proceedings shall be in the Superior Court of California in and for the County of Stanislaus.
21. Attorney’s Fees and Costs. If any action at law or in equity, including action for declaratory relief, is brought by either Party to enforce or interpret sections of this Agreement, the prevailing Party shall be entitled to reasonable attorney's fees and costs, which may be set by the court in the same action or in a separate action brought for that purpose, in addition to any other relief to which such Party may be entitled.
[SIGNATURES ON FOLLOWING PAGE]
Settlement and Release Agreement
City of Patterson and VOP North, LLC
4900-9969-2647, v. 1
IN WITNESS WHEREOF, this Agreement has been entered into by and between the City and VOP North as of the dates set forth below.
CITY: VOP North:
City of Patterson, a California municipal
corporation
By:
Fernando Ulloa, City Manager
Date: __________________________
APPROVED AS TO FORM:
By: __________________________
Nubia Goldstein, City Attorney
Date: ____________________________
VOP North, LLC, a California limited liability
company
By:
Title: ______________________________
Date: _______________________________
EXHIBIT A
The Mejia Improvements subject to reimbursement from the City are further described as follows:
Surface improvements along Sycamore Avenue, approximately 660-linear feet between Walnut Avenue and Somerset Lane, including the following: rough grading and finish grading; concrete sidewalks, curb and gutter; median curbs; moisture barrier behind median curb and curb/gutter; 4” Hotmix asphalt/20” aggregate base; aggregate base shoulder.