SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This SETTLEMENT AGREEMENT AND MUTUAL RELEASE (“Agreement”) is made as of April 17, 2024 (the “Effective Date”) among the City of San Clemente, a public entity (“City”), California Joint Powers Insurance Authority (“CJPIA”), OC RE-HAB 1, LLC (“OC”), and GC-8 LLC ("GC"). City, CJPIA, OC, and GC may be individually referred to herein as a “Party” and collectively referred to herein as the “Parties.”
I. RECITALS
A. This Agreement arises out of the litigated superior court action known as GEORGE ZEBER, OC RE-HAB 1, LLC, and GC-8 LLC, plaintiffs, v. CITY OF SAN CLEMENTE, a public entity, and DOES 1–25 inclusive, defendants, Orange County Superior Court Case No. 30-2021- 01191580-CU-EI-CXC (the “Action”). In the Action, on June 24, 2021, plaintiffs OC and GC filed a First Amended Complaint (“FAC”) for Specific Performance, Breach of Contract, Breach of Implied Covenant of Good Faith and Fair Dealing, Inverse Condemnation, Nuisance and Declaratory Relief. Individual George Zeber, named as a plaintiff in the original complaint, was removed as a plaintiff in the FAC and is no longer a party to the Action.
B. Plaintiffs OC and GC allege the Action arises out of the “Agreement and Release of Claims” (“Release”) entered into between 23 parties to completely resolve those litigation actions and cross-actions known as Joseph A. Arriola, et al. v. L.H.C. Investments LLC, et al., Orange County Superior Court Case No. 30-2011-00450299-CU-CD-CXC. That Release was intended to settle all potential claims relating to slope and drainage repair of a landslide affecting multiple upslope homeowners and the contiguous downslope Shorecliffs Golf Course in the City of San Clemente. The homeowners and golf course property share a common boundary located on the slope. Prior landslides had occurred in the area, also giving rise to earlier (settled) litigation among nearby homeowners, plaintiff GC, and City.
C. The Release terms provide for payment of damages both by and to homeowners, plus an agreement to fund, including with City’s (and/or CJPIA’s) $2+ million contribution, and implement a private slope repair project (the “Project”) to repair the landslide and install drainage improvements, including a box culvert drainage facility within Cascadita Canyon, and related work for certain residential lot restorations, with the primary objective to stabilize the reconstructed slope.
D. Pursuant to the Release, plaintiff OC was formed to serve as the developer and contracting party for the Project, including all slope and drainage repair work, and took title from plaintiff GC to the portion of the golf course property directly affected by the landslide (i.e., Cascadita Canyon and golf course holes 5 and 6).
E. The Release also requires OC and GC to dedicate to City permanent easement rights for City to control, operate and maintain the Project’s privately constructed box culvert drainage facility, and to dedicate to City all reasonably necessary associated easements, including a permanent easement for access to the drainage facility, across, over and under portions of the Shorecliffs Golf Course.
Attachment 2
Settlement Agreement – George Zeber, OC RE-HAB 1, LLC, and GC-8 LLC v. City of San Clemente Orange County Superior Court Case No. 30-2021-01191580-CU-EI-CXC
F. In 2016, the California Coastal Commission (“CCC”) issued an emergency coastal development permit (emergency permit no. G-5-16-061) for the landslide repair Project, authorizing partial removal of the landslide debris, installation of a 2,600-foot-long box culvert drain, import of 150,000 cu. yards of fill to reconstruct the slope, installation of a buttress and drainage system for the reconstructed slope, and revegetation. Plaintiff OC began the Project landslide repairs in February 2017 and completed all work in December 2019. The CCC emergency permit conditions required applicant OC to obtain a follow-up coastal development permit to mitigate 0.3 acres of creek (riparian habitat) and 0.41 acres of wetlands impacted by the landslide repairs, and to obtain permanent authorization for the emergency work. (Source: CCC Staff Report for April 16, 2021 hearing, Application No.: 5-20-0446, Summary at p. 2 (emergency permit no. G-5-16-061), and at p. 36, Appendix B – Mitigation Table; Exhibit Packet to CCC Staff Report for April 16, 2021 hearing, at CCC Exhibit 3 (open space/habitat).) G. Plaintiff OC applied to CCC for permanent Project permit authorization and submitted plans including proposed mitigation with on-site and off-site habitat restoration areas intended to allow reconstruction of holes 5 and 6. The 2016 application was withdrawn in 2017, followed by working with CCC staff to develop a plan to satisfy CCC’s mitigation requirements.
CCC partially denied OC’s application for permanent coastal development permit authorization for the repair Project, rejected the proposed restoration design and, instead, imposed conditions that required consolidation of the habitat restoration in the area of golf course hole 6. CCC allowed complete reconstruction of hole 5 but did not allow for reconstruction of hole 6 at all. To resolve CCC’s concerns, plaintiffs OC and GC proposed additional off-site mitigation, which CCC accepted and made part of its final permanent coastal development permit conditions for the Project. (Source: CCC Staff Report for April 16, 2021 hearing, Application No.: 5-20-0446, Summary at p. 2.) CCC also required plaintiffs OC and GC to record deed restrictions preserving in perpetuity the open space use of all restored habitat areas both on and off site. (Source: CCC Staff Report for April 16, 2021 hearing, Application No.: 5-20-0446, Summary at p. 4, CCC conditions 6 and 7, see also p. 6 (conditions run with the land, binding all future owners), p. 11 (deed restriction terms and conditions), p. 27 (special conditions 6 and 7 deed restrictions for onsite and off-site habitat restoration areas).) On February 10, 2022 CCC approved, with conditions, Permit Amendment No. 5-20-0446-A1, to amend Special Conditions 6 and 7 (Open Space/Habitat Use Restriction and Deed Restriction) to change "prior to Issuance" to "prior to occupancy" for each condition. (Source: CCC Staff Report for February 10, 2022 hearing, Application No.: 5-20- 0446-A1, Summary at p. 2, as further revised by the CCC Staff Report Addendum.) H. The Release acknowledged that the slope repair Project conceptual plans were subject to resource agency regulatory review, specifically including CCC and City. The Release provided City’s engineer express authority for approval of final repair plans, “approval of any mitigation conditions placed on the project by resource agencies whose approval of the project is required,” control and approval of the work of the construction manager, and over-all approval of any changes to the scope of work, among other matters. In the Action, City contends it exercised that express authority, responding to the options OC’s construction manager presented to either 1) appeal Coastal Commission’s decision and attempt to get them to accept a mitigation plan allowing hole 6 restoration, or 2) move forward and accept the slope repair Project permit condition requiring the 6th hole for mitigation purposes in perpetuity. City declined the appeal option.
I. In the Action’s allegations and causes of action contained therein, OC and GC contend that the City allegedly breached certain Release obligations, including but not limited to, Settlement Agreement – George Zeber, OC RE-HAB 1, LLC, and GC-8 LLC v. City of San Clemente Orange County Superior Court Case No. 30-2021-01191580-CU-EI-CXC
by failing to act in good faith in exercising City’s authority, as provided in the Release, to accept the CCC’s special conditions requiring permanent habitat mitigation and imposing requirements for recording deed restrictions affecting golf course hole 6, among other conditions, failure to restore holes 5 and 6, alleged delays by City in responding to Project development applications and processing the permit and plan check process for Project permits necessary for the slope repair and drainage facility Project, among other claims and allegations.
J. In the Action, Plaintiffs OC and GC contend that City’s acts and/or failure(s) to act, including allegedly improperly exercise of City’s authority pursuant to the Release terms to accept CCC’s permit conditions, entitles OC and GC to compensation for the loss of golf course hole 6, recovery of restoration costs for both golf course hole 5 and hole 6, related consequential damages including both temporary and permanent loss of use and loss of revenue, recovery of restoration costs, specific performance, breach of contract damages, breach of the covenant of good faith and fair dealing damages, inverse condemnation recovery for temporary and permanent loss of use and control of real property, nuisance damages, declaratory relief, and attorney fees recovery.
K. City denies all claims and allegations in the Action, including but not limited to any claims that City failed to comply with the duties and obligations created by the Release. City further contends it is entitled to immunity for any and all claims, including related to processing of any Project permits and applications. City further contends the allegations and claims based on specific performance, breach of contract, breach of covenant of good faith and fair dealing, and nuisance are without merit and barred by CCC’s authority over Project permits and CCC’s imposition of special permit conditions affecting the Project and precluding restoration of golf course hole 6, among other issues. City further contends inverse condemnation is inapplicable because the Project was a private work conducted on private property and plaintiffs OC and GC consented to the Project work to construct the facilities agreed to by all parties in the Release.
L. The Action, the claims and allegations by OC and GC against City relating to the Action, the Release, and/or the Project, including any alleged obligations of City or CJPIA to fund payments related to the Project and/or for payment for the long term maintenance of habitat areas subject to CCC’s special conditions imposed on the Project, and all claims for recovery of financial losses and other alleged impacts to OC and GC and the Shorecliffs Golf Course as a result of construction of the Project, together with CCC’s imposed special conditions and restrictions on the Shorecliffs Golf Course, reduced golf course yardage due to reconfiguration of course layout, reduced golf course playability and/or desirability due to reconfiguration of course layout, relocation of hole 6, permanent loss of use of former hole 6 site due to CCC’s special conditions requiring permanent habitat maintenance and deed restriction(s) affecting the former hole 6 site, restoration costs relating to both hole 5 and the newly configured hole 6 or any other area of the Shorecliffs Golf Course, and for recovery of compensation, damages, or any other claims for loss(es) relating to the Project, including the alleged delays by City in responding to Project development applications and processing Project permits, any other alleged responsibility of City and/or CJPIA relating to the Action, Release and Project, and City’s denial of any and all alleged liability, are collectively referred to herein as the “Disputes.” M. The Parties have engaged in mediation and other settlement discussions concerning the Disputes.
Settlement Agreement – George Zeber, OC RE-HAB 1, LLC, and GC-8 LLC v. City of San Clemente Orange County Superior Court Case No. 30-2021-01191580-CU-EI-CXC
N. The Parties each deny all liability relating to the Disputes, the Release, the Project, and all allegations in the Action. Nevertheless, in the interest of avoiding the risks and expense of further litigation, the Parties now desire to settle and resolve all matters arising from or relating to the Disputes, including the Action, the Release and/or the Project.
NOW, THEREFORE, in consideration of the mutual promises made herein, and for good and sufficient consideration, which is hereby acknowledged, the Parties, intending to be legally bound, agree as follows:
II. TERMS AND CONDITIONS
1. Incorporation of Recitals. The above recitals are incorporated herein and are part of this Agreement.
2. Effective Date. This Agreement shall be effective upon execution of this Agreement by all Parties, or the date one day after City Council approval, whichever is later.
3. Settlement Payments. In consideration of the terms and conditions set forth in this Agreement, City, through CJPIA, shall pay the total sum of Three Million Five Hundred Thousand Dollars ($3,500,000.00), in the form of drafts or checks payable to payees as follows “Newmeyer & Dillion IOLTA Client Trust Account” and delivered to:
Charles S. Krolikowski
Newmeyer & Dillion LLP
895 Dove Street, 5th Floor
Newport Beach, CA 92660
The settlement check or draft for the above sum shall be delivered to the above-identified counsel for plaintiffs OC and GC within thirty (30) days of receipt by City’s counsel of record, from plaintiffs OC and GC’s counsel of record, all of the following: (a) a fully executed copy of this Agreement, (b) executed W-9(s) by and on behalf of the payee(s) of the settlement amount, (c) as a contingency only to the payment of the $748,000 amount due to Shorecliffs Conservancy, as addressed in the next paragraph below, documents evidencing that Shorecliffs Conservancy has been duly formed as a California non-profit public benefit corporation, is qualified to hold endowments pursuant to California Government Code sections 65965-65968, and has applied for and been issued a determination letter by the U.S. Internal Revenue Service or from the state Franchise Tax Board stating that it is exempt from California franchise and income tax (California Revenue and Taxation Code Section 23701), and (d) a copy of plaintiffs’ executed Request for Dismissal with prejudice of the entire action has been delivered via email to City’s counsel of record Mitch Dean at [email protected] and to Scott Noya at [email protected].
In further consideration of the terms and conditions set forth in this Agreement, City, or through CJPIA, shall pay the total not to exceed sum of Seven Hundred Forty Eight Thousand Dollars ($748,000.00), in the form of drafts or checks payable to the “Shorecliffs Conservancy” in connection with, and satisfaction of, the endowment requirement to fund long-term maintenance obligations of the Conservation Easements (described below), and said payment shall be delivered to Shorecliffs Conservancy within thirty (30) days of receipt of the items listed in the immediately Settlement Agreement – George Zeber, OC RE-HAB 1, LLC, and GC-8 LLC v. City of San Clemente Orange County Superior Court Case No. 30-2021-01191580-CU-EI-CXC
preceding paragraph above. As provided in the Conservation Easements, if additional funding is subsequently required for long term habitat maintenance, plaintiffs OC and GC shall timely submit to Shorecliffs Conservancy any additional amount reasonably necessary to maintain sufficient funds in the endowment as determined by Shorecliffs Conservancy in its sole discretion.
Plaintiffs OC and GC will file the Request for Dismissal with prejudice of the entire action within three (3) court days of plaintiff’s counsel’s prompt confirmation of receipt of the settlement draft/check and will promptly provide a conformed copy upon entry of the dismissal to all Parties.
For plaintiffs’ internal purposes only, and not as a fact to which City and/or CJPIA stipulate, plaintiffs OC and GC state the settlement payments are made to compensate OC and GC for claims to damage to their property, not for replacement of income, and OC and GC further allocate the settlement payment from City as follows: (1) OC Re-Hab $2,400,000 (Two Million Four Hundred Thousand Dollars), and (2) GC-8 $1,100,000 (One Million One Hundred Thousand Dollars).
4. Terms and Conditions for Satisfaction of Release Obligations and Project Completion Tasks.
This Agreement, and City/CJPIA’s obligations for payment of the settlement amount to OC and GC, is conditioned on satisfaction of all remaining Release obligations and completion of the Project tasks pursuant to the Release and in compliance with the CCC permit special conditions imposed on April 16, 2021, as amended by that CCC permit amendment approval issued on February 10, 2022, final documentation of satisfaction of said conditions and completion obligations is as follows:
A. Issuance and maintenance of all permits and compliance with all conditions established by regulatory agencies for the Project, including by Fish & Wildlife, US Army Corp of Engineers, State Regional Water Quality Control Board, Caltrans, and CCC.
B. Release Section II.G.2, which requires restoration of the Shorecliffs Golf Course to include the restoration contained within the Restoration, Mitigation, Monitoring, and Maintenance Plan (“RMMMP”). OC and GC acknowledge City and/or CJPIA has satisfied the obligation to pay the costs for the restoration work, and all Parties agree that the work is now completed, all payments for the restoration work have been made, and there are no other outstanding costs claimed by any Party.
C. Release Section II.C.1 and the Independent Contractor Agreement for Construction Management require completion of storm drain improvements that lie within the boundaries of the Project and approval by the City Engineer of Record as reflected in the approved As-Built Plans dated February 9, 2024, which are on file with the City.
D. Release Section II.C.1 and the Independent Contractor Agreement for Construction Management require completion of storm drain improvements that lie within the boundaries of Caltrans (State of California Department of Transportation) right-of-way, which required permits and approvals of Caltrans, including approval of a Caltrans encroachment permit.
The encroachment permit work has been completed and the permit has been finaled by Caltrans.
Settlement Agreement – George Zeber, OC RE-HAB 1, LLC, and GC-8 LLC v. City of San Clemente Orange County Superior Court Case No. 30-2021-01191580-CU-EI-CXC
E. Release Section II.C.1 and the Independent Contractor Agreement for Construction Management, which requires OC to obtain and record a permanent easement by the vested title owners of the property located at 424 Via Alegre, City of San Clemente, California, in favor of and in a form acceptable to City for drainage, and Release Sections IV.H., IV.S, and IV.T, which require OC and GC to dedicate and record a permanent easement in favor of the City for the storm drain facility and access road rights, and a permanent easement for associated improvements on the portion of land between OC and GC’s golf course property and Caltrans right-of-way property. The Parties agree these obligations are deemed satisfied by executing, delivering, and recording the following three (3) permanent easement deeds, subject to final City Council action to deem the Project complete and authorize execution and acceptance of the easements:
(i) Permanent easement deed by Donald Aaron Lancaster and Erika Danielle Young, husband and wife as joint tenants, as grantors, to City and OC as grantees, for the operation, maintenance, access, repair, and, when necessary, replacement of the drainage facilities constructed as part of the slope repair Project and partially located within the real property identified as Orange County APN 691-031-14, commonly known as 424 Via Alegre, San Clemente, California, in a form substantially similar to that attached hereto as Exhibit 1;
(ii) Permanent easement deed by OC as grantor in favor of the City as grantee for the operation, maintenance, access, repair, and, when necessary, replacement of the drainage facilities constructed as part of the slope repair Project and partially located within the real property identified as Orange County APN 691-021-01, in a form similar to that attached hereto as Exhibit 2; and
(iii) Permanent easement deed by OC as grantor in favor of the City as grantee for the operation, maintenance, access, repair and, when necessary, replacement of the drainage facilities constructed as part of the slope repair Project and partially located within the real property identified as Orange County APN 691-021-02, in a form substantially similar to that attached hereto as Exhibit 3.
F. Release Section IV.J. requires OC to record certain Hillside Disclosure and Maintenance Agreements. OC and GC acknowledge that on August 31, 2023, City (through attorney Ed Richards) sent to the affected homeowners certified mail letters (with proof of mailing) requesting notary acknowledged signatures on the included “Hillside Disclosure and Maintenance Agreement” but as of the effective date of this Agreement no homeowners have responded or complied and none of the Hillside Disclosure and Maintenance Agreements have been recorded.
The Parties agree, as between the Parties hereto only but not including the affected homeowners who have not complied, Release Section IV.J is deemed fully satisfied by City’s mailing of the letters, copies of which are attached hereto as Exhibit 4.
Settlement Agreement – George Zeber, OC RE-HAB 1, LLC, and GC-8 LLC v. City of San Clemente Orange County Superior Court Case No. 30-2021-01191580-CU-EI-CXC
G. City’s Notice of Completion regarding the portions of the Project to be dedicated to City as permanent easements, which City Council has authorized to be executed and filed for recordation, final copies of which are attached hereto as Exhibit 5.
H. Revised Restoration, Mitigation, Monitoring, and Maintenance Plan, LongTerm Habitat Management Plan, and Project Plans, as approved by CCC’s Executive Director consistent with CCC’s approval of the amended permit Application No. 5-20-0446-A1, with conditions including OC and GC’s compliance with all requirements, requests and mitigation measures from the Regional Water Quality Control Board and California Department of Fish and Wildlife, including revised final Restoration, Mitigation, Monitoring, and Maintenance Plan, a revised final Long-Term Habitat Management Plan, and revised project plans in substantial conformance with the “Restoration, Mitigation, Monitoring, and Maintenance Plan” (RMMMP) dated April 26, 2021, “Long-Term Habitat Management Plan for the Shorecliffs Wetland Conservation Area” (LTHMP) dated April 26, 2021, and the project plans dated June 19, 2018, CCC-approved copies of which are attached as Exhibit C (RMMMP) and Exhibit D (LTHMP) to the Conservation Easement for Site 1 and Conservation Easement for Sites 2 and 3, described below and attached hereto.
I. Recordation of deed restriction documents by OC and GC as required by CCC special conditions for Application 5-20-0446-A1 (as amended), along with the Certificate of Compliance recorded with the Orange County Recorder on December 14, 2021 as document no. 2021000747999, in satisfaction of CCC Special Conditions 1, 6, 7 and 8, completion of compliance with said conditions was confirmed by the May 5, 2023 email from CCC which is attached hereto as Exhibit 6.
J. OC and GC shall grant to City as grantee, the two “Conservation Easement” documents affecting portions of the Shorecliffs Golf Course property owned by OC as grantor for “Site 1” and GC as grantor for “Sites 2 and 3”, respectively, by executing, delivering, and recording the Conservation Easements in the forms attached hereto as Exhibits 7 and 8, and concurrently executing and delivering the related Endowment Agreement with Shorecliffs Conservancy in the form attached hereto as Exhibit 9.
5. Letter of Map Revision (LOMR). The parties recognize that a Letter of Map Revision (LOMR) from the Federal Emergency Management Agency (FEMA) is required for the slope repair Project and that the application for the LOMR is pending with FEMA for review and could be pending for more than one (1) year.
A. While the Parties anticipate that the LOMR application will be approved, in the event that FEMA does not approve the LOMR application for the slope repair Project as submitted: (a) City staff will take over management of that project application; and (b) the costs for the City’s LOMR consultant BKF Engineers shall be paid by the City.
B. Regardless of whether the LOMR application is approved, OC acknowledges and agrees that the release in this Agreement includes, but is not limited to, claims that the slope repair Project and any work or map revision ordered by FEMA impacts the economic Settlement Agreement – George Zeber, OC RE-HAB 1, LLC, and GC-8 LLC v. City of San Clemente Orange County Superior Court Case No. 30-2021-01191580-CU-EI-CXC
value, developmental potential, lost profits, slope stability or any other affect whatsoever on Parcel No. 691-021-02 owned by OC.
6. City and/or CJPIA Payments Related to Project and/or Construction Management Agreement Terminated. Any duty or other alleged obligation(s) of City and/or CJPIA, whether express contractual or implied, to make payments related to Project and/or the Independent Contractor Agreement for Construction Management referred to in the Action and Release (and attached to the Release as Exhibit E) are hereby terminated by mutual agreement, as of the Effective Date of this Agreement. Said termination also terminates all obligations of City and CJPIA as “Management Committee” members appointed pursuant to Release Section II.B.1. The Parties agree all payments due or claimed to be due pursuant to the Release and Independent Contractor Agreement for Construction Management have been satisfied, and no other outstanding unpaid costs are claimed by any Party.
7. Mutual Releases and Waivers. Except for the obligations created by this Agreement, each Party, on behalf of itself and its predecessors, parent companies, subsidiaries, directors, officers, members, and employees, hereby waives and releases all claims of any nature whatsoever (including but not limited to breach of contract, patent ambiguity, latent ambiguity, and negligence, whether known or unknown) against the other arising out of or related to the Action and the allegations and causes of action contained therein, the Release including but not limited to the alleged breach(es) by City of the Release obligations, all payments due or claimed to be due pursuant to the Release and Independent Contractor Agreement for Construction Management, the Project and the Disputes (collectively, the “Released Claims”). This includes, but is not limited to, OC and GC releasing City and CJPIA from any and all claims relating to the Project, loss of income, loss of revenue, financial losses and all other alleged damages and impacts to OC and GC as a result of CCC’s imposed special conditions and restrictions on the Shorecliffs Golf Course, reduced golf course yardage due to reconfiguration of course layout, reduced golf course playability and/or desirability due to reconfiguration of course layout, relocation of hole 6, permanent loss of use of former hole 6 site due to CCC special conditions requiring permanent habitat maintenance and deed restriction(s) affecting the former hole 6 site, restoration costs relating to both hole 5 and the newly configured hole 6 or any other area of the Shorecliffs Golf Course, impacts on, damages to or restrictions on development of Parcel No. 691-021-02 or any other property owned by OC or GC, and from any claims relating to the Project including the alleged delays by City in responding to Project development applications and processing Project permits and claims for inverse condemnation. Except as expressly set forth otherwise in Section 5 above, the Released Claims also includes, but is not limited to, OC and GC releasing City and CJPIA from any and all claims relating to the LOMR and any impacts of the LOMR on any property owned by OC or GC.
Civil Code § 1542 Waiver. The Parties hereby each acknowledge that there is a risk that, subsequent to the execution of this Agreement, it may incur, suffer or sustain injury, loss, damage, costs, attorney’ fees, expenses, or any of these, which are in some way caused by and/or connected with the facts, entities and/or matters referred to in the Action, or which are unknown or unanticipated at the time this Agreement is executed, or which are not presently capable of being ascertained.
Further, each Party acknowledges that there is a risk that such damages as are presently known may become more serious than they now expect or anticipate.
Settlement Agreement – George Zeber, OC RE-HAB 1, LLC, and GC-8 LLC v. City of San Clemente Orange County Superior Court Case No. 30-2021-01191580-CU-EI-CXC
Nevertheless, each Party expressly acknowledges that this Agreement has been negotiated and agreed upon in light of those realizations and they thereby expressly waive all rights they may have in such unsuspected claims. In so doing, the Parties acknowledge that they are releasing all unknown claims and any other claims, defenses, or causes of action related to or arising out of the Action, the Disputes, and the Released Claims, that each Party has had the benefit of counsel, and as to the Released Claims they have been advised of, understand and knowingly, voluntarily, specifically and expressly waive all rights each Party may have under California Civil Code Section 1542 which 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 THE DEBTOR OR RELEASED
PARTY.
BY EXECUTING THIS AGREEMENT, THE PARTIES HEREBY WAIVE THE PROVISIONS OF SECTION 1542 WHICH ARE THE SUBJECT OF THE FOREGOING WAIVERS AND RELEASE OF THE RELEASED CLAIMS. CONSISTENT WITH THE FOREGOING, BY
EXECUTING THIS AGREEMENT EACH PARTY, FOR ITSELF AND ITS AGENTS,
AFFILIATES, SUCCESSORS AND ASSIGNS, HEREBY AGREES TO ASSUME THE RISK
THEREOF, IN FULL RELIANCE UPON ITS OWN INVESTIGATIONS, AND RELEASES
AND FOREVER DISCHARGES, WAIVES AND EXONERATES EACH OTHER PARTY AND SUCH PARTY’S AFFILIATES, MEMBERS, PARTNERS, OFFICERS, DIRECTORS,
MANAGERS, TRUSTEES, SUBSIDIARIES, PRINCIPALS, OWNERS, GENERAL
PARTNERS, LIMITED PARTNERS, AS WELL AS THE SUCCESSORS AND ASSIGNS OF
EACH OF PARTY AS A RELEASEE FROM ANY AND ALL LIABILITIES, OBLIGATIONS,
RIGHTS, CLAIMS, CAUSES OF ACTION AND DEMANDS AT LAW OR IN EQUITY,
CONTROVERSIES, DAMAGE, COSTS, LOSSES AND EXPENSES WHETHER KNOWN OR
UNKNOWN AT THE TIME OF THIS AGREEMENT, WHICH ANY PARTY HAS OR MAY
HAVE IN THE FUTURE, ARISING OUT OF THE RELEASE, THE PROJECT, THE ACTION,
THE DISPUTES, THE RELEASED CLAIMS, THE PHYSICAL, ENVIRONMENTAL,
FINANCIAL ECONOMIC OR LEGAL CONDITION OF THE PROJECT AND THE
OPERATION OR RESULTS OF OPERATIONS OF THE PROJECT ON THE AFFECTED
PROPERTY(IES), INCLUDING, WITHOUT LIMITATION, ALL CLAIMS IN TORT OR
CONTRACT, ALL CLAIMS UNDER A WARRANTY OF ANY KIND (WHETHER EXPRESS,
IMPLIED, OR, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW,
STATUTORY) AND INCLUDING ANY AND ALL CLAIMS FOR INDEMNIFICATION OR
CONTRIBUTION ARISING UNDER THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT (42 U.S.C. SECTION 9601, ET SEQ.)
OR ALL SIMILAR FEDERAL, STATE OR LOCAL STATUTE, RULE OR REGULATION,
AND ANY OTHER BASIS FOR RECOVERY OR REIMBURSEMENT (INCLUDING NEGLIGENCE OR STRICT LIABILITY). UPON EXECUTION OF THIS AGREEMENT Settlement Agreement – George Zeber, OC RE-HAB 1, LLC, and GC-8 LLC v. City of San Clemente Orange County Superior Court Case No. 30-2021-01191580-CU-EI-CXC
EACH PARTY SHALL BE DEEMED TO HAVE WAIVED, EXONERATED,
RELINQUISHED AND RELEASED THE OTHER PARTIES FROM ALL RELEASED
CLAIMS, AND AGAINST ANY AND ALL MATTERS AFFECTING THE RELEASE, THE
PROJECT, THE ACTION, THE DISPUTES, THE RELEASED CLAIMS AND/OR THE
PROPERTY(IES) AFFECTED BY THE PROJECT OTHER THAN RIGHTS OR REMEDIES EXPRESSLY PROVIDED IN THIS AGREEMENT. ALL PARTIES ACKNOWLEDGE AND
AGREE THAT THE WAIVERS, RELEASES AND OTHER PROVISIONS CONTAINED IN
THIS PARAGRAPH WERE A MATERIAL FACTOR IN ACCEPTANCE OF THE
AGREEMENT AND ITS TERMS, AND EACH PARTY, TOGETHER WITH ITS COUNSEL,
HAS FULLY REVIEWED THE RELEASES AND WAIVERS SET FORTH IN THIS AGREEMENT, AND UNDERSTANDS THE SIGNIFICANCE AND EFFECT THEREOF. ___________ ____________ ___________ ___________
Initials:
The Parties acknowledge that the facts and law in relation to this matter and the claims released by the terms of this Agreement may turn out to be different from the facts or law as now known to each Party or its counsel. Each Party therefore expressly assumes the risk of the existence of different or presently unknown facts or law as to the Released Claims and agrees that this Agreement shall be in all respects effective and binding as to such Party, despite the possibility of new or different facts or law.
8. No Admission. The Parties understand and agree that this Agreement is not to be construed as an admission whatsoever on the part of any of them and that the releases are made solely for the purpose of avoiding the burden and expense which would be imposed upon the Parties through further litigation.
9. Benefit of Counsel. The advice of legal counsel has been obtained by the Parties in connection with all aspects of the Action and prior to entering into this Agreement. The Parties therefore voluntarily execute this Agreement on behalf of itself, each of its executors, administrators, predecessors, successors, assigns, and all persons, firms, associations and/or corporations connected with them, including their attorneys, with full knowledge of its significance and with the express intention of affecting its legal consequences. Each Party is not relying on any representations, warranties or advice as to the rights, obligations, and terms of this Agreement from any other Party or its/their attorneys.
10. Compromise. This Agreement is the result of a compromise of a disputed claim between the Parties, and it shall never at any time or for any purpose be considered an admission of liability, fault and/or responsibility by any Party, nor shall the payment of any sum of money in consideration for the execution of this Agreement constitute or be construed as an admission of any liability, fault or responsibility whatsoever by any Party. It is expressly acknowledged and understood by the Parties, and each of them, that City continues to deny any and all liability, fault and/or responsibility for the matters alleged in the Action and the Dispute, including but not limited to any claims City failed to properly perform any duty or obligation(s) imposed by or created in the Release.
Settlement Agreement – George Zeber, OC RE-HAB 1, LLC, and GC-8 LLC v. City of San Clemente Orange County Superior Court Case No. 30-2021-01191580-CU-EI-CXC
11. Amendments. This Agreement may not be modified without a signed agreement in writing executed by all Parties.
12. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties to the Action and their respective employees, trustees, predecessors, successors, assigns, subsidiaries, affiliated and related entities, present and former officers, directors, principals, agents, employees, servants, representatives, and all persons, firms, associations and/or corporations connected with them, including without limitation their insurers, sureties and attorneys.
13. Construction of Release. This Agreement is the product of negotiation and preparation by and among the Parties to the Action and their respective attorneys. All Parties therefore expressly acknowledge and agree that this Agreement shall not be deemed prepared or drafted by one party or another, or their attorneys, and will be construed accordingly.
14. Fully Integrated Agreement. This is a fully integrated agreement. This Agreement constitutes the entire agreement and final understanding between the Parties with respect to settlement of the Action and Disputes. It is intended by the Parties as a complete and exclusive statement of the terms of their agreement to settle and resolve all claims related to the Release, the Project, the Action, the Disputes and the Released Claims. It supersedes and replaces all prior negotiations and all agreements, proposed or otherwise, whether written or oral, concerning the subject matter hereof. Any representation, promise or agreement not specifically included in this Agreement shall not be binding upon or enforceable against any of the Parties.
15. Covenant Not to Sue. Each Party covenants and agrees never to commence and/or prosecute against any other Party any legal action and/or other proceedings based in whole or in part upon the claims, demands, causes of action, obligations, damages and/or liabilities released in this Agreement or identified as part of the Action, the Project, the Release, the Released Claims, or based on alleged breach of obligations of the Release, other than action(s) or proceeding(s) to enforce this Agreement which shall be determined subject to and in accordance with the Judicial Reference provisions set forth below.
16. Cooperation; Further Acts. The Parties shall fully cooperate with one another and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement.
17. Attorney's Fees and Costs. Each Party shall bear its own attorney fees, expert witness fees, and costs incurred in connection with the Disputes and Released Claims.
18. Authority. Each of the Parties and signatories below represent and warrant that the undersigned signatories are authorized to sign this Agreement and to bind the Party identified and agree to indemnify the other Parties should such representation and warranty prove false.
19. Counterparts. This Agreement may be signed in counterparts, and electronically scanned signatures sent by e-mail shall constitute originals for all purposes and shall have the same effect as if all Parties had signed the same instrument.
Settlement Agreement – George Zeber, OC RE-HAB 1, LLC, and GC-8 LLC v. City of San Clemente Orange County Superior Court Case No. 30-2021-01191580-CU-EI-CXC
20. Law and Venue; Consent and Agreement to Judicial Reference as Sole and Exclusive Remedy. This Agreement shall be construed in accordance with the laws of the State of California.
Any disputes as to the terms, enforcement or interpretation of this Agreement shall be determined by Judicial Reference. Each of the undersigned Parties hereby consents and agrees that (a) any and all disputes relating to this Agreement shall be heard by a referee in accordance with the general reference provisions of California Code of Civil Procedure Section 638, sitting without a jury in Orange County, (b) such referee shall hear and determine all of the issues in any such dispute (whether of fact or of law), including issues pertaining to a “provisional remedy” as defined in California Code of Civil Procedure Section 1281.8, including without limitation, entering restraining orders, entering temporary restraining orders, issuing temporary and permanent injunctions and appointing receivers, and shall report a statement of decision, provided that, if during the course of any dispute any party desires to seek such a “provisional remedy” but a referee has not been appointed, or is otherwise unavailable to hear the request for such provisional remedy, then such party may apply to the Superior Court in Orange County for such provisional relief, and (c) pursuant to California Code of Civil Procedure Section 640(a), judgment may be entered upon the decision of such referee in the same manner as if the dispute had been tried directly by a court.
The Parties shall use their respective commercially reasonable and good faith efforts to agree upon and select such referee, provided that such referee must be a retired California state or federal judge, and further provided that if the Parties cannot agree upon a referee within ten (10) days of the request of any Party, the referee shall be appointed by the presiding judge of such Superior Court. Each Party hereto acknowledges that this consent and agreement is a material inducement to enter into the transactions described in this Agreement and all other agreements and instruments provided for herein or therein, and that each will continue to be bound by and to rely on this consent and agreement in their related future dealings. Each Party hereto further warrants and represents that it has reviewed this consent and agreement with legal counsel of its own choosing, and that it knowingly and voluntarily gives this consent and enters into this Agreement having had the opportunity to consult with legal counsel. This consent and agreement is irrevocable, meaning that it may not be modified either orally or in writing, and this consent and agreement shall apply to any subsequent amendments, renewals, supplements, or modifications to this Agreement or any other agreement or document entered into between the Parties in connection with this Agreement.
In the event of litigation, this Agreement may be filed as evidence of the Parties’ consent and agreement to have any and all disputes heard and determined by a referee under California Code of Civil Procedure Section 638.
21. Retention of Jurisdiction by Court. Each Party and its attorney hereby acknowledge and agree that the Superior Court of the State of California in and for Orange County shall have jurisdiction over the Action for all purposes pertaining to execution and performance of the terms and conditions set forth in this Agreement, which shall be determined subject to and in accordance with the Judicial Reference provisions set forth above. Each of the Parties waives any rights that they may have under Code of Civil Procedure section 394.
22. Severance of Invalid Provision. If any provision of this Agreement shall be held to be invalid, the same shall not affect the validity, legality or enforceability of the remainder of this Agreement.
Settlement Agreement – George Zeber, OC RE-HAB 1, LLC, and GC-8 LLC v. City of San Clemente Orange County Superior Court Case No. 30-2021-01191580-CU-EI-CXC
IN WITNESS WHEREOF, the Parties hereto have freely and voluntarily executed this Agreement as of the date set forth above:
Settlement Agreement signature page - George Zeber, OC RE-HAB 1, LLC, and GC-8 LLC v. City of San Clemente
OC Re-Hab 1, LLC:
OC Re-Hab 1, LLC
By: ______________________________________
Printed Name: George Zeber
Title: Sole Managing Member
GC-8 LLC:
GC-8 LLC
By: _______________________________________
Printed Name: Hon. James B. Copelan (Ret.)
Title: Attorney in Fact/Agent for Fah Sean Leong, Manager/CEO City of San Clemente:
City of San Clemente
By: ______________________________________
Name: Andy Hall
Title: City Manager, City of San Clemente
Attest:
By: ______________________________________
Laura Campagnolo, City Clerk
Approved as to form:
By:
Elizabeth A. Mitchell, City Attorney
California Joint Powers Insurance Authority:
California Joint Powers Insurance Authority
Settlement Agreement – George Zeber, OC RE-HAB 1, LLC, and GC-8 LLC v. City of San Clemente Orange County Superior Court Case No. 30-2021-01191580-CU-EI-CXC
By: ______________________________________
Name: Alex Smith
Title: Chief Executive Officer, California Joint Powers Insurance Authority
LIST OF EXHIBITS TO SETTLEMENT AGREEMENT
Exhibit 1: Grant of Easement – 424 Via Alegre, San Clemente, CA (APN 691-031-14) Exhibit 2: Grant of Easement – Golf Course, San Clemente, CA (APN 691-021-01) Exhibit 3: Grant of Easement – Vincent parcel, San Clemente, CA (APN 691-021-02) Exhibit 4: August 31, 2023 certified mail letters to homeowners requesting notary acknowledged signatures on “Hillside Disclosure and Maintenance Agreement” Exhibit 5: City Notice of Completion
Exhibit 6: May 5, 2023 email from California Coastal Commission (CCC) confirming coapplicants OC and GC’s satisfaction and completion of compliance with CCC Special Conditions 1, 6, 7 and 8 for CDP Application 5-20-0446-A1 (as amended) Exhibit 7: Conservation Easement, Site 1
Exhibit 8: Conservation Easement, Sites 2 and 3
Exhibit 9: Endowment Agreement with Shorecliffs Conservancy