SETTLEMENT AGREEMENT AND MUTUAL RELEASE BETWEEN CITY OF SAN CLEMENTE AND CALIFORNIA JOINT POWERS INSURANCE AUTHORITY This SETTLEMENT AGREEMENT AND MUTUAL RELEASE BETWEEN CITY OF SAN CLEMENTE AND CALIFORNIA JOINT POWERS INSURANCE AUTHORITY (“Agreement”) is made as of April 17, 2024 (the “Effective Date”) among the City of San Clemente, a public entity (“City”), and California Joint Powers Insurance Authority (“CJPIA”). City and CJPIA may be individually referred to herein as a “Party” and collectively referred to herein as the “Parties.”
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 RE-HAB 1, LLC (“OC”), and GC-8 LLC ("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. City is named defendant in the Action. 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 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 re-constructed 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.
F. City and CJPIA intend to enter into a separate settlement and mutual release agreement (the “Separate Settlement Agreement”) with OC and GC to mutually and globally settle the Action, all claims and allegations by OC and GC against City relating to the Action, the Release, and/or the Project (including any alleged obligations of CJPIA to fund payments related to the Project and/or for payment to CCC 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. Among the mutual releases and other terms and conditions in the Separate Settlement Agreement, City and CJPIA will be released by OC and GC from all claims in the Action and related to performance of the Release obligations.
G. CJPIA, on behalf of City, funded certain cost overruns and scope changes associated with construction of the box culvert, access road, and other public improvements built as part of the Project pursuant to the terms of the Release. CJPIA contends City owes reimbursement of certain cost overrun amounts and construction scope changes funded by CJPIA.
H. For purposes of this Agreement, the monetary amount of, and City’s reimbursement obligations to CJPIA for, the cost overruns and scope changes for construction of the box culvert, access road, and other public improvements are referred to herein as the Disputes which are being settled and released herein between City and CJPIA.
I. City and CJPIA now desire to settle and resolve all matters arising from or relating to the Disputes without further delay.
J. The purpose of this Agreement is to resolve all Disputes between City and CJPIA regarding City’s obligation for reimbursement to CJPIA the monetary amount funded by CJPIA on behalf of City for the Separate Settlement Agreement and for cost overruns and scope changes associated with construction of the box culvert, access road, and other public improvements built as part of the Project pursuant to the terms of the Release.
K. Nothing in this Agreement is intended to affect the existing terms and conditions of City’s ongoing participation as a CJPIA member or matters unrelated to the Action.
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:
TERMS AND CONDITIONS
Incorporation of Recitals. The above recitals are incorporated herein and are part of this Agreement.
Effective Date. This Agreement shall be effective upon execution of this Agreement by all Parties.
Settlement Payments. In consideration of the terms and conditions set forth in this Agreement, (a) CJPIA shall fund all payment obligations in the Separate Settlement Agreement; and (b) City shall pay CJPIA the total sum of Seven Hundred Thousand Dollars ($700,000.00), in the form of drafts or checks payable to “California Joint Powers Insurance Authority” and delivered to:
Alex Smith
Chief Executive Officer
California Joint Powers Insurance Authority
8081 Moody Street
La Palma, CA 90623
4. Payment Due Within 30 Days. City shall pay to CJPIA the sum stated above by settlement check or draft within thirty (30) days of mutual execution of this Agreement.
5. Releases and Waivers. Except for the obligations set forth by this Agreement, each Party, on behalf of itself, hereby waives and releases all claims of any nature whatsoever against the other arising out of or related to the Disputes between City and CJPIA regarding City’s obligation for reimbursement to CJPIA the monetary amount funded by CJPIA on behalf of City for the Separate Settlement Agreement and the cost overruns and scope changes associated with construction of the box culvert, access road, and other public improvements built as part of the Project pursuant to the terms of the Release (collectively, “Released Claims”).
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. 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.
Initials: _______ ________
The Parties acknowledge, except for matters expressly represented or recited herein, 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.
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.
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.
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.
Amendments. This Agreement may not be modified without a signed agreement in writing executed by all Parties.
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.
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.
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 Action and Disputes. 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.
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 or based on alleged breach of obligations of the Release, other than action(s) or proceeding(s) to enforce this Agreement.
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.
Attorney's Fees and Costs. Each Party shall bear its own attorney fees, expert witness fees, and costs incurred in connection with the Disputes. However, if any action or legal proceeding is instituted by any Party hereto arising out of this Agreement, the prevailing party therein shall recover reasonable attorney’s fees in connection with such action or proceeding.
Authority. Each of the Parties represent and warrant that the undersigned signatories are authorized to sign this Agreement and to bind the Party identified.
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.
Law and Venue. 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 in Superior Court, Orange County, California.
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.
IN WITNESS WHEREOF, the Parties hereto have freely and voluntarily executed this Agreement as of the date set forth above:
[Signatures begin on following page]
City of San Clemente and California Joint Powers Insurance Authority Settlement Agreement signature page – Regarding George Zeber, OC RE-HAB 1, LLC, and GC-8 LLC v. City of San Clemente City of San Clemente:
City of San Clemente
By: _______________________________
Name: Andy Hall
Title: City Manager, City of San Clemente
Approved as to form:
By:
Elizabeth A. Mitchell, City Attorney
Attest:
By:
Laura Campagnolo, City Clerk
California Joint Powers Insurance Authority:
California Joint Powers Insurance Authority
By: ______________________________________
Name: Alex Smith
Title: Chief Executive Officer, California Joint Powers Insurance Authority ClarkHill\94342\333720\266673895.v1-4/6/22
City of San Clemente and California Joint Powers Insurance Authority Settlement Agreement Regarding 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
Attachment 3