CITYOF �
SANJOSE
CAPITAL OF SILICON VALLEY
TO: HONORABLE MAYOR
AND CITY COUNCIL
SUBJECT: SETTLEMENT OF LAWSUIT
FILED BY GRADETECH
RECOMMENDATION
4/28/2026 COUNCIL AGENDA:
FILE:
ITEM:
26-535
2.18 Memorandum
FROM: Susana Alcala Wood,
City Attorney
DATE: April 24, 2026
Approve the settlement of a lawsuit brought by Plaintiff Gradetech Inc. in the total amount of $675,000 and authorize the City Attorney to execute a settlement agreement.
OUTCOME
Settlement of the breach of contract lawsuit brought by Plaintiff Gradetech in the amount of $675,000. Each side will bear its own costs and attorney fees.
BACKGROUND
This lawsuit arises from a contract between the City of San Jose and Gradetech for the construction of the Lake Cunningham Bike Park in 2017. Following completion of the bike park, Gradetech filed suit alleging that the City owed Gradetech for cost overruns and delays, plus attorney's fees and interest. The matter has been the subject of ongoing litigation since 2017. The settlement will resolve all of Plaintiff's claims for damages, including any future damages.
ANALYSIS
This is a negotiated settlement between the parties to avoid the risks inherent in litigation. The City will pay plaintiff the total sum of $675,000 in full satisfaction and settlement of all claims, and plaintiff will dismiss its entire lawsuit with prejudice. The proposed agreement will conclude the litigation without further cost, expense, or risk of loss to the City and City employees. The parties will bear their own respective attorneys' fees and litigation costs.
PUBLIC OUTREACH/INTEREST
This memorandum and the Settlement Agreement have been posted on the City's website for the April 28, 2026, agenda.
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