SETTLEMENT AGREEMENT AND RELEASE 1
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release (“Settlement Agreement”) is made by and between City of Sunnyvale ( hereafter “Sunnyvale”), a chartered municipal corporation, and the City of San Jos é, (he reafter “San Jos é”) a chartered municipal corporation. “ Parties,” when referenced herein, i ncludes Sunnyvale and San Jos é, collectively.
WHEREAS, Sunnyvale filed a government claim with San José on April 13, 2021 (hereafter the “Claim”); and
WHEREAS, S unnyvale alleges that since the mid-1950s, Sunnyvale has provided sewer service to a tract of 15 1 single-family homes within West San José known as Tract 1379, depicted on Exhibit A attached hereto, commonly referred to by Sunnyvale staff as part of the Sunnyvale’s larger Rancho Rinconada service area, and including the three-lot subdivision on Kimberly Street recorded in Book 352, P age 2, in the official records of Santa Clara County, Office of the County Clerk-Recorder; and WHEREAS, Sunnyvale alleges that the homes on Tract 1379 were built on what wa
s originally unincorporated land of Santa Clara County and annexed to San Jos é in 1956; and
WHEREAS, Sunnyvale alleges that after San Jos é annexed Tract 1379, Sunnyvale continued to provide sewer service to Tract 1379 and collecting service fees from the homeowners; and
WHEREAS, Sunnyvale alleges that on or about December 21, 202 0, during routine sewer flushing of the Tract 1379 service area, Sunnyvale sewer crews discovered that a new manhole had been constructed downstream of Sunnyvale man hole #A146-203 on the eastbound side of Bollinger Road; and
WHEREAS, Sunnyvale alleges that upon further investigation, Sunnyvale staff learned that a San Jos é sewer construction project had plugged the Sunnyvale sewer pipe that connected Sunnyvale manhole #A135-219 on Newsom Avenue and installed a new sewer pipe that diverts flow from the homes in Tract 1379 into the San Jos é sewer system; and
WHEREAS, Sunnyvale alleges that the work performed by San José to divert the flow from Tract 1379 was done without Sunnyvale’s knowledge or approval; and WHEREAS, Sunnyvale all eges that San Jos é’s actions damaged Sunnyvale’s property and have resulted in ongoing l oss of sewer service revenue from the Rancho Rinconada service area; and
WHEREAS, San José disputes the allegations from Sunnyvale; and WHEREAS, during the course of settlement discussions , the Par ties recognized there are two (2) additional Rancho Rinconada service area commercial parcels annexed Attachment 2
SETTLEMENT AGREEMENT AND RELEASE 2
to San Jos é in 1956, near the southeast corn er of Stevens Cree k B oulevard and Stern Avenue; and
WHEREAS, the two commercial parcels are located at 5696 Stevens Cr eek Boulevard, San Jos é, CA (Assessor’s Parcel Num ber 375-12-017) and 90 Stern Avenue, San Jos é, CA (Assessor’s Pa rcel Nu mber 375-12-014) ( collectively “Commercial Parcels”); and
WHEREAS, the commer cial parcel know n as 90 Stern Avenue, San Jos é, CA (Assessor’s P arcel Number 375 -12-014) is current ly connec ted to S an Jos é’s sewer service system and Sunnyvale collects the sewer service fees; and WHEREAS, Sunnyvale collects the s ewer service fees for the commercial parcel known as 5696 Stevens Cr eek B oulevard, San José , CA (Assessor’s Parcel Number 375-12-017) and San José believes that it is currently connected to S unnyvale sewer system and Sunnyvale; and
WHEREAS, as part of this Agreement the Parties desire to have San José own, operate, and maintain the sewer s ervice system fo r Tract 1379 and the Commercial Parcels as further d escribed below since Tr act 1379 a nd t he Commer cial Parcels are located within the C ity of San Jo sé and San Jos é’s Urban G rowth A rea and Urban Service Area; and
WHEREAS, the Parties now undert ake to s ettle the Claim (including the Commercial Parcels) in its entirety by entering in to thi s Agreement, pursuant to which Sunnyvale releases and extinguish es on a final basi s all claims and potential cl aims against San Jos é arising out of, or in any way co nnected with , the subject matters described herein comprising the Claim and Commercial Parcels; and NOW THEREFORE, the Parties agree as follows:
1. Scope o f Settlement. This Agreement sha ll settle, compromise, and forever discharge all claims of any and every kind, nat ure and ch aracter, which Sunnyvale alleged, or could have alleged, in the Claim (including the Commercial Parcels) arising from or based on any act or omi ssion by t he City of S an Jos é, City Departments, City elected officials, and all City employees, named or who could have been named in the Claim.
2. Consi der ation. In consideration for the agreements, promises, covenants, releases, and waivers, stated herein, the Parties agree as follows:
a. San José shall pay the total sum of eight hundred thousand dollars ($800,000) i n the form of a check payable to the City of Sunnyvale, who shall provide a W-9 prior to issuance of payment.
Payment from San Jos é to Sunnyvale shall be made within sixty (60) days fr om full execution of this Agreement. Said payment shall compensate Sunnyvale for any and all damages claimed, or which Sunnyvale could have claimed , arising from or related in Attachment 2
SETTLEMENT AGREEMENT AND RELEASE 3
any way to the subject matters in the Claim and Commercial Parcels.
b. Sunnyvale fully acknowledges and agrees that this Agreement memorializes the transfer to San Jos é the ownership of the se wer services system within Tract 1379 including the pipeline and appurtenant facilities and equipment. Sunn yvale further acknowledges and ag rees, if requ ested by S an José, Sunnyvale shall make, execute, acknowledge and deliver such other instruments and documents, and take all such other actions as may be reasonably required in order to confirm the tr ansfer to San José the ownership of the sewer servi ce system within Tract 1379 , including the pipeline and appurtenant facilities and equipment. c. Notwithstanding anything to the contrary, t he Parties acknowledge and agree that this Agreeme nt shall supersede, replaces, and /or otherwise takes precedent over any prior agreements,
arrangements, or practices related to the s anitary sewer system within Tract 1379 and the Commercial Parcels.
d. Sunnyvale acknowledges and agrees that effective July 1, 2023, it relinquishes and disclaims any and all ri ghts to collect any sewer service fees or s ewer related fees within Tract 1379 and on the commercial p arcel known as 90 Stern A venue, San Jos é (Assessor’s Parcel Number 375-12-014).
e. As for the commercial parcel known as 5696 Stevens Cr eek Boulevard, San José, (Assessor’s Parcel Number 375 -12-017), this parcel may be redeveloped in the future. The Parties w ill investigate to confirm that t his parcel is currently connected to Sunnyvale’s sanitary sewer system. If it is determined that the parcel is already connected to San José’s sewer system, Sunnyvale shall relin quish and disclaim any and all rights to collect sewer service fees or sewer related fees from the parcel at that time. If the Parties determine that the parcel is connected to Sunnyvale ’s sanitary sewer system, Sunnyvale shall relinquish and disclaim any and all rights to collect sewer service fees or se wer related fees from the parcel when the parcel is redeveloped at a future date and a sanitary sewer connection from said parcel to San José’s sanitary sewer system is established.
3. R elease. Sunnyvale and Sunnyvale’s representatives, successors, assigns, attorneys, and agents, hereby generally releases and forever discharge San José and all past and present employees , whether or not the employee was named individually in the Claim. For purposes of this Agreement, the City of San José includes, without limitation, all C ity Departments and Agencies, the City Council , all past and present elected and appointed officials, City employees, and any person or entity to which the City may owe Attachment 2
SETTLEMENT AGREEMENT AND RELEASE 4
an obligation of contractual or implied indemnity relating to a released claim. The release includes, without limitation, a ny and all actions , causes of action, obligations, costs, expenses, damages, los ses, claims, lien s, liabilities, attorney’s fees , and demands of whatsoever nature relating to or arising out of t he facts or circumstances alleged in the Claim, or that could have been alleged in the Claim, whether or not such claims were actually asserted in the Claim.
4. Rel ease of Unknown Claims . Sunnyvale understands this Agreement is a full and final settlement of all disputes and matters arising out of any subject m atter identified in this Agreement , including but not limited to all claims and causes of action asserted, or which could have been asserted in the Claim, and all pre sent and future unknown and unanticipated injuries, losses or damages arising out of the Claim (the "Released Matters"). Sunnyvale acknowledges and understands Section 1542 of the Civil Code of the State of California provides as follows:
A gen eral 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 r elease and that , if kno wn by him or her, would have m aterially affected his or h er settlement w ith the de btor or released party.
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I nitials
Sunnyvale represents that he/she has read, reviewed with counsel, and understood Civil Code Section 1542, an d that he/she hereby waive s al l present and future rights and benefits under Section 1542 to the extent it would permit cl aims relating to, arising o ut of, or any way connected to the subject of the Claim based on facts found to be different from the facts believed to be true at the time this Settlement Agreement was executed.
5. Lia
bility No t Admit ted. The Parties acknowledge and agree that San Jose’s payment represents a compromise and release of disputed claims and that neither the payment, nor anything stated i n this Agreement, c onstitutes or represents an admission by the San Jose, or any other Party, of liability or responsibility of any kind, or a concession by any P arty that assertions or allegations regarding the claims alleged in the Claim are valid. Each Pa rty fully assumes the risk that the facts or law surrounding such claims, and/or the other matters settled pursuant hereto, may be other than that Party believes them to be.
6. Parties t o Bear Own Attorney’s Fees and Costs. The Parties shall bear their own costs, including attorneys’ fees, and any other fees incurred in connection with the Claim, this Settlement Agreement, and the matters settled pursuant to this Settlement Agreement.
7. Consultation with Counsel . The Parties and each of them acknowledge they have carefully read and understand the terms of this Settlement Agreement and have consulted with legal counsel of their choice prior to execution and delivery of this Attachment 2
SETTLEMENT AGREEMENT AND RELEASE 5
Agreement. The Parties have voluntarily accepted the terms stated herein for the expre ss purpose of making a full and final compromise and settlement of the Claim.
8. Repres entations. Each person execu ting this Settlement Agr eement hereby warrants that he/she has full authority to do so. Sunnyvale further represents and warrants that he/she is the sole and r ightful owner of the claims asserted in the Claim; that he/she has not assigned any claim or claims, or the right to receive payments that are the subject of this Agreement ; and that no liens on the settlement proceeds have been asserted or exist.
9. Severability. If a ny provision in this Agreement is found to be unenforceable, it shall not affect the enforceability of the remaining provisions and the court shall enforce the remaining provisions to the extent permitted by law.
10. Counterparts . This Agreement m ay be e xecuted in counterpa rts, each of which shall be deemed an original and shall be deemed duly executed upon the signing of the counterparts by the Parties hereto.
11. Binding Force and Eff ect. Th is Agreement shall be governed by California law. It sh all bind and inure to the be nefit of all P arties and their r espective heirs, executors, administrators, trustors, trustees, beneficiaries, predecessors, successors, assigns, partners, partnerships, affiliated entities, agents, and representatives.
12. Entire Agreement. Thi s document is a fully integrated contract. I t contains a ll agreements, covenants, understandings, represent ations, and warranties between the Parties concerning the subject matter of the Agreement. The Parties have made n o other express or implied agreements, covenan ts, understandings, representations, or warranties concerning the subject matter of this Agreem ent. All prior and contemporaneous conversations, negotiations, possible and alleged agreements, understandings, representations, covenants, and warranties concerning the subject mat ter of thi s Agreement, other than those referred to herein, are merged he rein. This Agreement cannot be modified or amended by the exchange of electronic communications or any means other than a fully integrated writing signed by all Parties. ///
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Attachment 2
SETTLEMENT AGREEMENT AND RELEASE 6
IN WITNESS W HEREOF, th e Parties have ex ecuted this Settleme nt Agreement effective as of the date last set forth below.
CITY OF SUNNYVALE,
a chartered municipal corporation
Dated:_____________ By: ________________________________ Kent Steffens, City Manager
CITY OF SUNNYVALE
Dated: ____________ C ITY OF SAN JOSE,
a chartered municipal corporation
By: ______________________________
N ORA FRIMANN
City Attorney as Authorized Agent
for CITY OF SAN JOSE
APPROVED AS TO FORM:
Dated: ______________ By: __________________________ John A. Nagel, City Attorney
C ity of Sunnyvale
Dated: ______________
NORA FRIMANN, City Attorney
By: ______________________________
JOHNNY V. PHAN, Chief Deputy City
Attorney, City of San José
Attachment 2
EXHIBIT A
Attachment 2
Attachment 2