HomeMy WebLinkAboutAgenda Report - March 21, 2007 K-02r�AGENDA ITEM
CITY OF Lom
COUNCIL COMMUNICATION
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AGEN[I TITLE: Authorize Confingency Fee Contract with Folger, Levin & Kahn, LLP, for the
Hartfood Litigation.
MEETING DATE: March 21, 2007 City Council Meeting
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RECOWASKM ACTION: Authorize Contingency Fee Contract with Folger, Levin & Kahn,
LLP, for the Hartford Litigation.
BACKWOIINNrID INFORMA•NON: The City Council approved retention of the law firm of Folger Levin
& Kahn on June 2, 2004, to serve as outside counsel for the PCE
litigation.
The majority of that litigation has been resolved excepting one party in the Northern Plume, and
approx ately six parties in the South Central 1 Western Plume. However, the City's case against its
insurance carriers continues. Folger, Levin & Kahn, reflecting its confidence in the case has offered a
contingency fee agreement b continue the Hartford case. Folger, Levin & Kahn's proposal is to cap all
monthly fees at $50,000 p1m expert fees and costs starting February 1, 2007. Folger, Levin & Kahn
would also recover 25% of aM recoveries from the City's insurance carriers in excess of $4 million.
FISCAL IMPACT: Monthly Savings of $150,000 - $200,000
FIU14Di1$G AVAILABLE: Water Fund
Approved:
APPROVED:
Blair Kln ity Manager
FOLGER LENIN & KAHN LLP
March 19, 2007
D.Stephen Schwabsuer
Cly Attorney
CW
r of Lodi
2211 W. Pine St.
L di, CA 95240
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ATTORNEYS AT LAW
Embarcadero Center West
275 Battery Street, 23rd Floor
San Francisco, Califomig 94111
Telephone 415,986.2800
Facsimile 415 966.2827
Los Angeles .office:
1900 Avenue of the Stats. 28th Floor
Los Atigeles, California 90x67
Telephone 310.556.3700
Facsimile 310.556.3770
www.flk.com
Re: Htilrtford Accident and Indemnity Company, et al. v. City of Lodi, San
Frncisco Superior Court Case No. 323658
Dar Steve:
Folger Lewin & Kahn LLP ("FLK"} is currently representing the City, of Lodi
in the above -ref enced litigation. ("Hartford Action's pu uarit'to the June 2 2004
A.ssreement to Engage ouiside Legal Counsel Between The City Of Lodi And Folger Levin &
Karn LLP ('2004 Fee A$reem;ent' ). (For purposes of this letter, the term "Litigation!' shall
mean the pending proceedings in the Hartford Action in the San Francisco Superior Court, any
appellate proceedings arising out of or in connection therewith, -and any proceedings: for the
enforcement of any judgment entered in favor of the City therein.) Until now, our representation
of the City in the Hartford Action has been on a basis whereby FLK bills the City on a monthly
baths for our fees (at reduced rates from our standard hourly rates) and costs consistent with the
Fee Agreement. This letter modifies the 2004 Fee Agreement to reflect an alternative fee
arrangement with respect to the Hartford Action only under which FLK will handle the
remainder of the Litigation, going forward, on a partial contingent basis as follows:
I . This agreament will apply to fees and costs incurred by FLK on and after
February 1, 2007. This ageement+does not affect outstanding invoice number 100361 in the
amount of $211,159.60 fbr fees and costs incurred by FLK before February 1, 2007.
2. The City will pay fees to FLK for the time spent by FLK personnel (lawyers,
paralegals and case clerks) at the hourly rates agreed to by the City and FLK for such personnel
in effect at the time services are rendered, in an amount not to exceed $50,000 per month. These
fee amounts will continue to be billed and paid on a monthly basis, regardless of the status or
outcome of the Litigation or the amount of any Recovery (as defined below).
3. The City will pay all out of pocket expenses incurred in connection .with the
Litigation, regardless of gte status or outcome of the Litigation or the amount of any Recovery,
including (but not limited to) expenses for travel and lodging, experts, consultants and court
Fot.GER LFV1N & KAHN LLP
D. Stephen Schwabauer
March 19, 2007
Page 2
reporting fees, photocopying, document imaging, telecommunications, computerized legal
research, delivery charges and preparation of graphics (including, but not limited to, fees and
cents of graphics: consulnts).
4. In additiorn to the fps paid pursuant to Paragraph 2 above, FLK will receive 25%
of any and all "Recovert" obtained by the City from any and all sources whatsoever, whether by
why of settlement, judgment or otherwise. "Recovery" is defined as all monies and other
corisideration received by the City as a result of or in connection with the. Litigat on in excess of
$4 million, not including the settlement paid to the City by its primary insurer USF&G or its
excess insurer, American Centennial. The City acknowledges that FLK has made no guarantee
as to the outcome of the Litigation or as to the amount of any Recovery that the City may obtain
as a result of or in connection with the Litigation.
5. If the City rejects a settlement offer or offers that FLK supports, then FLK may
elect to revert to receiving payment (in addition to all amounts due under Paragraph 3 above) for
the time spent by FLK personnel at the hourly rates agreed to by the City and FLK for such
personnel in effect at the time services are rendered, including fees in excess of $50,000 per
month, and the City also agrees to pay FLK 75% of its past fees from February 1, 2007 through
the time of the settlement offer. However, the City shall have the sole and absolute right to make
decisions regarding the litigation including, but not limited to, accepting a resolution that FLK
does not support, withoid any effect on its fee obligations herein.
6. We do not anticipate any recovery of attorneys' fees in: this matter, but in the
event any award for attotneys' fees is actually recovered, any and all amounts thus recovered for
attorneys' fees and costs, after the date of this agreement, would be included in the Recovery.
We are required by law to advise you that the terms of a contingency fee
agreement are not set by but are negotiable between attorney and client.
OLOER LEviN & K*.HN UP
D. S� Schw*aw
Mph 19:2007
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