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HomeMy WebLinkAboutResolutions - No. 2005-67WHEREAS, on December 2, 2004, the Lodi City Council approved the Settlement Agreement with the Guild parties: Jack Alquist, individually and as a Trustee of the Alquist Family Trust, dated March 2, 1981; Guild Clearers, Inc., a California Corporation; the Estate of Dwight Alquist, Deceased; the Alquist Family Trust, dated March 2, 1981; and Beulah Viva Alquist, individually and as a Trustee of Alquist Family Trust, dated March 1, 1981; and WHEREAS, the Settlement Agreement contemplates a formal resolution approving the settlement in open session of the City Council; and WHEREAS, this resolution fulfills that provision but is a mere formality in that the Council has already approved the settlement in closed session. NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby approve the Guild Settlement Agreement attached hereto as Exhibit A, relative to the Environmental Abatement Program litigation by adoption of this Resolution in "Open Session"; and BE IT FURTHER RESOLVED that funds in the amount of $2.2 million will be derived from the USF& Settlement Fund. Dated: April 6, 2005 I hereby certify that Resolution No. 2005-67 was passed and adopted by the Lodi City Council in a regular meeting held April 6, 2005, by the following vote: AYES: COUNCIL MEMBERS — Hansen, Johnson, Mounce, and Mayor Beckman SUSAN J. BLACSTON City Clerk EXHIBIIJ Senlement A nt and mei ... Release A- a This Sattlemont Agreement and .Release {t e `°A ree enO is entered into among the following parties, I . The City of Lodi, California, ra municipal corporation (the "City"); and 2. Jack Alquist, individually and as a Truster of the Alquist Family ``rust. dated, March 2, 198 t, Guild Cleabers, Inc.., a California, corporation; the Estate of Dwight Alquist, Dec sed, its Alquist family Trust, dated, March 2, 198 1; and Beulah V. Alquist, individually and as a "Trustee of Alquist Family Trust, dated, Mph 2, 198 1, (collectively referred to as the "Guild Parties"). These parties arx, so etimeas collectively referred to herein as the " Settling Parties," Any pe can or entity identified above may be referred to as a "Party." B. tlt t. The City is the owner and operator of the municipal sanitary sewer and water supply systems within the City of Lodi. Jack Alquist, Beulah V. Alquist, and the Alquist Family Trust, dated, March 2, 1981 own or have owned at various times certain property ]scared at 17 and 31 South Church Street, %iz, Califbrnia (the "Guild pet '@). The Guild Property, as well as certain neighboring property, is luted within what is commonly referred to as the CenW Plume Area, and is alleged to have became environmentally contaminated as a result of or arising from the operations of Guild Dry Cleaners artd Esther businesses, and from the City's sewer main located inthe alley behind 17 South Church Street. Dwight Alquist, ars individual, owned and opted wild Dry Cleaners as a sole proprietorsbip at 17 Soutb Church Street from approximately 1959 to 1981. wvi ht Alquist died in 1912. The City sued the Estate of Dwight Alquist, Deceased, pursuant to the California Probate Code section. 550, et seq., in that federal litigation identified At paragraph l l of this motion. 4, Guild Cleaners, Inc., a California corporation, was incorporated in 1981 by Jack Alguist, Guild Cleaners, be. has operated the Guild Dry Cleaners at 17 South Church Street from approximately roximately 1981 to the present. Settlement Agreement ent and Mutual ketlease — City and Guild Parties mage I of 12 5. Contaminants, including -PM have been identified in the sail and groundwater beneath. the Central Plume Aa, as set forth in that federal litigation identified at paragraph l 1 of this section the April 22, 2004, California Regional Water Quality Control Board (thea'RWQC11 ') Cleanup and Abatement Orden No, R5- 2 0 .5-2t -0043 for the Cepstral Plume A a ("CAO"), and the rescinded Imminent and SU bstantial Endangerment Determination and .Real Action Order (" R.AOF) that e Department of Toxic Subs sees Control (" DT'SC") issued for the Ventral Plume Arm can May 30, 2003, and amended on July 9, 2003 (the "Central Plume irsati�r�"?- 6. in or about 2001, the Guild Parties began investigative activities associated with commencing a Remedial Trsvesti tion/F aslbility study (F, ',) in the central: Plume Area, In or about:April 2012, the Guild Parties subsaai#t a draft RLTS Workplan to the RWQCB and the DTSC The Guild Panhave conducted all ot.thteir investigative activities and associated work and submittals. to ft RWQCB and DTSC in compliance with the rational Contingency plans, 40 C. .R_ part 3. i, The amended RAO nanwd as respondents Guild Cleaners, Inc.; the Estate of Dwight Al uist, Deceased, Odd Follows Hall Association of Lodi, Inc., Lodi News Sentinel, Inc.; Beckman. and Company„ 1kcianan Capital Corporalion, and Angelina Comporato, The D TS C rescinded the RAO on or about May 12, 2004, F3- The RWQCB is the lead,governmental agency responsible for oversight of the Central Plume Area. Pursuant to a letter, datod May l2, 2004, the DTSC has to] inqui aed all oversight responsibility and jurisdiction over the Central Plume, Area to the RWQCB. 9. On April 229 2004, the RWQCB ... issued Cleanup and Abatement Circler No. R5- 2 4-0043for the Central Plume Area (`°CAC}")a The. CACI narries as respondents Guild Cleaners -Inc., the City, Lodi News -Sentinel, Odd Fellows mall Association of Lodi, and Beckman Capital Corporation. 10, As part of the investigation and remediation measures set forth above, the Guild Pries conducted a pilot study, which included The installation of a soil -vapor extraction system. The Goad pies also submitted a DRAFT Remedial InvesfigationfFeasibility Study, Lodi Central Plume Area to the RWQCB on August 16, 2004, The Cityconducted sampling and analysis of indoor air io the C "al Plume Arm pursuant to a word plan approved by RWQCB (tits "Indoor .Air Ass mment" ), andrfon-reed deep groundwater sampling iu the Central Plume Area. Settlement Agreement and Mutual Release -City and. Guild Parties Page 2 of 12 I L On November 2, 2000, and as later amended on May 25, 200August 4, 2004, September 9, 2004, and January 21, 2005, the City filed a Complaint for damages against Guild Cleaners, Inc.; Jack Alq.uisv, and Estate of Dwight Alquist, Deceased, among o.tht;ts, in United States District Court for the Eastern District of California, Case No- C.TV-00-2441 FCD/JFK alleging that Guild Cleaners, Inc., Jack Alquist; and Estate of Dwight Alquist, Deceased were responsible in pan for the Central Plurne Contaimnation (the "" Action"). Guild Cleaners, lnc. has filed counterclaims against the City in the Lodi Action, 11 Substantial. disputes exist among the Settling Parties regarding their respective liabilities and obligations arising from the Central Plume Contamination, By and thmagh this Agreement, the Settling Parties have now resolved tri settle any and all disputes arising from or related to the Central Plume Contamination or its causes, including thost claims and counterclaims arising from any alleged civil rights violations. NOW, THEREFORE, in consideration for the mutual promises set forth in this Agreement, ft City and the Guild Parties agree to resolve their claims and allegafions against each other in the rnanner,%et forth below. This Agmernent requires tbat the Settling Parties will each take or authorize that certain steps be taimn far the purpose of obtaining.release, one Oom the other, a gold faith finding and contribution bar from the United State% District Court for the East= District of California, a covenant not to sue and a contribution bar from both the RWQCB and DT C, as identified below, (a) The City will establish an escrow account (fl-je "Central Plume Fund") into which the Guild Parties' settlementpayment will be deposited. The City will also make a Settlement payinent to the Central Plume Fund. The settlement payments and any other amounts in the Central Plume fund will be used by the City exclusively For environmental cleaup, investigation or remediation expenses incurred by the City with regazd to the Central Plume Area. The amounts in the Central Plume Fund will not be used for the payment of legal or technical fees connected with the continued prosecution of the Lodi Action or any other litigation or legal activities against any mmaining potentially responsible parties ("PRP's"). The City will sobirift a report of the expenditures from the Fund to the Court bi- annually. It any money remains in the Central Plume Fund after the City obtains a no further action letter or its equivalent from the RWQCB for the Central Plume Settlement Agmernew and Mutual Release 4 City and Guild Parties Page 3 of 12 Area, the money my be used by. the City solely for cleanup, investigation or remediation expenses in connection with outer contaminated plume areas within k e.o pl i4� bouttdaties of the City of Lodi, California. Otter than the settlement payment identified in this paragraphof tate ,A, e nt, the guild Paries will have no obligation to pay the expensas of conduct, or perform any cleanup, invtsti ation or remediation activities associated with or for the Central Plume Area. (b) Within thirty (30) calendar clays of the Court's confirmation of this settlement pursuant to Section 3 of this Agreement, tl uild ponies will make, a settlement payment into the Central Plume Fund in the amount of $4.2 million (four million two hundred thousand dollars and no cents), and the City will make a settlement payment in the amount of 2.2.milli€ n (two million two hundred thousand dollars arta no cents) into the Central Plume Farad. (c) The City will assume the Guild Parties' obligations under the CAO for the Central Plume Contamination, whether the City is specifically named lander such CAO or neat.: Exoept for any obligations of the Guild Parties covered, e leased, or extinguished .by the covenants not to sue pursuant to paragraph C. 1.0) of this Agrcomcatt, the City will assume any obligations of the Guild Parties under any future order of any regulatory agency, including federal, state and local agencies, regarding the Central Plume Contamination. (d) °fare Guild Parks and their attorneys will cooperate fully and assist in coordinating the City's reteaition of the Guild Patties' technical and litigation consultants and experts (collectively, "Guild's xpertC); Donald Bradshaw, LFR, Uviue . F°ric;ke, Inc. CLMI, Keith O'Brien, and Peter Kmnoff. lu addition, the Guild Parties and their anorneys will auftrize Guild's experts to provide the My with all work product relating to the technical work conducted by LFR, Keith O'Brien or Fehr Krasnoff, prepared on behalf of tate Guild Parties, in electronic an hard.. copy, indudi ng investigation, monitoring and response action data, all reports and database compilations, and all field nows and reports of technical persoiinol (e.&, daily field mports and logs), but not including attorney work. product, which will remain privileged and protected. (e) The Guild Parties will allow the City reasonable mess to the Guild Property to the extent reasonably neeessary and without cost to the City to comply with the CACI, upon. seventy-two ("72") hours' written notice to: Guild Cleaners, Inc,, Attention Jack Alq ist and Scott Rowell, 17 S. Church Street, Lodi, California 95240, facsimile (20 9) 368-2542„ and Lori J. Quaico, Esq., 455 Capitol Miall, Suite 210, Sacramento, CA 95$14, facsimile ( Ifs) 442-0145, to comply with the CAO for the Cental Plume Area. The City may obtain access gander this Settlement Agreement and Mutual release - City and Guild Parties Page 4 of 12 paragraph on less than seventy-two ('72") hours' notice, (i) in the event of an emergency ori the. Guild Property that makes it. impracticableto provide the notice provided in this paragraph, or (ii.) if so ordered by the i WQCB.. The City agrees to require that any and all consultants and contractors working at the Guild Property carry insurance and that Guild Cleaners, Inc. and Jack Alquist be named as additional insuteds.under those policies. The City agrees to ropair any damage carried by its activities on the Guild Property associated with the work under this paragraph. (f) The Guild Patties will usfer ownership of and allow the City full Kiss to and use of any and all remedial, investigatory and monitoring equip eat installed by the wild Parties, including any related contracts (with no outstanding balances or enlarges owing.), warranties, equipment manuals, invoi streccipts, service agrftmonts, reninl ag=.nients, glans and specifications (origind dosign and as- builts), I addition, the Guild Parties will allow the City fall acorn to any and all monitorinS wells on the Guild Property and Guild's experts will provide the City with information relating.to their .laxation and nstallation, to the extent that information has not otherwise been provided, The City agrees to r,,oaaduct all O&M associated with any equipment that is transferred under this Agreement at its own cost. Guild makes no representations or warranties regarding the wndition, suitability, or effectiveness of tho equipment transferred under this paragraph and the City exp ssly recognizes that the equipment transferred under this paragraph is transferred AS IS, WHERE IS. Other than the equipment pmsently installed on the Guild Property as of the Effective Date of this Agreo ent, the City Shall not install any new equipment on the Guild Property, unless otherwise ordered by the RWQCB or to comply with the terns of the CAO. The City shall remove the equipment presently installed on the Guild Property within tett (10) years of the ,Effective Date of this A,grermeot, unless otherwise ordered by the RWQCBair to comply with the terms of the CAO. The City shall properly abandon all monitoring wells and remove all equipment transferred carder this paragraph upon conclusion of any work required under the CAO, in, accordance with all applicable lavers and regulations. Closure of all monitoring wells and removal of all Nuipment from than Guild Properly shall be deme in such a mauner as to restore the surface of the Guild Property, to Its normal condition prior to the installation of any such Monitoring wells or equipment - The Guild Parties will assign to the City their rights to pursue any clams against any parties in the Lodi Action relating to or arising from the alleged Centel Plume Contamination, including the Citys former consultants or experts, as well as the City's former outside counsel, Settlement Agreement and Mutual Release — City and Guild Parties Pagan 5 of 12 (h) On the Effective late of this Agreement, the City will be deemed the "generator" for purposes of completing hazardous waste manifests for offsite disposal of all waste extracted from the Guild Property in connection with the cleanup of the Central Plume Contamination. (i) This Agreement is subject to confirmation by the United States District Court for the Uitern District of California in an order finding this settlement to be entered into in good faith tinder section 877,6 of the California Code of Grit Procedure and barrri g any claims for contribution against the City and the Guild Parties lander section 87U of the California Code of Civil Procedure and applicable federal law. (t3 This Agreement is conditioned Qn the Guild .parties obtaining covenants not to sire and eonWbution bars from both the RWQCB and the Department of Toxic substanem Control. (a) Excopting acrd p sorving the obligations and duties of the parties sit forth in this Agreement, andin considetation. of tho pxo ises evchanged alcove, the ceding of a g faith settlement tinderCalifornia law, and the antic of a ntributJ b as contemplated by this Agmeinent, the City, its former and current attorneys, former and current consultants, and agents forever release the Guild Parties, and each of their mspective administrators, tmtors, trustees, beneficiaries, shaxeholders, officers, directors, beneficiaries, pry scars. success, assigns, partzr ; parents, subsidiad sy affiliatc4 and related legal entities, agents, employ, servants, representatives, heirs, and associations connected with tray, including without lir itation their insum s, sureties, and attorneys, of and from any and all claims, demands, causes of action, obligations, liens, damages, tosses, costs; and attorneys', consultants', and experts' fees and expenses of every kind and nature whatsoever, known and unknown, fixed or contingent, arising from, related to, or connected with (1) the Central Plume Contamination-, (2) any scan or groundwater cont"nation at Guild Cleaners — Wine Country, a California Limited Partnership; (3) the equipmont transferred under paragraph G. L(f) of this Agreement; (4) the Lodi Action; aad (5) the CAC}. (b) Excepting and pre%erving the € bligations and duties of the parties set forth in this Agreement, and in consideration of the pmmises exchanged above, and the goad faith finding and the granting of :a contribution bar as contemplated by this Agreement, the mild Fries forever t lease the City and each of its elected cat vials, appointed officials, managers, officers, administrators, assigns, affiliated and related legal entities, agents, employees, servants, representatives, and Settlemew Agreement and Mutual Relme — City € nd Guild Parties Page 6 of 12 political associations or subdivisions, including without limitation its insurers and sureties, of and from any and all claims, dernaA s, causes of action, obii a[ions, Iiens darnages, 10sws, costs, aaasi attorneys', consultants', and experts' lees and expense of every kind and nature whatsoever, known and urdmown, fixed or contingent, arising fr6m, related to, or connected with (1) the Central Plume Contamination. () any soil or groundwater contamination at Guild ie -avers Wine Country, a California f<aa i d Partnership; and (3) the Lodi Action. 'sjWn thirty () calendar drays after both (i) execution. n. of this Agreormnt, and (if) the Guild PaAies' obtaining covenaws not to sue and contribution bars from the RWQCB and the DT C, the Guild Parties will file a motion taking confirmation by the Court of the settlement, a judicial finding trent the settlement was entered into in gonad faith under + California law, and seeking an Larder barring contr}btiti�ta actions for "Matters Addressed" in this Agreeuserai "Matters Addressed'.' in this Agreeownt, include, but are not limited to, (i) all mmoval or remedial actions undertaken at the Central Flume area, (ii) all response costs incurred or to be incurred by the City, any regulatory agency of the State of California or United ,Mates of America, or any private party in connection with the. Central flume Area, (iii) enforcement actions undertaken or tci be undertaikp a by any mgulatory agency of the State of California or United States of America inconnection with the Central Phime Contamination, (iv) torts, toxic tracts, perseanal injuries adsing fres the Central Plow Contamination, and (v) litigation costs associated with the Central Plume Contamination or the l_.cadi Action, The City will support the Guild pa es" motion to confirm the stttl meat, for a good faith finding, and for a contribution bar-. Within thirty ( l) calendar days of the execution of this Agrcoment, the City shWl secum approval of this Agmement ftni tip Lodi City Council by formal resolution, Within five (5) calendar days of the Effective Date, the City and the Guild Pars shall file a stipulation and proposed carder to dismiss with prejudice any and all cleans against each other in the Lodi.Actiona 4. No A 'o of; ,a bi This settlement represents an agreement resulting fracas disputed isswt s of fact aurid of law. by entering into this Agmmont, the Settling Parties do not admit gnat they, individually or jointly, have any l abi lity or obligation for :tire otuall or alleged envi omental co t ruination within Lori. Nonc of the terms reflected herean nor any stator nts or comma icat ions made by tine Settling Parties or their agents, attorneys, or insurers. during the negotiations leading to this Agreement shall itre considered admissions of liability by or on behalf of any of the Settling Fpau-ties. S;ttlement Agrornent,and. Mutual Release'` City and Guild Parties Page 7 of 12 This Agreement shall be effective upon the cntry of aa order by the United States Disu ict Cert for the Eastern District of Californiain the Lodi Aelioni finding the settlement in good faith ander section :877:6 of the Code of Civil Procedure € nd barring. c# -aims for contribution against the City and the Guild Mies under secta� .w 877.6 of the California e of Civil Procedure and applicable federal taw (the "Effective Date'" . l r:: Each Settling Party repre zats and Warrants that no otter person or entity has, or has had, any irate s.t in the c)aims, domands, obligations, or causes of anion reforred to in this Agree: nt. Each Settling: Party further represents and warts blot it has the sale right and exclusive authority to execute ibis Agreement and to agree to. the terms herein, and that it has not sold, assigned. transferred, conveyed, or other ise disposed of any claims, demands, obligations, or causes of actioi0 referred to in this ASr meat. f:J�i ft I' Cit€€ Each party hereto acknowledges that themf s a risk that, subsequent to the execution of this A reerrretat, it irtay it[e&re; suffer, or sustain an injury, itass, ftnages; casts; attorneys' fees, expenses, or any of these, which am in scall way caukA by or con ted with the matters released and referred to above, which are unknown and unanticipated at the tine this Agreement is sued, or which are not presently capable of toeing ascertained, and further that them is a risk that such damages as am known may becom more serious am the Settling Parties now expect or anticipate, Nev rtircless„ each of tate Settling fees hereto ackAowl-cdges that this Agreement ,has been negodated and agreed upon in light of'.that rcMization and ho by expressly waives any rights it may have in such unsuspected claims. This release of claims is not intended to release any contractual rights that a policy holder may have against his, her, or its own insurer, 8_ t, In entering; into. this Agreement, each Settling Party Inas had the benefit of legal counsel road has been advised of, undoTstand , and knowingly and specifically waives its rights under California Civil Code Section 1542, which provides as follows - CERTAIN CLAIMS NOT AFFECTED BY GENERAL RELEASE - A general release sloes not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the releaft which, if known by him, must have materially affected his xWeracof with debtor. Settlement AgreeMent and Mint;anal Release � City and Guild unties Pae 8 of 12 Each party hemto further waives all rights under any similar law in any state or territory of the United Mates. The Settling Parties acknowledge and awe that they are to them owns casts, expenses, expert and consultant fps, and atta .ys' fees. arising out of the tatters .Addressed herein, the negotiation, drafting, and execution of this Agreement, and all matters arising oot of or connected therewith, 1(1. ftp:'. t. We .f This Agreement supamd any prior conn runicatiOns, agreements, and understandings regarding the matters contained herein between the si rato ies hemto or their repr ntatives. Any represe Cation, protnise, or condition in connection with such maners that is not incorporated In this Agreement sha3l not be binding upon any of the Settling Parties. Subject to. the conditions found in this Agreement, this Agreement shall be binding upon and shawl. ina e tri :the benefit of thetd41g Parties &,; well as their tine bffi and directors, tlae true hears, executor�rs, adrWnistr tt•;srs, tutors, MWees, beneficiaries, predecessors, successors, affiliated and related entities, offices, directors, principals, agents, employees, assigns, mpmentatives, ad all pons, firms, associations, an br corporations connected with ftm, including, without. limitation, their sureties and/or attorneys, except as otherwise provided by this Agreement. ent. 12. In eaters into tis Agreenient, each Fa0y represents and wan its that be, she, or it is not relying on arty, re septa ons, opinions, conclusions, recommendations, or opinions expressed by, provided by, orinferred from any other Party to this AVmerit, any attorney for any other Party, or an'' other arty's experts, consultants, or agents. Each Party: ropmsents and warrants that it Inas been fully advised by its attorney concerning the effect and finality of this Agreement, and that the Pavy understands, without reservation or doubt, the effect and finality of this Agreement. 13. %WW " This Agreement may be executed in counterparts, and all so executed shall be binding capon all Parties hereto, notwitl anding that the signatures of the Parties' designated repmsentatives do not appear- on the wire page, Settlement Agreement and mutual Releasees -City and Guild Parties Page 9 of 12 The Settling Parties make the following representations and warranties to the extent that the representation ig related to its own respective knowledge, interests, or action: (a) Each Party wwants that it is fully authorized to enter into this Agmement on behalfof itself and that each Party's signatory is authorized to sign on behalf of the Party identified; and (b) Jack Alquist and Guild Cleaners, Inc, represent and .w ant that fty performed a m-isonable search to locate policies issued to Dwight Alquist, Jack Alquist, or Guild Cleapen, Incr reprdin Cleaners, n hat . . g the Guild Property or Guild CI aner , a d t there are no oftr iasurance policies. t5-(hur a Law 091— This Agreement is entered into and ,shall: be interpreted in accord arme with the laws of the State of California, the laws of the United States of Amrica, wd the coon law, as applied in the juhsdictioa of United States Court of pp=15 for the Ninth Cirmit and the United States District Court for the Eastern District of California. <SIGNATURE PAGES FOLLOW> Settlement Agreement and Mutual Release - City and Guild Parties Page 10 of 12 DA ISD; umPaye - city and Ouild PuMes PftF 1 I Df 12 D DATED., " APPROVED AS TO MRM DOWNEY BRAND LLP DA'['FD., By - S J Atto. eys for Jack Alquist, AGUi d CleaAnershic� an;d Estate of Dwight Alquist, Deceased APPROVED AS TO FORM DATED, DATED: 657"1,2 Settlement Agreetnemt and Mutual Release —City and Guild Parties BLAIR .KING, City Manager, CITY Of LODI DSTEPOM SCHWABAUER, City Attorney, CITY OF LODI FOLGER LEVIN & KAHN LLP Page 12 of 12 DA.' j-)Os- DATED; i Settlement A:crttt mid . aW Rel — Citta wd Guild POTOvi DOWNEYDRANDI" e MAROAUBT R. MUZAUM, A.#tomcy-. for MY Of LODI Po 12 of 12 ME I ,, A tri ep for lack AlqulK GtHM l i d: gnd Estate of DMght Alquist, Dmeasdtl DATED., Settloment Agmnictit and Mutual Rol c -- City and GuildPanic* i Pase 12 of 12 APPROVED A TO FOR DOWNEY DRAM LLP DATED- STEPHEN J. k. Ammer_ r JackDwight AlqWst, y LATE`-. MubW Release City mid GWId P2diet Fags 12 of 12