Marshalltown vs City/Settlement Agreement 940
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release ("Agreement") is entered into by the City
of La Quinta and the La Quinta Redevelopment Agency ("La Quinta"), on the one hand, and the
City of Marshalltown ("Marshalltown"), on the other hand.
SECTION ONE
RECITALS
1.1 This Agreement is made as a compromise between the parties for the complete
and final settlement of their claims, differences and causes of action as described below.
1.2 La Quinta believes it possesses certain claims and causes of action against
Marshalltown arising out of and related to La Quinta's and Marshalltown's former retention of
Denman & Company ("Denman") and Institutional Treasury Management, Inc. ("ITM").
Marshalltown disputes said claims and causes of action.
1.3 The parties hereto desire to avoid the risks and expenses attendant upon litigation
and to reach a full and final compromise and settlement of all matters, claims, causes of action
and the like, as described herein.
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SECTION TWO
TERMS OF SETTLEMENT
In consideration of the mutual covenants set forth herein, the parties agree as follows:
2.1 Marshalltown shall pay La Quinta the sum of Four Hundred Thousand Dollars
($400,000.00). Said payment shall be made within thirty (30) days of the date of the execution
of this agreement by both parties.
2.2 Marshalltown further agrees to assign and hereby assigns to La Quinta all its
rights, title and interests in any and all claims and causes of action ("Claim or Claims") arising
out of or related to Marshalltown's former retention of Denman and ITM and the conduct of
third parties in connection with Denman, ITM and Marshalltown's interests, except any Claim or
cause of action Marshalltown may possess against its own former accountants. Subject only to
any limitations specifically identified herein, La Quinta shall own all right, title and interest in the
Claims and shall have the sole and exclusive right to present, prosecute, compromise or withdraw
(collectively referred to as "pursue") the Claims against any party against whom Marshalltown
owns a Claim.
2.3 La Quinta agrees to share with Marshalltown any proceeds from any
Marshalltown Claim against any Refco entity (i.e., Refco Securities, Inc., Refco Capital
Corporation, Refco Group Limited or Refco, Inc.) or any person employed by or affiliated
therewith ("Refco"). Marshalltown's share of proceeds from any Marshalltown Claim against
Refco shall be as follows: Gross proceeds from recovery on a Marshalltown Claim against Refco
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shall be reduced by any attorneys' fees and costs incurred by La Quinta in pursuit of
Marshalltown's Claim and which are attributable to La Quinta's pursuit of the Marshalltown
Claim and the remaining proceeds shall be divided equally between Marshalltown and La Quinta.
In the event of no recovery on a Marshalltown Claim against Refco, Marshalltown shall have no
responsibility for any costs or attorneys' fees incurred in pursuit of any Marshalltown Claim by
La Quinta.
2.4 Marshalltown and La Quinta agree to share any distributions of funds for
Marshalltown from the Securities and Exchange Commission. La Quinta and Marshalltown shall
evenly divide any of Marshalltown's distributions from the Securities and Exchange Commission.
Within ten (10) days of receipt of any distribution from the Securities and Exchange Commission,
Marshalltown shall forward to La Quinta one half of Marshalltown's distribution.
2.5 Marshalltown agrees to cooperate with La Quinta in the pursuit of the Claims and
shall provide to La Quinta all extant documentary evidence, records and information in
Marshalltown's possession relevant to the Claims, at no cost to La Quinta. Marshalltown shall
also provide reasonable access to persons employed by Marshalltown for interview and
investigation of evidence and testimony relevant to the Claims, at no cost to La Quinta.
2.6 La Quinta shall have sole discretion whether to prosecute the Claims, select
attorneys, experts, and all support personnel required to conduct the pursuit of the Claims. La
Quinta shall have sole and exclusive discretion as to all matters as to any trial, mediation,
arbitration, settlement negotiation and as to the terms of any settlement or other resolution of the
Claims. La Quinta shall have no duty whatsoever, of any nature, to Marshalltown in connection
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e
with the Claims except to share the proceeds of any such Claim, if any, as set forth in
Paragraphs 2.3 and 2.4. Each party to this Agreement, however, shall have a good faith duty to
comply with this Agreement with respect to all other terms.
2.7 La Quinta and Marshalltown mutually release each other, as well as, to the extent
applicable, their respective successors and assigns, from any and all claims, demands, costs,
contracts, liabilities, objections, actions and causes of action of every nature, whether in law or
in equity, or known or unknown, or suspected or unsuspected, which the parties ever had or now
have against each other of any type, nature and description.
2.8 La Quinta and Marshalltown do hereby mutually waive and relinquish any and all
rights which either of them may have under the provisions of Section 1542 of the Civil Code of
the State of California, which Section reads as follows:
"A general release does not extend to claims which
the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if
known by him must have materially affected his
settlement with the debtor."
2.9 La Quinta and Marshalltown agree that any payments or distributions made by
Marshalltown to La Quinta, or from La Quinta to Marshalltown shall be delivered via certified
mail and addressed as follows:
City of La Quinta
La Quinta Redevelopment Agency
c/o John F. Cannon, Esq.
Stradling, Yocca, Carlson & Rauth
660 Newport Center Drive
Newport Beach, California 92660
City of Marshalltown
c/o Patrick W. Brooks, Esq.
6 West Main
Marshalltown, Iowa 50158
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SECTION THREE
WARRANTIES AND REPRESENTATIONS
3.1 The parties hereto warrant and represent that no promise or inducement has been
offered or made for this Agreement except as herein set forth, that this Agreement is executed
without reliance on any statements or any representations not contained herein, and that this
Agreement reflects the entire settlement among the parties. The attorneys of record warrant and
represent that they are satisfied that their respective clients have fully understood the effect,
significance and consequence of this Agreement. The warranties and representations made herein
shall survive the execution and delivery of this Agreement, and shall be binding upon the
respective representatives, and assigns and successors of each of the parties and their attorneys.
3.2 Marshalltown warrants and represents that it has not previously assigned or
compromised any Claims subject to this Agreement.
3.3 Marshalltown further warrants and represents that it has sustained recoverable
losses arising out of and related to its former retention of Denman and ITM in excess of Two
Million Dollars ($2,000,000.00).
SECTION FOUR
NO ADMISSION OF LIABILITY
4.1 The parties hereto acknowledge and agree that this Agreement is entered into as a
compromise settlement which is not in any respect or for any purpose to be deemed or construed
uTc13311_1 1377lb2588.28
19
as an admission or concession of any liability whatsoever on the part of La Quinta or
Marshalltown.
SECTION FIVE
ENFORCEMENT OF AGREEMENT
5.1 If any legal action or other proceeding is brought for the enforcement of this
Agreement, or because of an alleged dispute, breach, default, or misrepresentation in connection
with any of the provisions of this Agreement, the venue of such action or proceeding shall be
Orange County, California, and the successful or prevailing party or parties shall be entitled to
recover reasonable attorneys' fees and other costs incurred in that action or proceeding, in
addition to any other relief to which it or they may be entitled.
IN WITNESS WHEREOF, this Agreement has been executed by the undersigned on the
dates below indicated.
Dated: 7 —/
City o
La Quinta
Dated: 9-/- 9�1
City of Marshalltown
Agency
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20,
Dated:
Dated: 3� Z*
Approved as to form:
STRADLING, YOCCA, CARLSON & RAUTH
A Professional Corporation
By: &,,,Cz��-P
DAWN HONEYWELL
Attorneys for City of La Quinta and the
La Quinta Redevelopment Agency
By:
PATRICK W. BROOKS
Attorney for City of Marshalltown
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• •
STRADLING, YOCCA, CARLSON & RAUTH
A PROFESSIONAL CORPORATION
Ffl ITZ R. STRADLING
HARLEY I. BJELLAND
JOHN E.6RECK ENRIOGE
NICK E. YOCCA
6TEPHEN T. FREEMAN
ATTORNEYS AT LAW
gENp C. STONE
I
L. A cRM R.
WICRARAUTH H III
CHERYLA. Dow
NICHOA6 J. VOCLq
660 NEWPORT CENTER DRIVE, SUITE 1600
of cauxssi
K. C. 6CHAAF
JULIE M. PORTER
RI CHARDC.GOODMAN
MICHAEL E. FLYNN
POST OFFICE BOX 7680
JOHNJ. MURPHY
THOMAS P. CLAflK, JR.
GARY A. PEMBERTON
CAROL I. LEW
NEWPORT BEACH, CALIFORNIA 92660-A46•�p4 ('')
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BEN A. Ffl YDMAN
DENISE HAROAUGH HERING
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TELEPHONE (714) 725-4000
DAVID R. MCEWEN
BARBARA ZEIO LEIBOLD
PAUL L. GALE
JON E. GOETZ
FACSIMILE(714) 725-4100
WRITER'S DIRECT DIAL:
R U DOLPH C. SHEPARD
JOHN D. IRELANO
1 T s
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ROBERT J. KANE
DAVID H. MANN
1>I�
1 A (14) 725-4142
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BR VCE C. STUART
CHRISTOPHEfl M. MOflOPOVl06
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I'i t'r,IY�V
RI KURT YEAGER
ELIZABETH A. NEWELL
Ei 1
L: CFFICE
ROBERT J. WHALEN
DARRYL S. GIBSON
ROBERT E. flICH
JEE HI PARK
RANDALL J. SHERMAN
TODD R. THAKAR
BRUCE W. FEUCHTER
RICHARD T. NEEDHAM
H MARK J, UEBSCH
ROBERT C. WALLACE
KAREN A. ELLIS
JOHN F. CANNON
BRUCE O. MAY
JAY RAPPAPORT
March 24, 1994
ANDREW F, PUZOER
JOHN E. WOOOHEAO IV
DONALD J. HAMMAN
DOUGLAS P, FEICK
JOHN J. 6WIGART, JR.
WILLIAM J. MORLEY
MICHAEL A. ZABLOCKI
MARK L. 6KAIST
NEILA R. BERN6TEIN
JEFFREY B. COYNE
CELESTE STAHL BRADY
SANDRA WAKAMIYA 6CHAAL
CHRISTOPHER J. KILPATR ICK
JOHN D. VAUGHAN
JOEL H. GUTH
STEVEN M. HANLE
JULIE MCCOY AKIN6
MICHA EL H. MULROY
DAWN C. HONEYWELL
MARY ANNE WAGNER
LAWRENCE B. COHN
SCOTT F. MAPLES
VIA OVERNITE EXPRESS
Mr. Robert L. Hunt, City Manager
CITY OF LA QUINTA
78-495 Calle Tampico
La Quinta, California 92253
Re: Resolutions of the City Council and Agency Approving Settlement
Agreement/Marshalltown
Dear Bob:
Enclosed for the next City/Agency agenda are City Council and Agency Resolutions
approving the Settlement Agreement with the City of Marshalltown with respect to the funds in
dispute with Denman and Company, Institutional Treasury Management, Inc. and REFCO.
Also enclosed is the transmittal from the City of Marshalltown including their certified
resolution approving the Settlement Agreement as well as an executed original of the agreement.
As they have indicated in their letter, within thirty days of receipt of the City's signed certified
resolutions and Settlement Agreement, remittance of the $400,000 will be mailed to the City.
Please give me a call if you have questions or comments regarding the enclosed.
DCH:cm
Enclosures
Very truly yours,
STRADLING, YOCCA, CARLSON & RAUTH
X&L,E----
Dawn C. Honeywell
11
C E R T I F I C A T E
STATE OF IOWA )
) ss:
COUNTY OF MARSHALL )
I, Mary Skartvedt, do hereby certify that I am the duly
appointed and qualified City Clerk of the City of Marshalltown,
Iowa; That as such City Clerk I have in my possession and under my
control, the official records of the City of Marshalltown, Iowa;
That I certify the foregoing papers to which this certificate is
attached are true and correct extract of records pertaining
thereto.
Dated this 7TH day of March, 1994
Mary Skartvedt
City Clerk
13
RESOLUTION APPROVING SETTLEMENT AGREEMENT
AND MUTUAL RELEASE WITH THE CITY OF LA QUINTA AND
THE LA QUINTA REDEVELOPMENT AGENCY CONCERNING
FUNDS IN DISPUTE RELATIVE TO DENMAN AND COMPANY,
INSTITUTIONAL TREASURY MANAGEMENT, INC., AND
REFCO ENTITIES
WHEREAS, the City of Marshalltown has been the subject of a claim by La
Quinta for three million dollars, said claim related to the investment of City monies
with Denman & Company and ITM; and
WHEREAS, the City of Marshalltown has negotiated a settlement of this
dispute, which settlement has been reduced to writing.
THEREFORE, IT IS HEREBY RESOLVED BY THE COUNCIL OF THE CITY OF
MARSHALLTOWN, IOWA, AS FOLLOWS:
1. The attached Settlement Agreement and Mutual Release is hereby approved
and ratified by the City of Marshalltown, Iowa, as a formal agreement to be executed
by the Mayor and City Clerk on behalf of the City of Marshalltown, Iowa.
2. The provisions of this Settlement Agreement are in the best interests of the
City of Marshalltown in resolving existing disputes and reducing related litigation
expenses. In addition, the Settlement Agreement represents the most feasible avenue
whereby the City of Marshalltown can maximize its monetary return on an existing
claim while reducing its exposure to related costs and expenses.
3. The Mayor and City Clerk are hereby directed to execute this Settlement
Agreement and Mutual Release on behalf of the City of Marshalltown, Iowa.
Passed on this 28 day of February, 1994, and signed on this 1 day of
:March 1994.
BY:
ATTEST:
wlet" k/�C2GL�
Mary Sk rtvedt, City Clerk
T.R. Thompson, Jr
TOWN, IOWA
14
r
July 11, 2016
VIA OVERNIGHT MAIL WITH
RECEIPT OF DELIVERY REQUESTED
Mr. Wells Marvin
Marvin Investments, Inc.
78-100 Main Street, Suite 203
La Quinta, CA 92253
SUBJECT: VILLAS AT OLD TOWN AMENDED PURCHASE AND SALE AGREEMENT
- NOTICE OF TERMINATION OF AGREEMENT & CANCELLATION OF
ESCROW
Dear Mr. Marvin:
This Notice of Termination and Cancellation of Escrow (Notice of Termination) is
delivered in accordance with the terms and conditions in that certain
Agreement for Purchase and Sale and Escrow Instructions by and between the
City of La Quint ("City" as "Seller") and Marvin Investments, Inc., ("Developer"
as "Buyer") dated January 6, 2014 ("Original Agreement"), as amended by the
Amendment to Purchase and Sale Agreement and Memorandum of
Understanding between the City of La Quinta and Marvin Investment, Inc., dated
March 26, 2015 ("Amendment" and collectively with the Original Agreement,
referred to herein as the "Agreement"). Pursuant to that certain Notice of
Default dated June10, 2016 (Notice of Default), the Developer was given notice
for failure to perform pursuant to specified provisions in the Amendment. A
copy of the Notice of Default is attached to this Notice of Termination. To date,
no cure of the identified default has occurred.
Because the Developer has not performed under the Revised Schedule for
Specific Plan and Entitlements (Article 4.0 in the Amendment), the Developer
failed to satisfy the "Seller's Conditions to Closing" (Section 8.2 of the Original
Agreement) that would require the City to continue to perform or convey the
property under the Agreement.
Specifically, pursuant to Section 8.2(e) of the Original Agreement, the City has
no obligation to close the Escrow for Phase One (and Phase Two) of the
Property (as those terms are defined in the Amendment).
78-495 Calle Tampico I La Quinta i California 92253 1 760.777.7000 1 wwwla-Quinta.or�
By delivery of this notice, the City hereby terminates the Agreement and
cancels the Escrow. Pursuant to Section 4.3 of the Original Agreement, the
Developer must pay for all Escrow Cancellation Charges (as defined therein).
The Developer must execute any and all documents required of the Escrow
Holder (as defined in Section 3.1 of the Original Agreement) cancelling the
Escrow.
A copy of this letter will be delivered to the Escrow Holder as identified in the
Original Agreement. If a different escrow holder has been used, the Developer
must deliver notice of that other escrow holder immediately.
In addition to the rights and remedies identified in this Notice of Termination,
the City reserves any and all other rights and remedies under the Agreement
and available at law or in equity. The City does not and shall not be deemed to
waive any rights or remedies or otherwise release Developer from any other
obligations that Developer is required to perform under the Agreement. Finally,
the City requests that the sign the Developer installed on the subject property
be removed within thirty (30) days of this Notice of Termination.
Please feel free to contact me with any questions.
Sincerely,
Frank Sp dcek
City Manager
City of La Quinta
cc: Sharon Elkins, Escrow Officer First American Title Company
ATTACHMENT
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