Travelers Casualty & Surety/Settlement TM 30138SETTLEMENT AND RELEASE AGREEMENT
_ This Settlement and Release Agreement ("Agreement") is made and entered into this
�day of December 2012 ("Effective Date"), by and between THE CITY OF LA QUINTA
("City"), and TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA, a
Connecticut corporation, ("Travelers"). In this Agreement, Travelers and the City are referred to,
each as a "Party," and collectively, as the "Parties."
I. RECITALS
A. WHEREAS, in or about October 7, 2006, La Quinta Developers, a California
corporation ("Developer"), entered into the following agreements with the City to complete, install,
and guarantee for one year certain public works of improvement located on Tract No. 30138 in the
City of La Quinta, California ("Project"):
Subdivision Improvement Agreement Tract Map No. 30138 On -Site
Improvements ("On -Site Subdivision Improvement Agreement"); and
Subdivision Improvement Agreement Tract Map No. 30138 Off -Site
Improvements ("Off -Site Subdivision Improvement Agreement")
(the "On -Site Subdivision Improvement Agreement" and "Off -Site. Subdivision Improvement
Agreement" will be referred to collectively as "Subdivision Improvement Agreements").
B. WHEREAS, pursuant to California Government Code Sections 66499 et seq.,
Travelers issued several surety bonds to guarantee the completion of the aforementioned public
works of improvement on the Project under the Subdivision Improvement Agreements including,
but not limited to, the following:
• Performance Bond No. 104405304;
• Labor and Material Bond No. 104405304;
• Performance Bond No. 104405305;
• Labor and Material Bond No. 104405305;
• Grading Bond No. 104405259; and
• Fugitive Dust Control Bond No. 104230962 (collectively, "Bonds" n ).
C. WHEREAS, subsequently thereafter, the City declared the Developer to be in
default under the Subdivision Improvement Agreements and Project.
' The definition of "Bonds" includes the aforementioned listed bonds but also any bonds issued by Travelers to
Developer in connection with the Project which may not be listed herein.
D. WHEREAS, in exchange for valuable consideration offered by each Party, the
Parties have agreed to enter into this Agreement for the purpose of resolving all outstanding issues
and claims arising from the Bonds, Subdivision Improvement Agreements, and Project, subject to
the terms and conditions of this Agreement.
E. WHEREAS, this Agreement is intended to resolve all issues between Travelers and
the City with regard to any claims arising from the Bonds, Subdivision Improvement Agreements,
and Project, fully, finally and forever, as set forth herein.
NOW, THEREFORE, based on the exchange of valuable consideration, the receipt and
sufficiency of which is acknowledged, and based on the Recitals set forth above which form a part
of this Agreement, Travelers and the City agree to the following terms and conditions:
II. TERMS AND CONDITIONS
1. Payment by Travelers. In consideration for this Agreement and the terms and
conditions set forth herein, Travelers shall pay to the City the total sum of One Million Dollars
and No Cents ($1,000,000.00) ("Payment") in full and complete satisfaction of any and all claims,
including all interest, attorneys' fees, prompt payment penalties and costs, that the City has asserted
or could have asserted against Travelers in connection with the Subdivision Improvement
Agreements, Projects, and Bonds. Payment will be made by Travelers within fifteen (15) days of
the execution of this Agreement by the Parties.
2. Restriction on Use of Payment. The City agrees and promises to use the Payment
only for the payment of expenses incurred in connection with the completion of work covered by
the Bonds.
3. Release by the City. In exchange of Travelers' payment under the Bonds and the
release of claims as described in Paragraph 5 below, and any other terms contained herein, the City
hereby agrees and promises to fully and forever waive and release Travelers from any and all
liability arising under or related to the Bonds, Project, and Subdivision Improvement Agreements.
4. Return of Original Bonds. Once the Agreement is fully executed by all Parties,
the City will return the original Bonds to Travelers within ten (10) days.
5. Mutual Release of Claims. Except for the obligations set forth in, created by,
arising out of or reserved by this Agreement, the Parties, for themselves, and for all of their heirs,
executors, administrators, successors, employees, agents and assigns, do hereby fully and forever
release, discharge, and dismiss any and all present and future claims, demands, action, causes of
action, rights, damages, costs, expenses and compensations whatsoever, in law or in equity, in the
nature of an administrative proceeding or otherwise (known, unknown, contingent, accrued,
inchoate or otherwise), that they have, have had or may have, now or in the future, against one
another, and all companies, partnerships, individuals, associated or affiliated or otherwise
connected with them, and of their agents, employees, attorneys, servants, consultants, successors,
heirs, executors, associations or partnerships, arising out of or relating in any way to the Bonds,
Project, and Subdivision Improvement Agreements.
6. Waiver of Statutory Rights. Except for the obligations set forth in, created by,
arising out of or reserved by this Agreement, the Parties hereby acknowledge that they are familiar
with California Civil Code §1542, which provides as follows:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have
materially affected his settlement with the debtor.
Except as provided for under the terms of this Agreement, the Parties waive and relinquish any and
all rights and benefits which they may have under, or which may be conferred upon them by, the
provisions of § 1542 of the California Civil Code and/or by any similar law of any state or territory
of the United States, to the fullest extent that they may lawfully waive such rights or benefits
pertaining to the subject matter of this Agreement. In connection with such waiver and
relinquishment, the Parties acknowledge that they are aware that they or their attorneys may
hereafter discover claims or facts in addition to or different from those which each of them now
knows or believes to exist with respect to the subject matter of, or any part to, this Agreement, but
that it is the intention of the Parties to hereby fully, finally and forever waive said claims, whether
known or unknown, suspected or unsuspected, which concern, arise out of, or are in any way
connected with the Bonds (including any payment bond counterpart), Projects, Agreements, and/or
Action.
7. Exclusion from Scone of Agreement. Notwithstanding any provision to the
contrary, this Agreement does not address and has no effect on any claims, demands, action, causes
of action and rights, in law or in equity, in the nature of an administrative proceeding or otherwise
(known, unknown, contingent, accrued, inchoate or otherwise), which Travelers has or may have,
now or in the future, against the Developer.
8. Reuresentation and Warranties.
8.1 Except as.otherwise set forth in this Agreement, each of the Parties hereby
represents and warrants that it has not previously assigned or transferred in any manner, or
purported to have assigned or transferred in any manner, and is the sole owner of any of the claims
described or set forth in Paragraphs 5 and 6 above.
8.2 Except as otherwise set forth in this Agreement, each of the Parties hereby
represent and warrant that the person executing this Agreement on its behalf is duly authorized to
do so, and that he/she is authorized to bind the party to the terms set forth herein.
9. Notices. All notices and correspondence to the City shall be mailed by U.S. Postal
Service First Class Mail to:
Katherine Jenson
RUTAN & TUCKER, LLP
611 Anton Blvd., Suite 1400
Costa Mesa, CA 92626
Telephone: (714) 641-3413
Facsimile: (714) 546-9035
Email: kiensonna rutan.com
All notices and correspondence to Travelers shall be mailed by U.S. Postal Service First
Class Mail to:
Sam Barker
33650 6th Ave. South, Ste. 200
Federal Way, WA 98003
Telephone: (253) 943-5802
Facsimile: (866) 842-9201
Email: sebarker@travelers.com
10. Admission of Liability. Nothing in this Agreement shall be construed as an
admission of liability by any of the Parties to this Agreement.
11. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California.
12. Further Assurances. Each party to this Agreement shall execute all instruments
and documents and take all action as may be reasonably required to effectuate this Agreement.
13. Time of Essence. Time is of the essence with respect to each provision of this
Agreement.
14.. Attorneys' Fees. If any party shall bring an action or proceeding against another
parry to enforce any of the terms of this Agreement, the prevailing party shall be entitled to an
award of reasonable attorneys' fees and costs.
15. Modification. This Agreement may be modified only by a contract in writing
executed by the party to this Agreement against whom enforcement of such modification is sought.
16. Prior Understandings. This Agreement contains the entire agreement between the
Parties with respect to the subject matter of this Agreement, is intended as a final expression of
such Parties' agreement with respect to such terms as are included in this Agreement, is intended as
a complete and exclusive statement of the terms of such agreement, and supersedes all negotiations,
stipulations, understandings, agreements, representations and warranties, if any, with respect to
such subject matter, which precede or accompany the execution of this Agreement.
17. Interpretation. Whenever the context so requires in this Agreement, all words
used in the singular shall be construed to have been used in the plural (and vice versa), each gender
shall be construed to include any other genders, and the word "person" shall be construed to
include a natural person, a corporation, a firm, a joint venture, a trust, an estate, or any other entity.
18. Partial Invalidity. Each provision of this Agreement shall be valid and enforceable
to the fullest extent permitted by law. If any provision of this Agreement or the application of such
provision to any person or circumstance is, to any extent, deemed to be invalid or unenforceable,
the remainder of this Agreement, or the application of such provision to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be affected by such
invalidity or unenforceability, unless such provision or such application of such provision is
essential to this Agreement.
19. Successors -in -Interest and Assigns. Except as otherwise set forth in this
Agreement, the Parties, and each of them, shall not assign or delegate to any other person this
Agreement or any rights or obligations under this Agreement. Subject to any restriction on
transferability contained in this Agreement, this Agreement shall be binding upon and shall inure to
the benefit of the successors -in -interest and assigns of the Parties hereto, and each of them.
Nothing in this Paragraph shall create any rights enforceable by any person other than the Parties,
except for the rights of the successor -in -interest and assigns of the Parties, unless such rights are
expressly granted in this Agreement to other specifically identified persons.
20. Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original. All counterparts so executed shall constitute one Agreement
binding all the Parties hereto. A photocopy or fax reproduction of an original copy of the
Agreement shall be of the same binding effect as the original.
21. No Inducement or "Drafting Party". Each of the Parties have had the
opportunity to, and have to the extent each deemed appropriate, obtained legal counsel concerning
the content and meaning of this Agreement. Each of the Parties agrees and represents that no
promise, inducement or agreement not herein expressed has been made to effectuate this
Agreement, and that this Agreement represents the entire agreement between the Parties. Each of
the Parties' respective legal counsel have reviewed and approved this Agreement. The rule of
construction that any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement.
22. No Third Party Rights. Except as expressly provided herein, nothing in this
Agreement shall be deemed to create any rights in favor of, or to inure to the benefit of, any third
parties, or to waive or release any defense or limitation against third party claims.
WHEREFORE, the Parties have executed this Agreement by their authorized
representatives.
DATED%&&&RM (Z CITY OF LA QUINTA
py:
Its:
DATED: i z 3 z TRAVELERS CASUALTY AND SURETY COMPANY
OF AMERICA
By: Mr, Sam Barker
Its: Senior Claim Counsel
IRVINE 181625.1 103124.00011
ATTEST TO CITY MANAGER'S SIGNATURE:
Susan Maysels, City Terk