Spohn Ranch - 2024 Settlement Agrmt - X-Park Project 2015-09SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release (hereinafter the "Agreement") is entered by and
between the CITY OF LA QUINTA, a California municipal corporation ("City") and SPOHN
RANCH, a California corporation ("SR") and is binding and effective as of the Effective Date
(defined below). The City and SR are referred to jointly hereinafter individually as a "Parry" and
collectively as the "Parties." The Parties enter into this Agreement with reference to the following:
RECITALS
A. WHEREAS, pursuant to applicable laws and policies, the City publicly bid and
subsequently awarded a contract to SR for the City of La Quinta Public Works Project No. 2015-
09, commonly referred to as the La Quinta X-Park facility and ancillary improvements; and
B. WHEREAS, for purposes of this Agreement, Project No.2016-18 included,
specifically, a design -build contract to investigate, design, and construct the X-Park facility and
other ancillary improvements ("Project"); and
C. WHEREAS, under the Agreement, SR was responsible for determining the "exact
location and depth of all utilities, including service connections[,]" and was required to warrant
that its design would be free from any errors or omissions and SR would ensure the accuracy and
coordination of all design; and
D. WHEREAS, on or about September 17, 2018, SR requested all drawings and
information in the City's possession relating to the Project. The drawings sent by the City in
response to this request included the retention basin concept proposed to capture water off
Westward Ho Drive. As part of the main design stage, the water basins were to be considered part
of the site layout, and the City's designer coordinated with Altum, SR's contracted designer; and
E. WHEREAS, during the course of the design, in or around June of 2020, the City
was sent a notice that the cost for drainage was higher than originally anticipated, as SR was
requesting to make modifications to the drainage and site layout. This prompted the City and SR
to execute Amendment Four to the Agreement ("Amendment Four"), which incorporated the
construction of the retention basins as part of the contract with SR; and
F. WHEREAS, the retention basins were constructed near the end of construction of
the Project. After construction was purported to be completed, in the Spring of 2022, the City
conducted a punch -list walk-through to inspect the improvements which (i) revealed the slopes of
the retention basins were steeper than designed and (ii) the basins included an access road around
them that did not conform to design plans; and
G. WHEREAS, the City had not received written notice that existing utilities had
prevented the construction of the basin near Westward Ho Drive according to the SR -created and
City -approved design plans. After reconstruction on the basins started, in order to rectify the fault,
the City was notified on or about September 20, 2022, that a design change would be needed to
avoid conflict with the utilities; and
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H. WHEREAS, the City first learned of existing utilities through notification by SR
that the utilities' existence prevented construction of the basin near Westward Ho Drive according
to approved plans; and
I. WHEREAS, a dispute between the City and SR arose based on the Agreement, and
amendments incorporated therein, as to SR's responsibility for locating the utilities as part of the
Project and thereafter constructing the Project according to the City -approved plans (generally
referred to as the "Dispute"); and
J. WHEREAS, on June 1, 2023, the City sent a letter requesting acceptance of the
final accounting for the Project, which is undisputed by the parties stands at Three Hundred Forty -
Six Thousand Dollars and Sixty -One Cents ($346,000.61) (the "Final Accounting Amount"). The
Final Accounting Amount was approved, budgeted, and appropriated by the La Quinta City
Council in connection with the approval of the Project. As such, the Final Accounting Amount,
though referenced in this Agreement, is not an additional amount being paid for settlement of the
dispute; and
K. WHEREAS, in order to resolve the Dispute, and to compensate SR in part of the
additional costs incurred to complete the Project in accordance with the City -approved plans, the
City will pay to SR the Settlement Payment (as defined in Section 1(b) below) and will disburse
the Final Accounting Amount, as more particularly set forth in this Agreement.
NOW THEREFORE, in consideration of the Recitals above, which are a substantive part
of this Agreement and incorporated by this reference, and the mutual covenants set forth herein,
the Parties agree as follows:
1. Settlement Terms
In consideration of the terms and conditions set forth in this Agreement, the Parties agree
as follows:
a) SR shall deliver to City written acceptance of the Final Accounting Amount, in the
City's standard form for acceptance of a final disbursement under a public works
contract, concurrently with SR's execution and delivery of this Agreement.
b) Within fifteen (15) days of full execution of this Agreement, City shall pay to SR
one lump sum payment of Nineteen Thousand Three Hundred Ten Dollars
($19,310.00) (the "Settlement Payment"), to resolve the Dispute and to resolve any
and all allegations or claims that may be disputed in prior or subsequent
communications, verbal and written, between the City and SR relating to the
Project. The City shall deliver to SR written instructions as to how payment of the
Settlement Payment will be completed, such as by payment by check or wire
transfer.
c) Within fifteen (15) days of full execution of this Agreement, City shall disburse
and release to SR the Final Accounting Amount, which shall be separate from the
Settlement Payment. The City shall deliver to SR written instructions as to how
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payment of the Settlement Payment will be completed, such as by payment by
check or wire transfer.
d) SR shall deliver to City any and all requested information and documents, such as
SR's W-9 issued by the Internal Revenue Service, necessary or proper for
facilitating the City's Settlement Payment and disbursement of the Final
Accounting Amount.
2. No Admission of Fault
Upon full performance by the Parties to this Agreement of their respective obligations set
forth above, this Agreement is intended to be and is a compromise between the Parties, and nothing
in this Agreement shall be interpreted, used, or construed as an admission of fault or wrongful
conduct of any kind by any of the Parties. All such liability and wrongdoing alleged against one
Party is denied by the other Party.
3. Release
a. Full and General Release. In consideration for the agreements as set forth
herein, and except for the respective rights of the Parties expressly retained under this Agreement,
SR and City, on behalf of themselves and their respective successors, assigns, officials, directors,
officers, employees, insurers, lenders, lien holders, attorneys, agents, and other representatives, do
hereby release the other Party from any and all claims, actions and causes of action, obligations,
liabilities, indebtedness, breaches of duty, claims for injunctive and other equitable relief, suits,
liens, losses, costs or expenses, including attorney's fees, of any nature whatsoever, known or
unknown, fixed or contingent as of the date of execution of this Agreement relating to the Project
(the "Release"). The Release expressly does not include, and nothing in this Agreement does or
shall be deemed as, a release of any claims, actions and causes of action, obligations, liabilities,
indebtedness, breaches of duty, claims for injunctive and other equitable relief, suits, liens, losses,
costs or expenses or both, not related to the Project.
b. 1542: By releasing and forever discharging claims both known and
unknown as above provided in the Release, the Parties expressly waive any rights under California
Civil Code section 1542, which provides:
"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 OR
HER SETTLEMENT WITH THE DEBTOR."
Except for the administrative appeals and respective rights of the Parties expressly retained under
this Agreement, SR and City waive and relinquish any rights and benefits that they have or may
have under section 1542 of the Civil Code of the State of California with respect to the Project.
SR and City have performed a full and complete investigation of the facts pertaining to this
Agreement, and SR and City acknowledge and agree that they are aware that they may hereafter
discover facts in addition to or different from those which they now know or believe to be true
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with respect to the subject matter of the Release, but it is their intention hereby to fully and finally
forever settle and release any and all matters, disputes and differences, known or unknown,
suspected and unsuspected, which now exist, may exist or heretofore have existed, as against each
other, relating to the Project.
4. Non -Disparagement; Reference
a. City agrees that it shall not make any statements, whether orally, in writing,
or otherwise, which could potentially or actually disparage, defame, or impugn SR.
b. Should any member of public or the press inquire regarding the Project or
any dispute arising from the Project, both City and SR shall respond "the Project has been a success
and the dispute has been settled by mutual agreement of the parties."
C. SR acknowledges and understands that California law establishes that
settlement agreements with the City are subject to the California Public Records Act, Government
Code section 7920.000 et seq. ("PRA"). While the City will not on its own disclose the contents
of this Agreement, SR acknowledges and understands that the City is required to disclose the
Agreement should it be responsive to a PRA request, and nothing in this Agreement or this Non -
Disparagement clause shall be deemed to or does prevent the City from complying with its legal
obligations under the PRA.
5. Effective Date of Agreement
This Agreement shall be binding and deemed effective as of the later date of signature for
the respective Parties, which date shall be the "Effective Date" of this Agreement.
6. Entire Agreement
This Agreement forms the entire agreement of the Parties relating to the subject matter
herein and supersedes any and all prior agreements or understandings relating thereto, if any,
between them pertaining to the subject matter herein, and shall not be modified or altered except
by a subsequent written agreement signed pursuant to Section 13 below. This Agreement shall be
binding upon and shall inure to the benefit of the Parties, their respective successors, assigns,
officials, directors, officers, employees, insurers, lenders, lien holders, attorneys, agents, and other
representatives.
7. Representations and Warranties
SR hereby expressly represents and warrants that it has not transferred or assigned or
attempted to transfer or assign any of the released claims that are subject to this Agreement and
are included in the Release. No claim of subrogation may be brought against the City under any
of the other released claims, and SR expressly agrees to waive any subrogation rights against the
City related to any of the released claims. The persons signing this Agreement hereby represent
and warrant that they have the power and authority to bind any Parry on whose behalf this
Agreement is signed. SR acknowledges and agrees that the City is materially relying upon the
representations and warranties of SR set forth in this Agreement, and only those set forth
specifically in this Agreement. If any of SR's representations and warranties made herein are
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found to be untrue or inaccurate either at the signing of this Agreement or with the passage of time,
or both, then such untrue or inaccurate representation and warranty shall be a material default and
the basis for a breach of this Agreement.
8. Controlling Law
This Agreement shall be interpreted and construed in accordance with the laws of the State
of California without regard to conflict of law principles.
9. Attorneys' Fees and Costs
The Parties shall bear all of their own respective costs and attorneys' fees incurred relating
to this Agreement. In the event that a Parry is required to initiate or defend any litigation relating
to or arising out of this Agreement, the prevailing Party shall be entitled to recover from the other
Parry its reasonable attorneys' fees in addition to any costs to which such prevailing Parry shall be
entitled to recover pursuant to applicable law.
10. Severability
If any provision or part of this Agreement is held, determined, or adjudicated to be invalid,
unenforceable or void for any reason, each such provision shall be severed from the remaining
provisions of the Agreement and shall not affect the validity and enforceability of such remaining
provisions.
11. Review of Agreement
The Parties each acknowledge and represent that they have read this Agreement, that they
have had the opportunity to consult with their respective attorneys concerning its contents, that the
Agreement is being executed solely in reliance on their respective judgment, belief, and knowledge
of the matters set forth herein and on the advice of their respective attorneys (if any), and that they
enter this Agreement freely and voluntarily.
12. Neutral Interpretation
The Parties agree that all parts of this Agreement shall in all cases be construed as a whole
according to their fair meaning and shall not be construed strictly for or against any Party hereto.
13. Modification
This Agreement shall not be modified, amended or supplemented unless such
modifications, amendments or supplements are in writing and signed by the Party to be charged.
14. Counterparts
This Agreement may be executed in counterparts and by facsimile, electronic mail or other
electronic delivery, each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the date set forth
below.
Date: . 2024 SPOHN RANCH, a California corporation
SIGNED IN COUNTERPART
By: Kristen Dermer
Its: CEO
APPROVED AS TO FORM (for Spohn
Ranch)
SIGNED IlV COUNTERPART
By:
Jeffrey D. Dermer, Esq.
Date: 1 2024
r
ATTEST (for City):
V ! _
Monika Radeva
City Clerk
APPROVED AS TO FORM (for City)
By:
William H. Ihrke
City Attorney
CITY OF LA QUINTA, a California
municipal corporation
on McMillen
Its: City Manager
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the date set forth
below.
Date: 3 ZZ .2024 SPOIM.KANCH, a California corporation
r
y-. oK Ear Dermer
Its: CEO 'Ki c's'�121ti
APPROVED AS TO FORM (for Spohn
Ranch)
— Jr
By:
Jeftrey D.,Dolme q.
r
Date: ?2- 2024 CITY OF LA QUINTA, a California
municipal corporation
SIGNED IN COUNTERPART
By: Jon McMillen
Its: City Manager
ATTEST (for City):
SIGNED rnT COUNTERPART
Monika Radeva
City Clerk
APPROVED AS TO FORM (for City)
SIGNED IN COUNTERPART
By:
William H. Ihrke
City Attorney
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