HomeMy Public PortalAboutC-20-150 - CRA Snyder Langston, LLC et al., Settlement Agreement and Mutual ReleaseSETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release ("Agreement") dated for reference
purposes December 10 , 2020, is entered into by and between SL CARSON BUILDERS,
LLC, a Delaware limited liability company ("SLCB"), and SNYDER LANGSTON, LLC, a
Delaware limited liability company ("SL") on the one hand, and CARSON RECLAMATION
AU'T'HORITY, a California joint powers authority ("CRA") and RE / SOLUTIONS, LLC, a
Colorado limited liability company ("RES"), on the other hand. SLCB, SL, CRA and RES may
each hereinafter be referred to as a "Party" or collectively as the "Parties."
RECITALS
A. Whereas, CRA is a public entity joint powers authority comprised of Community
Facilities District 2012-1, Community Facilities District 2012-2, and the Carson Housing
Authority. The CRA is the owner of the 157 -acre parcel of real property with a common address
of 20400 S. Main Street, Carson, California, which real property was formerly known as the Cal
Compact Landfill C Property" or "Site').
B. Whereas, on or about July 12, 2017, CRA and RES entered into a written
"Environmental Remediation and Development Management Agreement," which was
subsequently amended and restated in its entirety by an "Amended and Restated Environmental
Remediation and Development Management Agreement" dated as of June 20, 2018 ("Prime
Contract"), pursuant to which RES agreed to act as the development manager to coordinate,
oversee and implement certain construction work to be performed with respect to the Property.
C. Whereas, on or about February 19, 2018, RES and SLCB entered into a written
contract identified as the "Master Agreement for Civil Improvements" ("Master Agreement"),
pursuant to which SLCB would act as a contractor to perform the construction of certain site
work, infrastructure improvements and foundation systems on the Property.
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D. Whereas, the purpose of the Prime Contract and the Master Agreement was to
implement a Conveyancing Agreement, entered into in September 2018, by the CRA and CAM -
Carson LLC, which provided for the remediation of a former landfill (the "157 Acre Site") and
the installation of improvements which would constitute the foundation for an outlet mall
development to be constructed by CAM -Carson on a portion of the former landfill (thc
"Project").Under Section 6 of the Conveyancing Agreement, CAM -Carson was to fund
construction of"Offsite Improvements" and "Site Development Improvements" (both as defined
in the Conveyancing Agreement) , which were to be installed and constructed by SLCB
pursuant to the Master Agreement. CAM -Carson's attorneys from the law firm of Lathan &
Watkins were actually involved in drafting and negotiating the Master Agreement and thus
CAM -Carson was fully aware of its Perms.
E. Whereas, pursuant to the provisions of the Master Agreement, RES and SLCB
cntcred into Work Orders, as defined in the Master Agreement, which Work Orders identified
the specific work to be performed by SLCB, the schedule for performing the work, and the
compensation to be paid to SLCB for the work. Payment for the work performed by SLCB
would be approved and made by CRA to RETS which, in turn, would pay SLCB.
P. Whereas, on or about September 6, 2018, RES and SLCB executed Work Order
No. 2 pursuant to which SLCB would construct certain improvements identified as the
"Foundations and Related Work for the Horizontal Package--CAM-Carson Work Only" on the
Property. SLCB performed work under Work Order No. 2 until November 25, 2019, when work
was stopped at the direction of CRA and RES prior to the entire scope of work being performed.
SLCB has not received full payment for the work performed under Work Order No. 2.
G. Whereas, on or about September 6, 2018, RES and SLCB executed Work Order
No. 3 pursuant to which SLCB would construct certain improvements identified as the
"Foundations and Rclatcd Work for the Horizontal Package CRA Work Only" on the Property.
SLCB performed work under Work Order No. 3 until November 25, 2019, when work was
stopped at the direction of CRA and RES prior to the entire scope of work being performed.
SLCB has not received full payment for the work performed under Work Order No. 3.
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H. Whereas, in October 2019, CAM -Carson stopped making the payments to CRA
required of it by the Conveyancing Agreement. The amounts owed but unpaid by CAM -Carson
presently exceed SIO million. CAM -Carson's failure to meet its financial obligations under the
Conveyancing Agreement led directly to CRA's inability to timely pay RES, and RES's inability
to pay SLCB under the Prime Contract and Master Agreement.
I. Whereas, on April 14, 2020, SLCB served on CRA certain Stop Payment Notices
based upon the amounts owed to SLCB under Work Order No. 2 and Work Order No. 3. Said
Stop Payment Notices were in accordance with Civil Code Section 9350 et seq.
J. Whereas, on July 16, 2020, SLCB filed a Complaint against CRA and RES in the
Los Angeles County Superior Court, which Complaint was assigned Case No. 20STCV26830
("Lawsuit"), in which SLCB sought to enforce the Stop Payment Notices served with respect to
the amounts owed to SLCB under Work Order No. 2 and Work Order No. 3.
K. Whereas, at various times, SLCB subcontractors and suppliers filed complaints in
Los Angeles County Superior Court against SLCB, CRA, and RES based on non-payment.
These cases are styled Pacific Steel Group v. SL Cason Builders et al, Case No. 20STCV23042,
Largo Concrete v. SL Carson Builders et al, Case No. 20STCV23064, Keller North America,
Inc. v. SL Carson Builders et at, Case No. 20CMCVOI87, Keller North America, Inc. v. SL
Carson Builders et al, Case No. 20CMCVO 188, and A&A Ready Mix v. SL Carson Builders et
al, Case No. 20CMCV00166.
L. Whereas, as of the date of this Agreement, SLCB contends that it is owed the sum
of $7,794,767.00 under Work Order No. 2, which amount includes the cost for all work
performed by SLCB and its subcontractors, interest on past due amounts, and costs to be
incurred for demobilization and close out of Work Order No. 2. Included in the amount of
$7,794,767.00 is retention in the sum of $1,469,227.00, held by RES.
M. Whereas, as of the date of this Agreement, SLCB contends that it is owed the sum
of $I50,529.00 under Work Order No. 3, which amount includes the cost for all work performed
by SLCB and its subcontractors, interest on past due amounts, and costs to be incurred for
01223 0020!686562.1
demobilization and close out of Work Order No. 3. Included in the amount of $150,529.00 is
retention in the sum of $10,871.00, held by RES.
N. Whereas, as of the date of this Agreement, there is certain reinforcing steel that
was purchased for use in the construction of Work Order No. 2 and which is currently being
stored off-site. A UCC -1 financing statement was previously filed in favor of the RES with
respect to said reinforcing steel. The value of such steel is approximately $1.13 million.
0. As of the date of this Agreement, there are approximately $1.58 million in
outstanding potential change orders ("PCOs") owed to SLCB and its subcontractors due to
changed conditions, delay, and loss of productivity incurred during the course of construction.
These PLO's were initiated by subcontractors and notice was provided to CRA and RES as
required by the terms of the Master Agreement. These PCO's had not yet become formal change
orders to the Work Orders due to work being stopped at the direction of CRA and RES in
November 2019.
P. Whereas, the Parties desire to enter into a full, complete and final compromise
and settlement with regard to the amounts claimed by SLCB to be owed with respect to Work
Order No. 2, Work Order No. 3, and the PCOs.
AGREEMENT
NOVO', TIIEREFORE, in consideration of the foregoing Recitals and the mutual
covenants, agreements and representations set forth herein, the Parties hereby agree as follows:
Incorporation of Recitals: Each of the above recitals is incorporated herein by
this reference as though set forth in full.
2. Pavment to SLCB: Within three (3) business days after this Agreement has been
approved by the CRA Board, the following payments ("Settlement Payments") shall be placed in
the Aleshire & Wynder LLP Client Trust Account for the benefit of SLCB:
a. CRA shall deposit the sum of $6,465,198.00; and
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b. RES shall deposit the sum of $1,480,098.00.
The sum of the Settlement Payments is $7,945,296.00 and shall be referred to as the "Settlement
Sum." The CRA shall instruct Aleshire & Wynder, LLP that the Settlement Sum shall be
released to SLCB within two (2) business days following delivery to Aleshire & Wynder LLP of
the "Release Documents" specified in Section 4, below.
Within five (5) business days following its receipt of the Settlement Sum, the following amounts
shall be paid by SLCB to the following subcontractors:
a. Largo (including its subcontractor Pacific Steel Group and its supplier, A&A
Ready Mixed Concrete): $3,478,823.00;
b. Keller North America: $I,367,693.00;
c. Murray Company: $481,797.40;
d. Michael Baker: $207,543,-
e.
207,543;
e. Unison: $103,587; and
f. Sukut: $25,633.00
The remaining amount shall be retained by SLCB. ; however, if the sums paid in settlement per
the agreements set forth in paragraph 4f are less than the amounts actually owed by SLCB per its
contracts with such subcontractors and material suppliers, then such amount shall be deducted
from the Settlement Sum and refunded to CRA. The intent of this provision is to assure that
because SLCB is being paid in full for its work it does not receive a windfall by compromise
settlements with its subcontractors and material suppliers
3. Transfer of Ownershin of Reinforcine Steel: In consideration for the waiver of
approximately $1.58 million in PCOs, ownership of the reinforcing steel currently stored off-site
shall be transferred to Pacific Steel Group, a sub -tier subcontractor to Largo Concrete, Inc., a
subcontractor to SLCB. Within three (3) business days after this Agreement has been approved
by the CRA Board, CRA and/or RBS shall file a termination of the UCC -1 financing statement
01223.00201666562.1 5
(i.e. a UCC -3) with respect to the reinforcing steel stored off-site, the CRA and RES agree to
relinquish ownership of said reinforcing steel as evidenced by the termination of the UCC -1
filing, the CRA and RES waive and release any right, title or claim of interest to the reinforcing
steel stored off-site which is being transferred to Pacific Steel Group, and the CRA and/or RES
shall execute and deliver any other documentation necessary to relinquish ownership of said
reinforcing steel. Nothing herein shall be deemed to affect the ownership of any and all
reinforcing steel currently stored or located on the Property.
4. Release Documents: As a condition precedent to the payment of the Settlement
Sum set forth in paragraph 2, above, SLCB shall deliver each of the following Release
Documents to counsel for the CRA. Counsel for the CRA shall hold the Release Documents in
trust, and shall not file, record or use the Release Documents in any way until the Settlement
Payments have been received and successfully negotiated by SLCB. The Release Documents are
as follows:
a. A Conditional Waiver and Release Upon Final Payment from SLCB for
each Work Order, in the amounts set forth in Recital paragraphs L and M;
b. An original Release of Stop Payment Notice with respect to the Stop
Payment Notice for Work Order No. 2 from SLCB and all plaintiffs in the
actions set forth in Recital paragraph K, to the extent such plaintiff
performed work under Work Order No. 2;
C. An original Release of Stop Payment Notice with respect to the Stop
Payment Notice for Work Order No. 3 from SLCB and all plaintiffs in the
actions set forth in Recital paragraph K, to the extent such plaintiff
performed work under Work Order No. 3;
d. An original Request for Dismissal of the Lawsuit (entire action, with
prejudice) and Requests for Dismissal (entire action, with prejudice) for
all actions set forth in Recital paragraph K;
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e. A Conditional Waiver and Release Upon Final Payment from each of the
Subcontractors identified in paragraph 2, in the amounts set forth in
paragraph 2; and
f. Signed settlement agreements between SLCB and each of the plaintiffs in
the actions set forth in Recital paragraph K.
S. Releases: Except for the obligations imposed by this Agreement, the Parties
hereto agree as follows:
a. SLCB does hereby release, remise and forever discharge CRA, RES and their
respective members, member agencies, shareholders, directors, officers,
employees, agents, joint venturers, parents, subsidiaries, successors, assigns,
insurers and sureties from any and all claims, cross-claims, damages,
indebtedness, liabilities, accounts, reckonings, demands, obligations, costs,
expenses, attorneys' fees, liens, actions and causes of action of every kind and
nature whatsoever, whether known or unknown, suspected or unsuspected, arising
out of or related to the monies claimed to be owed to SLCB and its subcontractors
and suppliers for work performed prior to the date of this Agreement pursuant to
Work Orders 2 and 3.
b. CRA and RES do hereby release, remise and forever discharge SLCB and its
members, shareholders, directors, officers, employees, agents, joint venturers,
parents, subsidiaries, successors, assigns, insurers and sureties from any and all
claims, cross-claims, damages, indebtedness, liabilities, accounts, reckonings,
demands, obligations, costs, expenses, attorneys' fees, liens, actions and causes of
action of every kind and nature whatsoever, whether known or unknown,
suspected or unsuspected, arising out of or related to the monies claimed to be
owed to SLCB and its subcontractors and suppliers for work performed prior to
the date of this Agreement pursuant to Work Orders 2 and 3.
C. The releases of claims in subparagraphs 5(a) and 5(b) and the waivers set forth in
paragraph 6 do not extend to any claims under any warranty, for latent defects, or
01223 00301686562.1 7
for personal injury, arising from or relating in any way to the work performed by
SLCB or its subcontractors and suppliers. Nor do the release of claims in
subparagraphs 5(a) and 5(b) extend to any claims arising from or involving fraud
or willful misconduct. Further, the provisions of subparagraphs 5(a) and 5(b) do
not extend or relate to any work performed by SLCB or its subcontractors and
suppliers after the date of this Agreement. SLCB and its subcontractors do not
warrant any damage to work or materials, including but not limited to any
reinforcing steel stored on site, that occurred after SLCB and its subcontractors
stopped workor caused by the work of others.
6. Waiver of Civil Code Section 1542: Each of the Parties represents,
acknowledges and agrees that it has been advised by legal counsel of its choice of section 1542
of the California Civil Code, which provides as follows:
"A general release does not extend to claims that the creditor or
releasing party does not know or suspect to exist in his or her favor
at the time of executing the release and that, if known by him or
her, would have materially affected his or her settlement with the
debtor or released party."
Except as expressly provided in this Agreement, each of the Parties specifically waives any and
all rights and/or benefits it has or may have under California Civil Code section 1542 or any
other statutes or common law principles of similar substance and effect, and further represents,
acknowledges and agrees that his knowing and voluntary waiver of the provisions of California
Civil Code section 1542 is an essential and material term of this Agreement without which the
consideration set forth herein and relating hereto would not have been delivered.
7. Indemnification: Provided that CRA and RES have made the Settlement
Payments described in paragraph 2, hereof, and commencing on SLCB's receipt of the
Settlement Sum, SLCB and SL shall defend, reimburse for staff time reasonably necessary to
defend, indemnify and hold CRA, its member agencies, and RES hannless from any and all
claims and Iawsuits brought now or in the future by any subcontractors or suppliers to SLCB
01223.00201666562.1
with respect to Work Order No. 2 and Work Order No. 3. As a condition to said defense and
indemnification, the Parties further agree as follows:
a. Concurrently with the payment of the Settlement Payments, or as soon as possible
after new claims or lawsuits by subcontractors or suppliers to SLCB are asserted,
CRA, its member agencies, and RES shall tender to SLCB and SL for defense and
indemnification any and all claims or lawsuits of subcontractors or suppliers to
SLCB with respect to Work Order No. 2 and Work Order No. 3. SLCB and SL
shall be entitled to retain counsel of their choice, subject to the reasonable
objection of CRA and RES, to defend CRA, its member agencies, and RES with
respect to said claims or lawsuits. CRA and RES agree to waive any conflict of
interest which arises by virtue of SLCB and SL desiring to retain the same
counsel that represents SLOB, and specifically agree to the same counsel
representing SLCB, CRA, its member agencies, and RES with respect to any
subcontractor or supplier claim or lawsuit.
b. Notwithstanding any other provision herein to the contrary, SLCB and SL shall
not be obligated to reimburse, indemnify or hold harmless the CRA, its member
agencies, or RES with respect to any costs, expenses or attorneys' fees incurred
by CRA, its member agencies or RLS prior to SLCB's receipt of the Settlement
Sum and the tender by CRA, its member agencies, and/or RES pursuant to this
paragraph 7.
S. Status of Master Agreement and Work Order: The Parties agree that no
further work shall be performed under Work Order No. 2 and Work Order No. 3, and said Work
Orders shall be deemed closed as of the date of execution of this Agreement. Any further work
to be performed by SLCB under the Master Agreement shall be performed pursuant to a new
Work Order to be negotiated by the Parties. The Parties further agree that the Master Agreement
between RES and SLCB shall remain in full force and effect.
9. No Effect Upon Prime Contract: Neither this Agreement nor the Parties'
performance hereunder shall be deemed to modify, waive, alter or release any rights, remedies or
obligations by and between CRA and RES under the Prime Contract or applicable law.
01223.0020/686562.1 9
10. Additional Documentation: The Parties agree to execute such other and further
documentation that may be necessary to effectuate the intention of this Agreement.
11. Bindintt on Successors: The terms of this Agreement shall be binding upon and
shall inure to the benefit of the Parties' successors, assigns, members, shareholders, directors,
officers, employees, agents, insurer, sureties and the legal representatives of each of them.
12. No Other Representations or Warranties: There are no representations,
warranties, promises or other statements upon which the Parties have relied, by whatever name
called, express or implied, written or oral, except as expressly set forth in this Agreement. The
only representations, promises, warranties, or other statements upon which the Parties have
relied are as set forth in this Agreement.
13. Additional Facts: In entering this Agreement, each of the Parties acknowledges
that it may hereafter discover facts different from, or in addition to, those which it now knows or
believes to be true with respect to the releases herein made and agrees that every release herein
made by it is now and will remain effective notwithstanding die existence or the discovery of
such additional facts.
14. Warranties: Each of the Parties expressly represents, warrants and agrees as
follows:
a. There has been no assignment, sale, transfer or hypothecation, by operation of law
or otherwise, of any claim, right, cause of action, demand, obligation, liability or
interest released;
b. Each of the Parties has received independent legal advice from its attorneys with
respect to the advisability of making the settlement provided for herein, with
respect to the advisability of executing this Agreement, and with respect to the
meaning of California Civil Code section 1542;
C. Each of the Parties has made such investigation of the facts pertaining to the
settlement and this Agreement and of all the matters pertaining to it as it deems
necessary;
01223.0020/686562.1 10
d. Each of the Parties or responsible officer or agent thereof has read this Agreement
and understands the contents thereof. Each of the individuals executing this
Agreement on behalf of the respective party possesses the power and authority to
do so and thereby binds his respective party;
e. Each term of this Agreement is contractual and not merely a recital; and
E Each of the Parties is the sole owner of the respective aforementioned claims and
demands and does hereby agree and undertake to indemnify and save entirely
harmless those Parties released hereby from any and all claims, demands, liens, or
suits, including, but not limited to, the expenses of defense thereof, which may
hereafter be asserted by any other person or persons claiming any interest in or to
the said claim, demand, or cause of action hereinabove set forth.
15. Construction and Jurisdiction: This Agreement is to be executed and delivered
within the State of California, and its validity, construction and performance shall be governed
by the laws of the State of California. Pursuant to C.C.P. section 664.6, the Parties request that
the Court in the Lawsuit retain jurisdiction over the Parties to enforce the terms of this
Agreement. Such request to the Court shall be prepared by counsel for SLCB.
16. Interpretation: Each of the Parties has participated in the preparation of this
Agreement, and the Parties agree that the Agreement and its terms shall not be construed in favor
or against any Party by virtue of the identity of its preparer.
17. Attornei-s' Fees: Should suit be brought to enforce any or all of the provisions of
this Agreement, to obtain a declaration of rights under it, to rescind it, or by reason of a breach of
any term, warranty or condition set forth in it, the prevailing party in said suit shall be entitled to
reasonable attorneys' fees and costs_ Except as provided in this paragraph, each of the Parties
shall be responsible for its own costs and attorneys' fees. Further, CRA, its member agencies,
and RES shall agree to a mutual waiver of attorneys' fees and costs with each Plaintiff in the
Iawsuits identified in Recital paragraph K.
01223.00201686562.1 11
1 S. Execution in Counterparts: This Agreement may be executed in one document
signed by all Parties, or in counterparts, some or all of which may be transmitted by facsimile or
in .pdf format and each of which will be deemed an original. If executed in separate
counterparts, all such counterparts shall constitute but one and the same document which may be
sufficiently evidenced by one counterpart signed by the party who is to be charged with it, and an
electronic or digital signature shall be effective the same as an original.".
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
day, month and year below written.
Dated: December 1 , 2020 SL CARSON BUILDERS, LLC, a Delaware limited liability
company
Pon
SNYDER LANGSTON, LLC, a Delaware limited liability
Dated: December ?' , 2020 company
By: Z
Na ' e• JAs�N mcy
Tit e: p,�tsio��yT
Dated: December 1 , 2020 CARSON RECLAMATION AUTHORITY, a California joint
powers authority
By: - &�, (\ , .
Name• ,ber+ V-Obl S
Title: 84i1ori+_ ONirman
017.23.0020/686562.1 17
Dated: December 2020 RE 1 SOLUTIONS, LLC, a Colorado limited liability
company
By- ��� -e.
Name: 5'Tl,,AA-r L •
Title: M. m8f'2
01s 002wbsOal 13
SETTLEMENT AGREEMENTAND MUTUAL RELEASE BY AND BETWEEN SL
CARSON BUILDERS, LLC, A DELAWARE LIMITED LIABILITY COMPANY ("SLCB"),
AND SNYDER LANGSTON, LLC, A DELAWARE LIMITED LIABILITY COMPANY
("SL") AND RE I SOLUTIONS, LLC, A COLORADO LIMITED LIABILITY COMPANY
("RES")
ATTEST:
By:
Donesia Gause-Aldana, Authority Secretary
APPROVED AS TO FORM:
ALESHIRE & WYNDER, LLP
Sunny K. Soltani, Authority Counsel