CONTRACT 4400 Settlement Agreement. m,
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
THIS SETTLEMENT AGREEMENT ( "Agreement ") is made and entered into
as of this 5 day of Maich , , 2013 (the "Effective Date ") by and among ARMAND
GONZALES, INC. dba GONZALES CONSTRUCTION ( "Gonzales ") and the CITY
OF EL SEGUNDO (the "City "). The above parties will be collectively referred to as the
"Settling Parties."
RECITALS
A. On August 6, 2008, the City and Gonzales entered into a contract for the
construction of El Segundo Fire Station No. 2 (Project No. PW 08- 06)(the
"Contract "). The City issued a Notice to Proceed on September 3, 2008;
B. On January 26, 2010, Gonzales submitted Change Order No. 86, resulting from
the City's request to install a new HVAC unit for the Telecomm Room. On
February 3, 2010, the City approved Change Order No. 86 relative to the
subcontractor's work but disallowed it as to Gonzales' claim for supervision
costs;
C. On February 2, 2010, Gonzales submitted Change Order No. 92 to request
reimbursement for 110 additional workdays that, according to Gonzales, were
necessitated by the Project's change orders. The City rejected Change Order No.
92 on April 13, 2010;
D. On May 21, 2010, Gonzales submitted contractual claims to the City seeking
reimbursement for project delays and for its work related to the HVAC unit. The
City denied the claims on June 3, 2010, finding that the claims were untimely
since they were received more than thirty days beyond the time period set forth in
the contract, among other reasons;
E. Gonzales appealed the denial of the claims and, on June 23, 2010, the City denied
the appeal;
F. On October 25, 2011, Gonzales initiated an action entitled Armand Gonzales, Inc.
dba Gonzales Construction v. City of El Segundo, designated Case No.
YC065813, in the Los Angeles Superior Court (the "Action "). In the Action,
Gonzales alleges that the City improperly denied Change Order Nos. 86 and 92
and, consequently, breached the Contract;
K A dispute now exists between the City and Gonzales concerning whether the
City's denial of Change Order Nos. 86 and 92 constituted a breach of the Contract
(the "Dispute "); and
G. Gonzales and the City now wish to resolve the Dispute as set forth below,
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NOW, THEREFORE, in consideration of the mutual covenants and agreements
described below, and for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Settling Parties hereby agree:
Payment by City.
Within Ten (10) days of execution of this Agreement by all parties, the City will make a
payment to Gonzales in the sum of Three Hundred Forty Three Thousand, Eight Hundred
Seventy Three Dollars and twenty seven cents ($343,873.27) in full payment of all
Gonzales' invoices, claims and services on the Project. No further compensation shall
be due or owing to Gonzales for work performed pursuant to the Contract.
2. Dismissal of the Action.
Within five (5) business days of receipt of the payment described in Section (1), above,
Gonzales must prepare and serve a Request for Dismissal of the entire Action with
Prejudice and file said Request for Dismissal in the Los Angeles Superior Court.
Release_
a. In exchange for the payment provided for in Paragraph 1 above, Gonzales, and its
respective parent, subsidiary and affiliated corporations, and their respective past and
present officers, directors and shareholders, employees, agents, subcontractors and
representatives (the "Gonzales Parties "), hereby fully and forever release and discharge
the City, and its respective officers, elected or appointed officials, attorneys, agents,
representatives, directors, members, shareholders, employees, successors, and assigns,
and each of them (collectively the "City Parties "), from any and all past, present or
future claims, actions, losses, liabilities, causes of action, liens, demands, rights,
damages, costs, attorney's fees, interest, expenses, reimbursement and compensation of
any nature whatsoever (collectively, "Claims "), whether known or unknown, disclosed or
undisclosed, and whether or not anticipated, in any way related to compensation for the
Services or any materials provided by any of Gonzales' vendors, contractors or
subcontractors (collectively, "Vendors ") or any of Gonzales' or the Vendors' respective
employees, under the Contract. Without limiting the foregoing, Gonzalez specifically
releases any mechanic's lien, stop notice or bond right the undersigned has for work
performed under the Contract. This release covers the final payment to the undersigned
for all labor, services and equipment or material furnished on the job, and waives the
protections of Civil Code Section 3262(c) and any and all rights to assert exceptions for
disputed claims for additional work
b. Each of the Settling Parties also waives any and all claims for the recovery of any
costs, expenses or fees, including attorney fees associated with the matters and claims
released herein.
C. In connection with the release of the Claims described in this Agreement, the
Gonzales Parties, and anyone acting by or through them, hereby waive any and all rights
that they may have under the provisions of California Civil Code § 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 this release, which if
known by him or her must have materially affected his
or her settlement with the debtor."
In the event that any waiver of the provisions of Section 1542 of the California Code
provided for in this Agreement shall be judicially determined to be invalid, voidable or
unenforceable, for any reason, such waiver to that extent shall be severable from the
remaining provisions of this Agreement, and the invalidity, voidability or
unenforceability of the waiver shall not affect the validity, effect, enforceability or
interpretation of the remaining provisions of this Agreement.
Each of the Parties acknowledge and agree that nothing contained herein shall release or
discharge any of them from the rights, duties and obligations assumed under this
Agreement.
d. Nothing in this Agreement waives, discharges or otherwise relinquishes Gonzales
from its duty to warrant, either expressly or impliedly, the work performed pursuant to
the Contract.
4. Hold Harmless.
Gonzales agrees to hold the City Parties harmless, including all costs of defense, from
and against any and all claims, losses, liabilities, damages, complaints or lawsuits
asserted, claimed or filed by any vendor, contractor, subcontractor, materialmen or
employee of Gonzales for payment or compensation arising from the Contract on the
subject Project. This agreement to hold harmless will survive the termination of the
Agreement and is in addition to any other rights or remedies the Settling Parties may
have at law.
5. Representations and Warranties.
Each Party represents and warrants that he, she or it has not heretofore assigned or
transferred, or purported to assign or transfer, any of the claims released pursuant to this
Agreement to any other person not a Parry hereto, and that he, she or it is fully entitled to
compromise and settle same. Each Party indemnifies the other against all costs,
expenses, and judgments, including all attorney's fees incurred, in the event any third
party asserts any of the claims released pursuant to this Agreement based upon the
assignment or transfer thereof to such third party.
6. No Admissions of Liability.
Each Party acknowledges that this Agreement affects the settlement of claims that are
denied and contested by the other, and that nothing contained herein can be construed as
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an admission of liability by or on behalf of either Party, all of which liability is expressly
denied.
7. Own Counsel.
Each Party acknowledges that he, she or it has been represented by counsel of his, hers or
its own choice throughout all of the negotiations that preceded the execution of this
Agreement and in connection with the preparation and execution of this Agreement.
Gender.
References to the masculine, feminine, or neuter genders in this Agreement shall each be
inclusive of the others; references to the singular shall include the plural; and references
to "person" shall include corporation, firm, partnership, trust or other form of association;
all as required by the context of this Agreement.
9. Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. In addition, a facsimile or photocopy signed copy of the Agreement shall be
treated as an original.
10. Cations.
The captions of paragraphs contained in this Agreement are for reference only and are not
to be construed in any way as a part of this Agreement.
11. Own Costs.
As between themselves, each party to this Agreement will bear his, hers or its own costs,
expenses, and attorney's fees that he, she or it has heretofore incurred in connection with
or arising out of the matters set forth in the Recitals hereinabove.
12. Entire Agreement.
This Agreement represents the entire agreement between the Parties with respect to the
subject matter hereof and supersedes all prior and contemporaneous oral and written
agreements and discussions relative to the Dispute. Each of the Parties hereto covenants
that he or she has not entered into this Agreement as a result of any representation,
agreement, inducement or coercion, except to the extent of representations and /or
agreements specifically set forth herein. Each Parry hereto further covenants that the
consideration recited herein is the only consideration for entering into this Agreement,
and that no promises or representations of other or further consideration have been made
by any person. Each Party hereto further represents and covenants that in executing this
Agreement each Party does so with knowledge of any and all rights which he, she or it
may have with respect to the provisions of this Agreement; that he, she or it has carefully
read and considered this Agreement and fully understands its contents and the
significance of its contents; that he, she or it is entering into this Agreement of his, hers
or its own informed and free will and based upon his, hers or its own judgment and that
he, she or it has obtained independent legal advice with respect to this Agreement. This
Agreement may be amended only by an agreement in writing and duly executed by all
the Parties hereto.
13. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the Parties hereto and to
their respective employees, agents, heirs, representatives, and related -party successors
and related -party assigns.
14. Severability.
In the event any covenant, condition, or other provision herein is held to be invalid, void,
or illegal, the same is deemed severed from the remainder of this Agreement and will not
affect, impair or invalidate any other covenant, condition, or other provision herein unless
a court finds that the stricken provision(s) were integral to the Agreement and that it
would be unfair to enforce the balance of the Agreement. If any covenant, condition, or
other provision herein is held to be invalid due to its scope or breadth, such covenant,
condition, or other provision shall be deemed valid to the extent of the scope or breadth
permitted by law.
15. Authori .
Each Party warrants, represents, and agrees that this Agreement has been duly approved,
executed, and delivered and constitutes the valid and binding obligation of such Party;
and that the individual executing this Agreement on behalf of such Party has the authority
to do so.
16. Notice.
Any notices that are provided pursuant to this Agreement shall be provided via both
electronic mail and writing (either facsimile or U.S. Mail) to the other party as follows:
For Gonzales: Dan L. Longo, Esq.
MURCHISON & CUMMING
200 West Santa Ana Boulevard, Suite 801
Santa Ana, CA 92701
f. 714.972.1404
For the City: John C. Cotti, Esq.
JENKINS & HOGIN, LLP
1230 Rosecrans Avenue, Suite 110
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with copy to:
Manhattan Beach, CA 90266
f. 310.643.8441
City Clerk
CITY OF EL SEGUNDO
350 Main Street
El Segundo, CA 90245
17. Governing law, arbitration, and venue.
This Agreement shall be governed by the laws of the State of California. Any disputes
arising out of or in connection with this Agreement shall be heard in the Superior Court,
County of Los Angeles.
18. Arm's Length Negotiations.
This Agreement has been negotiated at arms' length between persons knowledgeable in
the matters dealt with herein. In addition, each of the Parties hereto has been represented
by independent legal counsel of his, hers or its own choice. Accordingly, any rules of
law, including, without limitation, California Civil Code § 1654, or any other statute,
legal decision, or common law principle of similar effect, that would require
interpretation of any ambiguities in this Agreement against the parry that drafted it, is of
no application and is hereby expressly waived. The provisions of this Agreement will be
interpreted in a reasonable manner to affect the intentions of the Parties hereto and of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the Effective Date.
ATTEST:
CITY O .m SEG ISO
f6y:
Tt.t t "t Si ➢ i WEAVER By:_ „
y Clerk (3RE AiD'I f+:
Unage
Approved a„ to form: A �
MA,i E D. HENSLEY
City Attorney ARMAND GOl"+VZALES, INC. dba
GONZMA,LES S CIION
Approv as to form: ;
By:_ _. ARM)N T) GONZALFS
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