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HomeMy WebLinkAbout6.s. Mercury Contamination Settlement Agreement and Mutual ReleaseAGENDA ITEM: Mercury Contamination Settlement Agreement and Mutual Release AGENDA SECTION: Consent PREPARED BY: Jamie Verbrugge, City Administrator AGEN :fig r; 4 t; ATTACHMENTS: Redlined Agreement APPROVED B RECOMMENDED ACTION: Motion to approve the settlement agreement fors mercury contamination claim and to authorize the Mayor and Clerk to execute the sett ment agreement and mutual release ROSEMOUNT CITY COUNCIL City Council Regular Meeting: April 18, 2006 EXECUTIVE SUMMARY ISSUE The Office of the Attorney General has forwarded a settlement agreement and mutual release related to costs and claims resulting from the contamination and clean-up response of September 2004 at Rosemount Woods BACKGROUND On September 6, 2004, Rosemount first responders and other agencies were involved in a contamination response and clean -up following the release of mercury in the Rosemount Woods neighborhood. The Minnesota Attorney General's Office has prepared a settlement agreement and mutual release for the parnes Involved in the incident SUMMARY By approving the settlement agreement and release, the City will be eligible to recover its costs related to the incident Staff and legal counsel recommend approval. SETTLEMENT AGREEMENT AND MUTUAL RELEASE This Settlement Agreement and Mutual Release "Agreement is made and entered into as of 2005,2006 in Minnesota, by and among the Minnesota Pollution Control Agency "MPCA Dakota County, Minnesota "County City of Rosemount, Minnesota "City Contractor Property Developers Company "CPDC Veit Company, Inc "Veit and Luminaire Recyclers, Inc "Luminaire collectively referred to herein as the Parties. RECITALS WHEREAS, the Parties are involved in a dispute regarding reimbursement of MPCA for alleged funds expended responding to an alleged mercury contamination at the Rosemount Woods manufactured home park in Rosemount, Minnesota WHEREAS, CPDC is a Minnesota corporation engaged in development of real estate; WHEREAS, in July 2004, CPDC entered into a redevelopment contract with the City of Rosemount Port Authority for redevelopment of the former Brockway Glass factory property located at 13500 Robert Trail South in Rosemount, Minnesota "Facility WHEREAS, on July 28, 2004, CPDC purchased the Facility from its owner, Cue Properties, LLC, WHEREAS, when CPDC purchased the Facility two jars of liquid mercury were present inside the buildings, WHEREAS, CPDC contracted with Veit to demolish the buildings and perform other related work, WHEREAS, Veit subcontracted with Luminaire to perform hazardous material removal in the buildings and other related work prior to demolition, WHEREAS, on or before August 31, 2004, personnel employed by Luminaire moved the two jars of liquid mercury and other hazardous substances or wastes into a garage -type building at the Facility "Garage The Garage had interior and exterior entrances, WHEREAS, on September 6, 2004, two juveniles broke into the Garage through an exterior service door and stole the two jars of liquid mercury, WHEREAS, the juveniles brought the mercury to the Rosemount Woods manufactured home park and used it as a plaything, resulting in an alleged mercury contamination, WHEREAS, MPCA, County, City, and other governmental entities responded to the alleged mercury contamination On September 6, 2004, MPCA declared that the alleged mercury contamination was an emergency under Minn Stat 115B 17, WHEREAS, state and local governmental actions in response to the alleged mercury contamination have been completed, WHEREAS, CPDC has since September 6, 2004 removed (or had removed) all remaining hazardous substances and wastes from the Facility and completed (or had completed) the demolition of the structures, WHEREAS, on November 10, 2004, MPCA issued a Notice of Violation "Notice of Violation to CPDC; WHEREAS, MPCA alleges that it, together with County and City, expended $525,074 00 in costs related to the alleged mercury contamination "MPCA Response Costs Claim MPCA seeks recovery, on behalf of itself, as well as on behalf of County and City, of the MPCA Response Costs Claim, WHEREAS, CPDC denies liability for the MPCA Response Costs Claim. However, CPDC maintains that, if and to the extent it is found liable for the MPCA Response Costs Claim or any portion thereof, it is entitled to recover the same from Veit and /or Luminaire, WHEREAS, in addition to seeking the MPCA Response Costs Claim, MPCA also seeks a penalty of $44,000 from CPDC for the violations alleged in the Notice of Violation "MPCA Penalty Claim WHEREAS, CPDC denies liability for the MPCA Penalty Claim However, CPDC maintains that, if and to the extent it is found liable for the MPCA Penalty Claim, it is entitled to recover the same from Veit and /or Luminaire, WHEREAS, the MPCA Response Costs Claim and the MPCA Penalty Claim are together known as the "Settled Claims WHEREAS, Veit and Luminaire deny any liability to MPCA or CPDC for the Settled Claims, WHEREAS, MPCA, CPDC, Veit and Luminaire engaged in a mediation conducted by the Honorable Roland I Fancy regarding the Settled Claims, WHEREAS, MPCA has offered to reduceresolve the Settled Claims by reducing the MPCA Response Costs Claim to $375,000 00 and to reducehy reducing the MPCA Penalty Claim to $10,000 and a $25,000 Supplemental Environmental Project, WHEREAS, in exchange for fill releases from the Settled Claims, CPDC, Veit and Luminaire have each agreed, without any admission of liability or acknowledgement of the validity of the MPCA Response Costs Claim and without any right of recovery against one another for such payments, to pay an allocated share of the reduced MPCA Response Costs Claim as follows a. CPDC $166,500; b. Veit $134,500; and c. Luminaire $74,000, 2 WHEREAS, CPDC has agreed, without any admission of liability or acknowledgement of the validity of the MPCA Penalty Claim and without any right of recovery against Veit and/or Luminaire for such payment, to pay the reduced MPCA Penalty Claim, WHEREAS, MPCA and CPDC have drafted and negotiated a Stipulation Agreement, in the form of Exhibit A attached "Stipulation Agreement"), for resolution of the Settled Claims, WHEREAS, CPDC's willingness to enter into the Stipulation Agreement is contingent upon the execution and delivery of this Agreement by the other Parties, contingent u MPCA; WHEREAS,, CPDC Veit and Lnminaire willingnesc to enter into the Agreement is WHEREAS. Veit and Luminaire's willingness to enter into the Agreement is ii .i! I 1 NOW, THEREFORE, for and in consideration of the promises, releases, covenants and conditions herein contained, the adequacy and sufficiency of which consideration is hereby irrevocably acknowledged, the Parties hereto agree as follows. AGREEMENT 1. Recitals The above recitals are incorporated herein. The above recitals shall not be admissible to prove the truth of the matters asserted in any action or proceeding involving any of the Parties (other than an action brought to enforce the terms of this Agreement), nor do any of the Parties intend such recitals to constitute admissions of fact by any of them 2. Payments Pursuant to the Stipulation Agreement, CPDC has agreed to pay MPCA $375,000 in full settlement of the MPCA Response Costs Claim within 60 days of the effective date of the Stipulation Agreement Within 60 days of the effective date of the Stipulation Agreement a. Veit shall pay CPDC $134,500 and Luminaire shall pay CPDC $74,000, representing reimbursement to CPDC for Veit's and Luminaire's allocated shares of the MPCA Response Costs Claim, and b. MPCA shall pay City $36,502 39 and County $39,918 92, representing reimbursement of response costs incurred by City and County 3. Mutual Release Upon payment of the required amounts under paragraph 2 above, each of the Parties hereby mutually releases and forever discharges the other Parties, their successors and assigns, agents, heirs, executors, representatives, and past and present principals, agents, partners, officers, directors, shareholders, employees, attorneys and representatives, from 3 all claims, liabilities, demands, actions and causes of action existing as of the date of this Agreement for the Settled Claims Nothing in this paragraph shall be interpreted, however, to release any party from any other obligations with respect to the alleged mercury contamination 4. Covenant Not to Sue Without limiting the generality of the foregoing releases, each of the Parties hereby covenants and agrees that it shall not institute, bring, commence or continue any action in any court, arbitration, or other forum against any other of the Parties for any claims, liabilities, demands, actions and causes of action existing as of the Effective Date of this Agreement for the Settled Claim, known or unknown, that have been asserted or could have been asserted by, for or on behalf of any of the Parties, provided, however, that nothing herein shall waive, release, acquit or discharge any claim or counterclaim for enforcement or breach of this Agreement. 5. Compromise of Claims It is understood that this Agreement effects the settlement of potential claims, counterclaims and cross claims concerning the Settled Claims This Agreement is not to be construed as an admission of wrongdoing or liability on behalf of any of the Parties, who respectively continue to assert or deny liability and responsibility. It is further agreed and understood that each Party has reserved all of its claims, rights, defenses, and positions, other than as specifically released herein In addition, the Parties acknowledge that this Agreement is not, and shall not be construed as, reflective or adoptive of any particular position, analysis, or interpretation as to the facts, source, or nature of the incident All actions taken and statements made, whether orally or in writing, by any of the Parties, or by their respective representatives, relating to this Agreement or participation in this Agreement, including its negotiation, development and implementation, shall be without prejudice or value as precedent beyond the scope of this Agreement, and shall not be used as a standard by which other matters may be judged 6. Existing Rights and Obligations This settlement is solely limited to the dispute concerning the Settled Claims It is expressly acknowledged that entering into this Agreement shall not alter or change any existing rights, duties and obligations between and among the Parties, whether contractual or otherwise. 7. Consultation With Counsel. Each party hereto acknowledges and represents that such Party has consulted with legal counsel of its choice before effecting this settlement and executing this Agreement and that it understands the meaning and contents of this Agreement, and expressly consents that this Agreement shall be given full force and effect according to each and all of its express terms and provisions. 8. Governing Law This Agreement and its terms and conditions shall be governed by the laws and construed solely in accordance with the laws of the of State of Minnesota The parties hereto agree that all disputes or controversies arising out of this Agreement, and any claim for relief or other legal proceeding filed to interpret or enforce the respective rights of the parties hereunder, shall be filed in the District Court of the State of Minnesota for the County of Dakota. 9. Attorneys' Fees and Costs Each party hereto shall bear its own attorneys' fees, expenses, and costs incurred in connection with the dispute In the event any litigation, arbitration or other proceeding is brought for the interpretation or enforcement of this Agreement, or because of an alleged dispute, default, misrepresentation, or breach in connection with any of the provisions of this Agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys' fees, costs, and expenses actually incurred in connection therewith, in addition to any other relief to which it may be entitled 10. Execution This Agreement may be executed in several counterparts by one or more of the Parties named herein and all such counterparts once so executed shall together be deemed to constitute one final agreement, as if one document had been signed by all of the Parties, and each such counterpart, upon execution and delivery, shall be deemed a complete original, binding the Parties to this Agreement 11. Effective Date This Agreement shall become effective immediately following its execution by all Parties 12. Use of Facsimile Copies Facsimile copies of this Agreement, including but not limited to signature transmitted by facsimile, shall be treated as original copies for all purposes 13. Integration; Stipulation Agreement With the exception of the Stipulation Agreement between the MPCA and CPDC, this Agreement constitutes the entire understanding between the parties hereto pertaining to the subject matter hereof and fully supersedes any and all prior and contemporaneous negotiations, proposed agreements, agreements and understandings, whether written or oral, between or among the Parties hereto pertaining to the subject matter hereof With the exception of the Stipulation Agreement between MPCA and CPDC, the Parties acknowledge that no promise, representation, or agreement has been made or relied upon by any Party hereto other than as set forth herein with respect to the subject matter hereof The Parties agree that the Stipulation Agreement is solely between MPCA and CPDC County, City, Veit and Luminaire shall not be deemed to be third party beneficiaries nor to have any other rights under the Stipulation Agreement CPDC shall not attempt to recover from Veit and /or Luminaire the monies and other value which CPDC agreed to provide under the Stipulation Agreement. 14. Amendments No changes in, additions to or modifications of this Agreement shall be valid unless set forth in writing and executed by the parties to be bound thereby 15. Successors and Assigns The provisions of this Agreement shall be binding upon and inure to the benefit of the respective parties and their heirs, executors, administrators, past and present principals, agents, partners, officers, directors, shareholders, employees, attorneys, representatives, successors and assigns 16. Headings. The headings in this Agreement are for convenience or reference only, and shall not limit or otherwise affect the meaning hereof. 17. Authority to Execute Each person signing this Agreement and any other documents executed in connection with this Agreement, whether signed individually or on behalf of arty person or entity, warrants and represents that he or she has full authority to so execute the 5 Agreement on behalf of the Parties on whose behalf he or she so signs. Each separately acknowledges and represents that this representation and warranty is an essential and material provision of this Agreement and shall survive execution of this Agreement. 6 IN WITNESS WHEREOF, the Parties, by and through their duly authorized representatives, have hereunder set their hands and entered into this Agreement on the day and year first written above Dated. 2005 Minnesota Pollution Control Agency By Its STA FE OF ss COUNTY OF The foregoing instrument was acknowledged before me this day of 2005, by the of on behalf of Notary Public 7 IN WITNESS WHEREOF, the Parties, by and through their duly authorized representatives, have hereunder set their hands and entered into this Agreement on the day and year first written above. Dated 2005 Dakota County, Minnesota STATE OF ss COUNTY OF By 8 Its The foregoing instrument was acknowledged before me this 2005, by the of on behalf of Notary Public day of IN WITNESS WHEREOF, the Parties, by and through their duly authorized representatives, have hereunder set their hands and entered into this Agreement on the day and year first written above Dated: 2005 City of Rosemount, Minnesota STATE OF ss COUNTY OF The foregoing instrument was acknowledged before me this 2005, by the of on behalf of 9 By Its Notary Public day of IN WITNESS WHEREOF, the Parties, by and through their duly authorized representatives, have hereunder set their hands and entered into this Agreement on the day and year first written above Dated. 2005 Contractor Property Developers Company By Its. STATE OF ss COUNTY OF The foregoing instrument was acknowledged before me this day of 2005, by the of on behalf of Notary Public 10 IN WITNESS WHEREOF, the Parties, by and through their duly authorized representatives, have hereunder set their hands and entered into this Agreement on the day and year first written above Dated. 2005 Veit Company on behalf of 11 By. Its STATE OF ss COUNTY OF The foregoing instrument was acknowledged before me this day of 2005, by the of Notary Public IN WITNESS WHEREOF, the Parties, by and through their duly authorized representatives, have hereunder set their hands and entered into this Agreement on the day and year first wntten above Dated 1815527v46 2005 Luminaire Recyclers, Inc By Its STATE OF ss COUNTY OF The foregoing instrument was acknowledged before me this day of 2005, by the of on behalf of Notary Public 12