HomeMy WebLinkAboutContract 1624 e. - 160
SETTLEMENT AGREEMENT
CITY OF CATHEDRAL CITY & ANN MADISON
THIS SETTLEMENT AGREEMENT ("Agreement") is entered into as of August
12, 2015 (the "Effective Date"), by and between the CITY OF CATHEDRAL CITY (the
"City"), a California municipal corporation; Ann T. Madison, as Trustee of the Madison
Family Trust and Ann Madison, an individual (collectively, "Madison"). The City and
Madison are sometimes collectively referred to herein as the "Parties," and alternatively
referenced singularly as a "Party" with respect to the following:
RECITALS
WHEREAS, on September 11, 2012, the City filed an action in the Riverside
County Superior Court (Case No. INC1206440) against Madison and other defendants
to enjoin the operation of a medical marijuana dispensary on Madison's property located
at 34900 Date Palm Drive, Cathedral City, California 92234 ("Property"); and
WHEREAS, on May 14, 2014, the Parties in Case No. INC1206440 stipulated to
a judgment for permanent injunction ordering Madison and all other defendants to
cease the occupation and use of the Property as a medical marijuana cooperative,
collective, or facility (Exhibit "A"); and
WHEREAS, the City subsequently filed a Motion for Attorney's Fees on August
11, 2014 in Case No. INC1206440 which was granted by the Superior Court on April 9,
2015; and
WHEREAS, Madison filed a separate petition for writ of mandate in the Riverside
County Superior Court (Case no. INC1302536) on April 22, 2013 against the City to
overturn several administrative citations issued against Madison in connection with the
operation of a medical marijuana dispensary at the Property; and
WHEREAS, on May 22, 2013, the Superior Court denied Madison's petition for
writ of mandate and upheld the administrative citations issued by the City amounting to
$6,650; and
WHEREAS, on July 29, 2013, Madison filed a notice of appeal to appeal the
denial of the petition for writ of mandate; and
WHEREAS, on February 23, 2015, the Court of Appeal filed a remittitur affirming
the Superior Court's ruling; and
WHEREAS, the City filed a Motion for Attorney's Fees on Appeal in Case No.
INC1302536 on February 27, 2015, which the Superior Court granted on March 30,
2015; and
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WHEREAS, as a result, the City currently has two separate awards for attorney's
fees against Madison in Case no. INC1302536 and Case No. INC1206440 and $6,650
in administrative fines in Case no. INC1302536 (collectively, the "Attorney Fee Award").
WHEREAS, the Parties now believe that it is in their best interests and in the
best interest of the public to resolve these matters as between them, and have reached
a full and final compromise and settlement of all claims and causes of action related to
Case No. INC1206440 and Case No. INC1302536 (collectively, the "Lawsuits")
regarding the liability of Madison for any and all fines, penalties, attorneys' fees or any
other costs as related to the Lawsuits.
NOW THEREFORE, in consideration of the mutual promises and releases
contained herein, and for other good and valuable consideration, receipt of which is
hereby acknowledged, the Parties agree as follows:
AGREEMENT
SECTION 1. INCORPORATION OF RECITALS
The foregoing recitals are hereby expressly made a part of this Agreement.
SECTION 2. MUTUAL RELEASE
2.1 Mutual Release of the Parties. Except as otherwise provided in
Paragraph 2.4, below, and in consideration of the execution of this Agreement, the
Parties hereby release, acquit, and forever discharge the other Party, and each and all
of its respective members, associates, predecessors, successors, assigns, parents,
subsidiaries, alter egos, and affiliates, (and each of their respective present and former
officials, officers, employees, independent contractors, directors, stakeholders, partners,
agents, attorneys, insurers, accountants, heirs, and successors and assigns, if any)
(collectively, "Related Entities and Representatives"), both past and present, of and
from any and all claims, causes of action, appeals, costs, or demands of whatever
nature, character, or description, whether known or unknown, which the Parties may
have had or may now have against the other Party related in any way to the operation
of the marijuana dispensary at the Property, the administrative citations issued by the
City, and/or the Lawsuits in the Riverside County Superior Court, and/or the Attorney
Fee Award ("Released Claims"). The Parties, on behalf of themselves and each of their
respective Related Entities and Representatives, hereby discharge the other Party from
any and all Released Claims. The Parties, on behalf of themselves and each of their
respective Related Entities and Representatives, covenant not to threaten, bring,
commence, initiate, institute, file, join, maintain, prosecute, support, or threaten any
action or appeal based in whole or part upon any of the Released Claims. The Parties
understand and agree that this Agreement may be pled as a full and complete defense
and bar to, and may be used as the basis to dismiss with prejudice or enjoin, any Action
based in whole or in part upon a Released Claim.
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2.2 Release of Madison by the City. Upon completion of the payment terms
contained in this Agreement, the City will release Madison from all Released Claims.
2.3 Release of the City by Madison. Upon execution of this Agreement,
Madison will release the City from liability for having filed an action against Madison in
Riverside County Superior Court, Case No. INC1206440, for defending the action
against the City Case No. INC1302536, for filing motions for attorney's fees in both
cases, and all other Released Claims.
2.4 Liability and Failure to Perform. All Parties hereto, and each of them,
recognize and acknowledge that this Agreement is not intended to and shall not release
any of the Parties hereto from any liability or damages, if any, caused by, or arising out
of, the failure or refusal of that Party to perform any and all of the acts required on their
respective parts to be done, as per the terms and conditions of this Agreement.
2.5 Civil Code Section 1542. The Parties are aware that facts may be
discovered later that are different from and/or in addition to those that the Parties now
know or believe to be true concerning the matter relating to the aforesaid facts. The
Parties acknowledge that they have been informed by their attorneys regarding, and are
familiar with 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."
The Parties expressly waive all rights under Civil Code section 1542 with respect to the
Released Claims.
SECTION 3. SETTLEMENT TERMS
3.1 Structured Settlement Payments. The total settlement amount payable
by Madison to the City is sixty-five thousand dollars and no cents ($65,000.00)
("Settlement Payment"). The Parties hereby agree that Settlement Payment is a full and
complete payoff of the Attorney Fee Award, including, without limitation, charges for
administrative fines, penalties, attorneys' fees, and other costs of whatever nature. The
Settlement Payment shall be paid as follows:
3.1.1. Initial Payment. Within five (5) days after execution of this
Agreement and approval hereof by the City Council of the City, Madison will
deliver to City's attorney of record, a check(s) made payable to "City of Cathedral
City" in the total sum of fifty-five thousand dollars and no cents ($55,000.00). This
Initial Payment is classified as partial satisfaction of the Attorney Fee Award.
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3.1.2. Second Payment. The remaining balance of ten thousand dollars
and no cents ($10,000.00) shall be delivered to the City by Madison within six (6)
months after execution of this Agreement and approval thereof by the City
Council of the City ("Second Payment"). No interest shall accrue on the
remaining balance so long as the Second Payment is paid on or before the due
date, subject to the notice and opportunity to cure provisions of Section 21.1
hereof. Upon the City's receipt of the Second Payment, Madison will owe no
further sums. The Second Payment is classified as payment for the remaining
unpaid balance of the Settlement Payment and full satisfaction of the Attorney
Fee Award.
3.1.3 Credit for Payments by Grasshopper. Out of the total $65,000.00
payments by Madison to the City, $49,349.33 shall be deemed to be applied
toward the attorney's fee award in the City's favor in Riverside County Superior
Court Case Number INC 1206440. In the event that the City recovers additional
funds in that case from co-defendant The Grass Hopper, Inc., such that the City
has collected more than the total award of $92,533.33 imposed against The
Grass Hopper, Inc., any excess recovery shall be refunded to Madison.
3.3 Release of Lien and Lis Pendens. The lien and the lis pendens recorded
by the City on the Property will remain until Madison makes her Second Payment to the
City for a total Settlement Payment of sixty-five dollars and no cents ($65,000.00). Upon
the City's receipt of Second Payment, the City shall remove the lien from the Property
and record a Notice of Withdrawal of Notice of Pending Action with the Riverside
County Recorder and file the same with the Superior Court. In the event that the City
fails to do so, Madison shall serve written notice in accordance with the notice
provisions of this Agreement, specifying that payment in full has been made and
demanding release of the aforesaid liens. The City shall comply with that demand
within 15 business days of receipt of said written notice.
3.4 Failure to Make Payment. In the event Madison fails to make the Initial
Payment or the Second Payment after the deadline for delivery of Payment as
proscribed in this Agreement, the event shall constitute a Default of Payment, as set
forth in Section 21.1 below. In the event that a default remains uncured and a breach has
occurred, as described in Section 21.4, and from the date of the payment which was not
paid as agree, all remaining sums owed to the City by Madison shall bear interest at the
rate of ten percent (10%), or such lower rate as required by law, from the Effective Date
until the date each is paid. After service of the Notice of Default required by Section 21.2,
and the passage of 15 business days without a cure by Madison, the City may do the
following:
3.4.1 The City may submit this Settlement Agreement to the Superior Court
of Riverside County for entry as a judgment on the terms contained herein, which
judgment shall allow for the imposition of a judgment lien or special assessment of the
affected Property, together with costs of enforcement and attorneys' fees incurred in
pursuing said remedy. The Parties agree that the Superior Court retains jurisdiction over
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the Parties, the Property and the Lawsuits for the purposes of this Section. The Superior
Court shall entertain no further litigation of the facts or law pertaining to the Lawsuits but
shall enter the judgment upon application by the City supported by a declaration
establishing default and that the Notice of Default was given and that no cure was made
within the time permitted. Madison shall be given 20 calendar days' notice of the date and
time the application by the City will be heard and may appear and contest the application.
3.5 Payment Method and Delivery. All Payments under this Agreement shall
be made in the form of a personal or certified check payable to the City of Cathedral City
and shall be delivered, via personal delivery or certified mail, to Nicholas Hermsen, Deputy
City Attorney, at 41750 Rancho Las Palmas Drive, Suite P1, Rancho Mirage, California
92270.
3.6 No Change to Prior Stipulated Judgment. The stipulated judgment
agreed to by the Parties in Case No. INC1206440 (Exhibit "A") and the terms thereof
shall be remain unchanged and unaffected by this Agreement.
SECTION 4. FULL AND FINAL SETTLEMENT
The Parties agree that this Agreement shall constitute a full and final settlement
between the Parties hereto, as well as their Related Entities and Representatives for
any and all Released Claims, as defined in Section 2.1.
SECTION 5. NO ADMISSION OF LIABILITY
The Parties explicitly acknowledge and covenant that this Agreement represents
a settlement of disputed rights and claims and that, by entering into this Agreement, no
Party hereto admits or acknowledges the existence of any liability of wrongdoing, all
such liability being expressly denied. No provisions hereof, or of any related documents,
shall be construed as any admission or concession of liability, or any wrong doing or of
any preexisting liability.
SECTION 6. FEES AND COSTS
In the event that any action, suit or proceeding is brought for the enforcement of,
or the declaration of any right or obligation pursuant to this Agreement or as a result of
any alleged breach of any provision of this Agreement, the prevailing Party in such suit
or proceeding shall be entitled to recover its costs and expenses, including reasonable
attorneys' fees, from the losing Party. Any judgment or decree rendered in such a
proceeding shall include an express award of such costs, expenses, and attorneys'
fees.
SECTION 7. RELEASES
Each Party acknowledges and accepts the release of the other Party as provided
above in Section 2 of this Agreement and the consideration received, if any, as
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specified above in Section 3 of this Agreement, in full compromise, settlement, and
satisfaction of and as the sole consideration for the release given and the consideration
provided by that individual Party.
SECTION 8. INTEGRATION, MODIFICATION
8.1 No Reliance. The Parties acknowledge that this Agreement is signed and
executed without reliance upon any actual or implied promises, warranties or
representations made by any of the Parties or by any representative of any of the
Parties, other than those which are expressly contained within this Agreement.
8.2 Entire Agreement. The Parties intend that this Agreement, including the
true and correct Recitals above, incorporated by reference herein as operative covenants
and specifically relied upon by the Parties in executing this Agreement, and any exhibits
attached hereto constitute a complete and exclusive statement of its terms, and that no
extrinsic evidence whatsoever may be introduced in any judicial or other proceeding, if
any, involving this Agreement. Each of the Parties acknowledge that no other party has
made any promise, representation or warranty whatsoever, expressed or implied, written
or oral, not contained herein concerning the subject matter hereof, to induce the execution
of this Agreement, and each of the Parties acknowledges that it has not executed this
Agreement in reliance on any promise, representation or warranty not contained herein.
8.3 Supersedes Prior and Contemporaneous Agreements. This Agreement
supersedes all prior and contemporaneous agreements, understandings, terms,
conditions, and representations, written or oral, made by the Parties hereto or their
attorneys concerning the matters covered by this Agreement.
8.4 No Oral Modifications. Neither this Agreement, nor any term or provision
thereof, may be waived, modified, or amended except by written agreement signed by all
Parties.
SECTION 9. BINDING EFFECT
Pursuant to Evidence Code 1123 (b), this settlement agreement is enforceable,
binding and admissible in a court of law. To the maximum extent allowed by law and
except as otherwise specified herein, this Agreement inures to the benefit of and is binding
upon the Parties and all their respective predecessors, assigns, beneficiaries, employees,
affiliated entities, shareholders, officers and directors, partners, joint venturers,
dependents, spouses, respective representatives, agents, accountants, attorneys,
insurance carriers, and successors.
SECTION 10. APPLICABLE LAW
This Agreement shall be deemed to have been executed and delivered within the
State of California. The rights and obligations of the Parties hereunder shall be interpreted,
governed, construed and enforced in accordance with the laws of the State of California in
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all respects.
SECTION 11. NO THIRD PARTY BENEFICIARIES
It is expressly agreed that this Agreement is not for the benefit of any person or
entity not a Party hereto. This Agreement is not intended to constitute a third party
beneficiary contract.
SECTION 12. RELATIONSHIP OF THE PARTIES
It is hereby specifically understood and acknowledged that this Agreement is
merely intended to settle the matter and preclude Actions based in whole or in part upon
Released Claims. No Party hereto will be deemed to be an agent of any other for any
purpose whatsoever. The Parties hereby renounce the existence of any form of joint
venture or partnership between or among them and agree that nothing contained herein or
in any document executed in connection herewith shall be construed as making any Party
a joint venturer or partner with another.
SECTION 13. SEVERABILITY
If any portion, provision, or part of this Agreement is held, determined or
adjudicated to be invalid, unenforceable or void for any reason whatsoever, each such
portion, provision or part shall be severed from the remaining portions, provisions or parts
of this Agreement, and shall not affect the validity or enforceability of any remaining
portions, provisions, or parts.
SECTION 14. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which will
be deemed an original, but all of which constitute one and the same instrument.
SECTION 15. INDEPENDENT INVESTIGATION
Each Party to this Agreement knows and understands the contents thereof, and
has made an independent investigation of the facts pertaining to the provisions contained
in this Agreement and all of the matters pertaining thereto as deemed necessary.
SECTION 16. EACH PARTY AUTHORIZED
Each Party warrants that it has the full right and power to enter into this Agreement
and to execute and bind each other Party identified to the releases and other provisions
contained herein. By signing this Agreement, each Party attests that he or she is duly
authorized by his or her respective corporation or entity, if applicable, to execute this
Agreement.
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SECTION 17. INDEPENDENT LEGAL ADVICE
Each of the Parties has received prior independent advice from legal counsel of its
choice with respect to the advisability of making the settlement provided for herein and
with respect to the advisability of executing this Agreement. Each Party's attorney has
reviewed the Agreement at length, made any desired changes, and signed the Agreement
to indicate the attorney approved the Agreement as to form.
SECTION 18. JOINTLY DRAFTED
It is agreed to by and between the Parties that this Agreement was jointly
negotiated and jointly drafted by the Parties, and that it shall not be interpreted or
construed in favor or against either Party on the ground that said Party drafted the
Agreement. It is also agreed and represented by all Parties that this Agreement was the
result of extended negotiations between the Parties, and that said Parties were of equal or
relatively equal bargaining power. In no way whatsoever shall it be deemed that this
Agreement is a contract of adhesion, is unreasonable or unconscionable. The language of
this Agreement shall be construed as a whole according to its fair and logical meaning and
not strictly for or against any of the Parties.
SECTION 19. HEADINGS AND FORMATTING
The headings and formatting in this Agreement are inserted for convenience only.
They do not constitute part of this Agreement and shall not be used in its construction.
SECTION 20. TIME IS OF THE ESSENCE
Time is of the essence for performance of each and every covenant in the
Agreement and of each and every condition contained in this Agreement.
SECTION 21. BREACH AND REMEDIES
21.1 Default. Unless otherwise provided in this Agreement, failure or delay by
either Party to perform any material term or provision of this Agreement shall constitute a
default under this Agreement; provided however, that if the defaulting Party commences to
cure, correct or remedy the alleged default, within twenty one (21) calendar days after
receipt of the written Notice of Default provided in Section 21.2 specifying such default,
and shall diligently complete such cure, correction or remedy, that Party shall not be
deemed in default hereunder. In the case of the City, the time to cure shall be extended if
necessary to the date which is three (3) business days after the next regularly scheduled
meeting of the City Council of the City, to allow the City's counsel to receive direction.
21.2 Notice of Default. Unless otherwise provided in this Agreement, in the
event of an alleged default by the either Party, the non-defaulting Party shall give written
notice to the defaulting Party of the alleged default only by personal delivery or certified
mail, with proof of delivery, to the person specified in Section 23 of this Agreement. A
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receipt indicating that the addressee refused to accept certified mail shall satisfy the notice
requirement herein. A delay in giving such notice shall not constitute a waiver of any
default nor shall it change the time of default; provided, however, the non-defaulting Party
shall have no right to exercise any remedy for a default hereunder without delivering the
written default notice as specified herein, and the expiration of the applicable right-to-cure
period.
21.3 Not a Waiver. Any failure or delay by a non-defaulting Party in asserting any
of its rights and remedies as to any default shall not operate as a waiver of any default or
of any rights or remedies associated with a default. The exercise by a non-defaulting Party
of one or more rights or remedies shall not preclude the exercise by that Party, at the
same or different times, of any other rights or remedies for the same default or any other
default.
21.4 Code of Civil Procedure section 664.6. Any Party alleging default may
bring a motion to enforce this Agreement under section 664.6 of the Code of Civil
Procedure. The Superior Court shall retain jurisdiction until all the terms of the settlement
agreement have been carried out.
SECTION 22. WAIVER
No breach of any provision hereof can be waived unless in writing. Failure to
initiate action or to declare a default or breach shall not be deemed a waiver of any
rights. Waiver of any one breach of any provision hereof shall not be deemed to be a
waiver of any other breach of the same or any other provision hereof.
SECTION 23. NOTICE
Any notice to be provided pursuant to this Agreement shall be in writing, and all
such notices shall be delivered by personal service or by deposit in the United States
mail, certified or registered, return receipt requested, with postage prepaid, and
addressed to the Parties as follows:
To the City: Charles McClendon, City Manager
City of Cathedral City
68700 Avenida Lalo Guerrero
Cathedral City, California 92234
With a copy to: Nicholas Hermsen, Deputy City Attorney
41750 Rancho Las Palmas Drive, Suite P1
Rancho Mirage, California 92270
To Madison: Ann Madison
(by mail) 78725 Sunrise Canyon Avenue
Palm Desert, California 92211
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With a copy to: Diane Blasdel, Esq.
P.O. Box 1747
Palm Springs, CA 92263
Notices, payments and other documents shall be deemed delivered upon date of
receipt by personal service or on the date signed for by certified or registered mail.
SECTION 24. ASSIGNMENT OF CLAIMS
All Parties warrant and represent to the other that no claims they might have, or do
have, and which are otherwise referenced and released by this Agreement have been
assigned to any other party or parties.
SECTION 25. GENDER
Whenever in this Agreement the context so requires the masculine or feminine or
neuter gender and the singular and plural number shall each be deemed to refer and
include the other.
SECTION 26. EFFECTIVE DATE
This Agreement shall become effective only upon its execution by each of the
persons and entities set forth below.
SECTION 27. FURTHER COOPERATION
Each of the Parties agrees to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the terms and conditions of this
Agreement. Neither Party will take action to interfere with the performance required under
this Agreement.
SECTION 28. COVENANT NOT TO SUE
Each Party covenants not to assert any claim, right or defense that the Agreement
is illegal, invalid, void or unenforceable and irrevocably waives any such claim, right or
defense. For each of the Parties, such covenant is a material part of the consideration
received for entering into this Agreement.
SECTION 29. SURVIVAL
Each and all of the covenants, representations and warranties of the Parties set
forth in this Agreement shall survive the execution and delivery of this Agreement and the
execution and delivery of any other document provided for herein.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
effective the day and year first written above.
CITY OF CATHEDRAL CITY ANN MADISON
tan Henry, Mayor By: AL.,4-6 , 17/1 z?-72
Ann Madison
ATTEST:
APPROVED AS TO FORM:
By: L1 . . 1:1- - - ., } 'C
tta_Gary Ho -II, i y Clerk ` C
By: �. .,- • i ! .r
APPROVED AS TO FORM: Diane Blasdel, - q.
Counsel for Ann Madison
' I,
By:
Charles R. Green, City Attorney
P:\APPS\WPDATA\CATH\0012-116 Grasshopper, Inc. (34900 Date Palm Dr.)\DOC\078 - Settlement Agreement Ann Madison
(08.05.15).doc
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