HomeMy WebLinkAboutGREAT AMERICAN INSRUANCE GROUPINSURANCE NOT REQUIRED
WORK MAY PROCEED
CITY CLERK
A-2024-005
DATE- FEB 0 7 ION
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CE -[or,e S)A-T- TAKEOVER AGREEMENT
PROJECT 16-2658
SANTA ANA ZOO GIANT RIVER OTTER & PRIMATE TRAILS
I. RECITALS
1. The parties to this Takeover Agreement ("Agreement") are GREAT
AMERICAN INSURANCE COMPANY ("GAIC" or "Surety") and the CITY OF
SANTA ANA ("Owner"). This Agreement is effective as of the date last signed by any
party ("Effective Date").
2. Owner entered into a Contract (the "Contract") with HYM
ENGINEERING ("HYM" or "Principal") for HYM to furnish all labor and material and
perform all work for the Santa Ana Zoo Giant River Otter & Primate Trails project (the
"Project") in accordance with the terms and provisions of the Contract, a copy of the
Contract being attached hereto as Exhibit "A" and incorporated herein, including all
Contract Documents forming a part of the Contract, as enumerated in the Contract and
modifications, amendments and/or changes to the Contract effectuated prior to the
Effective Date of this Agreement. References herein to the "Contract" shall be deemed
to include references to all modifications, amendments and/or changes to the Contract
effectuated prior to the Effective Date of this Agreement.
3. As required by the Contract, Surety issued Performance and Payment
Bonds numbered 4054734 identifying HYM as the principal and Owner as the obligee
(the "Performance Bond" and "Payment Bond"), each of which are in the Penal Sum
equal to the Contract Price under the Contract of $5,289,238.00 copies of these Bonds
being attached hereto as Exhibit `B," respectively, and incorporated herein;
4. HYM defaulted on the Project as outlined in HYM's Voluntary Letter of
Default attached hereto as Exhibit "C" and incorporated herein. The Owner
subsequently made demand upon the Performance Bond for GAIC to complete the
Project.
5. As of the date of HYM's default under the Contract, certain work and
other obligations of HYM remain to be performed under the Contract.
6. GAIC has decided to fulfill its obligations under the bond by completing
the contract, subject to the conditions of the bond, contract and this agreement,
specifically, but not limited, to the conditions described under section 10 of the Terms
and Condition listed below.
7. The Owner acknowledges that GAIC is acting in its capacity as the
Surety for HYM in making arrangements for the performance and completion of the
Remaining Work/Obligations.
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NOW, THEREFORE, based on the exchange of valuable consideration, including
the covenants and conditions of this Agreement, the receipt and sufficiency of which is
acknowledged, and based on the Recitals set forth above which form a part of this
Agreement, Surety and Owner agree to the following terms and conditions:
II. TERMS AND CONDITIONS
1. Recitals. The above Recitals and the Terms and Conditions herein are
contractual and not merely recitals and the agreements contained herein and
consideration transferred are to satisfy the rights and obligations between Owner and
Surety, except as to claims reserved by this Agreement.
2. Incorporation of the Contract. The Contract is incorporated by reference
into this Agreement, including the Contract Documents, including but not limited to, any
Addendum (which pertains to the Contract Documents), Notice Inviting Bids,
Instructions to Bidders, Bid (including documentation accompanying the Bid and any
post -bid documentation submitted prior to the Notice of Award) when attached as an
exhibit to the Contract, the Bonds, permits, the Special Provisions, the Plans, Standard
Plans, Standard Specifications, Reference Specifications, Change Orders (including
future Change Order for PCO #12 scope of work) and all Modifications issued after the
execution of the Contract All terms of the Contract are incorporated herein,
3. The Balance of the Contract Sum. GAIC will procure the performance of
the Remaining Work relying on, among other things, the Owner's representation that the
outstanding earned and unpaid Contract funds in the amount of $1,773,192.11 shall be
paid to LAIC. The Owner represents that the Balance of the Contract Sum as follows:
Contract Price: $5,289,238.00
Approved Change Orders: $ 90,500.00
PCO #12: $165,855.00'
Current Contract Price: $5,545,593.00
Amount Paid to Principal: $3.772.400.89
"Balance of the Contract Sum": $1,773,192.11
Owner agrees that the Balance of the Contract Sum is dedicated to and will be paid to
GAIC for the completion of the Remaining Work pursuant to this Agreement. GAIC
expressly reserves the right to verify all Contract fund accountings and to request the
appropriate adjustments from the Owner and/or its representatives. The Balance of the
Contract Sum shall be increased by the value of future Change Orders subsequently
approved by Owner.
' This amount represents GAIC's Completion Contractor's price to complete the work outlined in PCO #12
and related documents pursuant to GAIC's Consultant's RFP and specifically RFP Add Alternate #12.
Owner will issue a formal Change Order in this amount within ten (10) working days after Notice to
Proceed is issued by Owner to GAIC.
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4. Surety to Perform Remaining Work. Surety shall be responsible for the
completion of all Work, including the replacement of the Holding Building Roof as
outlined below in this Section, in accordance with the conditions of the bond, Contract,
and this Agreement ("Remaining Work/Obligations"), specifically, but not limited, to the
conditions described under section 10 of the Terms and Condition listed below. Surety
shall perform the Remaining Wort, through one or more completion contractors
(hereinafter "Completion Contractor"), subject to written approval by the Owner, which
Surety shall engage pursuant to the terms of a separate agreement. Owner hereby
acknowledges that Surety is not acting as a contractor and is not licensed as a contractor
in the State of California, and hereby agrees to fully and forever waive and release any
and all claims that Owner might allege against Surety on the grounds that Surety is an
unlicensed contractor for the work performed pursuant to the Agreement.
Additionally, HYM inadvertently removed the existing standing seam metal roof of the
Holding Building. GAIC shall replace the standing seam metal roof in kind at no cost to
Owner and Owner will pay for any necessary repairs to the existing damage of the
standing seam metal roof substrate through an additive change order to be negotiated
after construction resumes. In exchange for providing this new standing seam metal roof,
LAIC will not be required to provide the specified cool roof membrane system over the
new standing seam metal roof. Owner agrees to assign its rights for the replacement of
the roof only under HYM's Commercial General Liability insurance policy. The Parties
agree to cooperate with another to the extent reasonably necessary in submitting any
potential insurance claim(s) with HYM's Commercial General Liability insurance carrier.
4.1 Disputed Work. The parties acknowledge that there is a disagreement
whether the scope of work outlined in PCO No. 11 was validly executed and thus,
incorporated as part of the Contract and Remaining Work/Obligations ("Disputed Work
Item."). In order to avoid any further delay of the Project, GAIC and Owner shall in good
faith continue to work together to resolve any and all pending issues pertaining to this
Disputed Work Item to the extent practicable after the execution of this Agreement.
Owner and GAIC shall retain any and all rights provided by the either the Contract, this
Agreement, or by law which pertain to resolving the Disputed Work Item through any
legal means available.
5. Owner's Rights and Obligations Under the Contract. Except to the extent
provided in this Agreement, Owner shall have all rights, obligations and responsibilities
under the Contract with respect to Surety, to the reasonable extent and effect as if Surety
had executed the Contract.
6. Owner's Right With Respect to Changes in the Work. Owner reserves the
right, to the extent appropriate under the Contract and this Agreement, to issue Change
Orders. The terms of these Change Orders, including attendant extensions of time and
valuation of Change Order work, shall be determined as provided in the Contract. Surety
reserves the right to refuse to perform any extra or additional work if such work
constitutes a cardinal change under the Contract. Owner reserves the right to dispute that
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the extra or additional work constitutes a cardinal change and to immediately submit the
dispute to mediation with a mutually agreeable mediator followed, if necessary, by legal
action, including but not limited to any appropriate injunctive or other equitable relief.
7. Schedule for Completion of Remaining Work and New Completion Date.
Completion Contractor shall furnish to Owner all insurance certificates and other proofs
of insurance required by the Contract prior to starting work. The Owner will give a
Notice to Proceed after all insurance requirements of the Contract have been met. GAIC
shall complete the Remaining Work/Obligations within 200 working days ("Takeover
Final Completion Date") after the commencement date stated in the Notice to Proceed.
Owner waives any right to liquidated damages permitted under the Contract accruing
prior to the Takeover Final Completion Date, but retains the right to assess liquidated
damages if the Surety does not complete the Project by the Takeover Final Completion
Date, subject to claims by Surety for excusable and/or compensable delay, at the rate of
$1,500 per calendar day, and at Owner's discretion. If assessed by the Owner, GAIC shall
be liable for liquidated damages after the Takeover Final Completion Date.
8. Completion Contractor. The Completion Contractor shall be a contractor
to the Surety, and no contractual relationship shall exist between Owner and Completion
Contractor pursuant to this Agreement. Insurance and license requirements for the
Completion Contractor shall be in accordance with the Contract Documents. The
Completion Contractor shall not be required to procure new surety bonds identifying the
Owner as obligee. Owner acknowledges that, subject to the terms of the Contract, the
Completion Contractor is authorized to make routine day-to-day decisions regarding the
operation and manner of performing the Remaining Work, but does not have authority to:
(i) agree to any changes in the Contract or Remaining Work other than minor design
changes or clarifications, with advance notice to Owner, that do not increase the Project's
cost nor extend its schedule (ii) agree to any Change Orders; (iii) agree to any back
charges or deductions of any nature; (iv) agree to any schedule changes; or (v) agree to
any adjustments in the Contract amount or Remaining Work other than minor design
changes or clarifications that do not increase the Project's cost nor extend its schedule ,
without the Surety's prior express written consent which shall be delivered to Owner as a
condition precedent to the Completion Contractor negotiating items (i) through (v), such
consent not to be unreasonably withheld. The Remaining Work shall be subject to
inspection and acceptance by the Owner and applicable federal, state and local agencies
with jurisdiction, as provided in the Contract. The Owner shall forward concurrently to
Surety (by U.S. Mail or email as appropriate), a copy of all its written communications
directed to the Completion Contractor.
9. Surety Representative. All communications and administration will be
between the Owner and the Surety and its consultant, Mike Tomeo of J.S. Held, LLC (the
"Consultant"). The Surety hereby designates and authorizes Consultant to sign, on
Surety's behalf, any instrument which is required, or may be requested, by the Owner in
connection with the administration of the Contract.
10. Preservation of the Penal Sum Of Performance Bond. The Owner hereby
confirms that GAIC's liability and obligation hereunder shall not extend beyond the penal
sum of its Performance Bond. All payments made by GAIC previously, and those made
in the future, have been and will be credited against the penal sum of the Performance
Bond, less the amount paid to GAIC under the Contract and this Agreement. Neither this
Agreement nor any other GAIC act constitutes a waiver of such penal sum or an increase
in the liability of GAIC under the Performance Bond.
11. Payment Bond and Payment Bond Claims. The Payment Bond shall
remain in full force and effect in accordance with its terms and provisions. The total
liability of the Surety under the Payment Bond is limited to and shall not exceed the penal
sum of the Payment Bond.
12. Payment Requisitions. Surety, through its Completion Contractor, shall
submit to Owner all information and/or documentation required regarding the work
performed under the Contract, to conform and support the requisition process and
schedule established under the Contract. Owner recognizes that Surety shall be
completing the Remaining Work through the services of the Completion Contractor.
Subject to requirements of the Contract Documents, Owner shall accept the Completion
Contractor's work, progress of the work, quality of the work, conformance of the work to
the requirements of the Contract, payments to others, warranty and maintenance of the
work, and all other matters pertinent to the Contract, wherever such representations are
required by the Contract, as if those representations had been made by Surety, since
Surety may have no personal knowledge of such matters.
13. Satisfaction of Surety's Performance Obligation. Surety's satisfaction of
its obligations under the Contract, the Bonds and this Agreement or Surety's expenditure
of the Performance Bond Penal Sum, whichever comes first, shall satisfy Surety's
performance obligations under the Contract, its Performance Bond and this Agreement.
Owner represents that Principal would have been required to complete all of its
obligations under the Contract had Principal not been declared to be in default and that,
prior to the date of this Agreement and other than approved changed orders, Owner had
not made any agreement with Principal that any item of work included in the Contract
would not have to be performed.
14. Notices. All notices and correspondence to Owner, other than routine
email correspondence, shall be mailed, with a copy by email, to:
Nabil Saba P.E.
Executive Director, Public Works Agency
City of Santa Ana
20 Civic Center Plaza
Santa Ana, CA 92702
nsaba&santa-ana.org
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with copy to:
City Attorney
City of Santa Ana
20 Civic Center Plaza
Santa Ana, CA 92702
imontoya(Qsanta-ana.org
All notices and correspondence to Surety, other than routine email correspondence, shall
be mailed and emailed to:
C. Michael Mason, Esq.
Senior Financial Products Claims Professional
Great American Insurance Company
301 East Fourth Street, 24`h Floor
Cincinnati, OH 45202
cmason3(2gaig.com
With a copy to:
Mike Tomeo
J.S. Held, LLC
1375 Dove Street, Suite 250
Newport Beach, California 92660
mtomeo@isheld.com
15. No Third -Party Rights. Nothing in this Agreement shall be deemed to
create any rights in favor of, or to inure to the benefit of, any third parties, or to waive or
release any defense or limitation against third party claims.
16. All Claims Referred to Surety. Owner recognizes that Surety may be
liable to unpaid suppliers and subcontractors of Principal. Other than as required by law,
Owner agrees to make no representations or promises of payment to these suppliers and
subcontractors and to refer all inquiries to Surety.
17. Surety's Performance Rights Confirmed. Nothing shall limit Surety's
rights as a Completing Surety under the Contract and applicable law. Owner hereby
recognizes those rights, including the right of equitable subrogation. Further, Owner
recognizes Surety's rights as a performing Surety under the Contract, including the right
to additional compensation or damages where allowed or appropriate under the Contract
or applicable law for claims or matters arising after the date of this Agreement. The
Owner expressly agrees and acknowledges: (i) that Surety is entering into this
Agreement not as a contractor, but as a means of satisfying the Surety's performance
bond obligations; (ii) that the Surety has provided to Owner the Completion Contractor, a
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licensed contractor, to finish the Project; and (iii) that the Owner hereby forever releases
and discharges any and all claims that the Surety as an unlicensed contractor.
18. Agreement Binding on Successors. This Agreement shall be binding upon
the successors and assignees of Surety and Owner. Surety shall not assign this
Agreement without the written consent of Owner. Assignment without such written
consent shall be void.
19. No Modification Except in Writing, This Agreement cannot be modified
except in a writing signed by both Owner and Surety.
20. This Agreement Controls. In case of conflict between the provisions of
this Agreement and the provisions of the Contract and/or Performance and Payment
Bonds, this Agreement shall control. Notwithstanding any other provision herein, this
Agreement shall not be interpreted to limit any of the Owner's rights under the Contract
or the Performance Bond. Further, this Agreement, the Contract and the Performance
and Payment Bonds constitute the entire Agreement between Owner and Surety and,
together, supersede all prior negotiations, representations, offers, other writings and oral
statements of every description.
21. Construction and Application of Law. The parties stipulate that this
Agreement and all agreements or documents incorporated herein shall not be subject to
the rule of construction that a written agreement is construed against the party preparing
or drafting that Agreement. The parties also agree that this Agreement and its
performance shall be governed by and construed in accordance with all applicable local,
state, and federal laws, regulations, rules, and ordinances.
22. Validity. The provisions of this Agreement shall be applied and
interpreted in a manner consistent with each other so as to carry out the purposes and
intent of the parties, but if for any reason any provision is unenforceable or invalid, such
provision shall be deemed severed from this Agreement and the remaining provisions
shall be carried out with the same force and effect as if the severed provision had not
been a part of this Agreement. The headings of the Paragraphs are included solely for
convenience of reference, and if there is any conflict between such headings and the text
of Agreement, the Agreement shall control. This Agreement shall be governed by the
laws of the State of California.
23. No Waiver. The failure of either party to exercise in any respect a right
provided for in this Agreement shall not be deemed to be a subsequent waiver of the
same right or of any other right.
24. Counterparts. This Agreement may be executed in any number of
counterparts each of which, when executed and delivered, shall be deemed to be an
original with all the counterparts constituting but one and the same instrument.
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25. Reservation of Rights. Notwithstanding any contrary statement or
provision of this Agreement, nothing contained herein nor any payments made pursuant
hereto nor any performance hereunder shall constitute a waiver of any claims by any
party to this Agreement.
26. Authority. The persons executing this Agreement on behalf of the parties
hereto warrant that they are duly authorized to execute this Agreement on behalf of said
parties and that, by so executing this Agreement, the parties hereto are formally bound to
the provisions of this Agreement.
27. Applicable Laws. In performing its obligations and duties under this
Agreement, each party shall comply with all applicable local, state, and federal laws,
regulations, rules, and ordinances.
WHEREFORE, the parties have executed this Agreement by their authorized
representatives. This Agreement is effective as of the last date written below.
DATED: CITY OF SANTA ANA
;ZYN/ / !a--
Aomas R. Hatch
Interim City Manager
DATED:R( ATTEST
Pam
O W
- ti
DATED: 1/8/2023 APPROVED TO FORM
Vow. lm
J e Montoya
Assistant City Attorney
[Signatures continued on the following page]
DATED: T-lw?-4 RECOMMENDED FOR APPROVAL:
Nabil Saba, P.E.
C/ Executive Director of Public Works Agency
DATED: GREAT AMERICAN INSURANCE COMPANY
C. Michael Mayon
By: C. Michael Mason
Its: Senior Financial Products Claims Professional