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HomeMy WebLinkAboutROSALES, VERONICA AND ROBERT PETER GONZALESA-2017.180 SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS This Settlement Agreement and Mutual Release of Claims (hereinafter referred to as the "AGREEMENT") is entered into by and between the City of Santa Ana, a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California ("CITY"), and VERONICA ROSALES ("ROSALES") AND ROBERT` PATER GONZALES ("GONZALES"). The CITY and ROSALES AND GONZALES are hereinafter sometimes referred to individually as "PARTY" and collectively as the "PARTIES." The Effective Date of this AGREEMENT shall be the date on which the AGREEMENT has been fully executed by the CITY, ROSALES, AND GONZALES. In order to avoid the costs, expense, and uncertainty of protracted litigation, the PARTIES hereby enter into this AGREEMENT as set forth below. RECITALS This AGREEMENT is based on the following facts, with these Recitals incorporated into the AGREEMENT as settlement components expressly relied upon by the PARTIES: A. ROSALES owns and operates a dental office, commonly known as Veronica Rosales, D.D.S. located at 1417 North Bristol Street, Santa Ana, CA 92706, APN 405-252-17 ("DENTIST PROPERTY"). ROSALES also owns the DENTIST PROPERTY, which is unencumbered. B. GONZALES owns and operates an optometry business, commonly known as Dr. Robert Gonzales, Optometrist, located at 1415 North Bristol Street, Santa Ana, CA 92706, APN 405-272-19 ("OPTOMETRIST PROPERTY"). OPTOMETRIST PROPERTY, which is unencumbered. 4535406.1 --N1475.1 GONZALES also owns the eA C. The CITY owns property located immediately north of the DENTIST PROPERTY and the OPTOMETRIST PROPERTY, consisting of 1421 and 1429 N. Bristol Street, APN 405- 252-18 and APN 405-252-19, respectively ("CITY PROPERTY") D. CITY PROPERTY, when taken together with portions of the DENTIST PROPERTY and OPTOMETRIST PROPERTY, will form the single parcel legally described and depicted by Exhibit 1 to this AGREEMENT (referred to herein as the "CITY -OWNED RELOCATION SITE" or "RELOCATION SITE"). The RELOCATION SITE shall be conveyed to ROSALES and GONZALES free and clear of encumbrances, encroachments, structures, or obstructions, with the exception of the existing buildings on the GONZALES and ROSALES properties. CITY agrees to provide a legal description of the RELOCATION SITE within 20 days of the CITY's execution of this AGREEMENT. E. Through the process of a lot line adjustment to be conducted by the CITY at no cost to GONZALES or ROSALES, the RELOCATION SITE will be divided into two lots of equal size and conveyed to ROSALES and GONZALES to resolve the CITY's acquisition of the DENTIST PROPERTY and OPTOMETRIST PROPERTY, in accordance with the terms and conditions set forth herein. F. The PARTIES acknowledge that the payment as set forth in paragraphs 1 and 2 b e 1 o w, and other consideration given in connection with this AGREEMENT, are the result of a compromise and settlement of disputed claims, and shall never, at any time or for any purpose, be considered an admission of liability or responsibility on the part of any of the PARTIES herein released. G. The PARTIES agree that the full performance of this AGREEMENT satisfies all claims regarding the acquisition of the subject DENTIST PROPERTY and OPTOMETRIST 4535406.1--N1475.1�� PROPERTY including without limitation, residential relocation, furniture, fixtures and equipment, business relocation, loss of business goodwill and the purchase of the real property in a global settlement. The PARTIES acknowledge that they are waiving significant legal rights and/or claims by entering into this AGREEMENT. Each PARTY has consulted with legal counsel, has a full and complete understanding of the terms and legal effect of the AGREEMENT, and intends to be bound thereby. TERMS OF AGREEMENT 1. Payment: The CITY shall pay ROSALES AND GONZALES the grand total sum of $1,971,500.00 (One Million Nine Hundred Seventy -One Thousand Five Hundred Dollars) in full settlement as allocated and subject to the provisions below and those in paragraph 2: 4535406.1 --N1475.1 a. CITY shall pay to ROSALES the sum of $626,500.00 (Six Hundred and Twenty -Six Thousand Five Hundred Dollars) as the final total compensation for the acquisition of the subject DENTIST PROPERTY. b. CITY shall pay to GONZALES the stun of $586,500.00 (Five Hundred and Eighty Six Thousand Five Hundred Dollars) as the final total compensation for the acquisition of the subject OPTOMETRIST PROPERTY. c. CITY shall pay jointly to ROSALES AND GONZALES the sum of $237,000 (Two Hundred and Thirty -Seven Thousand Dollars) as full payment for relocation benefits. d. CITY shall pay jointly to ROSALES AND GONZALES the sum of $350,000 (Three Hundred and Fifty Thousand Dollars) for the value of the loss of business goodwill for both businesses combined. C25) V -PA 4535406.1 --N1475.1 e. City shall pay jointly to ROSALES AND GONZALES the sum of $100,000 (One Hundred Thousand Dollars) to build a sound wall at their relocation site according to City Specifications, with said specifications to be provided to ROSALES and GONZALES during the plan approval process by the CITY. Said wall to be owned by ROSALES AND GONZALES. In the event that wall is not built by ROSALES AND GONZALES, the $100,000 shall revert to CITY and access to the property shall be given to CITY in order to build said wall. f. CITY shall pay jointly to ROSALES AND GONZALES the additional sum of $71,500 (Seventy -One Thousand Five Hundred Dollars). g. CITY shall apply $910,000 (Nine Hundred Ten Thousand Dollars) to the acquisition of the RELOCATION SITE by ROSALES AND GONZALES from the total sum described in Paragraph 1. h. ROSALES AND GONZALES agree that the consideration received pursuant to this paragraph 1 and paragraph 2 constitutes full satisfaction of any and all obligations of the CITY to ROSALES AND GONZALES. i. NOTICE: i. THE PARTIES ACKNOWLEDGE THAT THE CITY SHALL ONLY BE REQUIRED TO DEPOSIT THE SUM OF $1,061,500.00 INTO ESCROW ONLY AFTER ROSALES AND GONZALES HAVE DEPOSITED FULLY -EXECUTED DEEDS AS SHOWN IN EXHIBITS 2 AND 3 FOR THE DENTIST PROPERTY AND THE OPTOMETRIST PROPERTY, RESPECTIVELY. ii. WITHIN TEN DAYS OF THE OPENING OF ESCROW, ROSALES AND GONZALES SHALL DESIGNATE THE GRANTEES THAT SHALL BE LISTED ON THE DEEDS FOR THE TWO LOTS OF EQUAL SIZE CREATED BY THE CITY FROM THE DIVISION OF THE RELOCATION SITE, AS PROVIDED IN PARAGRAPH 2 BELOW. IT IS ANTICIPATED THAT ROSALES AND GONZALES SHALL ENTER INTO RECIPROCAL ACCESS, MAINTENANCE, AND PARKING AGREEMENTS SO THAT THE RELOCATION SITE WILL BE OPERATED AS A SINGLE INTEGRATED DEVELOPMENT. THEREAFTER, THE CITY WILL SUBMIT INTO ESCROW THE GRANT DEEDS FOR THE TWO LOTS CREATED FROM THE DIVISION OF THE RELOCATION SITE, WHICH THE PARTIES HAVE COLLECTIVELY VALUED AT $910,000. 2. Implementation of Settlement: The parties agree that this settlement shall be implemented as follows: a. Immediately upon execution of this AGREEMENT, the CITY shall deposit 4535406.1 -- N1475.1 $1,061,500.00 into two escrow accounts (one escrow account for GONZALES, and a second escrow account for ROSALES at the same escrow company) in the following proportions: ROSALES shall receive $550,750, and GONZALES shall receive $510,750. ROSALES and GONZALES shall concurrently deposit fully - executed deeds for their respective properties. Once these proceeds and deeds have been deposited, City shall take all steps necessary to form two legal lots of equal size from the CITY -OWNED RELOCATION SITE through the administration of a lot line adjustment involving the remnant portions of the: (a) DENTIST PROPERTY, (b) OPTOMETRIST PROPERTY, (c) 1421 N. Bristol Street, Santa Ana, and (d)1429 North Bristol Street, Santa Ana. Upon completion of the lot line adjustment, the CITY shall deposit the deed for each lot into escrow and notify ROSALES and GONZALES of this fact, at which point ROSALES and GONZALES shall obtain the original deeds from escrow. ROSALES and GONZALES shall be deemed to have paid the CITY $910,000 for the purchase of such lots from the total compensation and consideration set forth herein of $1,971,500.00. b. Concurrent with the steps identified in paragraph 2.a., ROSALES and 4535406.1. --N1.475.1. GONZALES shall proceed with the demolition and development of the RELOCATION SITE as a single integrated development, including but not limited to the implementation of reciprocal easement agreements, reciprocal parking agreements, and shared use agreements between ROSALES and GONZALES, as applicable. The funds that are deposited in escrow by CITY will be drawn down by ROSALES AND GONZALES in the following manner as they proceed with the demolition and development of the RELOCATION SITE as a single integrated development. i. Drawdown for site plan development and permits upon deposit of deeds for the RELOCATION SITE: up to $300,000 in two equal amounts from each escrow account for payment of design professionals (to include architects, engineers, planners, consultants). ROSALES and GONZALES expressly agree to develop the RELOCATION SITE as a single integrated development as described above and to seek all necessary approvals from the City for such use. ROSALES and GONZALES will be subject to all applicable plan check, building or permit fees. ii. Drawdown for any necessary permits to be acquired and fees paid for construction work related to site preparations, building foundation, and rough grading of RELOCATION SITE: up to $500,000 in two equal amounts from each escrow account. iii. Drawdown of remaining escrow balance in two equal amounts from each escrow account upon inspection and approval by CITY of foundation and rough grading. c. Construction of the RELOCATION SITE to be completed within eighteen (18) months from the date of final "plan approval" by planning and building, issuance of a building permit by the CITY, or deed transfer to ROSALES and GONZALES, whichever is later, subject to extension however due to Acts of God. CITY shall coordinate timelines for any outside improvements that may impact construction of the RELOCATION SITE. d. If ROSALES AND GONZALES do not proceed with development of the 4535406.1 --N1475.1 RELOCATION SITE in accordance with the timing provisions of this AGREEMENT, they shall remain obligated to demolish and remove all structures existing on the RELOCATION SITE on the effective date of this AGREEMENT, and the CITY shall be entitled to a refund of $130,000 (One Hundred and Thirty Thousand Dollars) from the funds deposited in escrow. e. At no time shall the demolition, construction, or development of the RELOCATION SITE by ROSALES AND GONZALES interfere with or otherwise impair the activities of CITY'S Bristol Street Widening Project, which is expected to be in progress, immediately adjacent to the RELOCATION SITE, during the development of the RELOCATION SITE. ROSALES AND GONZALES shall have the affirmative obligation to coordinate with CITY regarding any activities during development of the RELOCATION SITE that will or have potential to interfere with such project. CITY agrees to make the necessary City staff available to meet with ROSALES and GONZALES upon reasonable request to facilitate the construction and coordination of the CITY's Project and the construction of the RELOCATION SITE. f The penalty provision contained in paragraph 2.d above will be of no force and effect at the moment in time when ROSALES AND GONZALES receive inspection approval by the City Building Inspector for all work related to the proposed building foundations and rough grading of the RELOCATION SITE. 3. Condemnation: CITY and ROSALES AND GONZALES acknowledge that this transaction is a negotiated settlement in lieu of CITY exercising its power of eminent domain. CITY and ROSALES AND GONZALES further acknowledge that CITY is acquiring the DENTIST PROPERTY and OPTOMETRIST PROPERTY set forth herein under the threat of the power of eminent domain. CITY and ROSALES and GONZALES agree that the acquisition of the RELOCATION SITE is a component of the negotiated settlement of the CITY's exercise of the power of eminent domain and ROSALES and GONZALES shall in their own discretion be entitled to determine the tax treatment of the same subject to their own discretion. 4535406.1--N1475.1� 4. Releases: Except for the obligations expressly set forth in this AGREEMENT, the CITY agrees to release and forever discharge ROSALES AND GONZALES and ROSALES AND GONZALES agree to release and forever discharge the CITY, and each of their respective parent companies, officers, directors, shareholders, partners, members, agents, insurers, employees, attorneys, successors and assigns, parents, affiliates, subsidiaries, related entities and all of their officers, directors, shareholders, partners, members, agents, insurers, employees, attorneys, successors and assigns and each of them, from any and all claims, demands, grievances, liabilities, debts, accounts, obligations, costs, expenses, liens, actions or causes of action, of every kind and nature whatsoever, including those for damages, arising from the condition of the DENTIST PROPERTY, OPTOMETRIST PROPERTY, CITY PROPERTY, AND CITY -OWNED RELOCATION SITE and their improvements, relocation assistance, relocation benefits, loss of goodwill, compensation for personal property (loss of inventory), furniture, fixtures and equipment, punitive damages, interest, costs, attorney's and appraisal fees existing as of the date of this AGREEMENT, whether known or unknown, anticipated or not, suspected or not, arising directly and/or indirectly from or directly and/or indirectly connected to the DENTIST PROPERTY, OPTOMETRIST PROPERTY, CITY PROPERTY, AND CITY -OWNED RELOCATION SITE. 5. Waiver of Civil Code section 1542: The PARTIES acknowledges that he, she or it, as applicable, is familiar with and has been advised by his, her or its, as applicable, attorney with respect to the provisions of 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. 4535406.1 --N1475.1 ���� The PARTIES acknowledge that he, she or it, as applicable, may have sustained damages, losses, fees, costs or expenses that are presently unknown anti unsuspected, and that such damages, losses, fees, costs or expenses might give rise to claims in the future. Nevertheless, the PARTIES acknowledge that this AGREEMENT has been negotiated and agreed upon in light of such possible damages, losses, fees, costs or expenses and aclmowledge and waive such claims. 6. Release Effective Upon Subsequent Discovery of Existing Facts: The PARTIES aclmowledge and agree that even if they later discover facts in addition to, or different from, those which either they now know or believe to be true with respect to the subject matter of this AGREEMENT, that it is their intention to fully settle and release and forever discharge all of the claims that are released and discharged by this AGREEMENT. The releases herein shall be, and shall remain in effect, as full and completed releases, notwithstanding the discovery or existence of additional or different facts. The PARTIES accept and assume the risk that such facts may be in addition to or different Iiom the facts now known or believed to be true and agree that the releases herein shall remain in all respects effective and shall not be subject to termination or rescission by reason of any such additional or difference in fact. 7. Severability: If any term of this AGREEMENT is determined by any court to be unenforceable, the other terms of this AGREEMENT shall nonetheless remain in full force and effect. 8. Non-Assienrnent: Each PARTY hereby represents and warrants that they or it, as applicable, has not heretofore assigned or transferred, or purported to assign or transfer, to any person or entity any of the claims, demands, grievances, liabilities, debts, accounts, obligations, costs, expenses, liens, actions or causes of action released by this AGREEMENT. 4535406.1 --N1475.1 9. Authority: Each PARTY hereby represents and warrants that the party executing this AGREEMENT is a duly authorized signatory. 10. Independent Advice: Each PARTY acknowledges and agrees that he, she or it, as applicable, has been represented throughout the negotiation and documentation of this AGREEMENT by counsel of the PARTY'S choice and has been advised by such counsel with respect to this AGREEMENT and the effect of the releases given in this AGREEMENT. Each PARTY further acknowledges and agrees that he, she or it, as applicable, has read this AGREEMENT, knows its contents and effect and, in executing this AGREEMENT, has relied solely on their or its, as applicable, own judgment, belief and knowledge and the advice and recommendations of such PARTY'S counsel. Neither PARTY has been induced to enter into this AGREEMENT by any representation or statement of any other party not expressly contained in this AGREEMENT. 11. Successors and Assigns: This AGREEMENT shall be binding upon the successors and assigns of the PARTIES to this AGREEMENT. 12. Integration: Conditions Precedent: This AGREEMENT shall be of no force or effect, and will be neither binding nor enforceable, unless and until the AGREEMENT has been fully executed by the PARTIES. No other agreements, covenants, representations or warranties, express or implied, oral or written, have been made by any PARTY to any other PARTY with respect to the subject matter of this AGREEMENT. All prior and contemporaneous conversations, negotiations, possible and alleged agreements, representations, covenants and warranties with respect to the subject matter hereof are of no force or effect. 13. No Admission of Liability: Each PARTY acknowledges and agrees that this AGREEMENT accomplishes the compromise of disputed claims and is not intended to constitute 4535406.1--N1475.1 I V �� an admission of liability, wrongdoing or error on the part of PARTY. Any liability, wrongdoing or error is expressly denied by each PARTY to this AGREEMENT. 14. Additional Documents: Each of the PARTIES agree to perform such further acts, and execute and deliver such further documents, as may be reasonably necessary to carry out the provisions of this Agreement. 15. Titles and Captions: Titles and captions contained in this AGREEMENT are inserted as a matter of convenience and for reference, and are not intended and shall not be construed to define, limit, extend or otherwise describe the scope of this AGREEMENT or any provision of this AGREEMENT. 16. Modification and Amendment: No modification or amendment of any of the terms or provisions of this AGREEMENT shall be binding upon any PARTY unless made in writing and signed by such PARTY or by a duly authorized representative or agent of such PARTY. 17. Governing Law: This AGREEMENT shall be governed by and construed in accordance with the laws of the State of California applicable to contracts entered into and wholly performed within said state. 18. No Construction: No PARTY or PARTY'S counsel shall be deemed to be the drafter of this AGREEMENT for purposes of interpreting or construing any of the provisions of this AGREEMENT. This AGREEMENT shall be interpreted in accordance with the fair meaning of its language and not strictly for or against any of the PARTIES to this AGREEMENT. 19. Execution in Counterparts: This AGREEMENT may be executed on separate counterparts and will become effective upon signature by all PARTIES upon one or more of such counterparts. 4535406.1 -- N1475.1 IN WITNESS THEREOF, the following have signed this AGREEMENT on the dates indicated below. ROSA ES: (" Date: f / DR. ERONICA ROSALES GONZALES: tt j C V "9 ��d � t Date: 17 / c % DR. ROBERT P. GONZALES ATTEST: CITY OF SANTA ANA "fil MARIAD. HUIZAR THIA J Clerk of the Council Interim City' APPROVED AS TO FORM: SONIA R. CARVALHO City Attorney a By: RYIN M. FUNK Assistant City Attorney APPROVED AS TO FORM: 4535406.1 --N1475.1 KEVIN A. DAY Attorney for ROSALES AND GONZALES 4535406.1 •-N1475.1 EXHIBIT 1 RELOCATION SITE 4535406.1 --N1475.1 & �jA