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HomeMy WebLinkAboutContracts & Agreements_27-2025SETTLEMENT AND RELEASE AGREEMENT This Settlement and Release Agreement ("Settlement Agreement") is entered into on February ff, 2025 and made by and between the City of Redlands ("City") and CEM Construction Corporation, a California corporation ("CEM"). The City and CEM may collectively be referred to as the "Parties" or individually as a "Party". RECITALS A. WHEREAS, on or about June 20, 2023, the Parties entered into a contract ("Contract") regarding the 2022 CIP Sewer Pipeline Replacement Project, Project No. 521029 (the "Project"); and B. WHEREAS, during the course of work on the Project, CEM made certain claims related to extra work and delays on the Project; and C. WHEREAS, the Parties have agreed to resolve and settle all claims related to the Dispute, the Contract and Project to avoid the expense, inconvenience, and uncertainties of engaging in litigation and without the admission of liability by any of them, and enter into this Settlement Agreement to formally memorialize the terms of the settlement as set forth below; and D. WHEREAS, the Parties declare that each has read this Settlement Agreement and understands and knows the contents thereof, and represents and warrants that each of the Parties executing this Settlement Agreement is empowered to do so and hereby binds the respective party. TERMS AND CONDITIONS Now, in consideration of the foregoing recitals, which are incorporated herein, the mutual understandings contained in this Settlement Agreement and other good, valuable and sufficient consideration, the Parties agree as follows: 1. INCORPORATION OF RECITALS The above recitals are incorporated herein by reference as though fully set forth herein. 2. FINAL PAYMENT & BOARD APPROVAL The City shall pay CEM at total of FOUR HUNDRED SEVENTY-FIVE THOUSAND DOLLAR ($475,000) as its final payment under the Contract ("Final Payment"). A single check payable to CEM by the City for the Final Payment will be delivered to CEM no later than thirty (30) days after full execution of this Settlement Agreement. 3. FULL SETTLEMENT Except for the obligations set forth in the Settlement Agreement or otherwise noted herein, the Parties acknowledge that the Final Payment shall constitute full and final settlement of all claims the Parties have against one another, including but not limited to, compensation for all {3318 308511 SETTLEMENT AGREEMENT — REDLANDS ADV. CEM Page 1 17942.00170\43174459.1 contract amounts and pending change orders, change order proposals, contract balance, claims, backcharges, liquidated damages, delay damages, and credits related to the Contract, the Dispute and/or the Project. 4. RELEASE 4.1 Release of Claims by the City Except as set forth by this Settlement Agreement, the City releases and discharges all claims of every kind whatsoever whether known or unknown, which the City or any of its agents, shareholders, representatives, employees, architects, engineers, construction managers, predecessors, successors and/or assigns, asserts or could assert against CEM or any of its agents, shareholders, representatives, sureties, insurers, employees, predecessor, subcontractors, successors and/or assigns, relating to the Contract, Dispute and/or the Project ("City Releases"). 4.2 Release of Claims by CEM Except as set forth by this Settlement Agreement, CEM releases and discharges all claims of every kind whatsoever whether known or unknown, which CEM or any of its agents, shareholders, representatives, employees, predecessors, successors and/or assigns, asserts or could assert against the City or any of its officials, officers, consultants, agents, shareholders, representatives, sureties, insurers, employees, architects, engineers, construction managers, predecessor, successors and/or assigns, relating to the Contract, Dispute and/or the Project ("CEM Releases").- 4.3 Released Matters The City Releases and CEM Releases are collectively referred to as the "Released Matters." Specifically excluded from the Released Matters include any liability or obligation created by this Settlement Agreement. 4.4 Civil Code Section 1542 Waiver. (a) With respect to the releases described in the Released Matters, the Parties expressly waive all rights under California Civil Code section 1542 which provides that a general release does not extend to unknown or unsuspected claims which, if known, would have materially affected the settlement. California Civil Code section 1542 provides: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY." (b) The Parties acknowledge that they may hereafter discover facts different from, or in addition to, those which they now believe to be true with respect to the release of {3318 308511 SETTLEMENT AGREEMENT — REDLANDS ADV. CEM Page 2 17942.00170\43174459.1 claims. The Parties agree that the foregoing release shall be and remain effective in all respects notwithstanding such different or additional facts or any discovery thereof. (c) The Parties further acknowledge and agree that waivers of rights under Section 1542 of the California Civil Code have been separately bargained for and are essential and material terms of this Settlement Agreement, and, without such waivers, this Settlement Agreement would not have been entered into. 4.5 Third Party Actions, Warranties and Latent Construction Defects Exclusion. The Parties agree that specifically excluded from the Released Matters and Civil Code 1542 Waiver are any demands, claims and causes of actions arising from or relating to unexpired warranties or unknown latent construction defects in the Project or any third party action against the City arising out of the construction of the Project. The City shall not be precluded from bringing any action at law or in equity arising from or relating to such matters. This includes any latent defects or claims made pursuant to California Code of Civil Procedure section 337.15. 5. GENERAL PROVISIONS. 5.1 Representation and Warranty. The Parties and signatories hereby each represent, covenant and warrant that they are authorized (individually or by their respective principals) to enter into and execute this Settlement Agreement and that they have not previously assigned any claims released or assigned in this Settlement Agreement, in whole or in part, or taken any other steps which would adversely affect the rights which are the subject of this Settlement Agreement. In the event that any of the above representations and/or warranties are breached or any of the representations and/or warranties contained in this subparagraph prove false, the breaching/misrepresenting Party hereby agrees to defend, indemnify and hold the other Parties harmless from all damages, loss, liability, costs and attorneys' fees resulting from said breach/misrepresentation. 5.2 No Reliance. Each Party acknowledges: (i) this Settlement Agreement is the resolution of a frilly matured set of facts and each Party individually declares and represents it is executing this Settlement Agreement in reliance solely on its own judgment, belief, and knowledge of the facts surrounding the transactions described in this Settlement Agreement; (ii) this Settlement Agreement is made without reliance upon any statement or representation not contained in this Settlement Agreement of any other Party, or any representative, agent or attorney of any other party; (iii) no promise, inducement or agreement not expressed in this Settlement Agreement has been made to any Party; and (iv) the recitals, terms and conditions contained in this Settlement Agreement are contractual and not mere recitals. 5.3 Discovery. Each Party acknowledges that it may subsequently discover facts different from, or in addition to, those which it now believes to be true with respect to the Released Matters, and agree this Settlement Agreement shall be and remain effective in all respects notwithstanding such different or additional facts. {3318 30851 } SETTLEMENT AGREEMENT — REDLANDS ADV. CEM Page 3 17942.00170\43174459.1 5.4 Additional Documents. The Parties agree to perform such further acts and to execute and deliver such further documents as may be reasonably necessary or appropriate to carry out the intent or provisions of this Settlement Agreement. 5.5 Entire Agreement. This Settlement Agreement embodies the entire understanding and agreement among the Parties pertaining to the matters described herein and supersedes and cancels all prior oral or written agreements among the Parties. No modification of this Settlement Agreement shall be valid unless agreed to in writing by the Parties. 5.6 Voluntary. This Settlement Agreement is executed voluntarily and without duress or undue influence on the part of or on behalf of the Parties, or of any other person, firm or other entity. 5.7 Consultation with Legal Counsel. The Parties acknowledge that they have had the right to seek counsel in the preparation of this Settlement Agreement and have had it fully explained to them by such counsel, and that they are fully aware of the contents of this Settlement Agreement and of its legal effect. Except as provided for in this Settlement Agreement, none of the Parties have been influenced to any extent whatsoever in executing this Settlement Agreement by any representations, statements, or omissions pertaining to any of the foregoing matters by any Party or said Party's counsel. 5.8 Drafting of Settlement Agreement. None of the Parties hereto, nor their respective counsel, shall be deemed the drafters of this Settlement Agreement for purposes of construing the provisions thereof. The language in all parts of this Settlement Agreement shall in all cases be construed according to its fair meaning, not strictly for or against any of the Parties hereto. 5.9 Waiver. No provision of this Settlement Agreement may be waived unless in writing and signed by all Parties hereto. Waiver of any one provision herein shall not be deemed to be a waiver of any other provision herein. . 5.10 Assignment. Each Party represents and warrants that it has not assigned or otherwise transferred any interest in any claims which are the subject matter hereof. Each Party agrees to indemnify and hold any other Party, and each of them, harmless from any liability, loss, claims, demands, damages, costs, and expenses for attorneys' fees incurred by any of them as a result of any person asserting such assignment of transfer. 5.11 Governing Law. This Settlement Agreement shall be interpreted pursuant to California law. If legal action is necessary to enforce any of the terms of this Settlement Agreement, such action shall be brought in accordance with the laws of the State of California in a court having appropriate jurisdiction. 5.12 No Promise or Warranty. No promise or warranty shall be binding on the Parties except as expressly contained in this Settlement Agreement. 5.13 Attorneys' Fees Incurred in Resolving the Dispute. The Parties agree to bear their own attorneys' fees and costs. {3318 308511 SETTLEMENT AGREEMENT — REDLANDS ADV. CEM Page 4 17942.00170\43174459.1 5.14 Settlement Agreement Binding on Assignees, Successors. This Settlement Agreement shall bind and inure to the benefit of the successors and assigns of the Parties, and to all affiliates, dba's or any other associated entities. 5.15 Severability. In the event that any portion of this Settlement Agreement is deemed illegal, invalid or unenforceable in any respect, then such invalidity, illegality or unenforceability will not affect any other provision of this Settlement Agreement and this Settlement Agreement shall be construed as though such illegal, invalid or unenforceable provision had never been contained herein, unless a court determines the primary purpose of this Settlement Agreement would be frustrated. 5.16 Counterparts. This Settlement Agreement may be executed in multiple counterparts, all of which shall constitute a binding Settlement Agreement. Facsimile and/or PDF signatures, when received, shall have the same force and effect as original signatures. [SIGNATURES ON NEXT PAGE] {3318 30851 } SETTLEMENT AGREEMENT — REDLANDS ADV. CEM Page 5 17942.00 170\43 17445 9. 1 PLEASE READ THIS DOCUMENT CAREFULLY. IT CONTAINS A GENERAL RELEASE OF CLAIMS KNOWN AND UNKNOWN. The Parties have executed and delivered this Settlement Agreement consisting of six (6) pages. WHEREFORE, the undersigned have read the foregoing Settlement Agreement, and fully understanding it agree to its terms, hereby execute this Settlement and Release Agreement and make it effective on the date of the last signature hereto. CITY OF REDLANDS Print Name: Mario Saucedo Title Mayor Date _ � Zo'2- Attested By: CITY OF REDLANDS B B Print Name: Jeanne Donaldson Title City Clerk Date 21512 G- CEM CONSTRUCTION CORPORATION, a California Corporation By Print Name Jesus E Carrillo Title President Date 02-03-2025 {33)18 30851) SETTLEMENT AGREEMENT — REDLANDS ADV. CEM Page 6 17942.00170\43174459.1