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2008-11 Copy of Settlement Agreement "Also licensed in illinOis COURI, MACARTHUR & RUPPE, P.L.L.P. Attorneys at Law 705 Central Avenue East PO Box 369 St. Michael, MN 55376-0369 (763) 497-1930 (763) 497-2599 (FAX) www.courimacarthur.com Kyle R. Hartnett Sarah E. Schwarzhoff Michael C. Couri. Andrew J. MacArthur Robert T. Ruppe" ""Also licensed in California November 20, 2008 Court Administrator Steams County District Court Steams County Courthouse 725 Courthouse Square St. Cloud, MN 56303 -I Re: S.J. Louis Construction, Inc. v. Minnesota Development Agency, LLC, et al.; Court File No. 73-CV-08-12825. Dear Court Administrator: Enclosed for filing is an copy of the Settlement Agreement that was filed with the Court at Monday's hearing which has been signed by the City of Albertville. I understand that the Court has copies of the Settlement Agreement that were signed by the other parties, and that the Court is waiting on this signed copy from the City. Please contact me if you have any questions regarding this matter. Thank you. Si~cere~ il ~CL._ Michael C. Couri Couri, MacArthur & Ruppe, P.L.L.P. Enclosure Cc: Larry Kruse, City Administrator, w/enc1osure Thomas A. Forker, w/enc1osure Nate Allen, w/enclosure RyanJ. Trucke, w/enclosure STATE OF MINNESOTA DISTRICT COURT COUNTY OF STEARNS SEVENTH JUDICIAL DISTRICT CASE TYPE: CONTRACT S.J. Louis Construction, Inc., Court File No. Plaintiff, v. SETTLEMENT AGREEMENT Minnesota Development Agency, LLC, a Minnesota Limited Liability Company; Hunters Development, LLC, a Minnesota Limited Liability Company; Contractors Capital Corporation; a Minnesota corporation; And City of Albertville, a Minnesota Municipal corporation, Defendants. SETTLEMENT AGREEMENT TO REMEDY DEFAULT OCCURRING UNDER THE TERMS OF DEVELOPER'S AGREEMENT WHEREAS, the City of Albertville ("City") and Hunters Development, LLC ("Developer") entered into a Planned Unit Development Agreement dated August '12, 2005 ("Development Agreement") for the Hunters Pass Development; and WHEREAS, pursuant to the Development Agreement, the Developer has posted a letter of credit with the City which currently has a balance of$195,993.77 remaining; and WHEREAS, pursuant to the Development Agreement, the Developer's Municipal Improvement warranty obligations extend to damage occurring to Municipal Improvements through August 12,2008; and WHEREAS, damage to Municipal Improvements covered under warranty and remaining work to be done by Developer as required by the Developer's Agreement is estimated to cost $54,500.00; and 1 WHEREAS, Paragraph 3.C of the Development Agreement required Developer to provide the City with lien waivers from all contractors and subcontractors engaged to construct required Municipal Improvements; and WHEREAS, Developer contracted with Minnesota Development Agency, LLC ("MDA") to construct the Municipal Improvements, and MDA contracted with SJ. Louis Construction, Inc ("S.l. Louis") as the general contractor to install the Municipal Improvements; and WHEREAS, S.l. Louis installed said Municipal Improvements, but has not been fully paid for such work and is still due $151,082.14 from MDA for such work; and WHEREAS, S.l. Louis has refused to provide lien waivers until it is fully paid by MDA; and WHEREAS, the City has found the Developer in default under the Development Agreement for failure to provide lien wavers required under the Development Agreement and failure to pay costs incurred by the City related to the Hunters Pass Development; and WHEREAS, S.l. Louis has initiated an action against Developer, MDA, Contractor's Capital Corporation and the City seeking a monetary judgment against Developer and a Court order requiring the City to draw on Developer's letter of credit ("Litigation"); and WHEREAS, the City, the Developer, MDA and S.l. Louis have reached an agreement to settle the Litigation. NOW, THEREFORE, the City, Developer and SJ. Louis agree as follows: 1. Developer acknowledges that it is in default under the Developer's Agreement for the following items: a. Breach of Paragraph 3B for failure to remedy curb, sidewalk, and cracked concrete failures, failure to remove erosion control materials, failure to clean storm water ponds, failure to adjust utility structures, failure to complete landscaping and failure to complete miscellaneous items related to the Municipal Improvements in the Hunters Pass Development; b. Breach of Paragraph 14H for failure to fully comply with all wetland monitoring and maintenance requirements; c. Breach of Paragraph 3C for failure to provide the City with lien waivers for the Municipal Improvements installed in the Hunters Pass Development; d. Breach of Paragraph 19 for failure to indemnify the City and hold it harmless from costs incurred due to the Litigation; 2 e. Breach of Paragraph 8 for failure to reimburse the City for costs incurred in the enforcement of the Development Agreement. 2. Developer waives its right to notice of default as required by paragraph 15.A of the Development Agreement for the defaults set out in paragraph 1 above. 3. The City shall draw on Developer's letter of credit in an amount sufficient to: a. Pay for the necessary curb repairs and any other warranty work in the Hunters Pass Development; b. Monitor and maintain the wetlands as required by the Wetland Conservation Act and the approved wetland replacement plan;. c. Reimburse the City for all outstanding expenses incurred by it related to the Hunters Pass Development, including expenses of the Litigation; d. Pay S.J. Louis $151,082.14 it is owed by MDA for work in the Hunters Pass Development; 4. The parties acknowledge and agree that the Litigation has been filed in Steams County District Court. Subject to the terms contained in this Agreement, the parties shall seek a Court order authorizing the City to use said letter of credit proceeds to pay S.J. Louis consistent with the terms of this Agreement. Upon the issuance of a court order authorizing the City to use said letter of credit proceeds to pay S.J. Louis, the City shall pay to S.J. Louis $120,000.00 in partial payment of the amounts due S.J. Louis from MDA as a result of S.J. Louis' work installing the Municipal Improvements. 5. The City shall make good faith efforts to complete all curbs and other warranty work in the Hunters Pass Development repaired and contracts issued for all required wetland work prior to November 30,2008, using proceeds from the draw upon the letter of credit to pay for such repairs and pay for such wetland work. Upon completion of all warranty work and issuance of contracts for all required wetland work, the City shall deduct all such costs (including the costs of the required wetland monitoring and maintenance work as set out in such contracts) from the letter of credit proceeds. In addition, the City shall reimburse itself from the proceeds of the letter of credit for all reasonable and necessary expenses incurred by it related to the Hunters Pass Development, including engineer's expenses, attorneys' fees and other expenses of the Litigation. 6. After the issuance of the Court order contemplated in paragraph 4 above and the reimbursement of all expenses as set out in paragraph 5 above, the City shall use the remaining letter of credit proceeds to pay S.J. Louis, up to an amount that, combined with the payment to S.J. Louis described in paragraph 4 above, equals $151,082.14. 7. Subject to paragraph 8 below, upon payment to S.J. Louis by the City as provided herein, S.J. Louis shall: 3 a. Provide the City with lien waivers for all work performed in installing the Municipal Improvements. b. Execute the attached Dismissal With Prejudice dismissing the Litigation in its entirety against all named defendants and provide each defendant with an original of said Dismissal With Prejudice. 8. In the event S.J. Louis is paid from the proceeds of the letter of credit as contemplated herein, but such proceeds are insufficient to fully satisfy S.J. Louis' claim of$151,082.14, SJ. Louis agrees that it shall dismiss the City from the Litigation (with prejudice) and agrees to hold the City harmless from any claims ofSJ. Louis for payment of remaining monies owned to S.J. Louis by MDA or Developer arising from work on the Hunters Pass Development. --~--I 9. Any excess proceeds held by the City after payment of all monies required under this Settlement Agreement shall be returned to Developer, except for any monies necessary for wetland mitigation monitoring, which shall not be returned until after all wetland mitigation monitoring has been completed and Developer has fulfilled all of its wetland mitigation obligations with respect to the Hunters Pass Development. Notwithstanding the foregoing, the City shall return any such monies referred to in this paragraph 9 to Developer by the later of: 1) sixty (60) days following approval of the appropriate governmental authority with oversight over the wetland mitigation and monitoring, or 2) December 31, 2010. The City agrees to use reasonable efforts to obtain such wetland-related approval on or before August 12,2010. 10. In the event the Stearns County District Court does not issue an order authorizing the City to pay S.J. Louis for its work on the Municipal Improvements in the Hunters Pass Development, the City shall pay any remaining letter of credit funds (after payment of all City construction, contract and reimbursement costs set out in paragraph 5 above) into the Stearns County District Court for disposition as the Steams County District Court may direct. 11. The Plaintiff shall pay its own costs and attorneys' fees related to this action, as shall Minnesota Development Agency, LLC, and Hunters Development, LLC. The City's costs and attorneys' fees shall be paid from the letter of credit proceeds as set out in paragraph 5 above, and shall remain governed by the terms of the Development Agreement. The parties acknowledge and agree that Defendant Contractor Capital Corporation has or will be dismissed from the Litigation and that, none of the parties to this Agreement shall be liable for any fees incurred by Contractor Capital in connection with the Litigation. 12. Nothing in this Agreement shall act to modify the Development Agreement as it applies to any future default by Developer under said Development Agreement. Dated: , 2008 4 CITY OF ALBERTVILLE (i2~~ Ron Klecker, Mayor ~~.~ Bridget ~ller, Clerk J MINNESOTA DEVELOPMENT AGENCY, LLC By: Its: HUNTERS DEVELOPMENT, LLC By: Its: S.l. LOUIS CONSTRUCTION, INC. By: Its: 5 'Also licensed in IllinoIS COURI, MACARTHUR & RUPPE, P.L.L.P. Attorneys at Law 705 Central Avenue East PO Box 369 St. Michael, MN 55376-036y (763) 497-1930 (763) 497-2599 (FAX) www.courimacarthur.com Kyle R. Hartnett Sarah E. Schwarzhoff Michael C. Couri- Andrew J. MacArthur Robert T. Ruppe" "Also licensed in CalifiJrnia November 20, 2008 Court Administrator Steams County District Court Steams County Courthouse 725 Courthouse Square St. Cloud, MN 56303 Re: S.J. Louis Construction, Inc. v. Minnesota Development Agency, LLC, et at; Court File No. 73-CV-08-12825, Dear Court Administrator: Enclosed for filing is an copy of the Settlement Agreement that was filed with the Court at Monday's hearing which has been signed by the City of Albertville. I understand that the Court has. copies of the Settlement Agreement that were signed by the other parties, and that the Court is waiting on this signed copy from the City. Please contact me if you have any questions regarding this matter. Thank you. Si~ce:e~ ;J ~~ CL:~"_ Michael C. Couri Couri, MacArthur & Ruppe, P.L.L.P. Enclosure Cc: Larry Kruse, City Administrator, w/enclosure Thomas A. Forker, w/enclosure Nate Allen, w/enclosure RyanLTrucke, w/enclosure 't " STATE OF MINNESOTA DISTRICT COURT COUNTY OF STEARNS SEVENTH JUDICIAL DISTRICT CASE TYPE: CONTRACT S.J. Louis Construction, Inc., Court File No. Plaintiff, v. SETTLEMENT AGREEMENT Minnesota Development Agency, LLC, a Minnesota Limited Liability Company; Hunters Development, LLC, a Minnesota Limited Liability Company; Contractors Capital Corporation; a Minnesota corporation; And City of Albertville, a Minnesota Municipal corporation, Defendants. SETTLEMENT AGREEMENT TO REMEDY DEFAULT OCCURRING UNDER THE TERMS OF DEVELOPER'S AGREEMENT WHEREAS, the City of Albertville ("City") and Hunters Development, LLC ("Developer") entered into a Planned Unit Development Agreement dated August '12, 2005 ("Development Agreement") for the Hunters Pass Development; and WHEREAS, pursuant to the Development Agreement, the Developer has posted a letter of credit with the City which currently has a balance of$195,993.77 remaining; and WHEREAS, pursuant to the Development Agreement, the Developer's Municipal Improvement warranty obligations extend to damage occurring to Municipal Improvements through August 12, 2008; and WHEREAS, damage to Municipal Improvements covered under warranty and remaining work to be done by Developer as required by the Developer's Agreement is estimated to cost $54,500.00; and I ~ ". WHEREAS, Paragraph 3.C of the Development Agreement required Developer to provide the City with lien waivers from all contractors and subcontractors engaged to construct required Municipal Improvements; and WHEREAS, Developer contracted with Minnesota Development Agency, LLC ("MDA") to construct the Municipal Improvements, and MDA contracted with SJ. Louis Construction, Inc ("S.l. Louis") as the general contractor to install the Municipal Improvements; and WHEREAS, S.l. Louis installed said Municipal Improvements, but has not been fully paid for such work and is still due $151,082.14 from MDA for such work; and WHEREAS, S.l. Louis has refused to provide lien waivers until it is fully paid by MDA; and WHEREAS, the City has found the Developer in default under the Development Agreement for failure to provide lien wavers required under the Development Agreement and failure to pay costs incurred by the City related to the Hunters Pass Development; and WHEREAS, S.l. Louis has initiated an action against Developer, MDA, Contractor's Capital Corporation and the City seeking a monetary judgment against Developer and a Court order requiring the City to draw on Developer's letter of credit ("Litigation"); and WHEREAS, the City, the Developer, MDA and SJ. Louis have reached an agreement to settle the Litigation. NOW, THEREFORE, the City, Developer and SJ. Louis agree as follows: 1. Developer acknowledges that it is in default under the Developer's Agreement for the following items: a. Breach of Paragraph 3B for failure to remedy curb, sidewalk, and cracked concrete failures, failure to remove erosion control materials, failure to clean storm water ponds, failure to adjust utility structures, failure to complete landscaping and failure to complete miscellaneous items related to the Municipal Improvements in the Hunters Pass Development; b. Breach of Paragraph 14H for failure to fully comply with all wetland monitoring and maintenance requirements; c. Breach of Paragraph 3C for failure to provide the City with lien waivers for the Municipal Improvements installed in the Hunters Pass Development; d. Breach of Paragraph 19 for failure to indemnify the City and hold it harmless from costs incurred due to the Litigation; 2 .- e. Breach of Paragraph 8 for failure to reimburse the City for costs incurred in the enforcement of the Development Agreement. 2. Developer waives its right to notice of default as required by paragraph 15.A of the Development Agreement for the defaults set out in paragraph 1 above. 3. The City shall draw on Developer's letter of credit in an amount sufficient to: a. Pay for the necessary curb repairs and any other warranty work in the Hunters Pass Development; b. Monitor and maintain the wetlands as required by the Wetland Conservation Act and the approved wetland replacement plan;. c. Reimburse the City for all outstanding expenses incurred by it related to the Hunters Pass Development, including expenses of the Litigation; d. Pay S.J. Louis $151,082.14 it is owed by MDA for work in the Hunters Pass Development; 4. The parties acknowledge and agree that the Litigation has been filed in Stearns County District Court. Subject to the terms contained in this Agreement, the parties shall seek a Court order authorizing the City to use said letter of credit proceeds to pay S.J. Louis consistent with the terms of this Agreement. Upon the issuance of a court order authorizing the City to use said letter of credit proceeds to pay S.J. Louis, the City shall pay to S.J. Louis $120,000.00 in partial payment of the amounts due S.J. Louis from MDA as a result of S.J. Louis' work installing the Municipal Improvements. 5. The City shall make good faith efforts to complete all curbs and other warranty work in the Hunters Pass Development repaired and contracts issued for all required wetland work prior to November 30, 2008, using proceeds from the draw upon the letter of credit to pay for such repairs and pay for such wetland work. Upon completion of all warranty work and issuance of contracts for all required wetland work, the City shall deduct all such costs (including the costs of the required wetland monitoring and maintenance work as set out in such contracts) from the letter of credit proceeds. In addition, the City shall reimburse itself from the proceeds of the letter of credit for all reasonable and necessary expenses incurred by it related to the Hunters Pass Development, including engineer's expenses, attorneys' fees and other expenses of the Litigation. 6. After the issuance of the Court order contemplated in paragraph 4 above and the reimbursement of all expenses as set out in paragraph 5 above, the City shall use the remaining letter of credit proceeds to pay SJ. Louis, up to an amount that, combined with the payment to S.J. Louis described in paragraph 4 above, equals $151,082.14. 7. Subject to paragraph 8 below, upon payment to S.J. Louis by the City as provided herein, S.J. Louis shall: 3 \ t a. Provide the City with lien waivers for all work performed in installing the Municipal Improvements. b. Execute the attached Dismissal With Prejudice dismissing the Litigation in its entirety against all named defendants and provide each defendant with an original of said Dismissal With Prejudice. 8. In the event S.l. Louis is paid from the proceeds of the letter of credit as contemplated herein, but such proceeds are insufficient to fully satisfy S.J. Louis' claim of$151,082.14, S.J. Louis agrees that it shall dismiss the City from the Litigation (with prejudice) and agrees to hold the City harmless from any claims ofSJ. Louis for payment of remaining monies owned to SJ. Louis by MDA or Developer arising from work on the Hunters Pass Development. 9. Any excess proceeds held by the City after payment of all monies required under this Settlement Agreement shall be returned to Developer, except for any monies necessary for wetland mitigation monitoring, which shall not be returned until after all wetland mitigation monitoring has been completed and Developer has fulfilled all of its wetland mitigation obligations with respect to the Hunters Pass Development. Notwithstanding the foregoing, the City shall return any such monies referred to in this paragraph 9 to Developer by the later of: 1) sixty (60) days following approval of the appropriate governmental authority with oversight over the wetland mitigation and monitoring, or 2) December 31, 2010. The City agrees to use reasonable efforts to obtain such wetland-related approval on or before August 12,2010. 10. In the event the Steams County District Court does not issue an order authorizing the City to pay S.l. Louis for its work on the Municipal Improvements in the Hunters Pass Development, the City shall pay any remaining letter of credit funds (after payment of all City construction, contract and reimbursement costs set out in paragraph 5 above) into the Steams County District Court for disposition as the Steams County District Court may direct. 11. The Plaintiff shall pay its own costs and attorneys' fees related to this action, as shall Minnesota Development Agency, LLC, and Hunters Development, LLC. The City's costs and attorneys' fees shall be paid from the letter of credit proceeds as set out in paragraph 5 above, and shall remain governed by the terms of the Development Agreement. The parties acknowledge and agree that Defendant Contractor Capital Corporation has or will be dismissed from the Litigation and that, none of the parties to this Agreement shall be liable for any fees incurred by Contractor Capital in connection with the Litigation. 12. Nothing in this Agreement shall act to modify the Development Agreement as it applies to any future default by Developer under said Development Agreement. Dated: , 2008 4 } z r CITY OF ALBERTVILLE a Ron Klecker, Mayor ! l 3 Bridget Ntiler, Clerk MINNESOTA DEVELOPMENT AGENCY, LLC By. Its: LL { 3 HUNTERS DEVELOPMENT, LLC i 3 i By: Its: E S.J. LOUIS CONSTRUCTION, INC. f By: Its: 5 Z n i I y i 2 a Dated: ,2008 CITY OF ALBERTVILLE k Ron Klecker,Mayor i `s Bridget Miller, Clerk f MINNESOTA DEVELOPMENT AGENCY,LLC Its: C L•.° rf 3 HUNTERS DEVELOPMENT,LLC I y: tS: �, j S.J. LOUIS CONSTRUCTION,INC. y� E It : 6 i i 5 "8-3 ZOO/ZOOd 5£L-1. 1LS5--56Z--89L+ uoilmils€ co .t9gnH-W0HS Z9:91 80,-K-Tt ,. I 9 • r 3 Dated: ,2008 r CITY OF ALBERTVILLE x Ron Klecker, Mayor Bridget Miller, Clerk 5 M 14NESOTA DEVELOPMENT AGENCY, LLC By: s Its: i HUNTERS DEVELOPMENT, LLC 3 i ! i i By: Its: i I i SJ. LOUIS CONSTRUCTION, INC. By: 1a I .e—seA Its: i I i ! 5