2009-03-05 Mediation Settlement Agreement with SEH
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MED~TEDSETTLEMENTAGREEMENT
This Mediated Settlement Agreement (HAireement") is entered into effective this 3fd day of
March, 2009, between the City of Albertville, Minnesota (the "City") and Short Elliot Hendrickson,
Inc. (IfSEHrr).
Now, for good and valuable consideration, the receipt and sufficiency of which is hereby
mutually acknowledged, the parties agree as follows:
Mediation Agreement. Attached and incorporated herein by this reference is the
Agreement to Mediate signed by the parties. All of the signatory parties acknowledge and agree that
this is a binding agreement reached through the process of the mediation. The parties further
acknowledge and agree that, pursuant to the requirements of the Minnesota Civil Mediation Act,
they have been advised that:
a. the mediator has no duty to protect either of their interests or to provide them with
any information about their legal rights;
b. signing a mediated settlement agreement may adversely affect their legal rights, and a
signed mediated settlement agreement is binding and enforceable against them; and
c. the parties may, and in fact have, consulted with an attorney before signing this
Mediated Settlement Agreement in order so that they may be certain of their rights.
Now, the parties agree to the following terms and conditions of settlement:
1. Settlement Options. This Agreement provides the City with two separate options
to settle claims, with the selected option being at the City's sole discretion, provided that its
selection of option shall be made and confirmed, in writing, to SEH on or before April 7, 2009.
The first option shall be comprised of all of the terms and conditions in this Agreement, except for
only the Alternative Settlement Option set forth in Paragraph 8 of this Agreement ("Cash/Contract
Option"). The second option shall be the Alternative Settlement Option in Paragraph 8 of this
Agreement ("Alternative Settlement Option"). The City may select only either the Cash/Contract
Option, or the Alternative Settlement Option, and not any combination of the two options.
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1. Payment (Cash/Contract Option). Upon written confirmation of the City's
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approval of the Agreement under Paragraph 11, SEH shall pay to the City the sum of One Hundred
Seventy Thousand and no/lOa Dollars ($170,000.00). The payment of such sum shall come in the
form of SEH providing a promissory note as outlined in Paragraph 3 below.
2. 1-94 Design Contract (Cash/Contract Option). SEH's commitment to making
the payment under Paragraph 1 of this Agreement is specifically conditioned on the City's agreement
to award SEH with a final engineering design services contract for the City's 1-94 corridor study
project ("1-94 Design Contract "). The City and SEH agree that the amount of the 1-94 Design
Contract shall be Three Hundred Fifteen Thousand Three Hundred Sixty Six Dollars ($315,366.00),
with a scope of work consistent with that set forth in SE;r-I's proposal dated February 19, 2009. The
1-94 Design Contract shall not include any obligation for SEH to provide any construction phase
observation services.
3. . Payment Schedule (Cash/Contract Option). Payments under Paragraph 1 shall
be made pursuant to a separate written agreement in the form of a promiss01Y note CNote") drafted
by the City in any form reasonably acceptable to SEH that shall contain the following terms:
· Payor shall be Short, Elliott, Hendrickson, Inc.;
· Payee shall be the City of Albertville, Minnesota;
· Term of the note shan be the remaining term of the financing bonds issued by
the City to fund retaining pond improvements for the benefit of the Albertvilla
Subdivision flood improvements that ate the subject of this ~spute ("Bonds").
· Payments, to be prorated over the term, shall be due semi-antlually, with the
payments due at the times and in the manner as set forth in the Bonds;
· Interest on the unpaid balance shall be at the rate as provided in the Bonds;
· There shall be a written notice of default, with a ten (10) business day
opportunity to cure.
· In the event of a need for action to enforce the Note, the City shan be entitled to
recover all of its costsof collection, including reasonable attorneys' fees.
4. 1-94 Construction Phase Observation Proposal. The City shall allow SEH to
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submit a proposal for the construction phase obsetvation and related services regarding the
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construction of the 1-94 corridor project, and the City shall allow SEH to fully and fairly compete
for the same with other qualified design vendors. The City is not making any conunitment under
this Agreement that SEH will actually be awarded the contract for the consu"Uction phase
observation and related services on the 1-94 corridor project.
5. Releases. Upon the City's confirmation of the acceptance of either the
Cash/ Contract Option, or the Alternative Settlement Option, and upon the dismissal of the
Lawsuit under Paragraph 6 of this Agreement, the City and SEH, on behalf of themselves, and on
behalf of each and all of their respective representatives, officers, elected officials, ditectors, insurers,
shareholders, and assigns, do hereby fully and finally release each other from all claims, causes of
action, and demands, including claims of professional negligence, that arise out of or are in any way
related to SEH's engineering senrices relating to the 2004 SEH Flood Study Report, flooding events
and related damage that the City has experienced in its Albertvillas subdivision, and the subsequent
construction of a storm water pond/holding pond upstream of the Albertvillas subdivision project
that was designed to prevent or minimize the impact of future flooding events, all as are the subject
of the Lawsuit identified in Paragraph 6 of this Agreement. This Release is intended to be global,
full, and final of any and all claims between the parties arising out of ot relating to alleged flood
stuclies and flooding events in the Albertvillas subdivision project, including, specifically, all
allegations of negligence relating to the 2004 SEH Flood Study Report.
6. Dismissal of Lawsuit. Upon the City's confirmation of the acceptance of either
the Cash/Contract Option or the Alternative Settlement Option, the lawsuit commenced in Wright
County District Court between the patties, captioned City of Albertville v. Short Elliot Hendrickson,
Inc., Court File No. [unfiled], shall be dismissed, with prejudice. Counsel for the City shall prepare
and circulate the stipulation for filing. The dismissal shall include a provision that no payment of
costs, disbursements, or attorneys fees shall be made by any party to any other party. The City
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acknowledges that its Summons and Complaint selved in the Lawsuit has not been filed with the
Wright County District Court as of the date of this Agreement. The City and SEH agree that they
shall not file the Lawsuit with the Wright County District Court unless there is a need to do so in
order to confirm or establish the fact, amount, and terms and conditions of settlement under this
Agreement.
7. Reserved Claim~, This Agreement, the releases contained herein, and the dismissal
of the Lawsuit relate and pertain only to the business dealings between the parties as they relate to
alleged flooding events and related damages in the City's Albertvillas subdivision, and specifically to
the 2004 SEH Flood Study Report. The City and SEH acknowledge that they have, over the years,
contracted with each other for any number of other design and professional engineering services,
none of which are the subject of this Agreement or the Lawsuit. The City and SEH specifically
acknowledge that the Releases do not include or extend to any work or services provided by SEH to
the City on 1-94 corridor studies, or to the 1-94 Design Contract, claims on which are specifically
preserved by the parties and are not released under this Agreement. All such claims, whether known
or unknown, whether asserted or not" that arise out of or relate to any other projects not specifically
referenced in this Agreement, are not released, and ate specifically preserved.
8.. Alternative Settlement Option. In lieu of the City's acceptance of the
Cash/Contract Option, which option shall be recommended to the city council by the City's
signatories to this Agreement, the City, through its city council, may elect to reject the
Cash/Contract Option and instead settle all claims asserted against SEH in the Lawsuit for SEH's
payment of One Hundred Fifty Thousand Dollars ($150,000), which payment shall be made
pursuant to a separate written agreement in the fonn of a promissory note ("Note") drafted by the
City in any form reasonably acceptable to SEH that shall contain the following terms according to
the following terms:
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. Payor shall be Short, Elliott, Hendrickson, Inc.;
. Payee shall be the City of Albertville, Minnesota;
. Term of the note shall be the remaining term of the financing bonds issued by
the City to fund retaining pond improvements for the benefit of the Albertvilla
Subdivision flood improvements that are the subject of this dispute ("Bonds").
. Payments, to be prorated over the term, shall be due semi-annually, with the
payments due at the times and in the manner as set forth in the Bonds;
. Interest on the unpaid balance shall be at the rate as provided in the Bonds;
. There shall be a written notice of default, with a ten (10) business day
opportunity to cure.
. In the event of a need for action to enforce the Note, the City shall be entitled to
recover all of its costs of collection, including reasonable attorneys' fees.
9. Mediation Fee. The City and SEH shall each pay an equal one-half (1/2) share of
the mediator's fee.
10. Execution in Counterpart! Authority. This Agreement may be signed in
. counterpart, meaning that not all signatures need appear on the same page of the Agreement for it
to be effective. Facsimile signatures shall be deemed as originals. The SEH signatories hereto
represent that they have secured the necessary authority to enter into this Agreement on behalf of
SEH and all of its officers, shareholders, insurers, and assigns. The City's signatories hereto state
that they do not have the individual authority to bind the City to this Agreement at this time, and
that the City's approval of the terms and conditions contained herein are subject to final review and
approval by the City's city council. The City's signatories represent that they shall make
recommendations to the full city council that the telms and conditions of this Agreement be
approved, and that they will endeavor to secure such final approval by the end of March, 2009.
11. Condition Precedent. SEH acknowledges that full city council approval is a
condition precedent to a binding effect cif this Agreement. The City, through its signatories to this
Agreement, shall use its best efforts to obtain an approval of the terms and conditions of this
Agreement on behalf of the City, and the signatories hereto shall recommend that the city council
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accept the Cash/Contract Option. In the event that the terms and conditions of this Agreemen
are rejected by a majority vote of the city council, then counsel for the City shall specifically advise
SEH's counsel, in writing,:in which case the terms and conditions of this Agreement shall be null
and void. The City, through its counsel, shall also advise SEH's counsel,:in writing, if the
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Agreement has been approved by the full city council.
Dated;
Dated:
Dated:
CITY OF ALBERTVILLE
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Party R esentallve
Atto:l97~ 4Y
SHORT ELLIOT HENDRICKSON, INC.
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By;
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MEDIATION AGREEMENT
The undersigned parties agree as follows:
1. The undersigned are parties or representatives of~~o the controversy identified
as City of Albertville v. SEH, Wright County Court File No."" I ,and they have agreed to
seek to resolve the controversy through mediation.
2. Eacl?- party acknowledges that the mediator has given them written notice that (a) the
mediator has no duty to protect their interests or provide them with information about their legal
rights; (b) signing a mediated settlement agreement may adversely affect their legal rights; and (c)
they should consult an attorney before signing a mediated settlement agreement if they are uncertain
about their rights.
3. The parties further acknowledge that prior to the commencement of the mediation,
they were provided with a written disclosure of the qualifications of the mediator, including a
description of the mediatot's educational background and relevant training and experience in
mediation.
4. The parties acknowledge that participation in the mediation is voluntary and may be
terminated at any rime by any party, their representative or the mediator upon notice to the other
parties. The provisions of the mediation statute with respect to the termination of mediation only
upon written notice are hereby waived.
S. The parties agree that (a) all statements, documents and disclosures made or revealed
at the mediation will be treated as settlement discussions under the rules of evidence and will be
inadmissible by any person unless offered by the person giving the statement, revealing the
document or making the disclosure; and (b) the mediator will not be compelled to give testimony at
a deposition or trial, or by other means ot at other times, as to a matter learned through the
mediation, except to prove the existence or terms of a settlement agreement which is made at or
through the mediation session or process.
CITY OF ALBERTVILLE
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By: (ii'
SEH
B~;7~
A torney