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HomeMy WebLinkAbout1998-03-23 98-156 ORDER98-156 COUNCIL ACTION Item No. Date March 23, 1998 Item/Subject Authorizing Settlement of Claims of Coleman COnstruCtion Company, Inc. -- Wastewater Secondary Treatment Plant Project Responsible Department: Legal Commentary: This Order would authorize settlement of the last of a number of claims that arose out of construction of the City's wastewater secondary treatment plant project in 1991-1993. In this instance, the claims being settled are those of Coleman Construction Company, the excavation subcontractor on the project. Coleman was impacted by the late relocation of the Mobil pipeline on the project site, and received additional payments on its subcontract during project construction. Coleman also submitted a claim for $497,394 in additional costa, due to impacts of the Mobil pipeline. The City has previously paid $49,500 toward portions of Coleman's claim. This Order would authorize an additional payment of $75,000 to extinguish all remaining claims. (cont'd on next page) /�� /y���- WY Iw Department Head Manager's Comments: rl A _ Cls.BlMru.frd a0F)1pIEv¢tC City Manager Associated Information: Order, Settlement Agreement, Releases Budget Legal Approval: 9 �i. w,� City Solicc itor Passage First Reading Referral Page I of�1 98-156 Aui�ed to Counciloe Tyler March 23. 1998 �/pp CITY OF BANGOR aiuv 181TiCX Authorizing Settlement of.. Claims of Coleman Construction Company, Inc. -- wastewater secondary Treatment By tae C5h Cou"44 of Ne CSM of Be -- ORDERED, TUT the City Manager and City Solicitor are hereby authorized to settle the claims of Coleman Construction, Inc., arising out of construction of the City's wastewater secondary treatment plant project, for $75,000.00, and to execute all settlement documents necessary for that purpose. Settlement documents shall be in a form sub- stantially similar to the forms attached to this order, and any changes shall be approved by the City Solicitor prior to execution. IN CITY COUNCIL " March 23, 1998 Passed c d IT CLE3K 98-156 0RDEA Title, Authorizing Settlement of Claims of Coleman Construction Company. Inc. - Wastevatei SecoMaiy Tieatmen[ Plan[ Project ...................................... Q. Assigned to ......... SOI .�I.a. �U Councilnn . Exhibit A To all whom these presents shall come or may concern, Greeting: Know Ye that CITY OF BANGOR, MAINE (hereinafter 'Releasor'), for consideration paid, on its own behalf, has remised, released and forever discharged and by these presents does for its officers, employees, administrators, successors and assigns remise, release and forever discharge FIRST ESSEX BANK. PELEAM RANR R TRUST COIFANY and COLEMAN CONSTRUCTION COMPANY (hereinafter collectively °Releasee'), their officers, employees, administrators, successors and assigns, of and from any and all manner of action and actions, cause and causes of action, suits, damages, judgments, executions, claims and demands whatsoever, in law or in equity, which Releasor ever had, now has or which its administrators, successors or assigns hereafter can, shall, or may have against Releasee for, upon, or by reason of, construction of a wastewater secondary treatment facility in Bangor, Maine, during the years 1991-1993, this Release to include without limitation all contractual claims and warranty claims arising out of said construction. IN WITNESS WHEREOF, the City of Bangor has caused this instrument to be sealed with its corporate seal, and signed in its corporate name by Edward A. Barrett, City Manager, thereunto duly authorized, this _ day of March, 1998. CITY OF BANGOR (By) Its City Manager STATE OF MAINE PENOBSCOT, as. Then personally appeared the above-named EDWARD A. BARNETT, City Manager, and acknowledged the foregoing instrument to be his free act and deed in his said capacity, and the free act and deed of said body corporate. Justice of the Peace/Notary Public Exhibit B W 98-156 To all whom these presents shall come or may concern, Greeting: Know Ye that FIRST ESSEX BANK (hereinafter collectively "Releasor-), for consideration paid, on its own behalf and on behalf of PELHAM BANK k TRUST CO. and COLEMAN CONSTRUCTION COMPANY, has remised, released and forever discharged and by these presents does for Releasor's officers, employees, administrators, successors and assigns remise, release and forever discharge [4 y Y't]:i'S Ko) -M RAGA (hereinafter -Releasee'), its officers, employees, administra- tors,and assigns, of and from any and all manner of actions and actions, cause and causes of action, suits, damages, judgments, executions, claims and demands Whatsoever, in law or in equity, which Nelessor ever had, now has or which its administrators, successors or assigns hereafter can, shall, or may have against Releasee for, upon, or by reason of, construction of a wastewater secondary treatment facility in Bangor, Maine, during the years 1991-1993, this Release to include without limitation all contractual claims, nonpayment claims, mechanics lien claims, and claims for additional compensation arising out Of said construction. IN WITNESS WHEREOF, the First Essex Rank has Caused this instrument to be sealed with its corporate seal, and signed in its corporate name by I , thereunto duly authorized, this _ day of March, 1998. FIRST ESSEX BANK (BY) COMMONWEALTH OF MASSACHUSETTS COUNTY OF ESSEX Subscribed and sworn to before me, the undersigned officer, this day of March, 1998, by who made oath that the statements herein contained are true. Justice OI the Peace/Notary Public 98-156 in default of its payment obligations under this Compromise and Settlement Agreement, and the Bank at any time thereafter may, but shall not be obligated to, bring an action for breach and seek all amounts due under this Compromise and Settlement Agreement together with interest at the per diem rate of $20.55 (102 APR), or alternatively, at its option, treat the City's obligations as they existed prior to execution of this Agreement as still in affect in all respects and pursue the Arbitration or institute new litigation to enforce same. J. Releases. Upon receipt by the City of Final Payment, the parties shall execute general releases in the form appended as Exhibits A and B hereto, each of which shall be held in escrow by opposing counsel for the party signing each release, to be delivered to the attorney for the party to be released thereafter. Actual delivery of such releases to the attorney for the party to be released shall be a condition precedent to their effectiveness. 6. Attorneys Pees for Breach. Since freedom from damages and costs of future litigation, except as herein provided, represents an important item of consideration bargained for by the parties to this Compromise and Settlement Agreement, it is agreed that damages recoverable for breach of this Compromise and Settlement Agreement by any party shall include reasonable attorney's fees and other costs as a consequence of such breach. 5. No Admission of Liability. The parties understand and agree that this Compromise and Settlement Agreement is a compromise of disputed claims and that the terms set forth herein are not to - 2 - 98-156 be construed as an admission of liability on the part of the City. This Agreement shall in no event be construed or be deemed to be evidence or an admission or a concession on the part of any Party with respect to any claim or cause of action, defense, or any liability for damages in the Arbitration or any subsequent litigation. The Parties are entering into this Agreement in order to avoid further expense, inconvenience and delay, and to dispose of potentially expensive, burdensome and protracted arbitration. This Agreement, and any proceedings taken pursuant to this Agreement, are not and shall not in any event be: (a) Construed as or deemed to be evidence of a presumption, concession oran admission by any of the Parties of the truth of any fact alleged or the validity of any claim or cause of action which has or could have been asserted in the Litigation, or the deficiency of any defense which has or could have been asserted in the Arbitration) or (b) Construed by anyone for any purpose whatsoever as a presumption, concession or an admission of any infirmity in a claim, liability, fault, defense or otherwise on the part of any of the Parties) or (c) Construed as an admission or concession by anyone that the consideration to be given hereunder represents the amount which could be or would have been recovered after trial of any of the claims settled hereby. 6. Succeaeora and Transferees. All covenants, promises and agreements of each of the parties contained herein shall be binding 3 98-156 upon and inure to the benefit of their respective successors, transferees and assigns, immediate and remote. This agreement may not be assigned, either as to obligations, or benefits without the express written consent of the non -assigning party. 7. Intearation. This Compromise and Settlement Agreement and the Releases contemplated hereunder constitute a complete and integrated statement of the terms of the agreement between the Parties, and no Party has made any promise to any other Party which is not contained therein. S. Notices. Any notice which is permitted or compelled under the terms of this compromise and Settlement Agreement shall be given by certified mail, return receipt requested, to the following persons, or to such other persons as may subsequently be specified by certified mail, return receipt requested, by the party entitled or required to receive the notice: A. On behalf of the Bank: Frank P. Spinella, Jr., Esquire Hall, Norse, Anderson, Miller a Spinella, P.C. 14 Centre Street P. O. Box 2289 Concord, MH 01102-2289 B. On behalf of the City: Erik M. Stumpfel, City Solicitor City of Bangor 71 Harlow Street Bangor, ME 04401 9. survival. The obligations of the Parties as set forth in this compromise and Settlement Agreement shall survive the exchange of any settlement proceeds and the execution and delivery of any settlement documents. 10. No Waiver. Neither this document, nor any provision - 4 - 98-156 thereof, may be changed, waived, terminated or discharged orally, or by failure to protest, laches, silence or otherwise, but only by an instrument in writing signed by the party or parties against whom enforcement of that change, waiver, termination or discharge is sought. 11. Governina Law. This Compromise and Settlement Agreement shall be conatruedin accordance with and governed by the substantive law of the State of Maine without regard to principles of conflicts of laws. 12. Venue for Resolving DisbuteS. In the event that a dispute arises between the Parties under this Compromise and Settlement Agreement, it is hereby agreed that such dispute may be litigated in any state or federal court of competent jurisdiction within the State of Maine. - 13. No Reliance on Representations. The Parties acknowledge that in entering into this Compromise and Settlement Agreement, neither Party has relied on any statements or representations made by the other Party not contained herein. 14. Severability. If any provision of this compromise and Settlement Agreement is held unenforceable for any reason, it is the intent of the Parties hereto that the balance of the terms and provisions hereof shall remain enforceable. IN WITNESS WREREOP, the Parties have set their hands this day of March, 1998. FIRST ESSEX BANE By: 6nR s Its Attorn duly thorised CITY OF SANGOR, MAINE Ey: Its duly authorized - 5 - 98-156 ul• � - M _vl"� FIRST ESSEX BAMS ("the Bank"), a Massachusetts banking corporation having a principal place of business in Lawrence, MA, and City of Bangor ("the City"), a municipality of the State of Maine, hereby stipulate and agree as follows: WHEREAS, the Bank has succeeded to the assets of Pelham Sank & Trust Co., including a certain claim of Coleman Construction Company, Inc. ("Coleman") of Pelham, NH, against the City arising out of certain work performed by Coleman as a subcontractor on the City of Bangor Primary Wastewater Treatment Plant Upgrade Project ("the Claim"), which Claim had been assigned by Coleman to Pelham Bank & Trust Co. by Assignment dated March 30, 1993; and WBRREAB, by agreement dated July 29, 1994, between said Pelham Bank & Trust Co. and the City, the Claim was subjected to private arbitration ("the Arbitration") for the purpose of collecting any outstanding indebtedness of the City to Coleman Construction Co., or its successors or assigns) and WHEREAS, the parties desire to settle the Claim and all indebtedness, obligations and claims which have been asserted, or which could have been asserted, in the Arbitration; NOW THEREFORE, the parties stipulate and agree as follows: 1. Payments, The City shall pay the Bank a total of seventy Five Thousand Dollars ($75,000.00) on or before March 24, 1998, by Beer Check in that amount payable to "Hall, Morse, Anderson, Miller & Spinella, P.C." as trustee for the Bank. 2. Default. In the event that the Payment has not been received on or before March 26, 1996, the City shall be considered 98-156 Coleman's original claim was assigned to Pelham Bank 6 Trust Company of Pelham, New Hampshire. Pelham Bank later was acquired by First Essex Bank of Lawrence, Massachusetts. The assignment of the claim by Coleman to its bank accounts in part for the delay in reaching a final resolution. An arbitration hearing finally had been scheduled for April 7-10, 1998. The proposed settlement will avoid the expense of arbi- tration for both sides, and will avoid the risk of an adverse award. under our arbitration agreement, the City could have been subject to an award of up to $215,000.