HomeMy WebLinkAbout2009-06-08 09-206 ORDERCOUNCIL ACTION
Date: June 8, 2009
Item/Subject: ORDER, Authorizing the Execution
Communications Company,
Corporation, and Third Parties
Responsible Department: Legal
Commentary:
Item No. 09 206
of a Settlement Agreement with Citizens
now known as Frontier Communications
In November 2002, the City of Bangor filed suit against Citizens Communications Company (Citizens) in
the United States District Court for the District of Maine alleging that Citizens contributed to pollution of
the Penobscot River. In February 2007, the City Council approved a settlement agreement with Citizens.
The settlement agreement provided that the City assign any rights it has against third party defendants in
the lawsuit to Citizens and that Citizens could continue to pursue its claims against them. The settlement
agreement also provided that any recovery from third party defendants will be divided one-third to the
City and two-thirds to Citizens after reimbursement to Citizens for its expenses to reach such settlement.
This Order will authorize the execution of a settlement agreement with Citizens Communications
Company, now known as Frontier Communications Corporation, and third party defendants Dead River
Company and certain individuals for $1.8 million.
Manager's Comments:
Recommend approval.
Associated Information:
Budget Approval:
Legal Approval:
Introduced for
X Passage
First Reading
Referral
Department Head
City Managile
."a *1--- -
Finance Director
A 206
` Assigned to Councilor — D' Errico June 8, 2009
r.
CITY OF BANGOR
OR4'L�f6 y.
(TITLE.) ORDER, Authorizing the Execution of a Settlement Agreement with Citizens
Communications Company, now known as Frontier Communications
Corporation, and Third Parties
WHEREAS, in November 2002, the City of Bangor filed suit against Citizens Communications
Company in the United States District Court for the District of Maine (styled City of
Bangor, Maine v. Citizens Communications Company, et al., Civil Action 02 -183 -B -S)
alleging that Citizens contributed to pollution of the Penobscot River; and
WHEREAS, in February 2007, the City Council of the City of Bangor approved a settlement
agreement with Citizens Communications Company; and
WHEREAS, the settlement agreement provided that the City of Bangor assign any rights it has
against Third Parry Defendants in the lawsuit to Citizens and that Citizens could
continue to pursue its claims against them; and
WHEREAS, the settlement agreement provided that any recovery from third party defendants
shall, after reimbursement of Citizens' expenses to reach a settlement, be divided
two-thirds to Citizens and one-third to the City of Bangor; and
WHEREAS, Citizens Communications Company, now known as Frontier Communications
Corporation, has reached a negotiated settlement with third parry defendants,
namely Dead River Company and certain individuals for $1.8 million.
NOW, THEREFORE, BE IT ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR THAT
the City Manager is hereby authorized to execute a settlement agreement with Frontier
Communications Corporation and third party defendants Dead River Company and certain
individuals in the matter of City of Bangor v. Citizens Communications Company, et al., Civil
Action 02 -183 -B -S (D.C. Me), said settlement agreement to be substantially the same as
attached hereto and in a final form as approved by the City Solicitor or Assistant City Solicitor.
IN CITY COUNCIL
June 8, 2009
Motion Made an Seconded for
Passage
Passed
r
ITY CLERK
(TITLE,) AUTHORIZING THE EXECUTION OF A
COMMUNICATIONS COMPANY, NOW KNOWN AS
FRONTIER COMMUNICATIONS CORPORATION, AND
THIRD PARTIES
(
Assigned to Councilor
�
A 206
15 April 2009
SETTLEMENT AGREEMENT AND RELEASE
THIS SE'T'TLEMENT AGREEMENT AND RELEASE ("Agreement") is entered into by Dead
River Company ("Dead River"), Robinson Speirs, Jr., Julie Ann Macmannis, Nancy S. Dawson,
Elizabeth H. Speirs, Mary S. Price and Robinson Speirs (collectively known as the "Speirs
Defendants") (Dead River and the Speirs Defendants are collectively known as the "Settling
Defendants"), the City of Bangor, Maine (the "City"), and Frontier Communications
Corporation, formerly known as Citizens Communications Company ("Frontier") (collectively
all parties above, the "Settling Parties") to become effective on the date provided in Section 4(b)
below (the "Effective Date").
WHEREAS, the Settling Parties agree that contamination associated with tar and hazardous
substances exists in certain portions of Dunnett's Cove in the Penobscot River (the "Site");
WHEREAS, on or about November 22, 2002, the City filed a civil action in the United States
District Court for the District of Maine ("District Court"), docketed as Civil Action No. 02-cv-
00183 (the "Action"), against Frontier alleging that some or all of the contamination at the Site
resulted from historical operation of a manufactured gas plant near the intersection of Main
Street and Patton Street (the "Bangor MGP"), and seeking recovery, inter alfa, of costs incurred
or to be incurred at the Site for assessment, abatement, clean up, mitigation, removal, remedial
action, or other response to actual or threatened releases of hazardous substances or other
contaminants and injunctive relief requiring Frontier to remediate the Site ("Response Costs");
WHEREAS, Dead River its predecessors and successors have owned and/or operated various
facilities for shipping, receiving and storing coal and other materials (the "Dead River Facility");
WHEREAS, Frontier subsequently filed third party complaints in the Action against a number of
third party defendants, including Dead River, some of which filed subsequent actions against
fourth parties, including Dead River's fourth -party complaint against the Speirs Defendants (all
third and fourth -party defendants hereinafter "Third Party Defendants");
WHEREAS, Frontier and the City have entered into a settlement agreement in which the City
agreed to undertake the cleanup of the Site and indemnify Frontier for all liability for such
cleanup, and Frontier agreed to make a payment to an escrow account for the cleanup of the Site;
WHEREAS, Frontier and the City negotiated a Consent Decree ("Frontier/City Consent
Decree") with the State of Maine and the Maine Department of Environmental Protection
("State") that was lodged in the District Court;
WHEREAS, the District Court entered the Frontier/City Consent Decree as a partial final
judgment and later entered a final .judgment in the Action, which incorporated certain orders
allowing Frontier to file its claims (including claims assigned to it by the City) against Dead
River and certain other Third Party Defendants, in a new action in the District Court, docketed as
Civil Action No. 07-cv-00113 (the "New Action");
WHEREAS, certain Third Party Defendants, including Dead River, appealed the partial final
judgment and the final judgment in the Action, which appeals were consolidated before the
United States Court of Appeals for the First Circuit (the "Appeals");
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15 April 2009
WHEREAS, the United States Court of Appeals for the lairst Circuit issued an opinion deciding
the Appeals and affirming the judgments below on July 9, 2008, and
WHEREAS, the Settling Parties desire to compromise, finally settle, fully release and discharge
all claims by and among them related to the Action, the New Action, the Appeals, and the Site as
and to the extent provided in this Agreement;
NOW, THEREFORE, in consideration of all mutual covenants and stipulations of dismissal
contained herein and in consideration of the payments by the Settling Defendants, as specified in
Attachment A, the parties hereto agree as follows;
Release and Dismissal of Claims.
(a) As of the Effective Date, Frontier and the City hereby release and forever
discharge each of the Settling Defendants and any of their respective past or present parent,
subsidiary or affiliated corporations or entities, as well as any predecessor corporations,
proprietorships or entities, and their respective past and present directors, officers, managers,
agents, employees, representatives, shareholders, insurers, reinsurers, attorneys, corporate
successors, successors -in -interest, assigns, and each of them, separately and collectively (each a
"Frontier/City Released Party"), from any and all claims, liens, demands, sums of money,
actions, rights, claims for attorneys' or experts' fees and related costs, taxable or otherwise,
claims for relief, claims for contractual indemnity, causes of action, debts, obligations, damages
and liabilities, whether decisional, statutory or regulatory, whether known or unknown,
suspected or unsuspected, claimed or unclaimed, direct or indirect, asserted or unasserted, that it
has had in the past, or now has, or may have in the future against any Frontier/City Released
Party related to the Action, the New Action, the Appeals, and the Site, including without
limitation the claims assigned to Frontier by the City, excepting, however, any obligation
specifically set forth in this Agreement.
(b) As of the Effective Date, each of the Settling Defendants hereby release and
forever discharge Frontier, the City, Barrett Paving Materials, Inc., Honeywell International Inc.,
Societe Colas, S.A., Beazer East, Inc., and each other, and any of their respective past or present
parent, subsidiary or affiliated corporations or entities, as well as any predecessor corporations,
proprietorships or entities, and their respective past and present directors, officers, managers,
agents, council members, employees, representatives, shareholders, insurers, reinsurers,
attorneys, corporate successors, assigns, and each of them, separately and collectively (each a
"Settling Defendant Released Party"), from any and all claims, liens, demands, sums of money,
actions, rights, claims for attorneys' or experts' fees and related costs, taxable or otherwise,
claims for relief, causes of action, debts, obligations, damages and liabilities, whether decisional,
statutory or regulatory, whether known or unknown, suspected or unsuspected, claimed or
unclaimed, direct or indirect, asserted or unasserted, that it has had in the past, or now has, or
may have in the future against a Settling Defendant Released Party related to the Action, the
New Action, the Appeals, and the Site, excepting, however, any obligations specifically set forth
in this Agreement.
(c) As soon as reasonably practical following the complete execution of this
Agreement, Frontier and Dead River will jointly move, in the New Action, (i) for a stay of all
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1.5 April 2009
proceedings between them or against Dead River, and including Dead River's claims against the
Speirs Defendants in the New Action, including discovery, pending entry by the District Court of
the Consent Decree described in Section 4 of this Agreement, (ii) for entry of the Consent
Decree described in Section 4 of this Agreement as partial final judgment; and (iii) for orders
providing for dismissal with prejudice of the claims among them, including Dead River's claims
against the Speirs Defendants, all claims assigned to Frontier by the City, and all claims that
have been brought by the City and any other Third -Party Defendant against Dead River in the
New Action. Upon complete execution of this Agreement, Frontier, Dead River, and the Speirs
Defendants agree that none shall initiate or require responses to discovery against or from each
other in the New Action, unless the District Court directs otherwise or determines not to enter the
Consent Decree described in Section 4 of this Agreement. Any claims asserted in the New
Action by Frontier against Third Party Defendants other than Dead River (collectively the "Non -
Settling Third -Party Defendants") are to remain pending until otherwise resolved at Frontier's
option. in pursuing claims against Non -Settling Third -Party Defendants, Frontier shall not
initiate any action separate and apart from the New Action, although nothing herein shall affect
Frontier's right to add additional defendants in the New Action or to bring claims separately
following any action initiated by the United States Environmental Protection Agency. Frontier
and the City agree that in the New Action, they shall be precluded from collecting from any other
party such portion of any damages attributable to any Settling Defendant's share of
responsibility, pursuant to 14 M.R.S.A. §§ 156, 163, and CERCLA § 113(f), 42 U.S.G. §
9613(t).
(d) Notwithstanding the releases provided herein, each Settling Party agrees not to
raise, in any subsequent action initiated by the United States Environmental Protection Agency
related to the Site, such releases as a defense to any Contribution Claim, as defined in Section 3
of this Agreement, by any other Settling Party.
2. Payments. Within ten business days after the Effective Date, Dead River will make the
payment to Frontier that is specified in Attachment A (the "Payment").
3. Indemnity trom Frontier,
(a) Subjcct to the limitations set forth herein, as of the Effective Date Frontier will
defend (with counsel chosen by Frontier), indemnify and hold harmless the Settling Defendants
from and against any claims for contribution, cost recovery, or any reasonably similar claims for
recovery of response costs for environmental conditions at the Site (hereinafter "Contribution
Claims") asserted by any Potentially Responsible Party who is not a Settling Defendant against
the Settling Defendants arising out of Frontier's or the City's pursuit of Contribution Claims
against the Potentially Responsible Party. Each of the Settling Defendants agrees to provide
prompt notice of any indemnifiable claim and to cooperate in its defense, including without
limitation waiving any conflict to allow defense of such claim by Frontier's counsel. Frontier
shall be deemed to have notice of any indemnifiable claims that may be tiled in the New Action.
Such indemnity shall, without further notice to Frontier, include defense on any appeal
challenging the Consent Decree described in Section 4 of this Agreement following entry of such
Consent Decree by the District Court. Such indemnity shall not apply with respect to any claim
initiated by the United States Environmental Protection Agency or any Contribution Claim that
may arise from any such claim asserted by EPA.
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406
15 April 2009
(b) Each of the Settling Defendants shall have the right (solely at their expense) to
associate additional counsel of its choosing in the defense of any indemnifiable claim, and shall
be timely consulted concerning any proposed settlement of such claim.
(c) The indemnity set forth in Section 3(a) shall expire upon the entry of final
judgment as to the New Action as a whole and the exhaustion of all relevant appeals or appeal
periods ("Expiration Date"), although such expiration shall not affect Frontier's obligation with
respect to any indemnifiable claims for which proper notice has been given prior to the
Expiration Date and that are then pending, which obligation shall continue until such pending
claims are resolved.
4. Consent Decree and Effective Date.
(a) The effectiveness of this Agreement is contingent upon the entry by the District
Court in the New Action, within 90 days of the complete execution of this Agreement, of a
,judicial decree executed by Dead River, the Speirs Defendants, and the State (the "Consent
Decree") as a partial final judgment and in the form of a judicial consent decree as specified in
and consistent with CERCLA § 113(f)(2), 42 U.S.C. § 9613(f)(2) and in 38 M.R.S.A. 348(4) that
is reasonably acceptable to the Settling Defendants, and includes the following provisions: (i) a
release of all the State's claims against Dead River and the Speirs Defendants relating to the Site,
including natural resource damage claims, without reopeners for unknown conditions or future
information regarding conditions at the Site; (ii) express protection for Dead River and the Speirs
Defendants from all Contribution Claims by any person or entity whatsoever relating to the Site
under state and federal law; (iii) dismissal with prejudice of all clairns against Dead River and
the Speirs Defendants in the New Action. The Consent Decree shall not include any provisions
that conflict with this Agreement or the Frontier/City Consent Decree. Dead River, the Speirs
Defendants, Frontier, and the City agree to inform the District Court in the joint motion for entry
of the Consent Decree that (i) the consent of Dead River, the Speirs Defendants, Frontier, and the
City is contingent upon entry of the Consent Decree with provisions consistent with this Section
and (ii) each of Dead River, the Speirs Defendants, Frontier, and the City reserves the right to
withdraw its consent from the Consent Decree in the event the District Court makes any material
modifications to the Consent Decree as lodged, and thereby renders the Consent Decree
inconsistent with this Section.
(b) The "Effective Date" of this Agreement shall be the date the Consent Decree is
entered by the District Court pursuant to subsection (a).
5. No Admission of Liability.
(a) The Settling Parties acknowledge that payment of the consideration referred to
herein does not constitute any admission or concession of liability whatsoever by the Settling
Parties on account of any matter related to the Action, the New Action, the Appeals, the Dead
River Facility, or the Site.
(b) The Settling Parties each expressly deny any liability whatsoever related to the
Action, the New Action, the Appeals, the Dead River Facility, the Bangor MGP, or the Site.
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15 April 2000
6. No Third Party Rights. Notwithstanding any other provision of this Agreement to the
contrary, nothing in this Agreement shall be interpreted to create any right or benefit accruing to
any person or entity not a Settling Party, a Frontier/City Released Party, or a Settling Defendant
Released Party.
7. Claims A ainst Other Parties. Aber the Effective Date, upon reasonable written request
from Frontier in connection with Frontier's settlement of any Contribution Claims against any
other party, the Settling Defendants agree to execute a release of any claims arising out of or
with regard to the Site against ,such parties. In settling Contribution Claims against any other
party, Frontier agrees to obtain a release from that party of any claims that party may have
against the Settling Defendants with respect to the Site.
8. Binding Effect. This Agreement shall be conclusively binding on and for the benefit of
the Settling Parties and their respective corporate successors (whether by merger or purchase of
all or substantially all corporate assets), assigns, bankruptcy trustees or estates, executors and
administrators.
9. Notices. Notices required to be given under this Agreement shall be provided in writing
delivered by hand, first-class, or overnight mail directed to each Settling Party's representative
and to its counsel, as follows:
Settlina Partv
Party Representative
Counsel
Frontier Communications
Hilary E. Glassman
John S. Hahn
Corporation
Frontier Communications
Jay C. Johnson
Corporation
Mayer brown LLP
Three High Ridge Park
1909 K Street, N.W.
Stamford, CT 06905
Washington, DC 20006
Dead River Company
Robert Frank
Harvey & Frank
Two City Center, 4th Floor
P.O. Box 126
Portland, ME 04112
Robinson Speirs, Jr.
Samuel W. Lanham
Julie Ann Maemannis
Lanham Blackwell, P.A.
Nancy S. Dawson
470 Evergreen Woods
Elizabeth H. Speirs
Bangor, ME 04401
Mary S. Price
Robinson Speirs
City of Bangor, Maine
Norm S. Heitmann
William B. Devoe
City Solicitor
P. Andrew Hamilton
City of Bangor
Eaton Peabody
73 Harlow Street
P.O. Box 1210
Bangor, ME 04401
Bangor, ME 04402-1210
15 April 2009
10. Entire Agreement and Modification. With respect to all Site -related issues between the
Settling Defendants on the one hand and Frontier and the City on the other hand, this Agreement
constitutes the entire agreement among the Settling Parties and supersedes any and all other
agreements and negotiations, whether Gyral or in writing, except that this Agreement does not
modify in any respect the Settlement Agreement between Frontier and the City, or any
agreement separately entered among Dead River and the Speirs Defendants. it is expressly
understood and agreed by the Settling Parties that this Agreement may not be altered, amended,
modified or otherwise changed in any respect whatsoever except by a writing duly executed by
the authorized representatives of each of the Settling Parties. The Settling Parties agree and
acknowledge that they will not claim at any time or place that (i) this Agreement has been orally
altered or modified or otherwise changed by oral communication of any kind or character, or, (ii)
they have taken any action in detrimental reliance upon any oral promise or communication to
effect modification of this Agreement.
11, Duplicate Originals. This Agreement may be executed in duplicate originals, each of
which is equally admissible into evidence.
12. Maine Law. This Agreement shall be construed and enforced pursuant to the laws of the
State of Maine.
13. Jurisdiction, The Settling Parties hereby admit and consent to exclusive jurisdiction in
the United States District Court for the District of Maine for any actions that may arise over the
performance, interpretation or enforcement of any provision of this Agreement. The Settling
Parties further agree that they will be subject to personal jurisdiction in the District of Maine for
purposes of any action arising out of any provision of this Agreement.
14. Joint Preparation of Agreement. This Agreement shall be interpreted as if it were
prepared collectively by the Settling Parties, such that any uncertainty or ambiguity shall not be
construed against any Settling Party.
15. Authority. Each Party to this Agreement represents that the person signing on its behalf
has been duly authorized to execute this Agreement, and to enter into the settlement described
herein.
[The rest of this page is intentionally blank.[
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15 April 2009
IN WITNESS HEREOF, the Settling Parties have placed their authorized signatures on the dates
set forth below.
FRONTIER COMMUNICATIONS CORPORATION
By:
Title:
Date:
DEAD RIVER COMPANY
By:
Title:
Date:
ROBINSON SPEIRS, JR., et al.
By:
Title:
Date:
CITY OF BANGOR, MAINE
By:
"Title:
Date:
a06
Attachment A
Settling Defendant Settlement Payment
Head River Company $1,800,000