Loading...
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"); A 286 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 2 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. �9 1-1 406 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. 4 59 206 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.[ 6 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