HomeMy WebLinkAbout01-29-18 City Commission Packet Materials - C4. City v. Moore, O'Connell & Refling Settlement AgreementCommission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Greg Sullivan, City Attorney
SUBJECT: Authorize Settlement of City v. Moore O’Connell & Refling, P.C, Lewis
and Clark County District Court (Cause No. BDV-2010-988)
MEETING DATE: January 29, 2018
AGENDA ITEM TYPE: Consent
RECOMMENDATION: Authorize City Attorney to sign settlement agreement in City v.
Moore O’Connell & Refling, P.C.
SUGGESTED MOTION: I move to authorize the City Attorney to sign the settlement
agreement in City v. Moore O’Connell & Refling, P.C. and to direct the City Manager to place
settlement funds in the City’s general fund reserve.
BACKGROUND: In 2003, the City was sued by Delaney and Company for issues related to
the acquisition of the Mandeville Farm. The City tendered the suit to the Montana Municipal
Interlocal Authority (MMIA) to provide a defense. The MMIA retained the law firm of Moore
O’Connell & Refling, P.C (MOR) to defend the City. After a district court judge ordered the City
liable as a sanction for discovery issues in 2006, a jury awarded Delaney & Co. $3,000,000.00 in
damages. That decision was affirmed on appeal. The MMIA subsequently paid the entire amount
subject to an agreement with the City to seek a Court’s determination whether the MMIA was
responsible for the entire judgment.
In 2010, the City filed a complaint for declaratory judgment against the MMIA seeking a
determination the entire $3M jury award was covered under the MMIA’s applicable insuring
agreements. A district court judge determined the jury award was not covered under the MMIA’s
insuring agreement. During the appeal of that decision, the City and MMIA settled wherein
MMIA agreed to pay $1M of the award and the City was to reimburse MMIA for $2M of the
award. The City made payments to the MMIA to cover its share of the settlement out of the
City’s general fund in FY13, FY14, and FY15.
Also in 2010, the City filed a suit against MOR seeking compensatory damages. This settlement
resolves the case against MOR.
The terms of the settlement include:
• Payment to the City of $1M;
• Full release of MOR and its insurer;
• No admission of liability by MOR; and
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• Stipulation for dismissal of the lawsuit.
The result of this settlement is the three parties involved in defending the original Delaney & Co.
lawsuit (MMIA, MOR, and the City) have all participated the equivalent of 1/3 of the damages
paid to Delaney & Co.
UNRESOLVED ISSUES: None.
ALTERNATIVES: None identified.
FISCAL EFFECTS: Settlement will result in the City no longer having to expend general fund
money in pursuit of this litigation. In addition, settlement will result in a payment to the City of
$1,000,000.00 to be placed in the City’s general fund reserve.
Attachments: Settlement and General Release City v. Moore O’Connell & Refling, P.C.
Report compiled on: January 22, 2018
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GENERAL RELEASE AND SETTLEMENT AGREEMENT (COB v. MOR) Page 1
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GENERAL RELEASE AND SETTLEMENT AGREEMENT
RELEASOR: The City of Bozeman
RELEASEE: Moore, O’Connell & Refling, P.C.
DATE OF CASUALTY: July 17, 2003 to present
DESCRIPTION OF CASUALTY: Alleged legal malpractice in Delaney &
Company, Inc. v. City of Bozeman, DV-03-354,
Eighteenth Judicial District Court, Gallatin
County.
SUM OF SETTLEMENT: $1,000,000.00
CIVIL CAUSE: The City of Bozeman v. Moore, O’Connell &
Refling, P.C., Lewis and Clark County District
Court, Cause No. BDV-2010-988
1. Release
The undersigned Releasor acknowledges receipt of the above sum of money and in
consideration for payment of such sum, fully and forever releases and discharges
Releasee, Releasee’s heirs, personal representatives, successors, assigns, agents, partners,
employees and attorneys from any and all actions, claims, causes of action, demands, or
expenses for damages or injuries, whether asserted or unasserted, known or unknown,
foreseen or unforeseen, arising out of the described casualty.
2. Future Damages
Inasmuch as the injuries, damages, and losses resulting from the events described
herein may not be fully known and may be more numerous or more serious than it is now
understood or expected, the Releasor agrees, as a further consideration of this agreement,
that this Release applies to any and all injuries, damages and losses resulting from the
casualty described herein, even though now unanticipated, unexpected and unknown, as
well as any and all injuries, damages and losses which have already developed and which
are now known or anticipated.
3. Release of Insurer
Releasor further releases ALPS Property and Casualty Insurance Company from
all obligations under any part of the company’s insurance policies applicable to
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GENERAL RELEASE AND SETTLEMENT AGREEMENT (COB v. MOR) Page 2
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Releasor’s claims and from any and all claims arising out of the investigation, handling,
adjusting, defense or settlement of the claim including, without limitation, any claims for
breach of contract, in tort, violation of the covenant of good faith and fair dealing,
violation of Montana Code Annotated §§ 33-18-201 et seq., and in common-law bad
faith.
4. No Admission of Liability
It is understood that the above-mentioned sum is accepted as the sole
consideration for full satisfaction and accord to compromise a disputed claim, and that
neither the payment of the sum by Releasee nor the negotiations for settlement shall be
considered as an admission of liability.
5. No Additional Claims
Releasor represents that no additional claims are contemplated by the City of
Bozeman, its employees and agents against any other party potentially liable for the
losses, damages, and injuries for which this Release is given. In the event any additional
claim is made which directly or indirectly results in additional liability exposure to
Releasee for the losses, injuries, and damages for which this Release is given, Releasor
covenants and agrees to indemnify and save Releasee harmless from all such claims and
demands, including reasonable attorneys’ fees and all other expenses necessarily incurred.
6. Stipulation for Dismissal with Prejudice
Releasor stipulates and agrees that Releasor’s attorney of record shall dismiss with
prejudice, as fully settled upon the merits, the above-described civil action. Each party
shall pay their respective costs and attorneys’ fees.
7. Disclaimer
Releasor has carefully read the foregoing, discussed its legal effect with Releasor’s
attorney, understands the contents thereof, and signs the same of Releasor’s own free will
and accord. This Release shall be binding upon Releasor’s heirs, successors, personal
representatives and assigns.
8. Severability
Should any provision of this Agreement be determined to be unenforceable, all
remaining terms and clauses shall remain in force and shall be fully severable.
9. Choice of Law
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GENERAL RELEASE AND SETTLEMENT AGREEMENT (COB v. MOR) Page 3
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The laws of the State of Montana shall apply to the interpretation of this
Agreement.
10. Final Agreement
This written Agreement constitutes the final agreement between the parties and
shall supersede any oral agreements to the contrary.
DATED this ____ day of , 2018
CAUTION: READ BEFORE SIGNING!
RELEASOR
The City of Bozeman
By
Its
STATE OF MONTANA )
:ss.
County of )
This instrument was acknowledged before me on the day of
, 2018 by , known to me to be the
, of The City of Bozeman, Releasor.
Typed or Printed Name:
NOTARY PUBLIC for the State of Montana
Residing at:
My Commission Expires:
APPROVED BY:
Attorneys for Releasor
MILODRAGOVICH, DALE & STEINBRENNER, P.C.
P.O. Box 4947
Missoula, MT 59806-4947
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GENERAL RELEASE AND SETTLEMENT AGREEMENT (COB v. MOR) Page 4
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By
G. Patrick HagEstad
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