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HomeMy WebLinkAbout94- General Insurance Co. Mutual Settlement Agreement and Release i i . , . MUTUAL SETTLEMENT AGREEMENT AND RELEASE INTRODUCTION This Mutual Settlement Agreement and Release ("Agreement") is entered into by and between GENERAL Insurance Company of America, and its officers, directors, agents, employees, attorneys, and its parent, subsidiary or affiliated companies (hereinafter collectively referred to as GENERAL) and the City of Bozeman, a Montana Municipal Corporation, and its officers, commissioners, agents, employees, attorneys, successors, and assigns (hereinafter collectively referred to as the City of Bozeman). DEFINITIONS BUTTREY SHOPPING CENTER hereinafter referred to as "BSC" is a tract of real property within the exterior municipal boundaries of the City of Bozeman, County of Gallatin, State of Montana. Upon this real property was constructed retail operations in the early 1960's which operations continue to date. BOZEMAN SOLVENT SITE hereinafter referred to as "BSS" is a parcel of real property within Gallatin County inclusive of BSC and adjacent real estate extending generally in a northerly direction towards United States Interstate 90. An exact description is incapable of definition and is dependent upon further investigatory efforts by the City of Bozeman and others. MONTANA DEPARTMENT OF HEALTH AND ENVIRONMENTAL SCIENCES hereinafter referred to as "MDHES" is that governmental entity of the State of Montana charged with the enforcement of the "Comprehensive Environmental Cleanup and Responsibility Act" (CECRA) Mont. Code Ann. 9 75-10-701 et seq. SITE LITIGATION, as of the date of the execution of this Agreement, is a specific reference to the following: a. Jewel Food Stores, Inc., v. the City of Bozeman et aI., No. CV-92-57-BU (U.S. D.C., MT); b. Order to Provide Information and Documentation, Docket No. WQ-90-002; Before the MDHES, dated August 23, 1990; c. Letter dated December 31, 1991 authored by MDHES, Director's Office and addressed to Robert Hawks, Mayor of City of Bozeman, identifying the City of Bozeman as a potentially liable person pursuant to 9 75-10-711 (3) Mont. Code Ann. for the contamination allegedly found at BSC/SSS. . d. Interim Water Supply Order, Docket No. WQ-93-101; Before the MDHES, dated June 14, 1993 and Amendments thereto dated June 18, 1993 and December 3, 1993 respectively. It is understood that other actions at law or administrative actions arising from the BSC/BSS may arise following the execution of this Agreement and that they shall, upon their filing or issuance, be characterized and identified within the definition of "Site Litigation." PREAMBLE WHEREAS: 1. The City of Bozeman has alleged that GENERAL provided liability insurance coverage to the City of Bozeman during a period of time in which it has been alleged by Jewel and MDHES that the predicate facts underlying the "Site Litigation" may have arisen. 2. The City of Bozeman, during that period of time, may have owned, leased, and/or conducted operations, including the operation of a sewage collection system at or near BSC. 3. As a result of the City's operations at BSC, MDHES has notified the City of Bozeman that it is potentially liable for the cleanup of BSC and BSS and, in furtherance thereof, has issued an Alternate Water Supply Order to the City of Bozeman dated June 14, 1993. The City of Bozeman has also been named as a defendant in a private cost recovery action by Jewel Food Stores, Inc. in which Jewel seeks contribution for costs incurred in the investigation and remediation of BSC and BSS, and in which other defendants have asserted cross-claims against the City of Bozeman predicated upon statutory violations and common law theories of recovery. 4. GENERAL maintains that there is no insurance coverage under any policy of insurance issued by it to the City of Bozeman for the "Site Litigation" and the City of Bozeman maintains that such coverage does exist. 5. GENERAL and the City of Bozeman acknowledge the existence of disputed questions of law and fact as to whether or not insurance coverage exists for the "Site Litigation." 6. GENERAL and the City of Bozeman wish to resolve fully, completely, and finally, as between themselves, all disputes which now exist or in the future may exist with 2 i , respect to insurance coverage for "Site Litigation" for which the City of Bozeman has sought, is presently seeking, or in the future may seek, by way of the payment of the costs of defense and/or indemnification. NOW, THEREFORE, in reliance upon the aforesaid recitals and in consideration of the mutual agreements contained herein, it is agreed by and between GENERAL and the City of Bozeman as set forth herein; 1. Policies For the purposes of this Agreement only, it shall be deemed that GENERAL issued the following insurance policies to the City of Bozeman either as an insured, named insured and/or additional insured: Policy No. Effective Limits COP 164352 2-28-69 to 2-28-70 Unknown COP 164352 2-28-70 to 2-28-71 Unknown CP 293477 2-28-71 to 2-28-72 Unknown CP 293477 2-28-72 to 2-28-73 Unknown CP 424788 2-28-73 to 2-28-74 $300,000 combined single limits This list is not meant to be exhaustive of all policies which GENERAL issued or may have issued to the City of Bozeman. It is the intention of GENERAL and the City of Bozeman, however, that this Agreement shall apply to all insurance policies (hereinafter collectively referred to as "the Policies") issued by GENERAL to the City of Bozeman, whether such policies are listed above and regardless of whether the City of Bozeman is an insured, named insured, or an additional insured under such policies identified or presently incapable of identification. 2. Payment bv GENERAL a. In consideration of the agreements herein given by the City of Bozeman and in response to demands by the City of Bozeman for the payment of the costs of defense and indemnification with regard to Site Litigation, GENERAL agrees to fund, on behalf of the City of Bozeman, the sums stated in paragraph 2b hereof. In entering into this Agreement to make such payments, GENERAL is not acting as a volunteer but rather is settling a disputed claim for which it denies any and all liability. b. Upon receipt by GENERAL of a fully executed copy of this Agreement, GENERAL shall pay to the City of Bozeman as follows: 3 i. $15,089.93 representing defense and indemnity costs incurred by the City of Bozeman incidental to its involvement with Site Litigation prior to January 1, 1994; ii. The City of Bozeman acknowledges receipt of $3,713.00 from GENERAL which sum shall be credited to that amount identified in paragraph 2b.i; and iii. 4% of all costs be they identified as costs of defense or indemnification incurred by the City of Bozeman with regard to Site Litigation, to be allocated 80% to indemnity and 20% to defense, regardless of the type of cost incurred after December 31, 1993. c. The City of Bozeman, upon receipt of the sum of $11,376.93, shall deem that GENERAL is in complete satisfaction of its obligations under the policies to pay defense and indemnity costs associated with Site Litigation which costs were incurred prior to January 1, 1994. d. The City of Bozeman agrees that the costs referred to in this paragraph and subparts hereof do not and will not include any costs associated with the installation, repair or replacement of sewer lines on the premises of BSe but will include the cost of the removal and/or remediation of contaminated and/or impacted soils, as identified by MDHES, which soils may be found during the installation, repair or replacement of sewer lines upon BSC. These costs for the removal and/or remediation of impacted soils on BSe are payable if such activity is required and/or permitted by MDHES, its agents, employees, contractor, or representative. 3. Indemnity and Hold Harmless a. The City of Bozeman, jointly and severally, agrees to hold GENERAL harmless and indemnify GENERAL against any and all claims and/or lawsuits made and/or brought against GENERAL by any expert, consultant or contractor retained by the City of Bozeman, which indemnity shall include all of GENERAL's attorney's fees, costs, disbursements and/or expenses incurred by GENERAL in defending against such claims and/or lawsuits. b. Bozeman, jointly and severally, hereby specifically agree to defend, indemnify and hold GENERAL harmless in connection with any and all claims or lawsuits, past, present or future, known and unknown, asserted or unasserted, anticipated or 4 ------ - - ------------------------- unanticipated which have been or hereafter may be asserted against GENERAL pursuant to the Policies by any person, including, but not limited to any claimant, plaintiff, petitioner, governmental agency, entity or body, or insurer or excess insurer in connection with the Site Litigation. c. GENERAL represents that it will not seek contribution from any of the City of Bozeman's other insurance carriers with regard to payments made under this Agreement. 4. Release of all Claims bv the City of Bozeman a. In consideration of the payments made and anticipated to be made pursuant to paragraph 2 hereof, and of the agreements made by the City of Bozeman, the City of Bozeman releases and forever discharges GENERAL, its corporate parents, subsidiaries, affiliate companies, predecessor and successor companies, if any, and all of their present, past and future officers, directors, employees, stockholders, representatives, agents, and attorneys from any and all liability whatsoever, for all claims, actions, demands, suits, liabilities, obligations, rights or causes of acti0n of every kind and nature including, but not limited to, compensatory, consequential and/or punitive damages, loss of profit, compensation, emotional distress, property damage, bodily injury, personal injuries, costs, expenses, attorney's fees, recision, reformation, declaratory relief or any other relief, which claims or causes of action arise out of or are connected with the Site Litigation; further including, but not limited to, all claims or causes of action arising out of or connected with any statute including any alleged violation of the provisions of the Montana Insurance Code, including but not limited to the Unfair Claims Settlement Practices Act, with any alleged breach of any implied covenant of good faith and fair dealing, with any and all claims of alleged "bad faith"; or, with any and all claims arising out of or connected with any monies owed by the City of Bozeman or any other persons or entities which may involve the interests of the City of Bozeman or to become due to any present or future claimant or arising out of or connected with the negotiation or execution of this Agreement, asserted or not asserted, known and unknown, anticipated and unanticipated, past, present or future, and further including, but not limited to any environmental claims. For purposes of this Agreement only, "claims" or "suits" shall mean any and all obligations, liabilities, demands, claims, administrative proceedings or lawsuits, past, present or future, presently asserted or unasserted, known or unknown, anticipated or unanticipated, running in favor of or against GENERAL and/or the City of Bozeman. b. It is the intent of GENERAL and the City of Bozeman that if and when GENERAL's indemnity payment to the City of Bozeman totals $300,000.00 with regard to Site Litigation or otherwise, all rights, title, and interest which the City of Bozeman may have had, presently has, or may hereafter have in the Policies will be extinguished, and that this Agreement likewise shall extinguish any and all obligations which GENERAL may 5 . have had, now has or in the future may have under the Policies to any person or entity, including but not limited to the City of Bozeman. It further is the intent and understanding of the City of Bozeman and GENERAL that upon exhaustion of the $300,000.00 indemnity limits, the City of Bozeman will not hereafter seek insurance coverage from GENERAL under the Policies for any and all claims or suits which have been or hereafter may be asserted against the City of Bozeman. Nothing in this subparagraph shall be deemed to impair such rights as may arise under the terms hereof. 5. Agreement bv the City of Bozeman a. The release given in this Agreement shall apply not only to all currently known and anticipated results of the matters released, but also to those currently unknown and unanticipated claims at the BSC/BSS. The City of Bozeman represents and warrants that it understands that the nature, amount, and extent of the actual or potential claims, actions, causes of action, injuries and damages arising from the BSC/BSS may not be known either to the City of Bozeman or GENERAL as of the date hereof, and that additional or different facts than those which it knows or believes to be true may be discovered. Nevertheless, the City of Bozeman hereby acknowledges that it specifically intends to forever and fully discharge and release GENERAL from any and all such claims, actions, causes of actions, injuries, and damages, even if not discovered or brought to the attention of the City of Bozeman until after the effective date of this Agreement. b. The City of Bozeman agrees that this Agreement supersedes any and all prior agreements between the City of Bozeman and GENERAL regarding insurance coverage for the Site Litigation. GENERAL CONDITIONS 6. The City of Bozeman represents and warrants that it has not and will not in any manner assign, transfer, conveyor sell, or purport to assign, transfer, conveyor sell to any entity or person any cause of action, any chose in action, or part thereof, arising out of or connected with the matters released herein, and that it is the only entity entitled to recover for any damages under such claims, causes of action, actions, and rights. The City of Bozeman represents and warrants that no subrogation of any cause of action, chose in action, or part hereof, has taken place. The City of Bozeman further represents, warrants, and agrees that it will not in any way voluntarily assist any other person or entity in the establishment of any claim, cause of action, actions or right against GENERAL in any way relating to the investigation, handling, defense, or settlement of claims relating to or arising from the claims governed by this Agreement. Except as otherwise provided, the City of Bozeman agrees to hold harmless and indemnify GENERAL for any breach by the City of Bozeman of any of the foregoing representations 6 -------- . , and warranties, such indemnity to include, but not be limited to, GENERAL's attorneys' fees and costs. 7. This Agreement is the result of a compromise and accord and shall not be considered an admission of liability or responsibility. This Agreement is a compromise and settlement of disputed claims and is the product of arms length negotiations. 8. This Agreement prevails over prior communications regarding the matters contained herein between GENERAL and the City of Bozeman or its representatives. This Agreement was drafted by counsel for GENERAL and the City of Bozeman and there shall not be a presumption or construction against GENERAL or the City of Bozeman, each expressly waiving the doctrine of contra proferentum. 9. This Agreement is an integrated agreement and contains the entire agreement regarding the matters herein between GENERAL and the City of Bozeman and no representations, warranties, or promises have been made or relied on by GENERAL or the City of Bozeman other than as set forth herein. 10. This Agreement is intended to confer rights and benefits only on GENERAL and the City of Bozeman and is not intended to confer any right or benefit upon any other person or entity. No person or entity other than GENERAL and the City of Bozeman shall have any legally enforceable right under this Agreement. All rights of action for any breach of this Agreement are hereby reserved to GENERAL and the City of Bozeman. 11. This Agreement is without prejudice or value as precedent and shall not be used in any proceeding or hearing to create, prove, or interpret the obligations under, or terms and conditions of, any other agreement or any insurance policy. 12. This Agreement is not a policy of insurance, and GENERAL and the City of Bozeman do not intend that it will be interpreted as such. 13. The parties represent and warrant to the extent applicable: a. that they have taken all necessary corporate and/or legal actions to duly approve the making and performance of this Agreement and that no further corporate or other approval is necessary; b. that the making and performance of this Agreement will not violate any provision of law or of their respective articles of incorporation or by-laws; c. that they have read this Agreement and know the contents hereof, that the terms hereof are contractual and not by way 7 . . of recital, and that they have signed this Agreement of their own free act; and d. that in making this Agreement, they have obtained the advice of legal counsel. 14. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be valid under applicable law, but if any provision of this Agreement shall be invalid or prohibited thereunder, such provision shall be ineffective to the extent of such prohibition without invalidating the remainder of such provision or the remaining provisions of this Agreement. 15. Each of the terms of this Agreement is binding upon GENERAL and the City of Bozeman, and their respective heirs, predecessors, successors, transferees, assignees, representatives, principals, agents, officers, directors, and employees. 16. GENERAL and the City of Bozeman agree that this Mutual Settlement Agreement and its terms and conditions are confidential and shall not be disclosed to anyone without the written consent of all parties to this Mutual Settlement Agreement. Notwithstandi ng the foregoing, written consent shall not be required for any disclosure (a) made pursuant to court order or (b) made to an attorney, reinsurer, auditor, representative, director or employee of GENERAL or the City of Bozeman, provided that any such disclosure is made in the furtherance of a financial or business interest of GENERAL or the City of Bozeman and is not part of a general publication or dissemination, or (c) made pursuant to the City of Bozeman's obligations under the Public Disclosure Laws or (d) made pursuant to a valid and proper subpoena or production request directed to the City of Bozeman. Any person to. whom a disclosure is made under (b) or (d) shall be advised of the confidentiality requirement. 17. This Agreement is entered into, and shall be construed and interpreted in accordance with the laws of the State of Montana. City of Bozeman .. Dated: June 3, 1994 (SEAL) By: ~.i.JJ~ CITY CLERK 8 ,. . ~, . , . . GENERAL Insurance Company of America Dated: S/~/'lf By: Its: Claims Adjuster 9 . I . ~ II ~ 'r' 11 V1H> JUN , ",311M THE LAW FIRM MOORE, O'CONNELL & REFLING A PROFESSIONAL CORPORATION SUITE 10 LIFE OF MONTANA BUILDING PERRY j, MOORE 601 HAGGERTY LANE BARRY G, O'CONNELL MARK D. REFLING Reply To WM, RUSSELL MeEL YEA POST OFFICE BOX 1288 CINDY E, YOUNKIN BOZEMAN, MONTANA 59771-1288 WILLIAM M. BROOKE TELEPHONE, (406) 587-5511 FAX: (406) 587.9079 June 7, 1994 Paul Luwe Attorney City of Bozeman POBox 640 Bozeman, MT 59771-0640 Re: Bozeman Solvent Site Our File No: 20028-012 Dear Paul: Please find enclosed one original, fully executed "Mutual settlement Agreement and Release" between the City and Safeco. Kindly have it kept in a secured, but easily accessible location for future reference as this matter may outlive the two of us. This firm has retained one original, executed Release, and one has been provided to Safeco for its records. Essentially, this is the insurance policy and we do not wish it to go the same route as did the original pOlicy. any questions, please feel free to contact me. BGOC:mp Enclosure 20028012.L53