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HomeMy WebLinkAbout96- Commercial Union Settlement Agreement .. , . , - SETTLEMENT AGREEMENT e This Settlement Agreement for the Release of All Claims and Policy Obligations ("Agreement") is entered into by and between Bozeman (as defined in Paragraph 1(a)) and Commercial Union (as defined in Paragraph 1(b)). Bozeman and Commercial Union are hereinafter collectively referred to as the "Parties" and either may be referenced as a "Party" . WHEREAS, Bozeman has filed a lawsuit against Commercial Union, and that action is pending in the United States District Court for the District of Montana, Butte Division, cause no. CV-94-081-BU-JDS ("the Lawsuit"); WHEREAS, in the Lawsuit, Bozeman has asserted against Commercial Union claims for insurance coverage, under various insurance policies allegedly issued by Commercial e Union, for several legal matters related to soil and groundwater contamination at Buttrey's Shopping Center in Bozeman, Montana; WHEREAS, Commercial Union has denied any obligation to defend or indemnify Bozeman with respect to those legal matters; WHEREAS, Bozeman and Commercial Union both wish to amicably resolve the dispute between them without the costs and risks associated with further litigation; WHEREAS, it is the intention of the Parties that this Agreement shall forever release Commercial Union from any and all obligations, duties and responsibilities of any nature and to anyone arising under and/or from any and all of the Policies (as defined in Paragraph 1(c)) from the beginning of time forward to the end of the world, as if the Policies had never existed. The terms of this Agreement shall be construed to accomplish the aforesaid intent of e the Parties; I 42326\P HI270803 . e NOW, THEREFORE, in consideration of the promises and mutual covenants and agreements and releases contained herein, and intending to be legally bound hereby, Bozeman and Commercial Union agree as follows: 1. Definitions. a. "Bozeman" means the City of Bozeman, a Montana municipal corporation, and all other entities or persons listed as insureds under any of the Policies (as defined in Paragraph l(c)), as well as their predecessors, successors and assigns and any and all of their subsidiary, affiliated, allied and associated companies, corporations, partnerships, proprietorships, joint ventures, foundations, organizations, governmental bodies and associations now or previously existing or hereafter created or acquired, and any and all past, present and future City or other governmental officials, directors, officers, partners, e employees, agents, insurers, servants, receivers, stockholders and other representatives including heirs, administrators, executors, assigns, and legal representatives. "Bozeman" shall also means all persons or entities claiming any right as an insured, additional insured, loss payee or assignee under any of the Policies. b. "Commercial Union" means Commercial Union Insurance Company, Employers' Surplus Lines Insurance Company, Employers' Fire Insurance Company, Employers' Commercial Insurance Company of America, Employers' Liability Assurance Corporation, Ltd., American Employers' Insurance Company, The Northern Assurance Company of America, Employers' Commercial Union Insurance Company, and their respective parents, subsidiaries, affiliates, divisions, predecessors-in-interest, successors-in- interest, related companies, and their respective directors, officers, employees, agents and e assIgns. c. The "Policies" includes any and all insurance policies issued or 2 42326\P HI270B03 . i e allegedly issued by Commercial Union to Bozeman, or under which Bozeman claims, has claimed in the past, or may in the future claim to be insured, and includes, but is not limited to, actual or alleged policies bearing the following numbers: CCW 279736 D536947 CCD536947 W297936 W271736 W279936 D714290 D712892 D733837 E283593 CAD064437 CCW 511859 2. Agreement Not to be Construed as an Admission. The Parties agree that this Agreement is the product of informed negotiations at arms e length between the Parties, assisted by counsel, and involves compromises. This Agreement shall never, at any time, for any purpose, be considered as an admission of obligation, liability, fault or responsibility on the part of any Party. Bozeman understands and agrees that the settlement embodied herein is a compromise of doubtful and disputed claims and this Agreement, including any payments and/or consideration provided for herein, is not to be construed as an admission of liability on the part of Commercial Union, by whom liability is expressly denied. Further, the signing of this Agreement by Commercial Union does not create and shall not be used as precedent or evidence in any proceeding or hearing to create, prove or interpret the obligations under, or the terms, conditions or exclusions of any other Agreement entered into, or insurance policy issued by, Commercial Union. 3. Intee:rated Agreement. e This Agreement is the entire Agreement between the Parties relating to the subject 3 42326\P HI270803 e matter hereof. All prior contemporaneous agreements, oral or written statements, representations, warranties, arrangements, understandings or collateral provisions concerning the negotiations or preparation of this Agreement, as well as any disputes between the Parties regarding the Policies, are merged and integrated into this Agreement and are without further force and effect. This Agreement may only be modified or amended by mutual agreement of the Parties, in writing, which specifically refers to this Agreement and is signed by both Parties. Bozeman understands, declares and acknowledges that no promise, inducement or agreement not herein expressed has been made to it and that this Agreement contains the entire agreement among the Parties hereto. 4. This A~reement Not a Contract of Insurance. This Agreement is not a contract of insurance and the Parties agree that it shall not be e interpreted according to any rules of construction particularly applicable to insurance contracts. Each Party has participated in the negotiation and drafting of this Agreement and no Party shall be deemed to be the drafter of this Agreement or of any particular provision hereof, and no part of this Agreement shall be construed against any Party on the basis of that Party's identity or capacity as an insurance company. 5. Reliance on Attorney. Bozeman and Commercial Union represent that they had full opportunity to review this Agreement with the attorneys of their choice, and that they have read the terms and conditions of this Agreement and that these terms are fully understood and voluntarily accepted by them. 6. Payment and Release of All Claims and Policy Oblil!ations. e Within twenty-one (21) days of the execution of this Agreement by both Parties, Commercial Union will pay to Bozeman the sum of one hundred thousand United States 4 42326\P HI270803 e dollars ($100,000.00) ("Settlement Amount"), in the form of a check payable to "the City of Bozeman" . In consideration of this promise to pay, Bozeman agrees that: (a) Commercial Union is forever released from any and all obligations, duties and responsibilities of any nature and to anyone arising under the Policies from the beginning of time forward to the end of the world, as if the Policies never existed. A complete extinguishment and termination of the Policies, and any and all rights and obligations thereunder is hereby effected. (b) From and after the date of this Agreement, Commercial Union shall have no further obligations, duties or responsibilities under the Policies in connection with the investigation, servicing, settlement, defense, or indemnification of any claim, whether or not such claim has been reported by Bozeman to Commercial Union. e (c) Bozeman hereby forever discharges, releases and remises any and all claims, causes of action, liabilities, contracts, obligations or agreements of any nature or kind whatsoever, known or unknown, that have been or could have been or might be in the future asserted against Commercial Union under and/or in connection with the Policies including, without limitation, all claims that are or might have been asserted in the Coverage Action, other than a claim based upon a breach by Commercial Union of its payment obligation under this Agreement. (d) Commercial Union hereby forever discharges, releases and remises any and all claims, causes of action, liabilities, contracts, obligations or agreements of any nature or kind whatsoever, known or unknown, that have been or could have been or might be in the future asserted against Bozeman under and/or in connection with the Policies including, e without limitation, all claims that are or might have been asserted in the Coverage Action, other than a claim based upon a breach by Bozeman of its obligations under this Agreement. 5 42326\P HI270803 . e (e) To the extent Bozeman is without power or authority to release or extinguish the rights of any entity described in Paragraph 1(a) under the Policies, it is agreed by and between the Parties that Bozeman shall be responsible for and shall succeed to any and all duties or obligations that Commercial Union would have possessed or would have been obligated to perform under the Policies. 7. Dismissal of Lawsuit. Upon the execution of this Agreement by the second Party to sign, Bozeman will dismiss the Lawsuit with prejudice. Bozeman and Commercial Union shall each bear its own costs and attorneys' fees in connection with the Lawsuit. 8. Indemnification. Hold Harmless and Defense. a. Bozeman shall defend, indemnify and hold Commercial Union e harmless, without limit, against any and all losses or liabilities incurred by and/or as a result of or in connection with any claim made against Commercial Union by any person or entity not a party to this Agreement under, in connection with, or as a result of any claim made under the Policies and/or this Agreement. Bozeman's obligations under this paragraph shall extend to and include any and all claims involving loss or expense incurred by Commercial Union, including, without limitation, attorney's fees, expenses, disbursements, costs, judgments, settlements, payments, fines, penalties and costs of investigating and complying with any equitable decrees or governmental directives, deriving from or resulting from the issuance of the Policies or arising from this Agreement. Commercial Union shall promptly notify Bozeman of any such claim(s) so that Bozeman can fully and timely defend such claim(s). Neither Commercial Union nor Bozeman shall act in any way that would prejudice e the other's rights with respect to the outcome of such a claim. The obligations of Bozeman pursuant to this paragraph shall not apply to claims asserted by Edsel Construction Co. with 6 42326\P HI270803 . . e respect to policy nos. D714290, D712892, D733837 and E283593. b. To the extent that any litigation decisions are required for any portion of any notice, claim, or complaint, as described in Paragraph 8(a), Bozeman and Commercial Union shall have joint authority to choose defense counsel. Commercial Union will not confess judgment in or settle such litigation without Bozeman's consent. Commercial Union shall have the right to prior approval of all litigation decisions. Commercial Union, however, shall have sole control over any issue of policy interpretation. Commercial Union shall have the right to retain independent counsel to monitor the defense of any such claim, the cost of such independent counsel shall be borne by Commercial Union. 9. Confidentiality. Bozeman hereby agrees to maintain the confidentiality of the existence and terms of e this Agreement to the fullest extent permitted by Montana law. In particular, Bozeman agrees to disclose the existence and terms of this Agreement to only: (a) its own officers, employees, agents and independent contractors who need such information in order to perform their job duties, and Bozeman further agrees to instruct such persons to maintain the confidentiality of such information to the fullest extent permitted by Montana law; and (b) members of the public, including representatives of print or broadcast media, who specifically request such information. 10. Notices. All notices or other communications which a Party desires or is required to provide to the other shall be given in writing and sent by certified mail to: e 7 42326\P HI270803 . . - For Commercial Union: For Bozeman: Mr. Ed Albanese Mr. Barry G. 0' Connell Commercial Union Insurance Company Moore, O'Connell & Refling One Beacon Street Life of Montana Building, Suite 10 Boston, MA 02108 601 Haggerty Lane Bozeman, MT 59771-1288 11. No Prior Assienment. Bozeman warrants that prior to and as of the Effective Date, as defined in Paragraph 13 of this Agreement, it has not assigned any claims, demands, causes of action or fights under any of the Policies to any other person or entity. 12. Authorization. The Parties expressly represent and warrant that each is fully authorized to enter into this Agreement through the representative of said Party whose signature appears at the end of e this Agreement. 13. Counterparts and Effective Date. This Agreement may be signed in counterparts and the Effective Date will be deemed the latest of the dates of signing by the Parties. 14. Choice of Law. This Agreement shall be construed under the laws of the State of Montana and all disputes concerning the validity, interpretation and application of this Agreement and any portion thereof and all disputes concerning issues within the scope of this Agreement shall be determined in accordance with Montana law. By agreeing to the use of Montana law solely for such purposes, Commercial Union shall not be deemed to have taken a position as to the appropriate law to be used in interpreting the Policies or any other contract between or e involving the Parties. 8 42326\P HI270803 . . e 15. Miscellaneous Provisions. a. This Agreement shall be binding upon and shall inure to the benefit of Bozeman and Commercial Union. b. Nothing in this Agreement shall be construed to make any person or entity not executing this Agreement a third-party beneficiary of this Agreement, nor shall any person or entity, other than one of the Parties hereto, have any authority to enforce this Agreement. c. The individuals who have executed this Agreement on behalf of the Parties expressly represent and warrant that they are authorized to sign on behalf of the Parties for the purpose of binding the Parties to this Agreement. e WHEREFORE, the Parties have caused this Agreement to be executed on their respective behalf as of the dates below the signatures of their duly authorized representatives. e 9 42326\P HI270803 ,- .. , . e SETTLEMENT AGREEMENT FOR THE RELEASE OF ALL CLAIMS AND POLICY OBLIGA nONS SIGNATURE PAGE The signing of this page by a duly authorized representative of Bozeman constitutes a valid execution by Bozeman of the Settlement Agreement for the Release of All Claims and Policy Obligations entered into by Bozeman and Commercial Union. CITY OF BOZEMAN (/' ~ L) ~' By:<o-_" -t~_t.._..LJ _/ L/ '" (Signature) ,""",--- Name: ,';:lmpc:: F Wyc::nrk-; (Print) Title: City Manager e (Print) Date: October 1, 1996 Witnessed this I d day of Oc to be r 1996 By:~dh~ (Signature) Name: Robin L. Sullivan (Print) Clerk of Commission Address: 411 E. Main. Bozeman. MT (Print) e 10 42326\P HI270803 --- . . . . . e SETTLEMENT AGREEMENT FOR THE RELEASE OF ALL CLAIMS AND POLICY OBLIGATIONS SIGNATURE PAGE The signing of this page by a duly authorized representative of Commercial Union constitutes a valid execution by Commercial Union of the Settlement Agreement for the Release of All Claims and Policy Obligations entered into by Bozeman and Commercial Union. COMMERCIAL UNION INSURANCE COMPANY By: {(f{~C/ (I ~~Le> .,( Signature) e Name: ~#,{"I (I A'/~fiffE.>'" (Print) Title: ~/Yft/RE.e (Print) Date: /J{; (/. /! /tf't7 c;" --.~ ~ Witnessed this 13/ ay of' er, 1996 By: f~.-'iJ~. 1tL-~""_A--7-~o-- '--- f (Signature) Name: Pl'~.r "-72- ~- (v( ( 1'\'/1'-/ /'.hr"? /( f;>" , (Print) Address: I A ,,:;'A-C c? 'v S T- ,,8(..-) S i~ i I ,-'7 vr- C) ,+. ({.~) :':;> (Print) e 11 42326\P HI270803 . . THE LAW FIRM RECE\VEO FEB 6 1997 MOORE O'CONNELL & REFLING , A l'ROI,"SSIONAt CORPORATION SUITE 10 LIFE OF MONTANA BUILDING 601 HAUUERTY LANE PERRY j, MOORE BARRY U, O'CONNELL Reply To MARK IJ, REf'LlNG POST ornCE BOX 1288 WM. RUSSELL McELYEA BOZEMAN, MONTANA 59771-lZ88 CINDY E, YOUNKIN WILLIAM M, BROOKE TELEPHONE, (406) 58n511 FAX, (406) SH7.9079 February 6, 1997 Paul J. Luwe, Esq. City of Bozeman P.O. Box 640 Bozeman, MT 59771-0640 RE: City v. Commercial Union Insurance Company Our File No. 20028-012 Dear Paul: Enclosed is an original executed Settlement Agreement between the City of Bozeman and Commercial Union Insurance Companies. You were previously provided only a copy. Because this is a public document, we requested that the City be provided an original of this Agreement. ~SincerelY' I - d~ Bre da S. Hegel, PLS Legal Assistant to BARRY G. O'CONNELL Enc. 22028012.osd