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HomeMy WebLinkAbout10- Signed Agreement for Payment and Non-Waiver 3 11 10.pdfAGREEMENT FOR TEMPORARY PAYMENT OF JUDGMENT AND NON - WAIVER OF COVERAGE DEFENSES The City of Bozeman ( 'City') and the Montana Municipal Intedocal Authority ( "MMIA "), in consideration of the promises and terns and conditions set forth herein, agree this day of March, 2010 as follows: A $3,000,000 Judgment against the City of Bozeman, entered in Cause No. DV -03 -354, in the Eighteenth Judicial District Court, Gallatin County, Montana, (the "Delaney Judgment'), has been affirmed by the Montana Supreme Court, and interest on that Judgment will begin accruing in early April, 2010. 2. The Montana Municipal Interlocal Authority, ( "MMIA"), Governmental Entities Mutual, Inc., ( "GEM "), and Endurance Specialty Insurance, Ltd., ( "Endurance "), have asserted coverage defenses under their respective Memoranda and Facultative Reinsurance agreements, asserting that they dispute any obligation under their coverage documents to pay all or any part of the Delaney Judgment. Similarly, the City has asserted Its entitlement to coverage under the respective Memoranda and Facultative Reinsurance agreements and that any failure to remit the Delaney Judgment timely would result in significant damages to the City. 3: In order to prevent the accrual of interest on the Delaney Judgment, as well as minimize any Oak of attempted execution of that Judgment upon the City of Bozeman, (the "City"), MMIA and the City wish to provide a mechanism for temporary payment of the Delaney Judgment while ultimate financial responsibility for that Judgment is determined. 4. In order to accomplish the goals set forth above, MMIA agrees, subject to the terms and conditions stated herein, including the parties' non - waivers provided herein, to pay the Delaney Judgment pending the resolution of the coverage dispute. 5. The parties agree that, while MMIA will provide funds to pay the Delaney Judgment pending resolution of the coverage dispute, which may involve the City, - MMIA, Endurance, and GEM, and any other entity which may ultimately be found responsible or agree to be responsible for the Delaney Judgment, this payment by MMIA is made without any prejudice whatsoever to MMIA, GEM, or Endurance to seek repayment of some or all of the Delaney Judgment from the City of Bozeman upon adjudication or agreement as to the ultimate legal responsibility for that Judgment. 6. The parties agree that the MMIA is paying the Delaney Judgment on an interim basis only, and neither the MMIA, GEM, or Endurance are waiving, any potential claim, policy defense, or public policy defense that there is no coverage, or limited coverage, for any or all of the claims asserted against the City in the underlying Delaney litigation. MMIA, GEM, and Endurance specifically retain and reserve all rights to contest whether there is any coverage for the Delaney Judgment, whatsoever, and MMIA and the City acknowledge and agree that satisfaction of the Delaney Judgment by the MMIA pending determination of the ultimate responsibility for payment of the Delaney Judgment does not constitute any waiver of or hindrance to any and all claims which may be asserted by the MMIA, GEM, and /or Endurance that coverage does not exist under MMIA's Gem's, or Endurance's documents. 8. The parties acknowledge and agree that, by agreeing to MMIA's temporary payment of the Delaney Judgment, the City Is not waiving any claims to coverage against the MMIA, GEM, or Endurance. Further, the City specifically retains and reserves all rights to any claims for damages based on extra - contractual claims, tort claims, or other any other legal theory relating to the obligations of MMIA, GEM, or Endurance. The Citys entry into this agreement neither enlarges, nor reduces, its rights to make such claims. 2. 9. The City agrees that, upon the parties' adjudication or agreement as to the ultimate financial responsibility for the Delaney Judgment, it Will reimburse the MMIA for all portions of the Judgment for which the City is found to be responsible, or in the alternative, for which the City agrees it is responsible. 10. The City and the MMIA agree that the coverage disputes between the City and MMIA shall be considered resolved, entitling MMIA to reimbursement of any or all of the Delaney Judgment, if any of the following events occur. MMIA and the City agree in writing as to the amount of the Delaney Judgment to be reimbursed to MMIA; or A court of competent jurisdiction issues a binding ruling on the coverage issues, and the time for appeal of such expires, or if appealed, the final appellate court issues a decision determining coverage for the Delaney Judgment; or An agreed -upon binding arbitration has occurred which determines coverage, and If appealed, the appeal of that decision is concluded. 11. Reimbursement of amounts due to the MMIA, if any, will be made in installments within twenty -four (24) months of the event triggering reimbursement. MMIA agrees it will not charge the City interest upon any portion of the Delaney Judgment that is ultimately adjudicated or agreed to be the City's responsibility; however, the City agrees that reasonable interest may accrue from the date of the event triggering the obligation to reimburse until the amount due is paid in full. 12. The parties agree that either the City or MMIA, or the parties jointly, may pursue claims against the firth of Moore, O'Connell, and Refling, P.C. or any professional malpractice carierfor damages accruing to them as a result of the Delaney Judgment prior to the resolution of the coverage issues. 3. 13. The parties acknowledge that they have been advised by independent legal counsel, not retained or paid by the other, regarding this agreement, and have entered it freely, without duress or coercion. Each party represents to the other that the person signing below on its behalf has authority to bind their respective entities to this agreement. 14. Each party represents to the other that the person signing below on its behalf has authority to bind their respective entities to this agreement. DATED this day of March, 2010. l NDiI ' G� ��lur�J AutKofized Representbilveof the City of Bozeman, Montana Authorized Representative of MMIA 4.