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HomeMy WebLinkAboutUnique Properties, Inc. (Questex, Ltd); Eladia Laines; Mark S. Adams 2017-11-13COU No. 1718-144 SETTLEMENT AGREEMENT This Settlement Agreement (the "Settlement Agreement") is entered into by and amongst: (1) Unique Properties, Inc., formerly known as Questex, Ltd., and Eladia Laines, an individual; (2) the City of Ukiah, a municipal corporation (the "City"); and, (3) Mark S. Adams, in his capacity as court appointed receiver in the action referenced herein (the "Receiver"). From time to time hereinafter, the parties to the Settlement Agreement will be collectively referred to as the "Parties" and individually as a 'Party." RECITALS A) On July 10, 2015, the City filed a Petition for Appointment of a Receiver Pursuant to Health and Safety Code Section 17980.7 with the Superior Court of California in and for the County of Mendocino (the "Petition"). On January 8, 2016, the City filed an Amended Complaint and Petition ("Amended Petition") (collectively with the July 10, 2015 petition, the documents shall be referred to as "Petition"). The Petition was assigned case number SCUK-CVPT-15-66036 by the clerk of the court. The Petition relates to the real property owned by Unique Properties, Inc. located at 272 North State Street in Ukiah, California (the "Subject Property"). In the Petition, the City alleges in part that several conditions existed at the Subject Property which were violations of the Health and Safety Code and/or the Ukiah Municipal Code. The City further alleged that the condition of the Subject Property constituted a public nuisance. The City requested that the court appoint a receiver, pursuant to the provisions of Health and Safety Code § 17980.7, to take full and complete control of the Subject Property and take all steps necessary to rehabilitate the Subject Property and bring it into compliance with the Health and Safety Code and the Ukiah Municipal Code. B) On October 31, 2016, Unique Properties, Inc. and Eladia Laines filed a Verified Answer and Response to the Petition ("Answer"). In the Answer, Unique Properties, Inc. and Eladia Laines objected to and disputed all of the material allegations of the Petition and reported on the work accomplished to date. C) On January 9, 2017, and in response to the Petition, the court appointed the Receiver as court appointed receiver of the Subject Property ("Order Appointing Receiver"). The time to appeal the order appointing the receiver has run and the order is not subject to appeal. Following his appointment, the Receiver took a number of actions including, but not limited to: (1) pursuant to a court order, borrowing funds secured by receivership certificates and associated deeds of trust encumbering the Subject Property; (2) contracting for various services related to the cleanup and repair of the Subject property; and (3) conducting and overseeing construction at the Subject Property. D) A dispute has arisen between the parties regarding, among other things: (1) the allegations of and the relief sought by the Petition; and, (2) the work conducted or anticipated to be conducted by the Receiver at the Subject Property (the "Dispute"). {SEI4/00054867. } E) Without any admission of any breach, liability, fault or wrongdoing, the Parties desire to mutually resolve the Dispute. NOW, THEREFORE, in the interest of compromise, in the spirit of cooperation and in good faith, and for and in consideration of the promises and covenants contained herein, and for good and valuable consideration, the sufficiency of which is acknowledged by all Parties, the Parties agree to the settlement and compromise as is detailed in this Settlement Agreement, and agree as follows: 1. RECITALS. The above recitals are incorporated herein by reference. 2. AGREEMENTS. For and in consideration of the mutual promises and covenants made in this Settlement Agreement, the Parties agree as follows: A. The Parties agree that this settlement agreement does not dismiss the Fourth Cause of Action for Orders Under Health and Safety Code Section 17980.7 in the Amended Petition which shall remain pending in this Court until the Receiver is discharged by the Court or the Order Appointing Receiver is terminated. When the Receiver is discharged by the Court or the Order Appointing Receiver is terminated, the City will execute, notarize, and record a Withdrawal of the City's Lis Pendens against the Subject Property, and will provide conformed copies thereof to counsel for Unique Properties Inc. Likewise, the Order Appointing Receiver shall remain in effect until the receiver is discharged or the Order Appointing Receiver is terminated after the Receiver has completed the roof repair, seismic retrofit, installation of a fire safety system and window replacement or weather protection on the Subject Property pursuant to the Order Appointing Receiver or other orders by the Court related thereto (collectively, "Phase 2 Repairs") and Unique Properties, Inc., Eladia Laines, or any successors, assigns, agents, nominees, partners, or other related entities has obtained financing as provided in Subparagraph E, below. The Parties retain their right to object to any requests made by the Receiver to the Court. B. Promptly following full execution of this Settlement Agreement by all parties thereto, the City shall submit this Settlement Agreement and a stipulation for entry of an Order approving this Settlement Agreement to the Court. The Parties agree that within seven (7) days of this Court's entry of an Order approving this Settlement Agreement, the City shall file with the Court a request for dismissal of the First, Second, Third, Fifth and Sixth Causes of Action in the Amended Petition. C. Following the implementation of the Phase 2 Repairs, Receiver may, but is not required to, request that the receivership order be discharged, terminated and/or modified. D. The Parties stipulate that the appointment of the Receiver and the creation of the receivership is the only relief required by the Fourth Cause of Action for Orders Under Health and Safety Code Section 17980.7 in the Amended Petition and that the City's dismissal of the additional causes of action sought by its Amended Petition shall not have any effect on the validity or enforceability of the Order Appointing Receiver or any {SEH/00054867. } 2 modification of the Order Appointing Receiver or any subsequent order concerning the receivership. E. Upon completion of the Receiver's duties as ordered by the Court, Unique Properties, Inc., Eladia Laines, or any successors, assigns, agents, nominees, partners, or other related entities shall be entitled to obtain financing secured by the Subject Property to retire the debt of the receivership and any other liens related to the Subject Property. F. In the event Unique Properties, Inc., Eladia Laines, or any successors, assigns, agents, nominees, partners, or other related entities is unable to timely obtain financing to retire the debt of the receivership and any other liens related to the Subject Property, the Receiver may petition the Court for approval of alternative measures to retire the debt of the receivership and any other liens related to the Subject Property. G. In full and complete satisfaction of the City's claim for payment of its attorneys' fees and costs arising out of or related to the Petition and the Dispute, the City shall receive from Unique Properties, Inc. a lien against the Subject Property in the amount of $75,000 ("Lien"). The Lien shall be a part of the receivership estate and is entitled to super - priority lien status but shall be subordinate to construction financing heretofore or hereafter funded by the Receiver. The Parties agree that the Receiver may, but is not required to, retire the Lien and pay the City $75,000 following the next round of financing. H. The Parties will act in good faith to complete the actions necessary to implement the terms of this Settlement Agreement. Time is of the essence in the completion of all of these actions. I. Within two weeks of full execution of the Settlement Agreement, the City will designate a specific person (a non -attorney) to receive and respond to communications from third parties directed to the City regarding financing for the Subject Property or opportunities for investment in, or leasing, construction or development thereof, and will notify Unique Properties and its attorneys in writing of such designation. The designated person will maintain a written record of every such inquiry including any and all contact information provided by third party to the designated person; a copy of this written record will be provided to Unique Properties and Eladia Laines promptly following a written request. This designation does not apply to communications directed to the City from the Receiver, the Receiver's office or staff, or the Receiver's consultants who are performing work or services for the Subject Property. 3. NO OTHER CONSIDERATION. The Parties affirm that the only consideration received for entering into this Settlement Agreement is as stated herein, and that no other promise, representation, or agreement of any kind has been made to or relied upon by the Parties in connection with his execution of this Settlement Agreement. The Parties further acknowledge that they have read the entire Settlement Agreement and fully understand the meaning and intent of the Settlement Agreement, including, but not limited to, its final and binding effect in relation to the Released Claims. {SEH/00054867. } 4. NO ADMISSION. This Settlement Agreement shall not be construed as an admission by the Parties of any liability or any acts of wrongdoing in violation of any federal, state, or local law, ordinance, or regulation, nor shall it be considered as evidence of any such alleged liability, wrongdoing, or violation of any federal, state, or local law, ordinance, or regulation. The Parties agree that this Settlement Agreement may be used as evidence only in a subsequent proceeding in which any of the Parties allege a breach of this Settlement Agreement. 5. NOTICES. Any notice required by this Settlement Agreement should be sent to: Notice to Unique Properties: Notice to the City: Notice to the Receiver: Robert F. Epstein Julia C. Butler Epstein Law Firm 369-B 3rd Street #182 San Rafael, CA 94901 Scott E. Huber Sean D. De Burgh Cota Cole & Huber LLP 2261 Lava Ridge Court Roseville, CA 95661 Mark S. Adams California Receivership Group, LLC 2716 Ocean Park Blvd., Suite 3010 Santa Monica, CA 90405 6. REPRESENTATIONS AND WARRANTIES. The Parties represent, warrant and agree with each other that: A. they have carefully read this Settlement Agreement; B. they have had an opportunity to seek legal counsel regarding this Settlement Agreement; C. they know and understand the contents of this Settlement Agreement; D. they freely and willingly sign this Settlement Agreement; and, E. prior to the execution of this Settlement Agreement, they have not sold, assigned, granted, conveyed or transferred to any other entity or person any of the rights, obligations, claims, demands, actions or causes of action described herein. { SEH/00054867. 1 4 7. GENERAL PROVISIONS A. Entire Agreement. It is expressly agreed that this Settlement Agreement, constitutes a full and final settlement and release of all claims identified herein. The Parties agree that this Settlement Agreement contains the entire agreement between the Parties, and therefore supersedes any prior agreements of the Parties, with respect to the issues addressed herein. The terms of this Settlement Agreement are contractual and shall survive the execution of this Settlement Agreement. B. Amendments. No modification, amendment, or waiver of any provision of this Settlement Agreement, nor consent to any departure by any Party therefrom, shall in any event, be effective unless the same shall be in writing and signed by the Parties, and same shall be effective only in the specific instance and for the specific purpose for which given. C. Severability. If any clause or provision herein shall be adjudged invalid or unenforceable by a court of competent jurisdiction or by operation of any applicable law, it shall not affect the validity of any other clause or provision, which shall remain in full force and effect as such invalid clause or provision shall be deemed severable, unless such severance should materially affect the intent of the Parties in entering into this Settlement Agreement. D. Governing Law. This Settlement Agreement is made and entered into in the State of California and will in all material respects be interpreted, enforced, and governed under the laws of said state, without regard to conflict of laws jurisprudence. E. Capacity. The Parties warrant and represent that, prior to the execution of this Settlement Agreement, they have not sold, assigned, granted, conveyed, or transferred to any other entity or person any of the rights, obligations, claims, demands, actions, or causes of actions described herein. The Parties have full legal and mental capacity to enter into, execute, and perform the terms and conditions contained in this Settlement Agreement and have entered into the Settlement Agreement voluntarily. Any person executing this Settlement Agreement in a representative capacity represents and warrants that that person is duly authorized to execute this agreement on behalf of the represented Party. F. Sinding Effect. This Settlement Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors, assigns and legal representatives. G. Counterparts. This Settlement Agreement may be executed in one or more counterparts, at different times and places. When all Parties have executed a counterpart of this Settlement Agreement, it shall be binding on all Parties notwithstanding that all of them may not have signed the same counterpart. A facsimile or other electronically transmitted copy of an executed counterpart hereof shall have the same effect as an original. {SEH/00054867 } 5 H. Waiver. No waiver by a Party affects the exercise of any of that Party's other rights and remedies. A Party's failure to neglect to enforce any of its rights un this Settlement Agreement will not be deemed to be a waiver of that or any other of that Party's rights. I. Headings. The headings of the paragraphs herein are intended solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Settlement Agreement. J. Date of Execution. The date of this Settlement Agreement shall be the date that the last Party executes this Settlement Agreement as shown below (the "Date of Execution"). IN WITNESS WHEREOF, the Parties hereto have executed this Settlement Agreement on the dates set forth below: Unique Properties, Inc. Respondent By: Its: Eladia Laines Respondent C of Tk h, a municipal corporation, Petitioner By: SAGE SANGIACOMO Its: CITY MANAGER Mark S. Adams, Court Appointed Receiver {SEH/00054867. } 6 Date: Date: Date: ii- /3 - ! % Date: APPROVED AS TO FORM Julia C. Butler Attorney for Unique Properties, Inc. and Eladia Laines Scott E. Huber, Attorney for City of Ukiah Mark S. Adams, Court Appointed Receiver in his Capacity as Attorney ORDER Date: Date: Date: Having read and considered the above settlement agreement and stipulation and good cause appearing therefor, the Court hereby approves the settlement agreement and stipulation and approves the City's dismissal of the additional causes of action alleged in the Amended Petition. Dated: Honorable Leslie Nichols, Judge of the Superior Court { SEH/00054867. } 7