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HomeMy WebLinkAboutresolution.council.078-24RESOLUTION #078 (Series of 2024) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, APPROVING A SETTLEMENT AGREEMENT AND RELEASE BETWEEN THE CITY OF ASPEN AND GUERDON, LLC. AUTHORIZING THE CITY MANAGER TO EXECUTE SAID CONTRACT ON BEHALF OF THE CITY OF ASPEN, COLORADO. WHEREAS, there has been submitted to the City Council a Settlement Agreement and Release in order to obtain full settlement and discharge of the Defect Claims and Payment Claims upon the terms and conditions set forth between the City of Aspen and Guerdon, Inc., a true and accurate copy of which is attached hereto as Exhibit "A'% NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, That the City Council of the City of Aspen hereby approves the Settlement Agreement and Release between the City of Aspen and Guerdon, LLC, whereby the City will receive $3,233,589.32 in exchange for release of its claims against Guerdon, LLC, a copy of which is annexed hereto and incorporated herein, and does hereby authorize the City Manager to execute said agreement on behalf of the City of Aspen. INTRODUCED, READ AND ADOPTED by the City Council of the City of Aspen on the 13th day of August 2024. Torre, Mayor I, Nicole Henning, duly appointed and acting City Clerk do certify that the foregoing is a true and accurate copy of that resolution adopted by the City Council of the 'ty of Aspen, Colorado, at a meeting held August 13th, 2024. �: /7r s Nicole Henning, City Cl Docusign Envelope ID: 65775E9&FAFC-4E69-AB7D-2D12659EDOB2 SETTLEMENT AGREEIVIEN I AND �tELEASE This Settlement Agreement and Release (the "Agreement") is entered into this 6th day of August, 2024 (the "Effective Date"), by and between the City of Aspen, Colorado and Guerdon, ,LC, as follows. L DEE�1yIT�C�NS A, As used herein, the term "City" shall mean and refer to the City ofAspen, Colorado. B, As used laexein, the terns "Guerdon" shall mean and refer to Guerdon, LLC. C, As used herein, the term "Parties" shall refer collectively to the City and Guerdon, and individually as "Party." rzz. I), As used herein, the terrxr "Project" shall mean and refer to Burlingame Ranch Phase �I. RECITALS . ...------ ....-----WHI;-REAS--thy -City- was -thy --flvtrner� ar�d� declarant iri - ci���tzol _.of -the--P�r©j e-ct during its -- construction; WHEREAS, the City and Guerdon entered into a Supply Agreement, under which Guerdon agreed to construct, supply, and deliver modular residential units on the Project for Building Nos. & 15 (13 buildings), as outlined. in more detail in the Supply Agreement; WHEI�.EAS, during the course of construction of the Project, the City claims the Project schedule was delayed resulting in increased constnzction, insurance, and design casts, and the nnodular units installed at the Project suffered from defects, including, but not limited to, the manufacturing and construction of the unit windows, defects in the construction of domestic water lines in certain units, and defects with electrical wiring, which caused Project delay and additional costs and expenses to the City; WHEREAS, the City issued a Notice of Warranty Claim to Guerdon on May 10, 2022. The City subsequently issued a Notice of Additional t�Varranty Claims, Notice of Default, and Notice of Claim. on August 19, 2022. The City then issued a Supplemental Notice of Additional Warranty Claims, Notice of Default, and Notice of Claim (collectively the "Defect Claims' ), WHEREAS, Guerdon and other contractors hired by the City on the Project performed repairs to correct the issues identified in the Claims. The City and Guerdon issued various change orders that were disputed between them concerning the delay and repair costs, including the City's deductive change orders for repair and impact costs, and Guerdon's change orders for cost escalations (collectively the "Payment Claims"); Docusign Envelope ID: 65775E98-FAFC-4E69-AB7D-2D12659EDOB2 WHEREAS, Notwithstanding Guerdon's repairs, Guerdon denied responsibility for the Claims; WHEREAS, the Parties have tuldertalcen investigation regardil-Ig the disputes amongst them, and deem it to be in their best, respective interests to resolve all such claims and defenses among themselves which were or could have been asserted by settling such Defect Claims and Payment Claims; WHEREAS, without determining any liability whatsoever, and in order to avoid uncertainties, expense, and delay inherent in litigation, the Parties desire to enter into this Agreement in order to obtain fiill settlement and discharge of the Defect Claims and Payment Claims upon the terms and conditions set forth below: IT IS THEREFORE AGREED as follows: �YZ. TERMS OF SETTLEMENT 1. Payment to the Cit�y. Guerdon sha11 pay the sum of THREE MILLION, TWO HUNDRED THIRTY-THREE THOUSAND, FIVE HUNDRED EIGHTY" -NINE DOLLARS AND THIRTY-TWO CENTS ($3,233,589.32) (the "Settlement Amount") in the following (a) $1,293,435.73 in good fi.�nds on or before October 15, 2424; (b) $1,070,948.77 in good funds on or before July 31., 2025, plus accrued interest at 6.65% per annum, compounded monthly, on the total principal amount owed as outlined in the attached Amortization Schedule, Attachment 1; (c) $1,070,948.77 in good Rinds on or before July 31., 2026, plus accrued interest at 6.65% per annum, compounded monthly, on the total principal amount owed as outlined in the attached Amortization Schedule, Attachment I . 2. The foregoing payments sha11 be issued to the City by check made payable to "City of Aspen" and delivered via FedEx to 427 Rio Gxande Place, Aspen, Colorado $161 I . 3. If any settlement payment identified above is not timely paid in full, the unpaid portion of such Settlement Amount, plus accil�ed interest, shall continue to accrue interest at the rate of 6.65 % per annum, compounded monthly, The City shall be entitled to recover all amounts owed, including accrued interest and all costs, expenses, and fees, including attorneys' fees, incurred for any collection efforts, including any litigation. In the event Guerdon fails to make a full and timely payment, the City shah be entitled to accelerate the payment schedule and demand full payment of the remaining Settlement Amount, plus accrued interest, without regard to the due dates outlined above. 4. In the event Guerdon is sold, conveyed, transferred, or otherwise acquired by another person or entity, the full remaining Settlement Amount, and accrued interest, shall be paid to the City prior to such sale, conveyance, transfer, or acquisition being closed. Guerdon shall 2 Docusign Envelope ID: 65775E98-FAFC-4E69-AB7D-2D12659EDOB2 notify the City in writing of such anticipated sale, conveyance, transfer or acquisition at least sixty (60) days before such closing. 5. R.elease. Upon the City's receipt and clearing of the first settlement payment identified in Paragraph La above, the following releases apply: (a} The Ciiy, for itself and its officers, managers, employees, consultants, contractors, and agents filly, finally, and forever releases Guerdon and its owners, members, managers, officers, directors, shareholders, parents, subsidiaries, affiliates, employees, insurers, reinsurers, representatives, contractors, consultants, and suppliers and assigns from and against any and all known clairns, rights, and alleged damages, whether sounding in law, equity, contract, warranty, tort, indemnity, contribution, recoupment, or subrogation that the City claimed or could have claimed against Guerdon relating to the Defect Claims and Payment Claims; and (b} Guerdon and its owners, members, managers, officers, directors, shareholders, parents, subsidiaries, affiliates, employees, insurers, reinsurers, representatives, and assigns fully, finally, and forever releases the City and its officers, managers, employees, consultants, contractors, and agents from and against any and all claims, rights, and damages, whether sounding in law, equity, contract, warranty, tort, indemnity, contribution, recoupment, or subrogation Guerdon asserted or could have asserted against the City in relation to the Project, including, without-limitation,--the-Defect-Claims,-Payment-.Claims, and. for.. any -sums Guerdon.-M. ayclaiim.it-is -- still owed by the City in relation to the Project. 6. The Parties expressly understand and agree that the foregoing releases da not include or relate to any future claims, alleged damages, defenses, or other rights concerning: (a) any presently latent or unknown defects or deficiencies associated with Guerdon's modular units, including any repair work (b) Guerdon's obligations under the Supply Agreement, including, without limitation, its warranty obligations; (c) claims pertaining to any manufacturer's warranties still in effect on equipment and materials, whether or not related to the Claims; and (d) the obligations specifically undertaken by any Party in this Agreement. The Parties further expressly understand and agree that the foregoing releases do not include or relate to any claims Guerdon may have against any manufacturer or distributor of building components used in relation to the Project, including but not limited to Milgard Manufacturing, LLC (alkla Milgard Windows and )oors), for any claims whether in contribution, indemnity or any other legal theory. 7. Each of the Parties agrees that the consideration specified, described, and stated herein is in complete compromise of the claims released in Paragraphs 5(a) and 5(b} above. Each of the Parties understands and agrees that if the law or facts with respect to which this Agreement is executed be found hereafter to be other than, or different from, the law and facts now believed to be true, each of the Parties expressly accepts and assumes the risk of. such possible difference in law or facts and agrees that this Agreement shall be and remain effective notwithstanding any such difference, $. In executing and delivering this Agreement, each of the Parties relies wholly upon its own judgment and knowledge. 3 Docusign Envelope ID: 65775E98-FAFC-4E69-AB7D-2D12659EDOB2 9. The Parties understand and agree that this Agreement, and payment of the Settlement Amount, do not comprise, and shall not be asserted or deemed to comprise, an admission of liability or fault by any of them to one another or to any third party. On the contrary, the Parties expressly deny any fault and liability to one another and all third -parties, The Settlement Amount is an accord and satisfaction of disputed claims, rights, alleged damages, and defenses to avoid the expense, delay, risk, and uncertainty of pursuing the above�released known claims, rights, alleged damages, and defenses in litigation, arbitration, or another legal proceeding. 10. Each Party shall pay its own attorney fees and costs for the abovevreleased l�nown claims, rights, defenses, and damages, In the event that any Party is engaged in suit to enforce the terms of this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys' fees and costs, IV. l . Il�clependent. Le�al Advice. The Parties have received, or had the opportunity to receive, independent legal advice from their respective attorneys with regard to the terms and conditions of this Agreement, as well as the advisability of entering into and executing this Agreement, and are fully informed as to its contents. _ - of the-Air-Bement:----The-Par-ties-have--r-Bad this--Agreement--and--_.._.. .___.___ understand its contents. Each has read the Agreement and, if necessary, has had it explained, by counsel. By voluntarily executing this Agreement, the Parties understand its contents and accept its terms as resolving fully all differences, disputes, and claims that may exist within the scope of this Agreement, 3. Authority to Execute, Each person executing this Agreement has fi�11 legal competence and authority to execute, deliver, and perform this Agreement and to bind the person and/or entity which he or she piuports to represent, 4, lyo Previous Assignment. Each party warrants and represents that it is the sole and only real party in interest with respect to the claims asserted in this matter, and that they have not previously assigned, transferred, subrogated, granted, or purported to assign, transfer, subrogate, or grant any of the claims, demands, suits, controversies, liabilities, or obligations released by this Agreement, or any of the benefits or payments to be made pursuant to this Agreement. V. MISCELLANEOUS PR.OVISY 1. Entire A�reernent. "1"lais Agreement constitutes the full and complete understanding of the Parties with respect to the subject matter contained in the Agreement and supersedes any and all prior agreements and understandings, whether written or oral, except as to the reserved and remaining terms of the Supply Agreement. No addition, deletion, or amendment shall have any force or effect, except as mutually agreed to in writing signed by the Parties to this Agreement. The Parties acknowledge that no promise, inducement, or agreement not expressed herein has been made, and that the terms of this Agreement are contractual and not a mere recital. Docusign Envelope ID: 65775E98-FAFC-4E69-AB7D-2D12659EDOB2 2, No Construction Against Drafter, The Parties have cooperated in the drafting and preparation of this Agreement. Hence, no construction of this Agreement shall be construed against any party. 3. Bindin;; Effect. For purposes of this Agreement, the terms the City and Guerdon shall be understood to include and inure to the benefit of their respective parents, subsidiaries, affiliates, partners, principals, officers, directors, )members, managers, shareholders, employees {past and present), agents, consultants, predecessors, successors, successors in interest, administrators, assigns, insurers, sureties, and legal representatives of the Parties and each of them. This Agreement and the payment obligations contained herein shall not be assigned to another person or entity without the express written consent of the City, and shall be binding on any successor or successor in interest of Guerdon. 4. Severabilit . Zf any portion or part of this Agreement is determined by a court or tnbun.al of competent jurisdiction to be invalid or unenforceable for any reason, it is the intention of Parties that the remainder of this Agreement shall remain in full force and effect. 5, Choice of Law, This Agreement shall be construed, interpreted, and enforced in accordance with the laws: of the State of Colorado, Exclusive venue for any action arising out of or relating to this Agreement shall be in Pitkin County District Court, Colorado. 6. Counterparts. This Agreement may be executed in any number of counterparts, each ofwhich, when so executed, shall be deemed to bean original and all of which, taken together, shall constitute one and the same agreement. Facsimile and electronic signatures shall carry the salve force and effect as an original signature. Executed this day of August 2024, by: THE CITY OF ASPEN, BX AND THROUGH ITS CITY COUNCIL AND CITY MANAGER: By: DocuSiyned by: City Mar��ri2024 � 10 : 38 : 46 AM PDT rxUERDON, LLC By: Total Principal 3,233,589.32 40% Initial Payment (1,293,435.73) Remaining 1,940,153.59 0.55% (0.55%/mo = 6.65%/yr) Beginning Period Monthly Interest Cost Pmt Ending Period 1 1,940,153.59 10,751.68 0 1,950,905.27 October 2 1,950,905.27 10,811.27 0 1,961,716.54 November 3 1,961,716.54 10,871.18 0 1,972,587.72 December 4 1,972,587.72 10,931.42 0 1,983,519.14 January 2025 5 1,983,519.14 10,992.00 0 1,994,511.15 February 6 1,994,511.15 11,052.92 0 2,005,564.06 March 7 2,005,564.06 11,114.17 0 2,016,678.23 April 8 2,016,678.23 11,175.76 0 2,027,853.99 May 9 2,027,853.99 11,237.69 0 2,039,091.68 June 10 2,039,091.68 11,299.97 (1,059,177.03) 991,214.62 July 2025 11 991,214.62 5,492.98 0 996,707.60 August 12 996,707.60 5,523.42 0 1,002,231.02 September 13 1,002,231.02 5,554.03 0 1,007,785.05 October 14 1,007,785.05 5,584.81 0 1,013,369.86 November 15 1,013,369.86 5,615.76 0 1,018,985.61 December 16 1,018,985.61 5,646.88 0 1,024,632.49 January 2026 17 1,024,632.49 5,678.17 0 1,030,310.66 February 18 1,030,310.66 5,709.64 0 1,036,020.30 March 19 1,036,020.30 5,741.28 0 1,041,761.58 April 20 1,041,761.58 5,773.10 0 1,047,534.68 May 21 1,047,534.68 5,805.09 0 1,053,339.77 June 22 1,053,339.77 5,837.26 (1,059,177.02) 0.00 July 2026 23 0.00 0.00 0 0.00 24 0.00 0.00 0.00 1,940,153.59 178,200.46 4.49% Total Principal 3,233,589.32 40% Initial Payment (1,293,435.73) Remaining 1,940,153.59 0.55% (0.55%/mo = 6.65%/yr) Beginning Period Monthly Interest Cost Pmt Ending Period 1 1,940,153.59 10,751.68 0 1,950,905.27 2 1,950,905.27 10,811.27 0 1,961,716.54 3 1,961,716.54 10,871.18 0 1,972,587.72 4 1,972,587.72 10,931.42 0 1,983,519.14 5 1,983,519.14 10,992.00 0 1,994,511.15 6 1,994,511.15 11,052.92 0 2,005,564.06 7 2,005,564.06 11,114.17 0 2,016,678.23 8 2,016,678.23 11,175.76 0 2,027,853.99 9 2,027,853.99 11,237.69 0 2,039,091.68 10 2,039,091.68 11,299.97 0 2,050,391.65 11 2,050,391.65 11,362.59 0 2,061,754.23 12 2,061,754.23 11,425.55 (1,070,948.77) 1,002,231.02 13 1,002,231.02 5,554.03 0 1,007,785.05 14 1,007,785.05 5,584.81 0 1,013,369.86 15 1,013,369.86 5,615.76 0 1,018,985.62 16 1,018,985.62 5,646.88 0 1,024,632.50 17 1,024,632.50 5,678.17 0 1,030,310.67 18 1,030,310.67 5,709.64 0 1,036,020.31 19 1,036,020.31 5,741.28 0 1,041,761.59 20 1,041,761.59 5,773.10 0 1,047,534.68 21 1,047,534.68 5,805.09 0 1,053,339.77 22 1,053,339.77 5,837.26 0 1,059,177.03 23 1,059,177.03 5,869.61 0 1,065,046.63 24 1,065,046.63 5,902.13 (1,070,948.77) - 1,940,153.59 201,743.94 5.07%