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HomeMy WebLinkAboutagenda.council.special.20081006TKO CITY o~ APE CITY COUNCIL SPECIAL MEETING MONDAY, OCTOBER 6, 2008 5:00 P.M. I. City of Aspen v Quasha -Resolution 90, 2008 MEMORANDUM TO: Aspen City Council CC: Steve Barwick, City Manager FROM: John Worcester, City Attorney Phil Overeynder, Water Director Cynthia F. Covell, water counsel RE: Si Johnson Ditch Access Litigation (Pitkin County District Court Case No. 07CV22): Recommended Settlement DATE: October 1, 2008 Background In late 2006, the City discovered an encroachment on the access road City staff had historically used to reach the Si Johnson Ditch. The encroachment was on property owned by Alan Quasha and Ilona Nemeth ("property owners") at 715 South Seventh Street, in the county. The City, together with Westchester Investments Inc., which also owns water rights decreed to the Si Johnson Ditch, sought a preliminary injunction in early 2007 to protect this easement from further encroachment pending trial. The injunction was granted by Judge Lynch in April 2007. The property owners filed numerous counterclaims against the City, and also made claims against water department employee John Hines and City consultant Canyon Engineering, Inc. and its president, Chazles Peterson. Most of the counterclaims against the City are related to provision of City water to the Quasha Property, and raised issues regazding the City's obligation to provide water, and its ability to collect certain recoupment fees in addition to the standard tap fees. The counterclaims include contract, constitutional and civil rights claims. The case is set for approximately three weeks of trial to a jury in November, 2008. Settlement Proposal Following long and extensive settlement negotiations, staff has negotiated a settlement agreement that has two component agreements: (1) a ditch access road easement and (2) a release and settlement agreement that results in dismissal of all counterclaims against the City, John Hines, Chazles Peterson and Canyon Engineering, and the City's agreement to provide City water in the future upon payment of all applicable fees and disconnection from the well. The City will not pay any monetary damages. Each party will pay its own costs and attorney fees, although the City will pay attorney fees and costs of its contractor, Canyon Engineering Inc., and Charles Peterson, as it has agreed to do. 1. The Ditch Access Easement Agreement. - Provides foot access for ditchwalkers behind the Quasha house from Seventh Street to southern boundary of Quasha property; - Ditchwalkers may carry tools and push wheelbarrows on the foot access route as they have historically done in order to access the ditch and headgate; - Staging area at the southern portion of the Quasha Property may be used for construction staging for ditch or pipeline replacement and repair and maybe accessed by motorized vehicles and equipment. Existing vehicle access is from the historic road which enters the Quasha property from the south; - Notice requirements and other conditions of use are acceptable to the City staff; - The easement has been surveyed and the easement agreement will be recorded; - Easement is revoked if the City officially acts to use it fox public purposes, such as a trail. 2. Settlement Agreement City Water Service and Dismissal of Counterclaims. - Property owners will remain on their well until at least January I, 2011. After that date, and until December 31, 2024, the property owners may request a new connection to City water service, and the City will provide service subject to the terms and conditions of the settlement agreement, which require payment of applicable tap fees and system investment fees, and disconnection from the shared well. - All counterclaims will be dismissed with prejudice and the City will pay no money to the property owners. Claims against John Hines, Canyon Engineering Inc. and Charles Peterson will also be dismissed with prejudice. Recommendation City staff recommends that the City Council approve this settlement agreement, and authorize execution of the Ditch Access Road Easement Agreement and the Settlement and Release Agreement. This settlement provides for a known, surveyed, and recorded easement on the Quasha Property, and dismissal of all of the counterclaims without payment of any City money or insurance funds. The easement contains certain restrictions on use, but City staff believes the City can continue to operate and maintain the Si Johnson Ditch notwithstanding the restrictions. The counterclaims are currently the subject of a motion to dismiss, which the City's water counsel and insurance defense counsel believe is meritorious. However, the outcome of court proceedings can never be guaranteed. Even if the motion were successful, and all counterclaims dismissed, the City would still be faced with the cost and uncertainty of a jury trial on the existence, scope and extent of the easement. Therefore, staff recommends approval of this settlement as a means of securing an acceptable easement, and bringing certainty and closure to the matter without incumng further expense or the risk of a trial. RESOLUTION NO. _ (Series of 2008) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO WHEREAS, the City owns an interest in the Si Johnson Ditch, and in February, 2007, filed Case No. 2007CV22 ("Pitkin County Litigation') in the Pitkin County District Court, seeking confirmation of certain claimed ditch access road easement rights in connection with the Si Johnson Ditch, and an injunction to protect the City's easement rights in the ditch access road; and WHEREAS, the Pitkin County Litigation claimed, in particular, that the City had rights of access to the Si Johnson Ditch via an historic ditch access route as it crossed a property described as Lot 1, Peter Vought Subdivision, according to the Plat thereof recorded August 3, 1983, in Plat Book 15 at Page 24, and also known as 715 South Seventh Street, in Pitkin County; and WHEREAS, Westchester Investments, Inc. ("Westchester"), which also owns an interest in the Si Johnson Ditch, is a co-plaintiff with the City in the Pitkin County Litigation; and WHEREAS, the property located at 715 South Seventh Street is owned by Alan Quasha and Ilona Nemeth ("Property Owners"), and is referred to in this Resolution as the "Quasha Property;" and WHEREAS, the Court granted the City's request for preliminary injunction by Order dated April 23, 2007; and WHEREAS, the Property Owners disputed the claims of easement made by the City and Westchester, and filed counterclaims relating to the easement against the City, as well as against a City employee and a City contractor; and WHEREAS, the Property Owners also filed other counterclaims against the City with regard to extraterritorial provision of City water service to the Quasha Property; and WHEREAS, the City and the Property Owners have reached a resolution of these disputes that confirms easement rights in the ditch access road for the benefit of the City, authorizes a new connection of the Quasha Property to City water service should the Property Owners (or their successors) request such service within a specified time period, and comply with other City requirements for extraterritorial water service, including payment of applicable fees and disconnection from the well now serving the Quasha Property; and WHEREAS, the City Council has reviewed the Si Johnson Ditch: Ditch Access Easement Agreement with the Property Owners, and the Release and Settlement Agreement among the City, the Property Owners, and the City employee and contractor, has been advised that the City Water Department, the City Attorney and the City's special water counsel recommend approval of these agreements, and has obtained such other advice and information as it deems appropriate regarding the these agreements and resolution of the Pitkin County Litigation, NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN as follows: Section One. Approval of Si Johnson Ditch• Ditch Access Easement Agreement. The City Council hereby approves the Si Johnson Ditch: Ditch Access Easement Agreement with Alan Quasha and Ilona Nemeth ("Ditch Access Agreement") in the form attached hereto, regarding access to the Si Johnson Ditch via the ditch access road on the Quasha Property for routine maintenance operations as well as major repairs. Section Two. Approval of Settlement Agreement and Mutual Release. The City Council hereby approves the Settlement Agreement and Mutual Release ("Settlement Agreement") among the City, City employee, City contractor and Alan Quasha and Ilona Nemeth, which fully and finally resolves the Pitkin County Litigation, and provides an opportunity for the Quasha Property to be connected to City water service in the future under specified terms and conditions, including payment of all applicable fees and disconnection from the well on the Quasha Property, and does not require payment of funds by the City or its insurer. Section Three. Execution of Documents. The Mayor and City Clerk are hereby authorized and directed to execute the Ditch Access Agreement and the Settlement Agreement, and the Mayor, City Clerk, City Manager, City Attorney and Water Director, as appropriate, are authorized and directed to execute such other documents and perform such other actions as may be necessary or desirable to effectuate the consummation of said agreements as contemplated by this Resolution. RESOLVED, APPROVED AND ADOPTED this day of , 2008. CITY OF ASPEN, COLORADO By: Mayor ATTEST: City Clerk z (SEAL) SI JOHNSON DITCH: DITCH ACCESS EASEMENT AGREEMENT r 'T'HIS AGREEMENT ("Agreement") is made and entered into this ~ day of "~~=" ~, 2008 by aid between ALAN QUASHA artd 1LONA NEMETH ( Grantors") and the CITY OP ASPEN, COLORADO, a home rule Colorado nnmicipality ("City"). WHEREAS, the City claims an interest in the water tights and ditch sh uchu-e and ditch access rights to the Si Johnson Ditch ("Ditch"), which water rights were decreed by the Gufield County Dhshict Courtin Case No. 3082 on August 25,1936, for 3.5 cubic feet per second (cfs) with priority number 422 and 2.0 cfs with priority number 435, with a point of diversion on the right Uaztlc of Castle Creek at a point whence the quarter section comer on the North side of Section 13, Township 10 South, Range 85 West of the 6`~' P.M. bears North 42° 15' East 1630 feet distant; and WHEREAS, the "Ditch" as used in this Agreement is defined as the Si Jolmson Ditch itself, iu its present location, and any headgate sh-uchire, ctttting, pipeline and related ditch infi-astnichue; and WHEREAS, other water users are served by the Ditch, and the City bas assmned responsibility to those users for hnspection, cleaning, operation, maintenance, repair artd replacement of certain portions of the Ditch; and WIIEREAS, Grantors are the owners of a parcel of laud in Pitkin County, Colorado more particularly described as Lot 1, Peter Vought Subdivision, according to the Plat thereof recorded August 3, 1983 hi Plat Book 15 at Page 24 (hereinafter "Quasha Property") upon which certain segments of the Ditch are located; and WHEREAS, the City claims an interest hi a sd'ip of laid crossing the Quasha Property to access the Ditch for proposes of inspection, cleaning, operation, maintenance, repair and replacement of the Ditch; and WHEREAS, to resolve existing disputes over the City's right to use this strip of land to access the Ditch, Grazrtors are willing to grant and convey certain easements and access rights in and to this strip of land ("Ditch Access Easement") on the terms aid conditions herein provided in this Agreement as a fiill and final resolution to the City's disputed claims to this ship of lazed and the City agrees to accept the Ditch Access Easement as herein provided, THEREFORE, IN CONSIDERATION of the pronises and agreements set forth below, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Grant of Easement: Ditch Access Easement. Gruitors hereby grant azid convey to the City anon-exclusive easement and right of way iu, on aid over the Ditch Access Easement (described below) as it is located on the Quasha Property for the sole access route across the Quasha Property to the Ditch (separate fi'om the City's access in, on top of and alongside the Ditch itself), for purposes of inspection, cleaning, operation, maintenance and repair axed replacement of the Ditch and maintenance and repair of the Ditch Access Easement itself, subject to the terms azid conditions of this Agreement. The Ditch Access Easement is depicted and described on Exhibit A, which is attached hereto and hicorporated hereni by reference azid includes the area described on Exhibit A as the "Staging Area" located south of an existing rock scree field. A photograph showing the general location of the Staging Area as marked in the field on September I1, 2008, is attached as Exhibit B. The Ditch Access Easement will be surveyed by a licensed surveyor no later thus October 1 Q 2008, aid the survey will be attached hereto and will replace the existing Exhibit A. The formal survey will be identified as "Fhial Exhibit A" aid will be attached to this Agreement when it is recorded with the Pitkin Comity Recorder. hi the u'ea just south of Toby Lazie by the utility transformer box, Grantors will provide at their expense, by May 15, 2009, a cleaz-ed, graded, four-foot wide path along the surveyed aligmnent so that the Ditch Access Easement will be to the east of this truisforiuer box. Until this segment of the Ditch Access Easement is created, the City shall be allowed to traverse tluough this area on the west side of the transformer box. The width of the Ditch Access Easement from the north edge of the Staging Area, to the northern bomiduy line of the Quasha Property, is four (4) feet, to accommodate foot traffic, hued-curied equipment, wheelbazrows or similarly-sized, non-motorized vehicles. The dimensions of the Staging Area (including the portion of the Ditch Access Easement from the north edge of the Staging Area to the southern boundary of the Quasha Property) are shown on Exhibit A. This grazit of easement shall run with the laid for the benefit of the City, and shall be binding upon and inure to the benefit of the City, aid its successors aid assigns and the Grantors, azid their successors aid assigiis. The pubes expressly acknowledge azrd agree that this Agreement does not address or limit: itself; a. any easement rights in, on top of, or alongside the Si 7ohnson Ditch stnichu-e b. any easement rights, access rights or other rights relating to any ditch, struchire or water rights other than the Si Joluison Ditch; provided, however, that tlis Agreement shall not be covstnied ui any manner whatsoever to be a giuit of easement rights, access rights or other rights on the Quasha Property for azry pxupose not set forth in this Agreement, including easement or access rights to any ditch, stricture or water rights other than the Si 7olmson Ditch, and access corder this Agi-eement is strictly limited to the ternis of this Agreement and does not allow general access across all puts of the Quasha Property; or c. any easement rights, access rights or other rights on raids other than the Quasha Property. 2. Foot wid Non-motorized Vchicrdu Use of Ditch Access Easement. a. Durnig the irrigation season (as defined hereui), the City's agents, employees and conh~actors may go upon the Ditch Access Easement by foot during daylight hours for pm-poses related to non-emergency inspecfion, cleaning, operation, maintenance, repair and replacement of the Ditch, uid may also transport hued-can~ied equipment or use wheelbazrows orsimilarly-sized, non-motorized vehicles on the Ditch Access Easement. b. Dm~ing the non-h-rigation season, the City's agents, employees and contractors may go upon the Ditch Access Easement by foot druing the hours of 7:30 a.m. to 4:30 p.m. Monday through Friday, for proposes related to non-emergency hispection, clewing, operation, maintenance, repair and replacement of the Ditch, and may also hazisport hand-carried egripment or use wheelbazrows or other similaziy sized non-motorized velicles on the Ditch Access Easement. c. For proposes of tlis Agreement, the "imgation season" is the tune period in any given year that begins two weeks before the time water is first diverted into the Si 7ohnson Ditch, and ends two weeks after the Ditch headgate is closed for the season. The Ditch is typically used for h-rigation between April 1 wid October 31 each year, Uut this time may vary somewhat fi'ont year to yen based on the water users' irrigation needs. d. It is expressly understood by all pw-ties hereto that the City's "agents, employees, and conhactors" as used herein shall not include the general public, wiy lessees, delegees or h'ansferees of the City, or uiy other persons or entities claiming to have azi interest in the Ditch or the water azid water rights associated with the Ditch, or their agents, employees or contractors (except as provided in Paragraph 11 below). e. The City may use the Ditch Access Easement by foot azid may trwnsport hand carried equipment or use wheelbwrows or other similaz~ly-sized non-motorized vehicles at any time without notice to respond to an emergency. £ Additionally, in accordance with the seasonal azid time limitations described above for non-emergencies, azid at any time without notice to respond to au emergency, the City may go upon the Ditch Access Easement by foot (and may trazisport hand caz-ried equipment, azid use wheelbarrows wid other sinilarly-sized non-motorized egripment) for inspection, clewlu~g, maintenance, repair and replacement of the Ditch Access Easement itself for proposes of insuring the Ditch Access Easement is free from damage azid obstructions and to otherwise effectuate, in the least invasive manner reasonably possible, the ability of the City to rrtilize the Ditch Access Easement for its intended purposes under this Agreement. The parties aclarowledge that portions of the Ditch Access Easement w~e located in an area, as approximately shown on Exhibit A, where the supporting rock shnchue beneath the Ditch Access Easement maybe rmdennined, requiring the City, at its cost, to re-stabilize this area to manitaiu the four- foot wide access route described in this pw~ag~aph. Maintenance of the Ditch Access Easement ui this u'ea tnay require such re-stabilization from time to time, as well as removal of rocks, boulders, and other debris that may shift or fall onto the Ditch Access Easement, or other such actions to restore the Ditch Access Easement to its usable azrd approximate pre-existing condition. Any work that requires more than restoring or re- stabilizing the existing, supporting rock structure (for exantple, installing a retainuig wall or rock fall fencing) must be expressly consented to by Gruitors, which consent shall not Ue wrreasonaUly withheld. Grantors acknowledge and agree that maintenance and repair of the Ditch Access Easement includes, but is not limited to, such re-stabilization, removal of rocks, boulders and debris, Ureaking down rocks azid boulders, and placing such material on the Staghig Area. The City may perform such maintenance azid repair pursuant to this Paz'agraph 2 to the extent it cazi be done without use of motorized vehicles. Otherwise, such maintenance and repair will be performed as provided in Pu'agt'aphs 3 and 4. g. Access to the Ditch by motorized velicles and equipment via the Ditch Access Easement, and use of motorized vehicles and equipment on the Ditch Access Easement shall not be allowed, except hi accordance with paragraphs 3 and 4. 3. Linited Use of Motorized Vehicles and Ec~tipment on Ditch Access Easement. In addition to foot azid non-motorized veUicle use of the Ditch Access Easement as provided in paragraph 2 above: a. Motorized vehicles and other motorized equipment may Ue used on the Ditch Access Easement as provided ni this paz'ag'aph and paz'agraph 4 Uelow for proposes of Major Repahs. "Major Repairs" include unusual or non-routute maintenance, improvement, repah' or replacement work to the Ditch and Ditch shmctures, or the Ditch Access Easement itself where foot and nmi-motorized vehicle access alone would, in the City's reasonable judgment, Ue inadequate to allow the wmk to be performed ui a practical and efficient mazmer. U. Such motorized vehicles and motorized equipment shall only use and occupy the Ditch Access Easement from the southern Uoundazy line of the Quasha Property to the north edge of the Staging Area, and raider no circumstazices u'e motorized vehicles and motorized equipment permitted ingress uid egi~ess or any other use of the Ditch Access $asement north of the north edge of the Staging Area. The areas where motorized vehicles and equipment maybe used are shown on Exhibit A. a Such motorized vehicles and motorized equupment maybe deployed and used on the Ditch Access Easement south of the Staging Area and witlin the Staging At'ea itself for Major Repairs, subject to the terms and conditions of paragraph 4 of this Agreement. 4. Conditions of Limited Use of Motorized Vehicles and Equipment on Ditch Access Easement. a. hi the event the City plans a Major Repair project that requires use of motorized vehicles or equipment on the Ditch Access Easement in accordance with Pu~agaph 3 above, it shall provide Grantors with at least 20 days notice of the work to be mndertaken and the estimated tune of completion. Notwithstanding the foregoing, the City may go upon the Ditch Access Easement south of the Staguig Area and within the Staging Area itself with motorized vehicles azid equipment without advance notice at airy time in the overt of au emergency sihiation or condition, and the City may nndertalce such repair or replacement activities as it deems necessary to properly resolve the emergency sihiation. hi the event that the City goes upon the Ditch Access Easement without such prior notice to respond to an emergency, it will, wilhui 48 hours of such entry, use reasonable efforts to give notice to Grazitors, in the mamter described in puagraph 7(c), of the date and purpose of such entry. b. The City shall undertake Major Repair projects ui a workmanlike manner and shall complete such projects within a reasonable time, absent extenuating circttmstazices outside of the City's reasonable control or events of force majeure. c. Vehicles azid other equipment that have been located on the Ditch Access Easement in the mazmer authorized by this Agreement may remain on the Ditch Access Easement as needed during the course of the Major Kepairs being undertaken. Such vehicle or equipment use and occupation of the Ditch Access Easement shall be made in a safe and workmanlike manner. Any materials, tools, equipment or vehicles stored temporarily on the Ditch Access Easement during Major Repairs shall be stored neatly, and removed promptly upon completion of the Major Repair project. The parties rccoguizc that dcployrncnt of cranes or other vehicles or equipment on the Staging Area daring the course of Major Repairs may require crossing or use of a sliver of laud ("Sliver of Land") on the Quasha property east of the Staghng ?,rea because a portion of the flat area needed for Major Repairs extends easterly from the Staging Area. The Sliver of Land is also shown on Exhibit A. The parties agree that this Sliver of Land tray be temporarily used or occupied if the Major Repair project requires use of a crane or other equipment that must cross this Sliver of Land, or be deployed iu put on this Sliver of Land in order to accomplish the Major Repair. The pazties fiuther aclarowledge azid agree that tlis Sliver of Land shall not be used as a vehicle access road or ury type of road or access for ingress or egress to reach the Staging Area from the eastern bomidary of the Quasha Property. The pubes agree to leave the Sliver of Land in substantially the same condition as found on the day of execution of this Agreement. City shall have no rights to remove trees or other nahtral vegetation in the Sliver of Land, as such items are shown on the photos attached as Exhibit B; azid to the extent azry such items are disturbed or destroyed during the City's use of the Sliver of Land, the City shall replace, at its cost, such items to their condition existing at the time of the disturbance or destruction. The pubes' obligations raider the indemnification puagraph below shall also apply to any use of this Sliver of Land. d. After completion of Major Repairs, the City shall, if necessary, and at its cost, grade the surface of the Ditch Access Easement that was disturUed Uy the Major Repairs to its former condition and contour, and the City shall re-seed the surface with native grasses shnilar to grasses that may have Ueen destroyed by the Major Repair project. The City shall not be required to restore or replace any trees, bushes, Urush, or gardens on the Ditch Access Easement, nor any boulders, structures or paving on the Ditch Access Easement, that were placed by Gruitors, their contractors or agents, in violation of Paragraph 5 Uelow, or any Uoulders, rocks or debris that may have fallen onto the Ditch Access Easement, or Ueen placed on the Ditch Access Easement by persons other than the City or Grantors, or their respective contractors or agents. 5. Use of Ditch Access Easement Uy Grantors. Subject to the limitations herein set forth, Grantors shall retain the right to use and enjoy the lands underlying the Ditch Access Easement to the fiill extent allowed Uy law so long as Cn'azitors do not utueasonaUly interfere with the City's tights under this Agreement. a. From the south Uoundary line of the Quasha Property to the north edge of the Staging Area (as shown on Exhibit A), Grantors shall not alter or change the length, width, size or suuface grade of the Ditch Access Easement, install, allow or suffer the installation or placement Uy Cttantors, their agents, contractors or invitees, of any oUstnictions or permanent encroachments within, on or tinder the Ditch Access Easement, hicluding Uut not liutited to fences, buildings, gates, or other shuchues, or Nees, Uttshes, Urush, gardens, Uoulders, rocks or pavement. Cn'antors may install on this portion of the Ditch Access Easement native grasses that can Ue mowed or removed in t]te event of Major Repairs that the City determines require such mowing or removal. b. From the north edge of the Stagng Area to the northern bomidary lute of the Quasha Property (as shown on Exhibit A), Grantors shall not alter or change the length, width, size or surface grade of the Ditch Access Easement, allow or suffer the installation or placement of aziy obstructions or encroachments of airy kind, including but not limited to fences, buildings or other struchu'es, landscaping, trees, bushes, Utush, gardens, boulders, rocks or pavement on or within the Ditch Access Easement, or adjacent to or overhanging the Ditch Access Easement so as to impede or impair the City's aUility to use the Ditch Access Easement as herehi described, provided, however, that Grantors shall be permitted to ntstall a locked gate across the Ditch Access Easement at the northern botmdary of the Ditch Access Easement on the Quasha Property so long as the City is at all tunes provided a key to the lock on that gate. c. City acknowledges that there are pre-existing utilities ender and over the Ditch Access Easement, that are not suUject to limitations of this Paragraph 5(a) and 5(b). Grantors agree that they will not install or place, or permit or authorize installation or placement of new utilities on, under or over the Ditch Access Easement without the City's prior written approval, which approval shall not be tutreasonably withheld. d. Grantors agree that if they or their employees, contractors, agents, or invitees, or any utility companies conducting work on, in or over the Ditch Access Easement, causes daznage to the Ditch Access Easement, Grantors will reuubmse the City's reasonable costs of repairing such damage. 6. htdenmificatiou a. To the extent permitted by law, the City shall protect, indennfify and hold hazlnless Grantors fi'om and against azry loss, damage or clauns, including reasonable attorneys' fees and costs, arising out of: (i) the use of the Ditch Access Easement by the City or its agents, employees, contractors, guests or invitees, which hrdemnity shall include, but not be lhuited to, hijtuy or loss to persons or property; azid (ii) any mechanic lien claims for unpaid labor, services or materials affecting any of the Quasha Property, Ditch Access Easement on the Quasha Property or Ditch on the Quasha Property arising out of work by the City, its contractors or agents, on the llitch or Ditch Access Easement. The City shall inchtde the Ditch Access Easement in its general public liability insttrauce coverage and, during times of Major Repairs, shall mahitain (or cause its contractors to maintain) workmen's compensation azid builder's risk insurance azid the City shall provide Grantors with proof of such insurance upon request. The foregontg agreement by the City to indemnify and hold harmless shall not apply if the claim or demand for loss or damages arises out of or from the negligence or willful misconduct of Grantors. Nothing herein shall be construed to abrogate or dinurush any protections and limitations afforded to the City by the Colorado Govenunental hmmmity Act, C.R.S. § 24-10-101 et seq. as amended, or other law b. Grantors shall protect, indemnify acid hold harmless the City from and agahnst any loss, damage or claims, including reasonable attorneys' fees and costs, arising out of the use or occupation of the Ditch Access Easement by Grantors or their guests or uivitees, which indcnurity shall include, but not be limited to, injury or loss to persons or property. The foregoing agreement by Grantors tontdenutify and hold harmless shall not apply if the claim or demand for loss or damages arises out of or fi'om the negligence or willfid misconduct of the City. c. The Quasha Property contains areas of steep slopes and loose rock. Accordingly, the City will take appropriate precautions to protect its property and persormel, as well as the property and persomtel of its agents and snbcontractms. 7. Notices. All notices required lobe given shall be deemed given upon deposit in the United States mail, ftrst class postage prepaid, addressed to: a. Grantors c/o Curtis B. Sanders, Krabacher & Sanders, P.C., 201 North Mill Street, Suite 201, Aspen, Colorado 81611 (tel. (970) 925-6300)(fax (970) 925- 1181)(email: esanders chi krabacher.com); and/or to Quasha and Nemeth, 40 W 57th Street, 20 Floor, New York, NY 10019; b. The City c/o City Attorney, City of Aspen, 130 South Galena Street, Aspen, Colorado 81611. c. Notwithstanding the foregoing, in the event the City uses the Ditch Access Easement in order to respond to an emergency, the City will make a reasonable attempt to provide notice to the Grurtors by telephone, telefacshnile or electronic mail as set forth above. d. Any party may change its address or contact iufonnation by notice to the others given pursuant to this paragraph. e. For uiy matter which the City deems to bean "emergency" under this Agreement, before takhig uiy action with respect to such emergency, the City will use good faith, reasonable efforts to fu'st contact Grantors and Grantors' attorney at the phone cumbers set forth herein advising Grurtors and Grantors' attorney of the existence of the emergency. 8. Binding Agreement - Recording. Tlis Agreement is binding upon the parties hereto and all those affirming this Agreement, and their heirs, successors and assigns, and any conveyance of the Quasha Property, or any portion thereof shall be subject to tlis Agreement. This Agreement shall be recorded with the Pitltin County Clerk and Recorder, and shall impose an easement and covenants nutnittg with the land upon the Quasha Property as herein provided. 9. Unauthorized Use of Ditch Access Easement. The City shall not use, or permit the use of the Ditch Access Easement for any proposes or in any manner not expressly set forth. in this Agreement. The City acknowledges and agrees that if, by ordinance or other official govenunental action, it authonizes, acquiesces or permits use of the Ditch Access Road by the public (not including City agents, employees, contractors or assignees), this Agreement shall terminate and all rights granted by Grantors shall be revoked and revert back to them, unless such utilization of the Ditch Access Easement is expressly agi-eed to in wniting by the Grantors. Any dispute raider this provision shall be subject to the u-bitration Paragraph 10 below. 10. Arbitration. hi the event of a dispute unong ttic parties concerning this Agreement, the dispute shall be resolved exclusively by binding arbitration in accordance with this paragraph. a. The parties to the dispute shall mutually select one qualified arbitrator to render a decision for the parties settling the dispute and the parties agree to be bormd by such decision of the arbitrator; provided however, the parties may always muhially agree togethen• to reject or not be bound by that decision. b. If the parties cannot agree as to selection of an ubitrator, each patty shall nomhiate one qualified neutral u-litrator and selection from the nominees shall be made by a coin toss. All costs and fees of such arbitration proceedings shall be divided equally between the parties. c. The pazty that is detenuined by the arbitrator to be the substantially prevailing patty will be entitled to recover its costs and reasonable attorney fees in accordance with the arbitrator's order. The arbitrator's detemrination may be made an order of llie Court. d. Notwithstanding the arbitration provisions of this paragraph 10, however, any pazty may first Beck a temporary restraitting order or preluninary injunction to enjoin an tmanthotized use or occupation of the Ditch Access Easement. 11. Assignment to Ditch Company. Grantors agree that the City may assign all, but not less than all its rights and obligations under this Agreement to a mutual ditch company formed to operate, maintain, inspect, clean, repair and replace the Ditch and Ditch Access Easement. Grazitors hereby consent to such assigmnent, provided that the City remains ulthnately responsible for performance of its obligations hereunder in the event the Ditch Company fails to do so, azid provided that the City's covenant in paragraph 9, above, regarding unauthorized use of the Ditch Access Easement, survives any assignment. The City may not otherwise assign its rights azid obligations under this Agreement without the Grazitors' prior written consent. 12. Governing Law; Venue; Attorneys' Fees. This Agreement and the rights and obligations of the patties hereunder shall be governed by and constned in accordazice with the laws of the State of Colorado. Venue for all actions az'isuig under this Agreement (including com't confirmation of an ubitrator's decision tinder puagraph 10) shall exclusively be Pitkin Cotmty, Colorado. 13. Incotrooratiou of Recitals. All of the recitals set forth above are incorporated into the terms and conditions of this Agreement aztd constitrrte part of this Agreement. 14. No Construction Against Drafter. Each party agrees that it has received advice of cotuisel regardung the teens, conditions and uuplications of this Agreement, and that cotmsel for both Grantors and the City have participated hi drafting this Agreement. This Agreement will not be considered to have been drafted by one party, aztd for that reason construed against the drafting patty. 15. Authorization of Si aen hires. All of the undersigned acknowledge and represent to each other that all procedures necessary to validly contract and execute this Agreement have been performed and that the persons signing for each entity has been duly authorized to do so. 16. Counterparts. Tltis Agreement maybe signed using counterpart signature pages, with the same force and effect as if all patties signed on the sazne signahue page. 9 IN WITNESS WHEREOF, the parties have executed this Agreement the date and year fast above written. G~ytor: Alan Quasha Grantor. Ilona Nemeth .~ Grantee~~Ci//ty~ of Aspen, Colorado, a nicipal Corporation and Home Rule City By: `~I~ • ~~ Attest: ~~~~G~"'~ Mayor ity Clerk Approved as to forth: ~~~ / ~~ ay: Lity tton ey STATE OF r:k, o`r-t~ ) u,II )ss. , COUNTY OF (V~ °rL(L ) SllBSCRTBED AND SWORN [o before me this 3o day of .5 P < , 20 ~ by Akae-Quasga~ax~ Ilona Ncmeth, Grantors. WITNESS my hand and official seal. (~~ [SEAL) ~\' ..:.;.~.~ _ _ _- ~ ~~ -~ Notary Public My commission expires: -T'~nr (3~t ~ ' IRENE TARNOWSKI Notary Public, State of New York No. 01 TA5029025 Qualifed in Nassau County Certificate Filed In New York County Commission Expires J"tt,.. N~ Polo l0 ilV WITNESS WHEREOF, [he patties have executed ibis Agreement the date and year first above written. Grantor:Q Aland~ ))Quasha Grantor: Ilona Nemeth Grantee: City of Aspen, Colorado, a Municipal Corporation and Home Rule City I3y: Attest: Mayor City Clerk Approved as to form: By: City Attorney STATF, OF ~QW ~lL ) '` `' ) ss. COUNTY OF t`1Q _~~'F- ) SUBSCRIBED AND SWORN [o before me this ~ day of-"f-""'°`=, 20 Q8 by Alan Quasha "' amra ne.~srtcrrrcm, Grantors. WITNESS my hand and official seal. [SEAL] t - (~ Notary Public My commission expires: H.Sin~ .~ ~ 2011 VIOLETA FIGVEROA Notary Public, Slaty of NaaYorPs No.01 FItS05797Z Qualili+d tn'BavoYAlkFoun9yy C.ommiasion F.xpiras April 30, 20~ LO STATE OF W ~ ra ~ ~ ) L ) ss. 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"S , tt ~ . SETTLEMENT AGREEMENT AND MUTUAL RELEASE Tlus Settlement Agreement and Mutual Release (the "Agreement") dated September ~, 2008, is made by and among the CITY OF ASPEN, COLORADO ("Aspen"), ALAN QUASHA ("Quasha"), ILONA NEMETH ("Nemeth"), JOHN HINES ("1 tines"), CANYON ENGINEERING, INC. ("Canyon") and CHARLES PETERSON ("Peterson") with the parties to this Agreement collectively referred to as the Parties. RECITALS WHEREAS, disputes have arisen among the Parties regarding certain access across certain property owned by Quasha and Nemeth, located at 715 South Seventh Street, Aspen, Colorado (the "Subject Property") and regarding extraterritiorial provision of Aspen's municipal water service to the Subject Property; and WHEREAS, Aspen has asserted claims against Quasha and Nemeth (the "Aspen Claims") in the lawsuit, Case No. 07 CV 22, currently pending in the District Court fox Pitkin County, Colorado (the "Pitkin County Litigation"); and WHEREAS, Quasha and Nemeth have asserted counterclaims in the Pitkin County Litigation against Aspen, Hines, Canyon and Peterson (the "Counterclaims"); and ~~JI IEREAS, each of the Parties has generally denied any liability to the other in the Pitkin County Litigation; and WHEREAS, the Parties have determined to compromise and settle their differences in an amicable manner according to the terms described in this Agreement; and WHEREAS, each party has determined that this Agreement is fair and in their mutual interest. AGREEMENT NOW, 'THEREFORE, inconsideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows. 1. Aspen, Quasha and Nemeth have, contemporaneously herewith, entered into a Ditch Access Agreement in the form attached hereto as Exhibit A. 'The Ditch Access Agreement will be recorded with the Pitkin County Clerk and Recorder. 2. Quasha and Nemeth agree that they will not dispute or challenge at any time, in vey forum, Aspen's claim of ownership to water rights decreed to the Si Johnson Ditch. 3. Aspen agrees that if, at any time from January 1, 2011 to and including December 31, 2024, the then-owner of the Subject Property makes a new application to Aspen for extraterritorial water service for the Subject Property, Aspen will provide such service subject to the following conditions: (a) Said owner has made application for extraterritorial water service for one main residence and one caretaker dwelling unit on the Subject Property, using Aspen's then-required extraterritorial water service application forms, and has paid all fees required in connection with such application; (b) Aspen. shall not be required to provide such new extraterritorial water service to the Subject Property for more than 6.5 ECUs (equivalent capacity units), to be allocated between the main residence and caretaker unit on the basis of fixtures in the manner provided by the Aspen Municipal Code, as such Code may be amended from time to time, with any remaining ECUs available for outdoor irrigation use to the extent permitted in the Aspen Municipal Cade (as such Code may be amended from time to time). The Code currently authorizes irrigation of 100 square feet of landscaping per 0.01 ECU; (c) Aspen, Quasha, and Nemeth acknowledge that the Subject Property is presently served by an individual well tlrat is shared with the owner of an adjacent property, and that one-half acre of irrigated acreage is allowable on the Subject Property by the well. Aspen requires abandonment and plugging of wells as a condition of receiving water service from Aspen. Because Quasha and Nemeth could not abandon acrd plug the shared well, Aspen withdrew its approval of water service to the Subject Property in 2007. Aspen has agreed, solely in order to settle the Pitkin County Litigation as herein provided, and not as precedent for any other water service request, that it will permit water service to the Subject Property pursuant to this paragraph 3 notwithstanding the csistence of the shared well provided that the owner of the Subject Property disconnects the Subject Property from the shared well at or before connection to Aspen's municipal water service, and advises the Colorado State Engineer in writing (with copy to Aspen) that the Subject Property is no longer served by the shared well, and requests the Colorado State Engineer to amend the well permit to reflect that the well serves only one residence, and to reduce the allowable irrigated acreage pursuant to said well permit by one-half acre. However, ultimate Colorado State Engineer approval or amendment of the well permit is not a condition precedent to receiving water service from Aspen as herein provided. (d) A memorandum of the parties' agreements set forth in this paragraph 3 shall he recorded with the Pitkin County Recorder. MUTUAL RELEASES 4. Aspen, for itself, and/or its insurer, Colorado Intergovernmental Risk Sharing Agency, and all other insurance carriers, administrators, successors, assigns, d'uectors, City council members, officers, agents, employees, attorneys, independent contractors and anyone holding claims which derive from Aspen, and Hines, Canyon, and Peterson, for themselves, and all heirs, executors, administrators, successors, directors, officers, employees, agents, attorneys, independent contractors, insurance carriers and assigns of, and anyone holding claims which derive from Hines, Canyon and Peterson (collectively, "City Releasors"), hereby fully release, forever discharge and acquit Quasha and Nemeth and their respective past and present employees, contractors, agents, predecessors, successors, assigns, guarantors, indemnitors, sureties, insurers, subrogors, and attorneys (each an "Owner Releasee"), from any claims, causes of action or liabilities which City Releasors, or any of them, may now have, or hereafter have, may have had or claim to have had, whether directly or indirectly, whether accrued in the past, present or future, whether known or unknown, whether for damages or equitable relief of any sort, including, without limitation, injunctive relief, economic damages, lost profits, exemplary damages, treble damages, consequential damages and attorney fees in any way arising from the relationships; facts, circumstances, events and agreements which gave rise to or which are related to the Aspen Claims, the Counterclaims and/or the Pitkin County Litigation, but this release shall not waive or release any claims regarding the scope and extent of the ditch easement in, on top of, or alongside of the Si Johnson Ditch as it crosses the Subject Property. The foregoing does not affect the ability of Aspen, Canyon, Peterson, and Hines to hying a cause of action against any Owner Releasee for a breach of any representation, warranty or covenant contained in this Agreement. 5. Quasha and Nemeth, for themselves and all heirs, executors, administrators, successors, directors, officers, employees, agents, attorneys, independent contractors, insurance carriers and assigns of, and anyone holding claims which derive from Quasha and Nemeth, hereby fully release, acquit and forever discharge Aspen, Canyon, Peterson, and Dines, and, where applicable, each of his or its subsidiaries, parent corporations, affiliates, and each of their respective past and present officers, directors, shareholders, employees, contractors, agents, predecessors, successors, assigns, guarantors, indemnitors, sureties, insurers, subrogors, and attorneys (each a "City Releasee"), from all claims, causes of action, damages, injuries, losses and liabilities of whatsoever kind and nature which Quasha and/or Nemeth may now have, or hereafter have, may have had or claim to have had, whether directly or indirectly, whether accrued in the past, present or future, whether known or unknown, whether for damages or equitable relief of any sort, including, without limitation, injunctive relief, economic damages, lost profits, exemplary damages, treble damages, consequential damages and attorney fees in any way arising from the relationships, facts, circumstances, events and agreements which gave rise to or which are related to the Aspen Claims, the Counterclaims and/or the Pitkin County hitigation ,but this release shall not waive or release any claims regarding the scope and extent of the ditch easement in, on top of, or alongside of the Si Johnson Ditch as it crosses the Subject ProperTy. The foregoing does not affect the ability of Quasha and/or Nemeth to bring a cause of action against any City Releasee for a breach of any representation, warranty or covenant contained in this Agreement. MISCELLANEOUS (, The Parties to this Agreement deny any liability to each other and agree that this Agreement and the Parties' performance in accordance with its terms is not to be carsuued as an admission of liability on the part of any of the Parties but is only a settlement of disputed claims and counterclaims. 7. For the consideration stated herein, the Parties assume the risk that the settlement underlying the execution of this document was made on the basis of mistake or mistakes, mutual or unilateral, including but not limited to mistakes regarding: the nature or extent of the underlying damages, injuries, losses or liabilities; the future course, effect or consequences of known or unknown damages, injuries, losses or liabilities; the impression that the Patties are fully informed as to the nature, extent, or effects of the underlying damages, injuries, losses or liabilities; and the possibility of mistake as to damages, injuries, losses or liabilities which are presently unknown or unforeseen but which the Puties sustained or will in the fuhtre sustain resulting directly or indirectly from the Aspen Claims, the Counterclaims and/or the Pitkin County Litigation. g. The panties warrant that no promise or inducement has been offered except as set forth herein acrd that this document was executed without reliance upon any statement or representation by the other Parties and that the Parties are legally competent to execute this document and accept full responsibility for it and assume the risks of any mistake of fact as stated herein. 9, The Parties understand and agree that the signing of this document shall be forever binding upon them and no rescission, modification, or release of the other Parties from the terms of this document will be made for any reason. I p, The Parties agree to take all necessary steps to implement this Agreement and to filc all necessary pleadings in order to dismiss with prejudice all claims and counterclaims asserted in the Pitkin County Litigation no later than 2 business days after exceptrto thetexteugany pa ty ha sa prerexising agreement to def i d tand/or pay the fees and costs of another party. 11. No later than 3 business days after a final order dismissing the Pitkin County p frdetn~ regarding tha property in thee eeo ds of the Ptkin Cou ty Cletkeand Recorder, and shall provide to counsel for Quasha and Nemeth a copy of th rom tleon receipt of witliln three business days of recording, or if not then available, p' p Y the recorded release fiom the Pitkin County Clerk and Recorder. 12. This Agreement, including the exhibits hereto, constitutes the entire agreement by and among the Parties with respect to its subject matter. This Agreement and the Ditch Access Agreement are intended to implement the Parties' settlement of the Pitkin County Litigation. Wherever possible, this Agreement and the Ditch Access Agreement are to be construed together in harmony. Neither Agreement is intended to supersede or alter the provisions, and enforceability of the provisions, of the other. Any and all understandings by and among the Parties, either written or oral, with respect to the subject matter of this Agreement and the Ditch Access Agreement prior to the date of these Agreements are superseded by these Agreements. 13. This Agreement shall be construed and interpreted in accordance with the laws of the State of Colorado. Venue for all legal actions hereunder shall be Pitkin County District Court. This Agreement may be modified or amended only by a written inshwnent signed by all the Patties. 14. This Agreement may be executed in one or more counterparts, each of which shall be deemed au original but all of which, together, shall constitute one and the same Agreement, 15. Every notice, demand, request, or other instrument required to be given pursuant to this Agreement shall be in writing and sent by United States certified mail, return receipt requested, postage prepaid, or by a recognized overnight delivery service, and shall be deemed effective five days afret• mailing or two days after deposit with the overnight delivery service, if properly addtessed as follows: (a) If to Aspen or Hines City Attorney, City of Aspen 130 South Galena Street Aspen, CO 81611 with a copy fo: Cynthia F. Covell Alperstein & Covell P.C. 1600 Broadway Suite 2350 Denver, CO 80202 (b) If to Canyon or Peterson: Canyon Engineering Inc. P.O. Box 398 Glenwood Springs, CO 81602 with a copy to: Cynthia F. Covell Alperstein & Covell P.C. 1600 Broadway Suite 2350 Denver, CO 80202 Sep 25 2008 11:25PM HP IRSERJET FFX (c) if to Quashes and/or Nemeth: Ilona Nemeth Alan Quashes 40 West 57'~ Street, 20t° Floor New York, NY 10019 with a copy to: Klein, Cot6, & Edwards, LLC Attenflon: Lance R Cotd, Esq. 201 North Mill Street, Suite 203 Aspen, CO 81611 Any party may designate an alternate or additional address by written notice given pursuant to this section. 16. Attorney Fees. A court shall award reasonable attorney fees to the prevailing party in the event that it is necessary .for any party to request judicial intervention to interpret or enforce any provisions of this Agreement, 17. The undersigned have carefully read the above and foregoing Agreement, and understand and agree to the contents and have obtained such legal advice as they deem necessary a(n~d appropriate prior to execution of this Agreement. Alan Quashes Ilona Nemeth City of Aspen, Colorado ~~ sy: Title: ~~~ p.3 Attest: ~ 1717 City Clerk ~~, Canyon Engineering, Inc. sy Charles Peterson, President (c) if to Quasha and/or Nemeth: Ilona Nemeth Alan Quasha 40 West 57`h Sheet, 20~" Floor New York, NY 10019 with a copy to: Klein, Cote, & Edwards, LLC Attention: Lance R Cotc, Esq. 201 North Mill Sheet, Suite 203 Aspen, CO 81611 Any party may designate an alternate or additional address by written notice given pursuant to this section. 16. Attornev Fees. A court shall award reasonable attorney fees to the prevailing party in the event that it is necessary for any party to request judicial intervention to interpret or enforce any provisions of this Agreement- 17. The undersigned have cazefully read the above and foregoing Agreement, and understand and agree to the contents and have obtained such legal advice as they deem necessary and appropriate prior to execution of this Agreement. Alan Quasha Ilona Nemeth City of Aspen, Colorado By; Attest: Title: City Clerk Canyon~Engineer/ing, Inc. By L% "'O~ Charles Peter on, President Charles Peterson, Individually . olut Hines, btdividually (Aclato~~dedgments on Yollowutg pages) Quasba and Net` (meth II STATR OF I V G~'" L/on.LC. ) ~ I ) ss. COUNTY OF N~ ~OiL~L ) ~, ' ~ 2008, b Alan uasha and Acknowledged before me~5.- t ~ no urs[ Y Q Ilona Nemeth. My commission expires ~ft'KP ~ ~f ~ - Wituess my ]rand and official seal. ~ `_ _ ~~` _~` ~~ IRFNE TARNO\NSKI - '^No' ry•Publir„ State of NoH•Yo~k N tuyPnblic No. OITA5029025 Qualifed in Nassau County Certificate Filed In New Vork County Cit~IA§~en C.omrnissionEx{tire;~ntfj Z"tJ S"fA'I'F. OF COLORADO ) ss. COUNTY OP PITI~IN ) Acknowlcdgedbcforeme 2008, U ~s - m .y'p and iEr4es}t as City Clemi C~'As~e~ ~ ka+hkcrl Strickland P-~ P ~ My conunission expires .___ q~2S ~alX> 9 Witness my bond attd official seal .~:~- ,... ~. ~ ~~ , 'r r . ;t l.'; , { ii i i ' ~ ^ ~- ~'t ~ ~ -. { My Com,~i:x;~ar C•:~ *cs 091292009 Notary Public Notary Public ~~~ Charles eterson, Individually (Acknowledgments on following pages) Quasha and Nemeth STATE OF COUNTY OF Acknowledged before me Ilona Nemeth. My commission expires Witness my hand and official seal. John Hines, Individually 2008, by Alan Quasha and Notary Public City of Aspen STATE OF COLORADO ) ss. COUNTY OF PITKIN ) Acknowledged before me , 2008, by as and Kathryn Koch as City Clerk, City of Aspen My commission expires Witness my hand and official seal. Notary Public ss. Notary Public John Hines STATE OF COLORADO ) ss. COUNTY OF PIE=~.'~y.,, ) ~.,_ ~,.:....... ~y Ac d~e~' 1}efax~~~ Vl u . ~ , 2008, by John Hines. My fi's'sion expires ; ~ ~~ ~-r ~ Wit ss~nyhandanc~of~~i seal. / ~, .~ : V '1370:•°....,=•~U:' _ ©~ CO , ~'- Notary Public qty Cp~nm <~ on E~'aes 09I2920~9 Canyon Engineering Inc. and Charles Peterson Individually STATE OF COLORADO ) ss. COUNTY OF C~/+EFIELI] ) Acknowledged before me Sea'[~r/Ba=.I~ a.Co , 2008, Charles Peterson, individually and as President of Canyon Engineering, Inc. My commission expires ~'~~'~L'~ Witness my hand and official seal. P~l_ _cv~o,. otary ublic WNYELLE L. CARLSON ill won F~pires 01116/2012