2021/09/15 Capital Pacific Real Estate, Inc. Settlement Agreement CPRE680/031858-0001
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SETTLEMENT AGREEMENT
This Settlement Agreement (“Agreement”) is entered into on the effective date
(hereinafter, the “Effective Date”) set forth below, by and between CAPITAL PACIFIC REAL
ESTATE, INC (“CPRE”) on the one hand, and on the other hand, the CITY OF MENIFEE
(“City”) (CPRE and City are herein referred to collectively as the “Parties” and individually as a
“Party”), based on the following:
RECITALS
WHEREAS, prior to the City’s incorporation, the County of Riverside approved Tract Map
No. 29636, now known as Calder Ranch (“Tract 29636”). In connection with the development of
Tract 29636, the County of Riverside secured a Faithful Performance Bond (“Original Bond”)
from the developer – Capital Pacific Holdings, LLC (“CPH”) – to secure the construction of,
among other things, roadway improvements.
WHEREAS, construction of Melvin Street, Thistletown Court and Beth Drive within the
area generally known as “Phase I” of Tract 29636 was partially conducted in 2006 and 2007,
WHEREAS, the City of Menifee was incorporated in October 2008.
WHEREAS, the final wearing surface along Melvin Street, Thistletown Court and the
eastern portion of Beth Drive was constructed some time prior to August 2011.
WHEREAS, in or about August of 2015 the City Council of the City of Menifee took action
to accept a Faithful Performance Bonds and Agreements, as more particularly described on
Exhibit A attached hereto (“Replacement Bonds”) from CPRE, and to, at or about the same time,
release the Original Bond.
WHEREAS, the amount of the Replacement Bonds was less than the amount of the
Original Bond. CPRE contends, and the City disagrees, that the Replacement Bond do not pertain
to the Phase I work. (the “Dispute”).
WHEREAS, CPRE has completed to the satisfaction of the City the improvements
associated with Phase II of Tract 29636 (which, combined with Phase I, constitutes the entirety of
Tract 29636), and has accordingly requested that the City release the Replacement Bonds.
WHEREAS, the pavement sequences within Phase I along Melvin Street, Thistletown
Court and the eastern portion of Beth Drive include an extensive network of longitudinal band
block type cracking, of varying widths and severity, the repair and maintenance for which the City
contends CPRE is responsible under the Replacement Bonds.
WHEREAS, the Parties have agreed that an additional allowance of Sixty Thousand
Dollars ($60,000) (the “Repair Allowance”) shall be provided by CPRE to the City, for the City’s
performance of work on the roadways within Phase I as may be reasonably directed by the City’s
Director of Public Works.
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WHEREAS, the Parties, through their attorneys of record, participated in a series of
discussions, through which they agreed to settle the Dispute in its entirety, thereby avoiding any
potential litigation relating thereto; and
WHEREAS, the Parties wish to avoid the disruption, inconvenience, uncertainty, and costs
associated with litigation with respect to this matter, and as such, the Parties seek to settle and
resolve the Dispute based upon the terms set forth herein.
AGREEMENT
NOW, THEREFORE, the Parties stipulate and agree as follows:
1. Effective Date. The Effective Date of this Agreement shall be September 15, 2021.
2. City’s Obligations.
a) Bond Release. Within ten (14) days of receipt of the CPRE Payment as set forth
below, the City shall exonerate and fully release the Replacement Bonds.
b) Use of Repair Allowance: City shall use the Repair Allowance for performance
of such work on the roadways within Phase I as may be reasonably directed by the
City’s Director of Public Works
c) Waiver of Fees and Costs. Upon completion of the CPRE Obligations as set forth
below, the City hereby waives any right to incur any costs or require any further
work, maintenance, or repair with respect to the Original Bond, the Replacement
Bonds and Phase I or Phase II of 29636, or recover any fees and/or costs, including
without limitation attorneys’ fees and costs, from CPRE or its affiliates, agents,
employees, officers, and representatives arising from or relating to the Dispute.
3. CPRE’s Obligations.
a) Payment. CPRE shall pay City (through delivery of a check made out to Plaintiff
and delivered to City with copy to the City Attorney) the Repair Allowance within
ten (10) days of the Effective Date of this Agreement.
b) Waiver of Fees and Costs. CPRE hereby waives any right to recover any fees
and/or costs, including without limitation attorneys’ fees and costs, from City or its
agents, employees, officers, and representatives arising from or relating to the
Dispute.
4. Mutual Release of Claims. In consideration for the agreements contained herein, and
except as to obligations created herein, the Parties for themselves, and their successors,
assigns, heirs, executors, administrators and representatives, hereby fully release and
forever discharge each other from any and all claims, demands, and causes of action of
whatever kind or nature arising from the Dispute (i.e., the alleged applicability of the
Replacement Bond to the improvements within Phase I). The Parties acknowledge and
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affirm that they are familiar with Section 1542 of the California Civil Code, which provides
that:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
THAT THE CREDITOR OR RELEASEING PARTY DOES
NOT KNOW OR SUSPECT EXISTS IN HIS OR HER FAVOR
AT THE TIME OF EXECUTING THE RELEASE AND
THAT, IF KNOWN BY HIM OR HER WOULD HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR OR RELEASED PARTY.
The Parties knowingly and voluntarily waive the provisions of Section 1542 of the
California Civil Code, and acknowledge and agree that this waiver is an essential and
material term of the settlement which led to this Agreement.
5. Successors and Assigns. This Agreement, and all the terms and provisions hereof, shall
be binding upon, and shall insure to the benefit, of the Parties and their respective heirs,
legal representatives, successors, and assigns.
6. Attorneys Fees’ and Costs. Each Party shall bear its own attorneys’ fees and costs related
to this Agreement and the Action.
7. Knowing and Voluntary. This Agreement is an important legal document and in all
respects has been voluntarily and knowingly executed by the Parties hereto. The Parties
specifically represent that, prior to signing this Agreement, they have been provided a
reasonable period of time within which to consider whether to accept this Agreement. The
Parties further represent that they have each carefully read and fully understand all of the
provisions of this Agreement, and that they are voluntarily, knowingly, and without
coercion, entering into this Agreement based upon their own judgment. The Parties further
specifically represent that, prior to signing this Agreement, they have conferred with their
counsel to the extent desired concerning the legal effect of this Agreement.
8. Entire Agreement. This Agreement contains the sole, complete, and entire agreement and
understanding of the Parties concerning the matters contained herein and may not be
altered, modified, or changed in any manner except by a writing duly executed by the
Parties, stating that such writing is by its express terms an amendment to this Agreement.
Except as stated herein, none of the Parties are relying on any representations by any other
Party in executing this Agreement.
9. Severability. If any provision of this Agreement is held to be invalid, illegal, or
unenforceable, that provision shall be interpreted as severable and severed from this
Agreement and all other provisions contained in this Agreement shall nevertheless continue
and remain in full force and effect.
10. Waiver. Failure to insist on compliance with any term, covenant, or condition contained
in this Agreement shall not be deemed a waiver of that term, covenant, or condition, nor
shall any waiver or relinquishment of any right or power contained in this Agreement at
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any one time or more times be deemed a waiver or relinquishment of any right or power at
any other time or times.
11. Enforcement Costs Including Attorneys’ Fees. If any action at law or in equity, or any
motion or application is brought arising out of this Agreement, or if any action at law or in
equity, or any motion or application, is brought to enforce, interpret, or rescind this
Agreement, then the prevailing party shall be entitled to all of its costs in bringing and
prosecuting or responding to and defending said action or motion, including, but not limited
to, without limitation, its reasonable attorneys’ fees.
12. Further Assurances. The Parties agree to and shall cooperate fully with each other in the
performance of this Agreement, and shall execute such additional agreements, documents,
stipulations, and/or instruments as may reasonably be required to carry out the intent of the
parties to this Agreement.
13. Counterparts. This Agreement may be executed in one or more counterparts and by
facsimile, each of which shall be deemed an original, and all of which together shall
constitute one single original Agreement.
14. Enforcement. By signing this Agreement the Parties acknowledge that it is enforceable
pursuant to California Code of Civil Procedure Section 664.6.
15. Authorization to Sign. The person or persons signing this Agreement warrant(s) that he,
she or they are authorized to do so on behalf of their respective parties and that this
Agreement is intended to be binding on all parties.
IN WITNESS WHEREOF, the Parties hereto have entered into this Settlement and Release
Agreement to be effective as of the Effective Date.
[SIGNATURES ON FOLLOWING PAGE]
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CAPITAL PACIFIC REAL ESTATE, INC.
By: ______________________________
Its:____________________________
CITY OF MENIFEE
By: _______________________________
Its: City Manager
Approved as to Form:
_____________________________________
Jeffrey Melching, City Attorney
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By:
_____________________________
Its: City Clerk
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Exhibit A
Description of Replacement Bonds and Agreements to be Released
Relating to City of Menifee Tract No. 29636
1. Faithful Performance Bond – Grading / Drainage – bond number 800011642 - $65,000.
2. Material and Labor Bond – Grading / Drainage – bond number 800011642 - $32,500.
3. Faithful Performance Bond – Street, Drainage, Flood Control, Water , Sewer – bond number
800011643 - $1,459,500.
4. Material and Labor Bond – Street, Drainage, Flood Control, Water , Sewer – bond number
800011643 - $729,750.
5. Agreement for grading and drainage projects – GP15-005, dated July 6, 2015.
6. Agreement for the construction of road/drainage & flood control improvements, dated July 6,
2015.
7. Agreement for the construction of sewer system improvements, dated July 6, 2015.
8. Agreement for the construction of water system improvements, dated July 6, 2015.
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