18-1001_MISSION COMMERCIAL PROPERTIES, INC._Jt Nondisclosure, Indemnity, and Litigation Defense Agreement JOINT NONDISCLOSURE,INDEMNITY,AND
LITIGATION DEFENSE AGREEMENT BY AND
BETWEEN THE CITY OF SAN JUAN CAPISTRANO,
CALIFORNIA,AND MISSION COMMERCIAL
PROPERTIES,INC.
This Joint Nondisclosure,0errinity,a L't' tion Defense Agreement("Agreement")
is made and entered into this ( day of=e� r 1018,by and between the City of San
Juan Capistrano,California(the"City")and Mission Commercial Properties,Inc.("Real Party").
The City and Real Party are sometimes referred to herein individually as a"Party"and
collectively as the"Parties"
Recitgls
A. The City is a municipal corporation situated in the County of Orange in the State
of California.
B. Real Party is a California corporation and acts on behalf of the owner of the
property located at 26871 and 26891 Ortega Highway,San Juan Capistrano,California("Plaza
Banderas").
C. On October 19,2010,the City Council certified the Final Environmental Impact
Report for the Plaza Banderas Hotel Project("Original Project")and the entitlements for the
Original Project including it General Plan Amendment to change the land use designation(GPA
10-001),the Plaza Banderas Hotel Comprehensive Development Plan(CDP 10-01)and a
Rezone to the City's Zoning Map(RZ 10-001).
D. The City Council's approval included a Condition of Approval(No.59)requiring
the Planning Commission to review and approve the project's Conceptual Design Plans. On
March 8,2011,the Planning Commission reviewed and approved the project's Conceptual
Design Plans,satisfying Condition No.59,
E. The 2010 City Council approval also included a Condition of Approval(No.60)
requiring the project's Final Construction Plans to be reviewed and approved by the Design
Review Committee(DRC)to ensure consistency with the City-approved Conceptual Design
Plans.
F. On July 13,2017,January 11,2018,and February 8,2018,DRC reviewed and
voted unanimously to approve the project's Final Construction Plans,finding that the
architectural design of the Final Construction Plans for the three buildings was consistent with
the 2011 Planning Commission approved Conceptual Design Plans.
G. On January 25,2018.the City received an appeal of the DRC's determination
made on January 11,2018(the"First Appeal").The First Appeal was filed by Steve
Behmerwohld,asserting he was a resident and representative of Save Our Mission—San Juan
Capistrano,c/o Charles S. Krolikowski,Newmeyer&Dillion,LLP.
61147,80008170496 524.6
H. On February 22,2018,the City received an appeal of the DRC's determination
made on February 8,2018(the"Second Appeal"). The Second Appeal was filed by Steve
Behmerwohld,asserting he was a resident and representative of Save Our Mission—San Juan
Capistrano,c/o Charles S.Krolikowski,Newmeyer&Dillion,LLP. The First Appeal and
Second Appeal together referred to hereinafter as the Appeals.
I. On March 20,2018,the City Council conducted a duly-noticed appeal hearing on
the Appeals pursuant to San Juan Capistrano Municipal Code Section 9-2.311.based upon the
oral and written evidence presented,as well as the entirety of the administrative record,the City
Council rejected the Appeals and upheld the DRC's January 11,2018 and February 8,2018
determinations.
J. On April 13,2018,the Save Our Mission–San Juan Capistrano,a purported
unincorporated association of concerned residents("Petitioner"),filed a lawsuit in the County of
Orange Superior Court,Save Our Mission–San Juan Capistrano v. City of San Juan Capistrano
et al.,Case No.30-2018-00966220-CU-WM-CXC(the"Litigation"),which challenges the
City's approval,alleging inter alia that the City failed to comply with the California
Environmental Quality Act("CEQA").
K. City Council Resolution No. 10-10-05-05,Condition No.4,provides that the
applicant shall defend, indemnify and hold harmless the City,its officers,employees and agents
from and against any claim,action or proceeding to attack,set aside,void or annul any approval
or condition of approval concerning this project,including but not limited to any approval or
condition of approval of the City Council,Planning Commission,Design Review Committee,or
Development Services Director.
L. Based upon information currently available,without admitting any individual or
shared liability;and expressly denying same,the Parties believe they have similar and common
legal interests in the prosecution of the Litigation and the claims that will likely be contained
therein,and any matters relating thereto. The Parties further believe It is to their individual and
mutual benefit to cooperate and share information,strategy and documents concerning issues
arising out of or relating to those claims,including,but not limited to,information and
documents that may be subject to the attorney-client privilege,attorney work-product doctrine,
and/or any other applicable privilege or immunity existing under state or federal law,effective as
of the commencement of this Agreement or thereafter.
M. The Parties intend to vigorously defend against Petitioner's claims. Accordingly,
the Parties have a common interest in the defense of future claims raised against them in the
Litigation. Each of the Parties intends to appear in the Litigation,oppose the Litigation,and may
represent its own separate interests,some of which may be unique. Such representation of
separate or unique interests is not inconsistent with the common interests of the Parties.
N. Nothing in this Agreement is meant or should be construed to abrogate the City's
legal obligation to exercise independent judgment as required by the CEQA concerning the
project,or consideration of project approvals.
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O. In defending against the Litigation and similar challenges to the project from
other third parties in the future,the Parties have interests in common and will litigate common
claims and have legal theories in common,and will benefit if they can communicate openly with
each other about all matters relating to the evaluation of and possible legal challenges to the
City's actions on the project.
P. In order to promote full and effective communication between the Parties,and to
avoid duplicative efforts by them and to minimize the costs of litigation,the Parties desire to
share attorney-client and/or work-product privileged information and other privileged
information concerning the Litigation noted in the above recitals,but the parties wish to ensure
that any such sharing of information will not diminish in any way the confidentiality of such
information and will not constitute a waiver of any applicable privileges.
Q. This Agreement also confirms that,to the extent the Parties and/or their attorneys
have already been in communication with each other since any privileges became operative
under any applicable law,their communications and work product were then,and remain now,
subject to the joint defense privilege and now are subject to this Agreement.
Agreernen
Now,therefore,the Parties,in consideration of their mutual promises and the foregoing
recitals that are incorporated herein,agree as follows:
1. A reemont. In order to pursue a joint legal effort effectively,the Parties agree
that their mutual interests in conducting coordinated litigation efforts and/or investigating,taking
measures to prevent or other activities in respect of claims,potential claims or regulatory
proceedings may be best served by exchanging or disclosing among themselves and their counsel
Privileged Information,as that term is defined below,provided,however,that nothing herein
shall compel the Parties to coordinate defense efforts or to share any such Privileged
Information. The coordination of defense efforts and the sharing of Privileged Information shall
be entirely voluntary.
1.1 Definition gfJoint Defense. All work performed by the attorneys for the
Parties pursuant to this Agreement and communications among the attorneys for the Parties in
connection with such representation of their respective clients shall be conducted and protected
pursuant to the joint defense doctrine recognized in such federal court cases as United States v.
McPartlin,595 F.3d 1321, 1336-37(7th Cir.),cert.denied,444 U.S.833(1979);Hunydee v.
United States,355 F.2d 183(9th Cir. 1965);and Continental Oil Co. v. United States,330 F.2d
347(9th Cir. 1964);and as contemplated in the California cases of California Oak Foundation v.
County of Tehama, 174 Cal.App.4th 1217, 1222-23(2009); Oxy Resources California LLC v.
Superior Court, 115 Cal.App.4th 874(2004);and Raytheon Co. v.Superior Court,208 Cal.
App,3d 683(1989);and in California Evidence Code section 952 and/or recognized under state
and federal law,including such rights that exist independent of rights described in this
Agreement.
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1.2 pef ition_of Privileged Information. Privileged Information,as used
herein,shall include all writings as defined in California Evidence Code section 250,including
all oral,electronic or written communications including,but not limited to,meeting agendas,
memoranda prepared by in-house and outside counsel,analyses,drafts of pleadings or comments
to regulatory authorities,or other materials or information,furnished by any Party to another
Party or Parties involving matters related to the Litigation,or any other summary,analysis,
report or other document containing information extracted,obtained or derived from such
communications,but excluding such materials or discussions which have been made public or
disclosed to third parties without restriction as to use or disclosure. Privileged Information shall
only be used by the Parties in connection with their rights to be informed about matters related to
the Litigation.
1.3 Limited Disclosure,. No Party shall disclose the Privileged Information
received under this Agreement to any person other than its directors,officers,employees,legal
counsel,accountants,agents and subcontractors(collectively,the"Qualified Persons")who
require knowledge of the Privileged Information for the purpose of evaluating or conducting the
Litigation,and in no event shall such disclosure cause the Privileged Information to become a
record subject to disclosure pursuant to the California Public Records Act. Each attorney for a
Party shall inform such Party's Qualified Persons of the privileged nature of the Privileged
Information. Each such Qualified Person shall be bound by the terms of this Agreement prior to
any disclosure. If any Party violates the terms of this paragraph,such disclosure(s)shall not
have been authorized and,therefore,shall not constitute a waiver of any applicable privilege.
Each Party shall be responsible for any breach of this Agreement by its Qualified Persons.
2. Pu se. The purpose of this Agreement is to ensure that such exchange or
disclosure of Privileged Information in furtherance of the Parties'joint legal efforts does not
diminish in any way the confidentiality of the Privileged Information or constitute a waiver of
any privilege or protection accorded to the Privileged Information,and the Parties hereby declare
their intent that no sharing of information as set forth above shall waive the applicable attorney
work-product privilege,attorney-client privilege,trade secret privilege,the joint defense
privilege,or any other applicable privilege,protection or doctrine. To the maximum extent
permitted by law,the sharing of Privileged Information shall be undertaken in a manner that
protects Privileged Information from public disclosure under the Ralph M.Brown Act,the
California Public Records Act or other applicable law.
3. Marking Written Materials. All written Privileged Information exchanged wilt be
clearly marked"CONFIDENTIAL:SUBJECT TO JOINT LITIGATION PRIVILEGE,"or
"SHARED UNDER THE JOINT NONDISCLOSURE AND LITIGATION AGREEMENT
AMONG PARTIES,"or"SUBJECT TO JOINT LITIGATION PRIVILEGE." The Parties will
use their best efforts to so mark all such written materials,and will instruct their attorneys,
paralegals,and clerical and other personnel as to this requirement,provided,however,that
failure to mark such exchanged written materials shall not be treated as waiving the joint
litigation privilege as to any materials not so marked. This requirement for marking of materials
is prospective in nature and does not apply to materials previously exchanged pursuant to oral or
written joint defense agreements not containing a requirement for such marking,
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4. Exceptions. The restrictions of this Agreement on use and disclosure of
Privileged Information shall not apply to information that:
a) is in the possession or control of a Party at the time of its disclosure hereunder
free of any obligation of Party to keep such Privileged Information confidential;
b) is or becomes publicly known or available,by actions not in violation of this
Agreement;
c) is received by a Party from a third party free to disclose it without obligation to
any other Party;
d) is disclosed to third parties without restriction as to its use or disclosure by the
Party who alone has prepared or obtained the information disclosed,and which
information contains no privileged or protected information obtained directly or
indirectly from another Party,
e) is approved for release by written authorization of the Parties;or
f) is required to be disclosed pursuant to any applicable statute,law,rule or order
of any governmental authority or pursuant to any order of any court of competent
jurisdiction.
5. Protected CommurlZ�ations. The Privileged Information addressed herein
represents communications subject to the joint attorney work-product privilege and/or the
attorney-client privilege and/or the joint defense doctrine and/or the trade secret privilege as
defined by California law(collectively,"Joint Defense Communications"). If used by a Party
hereunder for purposes other than internal evaluation of legal issues related to the Litigation,
such use would unfairly prejudice and irreparably harm the rights and interests of all the Parties.
Each of the Parties and counsel agree that any Joint Defense Communications they receive from
any other Party or its representatives shall be treated and maintained as privileged and
confidential communications. Execution of this Agreement constitutes mutual agreement that
any consultations among the Parties and their respective counsel,and any sharing or pooling of
work product or other confidential documents,are reasonably necessary for the accomplishment
of the purpose for which the Parties'counsel have been consulted and retained. The Parties
agree that any consultations among them or their counsel,and any sharing or pooling of work
product or other confidential documents,are in reliance on the joint litigants' privilege. The
Parties further agree that the joint litigants' privilege as it relates to the consultations,
information,data and other documents covered by this Agreement may not be waived except
with the consent of the Parties.
6. Third-Party Claims of Waiver. Should any third party claim that an otherwise
applicable privilege has been waived as a result of any exchange or disclosure of Privileged
Information made pursuant to this Agreement,the Parties agree to join in defending such claim
of privilege or protection.
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7. Disclosure Requirements. If a Party or its Qualified Persons become subject to a
bona fide requirement by law,regulation,deposition questions,interrogatories,Public Records
Act request,Freedom of Information Act request,other type of request for information or
documents,subpoena,civil investigative demand or similar process(collectively,a
"Requirement")to disclose any Privileged Information,such Panty(i)will,prior to producing
any Privileged Information,promptly notify all other Parties of the existence,terms and
circumstances of such Requirement(s)so that any other Party may seek an appropriate protective
order,and(ii)will cause its Qualified Persons to cooperate fully with any other Party in seeking
a protective order. If a Party subject to a Requirement,who has complied with the notification
and cooperation obligations described in the preceding sentence,is compelled,in the opinion of
its legal counsel,to disclose Privileged Information or else stand liable for contempt or other
substantial penalty,such Party will furnish only that portion of the Privileged Information which
is legally required pursuant to the terms of such Requirement as modified by any protective
order.
8. Disclosure to Clients. Counsel receiving Joint Defense Communications and
materials may disclose those communications to their respective clients,but may not disclose
such Joint Defense Communications to any other person without the consent of the Party
providing the privileged and confidential information. Any unauthorized disclosure of any Joint
Defense Communications to any third party shall not constitute a waiver of any applicable
privilege.
9. Goveming Law. This Agreement and any dispute hereunder shall be governed by
and construed in accordance with the internal laws,other than the choice of laws,of the State of
California.
10. No Warranty, No Party makes any warranty of any nature with respect to any
Privileged Information,including the accuracy and completeness thereof,provided to any other
Party pursuant to this Agreement.
11, Wive . This Agreement shall not create any agency or similar relationship
between or among the Parties. No Party shall have authority to waive any applicable privilege,
protection or doctrine on behalf of any other Party;nor shall any waiver of any applicable
privilege,protection or doctrine by the conduct of any Party be construed to apply to any other
Party. No failure or delay in exercising any right,power or privilege hereunder shall operate as a
waiver thereof,nor shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right,power or privilege hereunder.
12. N9 PartnershiRQr3gint_Entity. This Agreement is not intended to and does not
create a partnership or any other form of single or joint entity of any sort comprised of the Parties
and/or their attorneys.
13. No Obligation to Share Information Not 5harA„Qr 1~xrboged. Nothing herein
shall obligate a Party to share or exchange Privileged Information that has not been shared or
exchanged pursuant to the terms of this Agreement.
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61147,80000 90996534,6
14. Indernnifsation.
A. Real Party shall indemnify and pay for the reasonable cost of defense
(with counsel as provided herein)for the City,its officials(appointed or elected),officers,
employees,agents,departments,agencies,and instrumentalities thereof in the Litigation.
B. Counsel for the City shall include Jeffrey S.Ballinger and Alisha M.
W interswyk,as well as other attorneys and paralegals of Best Best&Krieger LLP(the"City
Attorney"). The City's reasonable attomeys'fees and costs in defending the Litigation shall be
reimbursed by Real Party as follows: (i)a separate billing file for litigation shall be opened by
the City Attorney;(ii)the time shall be billed in 0.1 hour increments;(iii)City's attorneys'fees
and costs shall be invoiced monthly with a statement to Real Party redacted to preserve
confidential information;and(iv)no cost in excess of$500 shall be incurred without Real
Party's prior written approval. Notwithstanding the foregoing,Real Party's reimbursement shall
be conditioned upon the City's cooperation with Real Party in the Litigation and joint defense of
the Project. Additionally,Real Party has raised a potential conflict of interest on the part of the
City Attorney that Real Party believes could require the City to have different counsel than the
City Attorney represent the City in the Litigation. Nothing about this Agreement is meant to
waive that issue nor to waive any rights or remedies of Real Party related to that conflict issue.
C. Counsel for Real Party and the City Attorney for the City shall reasonably
cooperate with each other in connection with their respective investigations and the Litigation.
City and City Attorney shall provide Real Party,its consultants,investigators,experts,and
counsel,access to the City's public files and documents upon request during normal business
hours.
D. Each Party shall communicate promptly to the other Party any offers
received for the settlement of the Litigation. City shall secure Real Party's consent to any
settlement. Real Party shall secure the City's consent to any settlement. Such consent shall not
be unreasonably withheld by either Party.
15. Ackn vl mt.- i . Each Party understands and
acknowledges that it is represented only by its own attorneys in the Litigation,and that nothing
in this Agreement creates an attorney-client relationship between such Party and the attorney for
any other Party. While attorneys representing a Party have a duty to preserve the confidentiality
of Privileged Information disclosed to them pursuant to this Agreement,such attorneys will not
be acting for anyone other than their respective client or clients in doing so. The attorneys
representing a Party owe duties,including the duties of care and loyalty,only to their respective
client or clients,and nothing in this Agreement creates any duties between a Party and counsel
for any other Party.
16. Entire Agreement;Amendments, This Agreement represents the entire agreement
of the Parties in connection with the subject matter hereof and may be modified only in writing
agreed to by all Parties.
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61147 BOQOB%30996524.6
17. Authority. The signatories hereto represent and warrant that they have been duly
authorized to enter into this Agreement by the Party on whose behalf it is indicated that the
person is signing and,by such signature,to bind such Party to the Agreement.
18. a ti ns The captions of the various articles and paragraphs are for convenience
and ease of reference only,and do not define,limit,augment or describe the scope,content or
intent of this Agreement.
19. Effective Date;Termination. This Agreement shall become effective as of the
date first above written and shall exist in perpetuity unless it is terminated upon written notice by
any Party or upon the resolution of the Litigation. Nevertheless,the Parties agree that privileged
communications occurred before formalizing this Agreement,including communications that
occurred leading up to and following the approval on March 20,2018,and those
communications are and continue to be protected under the common interest doctrine. The
confidentiality obligations and use limitations of the Parties with respect to Privileged
Information previously exchanged shall remain in full force and effect,without regard to whether
this Agreement is terminated or whether any particular action is terminated by final judgment or
settlement. In the event any Party settles or Is otherwise dismissed from the Litigation,or for
any other reason ceases to participate in this Agreement,such Party shall be obligated to
continue to preserve the confidentiality of Privileged Information and any and all privileges
pertaining to Privileged Information as though the Party were still part of the joint
prosecution/defense arrangement. The Parties agree that,in the event any Party determines that
it no longer has,or no longer will have,mutuality of interest in a joint defense for any reason,
including but not limited to a conflict of interest between the Parties,that Party will promptly
notify the other Parties of its intent to withdraw from this Agreement. A written notice of
termination shall constitute a termination of this Agreement,provided,however,that no such
termination shall affect or impair the obligations of confidentiality and privilege with respect to
Privileged Information previously furnished pursuant to this Agreement. Any party so
withdrawing will immediately return all copies of any written materials provided.
20. Reservation Qf Rights and Claims.. Each of the Parties mutually reserves all rights
and claims against the other Party arising out of the alleged conduct and actions alleged in the
Litigation or arising out of a conflict of interest between the Parties,as well as all defenses that
are or may be available to each of the Parties. The Parties waive any right to seek
disqualification of any other Party's attorney based on that attorney's receipt of confidential or
Privileged Information subject to this Agreement which was received while this Agreement was
in effect. The Parties agree that the existence of this Agreement shall not be disclosed or used
offensively or defensively in any proceeding involving the Litigation(except that this Agreement
may be disclosed or used by any Party hereto in any proceeding to maintain and protect,
consistent with the intent of this Agreement,the confidentiality of all Privileged Information);
nor will any Party claim that any counsel to a Party is disqualified from any proceeding by
reason of this Agreement or the sharing of Privileged Information under this Agreement.
21. Inde dcnt_Pro
secutivp gr Defense, Nothing in this Agreement shall limit or
interfere with the right and ability of a Party to conduct its own independent prosecution or
defense of matters relating to the Litigation and the claims therein,including filing appropriate
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61147.8000 MW65_4.6
motions,conducting separate and independent discovery,entering into individual settlements,or
otherwise engaging in pretrial procedures for the benefit of the Party.
22. Confidentiality, The Parties and their attorneys each agree to keep confidential
the existence of,and the terms of,this Agreement except to the extent required to enforce its
provisions or as required by the Ralph M.Brown Act,the California Public Records Act,or any
other applicable law or statute.
23. aSvemb lity. In the event that any covenant,condition or other provision of this
Agreement is held to be invalid,void or illegal by a court of competent jurisdiction,it shall be
deemed severable from the remainder and shall in no way affect,impair or invalidate any other
covenant,condition or provision of this Agreement.
24. Supplementary Activity. The Parties agree to cooperate fully and to execute any
and all supplementary documents and to take all additional actions that may be necessary or
appropriate to give full force to the basic terms and intent of this Agreement,and which are not
inconsistent with its terms.
25. Rgmedies. Breach of this Agreement by unauthorized disclosure will cause
irreparable harm for which there is no legal remedy,thereby entitling the other Party to seek
injunctive or equitable relief,including,without limitation,specific performance of this
Agreement or an injunction against breach of this Agreement.
26. Attorneys' Fccs:'Venue: In the event that either Party shall commence any legal
action or proceeding to enforce or interpret this Agreement,the prevailing party in such action or
proceeding shall be entitled to recover its costs of suit,including reasonable attorneys' fees. The
venue for any litigation shall be Orange County,In the event of any asserted ambiguity in,or
dispute regarding,the interpretation of any matter herein,the interpretation of this Agreement
shall not be resolved by any rules of interpretation providing for interpretation against the party
who causes the uncertainty to exist or against the drafting party. This Agreement shall be
governed by and interpreted under the laws of the State of California.
27. $uccenols and As§igns. This Agreement shall inure to the benefit of and be
binding upon the successors,successors-in-interest,assigns or affiliates of the Parties.
28. Others Joining Agreement. Any person wanting to join this Agreement must be
approved by unanimous agreement of the original Parties to this Agreement.
29. Consultants. This Agreement shall apply to any and all consultants retained by
each of the Parties and to each Party's legal counsel.
30. Notices. All notices and demands of any kind which any Party may require or
desire to serve on the other in connection with this Agreement must be served in writing either
by personal service or by registered or certified mail,return receipt requested,and shall be
deposited in the United States mail,with postage thereon fully prepaid,and addressed to the
Party so to be served as follows:
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61147.80006130996524.6
To The City:
Benjamin Siegel,City Manager
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano,CA 92675
With a copy to:
Jeffrey S.Ballinger,City Attorney
Best Best&Krieger LLP
655 West Broadway, 15th Floor
San Diego,CA 92101
To Real Party:
Mission Commercial Properties,Inc.
Jake Griffith
31866 Camino Capistrano
San Juan Capistrano,CA 92675
With a copy to:
K.Erik Friess
Allen Matkins
1900 Main Street,5th Floor
Irvine CA 92614-7321
31. 1=Qunif.Marts and Facsimile Si nag tures. This Agreement may be executed in
counterparts,all of which,when taken together,shall constitute the agreement of the Parties.
Facsimile and email transmitted copies of signed counterparts of this Agreement shall be deemed
as authentic and valid as an original of this Agreement.
32. No Admissions. Nothing contained in this Agreement shall be construed to
constitute an admission of any liability on the part of any Party with respect to the Litigation or
any issues or claims related thereto,or other matters associated therewith.
(Signatures on following page)
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61147,80008Ci0996524.6
IN WITNESS WHEREOF,the Parties have executed this Joint Nondisclosure,Indemnity and
Litigation Defense Agreement on the date first set forth above.
SAN JUAN CAPISTRA a municipal MISSION COMMERCIAL PROPERTIES,
corporation INC.,a California Cor7--
te:
By:
nj i;r ieg ,City Manager By:
— Name:L0-'f-_Efr Title:
Date: o
ATTEST: APPROV FR ATO FO
By:
(-(0 �-14— .�K.l�rik ri s
aria Morris, ty{ lark
Date: �
APPROVED AS TO FORM:
By: �
t re S.Balli or,City Attorney
Date: c 4-o b er- c.� -o,p
61147,80008U0996524,b