Loading...
12-0828_RUTAN & TUCKER LLP_Agenda Report_D118/21/2012 ti' f".„” D11 City of San Juan Capistrano Agenda Report TO: Karen P. Brust, City Ma r FROM: Hans Van Ligten Rutan & Tucker. LLP DATE: August 21, 2012 SUBJECT: Request Regarding Legal Services Agreement between Rutan & Tucker LLP and City of San Juan Capistrano; Disclosure of Potential Conflict of Interest RECOMMENDATION: By motion, consider the request by Rutan & Tucker, LLP ("Attorneys") and authorize the City Manager to execute a written consent to the potential conflicts of interest consistent with the conditions recommended below. EXECUTIVE SUMMARY Rutan & Tucker in the past has and currently does represent Standard Pacific Corporation (SPC), a residential developer, in connection with purchase and development of projects for residential development throughout the State of California. SPC is negotiating a contract to purchase land from the Scalzo Family Trust (the "Trust") and intends to pursue all development applications for the land. Attorneys from Rutan & Tucker have also represented the Trust and family members in prior litigation between family members, which litigation is now settled. The Trust wishes to retain Attorneys to prepare the contract with SPC, and SPC has previously consented to Attorneys representing Trust for that purpose. SPC, as buyer, will apply for all entitlements and agreements with the City, and will be represented by separate counsel. Attorneys request the City's consent to represent City in connection with this transaction. DISCUSSION/ANALYSIS: Rutan & Tucker will begin as the City Attorney on August 28 pursuant to a new Agreement for City Attorney services. Rutan traces its existence back over a hundred years the overwhelming bulk of that time servicing clients in Orange County. As part of its ethical obligations, it routinely monitors for conflicts as matters arise, and will from City Council Agenda Report August 21, 2012 Page 2 of 3 time to time as issues come up, apprise the City of those issues, and may request consent to represent an existing client so long as such representation is not adverse to the City. As noted above, Rutan trust litigators represented the Trust and certain family members in a prior action (which to be clear, where the City was not a party). That matter was settled last year, and the litigation is no longer pending. Rutan has been providing ongoing services to implement the settlement on an as needed basis, and was asked by Trust to prepare a purchase and sale agreement with SPC, an Orange County -based homebuilder. Rutan has also represented SPC in real estate acquisitions, and provided some land use and CEQA services over a number of years. SPC agreed to allow Rutan to represent Trust in connection with the purchase agreement. SPC has agreed to a similar waiver to allow Rutan to represent the City with respect to any development project relating to the Trust property, including entitlements, CEQA, and related agreements or issues. SPC would, to the extent it desired legal counsel, use different counsel for this Project. No Rutan lawyers would represent SPC in connection with any project in the City. Rutan would not disclose any information to SPC. SPC has imposed two conditions on its consent (i) no attorneys who have done work for SPC shall work for the City on this project, and (ii) the waiver would not extend to actual litigation between the City and SPC. As to the Trust, Rutan requests consent to continue representing the Trust with respect to the settlement of the prior Trust beneficiary litigation and the sale of the land to SPC. The Trust has indicated it will also consent to Rutan representing the City as outlined above. The City's consent is requested out of an abundance of caution because while that representation is limited to a transaction to which the City is not a party, as noted, SPC is planning to apply for entitlements, and the Trust will have consented to the application. The individual attorneys representing the City would not represent the Trust on any matters, and would not disclose any information to the Trust. Similarly, the attorneys working on sale for the Trust will not work for the City and will not disclose any information to the City. The circumstances described above may create both actual and potential conflicts of interest. Rules 3-310(A), (B), (C), and (E) of the Rules of the Professional Conduct of the State Bar of California generally permit clients to give informed written consent to representation in conflict of interest situations. FISCAL IMPACT: None. ENVIRONMENTAL IMPACT: Not applicable. City Council Agenda Report August 21, 2012 Page 3 of 3 PRIOR CITY COUNCIL REVIEW: Not applicable. COMMISSION/COMMITTEE/BOARD REVIEW AND RECOMMENDATIONS: Not applicable. NOTIFICATION: Not applicable. ATTACHMENT(S): None.