12-0828_RUTAN & TUCKER LLP_Agenda Report_D118/21/2012
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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.