15-0519_CAPISTRANO TAXPAYERS ASSOC_Settlement AgreementSETTLEMENT AGREEMENT
BETWEEN
CITY OF SAN JUAN CAPISTRANO
AND
CAPISTRANO TAXPAYERS ASSOCIATION, INC.
This Settlement Agreement ("Agreement") is made as of May 19, 2015
("Effective Date"), between the City of San Juan Capistrano, a municipal corporation and
general law city (the "City") and Capistrano Taxpayers Association, Inc., a non-profit
California corporation ("CTA") (the "Parties"), with respect to the following facts;
A. In February 2010, the City adopted a new water rate structure,
recommended by a consulting firm.
B. The City's 2010 rate structure included four (4) "tiers" of pricing.
C. In August 2012, CTA filed an action in Orange County Superior Court
entitled Capistrano Taxpayers Association, Inc. v. City of San Juan Capistrano.
Case No 30-2012-00594579 (the "Lawsuit"). The Lawsuit challenged, among
other things, the City's tiered pricing structure and the City's imposition of a
recycled water fee, under Proposition 218 (Cal. Const., Art. XIUD).
D. The trial court ruled in favor of CTA, concluding that the City failed to
carry its burden of establishing evidence that the tiered water rates were
proportional to the costs of providing water services (the "T iered Rale Ruling").
The trial court also concluded that the City violated Proposition 218 by imposing
on all water ratepayers a recycled water fee (the "Recycled Water Fee Ruling").
CTA was also awarded about $1,500.00 in routine costs.
E. In September 2013, the City appealed the trial court Rulings.
F. On April 20. 2015 the Court of Appeal, Fourth District, Division Three
issued its opinion in Case No. G048969 on the City's appeal (the "Appellate
Opinion"). In the Appellate Opinion, the Court of Appeal reversed the trial
court's Recycled Water Fee Ruling but affirmed the trial court's Tiered Rate
Ruling.
G. The City and CI A wish to resolve the Lawsuit as between themselves,
including all issues included therein.
IN LIGHT OF FHE FOREGOING RECITALS. IT IS MU FUALLY AGRIiED
THAF:
1. Resolution of Lawsuit. The Parties agree, as between themselves, that the
Lawsuit and Appellate Opinion shall stay intact, with City not seeking review of or
61 147 1)I7I)UW7HI366 3 1
4260667 I - NWMI1I233 2
depublication requests with respect to the Appellate Decision with the California
Supreme Court. To the extent person/entities other than City seek review/depublication
of the Appellate Opinion or the Supreme Court itself accepts review. City shall agree it
shall not support review or depublication, and CTA bears its own cost and expense of any
further appellate work without any liability to City. The Parties will cooperate in the
issuance of a remittitur or other steps to resolve the Lawsuit and Appellate Opinion as
between themselves, so that both matters are concluded in accordance with this
Agreement.
2. Attomevs' Fees Payment. City shall, within twenty (20) days following the
FTTective Date, pay CTA $884,000, as full reimbursement of CTA's attorneys' fees and
costs incurred in connection with the Lawsuit. CTA directs that $266,700.00 be paid to
Law Offices of Benjamin T. Benumof and that the remaining $617,300.00 be paid to
AlvaradoSmith. directives which will be honored by City.
3. Compliance with Proposition 218. City acknowledges the trial court
Rulings and Court of Appeal Opinion, and City commits to complying with Proposition
218.
4. Bearing Own Fees and Costs. Except as set Ibrth in paragraph 2 above,
each party shall bear its own attorneys' fees and costs incurred in connection with the
Lawsuit and the preparation of this Agreement.
5. Section 1542 Waivers. Civil Code § 1542 slates: "A general release does
not extend to claims which the creditor does not know {)r suspect to exist in his or her
favor at the time of executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor." By entering into this
Agreement, the City and C I A do not admit the truth of any of the allegations contained
in the Lawsuit.
6. CI A Releases. Fxccpt as set forth in this Agreement, CTA releases the
City, its council members, commissioners and employees, and their agents and attorneys
from any and all claims, demands, liabilities, obligations, costs, expenses, fees, actions,
and/or causes of action arising out of, or connected to, the Lawsuit, whether known,
unknown or suspected and CIA hereby waives the provisions of Civil Code § 1542.
CTA does not release any refund rights belonging to any individual v\ater users.
7. City Release. Except as set forth in this Agreement, the City releases CTA
and its members, officers, agents and attorneys from any and all claims, demands,
liabilities, obligations, costs, expenses, fees, actions, and/or causes of action arising out
of, or connected to, the Lawsuit, whether known, unknown or suspected and the City
hereby waives the provisions of Civil Code § 1542.
6M47()17(J(>'97Kii663
4260667 I " NWMII12)j 2
2
8. Successors, Third Parties. This Agreement is entered into solely for the
benefit of the parties hereto and their successors, transferees and assigns. Other than the
parties hereto and their successors, transferees and assigns, no third party shall be entitled
to directly, or indirectly, base any claim, or to have any right arising from, or related to.
this Agreement.
9. Further Assurances. The parties shall act in good faith and shall take all
further actions reasonably necessary to effectuate the letter and the spirit of this
Agreement.
10. Choice of Law. This Agreement and all rights and obligations arising out
of it shall be construed in accordance with the laws of the State of California.
11. Venue Selection. Any litigation arising out of this Agreement shall be
conducted only in the Orange County Superior Court.
12. Agreement Fees Clause. The prevailing party in any litigation brought to
enforce or interpret this Agreement shall be entitled to recover its attorneys" fees and all
costs of litigation including, but not limited to, expert witness fees, in addition to any-
other relief to which it may be entitled. Fees and costs not included within those allowed
by Code of Civil Procedure § 1033.5 shall be set forth in the parties' pleadings and shall
be proved in a bifurcated trial before the trial judge alone, the right to trial by jury being
hereby waived, after the conclusion of the trial on all other issues.
13. Integration. fhis Agreement contains the entire agreement and
understanding concerning the Lawsuit and supercedes and replaces all prior negotiations
or proposed agreements, written or oral. Each of the parties hereto acknowledges that no
other party, nor the agents nor the attorneys for any party, has made any promise,
representation or warranty whatsoever, express or implied, not contained herein, to
induce the execution of this Agreement and acknowledge that this Agreement has not
been executed in reliance upon any promise, representation or warranty not contained
herein.
14. Amendments. This Agreement may not be amended except in a writing
signed by all the parties hereto.
15. fnvestigalion/Risks. The parlies to this Agreement hereby acknowledge
that they have undertaken an independent investigation of the facts concerning the
Lawsuit. The parties expressly assume the risk that the true facts concerning the
foregoing may differ from those currently understood by them.
16. Advice/Consent of Counsel. The parties to this Agreement hereby
acknowledge that they have executed this Agreement with the consent, and upon the
advice, of their own attorney.
6ll47(ll700\47«LiM) 3
4260667 1 - \Vv Mlll235 2
3
17. Authority. Each individual signing this Agreement represents and warrants
that he or she has been authorized to do so by proper action of the party on whose behalf
he or she has signed.
18. Counterparts. This Agreement may be signed in one or more counterparts
and, when all parties have signed the original or a counterpart, such counterparts together
shall constitute one original document.
[signatures on following page]
(>l 1-17 ()l^(fO 97Xlif>(?3
4261)667 1 - NV* Ml II2J3 2
4
SIGNATURE PAGE TO
SETTLEMENT AGREEMENT
BETWEEN
CITY OF SAN JUAN CAPISTRANO
AND
CAPISTRANO TAXPAYERS ASSOCIATION, INC.
CAPISTRANO TAXPAYERS ASSOCIATION,
INC.
May i^, 2015
By:
Its:
May , 2015
CITY OF SAN JUAN CAPISTRANO
By:
Derek Reeve, Pvlayor
May 11 ,2015
Maria Morris, CUyNTlerk
APPROVED AS TO FORM:
By:
Jeifr<^ S. Ballidger, City Attorney
61!47.0I700\97S1366.3
4260667 I -- NWMH1235.2
5
SETTLEMENT AGREEMENT
BETWEEN
CITY OF SAN JUAN CAPISTRANO
AND
CAPISTRANO TAXPAYERS ASSOCIATION, INC.
This Settlement Agreement ("Agreement") is made as of May 19, 2015
("Effective Dale"), between the City of San Juan Capistrano, a municipal corporation and
general law city (the "City") and Capistrano Taxpayers Association, Inc., a non-profit
California corporation ("CTA") (the "Parties"), with respect to the following facts:
A. In February 2010, the City adopted a new water rate structure,
recommended by a consulting firm.
B. The City 's 2010 rale structure included four (4) "tiers" of pricing.
C. In August 2012, CTA filed an action in Orange County Superior Court
entitled Capistrano Taxpayers Association. Inc. v. City of San Juan Capistrano,
Case No 30-2012-00594579 (the "Lawsuif"). The Lawsuit challenged, among
other things, the City's tiered pricing structure and the City's imposition of a
recycled water fee, under Proposition 218 (Cal. Const.. Art. XllID).
D. The trial court ruled in favor of CTA. concluding that the City failed to
carry its burden of establishing evidence that the tiered water rales were
proportional to the costs of providing water services (the "Tiered Rate Ruling").
The trial court also concluded that the City violated Proposition 218 by imposing
on all water ratepayers a recycled water fee (the "Recycled Water Fee Ruling").
C TA was also awarded about $1,500.00 in routine costs.
1-. In September 2013, the City appealed the trial court Rulings.
F. On April 20. 2015 the Court of Appeal. Fourth District, Division I hree
issued its opinion in Case No. G048969 on the City's appeal (the "Appellate
Opinion"). In the Appellate Opinion, the Court of Appeal reversed the trial
court's Recycled Water Fee Ruling but affirmed the trial court's Tiered Rate
Ruling.
G. The City and C TA wish to resolve the Lawsuit as between themselves,
including all issues included therein.
IN LIGHT OF FHE FOREGOING RECITALS. If IS MUTUALLY AGRI-ED
THAT:
1. Resolution of Lawsuit. The Parties agree, as between themselves, that the
Lawsuit and Appellate Opinion shall stay intact, with City not seeking review of or
61147 0170O\M78l !(>6 i
426(1667 I - NWMI II24> 2
depublication requests with respect to the Appellate Decision with the California
Supreme Court. To the extent person/entities other than City seek review/depublication
of the Appellate Opinion or the Supreme Court itself accepts review, City shall agree it
shall not support review or depublication, and CTA bears its own cost and expense of any
further appellate work without any liability to City. The Parties will cooperate in the
issuance of a remittitur or other steps to resolve the Lawsuit and Appellate Opinion as
between themselves, so that both matters are concluded in accordance with this
Agreement.
2. Attorneys' Fees Payment. City shall, within twenty (20) days following the
Effective Date, pay CTA $884,000, as full reimbursement of CTA's attorneys' fees and
costs incurred in connection with the Lawsuit. CTA directs that $266,700.00 be paid to
Law Offices of Benjamin T. Benumof and that the remaining $617,300.00 be paid to
AlvaradoSmith, directives which will be honored by City.
3. Compliance with Proposition 218. City acknowledges the trial court
Rulings and Court of Appeal Opinion, and City commits to complying with Proposition
218.
4. Bearing Own Fees and Costs. Except as set forth in paragraph 2 above,
each party shall bear its own attorneys' fees and costs incurred in connection with the
Lawsuit and the preparation of this Agreement.
5. Section 1542 Waivers. Civil Code § 1542 states: "A general release does
not extend to claims which the creditor docs not know or suspect to exist in his or her
favor at the time of executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor."' By entering into this
Agreement, the City and CI A do not admit the truth of any of the allegations contained
in the Lawsuit.
6. CTA Releases. Except as set forth in this Agreement, C'fA releases the
City, its council members, commissioners and employees, and their agents and attorneys
from any and all claims, demands, liabilities, obligations, costs, expenses, fees, actions,
and/or causes of action arising out of, or connected to, the Lawsuit, whether known,
unknown or suspected and CTA hereby waives the provisions of Ci\il Code § 1542.
CIA does not release any refund rights belonging to any individual water users.
7. City Release. Except as set forth in this Agreement, the City releases CTA
and its members, oftlcers. agents and attorneys from any and all claims, demands,
liabilities, obligations, costs, expenses, fees, actions, and/or causes of action arising out
of, or connected to, the Tawsuit, whether known, unknown or suspected and the City
hereby waives the provisions of Civil Code § 1542.
611-47 0I70I)-97K1366 3
4260667 I - NWMII1235 2
8. Successors, Third Parties. This Agreement is entered into solely for the
benefit of the parties hereto and their successors, transferees and assigns. Other than the
parties hereto and their successors, transferees and assigns, no third party shall be entitled
to directly, or indirectly, base any claim, or to have any right arising from, or related to.
this Agreement.
9. Further Assurances. The parties shall act in good faith and shall take all
further actions reasonably necessary to effectuate the letter and the spirit of this
Agreement.
10. Choice of Law. This Agreement and all rights and obligations arising out
of it shall be construed in accordance with the laws of the State of California.
11. Venue Selection. Any litigation arising out of this Agreement shall be
conducted only in the Orange County Superior Court.
12. Agreement Fees Clause. The prevailing party in any litigation brought to
enforce or interpret this Agreement shall be entitled to recover its attorneys' fees and all
costs of litigation including, but not limited to, expert witness fees, in addition to any
other relief to which it may be entitled. Fees and costs not included within those allowed
by Code of Civil Procedure § 1033.5 shall be set forth in the parties" pleadings and shall
be proved in a bifurcated trial before the trial judge alone, the right to trial by jury being
hereby waived, after the conclusion of the trial on all other issues.
13. Integration. This Agreement contains the entire agreement and
understanding concerning the Lawsuit and supercedes and replaces all prior negotiations
or proposed agreements, written or oral. Each of the parties hereto acknowledges that no
other parly, nor the agents nor the attorneys for any party, has made any promise,
representation or warranty whatsoever, express or implied, not contained herein, to
induce the execution of this Agreement and acknowledge that this Agreement has not
been executed in reliance upon any promise, representation or warranty not contained
herein.
14. Amendments. This Agreement may not be amended except in a writing
signed by all the parties hereto.
15. fnvestigation/Risks. The parties to this Agreement hereby acknowledge
that they have undertaken an independent investigation of the facts concerning the
Tawsuit. fhe parties expressly assume the risk that the true facts concerning the
foregoing may differ from those currently understood by them.
16. Advice/Consent of Counsel. The parties to this Agreement hereby
acknowledge that they have executed this Agreement with the consent, and upon the
advice, of their own attorney.
6II47(II70II\9781.»)6 J
4260(,(>7 1 - N\\Mlll2,i3 2
3
17. Authority. Each individual signing this Agreement represents and warrants
that he or she has been authorized to do so by proper action of the party on whose behalf
he or she has signed.
18. Counterparts. This Agreement may be signed in one or more counterparts
and, when all parties have signed the original or a counterpart, such counterparts together
shall constitute one original document.
[signatures on following page
ol 147 01 :'0n 9781 406 4
426U067 1 NWMII1235 2
4
SIGNATURE PAGE TO
SETTLEMENT AGREEMENT
BETWEEN
CITY OF SAN JUAN CAPISTRANO
AND
CAPISTRANO TAXPAYERS ASSOCIATION, INC.
CAPISTRANO TAXPAYERS ASSOCIATION,
INC.
May 2015
By:
Us:
May_, 2015
CITY OF SAN JUAN CAPISTRANO
By:
Derek Reeve. Mayor
May 1372015
ATT
By:
Maria Morr s. City Cle
APPROVED AS TO TORM:
BY:
Jeffrey S. BallingeffCity gefTCity Attorney
61147.0!700\978I366,3
4260667 1 -- NWMH 1235.2
5