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HomeMy WebLinkAbout5791SETTLEMENT AGREEMENT This Settlement Agreement (the "Agreement") is made this/ 7 1day of fee Q 2017, by and between CAPITAL FINANCIAL, LLC, in its capacity as Receiver, and the CITY OF BREMERTON (collectively "the Parties"). RECITALS A. On December 19, 2014, the court entered an Order Appointing Capital Financial LLC (the "Receiver") as Custodial Receiver under which it was directed to take possession and control of the property of those defendants named in Kitsap County Superior Court, cause no. 14-2- 02368-7-7 (the "Receivership"). On January 30, 2015, the court converted the Receivership to a general receivership and expanded it to add additional parties and property; B. The Receivership property includes two parcels of real property described as follows: PARCEL A THE NORTHEAST QUARTER OF THE SOUTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 20, TOWNSHIP 24 NORTH, RANGE 1 EAST, W.M. IN KITSAP COUNTY, WASHINGTON Tax Parcel No. 202401-4-004-2001. PARCEL B THE SOUTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 20, TOWNSHIP 24 NORTH, RANGE 1 EAST, W.M. IN KITSAP COUNTY, WASHINGTON; EXCEPT THE NORTHEAST QUARTER THEREOF. Tax Parcel No. 202401-4-003-2002. C. The above described parcels of real property are subject to Utility Local Improvement District (ULID) 2002-01 created by City of Bremerton (the "City") Ordinance 4935 for the purpose of making improvements to the City's water system, including the installation of a 12 inch water pipe in the West Hills area. On October 24, 2013, two or more of the ULID assessments on these parcels were delinquent and pursuant to RCW 35.50.030 the City commenced a judicial foreclosure of its ULID assessment liens. The foreclosure action was filed on October 25, 2013, under Kitsap County Superior Court Cause No. 13-2-02376-0 and then stayed by order entered on February 18, 2015 (the "Foreclosure Action"). E. On March 13, 2015, the City timely filed its Proof of Claim (the "Proof of Claim") with the attorney for the Receiver. The City's Proof of Claim identified it as having a ULID lien against Tax Parcels 202401-4-003-2002 and 202401-4-004-2001 related to a debt incurred in March 31, 2005 (the effective date of Ordinance 4935), and further stated that pursuant to Settlement Agreement 1 RCW 35.50.010 the local improvement assessment liens are liens upon real property that are paramount and superior to any other liens except for general taxes. F. As of February January 23, 2017, the amount secured by the City's ULID assessment liens is as follows: 202401-4-003-2002 Principal: $72,693.21; Interest: $69,196.95; Penalty: $56,147.67; 202401-4-004-2001 Principal: $24,354.07; Interest: $23,182.74; Penalty: $18,810.89; Total Claim $264,385.53. G. The Receiver now wishes to sell the above described parcels of real property. To facilitate the sale, the parties have negotiated an amount to be paid to the City from the sale proceeds for release of its ULID liens and for the treatment of the additional amounts secured by said liens in the Receivership as provided for in this Agreement. NOW, THEREFORE, for and in consideration of the promises and covenants herein contained, the sufficiency of which is hereby acknowledged, the Parties agree as follows: TERMS OF THE SETTLEMENT AND RELEASE 1. City's Proof of Claim: Receiver shall accept, approve and take all necessary action in the Receivership to obtain the entry of an order approving the City's Proof of Claim in the amounts set forth in Paragraph F above plus interest, as follows: 202401-4-003-2002. A secured lien in the amount of $198,037.83 that is paramount and superior to any other liens except for general taxes; 202401-4-004-2001. A secured lien in the amount of $66,347.70 that is paramount and superior to any other liens except for general taxes; This order shall be entered prior to the City releasing its ULID liens. In the event payment is made to the City as called for in Paragraph 2 below, the City's allowed Proof of Claim shall be reduced by the amount of such payment and the remaining amount of its claim treated in the Receivership as a general unsecured claim. 2. Payment for Release of ULID Liens. The City agrees to accept payment of $150,000.00 for the release of its ULID liens from the above described properties. This release is conditioned upon the City's review and approval, prior to closing, of the HUD 1 or other settlement statement for the purpose of ensuring the full payment of the amounts required under this Agreement. Payment to the City shall be made at the time of closing for the sale of the above described properties out of escrow and the payment shall be wired to the City. Wiring instructions will be provided to escrow upon request. In the event a sale of the properties does not close within six months of the date of this Agreement, this Agreement shall terminate and Settlement Agreement 2 the Receiver shall stipulate to an order in the Receivership granting the City relief from stay to proceed with its Foreclosure Action, unless this Agreement is extended by mutual agreement of the parties. 3. Release of Liens and Dismissal of Foreclosure Action: Within ten calendar days of receipt of the payment described in Paragraph 2, the City shall file a motion to dismiss the Foreclosure Action in its entirety and without costs to any parry and cause to be recorded with the Kitsap County Auditor a release of liens for the two above described ULID liens. These releases shall be without full satisfaction of the obligation owed. 4. Approval by Bremerton City Council. This Agreement is conditioned upon its approval by (1) the Bremerton City Council, and (2) the Kitsap County Superior Court, within the Receivership proceeding. The Receiver will take the necessary action to obtain approval from the Kitsap County Superior Court. Should either the City Council or the Kitsap County Superior Court fail to approve this Agreement, it shall become null and void and of no force or effect. 5. Mutual Release: The parties hereby release and forever discharge each other and all of their directors, officers, members, partners, employees, servants, attorneys, insurers, agents, and representatives, whether past and/or present, from any and all claims, cross-claims, counterclaims, demands, actions, causes of actions, debts, liabilities, rights, contracts, obligations, duties, damages, costs, requests for replacement, expenses, attorney's fees, expert fees, appeals, or losses of every kind or nature whatsoever that they possess, whether at this time known or unknown, pled or not pled, suspected or unsuspected, anticipated or unanticipated, direct or indirect, fixed or contingent, or which may presently exist and may hereafter become known, in law or in equity, in the nature of an administrative proceeding or otherwise, for or by reason of any event, transaction, matter, or cause with respect to, in connection with, arising out of, or relating to the City's ULID assessment liens on the real property described in Recital B to this Agreement. 6. Attorneys' Fees and Costs: Each of the Parties shall bear its own attorney fees and costs other in relation to enforcement of this Agreement. 7. Entire Agreement: This Agreement constitutes the entire agreement between the Parties hereto with respect to settlement of the City's Proof of Claim and release of the Parties, and supersedes all prior agreements, understandings, negotiations, and/or discussions, whether oral or written, of the Parties with respect to settlement of the City's Proof of Claim and release of the Parties. There are no representations or agreements between the Parties in connection with respect to settlement of the City's Proof of Claim and release of the Parties except as specifically set forth herein. No supplement, modification, waiver, or termination of this Agreement shall be binding unless executed in writing by the party to be bound thereby. No delay or omission on the part of either party in exercising any right shall operate as a waiver of such right or any other right. A waiver on one occasion shall not be construed as a bar to or waiver of any right on any further occasion. 8. Governing Law: The Parties hereby agree that the validity, construction, and interpretation of this Agreement shall be governed by the laws of the State of Washington. 9. Binding Agreement: This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto, their representatives, parents, affiliates, subsidiaries, servants, Settlement Agreement attorneys, agents, insurers, experts, consultants, heirs, successors, officers, directors, partners, administrators, trustees, receivers, employees, executors, and assigns, and any legal or personal representative, whether past, present or future. 10. Warranty of Authorization: The undersigned persons warrant and represent that they have authority to enter into this Agreement and to bind the party who is represented by the signing person. 11. Benefit of Counsel: The Parties acknowledge that they have consulted with their respective attorneys of record herein concerning the terms of this Agreement, and have been fully advised by their respective attorneys with respect to the rights and obligations contained herein. The settlement which forms the basis of the Agreement has been arrived at after thorough bargaining and negotiation and represents a final agreement. 12. Construction: All Parties have been represented in the negotiation and preparation of this Agreement, and each party has had an opportunity to participate in the drafting to the extent that she or it desires. Accordingly, this Agreement shall be construed according to its plain meaning and not strictly for or against any party. 13. Execution in Counterparts: This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile or photocopy signatures shall be binding as though original. 14. Attorneys' Fees for Breach: In any action that is brought to enforce this Agreement, the prevailing party shall be entitled to recover its reasonable costs, including attorney fees, incurred to enforce the Agreement. I HAVE COMPLETELY READ THIS RELEASE AND FULLY UNDERSTAND AND VOLUNTARILY ACCEPT IT FOR THE PURPOSE OF FINAL RESOLUTION AND SETTLEMENT OF ANY AND ALL CLAIMS, DISPUTED OR OTHERWISE, MADE AGAINST THE PARTIES BEING RELEASED FOR THE EXPRESS PURPOSE OF PRECLUDING FOREVER ANY OTHER CLAIMS ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE LAWSUIT ABOVE-MENTIONED, INSOFAR AS SUCH CLAIMS MAY BE MADE AGAINST THE RELEASED PARTIES, THEIR EMPLOYEES, AGENTS OR REPRESENTATIVES. I ACKNOWLEDGE THAT MY INFORMATION REGARDING THE CLAIM MADE IN THIS MATTER IS SUFFICIENT TO ENTER INTO THIS RELEASE AND EXPRESSLY WAIVE ANY CLAIM THAT THIS RELEASE IS NOT FAIRLY AND KNOWINGLY MADE. SO AGREED: Settlement Agreement 4 RECEIVER I declare under penalty of perjury under the laws of the State of Washington, that the foregoing is true and correct to the best of my knowledge. IN WI ES WHEREOF, I have cans s Se ement Agreement to be executed this,, o day of 2017, Washington. Dat /o opal FINANCIAL, LLC CITY OF BREMETON I declare under penalty of perjury under the laws of the State of Washington, that the foregoing is true and correct to the best of my knowledge. IN WI ESS WHEREOF, I have caused this Settlement Agreement to be executed this a day of PIZ I L 2p 17 at > ,Washington. Dated: / ?O By: A(+L„ E Al 7 - Its:/ Settlement Agreement & 1.T+ '"t FIRST AMENDMENT TO SETTLEMENT AGREEMENT THIS FIRST AMENDMENT is made to the SETTLEMENT AGREEMENT by and between CAPITAL FINANCIAL, LLC, in its capacity as Receiver, and the CITY OF BREMERTON (collectively "the Parties") dated April 17, 2017. WHEREAS, on April 17, 2017, the parties entered into a Settlement Agreement related to the sale of two Receivership properties encumbered by two City of Bremerton Utility Local Improvement District assessment liens (hereinafter "Agreement"). Under the Agreement, the Receiver had six months from the date of the Agreement in which to sell the subject properties; WHEREAS, the Receiver now advises it has identified an interested parry who is prepared to offer $219,500.00 to purchase the properties, provided the Parties' Agreement is extended to January 31, 2018, to allow the proposed sale to be completed and approved by the court; WHEREAS, in approving the Agreement, the Bremerton City Council also authorized the Mayor to extend the Agreement beyond its six month term, if deemed necessary and appropriate, to allow for the Receiver's sale of the property; and WHEREAS, the Parties desire to amend the Settlement Agreement by extending it to January 31, 2018; NOW THEREFORE, for and in consideration of the promises contained herein, the parties agree as follows: full. 1. RECITALS. The recitals set forth above are hereby incorporated as if set forth herein in read: 2. TERM. The last sentence of Paragraph 2 of the Settlement Agreement is hereby amended to In the event a sale of the properties does not close on or before January 31, 2018, the Receiver shall stipulate to the entry of an order in the Receivership granting the City relief from stay to proceed with its Foreclosure Action. 3. OTHER TERMS. All other terms of the Agreement shall remain in full force and effect. IN WITNESS WHEREOF, this Amendment shall be effective on the date fully executed. RECEIVER CAPITAL FINANCIAL, LLC I declare under penalty of perjury under the laws of the State of Washington, that the foregoing is true and correct to the best of my knowledge. IN WITNESS WHEREOF, I have caused this First Armond nt to Settlement Agreement to be executed this 22--C y of 2017, at �: Washington. CAPITAL FINANCIAL Its: *17-p.✓a c..✓G �J�cr1�.� First Amendment to Settlement Agreement - 1 N' 1 -be" CITY OF BREMERTON I declare under penalty of perjury under the laws of the State of Washington, that the foregoing is true and correct to the best of my knowledge. IN WITNESS WHEREOF, I have caused this First Amendment t,o�� Settlement Agreement to be executed this 270—day of A611e,W 6 oti 2017, at � Washington. By_ Patty L ayor Approved as to Form: Bremerton City tt rney Attest: A�� --l" City Clerk First Amendment to Settlement Agreement - 2