HomeMy WebLinkAboutResolution - 2021-R0159 - Settlement Agreement and Release with ASCO 4.27.2021Resolution No. 2021-R0159
Item No. 6.19
April 27, 2021
RESOLUTION
WHEREAS, Lubbock Power & Light is the municipally owned electric utility of
the City of Lubbock ("LP&L");
WHEREAS, on or about May 30, 2019, a crane rented by LP&L from Associated
Supply Company, Inc. ("ASCO") was damaged at or near the Wadsworth Substation
in Lubbock, Texas (the "Incident");
WHEREAS, as a result of the Incident, ASCO and its insurer, Federated
Insurance Company ("Federated"), claim to have incurred or paid repair costs,
replacement costs, rental costs, loss of use, lost profits, taxes, interest, and/or other
amounts;
WHEREAS, a dispute arose between ASCO, Federated, and LP&L, arising from
the Incident (the "Dispute");
WHEREAS, ASCO and Federated have sought payment from LP&L in
connection with the Dispute;
WHEREAS, LP&L denies liability related to the Dispute;
WHEREAS, LP&L, ASCO, and Federated have agreed to mutually settle and
compromise the Dispute; and
WHEREAS, LP&L, through outside counsel, has resolved the Dispute in the
attached Settlement Agreement and Release between LP&L, ASCO, and Federated.
NOW, THEREFORE
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the City Council of the City of Lubbock hereby approves that certain
Settlement Agreement and Release by and between the City of Lubbock, acting by
and through Lubbock Power & Light, Associated Supply Company, Inc., and
Federated Insurance Company, as attached hereto and incorporated herein as though
set forth fully herein in detail, and agrees to payment in the following amounts: (1)
$94,331.07 made payable to Associated Supply Company, Inc., and (2) $148,163.93
made payable to the Law Offices of Robert A. Sturman as counsel for Federated
Insurance Company; for a cumulative amount of $242,495.00.
BE IT FURTHER RESOLVED BY THE CITY COUNCIL OF THE CITY OF
LUBBOCK:
THAT the Mayor of the City of Lubbock is hereby authorized and directed to
execute that certain Settlement Agreement and Release by and between the City of
Lubbock, acting by and through Lubbock Power & Light, Associated Supply
Company, Inc., and Federated Insurance Company, as attached hereto and
incorporated herein as though set forth fully herein in detail.
BE IT FURTHER RESOLVED BY THE CITY COUNCIL OF THE CITY OF
LUBBOCK:
THAT the City Council of the City of Lubbock hereby ratifies and approves, as
applicable, the City of Lubbock's receipt of funds in the amount of $182,495.98 from
its insurers regarding this matter.
Passed by the City Council this 27th day of April, 2021.
L,.,JV
Daniel M. Pope, Mayor
ATTEST:
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Becl y Garza, City Secr tar
APPROVED AS TO CONTENT:
-r,&, �- V\ " t �-,
lair McGinnis, Chief Operating Officer
Gl29-mUl/9)NX. 1011611163"M
Jeby 9milh, LP&L General Counsel
Resolution No. 2021-R0159
SETTLEMENT AGREEMENTAND RELEASE
This Settlement Agreement (the "Agreement") is made by and between the City of
Lubbock, acting by and through Lubbock Power & Light, on the one hand, and Associated Supply
Company, Inc. ("ASCO") and Federated Insurance Company ('Federated"), on the other
(collectively, the —Parties").
Definitions and Background
"Releasing Parties" means ASCO and Federated, together with and including all of their
respective former, present and future members, general partners, limited partners, parents,
subsidiaries, predecessors, successors, divisions, affiliates, acquired companies, merged
companies, sister and brothercompanies, and related entities, and includes each of their members,
officers, directors, attorneys, employees, agents, servants, legal representatives, insurers,
shareholders, general partners, limited partners, joint venturers, and all persons acting by, through,
or under any of them.
"LP&L" means the City of Lubbock, acting by and through Lubbock Power & Light,
togetherwith the City ofLubbock, a municipal corporation, and including all of its former, present
and future elected and appointed officials, predecessors, divisions, affiliates, and related or
affiliated entities, municipalities and governmental bodies, and includes their parent companies,
acquired companies, merged companies, and each of their predecessors and successors, and all
past, present and future directors, officers, agents, servants, employees, attorneys, legal
representatives, insurers, shareholders, predecessors, successors, assigns, partners, joint venturers
ofany of the foregoing, and all persons acting by, through, orunderany of them.
WHEREAS, on or about May 30, 2019, a crane rented by LP&L from ASCO was damaged
at or near the Wadsworth Substation in Lubbock, Texas (the "Incident"). As a result of the
Incident, ASCO and/or Federated claim to have incurred or paid repair costs, replacement costs,
rental costs, loss of use, lost profits, taxes, interest and/or other amounts. ASCO and Federated
have sought payment from LML for alleged damages resulting, from the Incident,
WHEREAS, a dispute arose amongst the Parties regarding liability and damages in
connection with the Incident (the "Dispute'),
WHEREAS, to avoid the costs and uncertainty of litigation, the Parties engaged in
settlement discussions and have agreed to fully and finally resolve the Dispute and all [natters
arising out of or relating totlte 1 ncident.
NOW THEREFORE, in consideration of the releases, promises, representations and
mutual covenants set forth herein, it is agreed:
1. Incornaratiou of Definitions and Background. The paragraphs set forth in the
Definitions and Background section above are incorporated herein as if set forth at length.
2. Payment_ City of Lubbock will make payment to the Releasing Parties forihetotal
sum of TWO HUNDRED FORTY-TWO THOUSAND FOUR HUNDRED NINETY-FIVE
DOLLARS AND NO CENTS ($242,495.00) (the "Settlement Amount') as follows:
a) one check in the amount of $94,331,07 made payable to Associated Supply
Company, Inc., and
b) one check in the amount of $148,163,93 made payable to The Law Offices of
Robert A Stutman as counsel for Federated Insurance Company
The above payments must be made by City of Lubbock within ten business days afterfull
execution ofthisAgreement by all of Lubbock Power& Light (as specified in the Signature Pages
below), ASCO, and Federated.
The above -referenced payment to ASCO shall be sent via Federal Express to:
2
Associated Supply Company, Inc
Attu: Scott Sharp
2102 East Slaton Road
Lubbock, TX 79404
The above -referenced payment to Federated shall be sent via Federal Express to:
Law Offices or Roben A. Stutman, P.C.
Alto. Sherief Ibrahim
500 Office Center Drive, Suite 301
Fort Washington, PA 19034
Releasing Parties acknowledge that this Agreement fixes the amount of the Dispute and
that the above payments are in full satisfaction of all claims mad a by Releasing Parties, and any
court costs, attorneys' fees, or any other costs, expenses, or damages of any type, whether known
or unknown, arising out oror in any way relating to the Incident or the Dispute.
3. Relense. In exchange for full and timely payment of the Settlement Amount as
specified herein, Releasing Parties release and forever discharge LP&L from and o» account of
any and all claims or demands of any nature whatsoever, whetter in late or in equity, whether
based in ton, contract, subrogation, assignment, statute, including but not limited to negligence,
breach of contract, or any other theory of recovery, and whether for general, special, actual,
compensatory, consequential, punitive, or any otherdamages, whether or not presently known or
suspected, directly orindirectly arising out of or in any way relating to the Incident.
4. Unknown Claims. Releasing Parties acknowledge and agree the release set forth
in Paragraphs 3_ above applies to all claims for loss and damaee related to the Incident, whether
those losses or damages are known or unknown, foreseen or unforeseen, or patent or latent, that
Releasing Parties may have against LP&L. Releasing Parties understand and acknowledgethat if
they should eventually stiffer additional losses ordamages arising out ofthe Incident, they will not
be able to make any claim against LPL for those losses or damages. Releasing Parties further
acknowledge that they intend these consequences even as to claims for losses and/or damages that
they do not know exist, and which, if known, would materially affect their decision to execute this
release.
5. Warranty and Indemnification, ASCO represents and warrants that the
crane has been fully repaired to GOINS Crate Service's satisfaction and that ASCO lens
fully paid all rental and other amounts to GOINS Crane Service relating to the Incident.
ASCO agrees to defend, indemnify, and hold harmless LP&L without limitation, from, and to
satisfy in full, any and all allegations, claims, amounts or liens presently existing, or that might
exist in the future. Ihat may beasserted by GO1NSCrane Service or any individual or entity related
to GOINS Crane Service, directly or indirectly arising out of or in any way relating to the Incident,
but only to the extent that such allegations, claims, amounts or liens relate to or arise out of file
repairs made by ASCO to the crane and/ or the rental and other amounts owing to GOINS Crane
Service related tothe Incident.
6. Disclaimer of Liability. Releasing Parties agree that by settling this matter and
accepting this Agreement, LP&L does not admit any liability whatsoever.
7. Annlicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Texas and the Parties hereby submit to the exclusive
jurisdiction of the courts of the State of Texas in respect to the enforcement of this Agreement and
any dispute nrising in connection with it.
S. Authority. ASCO and Federated each represent and warrant that they have the
sole right mid exclusive authority to execute this Agreement and receive the sums as specified
herein; and have not sold, assigned, transferred, conveyed, or otherwise disposed of any of the
claims, demands, obligations, or causes of action referred to in this Agreement.
4
9. Execution Authorized. Each undersigned signatory represents that he/she has
been duly authorized to enter into this Agreement.
10. Severability. The Parties agree that irany of these provisions should be deemed
invalid orunenforceable by any court of competent jurisdiction, such invalidity cr unenforceability
will not affect the whole agreement, but the Agreement will be construed to effectuatethe overall
intent of the Parties as evidenced by thetemts of this Agreement, and theobligations ofthe Parties
will be construed and enforced accordingly.
11. Successors and Assigns. This Agreement will be binding upon and inure to the
benefit of the Parties hereto and their respective permitted successors, assigns, heirs, devisees,
executors. administrators, affiliates, representatives, assibms, officers, agents, and employees
wherever the context requires or admits.
12. Entire Agreement. This Agreement contains the entire agreement between the
Parties and supersedes and replaces any and all prior or contemporaneous agreements or
understandings, whether written or oral, regarding the matters set Forth in it. This Agreement may
be amended or modified in wholeor in part only by the written agreement of Releasing Parties and
Lubbock Power & Light.
13. Execution & DeIivery: This Agreement may be executed in separate counterparts,
which together shall constitute one and the same document. Authentic executions transmitted
electronically shall be valid.
IN WITNESS WHEREOF, the Parties have executed this Settlement Agreement and
Release.
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DANIHI. M. POPi:. MAYOR
CITY Or LUBBOCK, acting by and through Electric
Utility Board
Dan Qtnm. Chninuan
ASSOCIATED SUPPLY COMPANY, INC.
By:
Date:
FEDERATED INSURANCE COMPANY
By:
Tide: GIA;Ms "re,Apk rorcr-t/113.
Date: y 7 — Z
RESOLUTION
WHEREAS, Lubbock Power & Light is the municipally owned electric
utility of the City of Lubbock ("LP&L");
WHEREAS, on or about May 30, 2019, a crane rented by LP&L from
Associated Supply Company, Inc. ("ASCO") was damaged at or near the
Wadsworth Substation in Lubbock, Texas (the "Incident");
WHEREAS, as a result of the Incident, ASCO and its insurer, Federated
Insurance Company ("Federated"), claim to have incurred or paid repair
costs, replacement costs, rental costs, loss of use, lost profits, taxes, interest,
and/or other amounts;
WHEREAS, a dispute arose between ASCO, Federated, and LP&L,
arising from the Incident (the "Dispute");
WHEREAS, ASCO and Federated have sought payment from LP&L in
connection with the Dispute;
WHEREAS, LP&L denies liability related to the Dispute;
WHEREAS, LP&L, ASCO, and Federated have agreed to mutually settle
and compromise the Dispute; and
WHEREAS, LP&L, through outside counsel, has resolved the Dispute in
the attached Settlement Agreement and Release between L.P&L, ASCO, and
Federated. NOW, THEREFORE
BE IT RESOLVED BY THE ELECTRIC UTILITY BOARD OF THE CITY
OF LUBBOCK:
THAT the Electric Utility Board of the City of Lubbock hereby approves
that certain Settlement Agreement and Release by and between the City of
Lubbock, acting by and through Lubbock Power & Light, Associated Supply
Company, Inc., and Federated Insurance Company, as attached hereto and
incorporated herein as though set forth fully herein in detail, and agrees to
payment in the following amounts: (1) $94,331.07 made payable to
Associated Supply Company, Inc., and (2) $148,163.93 made payable to the
Law Offices of Robert A. Stutman as counsel for Federated Insurance
Company; for a cumulative amount of $242,495.00.
BE IT FURTHER RESOLVED BY THE ELECTRIC UTILITY BOARD OF
THE CITY OF LUBBOCK:
THAT the Chairman of the Electric Utility Board is hereby authorized and
directed to execute that certain Settlement Agreement and Release by and
between the City of Lubbock, acting by and through Lubbock Power & Light,
Associated Supply Company, Inc., and Federated Insurance Company, as
attached hereto and incorporated herein as though set forth fully herein in
detail.
BE IT FURTHER RESOLVED BY THE ELECTRIC UTILITY BOARD OF
THE CITY OF LUBBOCK:
THAT, to the extent necessary, the Electric Utility Board hereby ratifies and
approves, as applicable, the City of Lubbock's receipt of funds in the amount
of $182,495.98 from its insurers regarding this matter.
BE IT FURTHER RESOLVED BY THE ELECTRIC UTILITY BOARD OF
THE CITY OF LUBBOCK:
THAT this resolution shall be null and void if the City Council of the City of
Lubbock does not approve a similar resolution approving the Settlement
Agreement and Release by and between the City of Lubbock, acting by and
through Lubbock Power & Light, Associated Supply Company, Inc., and
Federated Insurance Company within thirty (30) days of this resolution.
Passed by the Electric Utility Board this 20th day of April, 2021.
Dan Odom, Chairman
APPROVED AS TO CONTENT:
i Vfin
Blair McGinnis, Chief Operating Officer
APPROVED AS TO FORM:
Jen y Sm' P&L General Counsel