HomeMy WebLinkAboutResolution - 2002-R0468 - Settlement Agreement With Energas - 10_24_2002Resolution No. 2002-RO468
October 24, 2002
Item No. 35
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock BE and is hereby authorized and
directed to execute for and on behalf of the City of Lubbock a settlement agreement with
Energas, a Division of Atmos Energy, in Cause No. 2001-513945, The City of Lubbock,
Texas and The West Texas Municipal Power Agency vs. Stewart & Stevenson Energy
Products, Inc. aka S&S Energy Products, Inc., a Division of GE Packaged Power, Inc.,
and Energas, a Division of Atmos Energy, attached hereto, which shall be spread upon
the minutes of the Council and as spread upon the minutes of this Council shall constitute
and be a part of this Resolution as if fully copied herein in detail.
Passed by the City Council this 24th day i
ATTEST:
Q.11 get
Rebecca Garza, City Secretary
APPROVED AS TO CONTENT:
Paul Thompson,
Director of Electric Utilities
APPROVED AS TO FORM:
Ma ew L. Wade
Assistant City Attorney
1:/cityatt/matt/settiement resolution - energas 9-2002
Resolution No. 2002-RO468
October 24, 2002
Item No. 35
SETTLEMENT AGREEMENT AND RELEASE
This Mutual Release and Settlement Agreement ("Agreement") is made and entered into
by and between The City of Lubbock, Texas (the "City") and the West Texas Municipal Power
Agency (the "Agency") (collectively, "Plaintiffs"), and Energas Company, a division of Atmos
Energy Corporation, a Texas and Virginia Corporation ("Energas"). Plaintiffs and Energas will
be referred to collectively herein as the "Parties."
WHEREAS, Energas is a public utility, as defined by Texas law, operating in the City,
and is a distributor of natural gas in the City and its environs;
WHEREAS, Plaintiffs and Energas are parties to a civil lawsuit styled The City of
Lubbock, Texas and the West Texas Municipal Power Agency v. Stewart & Stevenson Energy
Products, Inc. a/k/a S&S Energy Products, Inc., a Division of GE Packaged Power, Inc., and
Energas, a Division ofAtmos Energy, Cause No. 2001-513,945, In the District Court of Lubbock
County, Texas, 99 h Judicial District (referred to herein as the "Lawsuit");
WHEREAS, the claims asserted against Energas in the Lawsuit arose out of the business
relations between Plaintiffs and Energas, and involve specifically the Municipal Main Extension,
Gas Transportation and Pipeline Operation and Maintenance Agreement (the "Contract"), entered
into by the City and Energas in or around January 1998 and amended in or around September
1998, pursuant to which Energas agreed to build an eight -mile natural gas pipeline (the "Energas
Lateral") that would connect a City -owned gas pipeline at the City's Cooke Station to a new gas
turbine (the "Turbine") that was being installed by Defendant GE Packaged Power, Inc. ("GE") at
the City's Massengale Station;
WHEREAS, Energas did construct and continues to operate the Energas Lateral, an
extension of the Energas natural gas system which is used and useful for the primary but not the
exclusive purpose of delivery of natural gas to the City at its Massengale electric generation
facility;
WHEREAS, the Plaintiffs assert that on or about September 2, 1999 the Turbine was
damaged due to rust and debris that entered the Turbine from the Energas Lateral and as the result
thereof, the Plaintiffs suffered certain damages to which they made claim in the Lawsuit
(collectively the "Events");
WHEREAS, Energas has denied and continues to deny any and all liability to Plaintiffs
in connection with the Lawsuit, the Contract, the Turbine, the Energas Lateral and the Events;
WHEREAS, Energas made a claim in the Lawsuit under the Contract to recover its
attorneys' fees for defending the claims brought by Plaintiffs (the "Energas Counterclaim");
WHEREAS, Plaintiffs have denied and continue to deny any and all liability to Energas
for the Energas Counterclaim;
SETTLEMENT AGREEMENT AND RELEASE — Page 1
WHEREAS, the Parties desire to avoid the vexation and expense involved in a protracted
trial of these disputed claims and counterclaims and desire to amicably compromise, settle and
dispose of all possible claims and counterclaims between them in the aforementioned Lawsuit or
which otherwise have been or could have been asserted in connection with the Contract, the
Turbine, the Energas Lateral and the Events up to and including the date of the signing of this
Agreement; and
WHEREAS, the Parties agree that the consideration for this Agreement is accepted by
Plaintiffs in full satisfaction of all claims they may have against Energas in connection with the
Contract, the Turbine, the Energas Lateral and the Events up to and including the date of the
signing of this Agreement; and
WHEREAS, the Parties agree that nothing contained herein affects or may affect in the
future the ability of the City or Energas to enforce any rights or obligations under the Contract
that (i) arise under the Contract after the date of the signing of this Agreement, and (ii) are not
related to the Events up to and including the date of the signing of this Agreement or the claims
asserted or which could have been asserted in the Lawsuit.
NOW, THEREFORE, in consideration of the mutual covenants, benefits, promises, and
agreements contained herein, the receipt, adequacy, and sufficiency of which are hereby
acknowledged, the Parties, intending to be legally bound, represent, covenant, and agree as
follows:
1. Payment
a. In consideration for settlement of all disputes with Plaintiffs, Energas agrees to pay
the sum of Four Hundred Thousand and 00/100 Dollars ($400,000.00) (the "Settlement Amount")
to Plaintiffs by no later than October 31, 2002.
b. Payment will be made by Energas by delivering a check in the amount of the
Settlement Amount to counsel for Plaintiffs at the following address: T.B. Nicholas, Jr., Esq.,
T.B. Nicholas Jr., P.C., 8214 Westchester, Suite 500, Dallas, Texas 75225.
C. Neither this Agreement nor the payment by Energas of the Settlement Amount is
intended as an admission of fault or liability by Energas. Energas has denied and continues to
deny that it was at fault or is liable in any way with respect to the claims made against it in the
Lawsuit, or any costs, expenses or damages allegedly incurred by Plaintiffs in connection with the
Contract, the Turbine, the Energas Lateral and the Events. To the contrary, Energas has agreed to
pay the Settlement Amount solely for the purpose of avoiding litigation and buying peace.
2. Mutual Release and Discharge
a. The City, together with its past, present and future principals, agents,
representatives, employees, attorneys, successors, assigns, insurers and underwriters at interest
(including, but not limited to, Continental Casualty Company) and any other person or entity
SETTLEMENT AGREEMENT AND RELEASE — Page 2
acting on the City's behalf (collectively, the "City Releasors"), for good and valuable
consideration recited in Paragraph 1 of this Agreement, the sufficiency of which is hereby
acknowledged, hereby releases and forever discharges Energas, its predecessors, successors,
parents, subsidiaries, affiliates, related companies, assigns, and any person or entity acting for or
on its behalf, including without limitation its past, present and future principals, representatives,
directors, officers, agents, shareholders, employees, attorneys, and their respective successors and
assigns (collectively, the "Energas Releasees") from any and all claims, causes of action and
damages of every kind and nature, in law or in equity, known and unknown, arising out of or
related to events occurring through the date of this Agreement, including without limitation all
matters relating to the Contract, the Turbine, the Energas Lateral and the Events up to and
including the date of the signing of this Agreement, and all matters which were asserted or could
have been asserted in the Lawsuit. The City Releasorsrepresent and warrant that there has been
no assignment or other transfer of any interest in any such claims which they or any of them may
have against the Energas Releasees.
b. The Agency, together with its past, present and future principals, agents,
representatives, employees, attorneys, successors, assigns, insurers and underwriters at interest
(including, but not limited to, Continental Casualty Company) and any other person or entity
acting on the Agency's behalf (collectively, the "Agency Releasors"), for good and valuable
consideration recited in Paragraph 1 of this Agreement, the sufficiency of which is hereby
acknowledged, hereby releases and forever discharges Energas, its predecessors, successors,
parents, subsidiaries, affiliates, related companies, assigns, and any person or entity acting for or
on its behalf, including without limitation its past, present and future principals, representatives,
directors, officers, agents, shareholders, employees, attorneys, and their respective successors and
assigns (collectively, the "Energas Releasees") from any and all claims, causes of action and
damages of every kind and nature, in law or in equity, known and unknown, arising out of or
related to events occurring through the date of this Agreement, including without limitation all
matters relating to the Contract, the Turbine, the Energas Lateral and the Events up to and
including the date of the signing of this Agreement, and all matters which were asserted or could
have been asserted in the Lawsuit. The Agency Releasors represent and warrant that there has
been no assignment or other transfer of any interest in any such claims which they or any of them
may have against the Energas Releasees.
C. Energas, together with its predecessors, successors, parents, subsidiaries, affiliates,
related companies, assigns, and any person or entity acting for or on its behalf, including without
limitation its past, present and future principals, representatives, directors, officers, agents,
shareholders, employees, attorneys, and their respective successors and assigns (collectively, the
"Energas Releasors"), for good and valuable consideration recited in Paragraph 2 of this
Agreement, the sufficiency of which is hereby acknowledged, hereby releases and forever
discharges Plaintiffs, their past, present and future principals, agents, representatives, employees,
attorneys, successors, and assigns, and any other person or entity acting on Plaintiffs' behalf
(collectively, the "Plaintiff Releasees") from any and all claims, causes of action and damages of
every kind and nature, in law or in equity, known and unknown, arising out of or related to events
occurring through the date of this Agreement, including without limitation all matters relating to
the Contract, the Turbine, the Energas Lateral and the Events up to and including the date of the
SETTLEMENT AGREEMENT AND RELEASE — Page 3
signing of this Agreement, and all matters which were asserted or could have been asserted in the
Lawsuit. The Energas Releasors represent and warrant that there has been no assignment or other
transfer of any interest in any such claims which they or any of them may have against the
Plaintiff Releasees.
d. The Agency, together with its predecessors, successors, parents, subsidiaries,
affiliates, related companies, assigns, and any person or entity acting for or on its behalf,
including without limitation its past, present and future principals, representatives, directors,
officers, agents, shareholders, employees, attorneys, and their respective successors and assigns
(collectively, the "Agency Releasors"), for good and valuable consideration recited in Paragraph 1
of this Agreement, the sufficiency of which is hereby acknowledged, hereby releases and forever
discharges the City, their past, present and future principals, agents, representatives, employees,
attorneys, successors, and assigns, and any other person or entity acting on the City's behalf
(collectively, the "City Releasees") from any and all claims, causes of action and damages of
every kind and nature, in law or in equity, known and unknown, arising out of or related to the
Events occurring through the date of this Agreement, including without limitation all matters
relating to the Contract, the Turbine and the Energas Lateral, and all matters which were asserted
or could have been asserted in the Lawsuit. The Agency Releasors represent and warrant that
there has been no assignment or other transfer of any interest in any such claims which they or
any of them may have against the City Releasees.
e. The City, together with its predecessors, successors, parents, subsidiaries,
affiliates, related companies, assigns, and any person or entity acting for or on its behalf,
including without limitation its past, present and fixture principals, representatives, directors,
officers, agents, shareholders, employees, attorneys, and their respective successors and assigns
(collectively, the "City Releasors"), for good and valuable consideration recited in Paragraph 1 of
this Agreement, the sufficiency of which is hereby acknowledged, hereby releases and forever
discharges the Agency, their past, present and future principals, agents, representatives,
employees, attorneys, successors, and assigns, and any other person or entity acting on the
Agency's behalf (collectively, the "Agency Releasees") from any and all claims, causes of action
and damages of every kind and nature, in law or in equity, known and unknown, arising out of or
related to the Events occurring through the date of this Agreement, including without limitation
all matters relating to the Contract, the Turbine and the Energas Lateral, and all matters which
were asserted or could have been asserted in the Lawsuit save and except any contractual
obligations or fiduciary responsibilities to which the Agency has with or to the City regardless of
the occurrence of the Events or the Lawsuit, including, but not limited to any indebtedness to the
City by WTMPA resulting from oral or written agreements related to the period that the Turbine
was not commercially operable. The City Releasors represent and warrant that there has been no
assignment or other transfer of any interest in any such claims which they or any of them may
have against the Agency Releasees.
f. The Parties expressly waive and assume the risk of any and all claims
encompassed within this Mutual Release that exist as of the date of this Agreement but of which
the Parties are unaware, whether through ignorance, oversight, error, negligence or otherwise.
SETTLEMENT AGREEMENT AND RELEASE — Page 4
g. It is understood and agreed by the Parties that this Agreement is a compromise of
doubtful and disputed claims and/or counterclaims between the Parties hereto.
h. Notwithstanding any contrary provisions of this Agreement, the Parties do not
release each other from the obligations imposed under this Agreement. To the extent it is
necessary for any Party to enforce obligations under this Agreement, said Party shall be entitled to
recover reasonable attorney's fees in addition to all other sums owed.
3. Dismissal of the Lawsuit
Contemporaneous with execution of this Agreement, the Parties will execute and cause to
be filed appropriate papers to cause the Lawsuit to be dismissed with prejudice, with the Parties to
bear their own costs and attorneys' fees. Copies of these agreed dismissal papers are attached
hereto as Exhibit A.
4. Representations, Warranties, Covenants and Additional Provisions.
a. The Parties warrant and represent that they have not assigned, pledged, or
otherwise sold, transferred, disposed or encumbered to any persons or entities, including without
limitation any insurers or underwriters at interest, by instrument, writing, or otherwise, any claim
that they have or may have by reason of any act or failure to act or any conduct whatsoever of any
of the Parties. Plaintiffs further agree to indemnify and hold harmless Energas from and against
any and all claims, demands or causes of action that may hereafter be brought against Energas by
or on behalf of anyone claiming to be an insurer or underwriter at interest or other assignee of any
claim owned by Plaintiffs or either of them against Energas ("Indemnified Claims"), including but
not limited to the payment of all costs and attorneys' fees incurred by Energas in defending such
actions. In defending against any Indemnified Claims, Energas shall have the right to select its
own counsel.
b. This Agreement between the Parties shall be executed by persons who have full
authority and capacity to sign the Agreement on behalf of the City, the Agency and Energas. The
Parties further represent and acknowledge that each of them has been represented by counsel with
respect to this Agreement and all matters covered by or related to such Agreement. Each party
has been fully advised with respect to all rights which are affected by this Agreement, and each
party hereby authorizes and directs its respective attorneys to execute and deliver such other and
further documents as may be required to carry out the terms of the Agreement.
C. This Agreement shall become valid when executed and accepted by the Parties. It
shall be deemed made and entered into in the State of Texas, and the parties agree that this
Agreement and the obligations provided hereunder shall be governed and construed in all respects
by the internal laws and decisions of the State of Texas, including all matters of construction,
validity, enforceability and performance.
d. The Parties warrant and represent that they have read this Agreement, they have
conferred with their attorneys concerning this Agreement and the terms and conditions hereof, and
SETTLEMENT AGREEMENT AND RELEASE — Page 5
that they fully understand the terms, conditions, requirements and effect of this Agreement.
C. This Agreement constitutes the entire agreement and understanding among the
Parties with respect to the Lawsuit and the settlement thereof. This Agreement incorporates,
memorializes, and supersedes all prior agreements, arrangements and understandings (written or
otherwise) between or among the Parties with respect to the Lawsuit, and no representation or
warranty, oral or written, express or implied, has been made by or relied upon by the Parties
hereto, except as expressly contained herein. This Agreement may not be modified, amended or
altered in any way, or rescinded except by a writing executed and signed by all the Parties. Any
waiver of any term or condition of this Agreement must be in writing and shall only be effective
for the specific period and purpose expressly stated therein.
f. If any provision or part of a provision of this Agreement shall be determined to be
void or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall
remain valid and enforceable by any of the Parties hereto.
IN WITNESS WHEREOF, the Parties have executed this Agreement with the intent that
this Agreement is and shall have the effect of a binding agreement under law as of the day of the
last signature by a Party below. The Parties agree that this Agreement may be executed in
multiple counterparts.
SETTLEMENT AGREEMENT AND RELEASE — Page 6
CITY OF LUBBOCK, TEXAS
MARC MCDOUG&L, MAYOR
STATE OF TEXAS
COUNTY OF LUBBOCK
BEFORE ME, the undersigned authority, on this day, personally came and appeared
MARC MCDOUGAL
known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that he is the
MAYOR for the City of Lubbock, Texas, that he had the authority to execute said
instrument on behalf of the City of Lubbock, Texas, and that he executed said instrument for the
purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 5 ` day of
2002.
&h:2a2
CELIA WEBB
9..............
of Tsxss
- 'L- 0301-20M
NOTARY PUBLIC
My commission expires: 05 -01 - ;w0,4 .
SETTLEMENT AGREEMENT AND RELEASE — Page 7
WEST TEXAS MUNICIPAL POWER AGENCY
STATE OF
T
COUNTY OF
BEFORE ME, the undersigned authority, on this day, personally came and appeared
j/ C / !� 0 e, , , known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that he is the
0 h 0 r rn a n for the West Texas Municipal Power Agency, that he had the authority to
execute said instrument on behalf of the West Texas Municipal Power Agency, and that he executed
said instrument for the purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, thi�3„ day of
2002.
NOTARY PUBLIC
My commission expires:
SETTLEMENT AGREEMENT AND RELEASE — Page 8
t '2 A DONNA JUSTICE
Notary Public, State of Texas
My Commission Expires 1-24-2004
ENERGAS, a Division of ATMOS ENERGY
BY:
Author ed Represent i
STATE OF
COUNTY OF
BEFORE ME, the undersigned authority, on this day, personally came and appeared
l D/n .S 14Aw1--/n� , c7 , known to me to be the person whose name is subscribed to
the foregoing instrument, and acknowledged to me that he is the Prgldg oy- for
Energas, a Division of Atmos Energy, that he had the authority to execute said instrument on behalf
of the Energas, a Division of Atmos Energy, and that he executed said instrument for the purposes
and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this day of
NOTARY PUBLIC
My commission expires: 03/Z0/w
SETTLEMENT AGREEMENT AND RELEASE — Page 9
aAP2WCODY
votwy Pubfie, state of Texas
re(,1Pi"WW fires
R e, -
APPROVED BY:
T.B. NICHOLAS, JR., P.C.
)7B. Nicholas, Jr.
State Bar No. 14 1700
8214 Westche,46r, Suite 500
Dallas, Texas 75225
(214)368-2688
(214)368-3103 (Fax)
ATTORNEY FOR PLAINTIFFS
BAKER BOTTS L. L. P.
K. Alan Parry 1
State Bar No. 24010
600 Trammell Cr Center
2001 Ross Avenue
Dallas, Texas 75201
(214) 953-6500
(214) 953-6503 (Fax)
ATTORNEY FOR ENERGAS
SETTLEMENT AGREEMENT AND RELEASE — Page 10
CAUSE NO.2001-513,945 J'.11 1" : ;? te
THE CITY OF LUBBOCK, TEXAS
and THE WEST TEXAS MUNICIPAL
POWER AGENCY
vs
STEWART & STEVENSON ENERGY
PRODUCTS, INC, a/k/a S&S ENERGY
PRODUCTS, INC., a Division of GE
PACKAGED POWER, INC., and
ENERGAS, a Division of ATMOS
ENERGY
IN THE DISTRICT COURT O "? ;, 'UTY
37
Vie+ /is
LUBBOCK COUNTY, TEXAS
99th JUDICIAL DISTRICT
AGREED MOTION TO DISMISS WITH PREJUDICE
Plaintiffs The City of Lubbock, Texas and the West Texas Municipal Power Agency
(collectively, "Plaintiffs") and Defendant Energas Company, a division of Atmos Energy
Corporation, a Texas and Virginia Corporation ("Energas") hereby jointly move this Court to
dismiss this action because all matters of fact and things in controversy have been fully and
finally compromised and settled.
WHEREFORE, the parties request that the Court dismiss this action with prejudice to the
rights of any party to refile the action or any part of it, and that all costs be taxed against the
party incurring the same. An Agreed Order of Dismissal with Prejudice has been provided for
the Court's convenience.
AGREED MOTION TO DISMISS WITH PREJUDICE — Page 1
AGREED AS TO FORM AND SUBSTANCE:
T.B. NICHOL , JR., P
By:
4.B.Nicholas, Jr/
L .
State Bar No. 91700
8214 Westc ter, Suite 500
Dallas, Texas 75225
(214)368-2688
(214)368-3103 (Fax)
ATTORNEY FOR PLAINTIFFS
BAKER BOTTS L. L. P,
K.'Alan Pbry V
State Bar No. 24007
600 Trammell Crow
2001 Ross Avenue
Dallas, Texas 75201
(214) 953-6500
(214) 953-6503 (Fax)
ATTORNEY FOR ENERGAS
AGREED MOTION TO DISMISS WITH PREJUDICE — Page 2
CAUSE NO. 2001-513,945 LJtt'f
THE CITY OF LUBBOCK, TEXAS
§
IN THE DISTRI(rr UST OF
and THE WEST TEXAS MUNICIPAL
§.
,
POWER AGENCY
§
vs
§
§
LUBBOCK COUNTY, TEXAS
STEWART & STEVENSON ENERGY
§
PRODUCTS, INC, a/k/a S&S ENERGY
§
PRODUCTS, INC., a Division of GE
§
PACKAGED POWER, INC., and
§
ENERGAS, a Division of ATMOS
§
ENERGY
§
99th JUDICIAL DISTRICT
AGREED ORDER OF DISMISSAL WITH PREJUDICE
On this day came on for consideration the parties' Agreed Motion to Dismiss with
Prejudice. The Court, having been made aware that all matters in controversy have been fully
compromised and settled, and that, as part of that compromise and settlement, the parties have
agreed to the entry of this Agreed Order of Dismissal with Prejudice, is of the opinion that this
case should be dismissed with prejudice.
IT IS THEREFORE ORDERED that all claims made or which could have been made in
this action be and the same hereby are DISMISSED with prejudice.
denied.
i
IT IS FURTHER ORDERED that all costs are taxed against the parties incurring same.
This Order is a final judgment in this cause, and all relief not expressly granted herein is
SIGNED thiW day of , 2002.
HanC4c"'
JUDGE PRESIDING
AGREED ORDER OF DISMISSAL WITH PREJUDICE — Page 1
AGREED AS TO FORM AND SUBSTANCE:
T.B. NICHOLAS'. JR., P.C.
rtate
.Nicholas, Jr.
Bar No. 149 700
8214 Westches ,Suite 500
Dallas, Texas 75225
(214)368-2688
(214)368-3103 (Fax)
ATTORNEY FOR PLAINTIFFS
BAKER B.OTTS L. Lit.
PA
KL. Alan Perry i
State Bar No. 240 809
Cro Cei
600 Trammell
2001 Ross Avenue
Dallas, Texas 75201
(214) 953-6500
(214) 953-6503 (Fax)
ATTORNEY FOR ENERGAS
AGREED ORDER OF DISMISSAL WITH PREJUDICE — Page 2
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