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HomeMy WebLinkAboutResolution - 3599 - Settlement Agreement - Stephen E. Cone Jr. - Water Rights Section 14, Block JS - 04_25_1991Resolution No. 3599 April 25, 1991 Item #21 DWM:dw 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 Water Rights Settlement Agreement to be entered into by and between the City of Lubbock and Stephen E. Cone, Jr., attached herewith, 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 25th day of April , 1991 l,•t . C . McM N , MAYOR , uity :3ecreza A P OVED JS T CON NET: D V A. Haw ins, Director oWer Utilities APPROV S 0 FORM: Dennis W. McGill, Trial Attorney -- Resolution No. 3599 April 25, 1991 Item #21 JWF:dw WATER RIGHTS SETTLEMENT AGREEMENT STATE OF TEXAS § COUNTY OF LUBBOCK § WHEREAS, the City of Lubbock, a Texas Home Rule Municipality located in Lubbock County, Texas (herein called "CITY") is the owner of certain water rights in Section 14, Block JS, Lubbock County, Texas, except the East 47 varas of said Section, as set forth in deed of conveyance of said water rights from Roy Riddel and wife, Myrtle Riddel unto the CITY, recorded at Volume 382, Page 83 et seq. of the Deed Records of Lubbock County, Texas, and quitclaim deed from S. E. Cone to City of Lubbock, recorded at Volume 377, Page 366 of the Deed Records of Lubbock County, Texas, reference to which deed of conveyance and quitclaim deed is made for all pertinent purposes; and WHEREAS, the City believes that underground water owned by the CITY pursuant to said deeds above -described has been contaminated by chlorides and hydrocarbons in connection with oil and gas exploration and/or production activities by Stephen E. Cone, Jr. a/k/a S. E. Cone, Jr. (herein called "CONE") or persons, firms, or corporations under grant from CONE to carry out and conduct such oil and gas activities; and WHEREAS, the CITY and CONE desire to compromise and settle matters arising out of such believed water contamination as aforesaid, and in consideration of avoiding possible litigation, and the keeping of the covenants and agreements herein contained, the CITY and CONE hereby contract and agree as of this 25th day of April , 1991, as follows: I. CITY agrees to convey by quitclaim deed and release unto CONE all its right, title, and interest in the water rights and interests owned by it, by virtue of the aforesaid deeds from Roy Riddel and wife, Myrtle Riddel, and S. E. Cone respectively to the CITY. Said quitclaim deed and release by CITY to CONE shall be substantially in the form, as shown by form, of quitclaim deed referred to as "Exhibit All, which is attached hereto and made a part hereof as if fully copied herein in detail in this place. Said quitclaim deed and release shall be executed and delivered by the CITY to CONE, upon payment by CONE to the CITY of the sum of $275,000.00 cash. It is contemplated that the exchange of such quitclaim deed and release for said payment shall occur in Lubbock, Lubbock County, Texas, within thirty (30) days from the date first above written in this contract, and time is declared to be the essence of this contract. II. CONE releases the CITY from all liability and responsibility for any and all claims, demands, causes of action, rulings, judgments, and regulatory demands related to the aforesaid water contamination of whatsoever kind or nature, and CONE hereby - 2 - agrees to hold the CITY harmless from any and all such claims, demands, causes of action, rulings, judgments, and regulatory demands, and all costs and attorneys' fees in connection therewith related to the aforesaid water contamination and the defense of and payment for such claims and demands arising therefrom brought against the CITY. CITY retains ownership of all metal wellhouses located upon the above -described property, and shall have ingress, regress, and egress for 120 days after date of the said quitclaim deed and release from CITY to CONE to remove said metal wellhouses from the above -described CONE property as property of the CITY. If such metal wellhouses are not so timely removed by the CITY within the said 120 day period, then such metal wellhouses shall ipso facto become the property of CONE. IV. The wells, pumps, motors, and water collector lines presently owned by the CITY located upon the above -described CONE property shall, upon the completion and performance of this agreement by the parties, become the property of CONE. In connection therewith, CONE shall transfer all electric meter billings with the electrical utility supplier to his name so he shall be responsible for all electric meter billings after execution of this agreement. - 3 - V. CITY retains ownership of all electric meters and transformers located upon the above -described property, placed by the CITY thereon or caused by the CITY to be placed thereon at its expense, and CITY shall have ingress, regress, and egress for 120 days after date of said quitclaim deed and release from CITY to CONE to remove said electric meters and transformers from the above -described CONE property as property of the CITY. If such electric meters and transformers are not so timely removed by the CITY within the said 120 day period, then such electric meters and transformers shall ipso facto become the property of CONE. VI. CITY retains ownership of its water collector line up to the CONE property line, and CITY retains the right to disconnect and/or modify said water collector line at the CONE property line. CONE shall not have the right to use any CITY owned water collector lines located off the CONE property; provided, however, the CITY may, at its sole discretion, allow CONE (under a separate agreement) to utilize CITY's collector line for remediation purposes to correct water contamination problems provided Texas Water Commission, Texas Railroad Commission, and any other necessary approvals are first had and obtained to do SO. 4 - V11. This Agreement shall survive the execution of the quitclaim deed and release to be executed and delivered by CITY to CONE pursuant to this Agreement, and all the terms of this Agreement shall remain enforceable as between the CITY and CONE after delivery of such quitclaim deed and release. Executed in Lubbock, Texas, as of the date first above written in duplicate originals, each of which duplicate shall have the dignity of an original. CITY OF LUBBOCK Q � By: ` A. C. MCMI N, MAYOR ATTEST: Ran tte Boyd, City ecre ary A P OWED AS CONTENT: D A. Hawkins, Director of W ter Utilities APPRO DS TO FO i Dennis W. McGill, -Trial Attorney r STEPHEN E. CONV JR. - 5 - STATE OF TEXAS § COUNTY OF LUBBOCK § BEFORE ME, the undersigned authority, personally appeared B. C. McMINN, MAYOR of the City of Lubbock, and acknowledged to me that he executed the foregoing instrument for the purposes and consideration therein expressed and in the capacity as hereinab�o., stated as thact nd deed of said City of Lubbock this day of f l /0^.c ��, 1991. 0 // [Seal! STATE OF TEXAS § COUNTY OF LUBBOCK § Notary Public in and for the State of Texas OIi ia. R 5n1, Typed or Printed Name of Notary My Commission Expires: BEFORE ME, the undersigned authority, personally appeared STEPHEN E. CONE, JR., and acknowledged to me that he executed the foregoing instrument for the purposes and consideration therein expressed this day of /-Pgf�- , 1991. Z2I&/-;4 k-k� ej-yz� , - Notary Pu 1'c in and for Vre State of Texas /7P'1�- V 177, "'e'aInsF [Seal] Typed or Printed Name of Notary My Commission Expires: EXHIBIT A QUITCLAIM DEED AND RELEASE STATE OF TEXAS § COUNTY OF LUBBOCK § COMES NOW the City of Lubbock, a Texas Home Rule Municipality located in Lubbock County, Texas (hereinafter called "CITY") acting by and through its Mayor hereunto duly authorized for and in consideration of Ten and No/100 ($10.00) Dollars, and other good and valuable consideration to it in hand paid by Stephen E. Cone, Jr., also known as S. E. Cone, Jr., being one and the same person (hereinafter called "GRANTEE"). CITY hereby quitclaims and releases unto GRANTEE all the right, title, and interest of the CITY in the water rights in and under Section 14, Block is, Lubbock County, Texas, except in East 47 varas of said Section conveyed to the CITY in warranty deed to said water rights from Roy Riddel and wife, Myrtle Riddel, to CITY, dated March 23, 1949, and recorded in Volume 382, Page 83 et seq. of the Deed Records of Lubbock County, Texas, and quitclaim deed to the CITY (as to said water rights) executed by S. E. Cone, dated March 23, 1949, and recorded in Volume 377, Page 366 of the Deed Records of Lubbock County, Texas. Reference to said warranty deed and quitclaim deed being hereby made for a more particular description of the water rights conveyed to the CITY, it being the intention of the CITY, in this instrument, to quitclaim and release unto GRANTEE herein all property rights, including but not limited to water rights, which were conveyed to the CITY in the warranty deed and quitclaim dedd next above described. CITY quitclaims all its right, title, and interest in and to the well, pump, motors, and collector lines placed by the CITY upon said Section 14 hereinabove referred unto the GRANTEE as his property. CITY retains, as its property, the metal well houses, electric meters, and transformers placed or caused to be placed by CITY upon said Section 14, and shall have ingress, regress, andegress in and to said.Section 1.4 for 120 days from date. of this instrument in which to accomplish removal of said well houses, electric meters, and transformers. If any of such well houses, electric meters or transformers, owned by the CITY, are not so removed within the said 120 day period, then such well houses, electric meters or transformers not so removed shall ipso facto become the property of the GRANTEE herein. The address of the GRANTEE, Stephen E. Cone, Jr., is P. O. Box 10321, Lubbock, Texas 79408. EXECUTED this the 25th day of April , 1991. CITY OF LUBBOCK C By: B. C. McMI N, MAYOR • ST: r Rane to Boyd, City Secretary A OVED AS O CONTENT: . � r D n A. Hawkins, Director of W ter Utilities APPROYEb AS TO FORM: Dennis W. McGill, Trial Attorney STATE OF TEXAS § COUNTY OF LUBBOCK § BEFORE ME, the undersigned authority, personally appeared B. C. McMINN, Mayor of the City of Lubbock, and acknowledged to me that he executed the foregoing instrument for the purposes and consideration therein expressed and in the capacity therein st �e,� as the act and eed• the City of Lubbock this $`' day of A : 1991. n e n Nota`1`y Public, State of Texas {'X- SO �t5 Typed or Printed Name of Notary My Commission Expires: - 2 - EXHIBIT A QUITCLAIM DEED AND RELEASE STATE OF TEXAS § COUNTY OF LUBBOCK § COMES NOW the City of Lubbock, a Texas Home Rule Municipality located in Lubbock County, Texas (hereinafter called "CITY") acting by and through its Mayor hereunto duly authorized for and in consideration of Ten and No/100 ($10.00) Dollars, and other good and valuable consideration to it in hand paid by Stephen E. Cone, Jr., also known as S. E. Cone, Jr., being one and the same person (hereinafter called "GRANTEE"). CITY hereby quitclaims and releases unto GRANTEE all the right, title, and interest of the CITY in the water rights in and under Section 14, Block JS, Lubbock County, Texas, except in East 47 varas of said Section conveyed to the CITY in warranty deed to said water rights from Roy Riddel and wife, Myrtle Riddel, to CITY, dated March 23, 1949, and recorded in Volume 382, Page 83 et seq. of the Deed Records of Lubbock County, Texas, and quitclaim deed to the CITY (as to said water rights) executed by S. E. Cone, dated March 23, 1949, and recorded in Volume 377, Page 366 of the Deed Records of Lubbock County, Texas. Reference to said warranty deed and quitclaim deed being hereby made for a more particular description of the water rights conveyed to the CITY, it being the intention of the CITY, in this instrument, to quitclaim and release unto GRANTEE herein all property rights, including but not limited to water rights, which were conveyed to the CITY in the warranty deed and quitclaim dedd next above described. CITY quitclaims all its right, title, and interest in and to the well, pump, motors, and collector lines placed by the CITY upon said Section 14 hereinabove referred unto the GRANTEE as his property. CITY retains, as its property, the metal well houses, electric meters, and transformers placed or caused to be placed by CITY upon said Section 14, and shall have ingress, regress, and egress in and to said Section 14 for 120 days from date of this instrument in which to accomplish removal of said well houses, electric meters, and transformers. If any of such well houses, electric meters or transformers, owned by the CITY, are not so removed within the said 120 day period, then such well houses, electric meters or transformers not so removed shall ipso facto become the property of the GRANTEE herein. The address of the GRANTEE, Stephen E. Cone, Jr., is P. O. Box 10321, Lubbock, Texas 79408. EXECUTED this the 25th day of April , 1991. CITY OF LUBBOCK By: ` " . C. McMI N, MAYOR Rane to Boyd, City Secretary �A PROVED AS O CONTENT: �. r D n A. Hawkins, Director of W ter Utilities APPROVED AS TO FORM: Dennis W. McGilI7 Trial Attorney STATE OF TEXAS § COUNTY OF LUBBOCK § BEFORE ME, the undersigned authority, personally appeared B. C. McMINN, Mayor of the City of Lubbock, and acknowledged to me that he executed the foregoing instrument for the purposes and consideration therein expressed and in the capacity therein state,di.as the act and eed• the City of Lubbock this 01 day of _ 9_ : 1991. n e Nota y Public, State of Texas 01 it Q... so Its T Typed or Printed Name of Notary My Commission Expires: - 2 - � __� �1_9 9 CITY OF LUBBOCK MEMO TO: Larry J. Cunningham, City Manager FROM: Dennis W. McGill, Trial Attorney SUBJECT: Agenda Comments -- April 25, 1991 DATE: April 19, 1991 ITEM: Consider a resolution authorizing the Mayor to execute an agreement and deed concerning water rights in Lubbock County, Texas. Previously, Mr. S. E. Cone, Sr. conveyed by Quit- claim Deed, all his ownership rights in sub -surface water under the property described in the attached Water Rights Settlement Agreement. Other persons having an interest conveyed their interest by General Warranty Deed. Following the conveyances the oil and gas deposits under the land were developed by drilling a series of wells. This development process and later pro- duction has caused contamination of our water rights. The Railroad Commission of the State of Texas is re- quiring immediate remedial action. Remedial action of this nature is very costly so the City has pro- ceeded to consider litigation to resolve the issues. The investigation process led to discussions with the current property owner through his attorney, Mr. John Sims. The City through Mr. Carroll McDonald and Mr. Dan Hawkins determined that the sum of $275,000.00 was a reasonable settlement of our claim for environmental damage, and further agreed to convey the contami- nated water rights back to Mr. Cone with the agree- ment that he would hold the City harmless from any costs connected with the remedial action that will be required by the Railroad Commission. 0 Larry J. Cunningham Agenda Comments --Water Rights April 19, 1991 Page 2 The monies received in this settlement may be used to obtain comparable noncontaminated water rights. RECOMMENDATION The sale price is reasonable to avoid the expense of litigation and remediation. The staff recommends approval. Dennis W. McGill Trial Attorney