Loading...
HomeMy WebLinkAboutCAG2021-420 - Original - Hytek Finishes Company - Model Toxic Control Act (MTCA) Final Settlement - 09/24/2021ApprovalOriginator:Department: Date Sent:Date Required: Mayor or Designee Date of Council Approval: Grant? Yes No Type:Review/Signatures/RoutingDate Received: City Attorney: Comments: Date Routed: Mayor’s Office City Clerk’s OfficeAgreement InformationVendor Name:Category: Vendor Number:Sub-Category: Project Name: Project Details: Agreement Amount: Start Date: Local Business? Yes No* Business License Verification: If meets requirements per KCC 3.70.100, please complete “Vendor Purchase-Local Exceptions” form on Cityspace. Yes In-Process Exempt (KCC 5.01.045) Notice required prior to disclosure? Yes No Contract Number: This form combines & replaces the Request for Mayor’s Signature and Contract Cover Sheet forms. (Print on pink or cherry colored paper) Visit Documents.KentWA.gov to obtain copies of all agreementsadccW22373_1_20 Budget Account Number: Budget? Yes No Dir Asst: Sup/Mgr: Dir/Dep: rev. 20210513 FOR CITY OF KENT OFFICIAL USE ONLY Agreement Routing Form For Approvals, Signatures and Records Management (Optional) Basis for Selection of Contractor: * Memo to Mayor must be attached Termination Date: Authorized to Sign: SETTLEMENT AGREEMENT This Settlement Agreement ("Agreement") is entered into as of the date last signed below ("Effective Date") by and between the City of Kent, a Washington municipal corporation ("City"), and Hytek Finishes Company, a Delaware corporation, registered in Washington as a foreign profit corporation ("Hytek"). For purposes of this Agreement, the City and Hytek may be referred to individually as a "Party" and collectively as the "Parties" to this Agreement. RECITALS A. The City is the current owner of the real property located at 8201 South 216th Street, 8000 South 216th Street, and 8000 South 218th Street [King County Tax Parcel Nos. 383000-0030, 383000-0055, and 383000-0070] ("Property"). B. Hytek is a former owner of the Property, and is the owner of adjacent property located at 8127 South 216th Street [King County Tax Parcel No. 383000-0035] (“Hytek Property”). C. Hytek owned the Property until approximately September 2019, when the Property was condemned and acquired by the City, King County Superior Court Case No. 18-2-55748-8KNT (“Condemnation Action”). As part of the condemnation, the City and Hytek agreed to place $550,000 plus an additional $50,000 into the Court Registry pending resolution of this Litigation (as defined herein). Interest has been accruing on the moneys held in the Court Registry since the time of deposits. D. Environmental investigations have determined that hazardous substances, primarily cadmium, have come to be located on the Property. E. The City initiated a lawsuit against Hytek in the Superior Court of Washington, King County Case No. 19-2-10901-7 ("Litigation") regarding hazardous substances (primarily cadmium) located on, beneath, migrating to and migrating from the Property. In the Litigation, the City alleged that Hytek was liable under the Model Toxics Control Act, Chapter 70A.305 RCW (“MTCA”) for remedial action costs incurred by the City, and that the City was entitled to a declaratory judgment that Hytek is liable for current and future remedial action costs under MTCA. Hytek filed a counterclaim alleging that the City is liable for remedial action costs incurred under MTCA, and that Hytek was entitled to a declaratory judgment that the City is liable for current and future remedial action costs under MTCA. F. As part of the Litigation, Hytek stipulated to MTCA liability in an Agreement for Stay and Stipulation of MTCA Liability (“Stipulation & Stay”) dated June 25, 2019, but Hytek did not provide any stipulation as to the extent of their MTCA liability and reserved all claims, rights, defenses and remedies. G. On September 10, 2021, the Parties engaged in mediation and entered into a CR2A Agreement that reflects the terms of settlement among the Parties for all claims in the Litigation regarding the Property, regardless of whether they are asserted in the Litigation (subject to Section 5, infra). H. The Parties wish to avoid the cost and inconvenience of litigation or further dispute resolution, and, therefore, enter into this Agreement to resolve any current, potential, or future claims at issue regarding the environmental conditions the Property, subject to reservations as outlined herein. The Parties are not resolving any current, potential or future claims regarding any hazardous substances, including cadmium, that are located or have come to be located in areas outside of the Property (including but not limited to the Hytek Property) or those matters outlined in Section 5, infra. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows: TERMS AND CONDITIONS 1. Incorporation of Recitals. The foregoing recitals are incorporated into this Agreement. 2. Nature of Agreement; No Admission of Liability. The Parties enter into this Agreement to resolve a dispute and, therefore, acknowledge that all obligations assumed under this Agreement are not intended to be, and shall not be construed as, an admission of liability by any Party, with the exception of what has already been addressed in the Stipulation & Stay. Moreover, nothing in this Agreement shall be construed or interpreted as a concession or admission by the Parties with respect to any dispute that any of them may now or in the future have with each other or with any other person or entity regarding the Property. The Agreement may be used as evidence to enforce any of the terms or conditions of the Agreement or to address any future liability issues regarding the Site or those matters outlined in Section 5, infra. 3. Payment. Settlement of all claims and counterclaims that were asserted or could have been asserted in the Litigation for past, current and future remedial action costs under MTCA regarding the Property shall include the following payments: a. The City and Hytek shall work cooperatively to ensure that all moneys placed and retained in the Court Registry pursuant to the Condemnation Action, including all accrued interest, shall be paid and returned to the City within ten (10) business days following the Effective Date. b. Hytek shall pay an additional $75,000 payable to the City within twenty (20) days following the Effective Date. Payment should be made via check made out to “City of Kent” and should be mailed to: City of Kent Finance Customer Service Attn: Legal 220 4th Ave S Kent, WA 98032 c. The City shall not be responsible for any remedial action costs incurred by Hytek, either currently or in the future, regarding the investigation and/or remediation of contamination on or beneath Hytek Property. 4. Waiver and Release of Claims. With the exception of any claims regarding any alleged or actual breach of the terms and conditions of this Agreement or any claims outlined in Section 5, infra: a. The City releases, acquits, and forever discharges Hytek and Hytek’s parents, affiliates, corporate officers, employees, and directors from any and all claims, demands, causes of action, damages, costs, and liabilities of any kind or nature, known or unknown, including claims that may arise in the future, that arise out of, or are in any way resulting from, relating to, or in any way connected with (either directly or indirectly) the investigation or remediation of the Property, or the discovery, presence, release, disposal, or remediation of hazardous substances on or beneath the Property, as the relevant terms are defined by this Agreement or, if not so defined, by applicable federal, state, or local laws or regulations (including, but not limited to MTCA; the Comprehensive Environmental Response, Compensation & Liability Act, 42 U.S.C. § 9601, et seq.; the Resource Conservation & Recovery Act, 42 U.S.C. § 6901, et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601, et seq.; and the Washington Hazardous Waste Management Act, Chapter 70A.305 RCW). b. Hytek releases, acquits, and forever discharges the City and the City’s elected officials, municipal officers, employees and representatives from any and all claims, demands, causes of action, damages, costs, and liabilities of any kind or nature, known or unknown, including claims that may arise in the future, that arise out of, or are in any way resulting from, relating to, or in any way connected with (either directly or indirectly) the Property, or the discovery, presence, release, disposal, or remediation of hazardous substances on or beneath the Property, as the relevant terms are defined by this Agreement or, if not so defined, by applicable federal, state, or local laws or regulations (including, but not limited to: MTCA; the Comprehensive Environmental Response, Compensation & Liability Act, 42 U.S.C. § 9601, et seq.; the Resource Conservation & Recovery Act, 42 U.S.C. § 6901, et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601, et seq.; and the Washington Hazardous Waste Management Act, Chapter 70A.305 RCW). 5. Matters and Claims Not Released. The following matters and claims are not waived, released or discharged under this Agreement: a. The City shall not release Hytek, nor shall Hytek release the City, from any current or future liability regarding: (i) any future releases of hazardous substances from the Hytek Property that come to be located on or beneath the Property, or (ii) any recontamination of the Property due to future releases of cadmium or any other hazardous substances on or from the Hytek Property that come to be located on or beneath the Property. b. The City shall not release Hytek, nor shall Hytek release the City, from any current or future liability associated with: (i) cadmium contamination located in areas other than the Property, including the Hytek Property, (ii) the upgradient areas of the Property (including stormwater conveyance system infrastructure), and (iii) areas downgradient of the Property. 6. No Indemnification. a. The City shall not provide any indemnification protection to Hytek regarding environmental conditions on, beneath, migrating to or migrating from the Property or the Site. b. Hytek shall not provide any indemnification protection to the City regarding environmental conditions on, beneath, migrating to or migrating from the Property or the Site. 7. Notices. All notices and other communications regarding this Agreement shall be in writing and sent by email to the following persons at the following addresses, and shall be effective on the date sent: For the City: Christina Schuck, Assistant City Attorney cschuck@kentwa.gov Ken Lederman, McCullough Hill Leary PS ken@mhseattle.com For Hytek: Kyle Martin, President, Hytek Finishes Co. kyle.martin@hytekfinishes.com Michael Dunning, Perkins Coie mdunning@perkinscoie.com 8. No Prior Transfer of Claims. Each Party warrants to the other that it has not previously transferred or assigned to any other person or entity a claim or cause of action that falls within the scope of the releases and waivers set forth in this Agreement. 9. Dismissal of Litigation. Within ten (10) calendar days of the Effective Date, the Parties agree to sign and submit to the Court a stipulated dismissal of all claims and counterclaims asserted by the City against Hytek and by Hytek against the City. The stipulated dismissal shall be with prejudice and without any award of attorneys' fees or costs to either Party. 10. Final Settlement Agreement. This Agreement constitutes a fully binding and enforceable settlement agreement. 11. Dispute Resolution a. The Parties agree that Chris Soelling will continue to serve as third-party neutral, unless he is unable to serve, in which case the Parties shall mutually agree on a third-party neutral with appropriate experience as a third-party neutral and in environmental matters relevant to this Agreement. In the event the Parties cannot agree on a suitable third- party neutral, the Parties agree that the presiding judge of the King County Superior Court shall appoint a third-party neutral with appropriate environmental knowledge to resolve the dispute. The Parties shall request that any third-party neutral provide a short, concise decision in writing, based on (i) the Parties' written submissions; and (ii) the neutral's experience and professional judgment. The dispute will be resolved as expeditiously as practicable, and the neutral may impose a schedule on both Parties to achieve an expeditious result. The decision of the third-party neutral shall be final and binding, with no right of or opportunity for appeal. City and Hytek shall share equally in the costs incurred by the third- party neutral in resolving the dispute. b. The prevailing party in any dispute shall be entitled to recover its reasonable costs and attorneys' fees, including any consultants' fees incurred in connection with the dispute. 12. Binding Effect. This Agreement shall bind and inure to the benefit of the Parties and their respective heirs, executors, legatees, representatives, receivers, trustees, successors, transferees, partners, and members. 13. Modifications. This Agreement contains the entire understanding of the Parties with respect to the specific matters set forth herein. Any change, amendment, or alteration to this Agreement must be in writing and signed by all Parties to be effective. Each Party warrants that is it not relying on any other representations, written or oral, in entering into this Agreement. 14. Full Understanding; Legal Counsel. Each Party to this Agreement fully acknowledges, represents, and agrees that it has read this Agreement and that it fully understands and voluntarily accepts this Agreement for final resolution and settlement of the claims as set forth herein. Each Party to this Agreement further acknowledges, represents, and agrees that it has had the opportunity to consult with its own legal counsel prior to execution of this Agreement. 15. Construction. This Agreement is a product of negotiations between the Parties and has been jointly drafted and approved by each Party. For these reasons, no provision of this Agreement shall be interpreted or construed against a Party for the reason that said Party proffered or drafted the language at issue. 16. Execution of Other Documents. Each Party shall cooperate fully in the execution of any and all other documents that may be reasonably necessary or appropriate to give full force and effect to the terms and intent of this Agreement. 17. Authority to Sign. Each person executing this Agreement expressly represents and warrants that he or she is fully authorized to enter into this Agreement on behalf of his or her respective Party for the purpose of binding that Party to the terms and conditions of this Agreement, and binding that Party's respective partners, members, managers, subsidiaries and affiliates, predecessors and successors, officers, directors, employees, and assignees. 18. Third Parties. This Agreement is not intended for the benefit of any third party and is not enforceable by any third party, including, but not limited to, any federal, state, or local governmental agency, except that this Agreement shall be binding upon and inure to the benefit of the heirs, executors, legatees, representatives, receivers, trustees, successors, transferees, and assignees of the Parties. 19. Counterparts. This Agreement may be executed by electronic signature (e.g., PDF), and in counterparts, each of which shall be deemed an original, and said counterparts shall constitute one and the same instrument. 20. Headings. Section headings in this Agreement are included only for the convenience of reference and shall not affect the interpretation of any provision of this Agreement nor any of the rights or obligations of the Parties. 21. Severability. If any covenant, condition, term, or provision of this Agreement is illegal, or if the application of any covenant, condition, term, or provision of this Agreement to any person or in any circumstance shall to any extent be judicially determined to be invalid or unenforceable, the remainder of this Agreement, or the application of such covenant, condition, term, or provision to persons or in circumstances other than those to which it is held to be invalid or unenforceable, shall not be affected, and each covenant, condition, term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 22. Attorneys’ Fees and Costs. Except as otherwise stated herein, the Parties shall bear their own attorneys' fees incurred in connection with the negotiation and implementation of this Agreement and in connection with the Litigation. Notwithstanding the foregoing, in any action brought to enforce the terms of this Agreement, the substantially prevailing party shall be entitled to recover its reasonable attorneys' fees and costs incurred therein. 23. Governing Law; Venue. This Agreement shall be construed and interpreted according to the laws of the State of Washington. Venue for any dispute arising out of this Agreement not resolved through the dispute resolution process set forth in Section 10 shall be King County Superior Court. CITY OF KENT a Washington municipal corporation HYTEK FINISHES COMPANY a Delaware corporation, registered in Washington as a foreign profit corporation Signature: _______________________________ Signature: ________________________________ Printed Name: Dana Ralph__________________ Printed Name: _____________________________ Title: _Mayor_____________________________ Title: ____________________________________ Date: ___________________________________ Date: ____________________________________ 09/23/2021 CITY OF KENT a Washington municipal corporation Signature: _ Printed Name: Title: Date: HYTEK FINISHES COMPANY a Delaware corporation, registered in Washington as a foreign profit corporation Signature: Printed Name: Title:I/��i Date: Cf ! z, 2 dZ�