HomeMy WebLinkAboutCAG2021-420 - Original - Hytek Finishes Company - Model Toxic Control Act (MTCA) Final Settlement - 09/24/2021ApprovalOriginator:Department:
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rev. 20210513
FOR CITY OF KENT OFFICIAL USE ONLY
Agreement Routing Form
For Approvals, Signatures and Records Management
(Optional)
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* Memo to Mayor must be attached
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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:
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