EDWARD M. CHEN, District Judge.
This Stipulation for Order Determining Good Faith of Settlement (the "Stipulation" entered into by the following parties (collectively, the "Parties"):
(i.) Michael R. Neely, an individual; Perry J. Neely, an individual; and Gary Neely, an individual; and Michael R. Neely, Perry J. Neely and Gary Neely, dba Mike's One Hour Cleaners (collectively, "Neelys") by and through their counsel of record Bassi Edlin Huie & Blum LLP;
(ii.) The Kirrbe, Corporation f/k/a Multimatic Corporation ("Multimatic") by and through its counsel of record Dongell Lawrence Finney, LLP;
(iii.) Western States Design, a California corporation ("Western") by and through its counsel of record Foley McIntosh Frey & Claytor;
(iv.) Charles F. Hartz, an individual and Charles F. Hartz, dba Paul's Sparkle Cleaners ("Hartz") by and through his counsel of record Rogers Joseph O'Donnell;
(v.) Stark Investment Company, a California limited partnership, and Fortney H. Stark an individual (collectively, "Stark.") by and through their counsel of record Gonsalves & Kozachenko;
(vi.) McCorduck Properties Livermore, LLC, a Delaware limited liability company ("McCorduck Properties") by and through its counsel of record Gordon Watrous Ryan Langley Bruno & Paltenghi Inc. and Castellon and Funderburk, LLP;
(vii.) John McCorduck, an individual; Kathleen McCorduck, an individual; Pamela McCorduck, an individual; and Sandra McCorduck Marona an individual (collectively, "McCorducks") by and through their counsel of record Gordon Watrous Ryan Langley Bruno & Paltenghi Inc. and Castellon and Funderburk, LLP;
(viii.) IMA Financial Corporation, a California corporation ("IMA") by and through its counsel of record Stanzler Law Group LLC;
(ix.) Palmtree Acquisition Corporation, a Delaware corporation, f/k/a Catellus Development Corporation ("Palmtree") by and through its counsel of record Cox Castle & Nicholson LLP;
(x.) Dorothy Anderson, as an individual and as Trustee of The Anderson Marital Trust and The Anderson Tax Deferral Trust, both dated February 28, 1979, as amended and restated August 31, 1994 and the Estate of Walter Anderson, Deceased (collectively, "Anderson") by and through her counsel of record Paladin Law Group LLP.
A. In 1993, the San Francisco Regional Water Quality Control Board ("RWQCB") issued Site Cleanup Order No. 93-139 ("SCO 93-139") directing certain parties (including some of the Parties to this Agreement) to design and implement a remedial action to abate perchloroethene and its breakdown products ("PCE") contamination in the soil and groundwater at and in the vicinity of the Livermore Arcade Shopping Center ("LASC") and Miller's Outpost Shopping Center ("MOSC") in Livermore, California (the "LASC/MOSC Site") to levels acceptable to the RWQCB. The LASC is identified as parcels with assessor parcel numbers ("APN") 98-403-19 with street address of 1436-1554 1
B. The parties named in SCO 93-139 sought to allocate certain liabilities associated with the PCE contamination in an action entitled
C. Remediation Contractor H+GCL performed remediation activities at the LASC/MOSC Site. In 1995, at the request of H+GCL, Order No. SCO 93-139 was converted to a "containment zone" order, Order No. 96-052, which required eventual site closure. H+GCL failed to obtain site closure.
D. In March 2008, the RWQCB directed parties named in Order No. 96-052 to perform additional work related to the PCE contamination in the deeper groundwater at the LASC/MOSC Site.
E. Several of the parties to the 1994 Settlement consisting of Palmtree, Neelys, Multimatic, Western, Hartz, McCorduck Properties, McCorducks, IMA and Stark formed a group known as the 2008 Group to respond to the 2008 RWQCB directives related to the to the PCE contamination in the deeper groundwater at the LASC/MOSC Site.
F. In July 2008, Palmtree filed an action entitled
G. On July 3, 2010, the Neelys, Multimatic, Western, Stark, Hartz, McCorduck Properties, McCorducks, IMA and Palmtree entered into a settlement agreement with Northrop Grumman Systems Corporation ("Northrop"), as the successor in interest to H+GCL. The settlement was determined to be in good faith by the United States District Court, Northern District, on October 4, 2010. Under the agreement, Northrop agreed to pay 35% of all Past and Future Response Costs, as defined thereunder.
H. In May 2008, California Water Service Company ("Cal Water") filed an action entitled
I. The Parties to this Agreement have separately reached a settlement with Cal Water whereby in exchange for payment, Cal Water will release all claims against the Parties arising from or related to: (i) claims asserted or that could have been asserted in the Cal Water Action; and (ii) claims related to alleged contamination of the Livermore Wells with PCE sourced directly or indirectly from the LASC/MOSC shopping Centers.
J. The Parties have participated in a series of mediation sessions from 2009 through 2012 ("Mediation Sessions") to resolve their claims and liabilities and implement a remedial action plan at the LASC and MOSC. The Parties have reached a settlement and are in the process of drafting a global settlement agreement (the "Agreement"). The Agreement represents a compromise resolution of the Parties' differing initial settlement positions and contradictory interpretation of pertinent Caotc" and legal claims and defenses recognizing the risks. expense, and uncertainties of litigation.
K. Pursuant to the terms of the Agreement, the Parties will enter into a Guaranteed Fixed Price Remediation Agreement ("Cleanup Contract") with The Source Group, Inc. (the "Cleanup Contractor") for the remediation of environmental contamination at and emanating from the LASC and MOSC.
L. The estimated total cost for the implementation of the remedial action plan is $8,109,110, which consist of the following: (1) $5,681,110 for the Cleanup Contractor; (2) $500,000 for California Water Service Company; (3) $325,000 for the Regional Water Quality Control Board for regulatory oversight for 15 years; (4) $375,000 for project management for 15 years; and (5) $1,228,000 for contingency costs. The Parties will pay 65% of the total costs ($5,770,921.50) and Northrop will pay 35% ($2,838,188.50).
M. A true and correct DRAFT copy of the Agreement is attached hereto as
(i.) At section 1., the Agreement provides that the Parties agree to pay the amounts allocated to them, as set forth in Exhibit B ("Settlement Fund"). Payment shall be made to the Trustee, identified in paragraph 3 of the Agreement, below, for the funding of a Qualified Settlement Fund Trust and Environmental Remediation Trust, within 60 days following the later of: (a) the Court's order determining that this Agreement is in good faith, or (b) the Court's order determining that the Parties' settlement agreement in the Cal Water Action is in good faith. A payment schedule applicable to some of the parties is incorporated within sections 1. a., 1. b., 1. c. and 1. d. of the Agreement.
(ii.) At section 2. a., the Agreement provides that the settlement is expressly contingent upon the Court's determination, pursuant to California Code of Civil Procedure section 877.6, that the Agreement is entered into in good faith and therefore bars any and all existing or potential claims against each of the Parties for total equitable indemnity, equitable comparative contribution, partial and/or comparative indemnity, and/or implied contractual indemnity.
(iii.) At section 2. b., the Agreement provides that the settlement is expressly contingent upon the Court's determination, pursuant to California Code of Civil Procedure section 877.6, that the Parties' settlement agreement in the Cal Water Action is entered into in good faith and therefore bars any and all existing or potential claims against each of the Parties for total equitable indemnity, equitable comparative contribution, partial and/or comparative indemnity, and/or implied contractual indemnity.
(iv.) At section 3. the Agreement provides that De Maximis, Inc. will serve as the Trustee for the Settlement Fund. The Settlement Fund shall be deposited into two separate trust accounts, the Qualified Settlement Fund pursuant to Treasury Regulation Section 1.468B (28 C.F.R. 1.468B-1) and a Environmental Remediation Trust pursuant to Internal Revenue Code Section 301.7701-4(e) which shall be used to meet the payment obligations for implementation of the remedial action plan at the LASC/MOSC site.
(v.) At section 5. a., in consideration of the Parties" payments as provided in section 1., the Parties agree to mutually release each other from any and all claims arising from or related to arising from or related to PCE contamination at and emanating from the LASC and MOSC.
(vi). At section 12., the Parties expressly waive any rights or benefits that they may have or might obtain pursuant to section 1542 of the California Civil Code.
N. The Neelys' insurers are Lumbermens Mutual Casualty Company, In Rehabilitation ("Lumbermens") and Firemens Fund Insurance Company ("FFIC").
O. Lumbermens and FFIC will pay 16% of the Parties $8,109,110 share to the Settlement Fund, or a total 1,297,457.60 ("Settlement Payment") nn behalf nf the Neelys.
P. The Neelys will be signatories to the Agreement.
Q. The Settlement Payment by Lumbermens and FFIC will be held in the Bassi Edlin Huie & Blum LLP Client Trust Account until the Agreement is fully executed by the Parties and the Parties tender their Settlement Payments under the Agreement.
R. This Stipulation is a stipulation for the Good Faith Order regarding Lumbermens and FFIC's Settlement Payment on behalf of the Neelys.
S. By entering into this Stipulation, the Parties agree that the Settlement Payment by Lumbermens and FFIC on behalf of the Neelys constitutes a good faith settlement of the claims against the Neelys in the 2008 Action.
1. The foregoing Recitals are true and correct and are incorporated herein by reference.
2. The Parties stipulate to the following points of law:
(i.) The Settlement Payment by Lumbermens and FFIC on behalf of the Neelys satisfies the requirements for a good faith determination under California Code of Civil Procedure section 877.6 and
a. the Settlement Payment due under the Agreement is reasonably proportionate to the Neelys share of liability for remediation of the PCE contamination in the deeper groundwater at the LASC/MOSC Site;
b. the amount of the Settlement Payment due by the Neelys under the Agreement is substantial; and
c. the Settlement Payment due by the Neelys under the Agreement is likely less than the amounts the Neelys would be found liable for after trial.
3. A good faith settlement operates to discharge a settling party from liability to any other alleged tortfeasors for partial or comparative indemnity or contribution in the 2008 Action, regardless of whether the other alleged tortfeasors are presently parties to the action or have ever been parties to the action. Al. Code of Civ. Proc. § 877.6 (Lexis Nexis 2012).
4. The Neelys are entitled to, as of the effective date of the Agreement, contribution protection pursuant to section 113(f) of CERCLA, 42 U.S.C. § 9613 (f) and any other applicable provision of federal or state law.
IT IS SO STIPULATED
UPON CONSIDERATION OF THE FOREGOING, the Court hereby finds the Agreement is fair and reasonable, both procedurally and substantively, consistent with applicable law, in good faith, and in the public interest. THE FOREGOING Agreement is hereby APPROVED.
IT IS HEREBY ORDERED that:
The Neelys are entitled to, as of the effective date of the Agreement, contribution protection pursuant to section 113(1) of CERCLA, 42 U.S.C. § 9613 (f) and any other applicable provision of federal or state law, including but not limited to the provisions and protections afforded by the California Code of Civil Procedure sections 877 and 877.6, whether by statute or common law for claims of any type concerning, arising from or related to PC ination at and emanating from the LASC and MOSC.
