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CCR1995023COMMON COUNCIL - CITY OF MUSKEGO RESOLUTION #23-95 RELEASE AS TO LITTLE MUSKEGO LAKE ASSOCIATION APPROVAL OF SETTLEMENT AGREEMENT AND MUTUAL AND WILLIAM STANIS, PLAINTIFFS V. TERRA DEVELOPMENT CORPORATION, ET AL BE IT RESOLVED that the Common Council of the City of Muskego, upon the recommendation of the Finance Committee with review by special City counsel, does hereby approve the attached Settlement Agreement and Mutual Release. The parties involved in the Agreement are the Little Muskego Lake Association, William Muskego. Stanis, The Terra Development Corporation, and the City of BE IT FURTHER RESOLVED that all other parties have executed the Agreement. Agreement in the name of the City upon adoption of this BE IT FURTHER RESOLVED that the Mayor is authorized to sign said Resolution by the Common Council. DATED THIS 14TH DAY OF FEBRUARY , 1995 SPONSORED BY: FINANCE COMMITTEE Ald. Patrick A. Patterson Ald. Edwin P. .Dumke Ald. David J. Sanders This is to certify that this is a true and accurate copy of City of Muskego. Resolution #23-95 which was adopted by the Common Council of the 2/95 jmb SETTLEMENT AGREEMENT AND MUTUAL RELEASE RECITALS 1. The parties to this Agreement are the Little Muskego Lake Association ("Lake Association"), a Wisconsin non-stock corporation, William Stanis, the City of Muskego ("the City"), a municipal corporation, and The Terra Development Corporation, Lake Forest Reside9tla1, IIIC., Lake Forest Multi-Family, Inc., Lake Forest Residential Development Limited and Lake Forest Multi-Family Development Limited (collectively hereafter the "Terra defendants"). 2. Little Muskego Lake Association and the Terra defendants are presently parties to a lawsuit in federal court entitled Little Muskeqo Lake Association and William Stanis, plaintiffs v. Terra Development Corporation, et al., United States District Court of Wisconsin, Case No. 93-C-0839 (the "Action" ) . 3. Several of the issues in the Action were subsequently submitted to an arbitration between Little Muskego Lake Association and the Terra defendants and were subject to an Arbitration Agreement (Attachment 1). The subject of the arbitration concerns a dispute arising out of the construction of the Lake Forest Development in Muskego, Wisconsin by the Terra defendants, alleged inadequate soil erosion and sedimentation control at the Lake Forest Development, and resulting alleged excessive deposits of sediment in Kingston and Moonlight Bays of 0 Little Muskego Lake. 4. Following an arbitration hearing, the Little Muskego Lake Association and the Terra defendants agreed to settle their dispute as follows: A. The sum of $25,920 will be paid to the Little Muskego Lake Association as compensation for sediment alleged to have been deposited in Little Muskego Lake: and B. The sum of $35,000 will be paid to the Little Muskego Lake Association as compensation for attorneys' fees incurred in connection with the Action and the subsequent arbitration, to be paid within 120 days of December 2, 1994. The Terra defendants further agreed to provide adequate security for the payment in the form of a mortgage against real property owned by Terra. 5. The City is party to two Subdividers Agreements as follows: A. Agreement dated February 5, 1991, between the City and the Lake Forest Residential Limited Partnership, by its general partner, Lake Forest Residential, Inc.: and B. Agreement dated January 3, 1991, between the City and Lake Forest Multi-Family Development Limited Partnership by its general partner, Lake Forest Multi-Family, Inc. (hereinafter the "Subdividers Agreements.") 6. Pursuant to the Subdividers Agreements several Letters of Credit have been posted with the City of Muskego to assure compliance with the Subdividers Agreements, including applicable state, federal and local laws regarding erosion control. City of -2- Muskego Ordinance No. 29 Erosion Control states in pertinent part (Chapter 29.09), "the City may also seek an order to restore the property to the conditions required by this Chapter." ln addition, City Ordinance Chapter 29.06(5)(f) states "that the permittee shall be responsible for repairing any damage at his expense to all adjoining streets, waterways and properties caused by excessive sedimentation resulting from activities which are not in compliance with the approved erosion control plan." 7. Pursuant to the above-entitled ordinance provisions and under the terms of Subdividers Agreements, the City either has or will withhold certain sums from the Terra defendants' Letters of Credit in the total amount of $25,920, said sum to be used for repair of waterways and properties allegedly damaged by excessive erosion allegedly caused by the during construction of the Lake Forest Development. 0 8. The Lake Association agrees in the future to apply for permits from the Wisconsin Department of Natural Resources and U.S. Army Corps. of Engineers and any other necessary permits, and to seek supplementary funding to allow the Association to dredge the Kingston Bay of Little Muskego Lake. Such dredging will include removal of the sediments alleged to have been deposited by the Terra defendants in Kingston Bay in the course of the development of Lake Forest, which sediments were the subject of both the Federal lawsuit designated above in paragraph 2 and the Arbitration Agreement referenced in paragraph 3 above. -3- 9. The parties to this Agreement wish to settle their 0 dispute regarding alleged excessive deposition of sediment in Little Muskego Lake by the Terra defendants and to release each other from future liability concerning claims arising out of such deposition of sediment by the Terra defendants and the resulting cost of dredging both Moonlight and Kingston Bays of the Little Muskego Lake. AGREEMENT 1. The City has or will, within the next thirty days, receive the sum of $25,920 from the Terra defendants, either directly or through a withholding of portions of the remaining Letters of Credit of the Terra defendants. The Terra defendants agree that $25,920 will either be directly paid to the City or withheld from the Terra defendants' Letters of Credit and that such sums will then be paid over by the City to the Little Muskego Lake Association. The Lake Association will hold the sum of $25,920 in an interest bearing account, certificate of deposit or similar investment separate from other Association funds and not to be used for any other purpose except as described herein or as may be negotiated with the City of Muskego. The Lake Association will not withdraw these funds without the City's prior written consent, which consent will not be unreasonably withheld or delayed. 0 At the time the Lake Association obtains the required permits and supplementary funding necessary to dredge Kingston Bay, the $25,920, plus accrued interest, will be applied toward -4- the cost of dredging Kingston Bay. In the event the dredging of Kingston Bay is not permitted by the State of Wisconsin and the Army Corps. of Engineers within 5 years of this agreement, it is agreed that the City and the Lake Association will negotiate an alternative lake improvement project to which these funds may be applied. 2. Upon receipt of payment of $25,920 as provided in the preceding paragraph, and in consideration of such payment, the City of Muskego shall fully and forever release and discharge the Terra defendants, Robert A. Patch and William W. Carity, and any of their agents, principals, officers, employees, successors and assigns, from any and all claims, demands, damages, actions and rights of actions which are in any way related to any claims by the City or any third party for damages for alleged excess sedimentation, excess erosion and/or improper erosion control with respect to the real estate developments which are the subject of the Subdividers Agreements (e.g., the claims made by the plaintiffs in the Action), including but not limited to the claims made by the plaintiffs in the Action. This release shall be effective as to the Terra defendants, Mr. Patch and Mr. Carity when all payments required by this paragraph have been made in full and shall not require the execution of any additional documents between the parties. 3. The Lake Association agrees to use its best efforts to timely apply for necessary dredging permits and other permits from the Wisconsin Department of Natural Resources and U.S. Army Corps. of Engineers and to seek supplementary funding to allow the Association to dredge the Kingston Bay of Little Muskego Lake. 4. The Terra defendants agree to pay the Little Muskego Lake Association $35,000 as and for a contribution toward attorneys' and expert witness costs pursuant to the terms of the Arbitration Agreement. Said sum will be paid to the Lake Association within 120 days of December 2, 1994 and adequate security in the form of a first mortgage against property owned by the Terra defendants will be provided. 5. Upon payment of all sums due, including the $25,920 and the $35,000 for attorneys' fees and costs, the Terra defendants and the Lake Association agree to mutually release each other from all and any liability arising out of allegations set forth in the Complaint in the Action, the Arbitration Agreement and all claims arising out of allegations of damage to Little Muskego Lake, Kingston and Moonlight Bays, as set forth in the Complaint, Arbitration Agreement and City Ordinances as they apply to the Lake Forest Development. Upon payment as specified in the preceding paragraph, the parties to the Action shall cause that action to be dismissed with prejudice and without costs against any party. This release shall be effective as to the Terra defendants, Mr. Patch and Mr. Carity when all payments required by this paragraph have been made in full and shall not require the execution of any additional documents between the parties. Further, the Lake Association and William Stanis on the one hand, -6- and the Terra defendants, Robert A. Patch and William Carity on 0 the other hand, also agree to release each other from any other causes of action which could have been asserted as cross-claims or counter-claims or otherwise in the Action. This release shall not constitute a release of any liability for future compliance or future non-compliance with any state, federal or local laws or ordinances by the Terra defendants nor a release of any other claims not specifically referenced in this document. 6. This Agreement is being executed in order to resolve disputed claims between the parties. Neither the execution of this Agreement, nor the payment or receipt of payments made pursuant to this Agreement shall be deemed as an admission of liability by any of the parties. 0 7. The parties to this Agreement agree that if a party breaches this Agreement. by non-payment or otherwise, any of the other non-breaching parties may seek enforcement of the Agreement in a court of competent jurisdiction, including the Circuit Court of the State of Wisconsin and the U.S. District Court for the Eastern District of Wisconsin. In the event of such a breach and in only such an event, the breaching party agrees to pay the prevailing party's reasonable costs and attorneys' fees in obtaining enforcement of the Agreement. CITY OF MUSKEG0 Dated: Mayor -7- LITTLE MUSKEG0 LAKE ASSOCIATION Dated: By: L+4 Sue Hammond, President- Dated : By: // William Stanis +4LkZlm ,fk William Stanis, individually THE TERRA DEVELOPMENT CORPORATION, LAKE FOREST RESIDENTIAL, INC., LAKE FOREST 0 Dated: xw 27- pjs” Corporate Officer -a- ARBITMTION AGREEMENT This Arbitration Agreement ( "Agreement") is made between the Little Muskego Lake Association and William Stanis (hereinafter collectively referred to as the "Plaintiffs"), and The Terra Development Corporation, Robert A. Patch, William W. Carity, Lake Forest Residential, Inc., Lake Forest Multi-Family, Inc., Lake Forest Residential Development Limited and Lake Forest Multi-Family Development Limited, (hereinafter collectively referred to as the "Defendants. 'I ) WHEREAS, on August 9, 1993. the Plaintiffs filed an action against the Defendants in the United States District Court for the Eastern District of Wisconsin entitled State Ex. Rel. Little Muskeao Lake Association, et al. v. The Terra Development Corporation. et al., Case No. 93-C-0839 (the "Action"); and WHEREAS, the Defendants have answered the complaint in the Action and have denied all of the material allegations alleged therein: and WHEREAS, the parties to this Agreement wish to avoid the expense and delay of a formal trial and instead wish to resolve through binding arbitration all matters which are the subject of or are otherwise within the scope of the Action. NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the parties agree as follows: ~ - a 1. Chqice of Arbitrator. The arbitrator chosen by the parties to resolve their dispute pursuant to this Agreement is the Honorable John A. Decker. In the event the Honorable John A. Decker becomes unwilling or otherwise unable to serve as an arbitrator, the parties will agree on a substitute. 2. Scope of Arbitration. Tha issues to be determined by the arbitrator pursuant to this Agreement shall be as follows: A. A determination of the amount, if any, of sediment which has been wrongfully deposited into the Little Muskego Lake (the "Lake") as a direct and proximate result of any wrongful or tortious actions taken by on0 or more of the Defendants in the course of developing the Lake Forest real estate development in Muskego, Wisconsin during the period September, 1990 through the date of the arbitration hearing. E. A determination of the reasonable cost to remove the sedinent wrongfully or tortiously deposited in the Lake by one or more of the Defendants, if any, as determined by the arbitrator pursuant to 11 2(a), above. This determination shall be exclusive of any cost to remove any sediment which has been deposited into the Lake which is not the result of the wrongful or tortious actions of the Defendants. C. A determination of the amount, if any, of litigation costs, including but not limited to attorneys' fees and expert witness fees, to which any party may be entitled pursuant to 33 U.S.C. 5 1365(d). 2 3. Discoverv. The parties shall be limited to the 0 following discovery prior to the arbitration hearing: A. Document Reauests. Each party shall be entitled to a full and complete production of documents in response to one request for the production of documents. Documents shall be produced for inspection and copying within 15 days of the request. €3. Depositions. Each party shall also be entitled to conduct the deposition of anyone named as an arbitration hearing witness pursuant to 11 4, below. C. Discovery Cut-off. All discovery shall be completed not later than 30 days prior to the date set for the commencement of the arbitration hearing. D. Additional Discovery. Additionaldiscoverymay be conducted by mutual agreement of the parties, or, if a dispute arises regarding the necessity for additional discovery, or regarding any other discovery matter, either party may petition the arbitrator for relief or additional discovery in accordance with the federal rules of Civil Procedure. 4. Arbitration Hearinq Witnesses. A. Lay Witnesses. Plaintiffs shall disclose in writing the names and addresses of any lay witnesses who they may call to testify at the arbitration hearing on or before June 1, 1994. Defendants shall disclose in writing the names and addresses of any potential lay witnesses whom they intend to call at the arbitration hearing on or before July 1, 1994. 3 B. Expert Witnesses. (1) On or before June 1, 1994, Plaintiffs shall fully comply with Rule 26(a)(2) of the Federal ,Rules of Civil Procedure with respect to any expert witness whom they intend to call to testify at the arbitration hearing. Any expert so disclosed shall be deposition ready on the date of disclosure. (2) On or before July 1, 1994, Defendants shall fully comply with Rule 26(a)(2) of the Federal Rules of Civil Procedure with respect to any expert witness whom they intend to call to testify at the arbitration hearing. Any expert so disclosed shall be deposition ready on the date of disclosure. C. Testimony of witnesses who have been deposed prior to the arbitration hearing may be submitted in deposition form, provided that copies of such submissions are personally served on opposing counsel ,at least ten business dEys prior to the hearing. Objections or rebuttal testimony from that witness' deposition, if desir'ed, shall be served at least three business days before the hearing. D. No witnesses other than those identified pursuant to this paragraph shall be permitted to testify at the arbitration hearing absent mutual consent or upon a showing of good cause, to be decided by the arbitrator. 5. Powers of Arbitrator and Court. To the extent not inconsistent with the provisions of this Agreement, the Wisconsin Arbitration Act, Ch. 788, Wis. Stats. shall apply to and govern the arbitration required by this Agreement. 4 6. Choice Of Law. Except as limited or modified by this Agreement, the law applicable to this arbitration shall be as follows: A. Procedural Law. The procedural law shall be the Federal Rules of Civil Procedure and the Federal Rules of Evidence. B. Substantive Law. The substantive law shall be the statutory and common law of the state of Wisconsin and, where applicable, the Clean Water Act, 33 U.S.C. 55 1251, et seq. 7. Location of Hearinq. The arbitration hearing shall be held at the offices of Decker & Gunta, S.C., Milwaukee, Wisconsin. 8. Arbitration Hearinq Procedure. A. Pre-hearing briefs shall be personally served upon the arbitrator and opposing counsel not later than five business days prior to the date set for the commencement of the hearing. E. The Plaintiffs shall have the burden of proof and the burden of persuasion with respect to the issues identified at 1I 2, above. C. Each side shall be limited to 12 hearing hours to present its case-in-chief and 3 hours in rebuttal. D. The arbitration hearing shall be conducted for not less than six hearing hours per day and shall be held on consecutive business days from commencement to conclusion, vis., September 26 through 30, 1994. 5 E. The hearing proceedings shall be recorded by an independent court reporter chosen by mutual consent, but trans- cribed only at the request of one or more of the parties or the arbitrator. F. Post-hearing briefs, if any, shall be at the request of the arbitrator only and shall be filed simultaneously not later than five business days following the conclusion of the arbitration hearing. G. The arbitrator's decision shall be in writing and shall be delivered to the parties not later than 15 business days after the conclusion of the hearing. The decision shall substantially comply with the requirements for a magistrate's report as described in Rule 53(e)(l) of the Federal Rules of Civil Procedure, provided, however, that no transcript need be prepared nor shall any documents be, filed with the court unless an appeal from the arbitrator's decisior, is filed purs.Gant to 11 11, below. 9. Expenses of Arbitration. A. The parties shall share equally the following expenses : (1) The arbitrator's fee and expenses. (2) The fee for the court reporter present at the hearing. If anyone desires a transcript of all or any portion of the proceedings, the cost of such transcript will be shared only if both parties join in the request, or if requested by the arbitrator. 6 (3) The costs incurred in connection with the room used for the hearing. B. The shared expenses shall be paid one-half by each party into the trust account for counsel for Cook L Franke, S.C., who shall then disburse the funds as agreed. 10. Sole Remedy. Upon the execution of this Agreement, neither party shall take any legal action against the other for any matter which is subject to resolution pursuant to this Agreement, or which is the subject of the Action, other than actions taken to fulfill and/or enforce this Agreement, or pursuant to the Wisconsin Arbitration Act. 11. Bindinq Arbitration. The decision of the arbitrator shall be binding upon the parties and shall appealable only in accordance with Rule 53(e)(2) of the Federal Rules of Civil Procedure. The standard of review which shall be applied by the court in the event of an appeel pursuant to this paragraph shall be the clearly erroneous standard. Any amounts determined by the arbitrator pursuant to II 2(b), above, shall be paid as directed by the arbitrator within 30 days following receipt by the parties of the arbitrator's written decision provided, however, that in the event there is an appeal from the arbitrator's decision no payment shall be due unless and until the decision is accepted by the court pursuant to Rule 53(e)(2). 0 12. Final Order. Upon the conclusion of the arbitration pursuant to this Agreement, the arbitrator's decision shall be adopted by the court before whom the Action is pending (the 7 "Court") as a final order adjudicating on the merits all matters which are the subject of the Action. In the event of an appeal pursuant to 1I 11, above, the decision of the Court on the appeal shall be adopted by the Court as a final order adjudicating on the merits all claims made in the Action. 13. This Agreement may be counterparts. LITTLE MUSKEGO LAKE ASSOCIATION TE Presaent ' Date: -r/e?? William &anis Date: f, 97 Date: William W. Carity . r. Approved as to form: W I LAKE ,’ FOREST RESIDENTIAL Patch, President Date: dz 7,kd LTI-FAMILY ( Name ) ( Name ) Date : Date: 9