PRESENTER: Presenter
Valeria M. Acevedo, City Attorney
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SUBJECT: Title
Approval of a settlement agreement between Carowest Land, Ltd.(“Carowest”) and the City related to four pending lawsuits: Cause No. C2010-1519D, Carowest Land, Ltd. v. YC Partners, Ltd. d/b/a Yantis Company and the City of New Braunfels, Cause No. C2014-0522A, YC Partners, Ltd. d/b/a Yantis Company v. The City of New Braunfels, Cause No. C2015-0304A, Carowest Land, Ltd. v. YC Partners, Ltd. d/b/a Yantis Company and the City of New Braunfels, and Cause No. C2017-0474A, Carowest Land, Ltd. v. YC Partners, Ltd. d/b/a Yantis Company and the City of New Braunfels; and authorizing the City Manager to execute the agreement and related documents.
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DEPARTMENT: City Attorney’s Office
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COUNCIL DISTRICTS IMPACTED: City wide
BACKGROUND INFORMATION:
As a result of serious flooding events within the City limits, the City had embarked on a drainage improvement project that would channel run-off waters down large drainage channels. The drainage channel for the initial “South Tributary” construction project would include an 18-acre section on the far side of Carowest’s property. Although Carowest had agreed in 2008 to the South Tributary drainage channel location on the far side of Carowest’s 240-acre property, Carowest changed its mind in 2009. This dispute over the exact location of the drainage channel delayed work on the South Tributary project in mid-2009. Eventually, on July 27, 2009, the City reached an agreement with Carowest that appeared to resolve all their disputes. Having appeared to resolve all of Carowest’s complaints by written contract, the City then resumed and completed the South Tributary project. However, Carowest again raised complaints against the City in 2010. Yantis Company was the construction company awarded the contract for the “South Tributary” project. In 2011, the City awarded Yantis Company the contract for the “North Tributary” project as well, in which the drainage channel would not cross Carowest’s land. On February 11, 2011, Carowest recorded in the Comal County Real Property Records, a “Termination of Recreational Easement,” which purported to terminate the “Recreational Easement” on the property and a “Termination of Drainage Channel Easement,” which purported to terminate the “Drainage Channel Easement” on the property. The Drainage Channel Easement was an integral part of the South Tributary Project.
This proposed settlement agreement involves four pending lawsuits between the City of New Braunfels (the “City”) and Carowest Land, Ltd. (“Carowest”) that ensued from the dispute.
The first lawsuit was filed by Carowest in 2010,the “2010 Cause”, asserting various claims including breach of contract and open meetings act. That 2010 lawsuit lies dormant. Second, Carowest intervened in the “2014 Cause” between the City and Yantis Company regarding alleged defects in the “North Tributary” work. That 2014 suit also lies dormant as the parties await resolution of Carowest's claims. Third, Carowest attempted to void the City's North Tributary contract awarded to Yantis Company in a 2011 and those claims were severed into the “2015 Cause.” Carowest won a jury verdict against the City for $1.2 million in attorneys’ fees, but the City got the entire judgment reversed on appeal. In late 2020, the Texas Supreme Court upheld the reversal of the trial court judgment but allowed Carowest the opportunity to “replead” on remand, however, no such repleading has occurred to date. Fourth, Carowest had claims regarding the City’s request for indemnification of Yantis Company’s alleged delay costs on the South Tributary project (which costs Yantis Company later waived) severed into the “2017 Cause.” Carowest obtained a summary judgment on its claims in the 2017 Cause, the City got the judgment against it reversed, and the court of appeals remanded for the City to request its attorneys’ fees.
The Parties desire to resolve and settle all claims that were or could have been asserted against each other in the 2010 lawsuit, the 2014 lawsuit, the 2015 lawsuit, and the 2017 lawsuit, without any admission of liability or fault by any of the parties. Carowest and the City will dismiss with prejudice all claims against each other. Further, Carowest agrees to pay the City $175,000, release the City, and cancel the Termination of Drainage Channel Easement. The City agrees to release Carowest, and to terminate its interests in the recreational easement across Carowest’s property.
ISSUE:
A settlement agreement has been reached by the party representatives, pending approval of the City Council, as set forth in the settlement agreement.
FISCAL IMPACT:
The City will receive a payment of $175,000.
Recommendation
RECOMMENDATION:
Staff recommends approval.