CC SR 20180306 G - Green Hills Settlement AgreementRANCHO PALOS VERDES CITY COUNCIL
AGENDA REPORT
AGENDA DESCRIPTION:
MEETING DATE: 03/06/2018
AGENDA HEADING: Consent Calendar
Consideration and possible action to approve an agreement with Green Hills Memorial
Park to contribute to the City $315,000 to the $515,000 settlement paid to the Vista
Verde homeowners, reducing the City's contribution to $200,000.
RECOMMENDED COUNCIL ACTION:
(1) Approve the Letter Agreement settlement with Green Hills Memorial Park
FISCAL IMPACT: $200,000
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: David Aleshire, City Attorney
REVIEWED BY: Gabriella Yap, Deputy City Manager.
APPROVED BY: Doug Willmore, City Manager,
ATTACHED SUPPORTING DOCUMENTS:
A. Letter Agreement (page A-1)
INTRODUCTION AND SUMMARY:
The City of Rancho Palos Verdes ("City") and Green Hills Memorial Park ("Green Hills")
entered into that certain indemnification agreement ("Indemnification Agreement") dated
January 18, 2016, related to allegations by various homeowners of the Vista Verde
("Vista Verde") condominium complex concerning the 2015 Annual Review of the Green
Hills' Conditional Use Permit ("CUP") 155, and the subsequent 2016 Annual Review
wherein conditions were added to the CUP.
Subsequently, the City and Vista Verde engaged in a mediation to resolve Vista Verde's
claims against the City, which culminated in a settlement agreement ("Settlement
Agreement") dated April 18, 2017, between the City and Vista Verde. Pursuant to the
Settlement Agreement, the City paid Vista Verde $515,000 to settle all claims.
Thereafter, the City and Green Hills commenced a dialogue as to what Green Hills'
contribution to this settlement should be given the provisions of the Indemnification
Agreement, particularly given that Vista Verde refused to allow Green Hills to participate
in the mediation.
The principal negotiators for Green Hills and the City reached an understanding relative
to Green Hills' contribution, which was discussed conceptually with the City Council and
was presented to the Green Hills Board. The proposed terms are as follows:
01203.0025/452862.2
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1. Contribution — Green Hills will pay to the City the amount of $315,000 (the
"Funds"). This amount constitutes the full amount of the $515,000 settlement
paid by the City to Vista Verde, less $200,000 which the City had previously
agreed to pay.
2. Time of Payment — Green Hills will pay the Funds over a two year period with
payments due every six months. Payments will be $75,000 every six months
except the initial payment of $90,000 paid on execution. A payment schedule
is attached to the Letter as Exhibit A. Notwithstanding the foregoing, nothing
precludes Green Hills from advancing any payment ahead of the schedule.
3. Interest — The payments would accrue interest compounded daily on the
unpaid balance at prime annualized at 4.5%, with interest paid in a lump sum
at the time the last payment is transmitted.
4. Annual Review Conditions — With this agreement, and given Vista Verde's
rejection of the three -party mediation process among Vista Verde, the City
and Green Hills, CUP Condition 11(h)(10) relative to mediation of the Vista
Verde disputes is deemed satisfied.
5. Late Payment — Any late payment after the due date accrues incurs a late
charge annualized at 8% compounded daily until paid/satisfied.
6. Release — These payments release Green Hills from any further liability to the
City with respect to Green Hills' obligation under the Indemnification
Agreement in connection with the Pacific Terrace Mausoleum (f/k/a the
Memorial Terrace Mausoleum).
By agreeing to make the payment described above, Green Hills admits no liability for
any alleged damages to Vista Verde or any other individuals residing in proximity to
Green Hills, nor does Green Hills admit any liability in connection with the construction
of the Pacific Terrace Mausoleum. Finally both Green Hills and the City expressly deny
that the lawful operation of the cemetery constitutes a public or private nuisance.
BACKGROUND AND DISCUSSION:
The 25 -unit Vista Verde Condominiums ("Vista Verde") was built in 1981 and its owners
(Owners) have administratively challenged various City approvals in connection with the
Green Hills Memorial Park since at least 1991. Recent disputes arose after the 2007
approval of the Master Plan and Conditional Use Permit ("CUP") which allowed the 3 -
story Pacific Terrace Mausoleum ("Mausoleum") to be built within 8 feet of the property
line adjacent to Vista Verde. The Mausoleum has rooftop plots and the view blockage
and conduct of burial services is a disturbance to the Vista Verde Owners.
The CUP included a condition providing for annual operational review of the CUP (the
"Annual Review"). With the complaints, the Planning Commission commenced such
review in February 2014. Numerous public hearings were held and the parties met
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attempting to resolve the issues. Finally, 9 months after commencement of review, on
November 11, 2014, the Planning Commission determined that Green Hills should be
required to obtain an "after the fact" variance, and that there should be a moratorium on
rooftop burials until such variance was granted. Accordingly, on November 11, 2014,
the Planning Commission adopted P.C. Resolution No. 2014-29. Within the 15 -day
appeal period, Green Hills counsel submitted an appeal letter dated November 25,
2014, on behalf of Green Hills appealing the Planning Commission's decision to City
Council.
After a lengthy administrative process of over a year, the City Council considered the
matter on November 17, 2015. The City Council modified the Planning Commission
decision and added mitigating conditions to the CUP and terminated the review. The
City Council determined that Green Hills should be required to participate in a mediation
process with the Vista Verde homeowners to determine an appropriate level of
compensation, if any, and conditioned the applicant accordingly. The City Council
offered to contribute up to $200,000 which was estimated to be the sum the City would
have incurred in litigation to such settlement. Green Hills would be relieved of such
obligation should the Vista Verde homeowners be unwilling to participate in mediation.
On December 12, 2015, Green Hills accepted all the conditions imposed by the City
Council. On or about December 23, 2015, Green Hills executed an Indemnity
Agreement with the City as required by Condition 41 to pay any claims arising from the
City's granting of the CUP. Under the Indemnity Agreement, the City retains the
unilateral right to settle any litigation against the City.
The Owners and the Association, and their legal counsel, Noel Weiss, raised various
issues concerning the City's granting of the CUP and issuance of permits, and
concerning Green Hills' operation of the Memorial Park. The Owners have made public
records requests, filed administrative appeals of various actions, threatened other
actions concerning the City's compliance with the Brown Act, and concerning the
conduct of annual reviews, and contemplated other legal actions. On January 19, 2016,
Noel Weiss submitted new claims for damages on behalf of numerous Owners. The
total amount claimed in damages was $16,597,985.63. On February 8, 2016, the City
rejected the claims as untimely based on the applicable statute of limitations.
On February 16, 2016, Vista Verde Owners filed a petition for writ of mandate
attempting to overturn the City's actions on November 17, 2015. Three lawsuits were
filed by the Owners and are still pending in Los Angeles Superior Court. These
lawsuits, referred to herein as the "Pending Lawsuits."'
After about a year of litigation, the parties began to discuss a mediation process.
Ultimately, the Vista Verde Owners would only participate in a two-party mediation
'Loveys v. City of Rancho Palos Verdes, Los Angeles Superior Court Case No. BS160652, filed
February 16, 2016; Loveys v. City of Rancho Palos Verdes, Los Angeles Superior Court Case No.
BC629637, filed August 5, 2016; Loveys v. City of Rancho Palos Verdes, Los Angeles Superior Court
Case No. BS166493, filed December 5, 2016.
01203.0025/452862.2
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excluding Green Hills. In the two-party mediation, the settlement sum of $515,000 was
ultimately agreed to, and was approved by the City Council on April 17, 2017.
Thereafter, the City began a discussion with Green Hills seeking contribution under the
Indemnification Agreement. Green Hills' arguments against contribution were based on
the fact that they were not allowed to participate in the mediation. In recognition of this
argument, the City waived claims for contribution to payment of legal defense costs and
related costs. Accordingly, Green Hills is reimbursing the City $315,000 of the
settlement payment made to the Owners, which means the City is only paying the
$200,000 it had agreed to contribute in 2015. Green Hills will pay the City over a two-
year period and make interest payments.
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ALESHIREDavid J. Aleshire18881 Von Karmen Avenue,
daleshire@awatt.c0 Suite 1700
W�Y N DER L.P
(949)) 250- 250-54099 Irvine, CA 92612
ATTORNEYS AT LAW P (949) 223-1170
F (949) 223-1180
ORANGE COUNTY LOS ANGELES I RIVERSIDE I CENTRAL VALLEY AWATTORNEYS.COM
February 21, 2018
VIA U.S. MAIL
John Resich City of Rancho Palos Verdes
Green Hills Memorial Park 30940 Hawthorne Bouleard
27501 Western Avenue Rancho Palos Ve des, CA 90275
Rancho Palos Verdes, CA 90275
Re: Indemnity Payment for Vista Verde Settlemegreement
The City of Rancho Palos Verdes ("City" ).sand lbreen Hills Memo Park ("Green
Hills") entered into that certain indemnification agreement ("Indemnification Agreement") dated
January 18, 2016, related to allegations by various homeowners of the Vista Verde ("Vista
Verde") condominium complex concerningthe 2015 Annual Review of the Green Hills'
Conditional Use Permit ("CUP") 155, and the subsequent 2016 Annual Review wherein
conditions were added to the CUP. 1 10 1W
Subsequently, the City and Vista Verde engaged in a mediation to resolve Vista Verde's
claims against the City, whicha culminated in a settlement agreement ("Settlement Agreement")
dated April 18, 2017 between the City and Vista Verde. Pursuant to the Settlement Agreement,
the City paid Vista Ver* $515,000 to�settle all clAims. Thereafter, the City and Green Hills
commenced a dialogue as, to what Green Hills'. contribution to this settlement should be given
the provisions of theIndemnificationAgreetrint, particularly given that Vista Verde refused to
allow Green Hips to participate in the mediation.
The principal negotiators for Green Hills and the City reached an understanding relative
to Green Hills' contribution which was presented to the City Council at its meeting of February
6, 2018, and to the GKn'Hills Board. The proposed terms are as follows:
1. Contribution — Green Hills will pay to the City the amount of $315,000 (the "Funds").
This amouneconstitutes the full amount of the $515,000 settlement paid by the City
to Vista Verde, less $200,000 which the City had previously agreed to pay.
2. Time of Payment — Green Hills will pay the Funds over a two year period with
payments due every six months. Payments will be $75,000 every six months except
the initial payment of $90,000 paid on execution. A payment schedule is attached as
Exhibit A. Notwithstanding the foregoing, nothing shall preclude Green Hills from
advancing any payment ahead of the schedule.
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A-1
Ellen Berkowitz
February 21, 2018
Page 2
3. Interest — The payments would accrue interest compounded daily on the unpaid
balance at prime annualized at 4.5%, with interest paid in a lump sum at the time the
last payment is transmitted.
4. Annual Review Conditions — With this agreement, and given Vista Verde's rejection
of the three -parry mediation process among Vista Verde, ity and Green Hills,
CUP Condition I I (h)(10) relative to mediation of the Vi rde disputes is deemed
satisfied. .
5. Late Payment — Any late payment after the
annualized at 8% compounded daily until paid/
a late charge
6. Release — These payments release Green Hills from any further liability to the City
with respect to Green Hills' obligation under the Indemnification Agreement in
connection with the Pacific Terrace Mausoleum (f/k/a the Memorial Terrace
Mausoleum).
By agreeing to make the payment described above, Gr en ills admits no liability for any
alleged damages to Vista Verde or any other\mdividuals resid g in proximity to Green Hills, nor
does Green Hills admit any liability in connection with the construction of the Pacific Terrace
Mausoleum. Further, Green Hills denies that such operation negatively impact the Vista Verde
property or its residents. Finally both Green Hills %and the City expressly deny that the lawful
operation of the cemetery constitutes a public or private nuisance.
we
ATTEST:
Emily Colborn, City Clerk
ante ed this day of
CITY:
CITY OF RANCHO
municipal corporation
Susan Brooks, Mayor
APPROVED AS TO FORM:
ALESHIRE & WYNDER, LLP
David J. Aleshire, City Attorney
01203.0001/445048.5
LA 1335185690
2018.
PALOS VERDES, a
A-2
Ellen Berkowitz
February 21, 2018
Page 3
GREENBERG TRAURIG, LLP GREEN HILLS MEMORIAL PARK
Ellen Berknwitz_ Attnrnev fnr
GREEN H
01203.0001/445048.5
LA 1335185690
A-3
WN■
City of Rancho Palos Verdes
Daily Loan Principal & Interest Calculation Schedule (Green Hills)
Beginning Balance:
$ 315,000.00
Loan Amount with Interest
$ 225,000.00
Beginning day of Loan
3/7/2018
First payment date
3/8/2018
Payment Schedule
Payment #13/8/18
$
90,000.00
Payment #2 9/8/18
$
75,000.00
Payment #3 3/8/19
$
75,000.00
Payment #4 3/8/20 (bal+interest)
$
86,835.62
Total Payments
$
326,835.62
APR: 4.50%
Daily APR:: 0.000123288
No. of Years 2