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HomeMy WebLinkAboutAGMT - California Resources Corporation and California Resources Long Beach Inc (collectively CRC) (Settlement Agreement and Mutual Release)SETTLEMENT AGREEMENT AND MUTUAL RELEASE This Settlement Agreement and Mutual Release ("Agreement") is made by and between CITY OF SEAL BEACH ("CITY"), on the one hand, and CALIFORNIA RESOURCES CORPORATION and CALIFORNIA RESOURCES LONG BEACH, INC. (collectively, "CRC"), on the other hand. CITY and CRC are referred to individually as a "Party" and together they are referred to as the "Parties." This Agreement shall become effective on the date it is executed (the "Effective Date") and shall be effective as to all parties that sign it. RECITALS A. On May 26, 2020, the CITY filed a complaint against CRC in the California Superior Court, County of Orange, captioned City of Seal Beach v. California Resources Corporation, California Resources Long Beach, Inc., and DOES 1 through 100, Case No. 30-2020-01143014-CU-MC-CJC. On April 29, 2021, the Orange County Superior Court transferred the case to San Diego County Superior Court, and the case was renumbered as Case No. 37 -2021 -00023791 -CU -MC -CTL (the '`Action"). The Action involves a dispute over CRC's business operations in PRC 186.1 that are located in State-owned tidelands off the coast of the CITY. The CITY alleged CRC was obligated to obtain a business license and pay taxes, penalties, interest, and the CITY's costs of collection for CRC's operations in PRC 186.1. CRC denied any requirement to obtain a business license and alleged it was exempt from the CITY's license, tax, and permit requirements due to the provision in the Seal Beach Municipal Code that states the business license chapter does not apply to drilling and production of oil where wells are located and bottomed in state-owned tide and submerged lands. B. On September 1, 2022, the Parties attended a mediation before the Hon. Scott Snowden (Ret.). C. The Parties now desire to completely and finally settle and resolve their disputes relating to or arising from the Action on the terms set forth in this Agreement. D. The Parties, and each of them, acknowledge and agree that they are entering into this Agreement solely to avoid the expense and inconvenience of litigation. Each of the Parties understands and agrees that this Agreement is a compromise and settlement of disputed claims relating to or arising from the Action and that this Agreement is not an admission of liability, guilt, or fault by any of the Parties. NOW THEREFORE, based on and in consideration of the above Recitals and in consideration of the mutual promises, covenants, and agreements set forth below, and for other 116767192.2 0055335-00254 good and valuable consideration, and intending to be legally bound by this Agreement, the Parties enter into the following Agreement. 1. Settlement Payment. As a compromise of the Action,, CRC shall pay the CITY the sum of Four Hundred Thousand Dollars and No/100 ($400,000.00) within sixty (60) days of executing this Agreement. The settlement payment shall be paid by wire transfer to the CITY Account: Bank of the West, Government Banking Admin (00514), 13300 Crossroads Parkway North, City of Industry, CA 91746; Account Name: City of Seal Beach; ABA No. 12100782; Account No. 045563863. 2. Business License: CRC shall obtain a business license with the CITY for its operations in PRC 186.1 on or before December 31, 2022, and shall pay the applicable business license tax for its operations beginning on September 1, 2022 and thereafter. CRC will pay the applicable Out -City production taxes for its production in PRC 186. 1, consistent with Seal Beach Municipal Code section 5.55.015(B), or any applicable successor ordinance, and the manner in which the CITY taxes other Out -City producers. 3. Mutual Release of Claims: (a) Except as provided herein, and with respect to the obligations created by, acknowledged, or arising from this Agreement or any other documents contemplated hereunder, the CITY and the CITY's council, boards, managers, members, agencies, successors, insurers, third -party administrators, attorneys, shareholders, officers, directors, employees, agents, and representatives of all kinds, do hereby release and absolutely and forever discharge CRC and CRC's successors, predecessors, affiliates, servants, board members, agents, employees, heirs, assigns, partners, managers, members, brokers, officers, directors, shareholders, insurers, sureties and persons and entities holding beneficial interests, from any and all claims, demands, rights, liabilities, costs, expenses (including attorney's fees), remedies, damages, losses, and causes of action, whether or not now known, suspected or claimed, which the CITY ever had, now has, claims to have had, or may have had against CRC relating to or arising from the Action. (b) Except as provided herein, and with respect to the obligations created by, acknowledged, or arising from this Agreement or any other documents contemplated hereunder, CRC on behalf of itself, and its successors, affiliates, servants, board members, agents, employees, heirs, assigns, partners, managers, members, brokers, officers, directors, shareholders, insurers, sureties and persons and entities holding beneficial interests, do hereby release and absolutely and forever discharge the CITY and CITY's council, boards, managers, members, agencies, successors, insurers, third - party administrators, attorneys, shareholders, officers, directors, employees, agents, and representatives of all kinds, from any and all 0) 116767192.2 0055335-00254 claims, demands, rights, liabilities, costs, expenses (including attorney's fees), remedies, damages, losses, and causes of action, whether or not now known, suspected or claimed, which CRC ever had, now has, claims to have had, or may have had against the CITY relating to or arising from the Action. 4. California Civil Code § 1542 Waiver. The Parties acknowledge that they are aware that statutes exist which render null and void releases and discharges of any claims, rights, demands, liabilities, actions and causes of action which are unknown to the releasing or discharging Party at the time of execution of said release and discharge. The Parties expressly waive, surrender and agree to forego any protection to which they would otherwise be entitled by virtue of the existence of any statute in any jurisdiction, including, but not limited to, California. The Parties acknowledge that they are familiar with Section 1542 of the California Civil Code, which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY." It is expressly understood and agreed that all rights under Section 1542 of the Civil Code of the state of California are expressly waived by the Parties to the full extent allowed by law. The Parties agree that this Agreement shall extend and apply to all unknown, unsuspected and unanticipated claims, demands, injuries, or damages within the scope of this Agreement and the releases therein. The Parties expressly waive any equivalent provision of any statute of the United States or any other state or jurisdiction with respect to such claims, demands, injuries, or damages within the scope of this Agreement. 5. No Admission ofLiability. This Agreement affects the compromise and settlement of disputed and contested claims, and nothing contained herein shall be construed as an admission by any Party hereto of any liability of any kind to any other Party. Each Party hereby expressly denies that it is in any way liable to any other Party relating to the Action. 6. Press Release. The Parties shall not issue any press releases regarding this Agreement or resolution of the Action more generally. 7. Attorney Fees and Costs. The Parties hereto agree to bear their own respective costs and attorney fees with respect to all matters pertaining to the Action, as well as the negotiation and preparation of this Agreement. 8. Notices. All notices, demands, requests, and communications given or required to be given under this Agreement shall be made as follows: 3 116767192.2 0055335-00254 CITY OF SEAL BEACH Attn: City Clerk City of Seal Beach 211 Eighth Street Seal Beach, California. 90740 Email cityclerk@sealbeachca.gov Counsel for City of Seal Beach Craig A. Steele Kyle H. Brochard Richards, Watson & Gerson 350 South Grand Ave., 37"' Floor Los Angeles, CA 90071 (213) 626-8484 csteelet"?u,rwizlaw.co m rceccon r(�i.rwa.law:co.m. kbrochard(@..rwalaw.com aeanser(@..rwalaw.com CALIFORNIA RESOURCES CORPORATION CALIFORNIA RESOURCES LONG BEACH. INC. Attn: Jody L. Johnson, Esq. California Resources Corporation I World Trade Center. Suite 1500 Long Beach, CA 90831 (818) 661-3703 Jodv.-johnson(@.crc.com Counsel for California Resources Corporation and California Resources Long Beach, Inc. Michael M. Mills Michael B. Brown Lauren V. Neuhaus StoeI Rives LLP 500 Capitol Mall, Suite 1600 Sacramento, CA 95814 (916) 447-0700 michael.mills a_.stoel.com. michael.brown0stoel.com lauren.neuhaus@stoel.com 9. Construction. Each Party has reviewed this Agreement prior to its execution, and the normal rule of construction that any ambiguities in this Agreement are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement. Title and captions 4 116.767192:2 0055335-00251 contained in this Agreement are used for convenience or reference only and are not intended to and shall not in any way enlarge, define, limit, extend, or describe the rights or obligations of the Parties, or affect the meaning or construction of this Agreement, or any provision hereof. 10. Authority to Enter into Settlement Agreement. Each Party, and each signatory for a Party, represents and warrants that he/she/it has the power and authority to enter into this Agreement and to consummate the transactions contemplated hereby on behalf of that Party, and this Agreement, when executed and delivered by the Parties, will be valid and binding and enforceable against each such Party in accordance with its terms. ll. Binding on Successors. This Agreement shall bind the heirs, personal representatives, successors, and assigns of the Parties, and inure to the benefit of each Party and each Parties' agents, directors, managers, brokers, officers, partners, employees, servants, insurers, successors, franchisors, and assigns. 12. Governing Law. The legality, interpretation, and enforcement of this Agreement shall be governed by California law, except as to any matter that is exclusively within the jurisdiction of federal law. 13. Dismissal of Action with Retention of Jurisdiction. The Court shall retain jurisdiction to enforce the terms of this Agreement, pursuant to Code of Civil Procedure section 664.6. Upon delivery of the signed Agreement to the CITY, CRC shall also deliver a signed copy of the Joint Stipulation for Order Dismissing Action with Prejudice and for Retention of Jurisdiction to Enforce Settlement Pursuant to Code of Civil Procedure Section 664.6, until December 31, 2023. Within 5 court days of the Effective Date of this Agreement the CITY shall file with the Court the Joint Stipulation for Order Dismissing Action with Prejudice and for Retention of Jurisdiction to Enforce Settlement Pursuant to Code of Civil Procedure Section 664.6. 14. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and will become effective and binding upon the Parties at such time as all of the signatories hereto have signed the counterpart of this Agreement. All counterparts so executed shall constitute an agreement binding on all the Parties, notwithstanding that all of the Parties may not be signatories to the same counterpart. The Parties agree to accept signed pages transmitted by email, PDF, facsimile, or DocuSign. 15. Independent Advice of Counsel. The Parties hereto represent and declare that in executing this Agreement they relied solely upon their own judgment, belief, and knowledge, and the advice and recommendations of their own independently selected counsel, concerning the nature, extent, and duration of their rights and claims, and that they have not been influenced to any extent whatsoever in executing the same by any representations or statements covering any matter made by any other Party hereto or by any person representing any such other Party hereto or that they have knowingly and voluntarily waived the right to seek the advice of such counsel. 16. No Representations. Each Party to this Agreement acknowledges that it is fully aware of the significance and legal effect of this Agreement, including its release provisions, and 116767192.2 0055335-00254 r) is not entering into this Agreement in reliance on any representation, promise, or statement made by any Party, except those explicitly contained in this Agreement. 17. Voluntary Agreement. The Parties, and each of them, further represent and declare that they have carefully read this Agreement and know the contents thereof and that they signed the same freely and voluntarily. 18. Mistake. Each of the Parties to this Agreement has investigated the facts pertaining to the Dispute and to this Agreement to the extent each party deems necessary. In entering into this Agreement, each party assumes the risk of mistake with respect to such facts. This Agreement is intended to be final and binding upon the Parties regardless of any claim of mistake. 19. Severability. The provisions of this Agreement are contractual, and not mere recitals, and shall be considered severable, so that if any provision or part of this Agreement shall at any time be held invalid, that provision or part thereof shall remain in force and effect to the extent allowed by law, and all other provisions of this Agreement shall remain in full force and effect, and be enforceable. 20. Survival of Provisions. All promises, covenants, releases, representations and warranties contained in this Agreement shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated herein. 21. Time of Essence. Time is of the essence in the performance of any of the terms of this Agreement. 22. Effective Date. This Agreement is effective on the last date of the Parties' execution of this Agreement. 23. Entire Agreement. This Agreement constitutes the entire agreement between the Parties, and it is expressly understood and agreed that this Agreement may not be altered, amended, modified, or otherwise changed in any respect or particular whatsoever, except by a written document, duly executed by the Parties, or their authorized representatives. Except as otherwise provided herein, this Agreement expressly supersedes all previous or contemporaneous representations, understandings and agreements between the parties concerning the matters referenced herein. The Parties acknowledge and agree that no one of them will make any claim at any time or place that this Agreement has been orally altered or modified in any respect whatsoever. This is an integrated Agreement. SIGNATURES ON NEXT PAGE. 3 116767192.2 0055335-00254 IN WITNESS WHEREOF, The Parties hereto have executed and entered into this Agreement as of the date last written below. and acknowledge that they have voluntarily and knowingly entered into this Agreement on the Effective Date. CITY OF SEAL BEACH CALIFORNIA RESOURCES CORPORATION By: A ?t By: Name: Title Name: �Q� : , L j " C Title: I &e-UjrMl ��]&e) CALIFORNIA RESOURCES LONG BEACH. INC. By: Name. j�,jn,n�on Title:' Vvt1�1 �pWi&.� Approved as to form by counsel: Dated: December 7 .2022 STOEL RIVES LLP Michael M. Mills Michael B. Brown Lauren V. Neuhaus Attorney for Defendants CALIFORNIA RESOURCES CORPORATION and CALIFORNIA RESOURCES LONG BEACH. INC. Dated: December 2 .2022 RICHAARRDS_ WATSON R GERSON Craig A. Steele Kyle H. Brochard Attorney for Plaintiff CITY OF SEAL BEACH 7 116767193 2 OW335•00254