HomeMy WebLinkAboutA6829 - DESERT WATER COOPERATIVE SETTLEMENT AGREEMENT
This Settlement Agreement ("Agreement") is entered into by and between the City of Palm
Springs ("City" or "Plaintiff') and Desert Water Cooperative, Inc. ("DWC"), Avedis Ghaghian
("Ghaghian"), LCLO, LLC ("LCLO"), Pure Life Organics ("PLO"), Ruben Harutyunyan
("Harutyunyan"), and Robert Grunder ("Grunder") (these Defendants are sometimes collectively
referenced herein as "Defendants"). The City and Defendants are sometimes referred to herein
individually as a"Party" and collectively as the"Parties."
RECITALS
1. The Parties intend by this Agreement to resolve their disputes in the lawsuit entitled Cih,
of Palm Springs v. Desert Water Cooperative, Inc., et at, Riverside Superior Court Case No. PSC
1503636 ("Litigation"), including all claims raised by the City's complaint and amendments to the
complaint against the Defendants. The City of Palm Springs filed a civil complaint against Defendants
Desert Water Cooperative, Inc., Avedis Ghaghian, and LCLO. LLC on or about August 6, 2015.
Subsequently, the City filed three amendments to the complaint naming Defendants Pure Life Organics,
Ruben Haruryunyan and Robert Grunder as so-called"Doe"defendants on or about February 24, 2016.
2. The Litigation involves enforcement of Plaintiffs land use and zoning regulations
pertaining to the use of certain real property within the City located at 440 El Cielo Rd., Palm Springs,
CA ("Property"). Specifically, the Litigation concerned allegations that Defendants maintained a public
nuisance at the Property by operating or facilitating the operation of an unpermitted marijuana dispensary
at the Property.
3. On December 15,2015,a preliminary injunction was issued which prohibited Defendants
DWC, Ghaghian, and LCLO from using certain portions of the Property for purposes of operating a
marijuana dispensary. Thereafter,on February 25,2016, a temporary restraining order was issued, which
prohibited all Defendants from operating a marijuana dispensary on any portion of the Property, or
anywhere within the City of Palm Springs, unless that operation was pursuant to a regulatory permit
issued by the City.
4. On or about February 25,2016,the City confirmed that use of the Property, as alleged by
the City,ceased.
5. The purpose of this Agreement is to settle the existing dispute between the City and
Defendants related to the Litigation.
NOW, THEREFORE, in consideration of the mutual covenants, promises and undertakings set
forth herein and other consideration, the receipt and adequacy of which the Parties hereby acknowledge,
the Parties agree as follows:
AGREEMENT
I. DEFENDANT'S OBLIGATIONS.
A. Compliance with the Palm Springs Municipal Code. Defendants, on behalf of
themselves, their elected and/or appointed officials, officers, board members, owners, principals, present
and former directors, employees, agents, affiliates, subsidiaries, parent corporations and their respective
agents, officers, executives, predecessors and/or successors in interest, agree that they will not now nor
ever operate as, or engage in the operation of,a marijuana storage, cultivation, processing, or distribution
facility, in any form, at any location within the City of Palm Springs, unless such operation is in
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compliance with all provisions of the Palm Springs Municipal Code ("PSMC") and the Palm Springs
Zoning Code ("PSZC"), including but not limited to PSMC Chapter 5.35, and any amendments thereto.
This release and agreement does not preclude Defendants,or any of their elected and appointed officials,
officers, board members, owners, principals, present and former directors, employees agents, affiliates,
subsidiaries, parent corporations and their respective agents, officers, executives, predecessors and/or
successors in interest, from applying for a permit from the City to operate a medical marijuana dispensary
or distribution facility pursuant to the provisions of the PSMC to the extent that such permits are or
become available from the City. Defendants understand and agree that the ability to apply for a permit as
described in this paragraph shall not entitle them to issuance of the permit, nor shall it affect the
qualification provisions of the PSMC related to marijuana dispensary permits.
B. Release of Claims. Defendants hereby release the City, the City's elected and appointed
officials, officers, board members, members, owners, principals, officials, directors, employees, agents,
attorneys and/or representatives, and each of them, (collectively, "City Released Parties"), from any and
all claims, lawsuits, demands, challenges, liabilities, damages, fees, costs, or causes of action, known or
unknown,that Defendants have or may have against the City or the City Released Parties,or any of them,
arising from this Litigation. Notwithstanding the foregoing, any Party may enforce the terms of this
Agreement.
C. Payment to City. Within ten(10)days of the effective date of this Agreement, DWC and
PLO shall collectively pay to the City the sum of$25,000.00, as the total compensation due to the City
for any civil penalties,damages,and/or attorney's fees to which the City is,or may be, entitled as alleged
in the Litigation. Payment shall be made via money order or cashier's check, payable to the City of Palm
Springs and forwarded to counsel for the City. Notwithstanding any of the foregoing, all Defendants
ultimately are and shall remain jointly and severally liable for payment of the aforementioned sum to the
City should DWC and/or PLO fail to make the payment described above.
D. Stipulation for Entry of Judgment. Contemporaneously with the execution of this
Agreement, Defendants shall sign the Stipulation for Entry of Judgment attached hereto as Exhibit "A",
which incorporates the Stipulated Judgment attached hereto as Exhibit `B". The Stipulation for entry of
Judgment(Exhibit"A") shall be attached hereto, and made a part of this Agreement in its executed form.
In the event of any breach of this Agreement by any Defendant, the Parties agree and acknowledge that
the City may, upon providing Defendants with notice and an opportunity to cure said breach pursuant to
paragraph 111, subsection (F) of this Agreement, immediately file the Stipulation for Entry of Judgment
and Stipulated Judgment with the Court and that the Stipulated Judgment may be entered by the Court.
Except as set forth in the preceding sentence, the Stipulated Judgment and Stipulation of Judgment shall
not be filed with the Court.
11. CITY'S OBLIGATIONS.
A. Dismissal of Defendants. Within five (5) days of the effective date of this Agreement,
the City shall dismiss Defendants from the complaint that is the subject of this Litigation.
B. Release of Claims. The City, and each of its elected and appointed officials, officers,
board members, members, owners, principals, officials, directors, employees, agents, attorneys and/or
representatives, and each of them, (collectively, "City"), hereby release Defendants, and any of their
respective elected and appointed officials, officers, board members, members, owners, principals,
officials, directors, employees, agents, attorneys and/or representatives (the "Defendants' Released
Parties"), from any and all claims, lawsuits, demands, challenges, liabilities, damages, fees, costs, or
causes of action, known or unknown, that the City has or may have against the Defendants' Released
Parties, or any of them, arising from this Litigation. Notwithstanding the foregoing, any Party may
enforce the terms of this Agreement. This release shall not prevent the City from taking action against
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any of the Defendants' Released Parties for any future violations of the PSMC, PSZC, or other applicable
law.
111. MISCELLANEOUS PROVISIONS.
A. Settlement Not to Constitute Admission, The Parties'entry into this Agreement shall not
constitute an admission of liability or fault of any nature. Defendants dispute the allegations against
them.The Parties agree that nothing herein shall be construed as an admission by any of them of any
liability,fault,guilt,responsibility, wrongdoing,or violation of any applicable law,order, statute,duty,or
contract,and that nothing in this Agreement shall be so construed by any other person. Further,this
settlement and payment shall not be construed as a sanction by the City of Palm Springs under Business
and Professions Code Section 19323.
B. Continuing Jurisdiction of Court. The Parties agree that the court shall retain jurisdiction
over the Parties and this action to supervise and enforce the terms of this Agreement pursuant to
California Code of Civil Procedure section 664.6. Upon any breach of this Agreement, the Parties agree
that either party may seek an ex parte application to the court and/or shorten the time limits for notice in
order to achieve speedy compliance with the terms of this Agreement. Further, the Parties agree that
upon any breach, and subsequent failure to cure after notice of such breach, the Court shall have
jurisdiction to enter judgment pursuant to the terms of the Stipulation for Entry of Judgment and
Stipulated Judgment attached hereto and incorporated by reference as Exhibit A, and Exhibit B,
respectively.
C. Benefited Parties. This Agreement shall be binding upon and inure to the benefit of each
of the Parties to this Agreement and their respective representatives, heirs, devisees, successors and
assigns. There shall be no third party beneficiaries.
D. Assumption of Risk. The Parties fully understand and declare that if the facts with
respect to which this Agreement is executed are found hereafter to be different from the facts now
believed to be true,each Party assumes the risk of such possible difference in facts and hereby agrees this
Agreement shall be in effect and shall remain in effect notwithstanding such difference in facts. The
Parties represent and covenant that they are fully informed regarding all facts related to this Agreement
and will not seek to void, rescind, set aside or alter this Agreement on an assertion of mistake of fact or
law.
E. Waiver of Section 1542. The Parties hereby forever waive, release and discharge one
another, their respective agents, assigns, attorneys, contractors, departments, employees, officials,
representatives, and servants (in the aggregate, 'Party Representatives") of and from any and all claims,
demands, rights, liabilities and causes of action, of every type and nature, known or unknown, choate or
inchoate, liquidated or unliquidated, resolved or unresolved, which exist or may exist in favor of each
Party(in the aggregate, "Claims"), arising out of, or in any way related to the Litigation as of the date of
this Agreement's execution. The Parties further expressly waive the provisions of California Civil Code
Section 1542 with respect to the items released above,which provides that:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his
or her settlement with the debtor.
The Parties hereby expressly waive the provisions of said Section 1542 as to all matters within
the scope of the claims released hereby. The Parties hereby warrant and guarantee that they have full and
complete authority to release all such claims on behalf of themselves, their heirs, assigns,and successors
in interest.
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F. Construction.Choice of Law.and Venue. The terms of this Agreement are the product of
arms-length negotiations between the Parties,through their respective counsel of choice,and no provision
shall be construed against the drafter thereof. This Agreement shall be governed by and construed in
accordance with the laws of the State of California. The venue for any disputes concerning this
Agreement shall be in Riverside County. In entering into this Agreement,the Parties represent that they
have had an opportunity to obtain the legal advice of attorneys of their own choice, and that the terms of
this Agreement are fully understood and voluntarily accepted by them. The Parties further represent that
they do not rely and have not relied upon any representation or statement made by any Party or any other
person with regard to the subject matter, basis or effect of this Agreement, other than the express
Provisions contained in this Agreement. If any action, at law or in equity, including an action for
declaratory relief, is brought to enforce or interpret the provisions of this Agreement,the prevailing Party
shall be entitled to recover its reasonable attorneys' fees and costs, in addition to any other relief to which
they or it may be entitled.
G. Notice and Cure.
1. Before any attempt to enforce the terms of this Agreement by any Party,there
must first be written Notice of Default to the breaching Party/Parties by sending said Notice of Default by
First Class Mail to:
Defendants:
Desert Water Cooperative, Inc.
c/o Salvatore Zimmitti,Esq.
Nelson Hardiman,LLP
11835 Olympic Blvd., #900
Los Angeles, CA 90064
Avedis Ghaghian
c/o Salvatore Zimmitti,Esq,
Nelson Hardiman,LLP
11835 Olympic Blvd.,#900
Los Angeles,CA 90064
LCLO, LLC
c/o Salvatore Zimmitti,Esq.
Nelson Hardiman,LLP
11835 Olympic Blvd.,#900
Los Angeles,CA 90064
Pure Life Organics
c/o Minas Melkonyan
1413 Yz West Kenneth Road
Glendale, CA 91201
Ruben Harutyunyan
604 E. Maple St.,#2
Glendale,CA 91205
Robert Grunder
P.O. Box 242523
Anchorage, AK 99524-2523
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City:
City Clerk
3200 East Tahquitz Canyon Way
Palm Springs, CA 92262
With a copy to:
Jason M. McEwen
Woodruff,Spradlin&Smart, APC
555 Anton Blvd., Suite 1200
Costa Mesa,CA 92626
2. The breaching party shall have five(5)calendar days to cure such default after
written notice is mailed.
H. Counterparts and Electronic Execution. This Agreement may be executed in counterparts
which, taken together, shall constitute one and the same Agreement. This Agreement may also be
executed and/or delivered by facsimile and/or email transmission and in such event all facsimile and/or
scanned and emailed signatures shall be deemed originals for all purposes hereof.
I. Authority. Each signatory to this Agreement represents and warrants that he or she is
authorized to sign this Agreement on behalf of the Party for which he or she is signing, and thereby to
bind that Party fully to the terms of this Agreement, and that none of the claims being released herein
have been previously assigned to any other person. The City specifically warrants that it has authorized
its City Attorney to execute the Agreement on its behalf.
J. Headings. Paragraph headings are for reference only and shall not affect the
interpretation of any paragraph hereto.
K. No Inducement. The Parties warrant that no promise or inducement has been made or
offered by any of the Parties, except as set forth herein, and that this Agreement is not executed in
reliance upon any statement or representation of any of the Parties or their representatives, concerning the
Litigation. The Parties further represent that they have each been represented by legal counsel during the
course of the negotiations leading to the signing of this Agreement, or have had an opportunity to consult
with legal counsel of their choice and has voluntarily chosen not to do so.
L. Effective Date,
This Agreement to be effective as of the date that the signature(s)of each
Party (or those of each Party's authorized representatives)is obtained.
M. Entire Agreement. This Agreement: (a) constitutes the entire Agreement between the
Parties concerning the subject matter hereof; (b) supersedes any previous oral or written Agreements
concerning the subject matter hereof; and (c) shall not be modified except by a writing executed by the
Party or Parties to be bound thereby.
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AGREED TO AND ACCEPTED AS OF THE EFFECTIVE DATE:
Desert Water Cooperative,Inc.
By:
Title:
Avedis Ghaghian
By:
Title:
LCLO,
By:
T' : 7)q
Approved as to
Form:
By: ; , _ r, '.J
Calt' itti,Eq. r
ou Desert Wa perative, Inc.
Avedis Ghaghian,and LCLO,LLC
Pure Life Organics
By:
Name&Title:
Ruben Harutyunyan
By:
Rober under:
By ? ,;,
City of Palm prings
By:
Jason M. cEwen
Assistan City Attorney,City of Palm Springs
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AGREED TO AND ACCEPTED AS OF THE EFFECTIVE DATE:
Desert Water
/Cooperative,Inc.
By:
Title: �V� 1 r ClQ,4h�a�n I CC-)
Avedis Ghaghrrian
By: d�Y' w --
Title: Cam.
LCLO,LCC
By:
Title:
Approved to Form:
By:
Sal re-Zi dti,Esq. ti
C Desert Water Cooperative, Inc.
Avedis Ghaghian,and LCLO,LLC
Pure Life Organics
By: 10,
Name&Title:
Ruben H --�
--
By:_... .._. _
Robert Grunder
By:
City of Palm Springs
By:
Jason M. McEwen
Assistant City Attorney, City of Palm Springs
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Fee Exempt Per Gov. Code§6103
1 WOODRUFF, SPRADLIN & SMART, APC
JASON M. MCEWEN - State Bar No. 246787
2 ticewen@wss-law.com
NICHOLAS A. HUTCHINS - State Bar No. 303963
3 nhutchinsna wss-law.com
555 Anton`boulevard, Suite 1200
4 Costa Mesa, CA 92626-7670
Telephone: 714 558-7000
5 Facsimile: 714 835-7787
6 Attorneys for Plaintiff
CITY OF PALM SPRINGS, a municipal corporation
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8 SUPERIOR COURT FOR THE STATE OF CALIFORNIA
9 FOR THE COUNTY OF RIVERSIDE, PALM SPRINGS BRANCH
10
I I CITY OF PALM SPRINGS, a municipal CASE NO.: PSC 1503636
12 corporation,
STIPULATION FOR ENTRY OF
13 Plaintiff, JUDGMENT
V.
14 [Proposed] Stipulated Judgment filed
DESERT WATER COOPERATIVE, INC. concurrently herewith]
$ <$ 15 AVEDIS GHAGHIAN, LCLO, LLC., and
3 16 DOES I to 50, inclusive,
Defendants.
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20 This Stipulation for Entry of Judgment ("Stipulation") is made and entered into and
21 between Plaintiff, the City of Palm Springs ("City") on the one hand and Defendants, Desert
22 Water Cooperative, Inc., Avedis Ghaghian, LCLO, LLC, Pure Life Organics, Ruben
23 Harutyunyan, and Robert Grunder (collectively hereinafter "Defendants"), on the other hand
24 as follows:
25 1. This Stipulation is prepared in conjunction with the settlement agreement
26 ('Agreement") entered into between the City and Defendants. A true and correct copy of the
27 Agreement is attached hereto, and incorporated by this reference as Exhibit "A."
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STIPULATION FOR ENTRY OF JUDGMENT
1148273.1
1 2. This case arises out Defendants' alleged use of property within the City of
2 Palm Springs in violation of the provisions of the Palm Springs Municipal Code and Palm
3 Springs Zoning Code. Specifically, the City alleges that Defendants operated and/or
4 authorized the operation of, a marijuana distribution facility in the City of Palm Springs at
5 440 El Cielo Rd., Palm Springs, CA, Palm Springs, California 92262, (hereinafter referred to
6 as the "Property").
7 3. Defendants and City now seek to settle the City's claims asserted against
8 Defendants in this litigation.
9 4. The purpose of this Stipulation is to enforce the terms set forth in the
10 Agreement and to ensure compliance with the Palm Springs Municipal Code and the Palm
11 Springs Zoning Code as it relates to the presence and operation of a marijuana storage,
12 cultivation, processing and/or distribution facility within the City of Palm Springs.
13 5. The Parties agree that this Stipulation for Order of Entry of Judgment shall be
<`E 14 filed with the Court only if Defendants, or any of them, breach any term of the Agreement.
8 c a 15 Specifically, by this Stipulation for Entry of Judgment, Defendants agree to:
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16 a. Judgment in favor of the City, and against Defendants, for all counts in
17 the City's operative complaint filed in this action.
18 b. A permanent injunction enjoining and restraining Defendants, and each
19 of them, including their elected and/or appointed officials, officers,
20 board members, owners, principals, present and former directors,
21 employees, agents, affiliates, subsidiaries, parent corporations and their
22 respective agents, officers, executives, predecessors and/or successors in
23 interest, from operating, conducting, using, occupying, or in any way
24 permitting the use of property for purposes of the storage, cultivation,
25 processing and/or distribution of marijuana at any location within the
26 City of Palm Springs. This shall not include operation of a medical
27 marijuana dispensary operating pursuant to a license or permit issued by
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STIPULATION FOR ENTRY OF JUDGMENT
1148273.1
I the City pursuant to the provisions of Palm Springs Municipal Code
2 Chapter 5.35, including any amendments thereto.
3 C. An award of damages in favor of the City of Palm Springs, and against
4 Defendants in the amount of$25,000.00, less any amount already paid
5 by Defendants pursuant to section I(C) of the Agreement at the time of
6 breach. Defendants shall be jointly and severally liable for payment of
7 this damage award to the City.
8 6. In the event that Defendants breach any term contained in the Agreement, the
9 City may, but is not required to, move the Court, ex parte, for an order to enforce the terms
10 of the Agreement. Specifically, the City may move the court for issuance of an abatement
11 warrant authorizing the City to enter onto any property owned or occupied by Defendants
12 upon which a use contrary to the provisions of the Agreement is being conducted, and to take
13 such action as is reasonably necessary to abate the condition.
aa� 14 7. The Parties specifically agree that this Court shall retain jurisdiction over the
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�a 15 parties and this action pursuant to Code of Civil Procedure section 664.6.
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16 8. In the event either Party is required to take action to enforce the terms of the
17 Agreement and/or Stipulation pursuant to its terms, the prevailing party shall be entitled to
18 its reasonable attorney's fees and costs incurred as a result of such action, including
19 collection thereof, in addition to the award of money damages as described herein and in the
20 Agreement.
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24 [Stipulation continues on following page]
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STIPULATION FOR ENTRY OF JUDGMENT
1148273.1
1 9. The Parties agree that the amount of the money judgment to be entered against
2 Defendants in the event of a breach of the Agreement may be proven by the declaration of
3 counsel for the City, and that no other evidence shall be required to prove the outstanding
4 amount due under the Agreement.
5 IT IS SO STIPULATED
6
7 DATED: Aard Sr 2016 NELSON HARD`IM�f-1N�' d
8 By:
9 SAL MM
Counsel fbf efendants, Desert Water
10 Cooperative, Inc„ Avedis Ghagian and LCLO,
LLC
11
12 DATED: 2016 PURE LIFE ORGANICS
3 13
��s By:
14
15 (NAME& TITLE)
a 16 DATED: 2016 RUBEN HARTYUNYAN
17 By:
18 Ruben Hartyunyan, for himself
19
20 DATED: 2016 ROB G DER
21
B
22 / obert Qnunder, for himself
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24 DATED: 2016 WOODRUFF, SPRADLIN & SMART, APC
25
26 By:
27 JASON CEWEN
Attorney for Plain ity of Palm Springs
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STIPULATION FOR ENTRY OF JUDGMENT
1148273.1
1 9. The Parties agree that the amount of the money judgment to be entered against
2 Defendants in the event of a breach of the Agreement may be proven by the declaration of
3 counsel for the City, and that no other evidence shall be required to prove the outstanding
4 amount due under the Agreement.
5 IT IS SO STIPULATED
6
7 DATED: S" , 2016 NELSON HARDIIMAN
8 By:
9 S'LV ORE ZI
C s for Defendants, Desert Water
10 Coo erative, Inc„ Avedis Ghagian and LCLO,
LL
11
12 DATED: t 2016 PURE LIFE ORGANICS
s< 13 By: :nM
n<m 14 ,aa.S ni 4-le-C-
3 15 (NAME & TITLV.)
16 DATED: Y , 2016 RUBEN 14ARIY12MVAN —�
17 By: i
18 R Hartyunyan, for himself
19
20 DATED: 2016 ROBERT GRUNDER
21 By.
22 Robert Grunder, for himself
23
24 DATED: 2016 WOODRUFF, SPRADLIN & SMART, APC
25
26 By:
27 JASON MCEWEN
Attorneys for Plaintiff, City of Palm Springs
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STIPULATION FOR ENTRY OF JUDGMENT
11482731