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HomeMy WebLinkAbout06606 - CAPS COLLECTIVE APOTHECARY LLC SETTLEMENT AGR The following agreements are closed, per Doug Holland, on 03-24-2016, ok to close so long we still have access to them. They are all available in Application Extender. A6827 Villas De Las Flores A6736 Wessman Dev & Friends of PS Mountains A6612 Pacific Hospitality Group A6606 CAPS Collective A6588 People for Proper Planning A6520 Douglas Calvin A6486 Advocates for Better Community Dev A6395 Brandenburg Revocable Trust P SETTLEMENT AGREEMENT This Settlement Agreement ("Agreement") is entered into by and between the City of Palm Springs ("City"), CAPS Collective Apothecary, Inc. ("CAPS'), P.S. Metro, LLC, and 4070 Airport Center, LLC (P.S.Metro,LLC and 4070 Airport Center, LLC will sometimes be collectively referred to as the "Property Owners"). The City, CAPS and Property Owners are sometimes referred to herein individually as a "Party" and collectively as the "Parties." The Parties intend by this Agreement to resolve their disputes as between the City and CAPS, and the City and Property Owners, in the lawsuit entitled City of Palm Slrrings v Collective Apothecary Prescription Services. Riverside Superior Court Case No. INCO88918 ("Litigation"), including all claims raised by the City's Complaint against CAPS and Property Owners,and in CAPS'cross-complaint against the City. RECITALS WHEREAS, the Litigation involves enforcement of City's land use and zoning regulations regarding the use of certain real property located at 4050 Airport Center Drive, Palm Springs, CA ("Property')by CAPS and Property Owners; WHEREAS,the City of Palm Springs filed a civil Complaint against CAPS and P.S.Metro,LLC on or about August 20,2009; WHEREAS,the City of Palm Springs filed an amendment to its Complaint naming 4070 Airport Center,LLC as a Doe Defendant on or about March 23,2010; WHEREAS, 4070 Airport Center, LLC filed a Cross-Complaint for indemnity and other relief against CAPS and Sahar Amstat on or about September 13,2010, WHEREAS,CAPS filed a Cross-Complaint against the City on or about July 21,2011; WHEREAS, CAPS was approved via City Resolution No. 23127 for receipt of a regulatory permit for operation of a medical marijuana cooperative or collective by the City Council of the City of Palm Springs pursuant to Palm Springs Zoning Code section 93.23.15 et seq, on or about April 18,2012 (hereinafter referred to as the"Permit"); WHEREAS, CAPS receipt of said Permit was conditioned on CAPS continued compliance with the operational provisions of Palm Springs Zoning Code section 93.23.15 et seq. and the"Conditions of Approval"incorporated into Resolution No.23127;and WHEREAS,the purpose of this Agreement is to settle all existing disputes related to the litigation as to the followinng: 1. City's Complaint and all causes of action as against CAPS; 2. City's Complaint and all causes of action as against P.S. Metro,LLC; 3. City's Complaint and all causes of action as against 4070 Airport Center,LLC; 4. CAPS'Cross-Complaint and all causes of action as against City. WHEREAS, the Parties to this Agreement agree and understand that this Agreement does not resolve any disputes related to the Cross-Complaint of 4070 Airport Center, LLC against CAPS and Sahar Amstat;and 1 898601.1 WHEREAS, P.S. Metro, LLC and 4070 Airport Center, LLC agree and understand that this Agreement is not intended to and shall not modify, affect, terminate or release any preexisting or future rights,remedies,duties,debts or obligations between 4070 Airport Center,LLC and P.S.Metro,LLC. 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 1. The Parties' Obligations. a. CAPS'Obligations: (1) Costs. Fees and Civil Penalties. CAPS hereby agrees to pay to City the sum of fifteen thousand,five hundred dollars($15,500.00)as a settlement payment for the City's administrative costs, legal fees and civil penalty liability associated with the Litigation. CAPS shall pay the City seven thousand dollars ($7,000.00) within seven (7) business days of execution of this Agreement. Thereafter, CAPS shall pay the City Eight Thousand Five Hundred Dollars ($8,500)within one hundred eighty (180)calendar days of execution of this Agreement Without limiting the generality of the foregoing, CAPS waives any and all claims for attorneys' fees or costs they have or may have against the City related in any way to the Litigation. The payment of the civil penalties, costs,and fees above shall be made by a check payable to City of Palm Springs and sent to Woodruff,Spradlin&Smart, APC,555 Anton Boulevard, Suite 1200,Costa Mesa,CA 92626, (2) Compliance with PSZC chapter 93.23.15 Regulatory Permit and Conditions of ApPproval. CAPS agrees that it must and will, at all times, operate its medical marijuana cooperative/collective business in compliance with all provisions of Palm Springs Zoning Code("PSZC") chapter 93.23.15,and any amendments thereto. In addition,CAPS agrees that it must and will comply,at all times,with each and every condition of approval articulated in Palm Springs City Council Resolution 23127, and the "Conditions of Approval" incorporated into and made a part of said Resolution. Resolution No. 23127 and the referenced "Conditions of Approval" are attached to this agreement as Exhibit "A", and hereby incorporated by this reference. CAPS agrees that failure to comply with any provision of the Permit, the Resolution and Conditions of Approval (Exhibit "A"), the Palm Springs Municipal and Zoning Codes, and/or this Agreement, can and will result in permit revocation of the Permit pursuant to Palm Springs Zoning Code section 93.23.15(L)(4) and (5). CAPS understands and agrees that it cannot and will not operate as a medical marijuana cooperative, collective, or dispensary during any time that the Permit is suspended,revoked,or is otherwise not in good standing,and that such operation will constitute a breach of this agreement. (3) Stipulation for Entry of Judgment. CAPS will sign, contemporaneously with this Agreement,a Stipulation for Entry of Judgment in favor of the City. A true and correct copy of the Stipulation for Entry of Judgment is attached hereto as Exhibit"B". (4) Compliance with Condition of Approval ADM 3. Pursuant to Condition of Approval, ADM 3, of Resolution 23127, CAPS must reimburse the City all costs and expenses,including without limitation attorney's fees incurred by the City in the City's enforcement of its ordinances against CAPS prior to April 11, 2012 (See, Exhibit "A"). The Parties agree that CAPS' payment of the stuns described in section 1(a)(1)of this Agreement shall constitute full satisfaction of this provision of ADM 3,and serve as compliance with said condition of approval. 2 R9R601 I (5) Dismissal of Cross-Complaint. Within five(5)business days of the execution of this Agreement, CAPS will prepare and file a dismissal of its Cross-Complaint against the City,with prejudice. b. Property Owners' Obligations (1) Compliance with Palm Springs Municipal Code.Property Owner agrees that it will not permit, lease, or maintain the Property at any time for the use of a medical marijuana coo rative/collective business that is not in compliance with all of the provisions of the Palm J Pe P Springs Municipal Code and Palm Springs Zoning Code, specifically,Palm Springs Zoning Code section 93,23.15 and any and all amendments thereto. Further, Property Owner agrees that it will not permit, lease,or maintain any other property that it owns,manages,or otherwise controls within the City of Palm Springs for use as a medical marijuana cooperative/collective business that is not in compliant with the provisions of the Palm Springs Municipal Code and Palm Springs Zoning Code. (2) Eviction of Illegal Businesses. Property Owner agrees that in the event that it discovers,whether through its own discovery or notification by the City,that any tenant, occupant, or lessee of the Property, including CAPS, or any tenant, occupant or lessee of any other property owned, managed, or maintained by Property Owner in the City of Palm Springs is operating a medical marijuana cooperative/collective business which is not in compliance with the Palm Springs Municipal Code or the Palm Springs Zoning Code, it will immediately take all necessary steps to evict said medical marijuana cooperativelcollective business. Property Owner must pursue such eviction to completion within sixty (60) days of Property Owners' discovery of the illegal business. Nothing shall prevent the City from granting Property Owner an extension,in writing and at the City's sole option,if the City determines in its sole discretion that Property Owner has moved forward with eviction proceedings in good faith. The City understands and acknowledges that P.S.Metro,LLC does not have the legal right or standing to evict a tenant of 4070 Airport Center,LLC,and no such obligation is crested or implied by this Agreement. (3) Release of Claims. Property Owner hereby releases 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 Property Owner has 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. (4) Nothing in this Sections l(bx1)and/or 1(b)(2)of this Agreement shall be interpreted to impose a continuing obligation on Property Owner or any obligation on Property Owner's vendee/assignee/transferee once that Property Owner, in an arms length transaction, has sold, assigned,transferred,or otherwise divested itself of the estate which it now owns or holds in the Property. The parties hereto acknowledge and agree that Property Owner shall be released of all obligations under Sections l(bxl) and/or 1(b)(2) once that Property Owner, in an arms length transaction, has sold, assigned,transferred, or otherwise divested itself of its estate in the Property, and further agree that the obligations created by Sections(t)(b)(1)and l(bx2)do not`nun with the land." 3 899601 1 C. City's Obligations: (1) Notice of Settlement Upon execution of this Agreement and the Stipulation for Entry of Judgment, the City shall file a notice of settlement with the court requesting an Order to Show Cause re: Dismissal to be calendared for July 2013. Notwithstanding the foregoing, any Party may enforce the terms of this Agreement. (2) Dismissal of Action. (a) Upon (1) timely payment by CAPS of the sums described in paragraph 1(a)(l)of this Agreement,and(2)satisfaction of the prerequisites for operation of CAPS as a medical marijuana dispensary as outlined in Palm Springs Zoning Code section 93.23.15 et seq. and the Conditions of Approval referenced in Resolution 23127(attached hereto as Exhibit"A"),the City shall file a dismissal of its Complaint as against CAPS, with prejudice, subject to the Court's continuing jurisdiction to enforce the terms of this Agreement as discussed below. (b) Within five (5) business days of execution of this Agreement, the City shall prepare and file a dismissal of its Complaint as against P.S. Metro, LLC and 4070 Airport Center, LLC, with prejudice, subject to the Court's continuing jurisdiction to enforce the terms of the Agreement as discussed below. (c) The Parties understand and agree that the City's dismissal of this action shall not relieve CAPS of its ongoing duty to operate its business in compliance with the applicable provisions of the Palm Springs Municipal Code, the Palm Springs Zoning Code, Resolution 23127 and the Conditions of Approval adopted thereby, and this Agreement, including its obligation not to operate as a medical marijuana dispensary at any time when its Permit has been suspended, revoked, or otherwise invalidated. The Parties further understand and agree that the City's dismissal of this action shall not relieve Property Owner of its continuing obligation as described in paragraphs l(b)(1) and 1(b)(2) of this Agreement. The Parties further understand and agree that notwithstanding any dismissal of the City's Complaint, any failure on the part of CAPS or Property Owner, respectively, to comply with their continuing obligations as described in this Agreement shall constitute a breach of said Agreement 2. 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. 3. Entire Agreement This Agreement and its exhibits: (a)constitutes the entire Agreement between the City and CAPS, and the City and Property Owners, respectively, 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. 4. Benefited Parties. This Agreement shall be binding upon and inure to the benefit of each of the Parties and their respective representatives, heirs, devisees, successors and assigns. There shall be no third party beneficiaries. 5. 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 4 8v660i.1 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. 6. Waiver of Section 1542. Except as otherwise provided in the Agreement, City, CAPS, and Property Owners hereby mutually release and forever discharge each other and each of their elected and appointed officials, officers, board members, 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, attorneys heirs and assigns, from any and all matters, claims, complaints, charges, demands, damages, causes of action, debts, liabilities, controversies,judgments and suits of every kind and nature whatsoever, as of the date of this Agreement, arising out of the allegations in the City's Complaint and CAPS' Cross-Complaint. 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. Notwithstanding any language in this release provision which could be interpreted to the contrary, the parties to this agreement, and each of them, understand and agree that this general release is not intended to and shall not release any rights, claims, or causes of action between or among 4070 Airport Center,LLC,CAPS,and Sahar Amstat,including without limitation those claims,causes of action,rights and/or remedies asserted by 4070 Airport Center, LLC in its Cross-Complaint against CAPS and Sahar Amstat. Notwithstanding any language in this release provision which could be interpreted to the contrary, 4070 Airport Center, LLC and P.S. Metro, LLC understand and agree that this general release is not intended to and shall not modify, affect, terminate or release either parry of any preexisting rights, remedies, duties, debts or obligations which existed prior to the execution hereof, between 4070 Airport Center,LLC and P.S.Metro,LLC. 7. 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 allomeys 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 arry 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 5 xaxaoi t 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. 8. CAPS' Failure to Comply with Obligations. The original Stipulation for Entry of Judgment referenced in paragraph I(a)(3) of this Agreement shall be held by the City and shall not be filed unless there is a breach of the terms of this Agreement by CAPS. In the event of a breach, and subject to the notice and cure provisions described below, the City may move the Court, ex parte for an order entering judgment pursuant to the Stipulation for Entry of Judgment attached hereto as Exhibit`B". The City shall be entitled to its attorneys' fees and costs against CAPS and Sahar Amstat for bringing said ex parte motion. Upon successful payment by CAPS of the sums as described in paragraph ](a)(]), the City will forward the original Stipulation for Entry of Judgment to counsel for CAPS, which will then become null and void. The Parties understand and acknowledge that successful payment by CAPS of the sums described in paragraph l(axl) of this Agreement shall not relieve the Parties of any continuing obligations described herein. a. Before any judgment may be entered against CAPS, the City must first provide written Notice of Default to CAPS by sending said Notice of Default by First Class Mail to: Nicholas Jurkowitz Fenton Nelson 11835 West Olympic Blvd.,9ih Floor Los Angeles,CA 90064 b. CAPS shall have fifteen calendar days to cure such default after written notice is mailed. 9. 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 entailed signatures shall be deemed originals for all purposes hereof. 10. Authori . 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 terns of this Agreement, and that none of the claims being released herein have been previously assigned to any other person. IL Headings. Paragraph headings are for reference only and shall not affect the interpretation of any paragraph hereto. 12. No Inducement CAPS and Property Owners 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 Patties or their representatives, concerning the Litigation. CAPS and Property Owners further represents they have been represented by legal counsel during the course of the negotiations leading to the signing of this Agreement, and have been advised by legal counsel with respect to the meaning of this Agreement and its legal effect. [This section intentionally left blank. Agreement is continued on Page 71 6 898601.1 13. Effective Date. This Agreement to be final when signed by all Parties or their authorized representatives,and will be deemed effective as of the date CAPS signatures)(or those of its authorized representatives)is obtained. AGREED TO AND ACCEPTED AS OF THE EFFECTIVE DATE: CAPS Collective Apothecary,Inc. By By: 'title: P.es;Ault Title: A astoFa ey: chol LUM Fenton Nelson Attorney for C Collective Apoffiecary,Inc. City of Pairs Springs By. David H.Ready, City Mazmger,City of springs By: Douglas e.Holland ,City Attorney far the City of Palm Springs Woodruff,Spradlin&Smart,APC 4070 Airport Center,LLC P.S.Metro,LLC By: By: Title: Tibor Approved as to Form: By: Steven Dedina Attorney for 4070 Airport Center,LLC and P.S.Metro,LLC 7 a996ol.i