Power Coatings, LLC Settlement Agreement Copyright 2014
City of Dubuque Consent Items # 14.
ITEM TITLE: Power Coatings, LLC Settlement Agreement
SUMMARY: Senior Counsel Lindahl recommending approval of a
settlement agreement of this case which is pending in the
Iowa District Court for Dubuque County.
SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Approve
ATTACHMENTS:
Description Type
Staff Memo Staff Memo
Settlement Agreement and Mutual Release Supporting Documentation
HE CITY OF
DUB
E MEMORANDUM
Masterpiece on the Mississippi
BARRY LINDAHL
SENIOR COUNSEL
To: Mayor Roy D. Buol and
Members of the City Council
DATE: January 17, 2017
RE: City of Dubuque v. Power Coatings, LLC
The purpose of this memorandum is to recommend approving a settlement agreement
of this case which is pending in the Iowa District Court for Dubuque County.
The City of Dubuque (City) and Tricon General Construction (Tricon) entered into a
contract in August 2005 for the Third Street Overpass Decorative Railing Project. The
Project provided for the removal of the existing chain-link fence and the custom
fabrication and installation of a decorative railing along the south side of the Third Street
overpass pedestrian sidewalk. The specifications required a powder coating finish for
the railing. The specification for the powder coating was developed with the assistance
of Power Coatings, LLC (Power Coatings), a specialty firm from Janesville, Wisconsin.
Tricon subcontracted the manufacture of the railing to Giese Manufacturing Company,
Inc. (Giese). Giese subcontracted the powder coating to Power Coatings.
Manufacture and installation of the railing was completed in 2006.
Peeling and flaking paint issues with the railing were first observed in 2009. Power
Coatings handled the paint repairs in 2009. Paint failure was again discovered in 2010.
However, the City did not pursue the matter with Power Coatings between 2010 and
2013.
In 2013 there were discussions between Power Coatings and the City and a series of
proposals by Power Coatings to pay for sandblasting and repainting of the railing, but
no agreement was ever finalized between the City and Power Coatings.
OFFICE OF THE CITY ATTORNEY DUBUQUE, IOWA
SUITE 330, HARBOR VIEW PLACE, 300 MAIN STREET DUBUQUE, IA 52001-6944
TELEPHONE (563)583-4113/FAX (563)583-1040/EMAIL balesq@cityofdubuque.org
The file was turned over to the City Attorney's Office in 2014. The cost of the repainting
was estimated to be around $50,000. The cost of removing and reinstalling the railing
was estimated to be around $41 ,000.
Based on the failure to reach an agreement with Power Coatings, the City filed the
lawsuit in 2015.
Power Coatings has raised the following defenses to the City's claims:
1 . There never was any contract between the City and Power Coatings.
2. The City unreasonably delayed making the claim against Power Coatings which
prevented it from being able to "assess and remedy" the problem.
3. The City failed to take steps to mitigate the damage to the railing, presumably by
repairing it earlier on, which allowed the railing to deteriorate further.
Power Coatings also brought Giese into the lawsuit, claiming that if Power Coatings is
at fault for the defective paint, Giese should pay for the damages since Power Coatings
was a subcontractor of Giese. Giese has denied any responsibility for the defective
paint.
Power Coatings and Giese have offered to settle the City's claims for $30,000. The
proposed settlement agreement is attached.
Considering the issues raised by Power Coatings and the uncertainty of the results of a
lawsuit, I recommend accepting the $30,000 settlement proposal.
BAL:tls
Attachment
Cc: Michael C. Van Milligen, City Manager
Crenna M. Brumwell, City Attorney
Gus Psihoyos, City Engineer
Bob Schiesl, Assistant City Engineer
F oUsersOsteckleALindshrPower Coatings-3rd Street Overpass RailingsVQty vs.Power Coatings LLCWIayorCouncil_SetilementProposal02061 7Agenda_011717 doc
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SETTLEMENT AGREEMENT AND MUTUAL RELEASE
THIS AGREEMENT is made by and among the City of Dubuque ("the City"), Power
Coatings, LLC ("Power Coatings") and Giese. Manufacturing Company, Inc. ("Giese"),
collectively described herein as "the Parties."
RECITALS
A. The City has initiated a lawsuit against Power Coatings in the Iowa District Court in and
for Dubuque County, Case No. 01311LACV103692 ("the Lawsuit")
B. Giese is a third -party defendant in the Lawsuit.
C. The Lawsuit relates to claims among the Parties concerning the design, fabrication, and
construction of the railing ("the Railing") on the 3rd Street Overpass Bridge in the City of
Dubuque.
D. The Parties have resolved the claims among themselves that have resulted in the Lawsuit.
NOW, THEREFORE, upon the above recitals and the mutual covenants contained herein, the
Parties agree as follows:
1. Payment. Power Coatings shall forthwith pay over to the City the sum of $20,000, and
Giese shall forthwith pay over to the City the sum of $10,000 in full and final settlement
of any and all claims held by the City against Power Coatings and Giese.
2. Dismissal. Upon payment of the sums recited above the City shall dismiss with prejudice
the petition in the Lawsuit and Power Coatings shall dismiss with prejudice its cross -
petition in the Lawsuit.
3. Mutual Release. Upon payment of the sums set forth in Paragraph 1 above, the Parties shall
be deemed to have irrevocably and unconditionally released, acquitted, and forever
discharged one another and one another's affiliates, officers, employers, employees,
agents, representatives, attorneys, successors, and assigns from any and all claims, charges,
complaints, liabilities, obligations, promises, agreements, controversies, damages, actions,
causes of action, suits, rights, demands, costs, losses, debts, expenses, and attorney's fees,
whether known or unknown, that any one party has, may have, owns, holds or could claim
in the future to have against any other party arising out of the Railing, any contract relating
to the Railing and any work done by Power Coatings and Giese in relation to the Railing.
4. No Reliance. The Parties expressly acknowledge that they are entering and agreeing to the
terms of this Agreement based on their own independent investigation of relevant facts and
circumstances, in the exercise of their own judgment, and that no party has relied or is
relying in any manner or to any extent upon any representations, statements, or other
communications, whether or not written, whether by any party, agent or attorney of any
party executing this Agreement.
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5. Entire and Binding Agreement. This Agreement embodies the entire agreement among the
Parties and shall be binding on and inure to the benefit of these Parties, their respective
legal representatives, agents, employees, heirs, successors, and assigns.
6. Execution. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same
instrument. This Agreement may be executed by a facsimile or other electronic signature.
7. Authority to Bind. Each person signing this Agreement represents and warrants that he or
she is duly authorized and has legal capacity to execute and deliver the Agreement. Each
party represents and warrants to the other that the execution and delivery of this Agreement
and the performance of such party's obligations hereunder have been duly authorized and
that this Agreement is a valid and legal agreement binding on such party and enforceable
in accordance with its terms.
IN WITNESS WHEREOF the Parties have entered into this Agreement by and through the
undersigned authorized officers, effective as of the latest date set forth below.
DATE: 211 Ir?
THE CITYI DUBUQUE
By:
APPROV
By:
4 -
Barry A. Lindahl, City Attorney
DATE: PO4/ER COAT
By:
GS, LC
Robert J. Sullivan, President
APPROV COUNSEL:
NOWN& IUAT
By:
2
Davi cf C. Moore
DATE: l - i 7
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GIESE MANUFACTURING COMPANY,
INC.
By:
APPROVAL BY COUNSEL:
KANE, NORBY & REDDICK, P.C.
By:
Todd L. Stevenson