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Adult Entertainment Settlement_The OfficeTHE CITY OF DUB E MEMORANDUM Masterpiece on the Mississippi JAMES (TIM) A. O'BRIEN, ESQ. ASSISTANT CITY ATTORNEY To: Mayor Roy D. Buol and Members of the City Council DATE: April 27, 2009 RE: The Office Over the past several weeks we have engaged in discussions with one of the owners of The Office. Those discussions have revolved around an agreement under which The Office would close on or before July 1, 2009 and the property would be leased to another party who would open anon-adult entertainment facility. As a result of the discussions we have entered into a tentative Settlement Agreement, subject to City Council approval under which The Office would close, the pending lawsuit by The Office and related parties against the City of Dubuque would be dismissed and the principals of The Office would agree not to open any adult entertainment establishment or similar sexually oriented business in the City of Dubuque. In addition, the City and its insurance carrier would each pay a settlement amount of $15,000 to The Office. A copy of the proposed Settlement Agreement is attached hereto along with the proposed Stipulation of Dismissal. We recommend that you approve this settlement including the payment of the settlement amount to The Office. We recommend the payment of this settlement amount despite our confidence that the City would prevail in the litigation because the continuation of the litigation to conclusions would result in the expenditure of a greater amount in attorneys fees, costs and staff time than the settlement amount. The dismissal of the lawsuit with prejudice is also likely to have a positive impact in terms of any future litigation which might be brought by another adult entertainment establishment challenging the City ordinance. JAO:tIs Attachment SETTLEMENT AGREEMENT The City of Dubuque and its affiliated entities, elected officials, directors, officers, employees, agents, and assigns (collectively "the City") and Dubuque Operating, LLC, an Iowa limited liability company on behalf of itself, its heirs, executors, related entities, successors, and assigns, as well as Dubuque Parking, LLC an Iowa limited liability company on behalf of itself, its heirs, executors, related entities, successors, and assigns, (as used herein, "The Office" applies to Dubuque Operating, LLC and Dubuque Parking, LLC, both jointly and severally), hereby enter into this settlement agreement, general release, and covenant not to sue (the "Agreement"). The parties agree as follows: A. To enter the attached Stipulation of Dismissal, which is incorporated herein by reference, in N.D. Iowa Case No. 08-1018 (the "Action"), with each party to bear its own legal fees, costs, and expenses. B. The Office agrees to fully and forever release, acquit, and discharge the City, and its affiliated entities, elected officials, directors, officers, employees, agents, trustees, and administrators, contractors, consultants, and attorneys, whether past, present, or future, and all predecessors, heirs, executors, successors, and assigns thereof, ("Released Parties") from any and all liability whatsoever, including all claims, demands, agreements, restraints, and causes of action of whatever kind, whether in law, equity, or otherwise, and whether now known or unknown or which have ever existed or now exist, whether the subject of The Office claims in the Action or otherwise, relating to or arising out of The Office's operation in Dubuque, Iowa. C. The Office covenants not to sue or to institute or cause to be instituted any kind of claim or action (except to enforce this Agreement) in any federal, state, or local agency or court against any of the Released Parties related to, arising out of, or attributable to The Office or the ordinances challenged in the Action. The Office agrees to permanently close its Dubuque adult entertainment business at 4292 Dodge Street on or before July 1, 2009 and not to open any other adult entertainment establishment or similar sexually oriented business in the City of Dubuque. D. In settlement of the disputed claim by The Office against the City, the City agrees to pay The Office the sum of Thirty Thousand Dollars ($30,000.00) within seven (7) days after The Office closes its business in Dubuque in accordance with Paragraph C above. E. The provisions of this Agreement shall be construed in accordance with Iowa law. F. The Office warrants and represents that it has neither made nor suffered to be made any assignment or transfer of any right, claim, demand, or cause of action covered by the above release or covenant not to sue and that The Office is the sole and absolute owner of all thereof and that The Office has not filed or suffered to be filed on its behalf any claim, action, demand, or other matter of any kind covered by the above release or covenant not to sue as of the date and time of the execution of this Agreement other than that expressly noted herein. G. This Agreement shall not be assigned by either party, and the Agreement shall forever bind the City and The Office as well as their owners, shareholders, partners, principals, officers, successors, and heirs. H. In the event that any paragraph, subparagraph, or provision of this Agreement shall be determined to be contrary to governing law or otherwise unenforceable, all remaining portions of this Agreement shall be enforced to the maximum extent permitted by law; the unenforceable paragraph, subparagraph, or provision shall first be construed or interpreted, if possible, to render it enforceable, and, if that is not possible, then the provision shall be severed and disregarded, and the remainder of this Agreement shall be enforced to the full extent permitted by law. The Office acknowledges that its representative, Tim Baldwin, has read this Agreement, that he has the ability to fully bind The Office, that he fully understands and appreciates the meaning of this Agreement, that it fully reflects the entirety of the agreement between the parties, that no representation, inducement, or warranty has been made to The Office by or on behalf of the City except as set forth herein, that he, acting on behalf of The Office, has been advised to consult and has consulted competent legal counsel of The Office selection with respect to this Agreement, and that he, on behalf of The Office, KNOWINGLY and VOLUNTARILY enters into this Agreement and agrees to comply with its terms and conditions. Executed this day of May, 2009. ®UBUQUE OPER,4TIIVG, LLC BY: CI1°Y OF ®lJ QU, 101A/A BY: ~ ~ . ®UBUQUE P,4RKIIVC, LLC BY: 2 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF IOWA EASTERN DIVISION DUBUQUE OPERATING, LLC, et al. ) CASE NO. 08-1018 Plaintiffs, ) STIPULATION FOR v. ) DISMISSAL CITY OF DUBUQUE, et al., ) Defendants. ) The parties stipulate that this cause be dismissed with prejudice with respect to Plaintiffs Dubuque Operating, LLC and Dubuque Parking, LLC and without prejudice with respect to Plaintiff Travis Cliburn. This stipulation entered pursuant to Rule 41(a)(1)(A)(ii). JOHN O. MOELLER 601 BRADY STREET, SUITE 303 DAVENPORT, IOWA 52803 (563) 323-3014 (563) 323-9403 /s/ WILLIAM A. WICKETT JASON W. MILLER 505 FIFTH AVENUE, STE. 729 DES MOINES, IA. 50309 (515)283-2147 J. MICHAEL HURRAY (Ohio Reg. 0019626) STEVEN D. SHAFRON (Ohio Reg. 0039042) BERKMAN, GORDON, HURRAY & DeVAN 55 PUBLIC SQUARE SUITE 2121 CLEVELAND, OHIO 44113-1949 (216) 781-5245 (216) 781-8207 (fax Attorneys for Plaintiffs CERTIFICATE OF SERVICE: The undersigned certifies that the foregoing Stipulation for Dismissal was served upon all counsel of record and pro se parties by electronic service by filing this document with the Clerk of Court using the ECF system on the day of April 2009, which will send notification to the following. Dubuque Operating, LLC, et al v. City of Dubuque, et al Page 2 William A. Wickett Jason W. Miller Counsel for Defendants Patterson Law Firm 505 Fifth Avenue, Ste. 729 Des Moines, IA 50309 Scott D. Bergthold, PLLC 8052 Standifer Gap Rd. Suite C Chattanooga TN 37421 /s/John O. Moeller