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Main St Buildings LitigationBARRY A. LINDAHL, E~. CORPORATION COUNSEl,I CITY OF DUBUQUE MEMO TO: Mayor Terrance Duggan and Members of the City Council DATE: June 23, 2003 RE: Main Street Buildings Litigation Dear Mayor and Council Members: As Les Reddick previously reported to you, a tentative settlement agreement was reached with the Plaintiffs in the Main Street Buildings lawsuit. To avoid public disclosure of the settlement while the case was still pending, we have waited until now to request formal City Council approval of the terms of the agreement. The terms of the agreement are as follows: The Iowa Communities Assurance Pool and the insurer for Conlon Construction Company will each contribute $150,000.00 to the settlement. 2. The City will forgive loans to the property owners which were used for operating expenses and temporary shoring of their buildings in the amount of $122,165.78. In connection with the claim of Steven Althoff for damage to his building caused during the demolition of the former Dolan building, the City had previously agreed to pay for the cost of a replacement fire escape as well as weatherproofing the south wall of the Althoff building, but no dollar figure had been agreed on. Mr. Althoff has now agreed to accept the sum of $65,000.00, which will be used in part to take remedial action as required by the Building Department to close up the rear of the building. I would request City Council approval of the terms of the settlement agreement and that the Finance Department be directed to issue a draft in the amount of $65,000.00, payable to Steven Althoff, MM&H Corporation and Steve Davis. Attachment cc: Michael Van Milligen, City Manager Cindy Steinhauser, Assistant City Manager Ken TeKippe, Finance Director Les Reddick, Esq. SUITE 330, HARBOR VIEVV PLACE, 300 MAIN STREET DUBUQUE, IA 52001-6944 "~ TELEPHONE (563) 583-4113 / FAX (563) 583-1040 / EM. AIL BALESQ~C1TYOFDUBUQUE.ORG Brian J. Kane Gary K. Noxby Les V. Reddick* D. Fl~t Drake** Brad J. Heying Todd L Stevenson* MaryBeth p£eiier Fleming Kerln T. Deeny All admitted in Iowa *Also admitted in BI{noN **Also admitted in Wisconsin KANE, NORBY & REDDICK, P.C. ATTORNEYS 2100 ASBURY ROAD, SUITE 2 DUBUQUE, IA 52001-3069 Of Counsd: Lo~s P. P feiler Phone: (563) 582-7980 Facsimile: (563) 582-5312 E-maik keddickO~amenorbylaw.com June 20, 2003 Mr. Barry A. Lindahl Corporation Counsel Harbor View Place, Suite 330 300 Main Street Dubuque, iA'~'52001a6944 RE: CONLON cONstRUcTION M~TTER Dear Barry.: The Main Street owners' attorney has requested that the City forgive the outstanding loans for his clients. These loans were made to assist the property owners during the closure of their businesses and to assist in providing shoring while the lawsuit was proceeding. It was my understanding during the settlement discussions that Mike and Cindy would recommend to the Council the forgiveness of these loans. Cindy can provide the exact mount. Would you please submit this to the City Council. As the verdicts turned out its doubtful that 'these loans could be repaid and the buildings repaired with the amount the owners received. For example, by the time Willis pays her share of expenses and attorneys' fees, if she had to repayher loan, which I believe is $43,000, she would end up with less than $100,000. I can also report what probably is going to happen with post-trial evems. Plaintiffs' counsel has requested that the Court extend the time to file post-trial motions to July 15, 2003. It is my sense fi.om talking to the various attorneys that none of the.Defendants will appeal, with the possible exception~.~fMaxim: ! also doubt that the property Owners will appeal. That will not only add anoth~ year an(~ a half without getting paid, but there probably is not anyrealisfic hope of getting the ;¢$rdict ~versed 0n'anY of the issues that came up during the trial. So it may be that all of the KANE, NORBY & REDDICK, P.C. June 20, 2003 Page 2 various parties will pay their respective settlements or judgments to the Plaintiffs and Maxim may appeal the 30% fault found against it, although I think that appeal would be fruitless, as well. I should also explain the posture of the Maxim cross-claim against the City of Dubuque. Maxim's claim was that the City entered into a written contract wb_ich provided an indemnification provision requiring the City to pay for any share of Maxim's fault. There is a proposal with indemn/fication language in it but it was never agreed to by anyone on behalf of the City, it never went before the City Council, it was not signed and in my view there is no evidence that the City entered it. Nonetheless, the jury found that the City agreed to the applicable language. However, that is simply a factual finding as to who hired Maxim, it does not mean that we have to indemn/fy Maxim. That issue will be put before Judge Fautsch by motion. I will file our Motion the week of June 23, 2003, Maxim will respond and the Court will then decide whether the contract is enforceable and whether it actually does require indemnification. It is my feeling that (1) the evidence does not support the verdict, (2) the contract is legally unenforceable because it was not approved by the City Council and (3) the contract language itself would not require indemnification under the facts of tiffs case. The City has insurance coverage for this claim. Best regards. Very truly yours, KANE, NOR.BY & REDDICK, P.C. LVRfomo Les V. Reddick Brian J. Kane Ga~ K. Norby Les V. Reddick* D. Flint Drake** Brad J. Heying Todd L. Stevenson* MmyBeth Pfeiler Fleming Kevin T. Deeny Ail admitted in Iowa *Also admitted in Ill/noN **Also admitted in Wisconsin KANE, NORBY & REDDICK, P.C. ATrOllNEYS 2100 ASBURY ROB_D, SUITE 2 DUBUQUE, IA 52001-3069 Of COunsel: Louis P. Pfeiler Phone: (563) 582-7980 Facsimile: (563) 582-5312 E-mail: keddick~kanmaorbylaw, com June 19, 2003 Mr. Barry A. Lindahl Corporation Counsel Harbor View Place, Suite 330 300 Main Street Dubuque, IA 52001-6944. .. . ~: CONLON CONSTRUCTION MATTER Dear Barry: Part of the settlement of the various claim.q against the City of Dubuque involved Count Xll ofthe Petition. This was a count brought only by Steve Althoff for damages caused to the south wall of the Silver Dollar during demolition of the Dolan Building. This involved replacement of a damaged fire escape as well as weather proofing the south wall which went from an interior wall to an exterior wall With the demolition. In October, 2000, the City agreed that it would do that work, however, because of the subsequent cracking and lawsuit, as well as the dispute over the cost, the work was never done. Originally, AlthofFs engineer was getting estimates of $150,000 or'more to do this work. As we.settled the crock case, we agreed to recommend payment to Althoffof$65,000 to settle Count XIL that includes approximately $20,000 for the fire escape and the remainder for waterproofing and weatherizing the south wall. Given the fire, we agreed that he could and should use some of that money to take remedial actions as required by the Dubuque Housing Department with respect to the rear of the Silver Dollar, which has parts open. I have ordered drafts from the insurance company to resolve the main case and if the $65,000 is approved bythe City Council, I would appreciate your forwarding the draft and I will obtain the appropriate releases and dismissal. The 'draft should be made payable to Steve Althoff, MM&H Corporation and Steve Davis. June 19, 2003 Page 2 LVRJbmo Best regards. KANE, NORBY & REDDICK, P.C. Very Ixuly yours, KANE, NORBY & REDDICK, P.C. Les..¥.