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..¥.