12-18 Resolution No. 12-18
RESOLUTION
AUTHORIZING EXECUTION OF A SETTLEMENT AGREEMENT
WITH THE CONTINENTAL INSURANCE COMPANY REGARDING THE
WATERFORD SUBDIVISION PERFORMANCE BONDS
(Neighborhood 5 and Neighborhood 6)
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that
David J. Kaptain, Mayor, and Kimberly A. Dewis, City Clerk, be and are hereby authorized and
directed to execute a Settlement Agreement with The Continental Insurance Company on behalf of
the City of Elgin regarding the Waterford Subdivision performance bonds relating to
Neighborhood 5 and Neighborhood 6, a copy of which is attached hereto and made a part hereof by
reference.
s/ David J. Kaptain
David J. Kaptain, Mayor
Presented: January 25, 2012
Adopted: January 25, 2012
Omnibus Vote: Yeas: 6 Nays: 0
Attest:
s/Kimberly Dewis
Kimberly Dewis, City Clerk
SETTLEMENT AGREEMENT
This Settlement Agreement is made and entered into as of the 25th day of January, 2012,
by and between the City of Elgin, Illinois, an Illinois municipal corporation(the "City"), and The
Continental Insurance Company ("CNA").
RECITALS
WHEREAS, Kimball Hill Homes, Inc. ("Kimball Hill") undertook to develop certain real
property in Elgin, Illinois, commonly known as the Waterford Subdivision, which Waterford
Subdivision is divided into Neighborhoods for the purpose of development; and
WHEREAS, to secure the construction of certain improvements in the Waterford
Subdivision, Kimball Hill procured and delivered to the City certain performance bonds
including the following performance bonds issued by CNA as surety: Bond No. 929297376
dated July 25, 2003, for certain onsite grading improvements for Neighborhood 6 of the
Waterford Subdivision; Bond No. 929297377 dated July 25, 2003, for certain onsite grading
improvements for Neighborhood 5 of the Waterford Subdivision; Bond No. 929297413 dated
September 26, 2003, for certain public improvements for Neighborhood 6 of the Waterford
Subdivision; and Bond No. 929297414 dated September 26, 2003, for certain offsite watermain
improvements related to Neighborhood 6 of the Waterford Subdivision (such four bonds being
hereinafter collectively referred to as the "CNA Bonds"); and
WHEREAS, Elgin has notified CNA that Kimball Hill was in default of its bonded
obligations and made demand upon the CNA Bonds; and
WHEREAS, the City and CNA have agreed to settle all issues involving the CNA Bonds
in accordance with the terms and conditions set forth in this Settlement Agreement.
NOW, THEREFORE, for and in consideration of the mutual undertakings as set forth
herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the City and CNA agree as follows:
1. The foregoing recitals are incorporated into this Agreement.
2. CNA shall pay to the City within ten (10) days of the execution of this Settlement
Agreement the sum of Five Hundred Five Thousand Dollars ($505,000) in full satisfaction of all
obligations under the CNA Bonds.
3. In consideration of the aforesaid payment of$505,000 from CNA to the City, the
City hereby completely, fully and finally releases, remises, acquits and forever discharges The
Continental Insurance Company, together with its parent, subsidiary and affiliated corporations,
their officers, directors, shareholders, employees, agents, attorneys and consultants, from any and
all claims, known or unknown, which have been or could have been asserted against any of them
directly or indirectly to the CNA Bonds, each of which named Kimball Hill Homes as principal
and related to the Waterford Subdivision Neighborhoods 5 and 6.
4. In further consideration of the aforesaid payment of $505,000 from CNA to the
City, the City hereby assigns to CNA its rights and remedies that it may have against Kimball
Hill with respect to the Neighborhood 5 or 6 improvements to the extent of such payment made
by CNA to the City. CNA agrees not to assert claims, including lien claims, against any party or
entity (other than against Kimball Hill) with respect to the payment made by CNA to the City.
5. CNA for itself, its parent, subsidiary and affiliated corporations, and successors
and assigns, and any and all persons or entities claiming through CNA, jointly and severally,
hereby fully and irrevocably releases and discharges the City, its attorneys, agents, contractors,
assigns, officers, officials, council members and employees, jointly and severally, from all
manner of liability or loss, claims, liens, causes of actions or demands, of any nature, whether in
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law or in equity, known or unknown, which CNA now has or may have arising out of or related
to the CNA Bonds or the Waterford Subdivision. CNA further agrees not to assert any claims,
including lien claims, against any party or entity (other than Kimball Hill) with respect to
payments made by CNA with respect to the CNA Bonds.
6. The City agrees to deliver to counsel for CNA the original CNA bonds within
thirty (30) days after the receipt by the City of the aforesaid payment from CNA of$505,000.
7. The City may use the aforesaid payment of$505,000 for any lawful purposes that
it deems appropriate, in its sole discretion, including, but not limited to, with respect to
improvements, costs and expenses in connection with the Waterford Subdivision.
8. This Settlement Agreement contains the entire understandings and agreements of
the parties hereto with respect to the subject matter hereof. All oral or written agreements prior
to the effective date of this Settlement Agreement and which relate to the Settlement Agreement
and the matters set forth herein are declared null and void. Any modification of this Settlement
Agreement must be made in writing and executed by the parties hereto.
9. Any notice related to this Settlement Agreement shall be deemed made if either
party emails such notice or mails such notice by first class mail, postage prepaid, as follows:
As to the City of Elgin:
William A. Cogley
Corporation Counsel
City of Elgin
150 Dexter Court
Elgin, IL 60120-5555
Tel.: (847) 931-5659
Fax: (847) 931-5665
e-mail:co ley w cr,cityofelgin.org
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As"to The Continental Insurance Company:
Jerome C. Gardocky, Esq.
Senior,Claims Counsel
.333 South Wabash Avenue
4151 Floor
Chicago, Illinois 60604-4107
Tel: (312) 822-3673
Fax: (312) 755-7276
e-(nail:jerome.gardocky @cnasurety.com
With,,a,copy to:
Ilarold E. McKee
Riordan McKee&.Piper, LLC
20 N. Wacker Drive
Suite 910
Chicago, Illinois 60606
e=mail: hmckee a,rmp-llc.com
10. It is understood and agreed by the City and CNA that this Settlement Agreement
shall be construed without regard to any presumption or other rule requiring construction against
the drafting party.
11. This Settlement Agreement may be executed in counterparts. Signatures
transmitted by facsimile or e-mail shall have the same legal effect as an original signature.
12. The parties agree that no third party shall have any rights under.this Agreement.
13. This agreement shall be governed by the laws of the State of Illinois.
IN WITNESS WHEREOF,the parties have executed this Settlement Agreement as of the
date and year first written above.
CITY OF ELGIN, an.Illinois municipal THE CONTINENTAL INSURANCE
Corporation, COMPANY,
By: By:
Its Mayor ts-
ATTEST:
City Clerk
F:Legal QepBAgreementl5etilemenr Agreement-CNA(Kimball Hill)-Waterford Nbads5&6.doc
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As to The Continental Insurance Company:
• Jerome C. Gardock Y Es q.
.q
Senior Claims Counsel
333 South Wabash Avenue
41" Floor
Chicago, Illinois 60604-4107
Tel: (312) 822-3673
Fax: (312) 755-7276
e-mail:jerome.gardocky @cnasurety.com
With a copy to:
Harold E. McKee
Riordan McKee & Piper, LLC
20 N. Wacker Drive
Suite 910
Chicago, Illinois 60606
e-mail: hmckee@,rmp-llc.com
10. It is understood and agreed by the City and CNA that this Settlement Agreement
shall be construed without regard to any presumption or other rule requiring construction against
• the drafting party.
11. This Settlement Agreement may be executed in counterparts. Signatures
transmitted by facsimile or e-mail shall have the same legal effect as an original signature.
12. The parties agree that no third party shall have any rights under this Agreement.
13. This agreement shall be governed by the laws of the State of Illinois.
IN WITNESS WHEREOF, the parties have executed this Settlement Agreement as of the
date and year first written above.
CITY OF ELGIN, an Illinois municipal THE CONTINENTAL INSURANCE
Corporatio COMPANY,
By: By:
Its Mayory Its
ATTE T:
• City Clerk
FAUgal Dept\Agreement\Settlement Agreement-CNA(Kimball Hill)-Waterford Nbads 5&6.doc
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