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BCC Minutes 11/01/2005 Closed Session (United Engineering Corporation) November 1, 2005 TRANSCRIPT OF THE CLOSED ATTORNEY-CLIENT SESSION OF THE BOARD OF COUNTY COMMISSIONERS Naples, Florida November 1, 2005 ***Item 12A *** Settlement negotiations and/or strategy related to litigation expenditures in the case of Collier County vs. United Engineering Corporation, case number 04-3363-CA, pending in the Twentieth Judicial Circuit in and for Collier County, Florida. The following members were present: CHAIRMAN: Fred W. Coyle Frank Halas Donna Fiala Jim Coletta ALSO PRESENT: Jim Mudd, County Manager David Weigel, County Attorney Paul Ullom, Esquire, of Carlton Fields Page 1 November 1,2005 Item #12A TO DISCUSS SETTLEMENT NEGOTIATIONS AND/OR STRATEGY RELATED TO LITIGATION EXPENDITURES IN THE CASE OF COLLIER COUNTY V. UNITED ENGINEERING CORPORATION, CASE NO. 04-3363-CA, PENDING IN THE TWENTIETH JUDICIAL CIRCUIT IN AND FOR COLLIER COUNTY, FLORIDA. ATTENDING: BOARD OF COUNTY COMMISSIONERS; COUNTY ATTORNEY DAVID C. WEIGEL; CHIEF ASSISTANT COUNTY ATTORNEY MICHAEL W. PETTIT; PAUL ULLOM, ESQ.; COUNTY MANAGER JAMES V. MUDD. CHAIRMAN COYLE: The closed session is finally in session. MR. PETTIT: Well, good afternoon. We're here today under the auspices of section 286.0118 which authorizes us to meet in closed session to discuss settlement negotiations and litigation expenses in this case related to the Collier County versus United Engineering Corporation case. That's case number 04-3363, which is now pending in our Circuit Court. That arises out of issues that occurred during the construction of the South Water Treatment Plant Expansion, which was recently completed -- substantially completed, I believe, in December '04, and is finally completed now. A couple ground rules. As you know, no final decision may be made in closed session on any matter. If final decision is to be made on any matter, you need to go to open session to do that. This is an opportunity for you to meet with your attorneys. And with me is Paul Ullom, our outside counsel, who's been the lead litigation counsel on this case to date, working with me kind of as associate, if you will, and I'm going to turn it over to him in a moment. I want to make two other points. We have disputes right now in Page 2 November 1,2005 this case or in this matter, I should say, with our engineer, Metcalf & Eddy, and they have disputes with us. They are not a party to the litigation we're here to talk about. Weare not in litigation with them yet; and therefore, any discussion about those disputes and direction we are going to seek from you will occur out in the open session. Finally, as you can see, we have a court reporter here. All the minutes of this discussion will be transcribed, and if we reach a resolution, whether through trial or settlement of the dispute with the contractor, United Engineering Corporation, those minutes then will be available for the public. So with that I'll let Paul get into the settlement negotiations as they stand. MR. ULLOM: Okay. Thank you, Mike. Commissioners, as you know, we have discussed this matter and gone through three separate analyses of how the dollars shake out on this project analysis and contract to contract analysis and a litigation analysis. We -- since we have an offer on the table from the contractor, UEC, let me just focus on the litigation analysis for you. We paid the follow-on contractor $4.3 million in excess of the contract balance we had. You had almost a million-two in county-initiated change work. You're entitled to the litigation -- to liquidate the damages in the litigation, should you go forward with a million, 152. And there are valid offsets for certain claims of the contractor. The long and short of it is, you have $1,800,000 on the table, and that is a lump sum offer. Initially when we negotiated this, it was going to be occurring on a monthly basis, and the contractor, in order to have their bonding capacity, decided to go ahead and basically either borrow or redistribute assets and come up with all the money you want up front. I can tell you, after 18 years of representing public bodies -- and I Page 3 November 1,2005 have done construction work for six different counties in Florida and a number of other public bodies, school boards, et cetera -- this is a very good settlement; this is a very good resolution of this claim. Now, I'm fully aware that from the standpoint of an aggrieved public body -- and that's what you are really. I mean, you did not __ you were not treated fairly. The contractor did not live up to their obligations here. It isn't satisfying, but my job is to tell you what there is compensable to you in the real world at a trial. And in this instance, I think you're probably well over 60 percent of what you would be able to obtain if you paid the money to go through a trial. At that point, resolution becomes somewhat compelling, I think. And so I would recommend to you, and I will say without hesitation, that you accept this million-eight to resolve your claims against the contractor for this claim, learn the lessons that are available to us, and move on. CHAIRMAN COYLE: Questions, anybody? (No response.) CHAIRMAN COYLE: Okay. We're going to make a motion then. MR. WEIGEL: Well, not in here. CHAIRMAN COYLE: I mean back in open session. COMMISSIONER HALAS: For approval of this. CHAIRMAN COYLE: That we will approve the settlement offer. MR. ULLOM: Yes. CHAIRMAN COYLE: Or settlement recommendation by you. MR. ULLOM: It's a recommendation to accept an offer that has been made. CHAIRMAN COYLE: Okay. So the offer has been made. So we will -- somebody will make a motion in open session then to do that. Page 4 November 1,2005 MR. PETTIT: To make -- MR. MUDD: Now, the Metcalf & Eddy piece, we wait till-- MR. PETTIT: At the open session, you have an opportunity to make a decision on the settlement situation with UEC. Then I will address you briefly on Metcalf & Eddy. MR. WEIGEL: And just as an aside, I appreciate Paul's recommendation to us, whatever the recommendation may be. You may recall, and should, that Paul was chief outside counsel and argued our Immokalee Road discretion contract case, and you all saw him arguing in court to the judge, and we, of course, had a winning opinion from Judge Schoonover in that case. So it's not a question of not litigating or avoiding litigation, as the case may be, in the courtroom. And I appreciated his assistance before, and certainly I do very much in this case, too. It's been a long time getting to this point. And your recommendation is taken very carefully. MR. ULLOM: Thank you. CHAIRMAN COYLE: And, of course, the lawyer is waiving his fees on this? Is that also incorporated in the motion? MR. WEIGEL: Well, he reminds us that the fees would be a lot larger if we went forward with the litigation. MR. ULLOM: I'm prepared to substitute in the 33 percent contingency on this million-eight. COMMISSIONER COLETTA: Christmas is still two months off. MR. ULLOM: Thank you all. MR. PETTIT: All right. Thank you. (The closed-session proceedings were concluded.) Page 5 November 1,2005 ***** There being no further business for the good of the County, the Closed-Session meeting was adjourned. BOARD OF COUNTY COMMISSIONERS BOARD OF ZONING APPEALS/EX OFFICIO GOVERNING BOARD(S) OF SPECIAL DISTRICTS UNDER ITS CONTROL ~w.~ FRED COYLE, Chairman ATTEST; :,~~', .... . DWIGl!T'~:-BROC.K, CLERK ~, \ ,,,0 '. '~I~e. AttKl...'to Ch.,rau , s1onaiur. onl. These minutes approved by the Board on presented ~I \ -7 JStf.D or as corrected ~ , as TRANSCRIPT PREPARED ON BEHALF OF GREGORY COURT REPORTING SERVICE, INC. BY TERRI LEWIS. Page 6 _....,-~-~,-,- ...... .... - .,..,.--....,--.