Agenda 07/22/2008 Item #16K10Agenda Item No. 16K10
July 22, 2008
Page 1 of 3
EXECUTIVE SUMMARY
Recommendation that the Board of County Commissioners accept Metcalf & Eddy, Inc.'s
( "M &E ") offer of judgment to dismiss M &E's counterclaims against Collier County and
the Collier County Water Sewer District (collectively "County ") in the lawsuit styled
Collier County and the Collier County Water -Sewer District v. Metcaf & Eddy, Inc. and
Travelers Casualty and Surety Co. of America, Case No. 06- 234 -CA, in return for the
County's payment of $125,000.00, and to accept M &E's settlement offer to pay the County
$25,000.00 in return for a dismissal of the County's claims against M &E and its surety,
Travelers. (Fiscal Impact $67,000.00)
OBJECTIVE: That the Board of County Commissioners accept M &E's recently served offer
of judgment to dismiss M &E's claims against the County in return for the County's payment of
$125,000.00, and to accept M &E's settlement offer to pay the County $25,000.00 in return for
the dismissal of the County's claims against M &E and its surety, Travelers Casualty and Surety
Co. of America, in the above - referenced lawsuit involving claims and counter - claims arising out
of M &E's provision of design -build services in connection with the wellfield expansion of the
North County Regional Water Treatment Plant ( "North Plant" or "the project ") in 2002 and 2003.
CONSIDERATIONS: The County filed suit against M &E on February 14, 2006, seeking to
collect damages under a design -build contract entered into on February 26, 2002. The County
claims that M &E provided deficient design -build services in connection with the wellfield
expansion of the North Plant in 2002 and 2003. M &E counterclaimed for extra work performed,
alleging that the County's refusal to execute change orders on three major project issues (power
supply spikes, current to ground, and addressing hydraulic problems caused by the County's
operation) constitutes a breach of contract.
Recently, M &E served the County with an offer of judgment and a proposal for settlement
pursuant to Florida Rule of Civil Procedure 1.442. M &E's offer of judgment proposes to dismiss
M &E's claims against the County in return for the County's payment of $125,000.00 to M &E.
M &E's proposal for settlement offers to pay the County $25,000.00 in return for a dismissal of
the County's claims against M &E and its surety, Travelers. Taken together, if both settlement
proposals are accepted, the County could resolve this suit in full for a net payment of
$100,000.00 to M &E.
Florida Rule of Civil Procedure 1.442 permits litigants to formally propose settlement for an
amount certain. The law further provides that where a party, such as M &E, proposes to settle in
return for a payment by its adversary, it may recover attorney's fees if: (1) it prevails at trial; and
(2) the amount awarded to it is at least 25% greater than the amount of the proposal. Likewise,
where a party proposes to settle by paying its adversary, it may also recover fees where it either:
(1) prevails at trial; or (2) its adversary does not recover 25% more than the proposal amount.
The attorneys' fees accrue from the date a proposal is made. M &E's current offer encompasses
both those types of settlement proposals. Accordingly, the County faces the additional risk of
having to pay M &E's attorney's fees if it doesn't accept its and M &E later prevails at trial in an
amount consistent with Rule 1.442.
Agenda Item No. 16K10
July 22, 2008
Page 2 of 3
At this time, Collier's outside counsel, Carlton Fields, and the County Attorneys' Office agree
that this settlement proposal is the most cost - effective for the County and recommends it be
accepted. We make this recommendation on the following factors: (1) the economics of the case,
considering the likely fees and costs incurred in going to trial, favor settlement, (2) the inability
to recover the County's lost revenue claim and damages; (3) the defection of a key witness who
was a Project Manager on the project but who is now employed by M &E; and (4) M &E's strong
emotional attachment to the suit.
Notably, following the receipt of M &E's settlement proposal, the County is still holding
$33,000.00 in retainage due M &E. Given the size of the retainage still being withheld, M &E's
current settlement offer makes further economic sense for the County. That is, a settlement with
M &E in the net amount of $100,000.00 would only require a further commitment of $67,000.00.
GROWTH MANAGEMENT IMPACT: None.
FISCAL IMPACT: The net fiscal impact that would result from accepting M &E's settlement
proposal is $67,000.00. ($67,000.00 plus withheld retainage in the amount of $33,000.00).
RECOMMENDATION: That the Board of County Commissioners accept M &E's offer of
judgment to dismiss M &E's claims against Collier in return for Collier's payment of
$125,000.00, and to accept M &E's settlement offer to pay Collier $25,000.00 in return for a
dismissal of Collier's claims against M &E and its surety, Travelers
PREPARED BY: Scott R. Teach, Deputy County Attorney
Page I of 1
Agenda Item No. 16K10
July 22, 2008
Page 3 of 3
—
COLLIER COUNTY
BOARD OF COUNTY COMMISSIONERS
Item Number:
16K10
Item Summary:
Recommendation that the Board of County Commissioners accept Metcalf & Eddy, Ines
(M &E) offer ofjudgment to dismiss M &E's counterclaims against Collier County and the
Collier County Water Sewer District (collectively County) in the lawsuit styled Collier County
and the Collier County Water -Sewer District v. Metcalf & Eddy, Inc. and Travelers Casualty
and Surety Co. of America, Case No. 06- 234 -CA, in return for the Countys payment of
$125,000.00. and to accept M &Es settlement offer to pay the County $25,000.00 in return for
a dismissal of the Countys claims against M &E and its surety, Travelers. (Fiscal Impact
$67,000.00)
Meeting Date:
7/22/2008 9:00:00 AM
Prepared By
Scott R. Teach
Assistant County Attorney Date
County Attorney
County Attorney Office 7/912008 2:13:18 PM
Approved By
Scott R. Teach
Assistant County Attorney Date
County Attorney
County Attorney Office 7/9/2008 2:31 PM
Approved By
James W. DeLony
Public Utilities Administrator Date
Public Utilities
Public Utilities Administration 7/9/2008 3:17 PM
Approved By
OMB Coordinator
OMB Coordinator Date
County Manager's Office
Office of Management & Budget 71912008 4:30 PM
Approved By
Randy Greenwald
Management/Budget Analyst Date
County Manager's Office
Office of Management & Budget 7/9/2008 4:44 PM
Approved By
James V. Mudd
County Manager Date
Board of County
Commissioners
County Manager's Office 7/9/2008 5:03 PM
file-//(°tAA dentin Test \Fxnorf \111_Inivo/7f10) n /,.OMfIl1RV1A o /�nr'f1A1e R�rTO� 1n A nT7X1n A VI 711 crnnno