Agenda 05/27/2008 Item #16K 5
Agenda Item No. 16K5
May 27, 2008
Page 1 of 4
EXECUTIVE SUMMARY
Recommendation that the Board of County Commissioners authorize the County
Attorney's Office to make a Demand for Judgment and an Offer of Judgment to Metcalf &
Eddy, Inc., in an attempt to settle ongoing litigation in the case known as Collier County
and Collier County Water-Sewer District v. Metcalf & Eddy, Inc. and Travelers Casualty and
Surety Company of America.
OBJECTIVE: For the Board of County Commissioners to authorize the County Attorney to
make a Demand for Judgment on Collier County and the Collier County Water-Sewer District's
(hereafter collectively, "Collier") complaint and an Offer of Judgment to Metcalf & Eddy, Inc.
("M&E") on its counterclaim, in an attempt to settle ongoing litigation in the case known as
Collier County and Collier County Water.Sewer District v, Metcalf & Eddy, lnc, and Travelers
Casualty and Surety Company of America by proposing to accept S199,000.00 on Collier's
claims, and to pay $85,000.00 on M&E's claim. Such a proposal would entitle Collier to recover
its attorneys' fees if M&E declines the demand for judgment and Collier recovers more than
$248,750.00 and/or if M&E rejects the offer of judgment and later recovers less than
$106,250.00 on its counterclaim
CONSIDERATIONS: The law firm of Carlton Fields has been serving as outside counsel in
litigation initiated on behalf of the Collier County Board of County Commissioners and Collier
r- County Water Sewer District with Metcalf & Eddy, Inc, The litigation is focused on deficiencies
in M&E's furnishing of design build services in the wellfield expansion of the North County
Regional Water Treatment Plant ("North Plant") in 2002 and 2003. As part of the lawsuit, M&E
has counterclaimed for extra work performed, alleging that Collier's refusal to execute change
orders constitutes a breach of contract. At this juncture of the litigation, authorization is sought
to serve a statutory proposal for settlement on M&E.
A. Background
M&E was retained as design engineers by Collier for the expansion of the North Plant, which
commenced in 2002, Those wells were plagued with operational problems from inception,
resulting in damages and expense to Collier. Collier's estimated recoverable damages
calculation approaches $500,000.00.
In response to Collier's claims, M&E has counterclaimed for amounts it argues were approved
and/or should have been approved under its contract with Collier. Specifically, M&E has argued
that Collier breached the parties' contract by failing to make payments for alleged extra-
contractual work expended in connection with investigating and addressing: (I) power spike
problems; (2) the ground cUITent on the project and (3) hydraulic pressure problems.
B. Procedural Posture.
()
At this point, the parties have exchanged written discovery and their project files. The County is
cUITently reviewing M&E's project materials, which were recently produced, and are preparing
Agenda Item No, 16K5
May 27,2008
Page 2 of 4
for depositions, Several rounds of depositions will likely occur prior to any potential mediation
of this matter.
C. Proposal for Settlement
The upcoming depositions and heightened discovery will likely prove involved and require
significant expenditure of resources. Given this, and M&E's dismissive stance on negotiation to
date, we would recommend service of a proposal for settlement.
A proposal for settlement can be an effective tool to secure a right to attorneys' fees in litigation.
Specifically, Florida law permits litigants to formally propose settlement for an amount certain,
The law further provides that where a party, such as Collier, proposes to settle in return for a
payment by its adversary (a "demand for judgment"), 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 (an "offer of
judgment"), 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,
The County Attorney is seeking authorization to make a joint settlement proposal offering to
accept $ I 99,000,00 on Collier's claims, and to pay $85,000.00 on M&E's claim. Such a
proposal would entitle Collier to attorneys' fees if the county recovers more than $248,750,00 on
its Complaint or if M&E recovers less than $ 106,250,00 on its counterclaim, The County
Attorney concurs with its outside counsel that this proposal for settlement is a practical
mechanism to create an avenue for seeking attorneys' fees and for putting M&E on notice ofthe
seriousness of Collier's position.
FISCAL IMP ACT: There is no fiscal impact in making the Demand and Offer for Judgment.
M&E actions in response to the Demand and Offer for Judgment will have fiscal impacts to the
Water Impact Fee Fund 413: a) if M&E accepts the Demand and the Offer of Judgment, there
would be a fiscal impact of additional revenues to the Water Impact Fee Fund 413 of $199,000
and an offsetting expense of $85,000,00; b) if M&E rejects the entire Demand and Offer of
Judgment, there is no fiscal impact until final settlement; c) if M&E agrees to the demand to pay
$199,000 and rejects the offer of $85,000 [rom the County, there would be an immediate fiscal
impact of additional revenues to the Water Impact Fee Fund 413 o[ $]99,000 with no additional
fiscal impact until final settlement; and, d) ) if M&E rejects the demand to pay $]99,000 and
accepts the offer of $85,000 from the County, there would be an immediate fiscal impact of
additional expense to the Water Impact Fee Fund 413 of $85,000 with no additional fiscal impact
until fmal settlement All the potential actions on the part of M&E will require budget
amendments; either upon M&E acceptance of all or part of this Demand and Offer of Judgment
or at time of final settlement. Funds are available in the Water Impact Fees Fund 413.
GROWTH MANAGEMENT IMP ACT: There is no growth management impact associated with
this Executive Summary.
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Agenda Item No. 16K5
May 27, 2008
Page 3 of 4
RECOMMENDATION: Authorization to make a joint settlement proposal offering to make a
Demand for Judgment to accept $199,000,00 on Collier's claims, and to make an Offer of
Judgment agreeing to pay $85,000,00 on M&E's claim,
PREPARED BY:
Scott R, Teach, Deputy County Attorney
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Agenda Item No, 16K5
May 27, 2008
Page 4 of 4
COLLIER COUNTY
BOARD OF COUNTY COMMISSIONERS
Item Number:
16K5
Recommendation that the Board of County Commissioners authorize the County Attorneys
Office to make a Demand for Judgment and an Offer of Judgment to Metcalf & Eddy, Inc.. in
an attempt to settle ongoing litigation in the case known as Colllef County and Collier County
Water~Sewer District v. Metcalf & Eddy, Inc. and Travelers Casualty and Surety Company of
Amenca
Item Summary:
Meeting Date:
5/27/2008900:00 AM
Prepared By
Scott R. Teach
Assistant County Attorney
Date
County Attorney
County Attorney Office
5/1512008 3e28;04 PM
Approved By
Scott R. Teach
Assistant County Attorney
Date
County Attorney
County Attorney Office
5115120084;38 PM
Approved By
Jeff Klatzkow
Assistant County Attorney
Date
County Attorney
County Attorney Office
5115120085;10 PM
Approved By
James W. Delony
Public Utilities Administrator
Date
Public Utilities
Public Utilities Administration
5116120088:47 AM
Approved By
OMS Coordinator
OMS Coordinator
Date
County Manager's Office
Office of Management & Budget
5/16/20089:17 AM
Approved By
John A. Yonkosky
Director of the Office of Management
Date
County Manager's Office
Office of Management & Budget
5116/20089:28 AM
Approved By
Leo E. Ochs, Jr.
Deputy County Manager
Date
Board of County
Commissioners
County Manager's Office
511612008 11 ;42 AM
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