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HomeMy WebLinkAboutTAT Fresno II LLC - Indemnification Agreement - 3-10-2023Ljuuuoiyi CIivt Iiu u IU. GU/ CVJL'-F-O/1VV-'4! CM-MJ/ r-rOCCro CJVVVL INDEMNIFICATION AGREEMENT THIS AGREEMENT (Agreement) is entered into on 3/10/2023 by and between the CITY OF FRESNO, a municipal corporation (City), and TAT Fresno II LLC (Applicant). RECITALS WHEREAS, Applicant has applied to City for a Cannabis Conditional Use Permit (Permit) for a retail or commercial cannabis business; and WHEREAS, litigation challenging the granting or issuance of Permit approvals by governmental bodies is proliferating, and such litigation exposes City to potential liability for damages, costs, and attorney's fees; and, WHEREAS, City incurs great expense in the active defense of such litigation and, if unsuccessful, may also be required to pay the prevailing party's attorney's fees and costs; and, WHEREAS, fairness and sound fiscal policy require that the person or entity receiving the benefits of Permit should also bear the burden of the liability for potential injuries and the expense of such litigation and claims: and, WHEREAS, Applicant and City mutually desire to enter into this Indemnification Agreement, by which Applicant shall indemnify, (at City's request) defend, save and hold City harmless, in order that City shall bear no fiscal or financial burden whatsoever resulting from any litigation challenging the City's grant or issuance of land use approvals to Applicant, subject to the provisions of Section 2, below. 1. HOLD HARMLESS AND INDEMNIFICATION To the furthest extent allowed by law, Applicant shall indemnify, hold harmless and defend City and each of its officers, officials, employees, agents and volunteers from any and all loss, liability, fines, penalties, forfeitures, costs and damages (whether in contract, tort or strict liability, including but not limited to personal injury, death at any time and property damage) incurred by City, Applicant or any other person, and from any and all claims, demands and actions in law or equity (including reasonable attorney's fees, litigation expenses and cost to enforce this agreement), arising or alleged to have arisen directly or indirectly out of performance of this Agreement. Applicant's obligations under the preceding sentence shall apply regardless of whether City or any of its officers, officials, employees, agents or volunteers are negligent, but shall not apply to any loss, liability, fines, penalties, forfeitures, costs or damages caused solely by the gross negligence, or caused by the willful misconduct, of City or any of its officers, officials, employees, agents or volunteers. This section shall survive termination or expiration of this Agreement. 2. INSURANCE REQUIREMENTS (a) Throughout the life of this Agreement, Applicant shall pay for and maintain in full force and effect all insurance as required herein with an insurance company(ies) either (i) admitted by the California Insurance Commissioner to do business in the State of California and rated no less than "A-VII" in the Best's Insurance Rating Guide, or (ii) as DEV-B Indemnity Agt (08-19-21) UVUUJIIy,, mivwupt: iu. CU/ CUUG'}-UF1VU-4/ CM-MJI r-rDCCrDCJUVUL may be authorized in writing by City's Risk Manager or designee at any time and in its discretion. The required policies of insurance as stated herein shall maintain limits of liability of not less than those amounts stated therein. However, the insurance limits available to City, its officers, officials, employees, agents, and volunteers as additional insureds, shall be the greater of the minimum limits specified therein or the full limit of any insurance proceeds to the named insured. (b) If at any time during the life of the Agreement or any extension, Applicant fail to maintain any required insurance in full force and effect, all terms under this Agreement shall be discontinued immediately until notice is received by City that the required insurance has been restored to full force and effect and that the premiums therefore have been paid for a period satisfactory to City. Any failure to maintain the required insurance shall be sufficient cause for City to terminate this Agreement. No action taken by City pursuant to this section shall in any way relieve Applicant of its responsibilities under this Agreement. The phrase "fail to maintain any required insurance" shall include, without limitation, notification received by City that an insurer has commenced proceedings, or has had proceedings commenced against it, indicating that the insurer is insolvent. (c) The fact that insurance is obtained by Applicant shall not be deemed to release or diminish the liability of Applicant, including, without limitation, liability under the indemnity provisions of this Agreement. The duty to indemnify City shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by Applicant. Approval or purchase of any insurance contracts or policies shall in no way relieve from liability nor limit the liability of Applicant, vendors, suppliers, invitees, contractors, sub- contractors, consultants, or anyone employed directly or indirectly by any of them. Coverage shall be at least as broad as: 1. The most current version of Insurance Services Office (ISO) Commercial General Liability Coverage Form CG 00 01, providing liability coverage arising out of your business operations. The Commercial General Liability policy shall be written on an occurrence form and shall provide coverage for "bodily injury," "property damage" and "personal and advertising injury" with coverage for premises and operations (including the use of owned and non - owned equipment), products and completed operations, and contractual liability (including, without limitation, indemnity obligations under the Agreement) with limits of liability not less than those set forth under "Minimum Limits of Insurance." 2. The most current version of ISO Commercial Auto Coverage Form CA 00 01, providing liability coverage arising out of the ownership, maintenance or use of automobiles in the course of your business operations. The Automobile Policy shall be written on an occurrence form and shall provide coverage for all owned, hired, and non -owned automobiles or other licensed vehicles (Code 1- Any Auto). 3. Workers' Compensation insurance as required by the State of California end Employer's Liability Insurance. DEV-B Indemnity Agt (08-19-21) 2 UUUUJIIJ. II CIIVCIUPt1 IU. CU! CV:JL'+-OF1V V-4/ CM-I1J! r-rDCCr DCJVVVL MINIMUM LIMITS OF INSURANCE Applicant shall procure and maintain for the duration of the agreement, insurance with limits of liability not less than those set forth below. However, insurance limits available to City, its officers, officials, employees, agents, and volunteers as additional insureds, shall be the greater of the minimum limits specified herein or the full limit of any insurance proceeds available to the named insured: 1. COMAIr- ?CIAL GENERAL LIABILITY LST (i) $1,000,000 per occurrence for bodily injury and property damage; (ill $1,000,000 per occurrence for personal and advertising injury; (lii) $2,000,000 aggregate for products and completed operations; and, (lv) $2,000,000 general aggregate applying separately to the work performed under the Agreement. 2. COItfiIMEWCIAL AUTOMOBILE LIABILITY $1,000,000 Per accident for bodily injury and property damage. 3. Workers' . C®mensaticon Insurance as required by the State of California with statutory limits and EMPLOYER'S LIABILITY with limits C;. -,ot I ess tI: (i) $,, ,v00,000 each accident for bodily injury; (11 i) $ 1,060,000 disease each employee; and, (iii) $1,000,000 disease policy limit. UMBRELLA OR EXCESS INSURANCE In the event Applicant purchases an Umbrella or Excess insurance policy(ies) to meet the "Minimum Limits of Insurance," this insurance policy(ies) shall "follow form" and afford no less coverage than the primary insurance policy(ies). In addition, such Umbrella or Excess insurance policy(ies) shall also apply on a primary and non-contributory basis for the benefit of the City, its officers, officials, employees, agents, and volunteers. DEDUCTIBLES AND SELF -INSURED RETENTIONS Applicant shall be responsible for payment of any deductibles contained in any insurance policy(ies) required herein and Applicant shall also be responsible for payment of any self -insured retentions. Any self -insured retentions must be declared on the Certificate of Insurance, and approved by, the City's Risk Manager or designee. At the option of the City's Risk Manager or designee, either: (i) The insurer shall reduce or eliminate such self -insured retentions as respects City, its officers, officials, employees, agents, and volunteers; or (ii) Applicant shall provide a financial guarantee, satisfactory to City's Risk Manager or designee, guaranteeing payment of losses and related investigations, claim administration and defense expenses. At no time shall City be responsible for the payment of any deductibles or self -insured retentions. DEV-B Indemnity Agt (08-19-21) 3 u uuuolyl I CI1vt I1u t:IU.muIGU:1 L'i-OMVV-4! C^-MJ/r-r�CCrCCJV VVL OTHER INSURANCE PROVISIONS/ENDORSEMENTS (i) All policies of insurance required herein shall be endorsed to provide that the coverage shall not be cancelled, non -renewed, reduced in coverage or in limits except after 30 calendar days' written notice has been given to City, except `en c!ays ".DF r-or �payrient of premium. Applicant is also responsible for providing written notice to the City under the same terms and conditions. Upon issuance by the insurer, broker, or agent of a notice of cancellation, non-renewai, or reduction in coverage or in limits, Applicant shall furnish City with a new certificate and applicable endorsements for such policy(ies). in uhe event any policy is cue co expire during the work to be performed for City, Applicant shaii provide a new certificate, and applicable endorsements, evidencing renewai o-i such policy not less than 15 calendar nays prior ),o the expiration dale of the expiring policy. (ii) Th- CommEr ci?i General and Autorr;obile Liability insurance policies shall be I,A/rittan o ; ar occur°ence form. (iii) f'he Corr,rrl� rci�, Cenerai and nutornobile Liability insurance policies shall ba endorsed. to na i-+s Ciiy, iLs cfficers, of-iicials, agents, employees, and vcl._inteerc .as an addition?! insured. Applicant shall establish additional insured status fer the City and for all ongoing and completed operations under the Commercial General Liability policy by use of ISO Forms or an executed manuscript insurance company endorsement providing additional insured s-taws. The Coinnierciai General endorsements must be as broad as that contained in 11SC Forms: GC 20 10 11 85 or both CG 20 26 or CG 20 12. (iv) The Commercial General and Automobile Liability insurance shall contain, or be endorsed to contain, that the Applicants' insurance shall be primary to and require no contribution from the City. The Commercial General policy is required to include primary and non-contributory coverage in favor of the City for both the ongoing and completed operations coverage. These coverages shall contain no special limitations on the scope of protection afforded to City, its officers, officials, employees, agents, and volunteers. If Applicant maintains higher limits of liability than the minimums shown above, City requires and shall be entitled to coverage for the higher limits of Lability maintained by Applicant. (v) Should any of these policies provide that the defense costs are paid within the Limits of Liability, thereby reducing the available limits by defense costs, then the requirement for the Limits of Liability of these polices will be twice the above stated limits. (vi) For any claims related to this Agreement, Applicant's insurance coverage shall be primary i.nSU ance with respect to the City, its officers, officials, ?cents, employees, and volunteers. Any insurance or self-insurance rnain:tained by the City, its officers, officials, agents, employees, and volunteers shall be excess of the Applicant's insurance and shall not contribute wii'h it. DEV-B Indemnity Agt (08-19-21) 4 Ljuuuo IIJ. II CI Ivtzluptl IL/. CV! CV:1LY-OMVV-4/ CM-MJI r-r IJ CCr I) CJVVVG (vii) The Workers' Compensation insurance policy shall contain, or be endorsed to contain, a waiver of subrogation as to City, its officers, officials, agents, employees, and volunteers. (viii) The Commercial General and Automobile Liability insurance policies shall certain. or be endorsed to contain, a waiver of subrogation as to City, its officers, officials; agents: employees; and volunteers. PROVIDVNG OF DOCdMENTS" - Applicant shall furnish City with all certificate(s) and app€ica'ale endorsements effecting coverage required herein. All certificates and app1!,rable endorser, ants are tc the raceived and approved by the City's Risk Mi.o.q-er -: desic-nee rori F- tc City's e,Xecution of the Agreement and before work commences. All non-iSO endorsements amending policy coverage shall be execu,,ad : y a ;iconse; an6 authorized agent or broker. Upon request of City, Applicant shall imrneaiare,y furnish Cit-y with a complete copy of any insuran-e policy required uric-6r -6-ds t=Agreerrnen-L, including all endorsements, with said copy uai-Lified by the urldcrtivritei- to be a true and correct copy of the original policy. This reaij,—s-me shy l survive expiration or termination of this Agreement. All sub-appiicants ��!orkir!c under tr,e direction of Applicant shall also be required to provide all documents rioted herein. _ LAIany coverage required is written on a claims -made coverac -0 (i) T:E rear caa6 a da�Le mus t—a shown, and must be before the effective date c'; _ e ;�raar: zr; or tl;e corn.;-nencement of work by Applicant. st' .� 7:jairtai -.ec and evidence of insurance must be provided a-r ;ease rive years after compietion of the work or termination of the r first occurs, (iii) cry✓e� :ye is canceiec; cr 11011-rcr ew6d, and not replaced with another claims -made policy form with a retroactive date prior to the effective date of the Agreement, or work commencement date, Applicant must purchase "extended reporting" period coverage for a minimum of five years after completion of the work or termination of the Agreement, whichever first occurs. (iv) A copy of the claims reporting requirements must be submitted to City for review. (v) These requirements shall survive expiration or termination of the Agreement. 3. NOTIFICATIONS AND COOPERATION 3Y CITY. City shall notify Applicant within a reasonable period of time of its receipt of any demand, claim, action, proceeding, or litigation in which City is to be indemnified and held harmless by Applicai If City requests that Applicant defend City, it shall notify Applicant in writing within a reasonable period of time of its receipt of any such demand, claim, action, proceeding, or litigation and City shall cooperate fully in such defense. DEV-B Indemnity Aat (08-19-21) 5 VUI.UJIIJ.II CIIVCIUFIC IU. CV/ CUVG'+-Oh1VV-'-FI CH-,-wl r-r�GGr�CJV VVG City sha!! have the right to select the attorney or attorneys who will defend the City. In selecting defense counsel, City should consider the prevailing local rates for attorneys with the requisite skills. City should further consider whether a joint defense arrangement utilizing counsel for Applicant will suffice in lieu of separate counsel. City reserves its rights at all times to retain separate defense counsel subject to the provisions of this paragraph, and Applicant agrees to accept such selection. City and Applicant shall a-: ali times cooperate wi�L-h respect io the retention of counsel. Applicant further agrees to be fully responsible for any and all costs and attorney's fees generated by said attorney(s) in the defense of City in any claim, demand, action, proceeding, or litigation arising out of the Project. 4. CITY'S R, ,RTIC:PP.TINr 1NDEFE-NSE. Nothing con-tained herein shall prohil--A City, in its sole discretion, from participating in the defense- Df any darnarid, claim, action, proceeding, or litigation over and above representation: by ou-L-sid.e counsel, or from participating in the defense of any demand, claim, action, proceeding. or Rig;=:tion. "f Ci.y elects to also defend, it shall do so in good faith. In no event shah! City's participation in the defense of any demand claim, action, proceeding, o,, iiiigaiion affect the obligations imposed upon Applicant in section 2 of this Agreement. 5. REIMBURSE�JPENIT OF CITY'S -OSTS RE: ADMINISTRATIVE RECORD. Without iIn,iting flhs City's rigrrt a recover its costs frorn Applicant under paragraph 2 herein above; p iicai-It agle­es to r.irrlbursa the City for its actual cost incurred, including, but not JmIted to, City staff and attorney time expended for certifying and/or preparing the a&ni is'rai've record ;n ccr±necticn �v;i th any proceedings related to the subject matter of this Indemnification Agreement. Applicant and City agree to work cooperatively A/!-Ccre-spec to preparation of -tine adrninistrative record, and Applicant shall ensure that CFiy is f,uiy rein-ibursed for Erie costs of preparation before receiving such administrative record. To the extent administrative record reimbursement and related costs are recov.—r d H� -G!riy litig-a-tion Ley the City, Apu icam shall be reimbursed to the extent any such re--overy is Ma�Ie as cos-1- recovery iter;ns. 6. COVE70 (a) Ace is ini o;n behaif of i se'pl, c,rld its successors, and assigns, hereby fully releases City, its successors, and ale Jiinee pers6ns and associations, known or unknown, from ail claims and causes of actioci by reason of any damage which has been sustained, or may be sustained, as a result of the above -described Permit and covenants not to sue relating to such claims, excluding gross negligence orwillful misconduct of City, as setforlth in Section 'I, above. (b) Applicant acknowledges and agrees that this release applies to all claims that Applicant may have against City arising out of the above -described Land Use Approval for injuries, damages, or losses to Applicant's person and property, real or personal, whether those injuries, damages, or losses are known or unknown, foreseen or unforeseen, or patent or latent. (c) Applicant certifies that Applicant has read section 1542 of the Civil Code, set out below: DEV-B Indemnity Agt (08-19-21) 6 UVVUJIIJ.II CI IVtl uyt. IL/. CV! CVVL4-OHVV-4! CH-HJI r-rDCC/-D CJVVUL A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. (d) Applicant hereby waives application of section 1542 of the Civil Code. (e) Applicant understands and acknowledges that the significance and consequence of this waiver of section 1542 of the Civil Code is that even if Applicant should eventually su-f,er additional damages arising out of the above described Land Use Approval, Applicant will not be permitted to make any claim for those damages. Furthermore, Applicant acknowledges that Applicant intends these consequences even as to claims for, damages that may exist as of the date of this release but which Applicant does not know exist, and which, if known, would materially affect Applicant's decision to execute this release, regardless of whether Applicant's lack of knowledge is the result of ignorance, oversight, error, neyiigei ice cc any other cause. (f) Ap:;`ican- w arranrs and represents that in executing this release, Applicant has relied on leg_1! advice frog^ 'the a tomey of .Applicant's choice that the terms of this release and its con. seeue!,ces have- bee:- co,mrlately read and explained to Applicant by that attorney, and that A plicari: f ;91; si..'arstands the terms of this release. (g) ,,rid warrants that Applicant's execution of this release is free and vol,!^t pry. (h) T NIs release pertai;-is to a disputed ciaiir, and does not constitute an admission of fo., ih:; aLD,je-uvascribed Permit. (i) ; he p: cvisisac='.cr, 8 , .erein be!ci✓ shall not apply to this covenant not to sue. 7. l-cRlVili�; s lui'v ,�.CILEov1;� . (a) This indemnification Agreement may be terminated only upon the following conditivrs: (i) The iDarties agree to terminate this Indemnification Agreement by their express r i rli iMl fir. iTrcr �nrc�rit �r (ii) -; he Applicant petitions thlC Ciiy Manager to terminate this Agreement by providing to the Council a written opinion of Applicant's legal counsel and the City wianaaer, in its scle d?scretion, ,determines that termination of this Agreement is r tl-�e h _. =t interest o-1 the public and the City. It is understood and agreed that file City, in making such determination of whether to terminate this Agreement, may reasonaD4 rely upc;ri said opinion of Appiicant's legal counsel. (b) If this Agreement is terminated as provided above, the City shall execute a written release of Applicant's obligations under this Agreement. It shall be Applicant's responsibility to record such document with the office of the Recorder of the County of Fresno. DEV-B Indemnity Agt (08-19-21) 7 UUUUJIyll CIIVCIUFIC IU. CU/ GUUL'F-OMUU-'F/ CM-MJ! r-rDCCr OCJUUUG 8. ATTORNEY'S FEES. If either party is required to commence any proceeding or legal action to enforce or interpret any term, covenant or condition of this Agreement, the prevailing party in such proceeding or action shall be entitled to recover from the other party its reasonable attorney's fees and legal expenses. For the purposes of this agreement, "attorneys' fees" and "legal expenses" include, without limitation, paralegals' fees and expenses, attorneys, consultants fees and expenses, expert witness fees and expenses, and all other expenses incurred by the prevailing party's attorneys in the course of the representation of the prevailing party in anticipation or and/or during the course of litigation, whether or not otherwise recoverable as "attorneys' fees" or as "costs" under California law, and the same may be sought and awarded in accordance with California procedure as pertaining to an award of contractual attorneys' fees. 9. SEVERABI!_ITY. If any provision of this Agreement isdetermined to be invalid in a final judgment by a court of cchr.patent Jjrisdiction, each anu every other provision hereof shall remain infull force and effect. 10. CONS i hUCTION OF CONTRACT. The pal-L-ies hereby acknowledge that they and their respective counsel have cooperated in t -,e drafting and preparation of this Agreement, for which reason this Agreement shall not be construed against any party as the drafter thereof. VSjgnatures foEow on the next page.] DEV-B Indemnity Agt (08-19-21) 8 UVUUOIIY. I I CI IVCIUYU IU. CU / CUJL'+-OMUU-'# / CM-MJ / r-rDCCrOCJVU VL IN WITNESS WHEREOF, the parties have executed this Agreement at Fresno, California, on the day and year first above written. CITY: CITY OF FRESNO, A Cal ifqMiLq.,VW.nicipal corporation By: r4tAj ' 3/9/2023 - Georgeanne White City Manager APPROVED AS TO FORM: ANDREW JANS City Attar. p�e;1 nv By: j�Ad"f F� W at,-- 0*42 0 2 3 ry. Maaterman-Doidge Date Senior Deputy City Attorney II ATTEST: Todd Ste�(rmer City cilar&cu signed Y. By:nL� g6W1 3/10/2023 Deputy DEV-B Indemnity Agt (08-19-21) 9 APPLICANT: TAT Frg,&qaijbLLC By: I QVIi �/I1�.�/l� 3/1/2023 Name: Avi Kahan Title: Manager DocuS_kgned by: By: ". 3/9/2023 Name: Mitchell Kahan Title: Manager (Parties authorized to sign on behalf of applicant rstaff- see AO 4-1])