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
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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.
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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.
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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.
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(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.
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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:
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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.
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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.]
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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
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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])