HomeMy WebLinkAboutR-90-07803-90-878
10/5/90
RESOLUTION NO. 9 0- 780
A RESOLUTIONt WITH ATTACHMENT, AUTHORIZING
THE DIRECTOR OF FINANCE TO PAY AT&T
COMMUNICATIONS OF THE SOUTHERN STATES, INC.,
WITHOUT ADMISSION OF LIABILITY, THE SUM OF
$1,296,000.00, PAYABLE IN 36 EQUAL MONTHLY
PAYMENTS OF $36,000.00EACH, BEGINNING IN
JANUARY OF 1991, IN FULL AND COMPLETE
SETTLEMENT OF ANY AND ALL CLAIMS AND DEMANDS
AGAINST THE CITY OF MIAMI, UPON THE EXECUTION
OF A SETTLEMENT AGREEMENT RELEASING THE CITY
OF MIAMI FROM ANY AND ALL CLAIMS AND DEMANDS;
AUTHORIZING THE CITY MANAGER TO EXECUTE THE
SETTLEMENT AGREEMENT, IN SUBSTANTIALLY THE
'ATTACHED FORM, ON`BEHALF OF THE CITY OF MIAMI
WITH FUNDING OF SAID PAYMENTS TO BE DEDUCTED
FROM ANTICIPATED FUTURE REVENUES OF PUBLIC
SERVICE TAXES DUE FROM AT&T COMMUNICATIONS OF
THE SOUTHERN STATES, INC.
WHEREAS, the City of Miami was sued in 1989 by AT&T
Communications of the Southern States, Inc., in the Circuit Court
of Dade County, Florida, Case No. 89-51200 CA (04), alleging an
overpayment of Public Service Taxes due under Chapter 55'of"the "
City of Miami Code; and
WHEREAS, the above lawsuit has been investigated by the City
Attorney's Office, the City Manager's Office, the Budget
Department, the Finance Department and the.Department of Internal
Audits, and said offices and departments recommend that this
lawsuit- be settled for the sum of $1,2961,000.008, upon the
conditions as set forth in the attached Settlement Agreement;
NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY
OF MIAMI, FLORIDA:
Section 1. The recitals and findings set forth in the
Preamble to this Resolution are hereby adopted by reference
thereto and incorporated herein as if fully set forth in this
Section.
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AOREEMENTr dated this day of , 1990, by and
between AT&T Communications of the Southern States, Inc,
(hereinafter referred to as "AT&T") and the City of Miami,
Florida (the "City"), as follows:
WHEREAS, the parties to this Settlement Agreement are
parties in a civil action styled AT&T Communications of the
Southern States, Inc. v. City of Miami, Case No. 89-51200 CA
(04), currently pending before the Florida Circuit Court of the
Eleventh Judicial Circuit (the "Civil Action"); and
WHEREAS, the parties hereto wish and are mutually willing to
enter into this Settlement Agreement for the purpose of settling
the differences between them in the Civil Action and all claims
therein, in order to avoid the further risk, inconvenience and
expenses associated with their respective prosecution and defense
of the Civil Action;
.NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as
follows:
1. Payment by the City. In total satisfaction of all
claims asserted or that could be asserted by 'AT&T in the Civil
Action, the City hereby agrees to pay to AT&T over time, the sum
SETTLEMENT AGREEMENT 9 Q
Page 1 of 5
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of one Million Two Hundred Ninety-giX Thousand and "No/100 Dollars
($11296tOOt).00)t to be paid in 36 equal monthly payments of
($36t000.00) to begin January 1991 and to end 'December 1993,
2�
Most Favored Gity Status. In the event that AT&T
should agreet after the date of this Settlement Agreement# to
accept payment from any other Florida municipality of an amount
which is a smaller percentage than the percentage of AT&T's claim
in the above -referenced Civil Action accepted from the City, then
AT&T agrees to refund to the Cityt at the time of its acceptance
of such smaller percentage payment, the amount of money necessary
to render the two percentages to be the same. "Percentage" for
the purposes of this paragraph shall be a fraction, the numerator
of which shall be the amount of the payment accepted by AT&T and
the denominator of which shall be the total amount of the
overpayment claim (excluding interest, costs, or fees) asserted
by AT&T on grounds similar or related to those asserted in the
above -referenced Civil Action. In the case of a subsequent
payment or payments to be made over a period of time, the
applicable percentages shall be determined at present value,
employing a discount rate of eight and one-half percent -(8'1/2$)
The adjustment provided for by this paragraph shall not apply to
any amounts awarded by judgment or in the event of :any final
determination of entitlement or lack of entitlement on the part
of AT&T in any judicial proceeding or as a result of: an `.audit
contemplated hereinafter.
90- . 78Q
SETTLEMENT AGREEMENT
Page 2 of 5
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36 kud t The City reserves the right, within the time
permitted by law and at its own expense, to audit AT&T's public
service tag returns and suppOtting documentation for the period
covered by the Civil Action and assess against AT&T any amounts
determined to be due as a result of such audit. Neither this
paragraph nor this Settlement Agreement shall be construed or
deemed to be a limitation upon or waiver of that right or any
right the City may have to inspect accounts and records required
to be kept under City of Miami Code, Section 55-16.
4. Dismissal of the Civil Action. Upon execution of this
_ Settlement Agreement by AT&T and the City, the parties will cause
to be filed with the Circuit Court a Stipulation of Dismissal of
the Civil Action, on the merits and with prejudice.
5. Entire Agreement. This Settlement Agreement con-
stitutes the entire agreement of the parties. This Settlement
Agreement may not be modified or amended or any term or provision
hereof waived or discharged except in writing signed by the party
against whom such amendment, modification, waiver or discharge is
sought to be enforced.
6. Assignability. Neither of the parties hereto may
transfer, assign or otherwise alienate any of its obligations
under this Settlement Agreement except upon the express written
consent of the other party. Neither of the parties to this
Settlement Agreement may transfer, assign or otherwise alienate
94- 780
SETTLEMENT AGREEMENT
Page 3 of 5
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the rights conferred upon it by virtue of this Settlement
At��een�ent.
pull ftwer_ and___Authority. Each of the parties to this
Settlement Agreement hereby warrants and covenants that it has
full right and authority to dispose of all claims asserted in the
s,
-
Civil Action# and that it has not previously transferred,
assigned or otherwise alienated any of such rights. Each of the
parties hereby warrants and covenants that the person or persons
executing this Settlement Agreement on its behalf is duly
authorized and empowered to do so.
B. Counterparts. This Settlement Agreement may be
executed in several counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and
the same instrument.
9. Governing Law. This Settlement Agreement shall be
SETTLEMENT AGREEMENT
Page 4 of 5 9 0
interpreted and enforced in accordance with the laws of the State
of Florida.
F, IN WITNESS WHEREOF, the parties to this Settlement Agreement
have set their hands and
' first hereinabove written.
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ATTEST:
MATTY HIRAI, AS CITY CLERK
(SEAL)
seals hereto as of the day and date
THIS INSTRUMENT IS EXECUTED
PURSUANT TO RESOLUTION NO.
PASSED AND
ADOPTED THE DAY OF
1990.
This Instrument Jointly Prepared By:
AT&T and Law Department, CITY OF
MIAMI, FLORIDA
of the City Commission
SUBJECT: Resolution Authorizing
YI Settlement with AT&T
Case No. 80 51200 CA (0 4)
Jo a `D. F rnandez
Fi�OM : � REFEpENCEB
Ci y Attci ey City Commission Agenda
ENCLOSUAEs : October 18, 1990
Attached is a proposed Resolution authorizing the Director of
Finance to pay AT&T Communications of the Southern States, Inc.,
without admission of liability, the sum of $1,296,000.00 in 36
equal monthly payments of $36,000.00, beginning January of 1991,
in full and complete settlement of any and all claims and demands
against the City of Miami, upon the execution of the Settlement
Agreement, releasing the City of Miami from any and all claims and
demands.
AT&T has. alleged that it overpaid the City of Miami $1,602,510.00
from June 1987 to May of 1988, after the City of Miami Department
of Internal Audits, initiated an audit'and brought this to AT&T's
attention. This office has been litigating this claim with AT&T
since November of 1989, and has raised all applicable defenses.
While the -liability of the City of Miami is not absolute and there
is a possibility of the City of Miami prevailing in the
litigation, the chance of success, in our view, is not by any
means clear. As of this date, if AT&T were to be awarded a non -
appealable final judgment, it would be entitled to pre -judgment
interest running from the time of payment at 12%, which would be
approximately $390,000.00, in addition to its principal claim of
$11602,000.00. Consequently, principal plus interest now amounts
to approximately $2,000,000.00. If the City of Miami were to
continue litigating this case, no doubt it would continue on for
the next two or three years through appeals, etc., and the
possible liability of the City of Miami could well approach
$2,500,000.00or more.
The settlement for which we are requesting your approval consists
of a payment of approximately 6 4.8% of the principal and accrued
pre -judgment interest, assuming that the total amount of
$1,296,000.00 were paid today. Of course, under the terms of this
Settlement Agreement, the payments are extended out over 36 months
(3 years)- beginning in January of 1991, thus substantially
mitigating the drastic impact of the claim payment upon the City
budget.
Please note that the City of Orlando also settled with AT&T and
paid approximately 62.4% of principal, but did so in one lump sum
payment of exactly $1,3008000.00, which was paid on May 1, 1990.
For the reasons.herein expressed, this office recommends that this
claim be settled on the terms specified above.
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