HomeMy WebLinkAboutCover MemoCITY OF MIAMI
OFFICE OF THE CITY ATTORNEY
MEMORANDUM
TO: Honorable Mayor an lmlets of City Commission
FROM: Jorge L. Fernandez/CV'', . eye t t'
DATE: November 30, 2
RE: Resolution r CityCo ission Meeting— December 13, 2007
Ric -Man International, Inc., vs. City of Miami, et al.
Miami -Dade Circuit Court Case No. 98-13051 CA (13)
(File No. 07-01416)
The attached proposed Resolution pertains to an offer made to the City on a motion to
enforce a settlement agreement arising from litigation in Ric -Man International, Inc., vs. City of
Miami, et al., Case No. 98-13051 CA (13). In 1998, Ric -Man International, Inc., brought this
breach of contract against the City of Miami and Utility Directional Drilling, Inc. The action arose
from a construction project involving the connection of sanitary sewers to Watson Island. Ric -
Man alleged that the City breached its contract by imposing specifications for construction
inconsistent with the requirements of the project and failing to provide accurate plans and
specifications. The City employed Carney -Neuhaus, Inc., an engineering corporation, for the
design and engineering work on the Watson Island Project. Carney was not a party to Ric-Man's
initial suit against the City.
In 2002, the City settled this case with Ric -Man. As part of the settlement agreement, the
City assigned to Ric -Man its right to pursue a cause of action against Eleanor Carney Engineering,
Associates, Inc., on the City's behalf. The agreement provided that Ric -Man was to pay over to
the City 50% of any monetary proceeds it received from pursuing the assigned action against
Eleanor Carney Engineering, Associates, Inc., after deducting its litigation costs and expenses,
which were to be capped at 25% of the settlement amount.
In 2002, Ric -Man filed suit against Eleanor Carney Engineering, Associates, Inc., and filed
two claims: one professional negligence claim on its own behalf and one breach of contract claim
as assignee of the City of Miami. In late 2003, Ric -Man settled with Eleanor Carney Engineering,
Associates, Inc. for the total amount of $600,000, including interest, attorney's fees and costs. The
settlement made no distinction regarding the amount paid for Ric-Man's claim versus the amount
paid for the assigned City claim. In December 2003, Carney disbursed settlement proceeds to Ric -
Man. The City filed a motion to enforce the settlement agreement, which was opposed by Ric -
Man. Ric -Man contended that the City's assigned breach of contract claim had no value because
the former Director of Public Works testified that Carney Neuhaus Engineering did not breach its
agreement with the City.
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On September 28, 2007, the parties appeared for a hearing before Judge Echarte on the
motion to enforce the settlement agreement. The issue for the Court's determination was whether
the settlement agreement required it to share half of the entire proceeds of the settlement, or only
one-half of the assigned breach of contract claim. In reviewing the language of paragraph 6, Judge
Echarte opined that the language of the settlement agreement was "ambiguous, at best, for the
City," because it interchangeably used the words "action, causes of action, and claims." If the
Court determines there is an ambiguity in the settlement agreement, it can consider extrinsic
evidence to determine the parties' intent as to the proceeds which were to be divided with the City.
Judge Echarte did not issue a final ruling but strongly encouraged the parties to reach a settlement.
Following the hearing, Ric -Man agreed to offer the City $112,500. The settlement offer was
calculated by dividing the total settlement for the tort and contract claims in half: ($600,000 _ 2 =
$300,000). It then subtracted 25% for fees and costs from the $300,000 ($225,000), and finally
divided that number by two to arrive at the City's portion of the breach of contract claim, or
$112,500.
cc Pedro G. Hernandez, City Manger
Elvi Gallastegui, Agenda Coordinator
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