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<br /> . , <br /> CITY OF ARDEN HILLS <br /> . MEMORANDUM <br /> DATE: May 6, 1998 <br /> TO: Mayor and City Council <br /> FROM: Brian Fritsinger, City Administrator ~~f & <br /> SUBJECT: Midwest Asphalt Litigation <br /> Backg-round <br /> As the City Council is aware, the City has been proceeding in litigation with Midwest Asphalt <br /> Corporation over the past two years. The case was tried in November of 1997 with the judge <br /> issuing his findings in February of 1998. <br /> The Order issued by the judge dismissed the bulk of the claims made by Midwest Asphalt. The <br /> only claim that was allowed to go forward was a limited "quantum meruit" claim. The judge <br /> held that the claim is limited to "only those increased costs.....which are attributable solely to the <br /> delay in utility work; and which can be shown to have been directly covered by that delay; and <br /> from no cause attributable to the utility companies, or the nature and extent of the utilities." <br /> . As part of the Order, the judge scheduled a pretrial settlement conference on April 15, 1998. <br /> Since this date, staff has been negotiating a settlement with Midwest Asphalt. The League of <br /> Minnesota Cities Insurance Trust has also been part of these negotiations, as it is willing to <br /> contribute to such a settlement. <br /> Settlement Offer <br /> Staff has verbally agreed to a settlement of $20,250 in this case. This is less than the amount <br /> discussed as part of conversations reeently held with Couneilmembers. Under this settlement, <br /> the City would be responsible for $11,250 and the LMCIT $9,000. Payment will need to be <br /> made prior to May 15, 1998. This settlement is significantly less than that discussed with <br /> Midwest prior to the trial last November. The proposed settlement appears to be fair and allows <br /> avoidance of incurring additional staff and legal counsel expense related to this case. <br /> Settlement Funding <br /> Prior to the final closing of the 1997 books, an $11,250 aecrued legal settlement expense item in <br /> the PIR Fund will be booked. This action will cause the 1998 settlement payment not to impact <br /> 1998 financial results. <br /> Recommendation <br /> Staff recommends that the City Council move to authorize settlement with Midwest Asphalt <br /> regarding litigation related to County Road F in the amount of $20,250. This settlement is <br /> subject to the LMCIT contributing $9,000 toward the total settlement amount. <br /> . BF/sls <br />