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HomeMy WebLinkAboutC-2322• 1 0 JOINT DEFENSE AND CONFIDENTIALITY AGREEMENT THIS JOINT DEFENSE AND CONFIDENTIALITY AGREEMENT (the "Agreement") is entered into as of this .` _ day of August, 2007 by and between the CITY OF ARCADIA ( "City"), CARUSO PROPERTY MANAGEMENT, INC., a California corporation ("Caruso Management "); SANTA ANITA ASSOCIATES HOLDING CO., LLC, a California limited liability company ( "Caruso LLC "); THE SANTA ANITA COMPANIES, INC., a Delaware corporation ( "Racetrack Owner "); SANTA ANITA COMMERCIAL ENTERPRISES, INC., a Delaware corporation ( "Commercial Owner "); SANTA ANITA ASSOCIATES, LLC, a Delaware limited liability company (the "Joint Venture Company "); MAGNA ENTERTAINMENT CORPORATION., a Delaware corporation ( "Magna "); LOS ANGELES TURF CLUB, INCORPORATED, a California corporation ( "Turf Club "); RICK J. CARUSO, and CARUSO AFFILIATED HOLDINGS, LLC, a California limited liability company) (sued erroneously in the litigation described in the Recitals below as CARUSO AFFILIATED, INC., an entity that does not exist) ( "Caruso Holdings "). Caruso LLC, Caruso Holdings, Racetrack Owner, Commercial Owner, Joint Venture Company, Magna, Turf Club, Rick J. Caruso and Caruso Affiliated are collectively referred to herein as "Other Real Parties," Magna, Turf Club, Caruso and Caruso Affiliated are a subclass of Other Real Parties referred to herein as "Dismissible Real Parties." The Other Real Parties and Caruso Management are collectively referred to herein as the "Real Parties ", each being a "Real Party." "Parties" shall refer to Real Parties and City collectively. RECITALS This Agreement is entered into based upon the following facts, understandings and. intentions of the Parties: A. On April 17, 2007, City certified a Final Environmental Impact Report under the California Environmental Quality Act ( "CEQA"), approved a General Plan amendment, a Specific Plan, a zoning ordinance, a development agreement and other ancillary approvals (the "Project Approvals ") in connection with a project referred to by the Parties as "The Shops at NACICARUAISASDocslw -Joint Defense (City). Agml • • Santa Anita" (the "Project "). Caruso Management is the developer of the Project and the Real Party responsible for the development as a member of the Joint Venture Company, The Other Real Parties (other than the Dismissible Real Parties) have an interest in the Project that qualifies them as indispensable parties in the "Litigation" described and defined below. B. On May 15, 2007, Westfield, LLC, a Delaware limited liability company, Santa Anita Shoppingtown LP, a Delaware limited partnership, and Santa Anita Fashion Park, LP, a Delaware limited partnership (collectively the "Westfield Petitioners "), filed suit in the Superior Court for the County of Los Angeles, Case No. BS 108923 (the "Westfield Litigation "), seeking to set aside the approvals granted by City as described in Recital A. All the Parties to this Agreement, except Rick J. Caruso and Caruso Affiliated, are named as Real Parties in Interest in the Westfield Litigation. C. On May 16, 2007, Arcadia First! ( "First ") filed suit in the Superior Court for the County of Los Angeles, Case No. BS 108937 (the "AF Litigation"), also seeking to set aside the approvals granted by City as described in Recital A. The Westfield Litigation and the AF Litigation are referred to collectively herein as "the Litigation." For purposes hereof, "Litigation" shall include all court proceedings required to reach settlement and /or final judgment in the Westfield Litigation and the AF Litigation, including, but without limitation, proceedings on appeal and remand. D. From the outset of the proceedings before City that led to the Project Approvals, the Westfield Petitioners and First took positions that clearly included the threat of litigation to challenge the Project Approvals, if City exercised its discretion and granted them. City and Real Parties have been proceeding in contemplation of such litigation in a cooperative fashion and the provisions hereof document an agreement that has previously existed between them since the date the Project Approvals were granted, as contemplated in part pursuant to the terms of the Development Agreement that is a component of the Project Approvals and other undertakings and agreements that were part of the application for Project Approvals. E. Dismissible Real Parties are parties who have been named as Real Parties in Interest in either the Westfield Litigation or the AF Litigation who are not proper parties to the action because they are not indispensable to any relief the Petitioners seek, do not own any 2 NAMCARUMSA1Docs\w -Joint Defense (City). Agmt interest in fee title to the land to which the Project Approvals apply, and are not signatories to the Development Agreement. Real Parties will attempt to have the Dismissible Real Parties dismissed from the Westfield Litigation and the AF Litigation prior to trial. Whether they are dismissed or not, however, the provisions of this Agreement shall continue to apply to them until such time as the Westfield Litigation and the AF Litigation have reached final judgment (with no further avenues of appeal remaining available) or have been resolved through settlement. F. Real Parties desire to provide for a joint, single and coordinated defense of the Litigation and, to that end, have appointed a single counsel to act as trial counsel for all of them in the Litigation, to provide for regular access to the documents, materials and information relating to the Project and the Litigation, and to establish a protocol for the manner in which the Litigation will be handled on their joint behalf. City has appointed its City Attorney to act as its counsel in the Litigation and Real Parties and City desire to establish the procedures for coordination between their respective counsel in the management of the Litigation. G. City and Real Parties also desire to state the terms and conditions under which they will have access to the documents, materials and information required for coordination of their joint defense of the Litigation, that may include confidential information, attorney /client privilege communications, attorney work product and/or other protected or privileged documents in a manner that preserves the confidentiality and protected status, as the case may be, of the documents, materials and information as to third parties. To that end, City and Real Parties desire that all information and communications that are privileged or protected as to any of the Parties or their attorneys or consultants shall remain privileged or protected from disclosure to third parties notwithstanding the communication of such information or communications to any of the other Parties or their attorneys or consultants in accordance with all applicable privileges including, but without limitation, Section 6254(k) of the California Government Code and Section 912(d) of the California Evidence Code as construed in relevant case law regarding communication of information to further the interests of the client and communication of information that is necessary to accomplish the purposes for which the Parties have retained counsel to defend the Litigation. NAOCARMSAOorskw Joint Defense (City). Agmt 0 0 AGREEMENT NOW THEREFORE, IN CONSIDERATION of their mutual covenants and promises herein contained, the Parties agree as follows: AMointment and Direction Of Lead Counsel. (a) Real Parties have appointed and retained Ellman Burke Hoffman & Johnson, P.C. ( "EBH&J ") (through Howard N. Ellman, Esq.), and DLA Piper ( "DLA ') (through Linda Bozung, Esq.) to act as counsel for the Real Parties in defense of the Litigation, with the assistance and counsel of Joel S. Moskowitz, Esq., as part of the legal defense team, in coordination with counsel appointed by City. EBH&J and DLA are collectively referred to herein as "Real Parties' Defense Counsel." (b) City has appointed and retained Best Best & Krieger ( "BBK") (through Michelle Ouellette, Esq., and Stephen P. Deitsch, Esq.), to act as counsel for City in defense of the Litigation, in coordination with counsel appointed by Real Parties. BBK is referred to herein as "City Defense Counsel." (c) Caruso Management shall have the exclusive responsibility for direction of Real Parties' Defense Counsel, and Real Parties' Defense Counsel shall have no obligation to take direction from any of the Other Real Parties. (d) City shall have the exclusive responsibility for direction of City Defense Counsel and City Defense Counsel shall have no obligation to take direction from any of the Real Parties. Management by City of its defense shall be determined by City. (e) Unless Real Parties' Defense Counsel (or either of them) is replaced or otherwise terminated by Caruso Management, the appointment shall continue until the conclusion of the Litigation, either by final judgment or settlement. Unless City Defense Counsel is replaced or otherwise terminated by City, the appointment shall continue until the conclusion of the Litigation, either by final judgment or settlement. NAC%CARUAISA\DccslwJ0Int Defense (City). Agmt (f) Caruso Management shall be responsible for payment of the fees and costs of Real Parties' Defense Counsel, in accordance with its agreements with Real Parties' Defense Counsel. (g) City shall be responsible for payment of the fees and costs of City Defense Counsel in accordance with its agreements with City Defense Counsel, subject to reimbursement in accordance with the terms of the Development Agreement (and another agreement in the application for the Project Approvals) that is a component of the Project Approvals. (h) Each of the Other Real Parties shall provide to Real Parties' Defense Counsel the names and contact information of its representative(s) to be kept apprised of events and circumstances that arise during the course of the Litigation. (i) Although entitled to information, none of the Other Real Parties shall have the right to instruct Real Parties' Defense Counsel or City Defense Counsel concerning litigation tactics or strategy. Real Parties' Defense Counsel shall be guided in such matters solely by representatives of Caruso Management, and City Defense Counsel shall be guided in such matters solely by representatives of City. To the extent that Other Real Parties are asked for their views with respect to tactics, strategy, drafts of court documents or other matters that pertain to the Litigation, they shall act promptly, recognizing that time is of the essence. (j) There is no present conflict of interest among the Parties with respect to the Litigation. Development in the future of a conflict is not anticipated by the Parties but, given the inherent nature of multiple parties defending litigation, a future conflict is not inconceivable. If such a conflict of interest does arise in the future among the Parties, Real Parties' Defense Counsel may continue to represent Caruso Management in the Litigation (and any of the Other Real Parties not then in conflict with Caruso Management), and no Party shall have the right to disqualify EBH &J and/or DLA from continuing such representation; and City Defense Counsel may continue to represent City and no Party shall have the right to disqualify BBK from continuing such representation. Similarly, if for any reason any of the Other Real Parties withdraws from participation in this Agreement as provided in Section 8(e) below, Real Parties' Defense Counsel shall continue to represent the remaining Parties in the Litigation, and N: \C\CARUA \SA\Docs \w -Joint Defense (City). Agmt 0 0 the withdrawing Party shall not have the right to disqualify EBH&J and /or DLA from continuing such representation; nor shall the withdrawing Party have the right to disqualify BBK from continuing to represent City. 2. Confidential Information. This joint defense effort, by virtue of its purpose, operation and use, may involve the exchange and generation of information, documents and other material subject to the attorney /client, work product, joint defense and other applicable privileges between and among the Parties. From time to time, the Parties may elect to disclose to each other such information as each of them deems appropriate to further the joint defense purposes of this Agreement. Such information may be disclosed to or transferred among the Parties, or their attorneys or consultants, orally or in writing or by any other appropriate means of communication. Nothing in this Agreement shall require any Party, its counsel or its consultants to share any particular privileged information or documentation, or attorney work product, with any other Party or its attorney or consultants. 3. Effect Of Intra -Party Disclosures. The disclosure of information among the Parties pursuant to this Agreement (defined below as "Shared Information ") shall not be deemed to be: (a) A "subject matter" waiver of any attorney /client, work product or otherwise applicable privilege with respect to any information that is not specifically disclosed to the other Parties by the disclosing Party; or (b) Any waiver of any attorney /client, work product or other privilege as to any person who is not a Party to this Agreement at the time of such disclosure. To ensure the protection of the mental impressions, conclusions, opinions, legal theories and other work product of counsel and of experts retained to assist (jointly or individually) the Parties or their respective counsel, as well as client confidences and other privileged information (or information otherwise protected from disclosure), all information that may hereafter be received from one another in connection with this joint defense effort, or from third parties where a claim of privilege may be asserted, shall be considered Shared Information for purposes hereof, shall be subject to the terms of this Agreement and considered privileged pursuant to the terms hereof. NA0CARUAISAMocslw -Jo1nt Defense (Clly). Agmt 0 4. Protection Of Shared Information. All Shared Information (that is not already a matter of public record) shall be handled in confidence and protected from disclosure to the maximum degree permitted by law, shall be used only in connection with the joint defense purposes of this Agreement and shall not be disclosed in any way to any person or entity (including, but not limited to, any government agencies) other than: (a) the Parties and their respective counsel; (b) any consultants who are or will be assisting the Parties or their respective counsel in this joint defense effort; and (c) such other person or persons approved for such disclosure by the Parties in writing prior to the proposed disclosure. 5. Imposing Confidentiality On Third Parties With Access To Shared Information. Each Party shall take all necessary and appropriate measures to assure that any person who is granted access to any Shared Information or who participates in work on any joint efforts with respect to the Litigation, or any aspect of it, or who otherwise assists any counsel in connection with the performance of this Agreement: (a) is familiar with the terms of this Agreement; (b) agrees to comply with the terms of this Agreement; and (c) agrees that the confidentiality obligations created by this Agreement will continue to remain in effect if such person terminates his /her relationship with the respective Party. 6. Compelled Disclosure. (a) Shared Information that is not a matter of public record shall not be disclosed by any Party except as may be ordered by a court of competent jurisdiction; or as otherwise required by law. If such disclosure of Shared Information is ordered or required, such disclosure shall be made only to the extent minimally necessary to comply with such order or law and shall not be made in any event until written notice of the proposed disclosure is given to N: \C \CARUA \SA \Docs \wJoinl Defense (City). Agmt 0 the other Parties so that any Party may seek a protective order or take any other steps it deems necessary to seek to prevent such disclosure. The Party subject to such disclosure order shall seek to defer disclosure for a period of ten (10) days to allow time for any other Party to take action in an effort to prevent disclosure. By providing the notice and the ten (10) day delay (or such shorter period as the order compelling disclosure may impose), the Party subject to the order satisfies its confidentiality obligations hereunder. (b) If Shared Information becomes the subject of demand upon City made pursuant to the Public Records Act or similar enactment that imposes a duty of disclosure, City shall promptly notify the other Parties in order to give any Party an opportunity to seek to protect the confidentiality of the Shared Information prior to its disclosure by application for protective order or other lawful means. By such notification (and providing a period often (10) days prior to disclosure, if such delay does not violate any law or court or administrative order), City satisfies its confidentiality obligations hereunder. 7. Effective Date. Given the threat of litigation to challenge Project Approvals that has existed throughout the processing of the application for the Project Approvals before City (including the original application for approval of a project subsequently changed during the course of processing) and the provisions of the Development Agreement that is a component of the Project Approvals concerning defense of any such action, this Agreement shall be deemed effective as of the date Real Parties (or any of them) first applications with City for the entitlements that ultimately led to the Project Approvals. 8. Dismissible Real Parties. Real Parties'De fense Counsel will seek to obtain dismissal of the Dismissible Real Parties from the litigation on the grounds that they are not properly Real Parties in Interest herein. Whether dismissed or not, however, Dismissible Real Parties shall remain bound by the terms hereof. 9. Settlement Discussions. The Parties shall not undertake discussions to settle the Litigation as applied to them without the prior written consent or participation of the other Parties. Although the Parties will be required by law to pursue settlement discussions under CEQA, and may have occasion to explore settlement outside the terms of CEQA's mandate, they N:\C \CARUA\SA \Docs\w -Joint Defense (City). Agmt 0 0 shall not undertake such discussions separately; this is necessary in order to protect and preserve the Parties' joint interests. 10. Miscellaneous. (a) Neither the existence of this Agreement nor the exchange of Shared Information shall be used by any Party as the basis of any claim that any counsel is disqualified from representing individuals, corporations or other entities in other and different matters. (b) The Parties shall keep this Joint Defense And Confidentiality Agreement, and all terms hereof, confidential to the same extent as they are required to do with respect to Shared Information under Section 6 above, and shall not make disclosure to any third party except to the extent that such disclosure is compelled as provided in said Section, subject to the notice and other provisions therein contained. (c) No part of this Agreement shall be construed or interpreted as an admission by the Parties of any liability under any federal, state or local law, rule or regulation, or that any of the Parties is in violation of or has ever violated any federal, state or local laws, rules or regulations. (d) This Agreement maybe executed in multiple counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. Facsimile signatures shall be treated as originals. (e) If any provision of this Agreement is determined to be invalid or unenforceable, the balance of this Agreement shall remain in full force and effect. (f) A Party may withdraw from participation in this Agreement by providing the other Parties at least thirty (30) days' prior written notice of the intention to withdraw. Any such withdrawal shall operate prospectively and not retrospectively. No such termination shall be deemed to waive any privilege or obligation to retain the confidentiality of any Shared Information that the terminating party has obtained. NAC%CARUXSA\Docs \w•Jotnt Defense (City). Agmt 0 0 (g) Unanimous consent shall be required in order to waive the joint defense privilege contained in this Agreement or expand the Parties to this Agreement or to modify this Agreement. Any modification must be in writing and signed by all of the Parties. (h) The terms hereof shall be binding upon and enure to the benefit of the successors and assigns of the parties hereto. (i) The obligations of all Parties under this Agreement (including, without limitation, any withdrawing Party) shall survive the withdrawal of any Party and the termination of this Agreement and shall remain in full force and effect until the Litigation is terminated by final judgment or other settlement. (j) The Parties are not adversaries and do not anticipate becoming adversaries in connection with the Litigation or the subject matter thereof. If, despite such expectations, any Party asserts any claim against any other Party arising from the subject matter of this Litigation or in connection with the subject matter, the Party asserting the claim shall withdraw from participation in this Agreement but shall not be excused from the obligations stated herein. (k) No third parties not named herein and signatories hereto shall be entitled to claim that they are third party beneficiaries of any provision hereof. 0) As violation hereof by any Party poses the risk of causing irreparable harm to some or all of the other Parties, injunctive relief shall be available to prevent violation hereof and enforce the provisions herein contained. (m) Time is of the essence of each and every provision hereof. IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day and year first above written. "CARUSO MANAGEMENT" "COMMERCIAL OWNER" CARUSO PROPERTY EMENT, SANTA ANITA COMMERCIAL INC., a California co ati ENTERPRISES, INC., a Delaware corporation /J By: 10 NAC%CARUAISASDocs\w Joint Defense (City). Agmt • "CARUSO LLC" SANTA ANITA ASSOCIATES HOLDING CO., LLC, a Calif limited liability company By: "RACETRACK OWNER" THE SANTA ANITA COMPANIES, INC., a Delaware corporation Its: Vice President, Regulatory Affairs and Assistant Secretary "JOINT VENTURE COMPANY" SANTA ANITA ASSOCIATES, LLC, a Delaware limited lia t �company By: Its: "MAGNA" MAGNA ENTERTAINMENT CORP., a Delaware corporation t Vice President, Regulatory Affairs I� ce President, Regulatory Affairs and Assistant Secretary 11 NAMCARUAISXDocslw -Joint Defense (City). Agmt • "TURF CLUB" LOS ANGELES TURF CLUB, INCORPORATED, a California corporation By =z z- 4— Its' ce.President Regulatory Affairs and Assistant Secretary " CARUSO" RIC 12 NACICARUAISA\DocMw -Joint Defense (City). Agmt " CARUSO AFFILIATED" CARUSO AFFILIATED HOLDINGS, LLC, a limited liability company (sued erroneously in the Litigation as CARUSO AFFILIATED, INC.) By: / / Its: Managing Member "CITY" THE CITY OF ARCADIA Approved as to form: �e� ; � City Attorney