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Agreement for Collection Services I
AGREEMENT FOR COLLECTIONS SERVICES
This Collections Services Agreement entered into this 17 f day of
✓Vi�� 2010 by and between the City of Arcadia, a Municipal Corporation
( "CITY ") arid Sequoia Financial Services ( "COLLECTOR ") is hereby amended as follows:
RECITALS
A. CITY has determined that it requires the following professional services from a
COLLECTOR: Collection services for the City of Arcadia.
B. COLLECTOR represents that it is fully qualified to perform such professional
services by virtue of its experience and the training, education and expertise of its principals and
employees. COLLECTOR further represents that it is willing to accept responsibility for
performing such services in accordance with the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of mutual covenants and conditions herein
contained, CITY and COLLECTOR agree to AMEND the aforementioned Agreement as
follows:
DEFINITIONS
A. "CITY" shall refer to the City of Arcadia, which forwards the DEBT(S) which
is /are, the subject of this AGREEMENT.
B. "COLLECTOR" shall refer to Sequoia Financial Services, who
is entering into this Agreement, which shall perform the collection services
contemplated herein.
C. "DEBT" shall refer to a sum of money the CITY seeks to collect, pursuant to state
and/or federal law, from a third party debtor.
D. "DEBTOR" shall refer to the third person against whom the CLAIM is made.
E. "COMMISSION" refers to fees earned by COLLECTOR for the collections of a
CLAIM.
F. "CLAIM" shall refer to a DEBT owed to the CITY.
G. "DIRECT PAYMENT" shall refer to any payment received by "CITY" from
"DEBTOR" or on behalf of "DEBTOR" from any third party including but not limited to
payment received by "CITY" as a result of any lien filed or recorded by "CITY" prior to
assignment of the claim to "COLLECTOR ", as well as any payment received by "CITY"
from the Franchise Tax Board representing tax refunds due "DEBTOR ".
Agreement for Collection Services 2
AGREEMENT
1. EFFECTIVE DATE /APPLICABILITY
The provisions of this Agreement shall apply to all CLAIMS hereinafter forwarded by
CITY to COLLECTOR. Execution of this Agreement by CITY is not a promise to forward any
CLAIM(S) to COLLECTOR. In its sole discretion, CITY shall choose those CLAIM(S)
for which COLLECTOR shall seek collection.
2. SCOPE AND DUTIES
COLLECTOR shall provide collection services in connection with all CLAIMS as the
CITY may submit from time to time. COLLECTOR shall take reasonable steps to keep CITY
informed of progress by submitting written reports to CITY by the 15th day of each month. No
CLAIM shall be reduced without the prior written consent of CITY. It is understood
COLLECTOR makes no promise or guarantee about the outcome of any CLAIM.
3. ACCOUNTS
A. All collections for any calendar month are remitted to CITY on the 15th day of the
following month. COLLECTOR shall submit to CITY a statement which
itemizes the services rendered during the previous month and said statement shall
provide at a minimum the following information: identification of each claim, the
amount(s) collected on each claim, and the amounts deducted for COLLECTOR'S
COMMISSION.
B. COLLECTOR shall have the right to endorse for deposit and collection all
remittances received in the name of CITY on accounts assigned to COLLECTOR
and to deduct from such remittance its authorized commission.
4. BANKRUPTCY
Upon actual or constructive notice that DEBTOR has filed a bankruptcy petition,
COLLECTOR shall file, at no cost to CITY, a timely "Proof of Claim" on behalf of CITY.
COLLECTOR shall further provide to CITY copies of any filed Proof of Claim(s), any
documents transmitted to COLLECTOR by the Federal Bankruptcy Court, any documents
transmitted to COLLECTOR by any parties in the bankruptcy proceeding. No further reports
need be made to CITY unless COLLECTOR receives a payment, in which a statement will be
provided as set forth in Paragraph 3.
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Agreement for Collection Services 3
5. COMMISSION
A. Unless otherwise specified upon the transmittal of a CLAIM, CITY shall pay
COLLECTOR a COMMISSION rate of 25% on all sums actually collected and
remitted to CITY by COLLECTOR from amounts due CITY from third party
debtors. This sum shall cover the full costs of COLLECTOR'S time and all other
direct and indirect costs in collecting the CLAIM, including the work of
employees and subcontractors to COLLECTOR. COLLECTOR shall earn no
COMMISSION prior to its acknowledgement of the CLAIM. No suit fee shall be
applied or requested over and above the fee for collection set forth herein. If
CITY engages COLLECTOR to commence litigation, CITY shall pay
COLLECTOR a COMMISSION rate of 30% on all sums actually collected.
B. COLLECTOR shall have the right to settle any account assigned to a maximum
of seventy -five percent (75 %) of the principal balance, which is a twenty -five
percent (25 %) reduction. Any settlement for an amount greater than 25%
reduction requires prior written consent by CITY. COLLECTOR will make every
effort on all accounts assigned by CITY to recover the full amount of the principal
balance due from the debtor.
6. INDEMNIFICATION
To the full extent permitted by law, COLLECTOR shall indemnify, hold harmless and
defend CITY, its officers, agents, employees and volunteers from and against any and all claims
and losses, costs or expenses for any damage due to death or injury to any person and injury to
any property resulting from any alleged intentional, reckless, negligent, or otherwise wrongful
acts, errors or omissions of COLLECTOR or any of its officers, employees servants, agents, or
subcontractors in the performance of this Agreement. Such costs and expenses shall include
reasonable attorneys' fees incurred by counsel of CITY'S choice.
The City shall defend, indemnify and hold harmless the COLLECTOR and it's respective
Affiliates, directors, officers, employees and agents against costs, expenses, demands, damages
and other obligations including but not limited to actual attorney fees and expenses to third
parties incurred or suffered in whole or in part as a result of any breach of any provision of the
Agreement by the CITY, or any active or passive negligence or intentional misconduct of the
CITY. This indemnification applies to CITY actions taken on accounts both prior to and
subsequent to placement.
7. LITIGATION
A. Upon COLLECTOR'S determination to sue a DEBTOR, COLLECTOR shall
request authorization to sue from CITY in writing. Upon receipt of written
authorization to sue from CITY, COLLECTOR at its option may retain its House
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Agreement for Collection Services 4
Counsel who are employees of COLLECTOR to represent COLLECTOR and
CITY in any such litigation and are covered and bonded by COLLECTOR for
Errors and Omissions as heretofore required by CITY. For purposes of this
Agreement only, said attorney(s) shall be considered the agent of COLLECTOR,
and shall be bound by the terms of this Agreement.
B. CITY agrees to promptly respond to COLLECTOR'S requests for authorization
on all claims /accounts being recommended for litigation by COLLECTOR and to
forward any additional documentation that may be requested in order to proceed
with authorized legal proceedings.
C. CITY agrees to furnish, when necessary to COLLECTOR a witness for all trials,
mediations, arbitrations and hearings as needed, in addition to providing any and
all declarations and documents necessary for litigation.
D. CITY warrants that none of the claims assigned to COLLECTOR hereunder, have
been previously assigned to other collection agencies, attorneys or other third
party debt collectors, unless such prior assignments have been terminated and
reassigned to CITY. Any monies received by a prior third party debt collector
after being assigned to COLLECTOR hereunder, shall be deemed a direct
payment for which COLLECTOR shall be entitled to its full fee.
E. COLLECTOR will compute interest on all accounts assigned for collection at an
interest rate currently allowed by law. All interest and attorney fees collected will
be retained by COLLECTOR, both pre judgment and post judgment interest.
Interest and attorney fees will only be retained by COLLECTOR after the
principal balance assigned has been collected or otherwise settled.
F. SUING IN SMALL CLAIMS COURT
1. At COLLECTOR'S option, COLLECTOR with the consent of CITY shall
prepare and assist CITY to file small claims suits for claims of $7,500.00
or less. COLLECTOR will advance all filing fees and related court costs,
prepare all documents necessary for filing and review same with the
designated CITY employee prior to said CITY employee's signing and
filing of suit. COLLECTOR will process all suits filed for service of
process and notify CITY of all dates scheduled by the court for trial.
CITY agrees to provide a CITY employee familiar with CITY procedures
for citation enforcement and familiar with each case to be tried, to
represent CITY at the time of trail.
2. Upon receipt of a judgment in favor of CITY, CITY agrees to immediately
execute an assignment of such judgment to COLLECTOR as prepared by
COLLECTOR, for collection and enforcement by COLLECTOR.
Agreement for Collection Services 5
3. COLLECTOR shall be entitled to a commission or fee for all small claims
actions filed as of the date of filing as provided in paragraph five (5)
supra, of thirty percent (30 %) and as otherwise provided for herein.
4. COLLECTOR shall be entitled to recover all court filing fees and other
court related costs such as service of process fees, advanced by
COLLECTOR, from the first monies collected for or received by CITY
and COLLECTOR shall have a lien against all funds collected or received
by CITY to cover court costs expended by COLLECTOR.
8. INDEPENDENT STATUS
COLLECTOR is, and for all purposes under this Agreement shall be and act as an
independent contractor. Nothing contained in this Agreement shall be construed as creating an
employer /employee relationship between the CITY and COLLECTOR.
9. TERM AND TERMINATION OF SERVICES
A. This Agreement shall continue in effect for a period of two (2) years and shall be
renewed for a like period automatically unless otherwise terminated in writing as
provided for herein
B. Any claim assigned to COLLECTOR hereunder, may not be cancelled by CITY
for the first 180 days after assignment without the consent of COLLECTOR.
After 180 days, CITY may cancel any claim by giving 30 days written notice of
cancellation EXCEPT for accounts in a paying, promise to pay, or legal status
which will require the consent of COLLECTOR and at COLLECTOR'S option
may require reimbursement to COLLECTOR of all court costs and attorneys fees
incurred including those of "house counsel" and a Creditor's lien not to exceed
20% of any monies recovered by CITY after cancellation.
C. Either party may terminate this Agreement by giving 60 days written notice of
termination. Upon such notice of termination, CITY may cease assigning new
claims to COLLECTOR, and COLLECTOR shall return all claims without
charges for any fees and except as provided in paragraph B above for those claims
in a paying, promise to pay or legal status.
10. RECORDS AND INSPECTIONS
COLLECTOR shall maintain full and accurate records with respect to all matters covered
under this Agreement for a period of four years. CITY shall have access, without charge, during
normal business hours to such records, and the right to examine and audit the same and to make
transcripts there from, and to inspect all data, documents, proceedings, and activities.
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for Collection Services
11. CITY NOT OBLIGATED TO THIRD PARTIES
n.
CITY shall not be obligated or liable under this Agreement to any party other than
COLLECTOR.
12. NOTICES
Any notices, bills, invoices, or reports required by this Agreement shall be deemed received
on: (a) the day of delivery if delivered by hand or overnight service during COLLECTOR'S and
CITY'S regular business hours; or (b) on the third business day following deposit in the United
States mail, postage prepaid, to the addresses set forth, below, or to such other addresses as the
parties may, from time to time, designate in writing pursuant to the provisions of this section.
If to CITY:
P. Shannon Huang
Financial Services Manager
City Treasurer
Administrative Service Department
240 West Huntington Drive
Post Office Box 60021
Arcadia, CA 91066 -6021
With a courtesy copy to:
Stephen P. Deitsch, City Attorney
Arcadia City Hall
240 West Huntington Drive
Arcadia, CA 91007
If to COLLECTOR:
King Bechtel
Chief Marketing Officer
Sequoia Financial Services
500 N. Brand Blvd
Suite 1200
Glendale, Ca 91203
Phone (818) 409 -6000
Facsimile (818) 552 -1111
Cl
for Collection Services
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13. NON - DISCRIMINATION AND EQUAL EMPLOYMENT OPPORTUNITY
In the performance of this Agreement, COLLECTOR shall not discriminate against any
employee, subcontractor, or applicant for employment because of race, color, creed, religion,
sex, marital status, national origin, ancestry, age, physical or mental handicap, medical condition,
or sexual orientation or other basis prohibited by law. COLLECTOR will take affirmative action
to ensure that subcontractors and applicants are employed, and that employees are treated during
employment, without regard to their race, color, creed, religion, sex, marital status, national
origin, ancestry, age, physical or mental handicap, medical condition, or sexual orientation.
14. ASSIGNABILITY: SUBCONTRACTING
COLLECTOR shall not delegate, transfer, subcontract or assign its duties or rights
hereunder, either in whole or in part, without CITY's prior written consent, and any attempt to
do so shall be void and of no effect. City shall not be obligated or liable under this Agreement to
any party other than COLLECTOR.
15. ATTORNEY'S FEES
In the event that CITY or COLLECTOR commences any legal action or proceeding to
enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to
recover its costs of suit, including reasonable attorney's fees.
16. ENTIRE AGREEMENT
All documents referenced as exhibits in this Agreement are hereby incorporated in this
Agreement. In the event of any material discrepancy between the express provisions of this
Agreement and provisions of any document incorporated by reference, the provisions of this
Agreement shall prevail. This instrument contains the entire Agreement between CITY and
COLLECTOR with respect to the subject matter herein. No other prior oral or written
agreements are binding on the parties. Any modification of this Agreement will be effective
only if it is in writing and executed by CITY and COLLECTOR.
17. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of the
State of California.
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Agreement for Collection Services 8
18. SEVERABILITY
Wherever possible, each provision of this Agreement shall be interpreted in such a
manner as to be valid under applicable law. If any provision of this Agreement is determined by
a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions
shall nevertheless continue in full force and effect.
19. CITY'S REPRESENTATIVE
The City Manager or his designee shall represent the CITY in the implementation of this
Agreement.
TO EFFECTUATE THIS AGREEMENT, the parties have caused their duly
authorized representatives to execute this Agreement on the dates set forth below.
20. SIGNATURES
COLLECTOR affirms that the person(s) executing this Agreement have authority to bind
the corporation.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
CITY OF ARCADIA
By:
nald enman
City Manager
Dated: M�� Z� , 2010
ATTEST:
SEQUOIA FINANCIAL SERVICES
By: �4k&
King Wechtel
Chief Marketing Officer
CONCUR:
Hue C. Q a
Administrative Services Director
Agreement for Collection Services 9
FORM:
APPROVED AS TO CMNf
L6C'� P
S
City Attorney
SEQUOIA FINANCIAL SERVICES
By:
oy t. du Plessis
President and C.E.O.
y:
JU
sia Ahmonuel
Secretary, Treasurer, and Executive
Assistant to C.E.O.
')�� W*""
King Be Atel
Chief Marketing Officer
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