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HomeMy WebLinkAboutC-2525/ /Do -/4) 25 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. 2 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 I 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. E 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 7 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. 7 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 /LvdC4 fie- SS %S —CCP