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Resolution No. 90361 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19' 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 9036 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON INDEMNIFYING, HOLDING HARMLESS AND AUTHORIZING THE DEFENSE OF COUNCILMAN WILLIAM MCCORMICK RESPECTING CASE NOS. BS 101423 AND 06K04481 WHEREAS, a complaint against Hilario Gonzales, William Davis, and William McCormick, individually, has been filed in Case No. 06K04481; and WHEREAS, a complaint against Leonis C. Malburg, Thomas A. Ybarra, and William McCormick, individually, has been filed in LASC Case No. BS 101423; and WHEREAS, LASC Case No. BS 101423 and Case No. 06KO4481 are collectively referred to herein as the "Lawsuits;" and WHEREAS, William McCormick serves as a Councilman of the City of Vernon; and WHEREAS, the City of Vernon has received a request from William McCormick pursuant to California Government Code Section 995 to have the City provide for his defense in the Lawsuits; and WHEREAS, the allegations within the Lawsuits are related to actions and/or omissions taken in the course and/or scope of William McCormick's duties as a Councilman in the City of Vernon; and WHEREAS, the City of Vernon wishes to indemnify, hold harmless and authorize the defense of William McCormick against any judgment, award, liability, costs, expenses, interest and attorney's fees in the Lawsuits arising out of any act, failure to act, or omission in the performance of his duties and responsibilities as an officer of the City of Vernon; and 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WHEREAS, the City of Vernon's intent to indemnify William McCormick is not an admission or a determination by the City of Vernon as to the merits of any claims or allegations raised in the Lawsuits. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: SECTION 1: The City Council of the City of Vernon hereby finds and determines that the recitals contained hereinabove are true and correct. SECTION 2: The City Council of the City of Vernon hereby indemnifies, holds harmless and authorizes the defense of William McCormick against any judgment, award, liability, costs, expenses, interest and attorney's fees in the Lawsuits arising out of any act, failure to act, or omission in the performance of his duties and responsibilities as an officer of the City of Vernon. SECTION 3: The City Council of the City of Vernon hereby approves and authorizes the expenditure of General Fund monies to pay any judgment, award, liability, costs, expenses, interest and attorney's fees in the Lawsuits. SECTION 4: The Acting City Clerk of the City of Vernon shall certify to the passage of this resolution, and thereupon and thereafter the same shall be in full force and effect. APPROVED AND ADOPTED this 3rd day of May, 2006. ATTEST: BRUCE V. MA KENHORST, JR. Acting Clerk - 2 - LEONIS C.-M LBURG, Mayor 1 2 3 4 5 6 7 8 9 10 11 12 13 14 !, 15 16 17 18 19 20 21 22 23 24 25 26 27 28 STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) I, BRUCE V. MALKENHORST, JR., Acting City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 9036, was duly adopted by the City Council of the City of Vernon at a regular meeting of the City Council duly held on Wednesday, May 3, 2006, and thereafter was duly signed by the Mayor of the City of Vernon. (SEAL) BR E V. MALKENHORST, JR. Ac ing 'ty Clerk - 3 - SUPPORTING DOCUMENTS ANTHONY MURRAY for Loeb & Loeb LLP 10100 Santa Monica Boulevard Suite 2200 Los Angeles, CA 90067-4120 Via Federal Express May 3, 2006 William Michael McCormick 3382 E. 501h Street Vernon, CA 90058 Re: Huff v. Davis, et al. and Cibrian v. Martinez et al. Dear Mr. McCormick: Direct 310.282.2373 Main 310.282.2000 Fax 310.919.3716 amurray@loeb.com It was a pleasure meeting with you on April 12. 1 explain below the basis of our engagement. Obviously if you have questions, I will welcome your call. Scope of Services. Our responsibilities will be to represent you regarding Huff v. Davis in Los Angeles Superior Court case no. 06KO4481 (the Davis case) and Cibrian v. Martinez, Los Angeles Superior Court Case No. BS 101423) ( collectively, the "Lawsuits"). Our engagement will also include any other services we agree to perform. Of course, we will regularly consult with you. The scope of our services does not include an evaluation of your insurance coverage unless we specifically agree to do so. We have agreed to accept service of the complaint and summons in the Lawsuits. In return, plaintiffs have provided us with an extension of time to respond, until May 8, 2006, for the Davis case, and May 10th, 2006, for the Cibrian case. As you know, we have also agreed to represent Messrs. Gonzales, Ybarra, Davis and Malburg in the Lawsuits. Based on my representation of Leonis C. Malburg in a related matter brought by Don A. Huff et al. against the mayor and his restaurant (case no. BC 346800), and my April 12, 2006, meeting with you and the other city council members, I do not believe that your interests diverge from the interests of Mr. Malburg or any other council member, either in the Lawsuits, or in case no BC 346800, or in any matter that has been related to case no BC 346800. 1 therefore do not see an actual conflict of interest between you, on the one hand, and the mayor and other city council members, on the other. If for any reason you believe my understanding is incorrect, or there is anything that you believe I should know regarding your interests, particularly as your interests pertain to Leonis Malburg, Hilario Gonzales, William Davis and Thomas Ybarra, please let me know at once. I also understand that my former partner Carla Feldman currently represents you, the City of Vernon, and other City council members in a separate lawsuit, and that she previously handled some matters for the City while at Loeb & Loeb LLP. It is also my understanding that any position you or the City may have regarding the Lawsuits is in no way adverse to your position Los Angeles New York Chicago Nashville www.loeb.com A limited liability partnership including professional corporations William Michael McCormick May 3, 2006 Page 2 in the suit in which Ms. Feldman represents you. Therefore, I do not believe that there is any conflict of interest between you and the City regarding the Lawsuits. To be sure the City agrees that we can represent you in the Lawsuits, I will ask that Eric Fresch, Esq., the City Attorney, sign below to indicate that the City agrees that there is no conflict and that he will notify us if he later believes that a conflict has arisen. I am sending an extra copy of this letter for his signature to Mr. Fresch. Even though we do not believe there is any conflict, under our rules we are obliged to discuss the issue of a potential conflict of interest. Whenever lawyers represent more than one client at the same time, or even successively, there is the potential for a conflict of interest. Rule 3- 310(C) of the Rules of Professional Conduct of the State Bar of California provides: A member [of the State Bar] shall not, without the informed written consent of each client: (1) Accept representation of more than one client in a matter in which the interests of the clients potentially conflict; or (2) Accept or continue representation of more than one client in a matter in which the interests of the clients actually conflict. In addition, Rule 3-310(E) of the Rules of Professional Conduct provides: A member shall not, without the informed written consent of the client or former client, accept employment adverse to the client or former client where, by reason of the representation of the client or former client, the member has obtained confidential information material to the employment. As stated above, I believe that the interests of you and the City are the same, that there is no actual conflict of interest now and that it is unlikely there will be a conflict. I also believe that the same is true regarding your interests, and the interests of Leonis Malburg, Hilario Gonzales, William Davis and Thomas Ybarra. However, if in the unlikely event a conflict should arise you understand and agree that depending on the nature of any conflict of interest, we shall be entitled to withdraw from representing you, if in our judgment the conflict is of such a degree that it would be ethically inappropriate for us continue the representation. You also understand and agree that we would not be able to represent your interests against any other joint client, such as Leonis Malburg, Hilario Gonzales, William Davis or Thomas Ybarra, and that we will not be able to disclose any confidential information in our possession received from or concerning any of our clients which would be material to any other joint client. We request your confirmation that you have considered the actual and reasonably foreseeable adverse effects of our representation. We also request your confirmation that we encourage you to consult with other counsel regarding any actual or potential conflicts of interest. Other counsel could include Eric T. Fresch, the City Attorney of Vernon. Your signature below will William Michael McCormick May 3, 2006 Page 3 confirm that you have considered and understand these conflict issues and consent to our representation of you under these circumstances. 2. Fees. Our fees will be charged based on the actual time spent performing legal services at the usual hourly rates in effect at the time services are performed for the lawyers, law clerks and legal assistants who are involved in the case. We will advise you of any significant change in our hourly rates before they become effective. Our firm's present hourly rates range from $215 to $850 an hour for lawyers and $200 to $280 an hour for paralegals. I will be principally responsible for handling your case and will work with Patrick Downes and others in our firm as needed. My current hourly rate is $650. The current hourly rate for Patrick Downes is $425. Depending on need and availability, other Loeb & Loeb lawyers or paralegals may be involved. If the City agrees to pay and does pay our fees and costs under the terms of this agreement, we are willing to represent you without personal contribution from you. If for any reason the City does not pay our fees and costs, you would be responsible to pay the fees and costs. 3. Retainer. This firm normally requires that clients pay us an initial retainer for new cases. Because of our past relationship with the mayor and the City, we do not ask for a retainer for this case. 4. Expenses Incurred and Other Charges. In addition to our fees, we will expect you to reimburse us for all expenses incurred on your behalf, including long distance telephone calls, travel costs, including first-class air fare, air freight, commercial messengers, computer research terminal time and printing costs, secretarial and word processing overtime when dictated by your needs and the like; we will expect you to pay us for all photocopying (currently 150 per page) and telecopying (currently 500 per page) done by us with respect to your matter(s); and if we are asked to incur any such expenses on your behalf in excess of $2,000 in any one instance, we will ordinarily ask you to prepay those expenses. In addition, we will ordinarily expect you to pay directly the fees and expenses of any third parties, such as consultants, appraisers, expert witnesses and court reporters, engaged with respect to your matter(s), where such fees and expenses exceed $2,000 in any one instance. In the event that, before or after our representation concludes, we are served with a subpoena or request for production of documents or testimony by any third party, you agree to pay for all of our reasonable fees and costs incurred in responding to such demand. 5. Billing Practices. We will send to you and the City Attorney an invoice, monthly, detailing all of the fees, costs and expenses incurred during the previous month. These invoices will give you sufficient detail to enable you to determine who performed the services on your behalf, the amount of time expended in performing those services and the nature of the expenses incurred. It is agreed that invoices will be paid promptly after receipt. William Michael McCormick May 3, 2006 Page 4 6. Termination of Representation. Either you or this firm is, of course, free to terminate our relationship at any time. In the unlikely event this firm should terminate, we will do so in a manner which complies with applicable law, court rules and the Rules of Professional Conduct of the State Bar of California. 7. Arbitration. We look forward to a mutually productive relationship with you. However, if you become dissatisfied for any reason with the fees charged or the services we have performed, we encourage you to bring that to our attention immediately. It is our belief that most such problems can be resolved by good faith discussions between the parties. Nevertheless, it is always possible that some dispute may arise which cannot be resolved by discussions between us. We believe that such disputes can be resolved more expeditiously and with less expense to all concerned by binding arbitration than by court proceedings. Arbitration is a process by which both parties to a dispute agree to submit the matter to an arbitrator and to abide by the arbitrator's decision. In arbitration, there is no right to a trial by jury, and the arbitrator's legal and factual determinations are generally not subject to appellate review. Rules of evidence and procedure are often less formal and rigid than in a court trial. Arbitration usually results in a decision much more quickly than proceedings in court, and the attorneys' fees and other costs incurred by both sides are usually substantially less. Of course, you are encouraged to discuss the advisability of arbitration with other counsel or any of your other advisors and to ask any questions which you may have. By executing this letter you agree that if any dispute between you and the firm arises out of this Agreement, our relationship with you or our performance of any current or future legal services, whether those services are the subject of this particular engagement letter or otherwise, that dispute will be resolved solely by binding arbitration in Los Angeles, California, before a retired California superior court judge under the auspices and the commercial arbitration rules of the American Arbitration Association. The disputes subject to binding arbitration will include, without limitation, disputes regarding attorneys' fees or costs and those alleging negligence, malpractice, breach of fiduciary duty, fraud or any claim based upon a statute, as well as any dispute as to the arbitrability of any such claims. The arbitrator's award will be final and binding, and judgment thereon may be entered in any court of competent jurisdiction. Arbitration will be the sole means of resolving any such disputes, and both parties waive their rights to resolve disputes by jury trial or other court proceedings. The prevailing party in any such arbitration or litigation will be entitled to recover all attorneys' fees (including, in the event we are the prevailing party, the value of the time of all attorneys in our firm who perform legal services in any such arbitration or litigation, computed at their normal billing rates), all experts' fees and expenses and all costs (whether or not such costs are recoverable pursuant to the California Code of Civil Procedure) which may be incurred in connection with either obtaining or collecting any judgment and/or arbitration award, in addition to any other relief to which that party may be entitled. Again, I am delighted to be working with you. AGREED B �L Y• Michael McCormick The City of Vernon By: Eric Fresc Its: City Attorney :prt 20768610002 LA1535237.1 Sincerely, & At � A4 Anthony Murray for Loeb & Loeb LLP Date: 6'— /�` a Date: William Michael McCormick May 3, 2006 Page 5 CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro-Tem WM. 'BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL McCORMICK Councilman May 10, 2006 4305 Santa Fe Avenue, Vernon, California 90058 telephone (323) 583-8811 Loeb & Loeb LLP 10100 Santa Monica Boulevard Suite 2200 Los Angeles, CA 90067-4120 Attn: Anthony Murray Re: Engagement Agreement Letters SOL BENUDIZ Police Chief MARK C. WHITWORTH Acting Fire Chief LEWIS J. POZZEBON Director of Environmental Health S. KEVIN WILSON Director of Community Services SHARON L. DUCKWORTH Acting City Treasurer Enclosed herewith a copies of the following fully executed Engagement Agreement Letters with Messrs: Leonis C. Malburg Thomas A. Ybarra Hilario Gonzales William Michael McCormick William Davis If you have any questions, please call Bruce V. Malkenhorst, Jr. at 323/583-8811 ext. 266. .Sincerely, Nell t% Deputy City Clerk :ng g%s , wxduglvdt Inbugtriui