Countersignature Litigation Agreement Made Easy

Countersignature litigation agreement

and he has a great practice though derived and being litigation and many judgments and looking at how to take situations that might not be so good and tournaments up we got act for overall parties also assisting where this year will be rollin Pena director of economic development for the city of San Angelo in the same is low economic development corporation with your executive director also he has TG government economic development haven't worked in you know I think a number of industries that help related support community growth and development and really a vested graduate of to assault Ross University bless your heart so Teresa James currently the city attorney for the city of San Angelo she actually link started in Abilene as an assistant city attorney but has a has a great I think record community service community achievement these folks are going to talk this afternoon about one of those agreements that performance-based agreement where some litigation was involved because of non performance so at this point is all over you know or to do this or like takes everyone for coming out for joining us does he just turned money this talk Barlow localnet against me but I am a lawyer and I'm here to talk to you guys today about something I'll be the lawyer to the second time around again thanks to the TDC for allowing us to present today I very much enjoyed attending this conference and hearing about the success stories I was proud to be here this morning when the city of San Angelo and its Development Corporation was honored for its excellence and received an award today for a program that it had done what we're here to talk about now is not that this presentation will focus on when things don't go so right and so in addition to te d c-- for allowing us to present today i want to thank mr. Pena and Teresa James for being here because frankly I think it takes a little bit of courage to get in front of a roomful of people and talk about a project that did not go the way it was supposed to if it had gone the way it was supposed to I wouldn't be here the only projects I hear about are the ones that don't feel right so hopefully with the experience that we lived through in the case we're going to talk about today we can provide some insight a little education a little bit about the law a little bit about politics a little bit about public relations and hopefully when it's all over you'll have a better idea of what goes into a lawsuit involving your development court so with that let me give me a little bit of history in 2009 the Texas Enterprise Fund decided to advance its public policy of making the state of Texas the world leader in wind energy development to advance that goal the state authorized a series of grants to companies to site development build and start wind farms across the state obviously have been going on for quite some time but in 2009 the Texas Enterprise Fund awarded a nine hundred and forty five thousand dollar grant to a Portuguese company called Marta fur and Marta fur was happy to take the money but marner fur had an obligation Barna fur had to get a renewable energy plant up and running by the end of 2012 that renewable energy plant had to cost forty million dollars and it had to employ 225 people so Marta fur needed someone to a place to cite their clamp and they found the city of San Angelo and the city of st. Angelo's Development Corporation as a partner to build the plant to hire the workers to work there and hopefully to advance the state's goal of making the state a world leader in wind energy development so that's kind of how the deal came about let's summarize very quickly what the contract was that was formed and there were two of them one between the city of San Angelo itself and one with its Development Corporation so Roland Nick we'll start with you talking about what the terms were of cosa DC's agreement with martyr for earth felt and make a little bit about Hirschfeld as well sure so so the company marker was a Portuguese company and they had a joint venture with a local Hirschfeld any sort of corn stone legacy company that has been in business a long time in San Angelo and employs a lot of people major employer what Costa deceived that Development Corporation decided to do was to provide one point two eight million dollars for the purchase of the land and site development of that this is a cycle and incentive and we paid in two payments we also provided a job creation incentives at six thousand dollars per job the slide says five hundred forty thousand dollars but in essence at the time that we filed a lawsuit we had paid when then in eighty six thousand dollars the agreement stated not to exceed one point three men one minute and three hundred thousand not to exceed that amount and then I'm gonna turn over the duration to talk about that 380 a group the city of San Angelo has thoughts that also had an agreement that was involved here ours the city agreement was a little bit different it didn't actually have any outlay of cash it was a services agreement and sort of a waiver agreement so what the city agreement said is that there would be a 10-year annual tax reimbursement amount of two hundred and thirty six thousand dollars and we also did some wastewater upgrades that was approximately two hundred thousand dollars and then there was $30,000 in waivers of beads now on the fact that the city didn't actually have a ballet of cash came in and we'll talk about that a little later how that came into the play but the two paper the two entities because you see Angela were both parties on the side of the sea so we've talked a little bit about what we gave now let's talk a little bit about what we were supposed to get one thing we were supposed to get is a 40 million dollar plant and obviously if you take a piece of land that doesn't have any improvement on it you put a 40 million dollar plant on it you have dramatically increased the taxable value of your property so the city was looking and his Development Corporation were looking to foster economic development increase the tax base to the tune of a 40 million dollar renewable energy plan that was supposed to be constructed in two phases creatively named phase one and phase two so that was the job one job two was to create workers to work at the plant and the plant was supposed to make wind turbines to be used in wind farms across the state so the plant had to be a renewable energy plant which this qualified has and there were two being up to 225 local residents hired to work there these were to be full-time jobs there were very complicated schedules included in the contract about what constituted a full-time position and we were very serious about making sure that the contract provided good work to local residents and so that's what the idea was now let's talk about what happened after we had the deal signed this was this was a big deal the newspaper was out there was local press coverage when Marta fir Hirschfeld broke ground the governor came out and gave a speech covered by local media talking about the state of Texas its commitment to wind energy its commitment to economic development talking about the new green economy and how we could use renewable energy development as a driver of growth into the future initially with initial milestones that were met those were newsworthy that second part of the slide marker makes a mile still whenever when it made its first turbine that was news because this was really happening people were excited the city and cosa DC had obviously committed a lot of money to make it happen and so everything was going very well and now for the bad news I'll turn it over to Roland so everything was going well until it wasn't the city and the sea of San Julian corporation had paid billions of dollars in economic incentives by the end of year three at the end of 2012 the company had claimed that they had reached out they were to hire 225 jobs and we proceeded with the verification as you know like most performance agreements about in the early part of 2013 so verification normally occurs at the early part of every year incidentally in February 2013 the governor's office had requested repayment based on the shortage of not being able to meet those job requirements in their agreement in our verification process we also noticed that they had failed to meet their requirements job there that their job performance requirement obviously they failed will you can see by the picture that circle indicates that second phase of the facility has not been built the requirement was and had to build that face by the end of 2013 that was not met and marriage got worse in that the Portuguese partner went bankrupt and that's what we're dealing with at the time so I'll just put a quick note in here I've in my practice litigating a lot of breach of contract cases and the picture you see on the slide there makes for one of the easiest cases of breach you can imagine there supposed to be a building there and it is not it's clearly these efficient codes this contract hasn't been performed so there was there was a little doubt about that but there was a lotta doubt about what we should do about it and that's what I want to talk about next and what I really consider part of the heart of this presentation when I represent private litigants private companies that have private agreements with other private parties it's really just a question of economics I've been done wrong and they want to seek redress in court but representing cities and and development corporations is a completely different animal and I found in the representation that I could generally divide my firm I considered to be City Council members or members of cosa DC people in management and executive positions into two camps you have the Hawks and you have it does and so nothing is necessarily reflective of the actual views of Teresa and Roland but I'll have Roland talk first about how the Hawks saw things when phase two wasn't built and because the DC had spent that much money on a project that just wasn't working so Todd is that is correct the the case made for some interesting dynamics between both the council who oversees the Development Corporation we had several meetings with the City Council and the Development Corporation in executive session to provide updates about the status of the of those agreements and our discussions with the company there came a time and point when the company had no response there was no action to our discussion and both the City Councilman Costa DC struggle to help resolve the the issue diplomatically and he came to go ahead and basically the City Council and the developer corporation board members every weary and were very impatient they felt that the damages were owed to the city in maintenance plus interest that they had a responsibility as stewards of the taxpayer money and this was taxpayer funds and our only recourse was to pursue litigation to help enforce those contracts now on the on the council side I'll ask Theresa to talk a little bit about what the at least initial deliberative process was going on let's see go as a city attorney and I know it's this way in a number of cities as well as in San Angelo that my office represents both the city of San Angelo as well as cosa DC and their legal matters and so from my perspective I was going I had just arrived on the scene when all this was starting to go off the tracks so from my perspective I've had two clients with cata two different we have we're gonna call the Hawks which was the cosa PC board that wanted this contract enforced on the other side of that we had City Council and I don't want to imply anyway the City Council did not take a breach of this contract very seriously but if somebody's that out in the hall they are operating in a very political environment and that definitely plays the large role in the decisions that they make so some of the things that we had going on in this situation in every single situation that comes up it's going to be unique because the players are going to be different the first thing is is that the personal part of Marquart Percival's is a very important business within the city of San Angelo they've been there a long time over the years that have contributed greatly and they would tell us on a frequent basis how much they contributed to the tax packs and they are absolutely right they did it's really hard to find somebody who's been in San Angel in very long that doesn't he hasn't either worked from her spell themselves or doesn't have family members who work for her show so they're very ingrained in the community as far as just a business is concerned these people were also friends and council members they went to the same church and behind the scenes you know there was this personal process that was going on with my council members at the time that they were being shunned at church like people who'd been there for a very long time over this matter so that definitely plays a role you have seen Angela is a hundred thousand people we know lots and lots of people in common and that's probably the case with a lot of you as well this company is politically connected and that one member of family and personal family was on our City Council certificate another member of the family is probably going to run for City Council at some point pretty much every election is encouraged to do so so we have passed little connection political connections as well as future political connections in their cap our mayor actually had a contract to work on this project which people he runs a fencing organization and so he had this contract for fencing with Perceval which meant that he was excluded from the conversations dealing with this lawsuit now there was a point towards the end where he was rollin called in earlier they leg off from her stomach and so the question was then does he rejoined the conversation or does he not at that point it was so far settlement that he was allowed to come in and kind of offer opinions but that definitely played an interesting role so in addition to all those you know when I was a young lawyer and I was still very fast over here what I was really and a little bit green I remember having a conversation with the seasoned attorney about this idea of justice is blind and what he told me which at the time I thought was cranky but now realizes he probably very realistic was that justice may be blind but those seeking justice or not so these people even though they knew that there was this idea that there's a legal principle here that they're trying to enforce they had a bigger world they were operating in the other issue in any municipality is public backlash and it really doesn't matter which you choose there's going to be public backlash the public either thinks that municipal officials are brilliant or that we are opinions I mean that's kind of the two ends of that spectrum there's very few people who kind of fall in the middle and that was the case here there were people who were like this is brilliant go get our tax money they were the Hawks in the community on the other side were the doves saying to who are public officials this is our community this is a family we are you know bigger than just this contract we need them to stay there my brother works there so even within the public itself there was the same Hawk versus doe then there's the legal fees now I'm just going to get a little practice check that I've come to learn throughout my 15 years of being City Attorney that public officials tell about how much attorneys away they need to think they're paying nothing or very little or they think they're paying millions and millions of dollars for these scenes and the truth is neither of those is true so one thing that engender jected very early into conversations about litigation now is I asked whatever attorney that were hiring to prosecutors to do is his case for us to provide a summary of what the expected costs of litigation is going to be because even though they believe they know and it's going to be when you put before your counsel who's feeling very hawkish and anticipated litigation cost of two or three hundred thousand dollars they become much more dovish pretty quickly so you know I would recommend doing that I've started doing that as early as I can when we're heading down that litigation pathway to get it you know estimate I want anticipated litigation costs are and go through that to make sure everybody's on the same page thanks Teresa and then on the issue of attorneys fees another thing to keep in mind as you're as you're contemplating whether to bring a lawsuit is are there non-traditional arrangements you can strike with your attorney other than paying in millions of dollars and hours I would love for that to happen you can enter into blended fee agreements reduced hourly partial contingency fee type arrangements you can attempt to negotiate for a flat contingent fee on some litigation some law firms will do that so you know keeping it up in mind about that month it can can help you as you plan going forward and what I want to talk about now is how the city of San Angelo would pose a DC dealt with there's tension between the Hawks and the doves and also how you can help your so pre-litigation by taking a few simple steps the first of which is preparing a demand letter in our case I will say that there wasn't just one demand letter there were a series of letters much of which was done before Rome did I ever met trying to work this out but let me sing a few a few bars about what a demand letter is and then let Roland and Teresa take over basically what a demand letter is is a written piece of Correspondence that you send to the counterparty to your agreement saying you have reached my contract in the following ways and here's what I want it's that second part that's important what do you want put it in writing explain the basis of your claims and do it in an attempt to avoid a lawsuit entirely in addition to forcing people to think about their case very critically before they ever bring a lawsuit a demand letter can sometimes elucidate some information that you have been expecting every once in a while the guy who got your demand letter will write you back or pick up the phone and have this lawyer call you and say here's why your letter makes no sense to me here's why your claim has no chance and you just might get an education that will help you and help your counsel and your board evaluate whether or not there are critical weaknesses in a lawsuit before it's ever brought so those are a few things that apply kind of in all cases to demand letters in general but there are also some benefits to a demand letter that apply in this specific context that I'll let roll - reciprocal so the the later followed a requirement of both the agreements I think it's important that we can prove that we're following process and procedure in the steps above in the in the performance agreement as Todd was saying it gives an indication and the reasons why we feel that in our case there was a breach we were seeking remedy and we've made that noted in those demand letters it served as a good document so that we could preserve documentation but also it was another way for us to try to reach agreement cause some interaction with a trusted company a member of the family it is a small community even though we're a large size see but which certainly helped preserve a business relationship we were trying to make all these attempts to help preserve that relationship recently again we're dealing with political people on both words so you councils definitely a political body the custody see is report to you in a little body so they have definite and we knew at some point if we were going to actually heavily perceiver go to trial against this company we were going to have to be able to show the public that we did everything we can to avoid that so one of the benefits of the demand letter is that it one becomes a public document so everybody can see what once we offered it because we're gonna talk a little bit later about messaging but the messaging is not always completely accurate in these kinds of situations and so how many document that we presented to them and the responses that came back to us from the ladyfingers fund is a great way to let the public see for themselves what the conversation was and it proved to be very helpful in the end to have this kind of demand letters going out so the reason why we are all here today talking about this case is because I hate to give it away but this case they didn't settle without lawsuit we tried to demand letter we tried the pre suit negotiation we tried face-to-face meetings we tried a months of informal type dispute resolution I say we I wasn't involved yet but that all went on and unfortunately none of it worked so I want to talk now about what you do if you've done everything you can to to build consensus internally to try to resolve the case without having to to go to court and that just doesn't work you know now what do you do this images of the plaintiffs original petition in the case I filed for the city of San Angelo and Koza PC and I want to talk a little bit about the venue I'll talk more about it in just a second but one of the advantages that economic development corporations have and that municipalities have if it comes to court is getting venue in your back yard if you have the case broad in your County the judge is going to be from the the potential jurors are all going to be from the county and the damages you're seeking are in a very real way the jurors money a lot of these projects are funded with tax dollars maybe all of them are and so you know it might make it tricky for picking a jury to to get them to realize that they're in effect trying to see to get their own money back but it doesn't take a genius to see just how valuable about it and it as frightening as all get-out to defendants with that exact same reason they know it just as we do so I'll talk in just a second about how to maximize your home court advantage but deciding where to bring your suit is one of the very first things to figure out and if at all possible that venue needs to be whatever County your Development Corporation is located in you know let rollin in Teresa address a couple of other issues to think about in preparing an original petition so we determine our strategy moving forward into the litigation we needed to decide how to play the right claims by the time we had filed that the company had incurred two more years of decline the number of jobs that they were supposed to retain and had failed to create any new additional jobs so the other piece of the agreement said they must have the wherewithal to have a ten year continuous operation and they must have the wherewithal to build the second phase which was another twenty twenty million dollars of capital investment we could have perhaps planned fraud since they were unable to be there performance but we chose to take the higher ground and stick to those job requirements and not being able to expand - Teresa well I would just like to trick her a little bit and saying we took the higher ground publicly but now it's hot about I made it very clear especially Todd made it very clear to opposing counsel that that was something we were considering if we ever wanted a response from him what we had to do is drop the F word and we got a response so even though we never ended up pleading fraud as one of the causes of action certainly what as an option that they understood very well was on the table you know think the other thing that's important she is in condemning your audience and that means the court and Republic instead of it's different in each community you know I came from Abilene so the way that the media care acts with the city there is different than the way the media acts with the city in San Angelo at San Angelo I am the face of the legal department if there is a legal decision for legal something happening on the news there's a clip of me that I wish that would find a new one but there's a clip of me that they show in relation to that so the legal action is happening in the city I'm the person they show but there's something happening with the Cosa DC role as the person they show so because of that I felt like and I still feel like it's very important in the courts in San Angelo that I'm present even if Todd is that they're arguing for the position of the city the media sees me come in and they comment on it the judge in this case happened to be a neighbor of mine saw me sitting right behind Todd and never commented on it but thing that is recognized and acknowledged I don't think that you can stress enough how important that is because that's not how many of you how many of you guys are like from what's checked sister like the little areas of Texas yeah so you guys understand probably the slick lawyer from Dallas coming in and messing with the homeboys right so we were kind of having to in Todd's Greg he's not so thank God that we understood that this is a hometown company and we have a lawyer from Dallas and so we dealt with that in the courtroom same thing with the public you know we were in a position where our sales tax was funny at the time and so preservation the sales tax was important and those were the kinds of things we brought up in our proceedings Thank You Theresa and now I want to talk a little bit more about what I touched on a moment ago and that's that's menu maximizing your home court advantage one way to do this is to contract for it if you have an in-house municipal legal department if you have representation internally as I'm sure you all do through through your cities knowing how to put a contract together in a lot of ways can win or lose your case for you before there's ever a breach before there's ever a lawsuit and so I want to talk a little bit about some practical ways to protect yourself and position yourself in the event that you have to someday enforce your agreement and the first of which is securing the venue in your contract saying if there's a lawsuit that's going to be brought right here and make the other side agree to involve actually show you the language in just a second another thing you can do and I put parentheses around around this as you can try to preserve immunity from counterclaims governmental immunity sovereign immunity is a it is an entire area of law that I could devote an hour to but I want to talk just a little bit about the concept just because you enter into an agreement and bring the lawsuit later to enforce that agreement it doesn't necessarily mean that you are liable for counterclaims that may be brought as a result of that contract a lot of it depends on how you designated your Development Corporation under the Texas local government code a lot of it depends on what the purpose of the agreement is and how you address the purpose of your agreement and the responses of the contract but you can and I'll show you in a second how to do it try to preserve or not waive any governmental immunity that you may have and then lastly insist on a right to a jury trial one of the major trends that I have seen developed over the last decade or so which it sounds what we want to say it that way but over the last decade or so is how many more cases have arbitration clauses where where parties are forced to litigate in private tribunals before paid arbitrators in confidential proceedings that are often remained confidential by contract and that is not what you want that was just not what the Development Corporation or a city wants especially when there's such public interest and agreements like this and if you can force a right to jury trial by contracting for it in your agreement then you have gone a long way toward giving yourself some leverage in the event there's a contract that's breached and so now I want to own them you know to brace yourselves for some fine print which I tried to make as big as possible here that's frightening but what it is is how to put in your language that will make sure your venue ends up in your County exclusive venue for any action cause of action lawsuit or other proceeding under or in connection with this Agreement shall be and live in Tom Green County Texas and the parties hereby submit themselves to the jurisdiction there now the next part these are the magic words Mar for her spell here by the ways in any suit any claim that it is not subject to such venue or the jurisdiction of the courts of Tom Green County Texas the Fifth Circuit the United States of America has found that's the circuit that governs where we are here today that in order to waive a right to remove a case from state to federal court a party to an agreement must expressly do so in the contract itself if we just had the first highlighted part exclusive venue yada yada that wouldn't necessarily be enough to force the defendant in our case to stay in Tom Green County because it doesn't use the magic word wait the second part does what we needed to do the defendant in the case waives any right to get out of Tom Green County and so these are the kinds of things you can do and your agreement to maximize your advantage and I'm going to give you one more now this is equally bad how to try to preserve your right about to get sued right now I can tell you that a lot of my practice is on the defense side and I've really met a lawsuit that wouldn't do just fine with a counterclaim because it's one thing you can do to immediately put an outside risk on the other guy who's just sued you and come back and to sue them right back as long as the hills as far as the litigation technique goes but here's another advantage you all have you may have some immunity from that because you're the sovereign and the King can do no wrong at least that's the the ancient common law principle from which sovereign immunity derives what you say is nothing in this Agreement shall or may be deemed to be or shout or may be construed to be a there's that word again waiver I mean immunity defense word tort limitation including without limitation any waiver of immunity to suit we could talk a little bit more about how effective that language is but at least put it in there because you've got a long way toward at least scaring the other guy into thinking he can't counterclaim against you whether you can or not is a subject for another discussion and then lastly let's talk briefly about attorneys fees and how you can preserve the right to get them this is an interesting case that came out a couple years ago a plaintiff in a lawsuit had sued a defendant that was a limited liability company a lot of times your counterparties would be limited liability companies plaintiff one had a huge award of attorneys fees was thrilled went to try to enforce a motion to get the attorney's fees only to find that no you can't get your attorneys fees from a limited liability company because a limited liability company doesn't fit within chapter 38 of the Texas civil practice and remedies code which provides and I've quoted it up there that a person may recover reasonable attorneys fees from an individual or corporation and a limited liability company for the Fifth Circuit is not an individual or corporation a corporation we all earn is a person but it's not an individual so there's a distinction that doesn't make a whole lot of difference to a lot of people but when attorneys fees are at stake it can become important so that same principle holds true for a governmental entity so I just want to briefly know the word to the wise if you're entering into a performance agreement and you can development agreement any kind of contract with a limited liability company don't assume that you will be able to recover your attorneys fees the way to preserve the right to get your attorneys fees is to put in your contract put that in the event of litigation the prevailing party will have a right to recover attorneys fees and you can solve that problem so now we've got legal stuff behind us I want to talk a little bit about our case again and how because of DC and the city dealt with in from a public relations perspective and the first line of this discussion is the the cover of the standard times on the day we filed our lawsuit and so rolling - Theresa wanna see if you could talk a little bit about some of the ideas and thoughts that went into crafting our PR strategy for our case it's very important to have a PR strategy we had a story to tell and the public needed to know why we were pursuing litigation we needed to get our story out we worked with our public information officer to develop a communication plan and quite frankly the filing caught the company by surprise the press release was issued this is what came out resolutions were issued and I believe that the company was caught by surprise but we were very effective in advance of the lawsuit during the lawsuit and after even at the time of the settlement so we utilized the poky officer with that regard to continue enhancement I think this area is just kind of philosophy of your city or your organization you know I came from the city where the public media was you know about the media person was about telling people what public meetings were going to be held you know when you're trash that we picked up and responding the things that were not very proactive the media folks of San Angelo are very proactive they both come from anthony's especially used to be the editor in the newspaper and happily and then in San Angelo so he understands the reporters perspective what they're looking for so the philosophies in Angelo is that there's going to be a story told you should probably be part of telling it and so what we do is when we know these big things are coming we we prepare in advance for instance we purchased a forty four million dollar ranch recently and we knew that was going to raise eyebrows of the poets before we ever take action on that there was a whole strategy the same thing that took place here and some of the things that we do is we drive press releases in advance when we knew we were going to follow that lawsuit Todd and Anthony and I Roland were on the phone and through email drafted and redrafted what we're going to release with the press to the press whenever it's released we also developed a game plan Anthony always wants to know who's going to answer the questions and we because we are aware of the court in the community we did not want to be seen as our neighbor we let Todd be the guy so if anything difficult had to be said or anything that sounded harsh had to be said Todd was the one saying it and that was you know keeping in mind what's going on in our community the PIO as I said he was the editor of the paper and Santangelo he hired the guy who was the parent and so he was able to reach out to them as well as to other contacts guys in the media and said we have this story we're going to wonder whether on Thursday can you do that already how to slot selectively so we already knew the story was going to be running the way that we wanted its breath and I think something that can't be understated is that have talking points available for your public officials whether that's members of your board or there's members of your counsel because they are going to be asked questions in the grocery store and they are going to be asked questions at church and they aren't going to be getting text messages and they want to know what they can't say they can't say and my experiences if you leave them on their own sometimes things go a little bit off track so when we were making the decision to file a lawsuit why I totally had Benina product only Anthony that we're planning on recommending this to our counsel we already had the top key points prepared to hand out in that meetings to tell them if you are asked a question this is the stuff that you can say and they were very professional about sticking to this point and next I want to talk about what you can probably expect the other side to do you're not going to be the only one who has some kind of public relations strategy or presents don't count out the other guy and this next slide be ready for some pushback I like rolling to talk a little bit about what goes in easy experience from Asheville after our case was filed in our case Hirschfeld hired a PR firm from Houston Texas that began a campaign through social media Facebook through radio newspaper and ran some TV commercials I cannot stress again how important it is to have good media relations in fact at the at the settlement meeting when we struck the deal we inform the company that we were already posting an agenda anticipating a good outcome of the settlement meeting but also preparing a press release that's how confident we were but that's the kind of relationship we had this ad that you see is one of the ads that was run in in the newspaper again our public information office has such a great relationship with the community and the public they have a twenty thousand followers on Facebook and in fact after we settled at her Chapelle wanted us to take down the lawsuit press release the information that we had posted that's how effective we had been and how effective our public information office can be I want to like a little context to the sad you know we're from San Angelo which is about 90 miles from our friends back there in Abilene and we have a great working relationship with Abilene but if you were to say that it's not competitive between two cities you would not be telling the truth we are two biggest cities in West Texas we were both having sales tax issues and we have one of our largest companies saying we are going to go to your big brother and set up our household over there our little brother little brother we're going to go to Abilene and so that you know I think it was really I understand why the company did that but I think it kind of backfired because as I've been saying back in the executive session room the discussion was these are our neighbors but now they're saying but we don't want to be your neighbor anymore and that kind of changed the context thanks it so let's back up a little bit and talk of room one is touched on the settlement portion of the case but I want to take a half step back and talk a little bit about how we position the case to get there and it was through frankly the application of pressure when you're dealing with a long-term member of your community though you apply it in a nice way so that's why I put the in a nice way apart whenever you're the plaintiff it is up to you to drive or a case forward nothing is easier for defendant what's fun I am also nan a plaintiff who doesn't do anything if you're not serving discovery if you're not finally motions if you're not noticing depositions if you're not subpoena a third party one this is doing any number of things then you're not many we just have this lawsuit and so on the left of there is an order that was entered on our first motion to compel I didn't quite win everything but we did pretty well at that hearing but that's what you have to do the defendant doesn't want to the documents that you know he has and that he knows are damaging to his case you request them you request them right when they're not produced we filed a motion you go have it argued you get an order compelling production that's just one example of how you can exert litigation pressure to try to move your case forward on the right is maybe the most important date you're going to need to have in your lawsuit that's your trial date nothing promotes an interest in a resolution like a looming day in court if you know the trials around the corner people get motivated in a way they're not if there is no scheduling work you would be surprised how many cases I'm currently involved in when plaintiff is never contacted me to confirm on getting a trial date I'm perfectly content about to have a trolly I'm the defendant what do I care but when you're the plaintiff you need those things and the looming trial that we had in this case was an important driving factor in how we ultimately brought the parties together and now I'd like to turn it over to Teresa who talked about what went into preparing to try to settle the case before we ever actually did I think one thing that's important to realize about the trial day to an election day and the way you get the council was staggered in San Angelo one year we could have the potential to lose three council members the next year we would have the potential to lose four council members which is a quorum of our council so we needed coming up in May there was not only our trial date but also an election that was going to happen and we had three seats on our council that would be changing so as we're having these conversations with the company all we tell them is we know until many such and such what our answer is after that is a whole new game and applying that kind of pressure around early election cycle can be very helpful particularly in the campaign cycle has been I don't like this law Souter I do I have this lawsuit against this guy so we leveraged that and feared that both at the same time the other thing we did that it really shifted the field for us as we now we judge Woodward went to mediation and when we showed up in mediation the person that the company they said the people we knew but the person they said that was the primary decision-maker in the case was well twelve or thirteen he was he was a young man just fresh out of college he was the Notre Dame's kicker and energy he was introduced as that like we were like that was important to us he would arrive wearing a jersey with no sleeves on his shirt and a tec-9 was a game his opening offer was insulting I was sitting next to my city manager when the mediator came back and he almost hated to tell us what they've offered and would do this whole song and dance about well you know the first offer is always a little bit insulting which I have an attorney expected but we were shocked at how insulting it was and so it felt like the one hand degree wasted day but it will embolden us to say these people really aren't our friends you know they gave this presentation about how important they are to us they're competing we are important to them as well the other thing that came out of the discovery process that played in mediations that twelve-year-old had so much power in that room because there was a private equity firm involved but had 51 percent of the interest in the company so when we went back to our counsel an executive session we're able to tell that they sent a mediator who was a young man who was playing games with us and oh by the way he is the decision-maker in this it ceased to be our neighbor who we were suing and it became this young man I'm here selling everything that he represents that we disagree with so that was very helpful so coming up on these dates you know we knew we had this election day so we posted a meeting and then we set a date for settlement discussions now let rollin talk a little bit about who is that because it was a decision that was made that all the like I wouldn't be in that room that would be taught he would be legal representation there and we wanted it to be a group of people who almost swore based on relationship personal relationship that actual you know knowledge of the deal who was chosen to be in that room the resolution that we passed was essentially giving the city manager full authority to negotiate a new agreement within certain terms so we didn't have to go back to the new council for any further action as long as we stay within these defined terms we were good we also use that we were negotiating that second agreement as a pressure point we would say yes we can consider that but if we do that we are outside these terms of the resolution that was passed and we will have to ask the new council who still we were not sure was going to be favorable to them what they think about this we are having a joint see Council Development Corporation executive session to make that determination of who would attend we decided on a former assistant city manager who was on the council at the time that the agreement was executed so she was one that was chosen to attend another council member that really had no ties to the company minimal ties to the community and then in terms of the Development Corporation we had the former president of the Development Corporation who helped execute the performance agreement so he was selected to be there and then again we had another board member who had really no no history with that perform agreement up from their side as Teresa had said we wanted a major decision maker we did not want the young Notre Dame punter for the team we wanted someone that can make the decision and we wanted a board member from her school steel to be there as well and then we had their president also that the at the settlement meeting and then they're turning and obviously taro was there as well talk about one of the lessons learned I want to kind of point out if you ever find yourself on the same side of a lawsuit with your city or if you're sitting on the same side of a bus it with your development corporation there are a lot of things you should probably be talking about along the way before you actually get a settlement check one of those things was how do we define our having to buy the proceeds if we win anything so after I'm going to deal with this is like it this little I'm going to flood the street we got something and after we got that check rollin and I and the city manager especially the one who's over my aunt's had a lot of discussion from the now what are we doing with it who who who owns it we know we've been splitting attorneys fees 50/50 so there are some on the city side about all that means we split all proceeds 50/50 right we were in like a tainting sales tax economy we see the settlement check they're like woohoo we have a salvation through our sales technician right here rollin seeing a completely different way he's seeing it as this is money we're going to pay out on this new agreement so we need to continue use the purpose that it was intended so just one of the practice tips make sure you're working these things out along the way so in the end your future doesn't feel like you're just gonna have a big family for you backwards thanks 37 we have a few minutes left but I wanted to talk a little bit about how this all this all wrapped up or actually have Roman Teresa do it now to the surprise to despoil there was a summon I can put the number on there because it's a public knowledge and it's it was a substantial cash payment but that's not all that cosa DC and the city were looking for out of this lawsuit just like it wasn't all they were looking for of the contracts in the first place so people under Teresa talked a little bit about some of the other benefits that that we obtained as a result of settling this litigation in the settlement agreement that we read at one point four million dollars in cash we wanted the company to continue to retain existing jobs and they committed to increase that number by another twenty eight jobs in addition what's what's not on the slide is to build rail spur to the plan to increase the value and help expand the plant in the future and there was another one good and dollar in capital investment we also have retained a million dollars of tax rebates that was also added to the coffers but more importantly I think is being able to resolve this as you as you can see by the picture we have some smiling faces there we wanted to retain that relationship we do have a beauty with the company now and I think that was much more important than the cash that we received yeah I'll just agree with Roman that and ultimately what we wanted to do throughout the whole discussions and what the council and the facilities the board wanted to do is they wanted to preserve a relationship with this this company in this family who'd been in our city for a long time when we managed to do that we also wanted to create jobs and the second agreement appears to be working and we are creating those jobs so it was a win-win personally these folks in this picture Tommy Hebert he's the first gentleman is now council member Jacob elders he was the vice president Hirshman was now the president and then Liz Grindstaff who was our Castle at the time it was defeated in her election just few days later no longer her castle with is a member of our tears board so she's still alright well it's now 3:30 I have once again prepared a PowerPoint expertly time to last one hour all finished Karen said I don't know if anyone wants to ask questions or not otherwise thank you over we're kind of go away there's one in the back [Music] yes about the defendants defense was to the claim yeah it was interesting it was really a public relations based case again all I had to do was point to the the whole mix of phase one and then I'm free preach but what they did say was in Discovery we had produced some email from one of the members of the cosa VC who was having discussions with Hirschfeld about their failure to perform timely and the defendants using some kind of rhetorical gymnastics converted some of those emails into what they contended was a written waiver of the requirement phase to be built there had been a discussion about doing something other than renewable and so he kind of said maybe okay and they said since we had waived that would have been an affirmative defense to the claim for breach that was I'd say the primary one and then secondarily in initiative public relations they had a an often powerful cuz alone that was what was going to bankruptcy which is a very real very legitimate concern that we dealt with throughout the case Morpher have been in bankruptcy her spells steel the longtime member of the community wisdom just one entity and an organizational structure that included of industries personal this person felt that but our contract was with a limited liability company called martyr for Hirschfeld LLC that owns nothing but this plant and unless he could show alter ego or some other veil-piercing theory if they went belly-up that we could have been left with nothing so that was another kind of poked attempt that they they made and secondly can we get a copy of it happy to talk to you after after around I try not to dispense legal advice in 50 yards I want the sense legal advice but I was like that languages in all city of San Angelo contracts [Music] yeah