2010-211ORDINANCE No. 2010-211
AN ORDINANCE OF THE CITY OF DENTON, TEXAS APPROVING AND
AUTHORIZING THE COMPROMISE, SETTLEMENT AND RELEASE OF ALL CLAIMS
BY AND BETWEEN THE CITY OF DENTON, TEXAS, DBT PORCUPINE, L1, A
DELAWARE BUSINESS TRUST AND BDC FAMILY LIMITED PARTNERSHIP, A TEXAS
LIMITED PARTNERSHIP; AUTHORIZING THE CITY MANAGER AND CITY
ATTORNEY TO ACT ON THE CITY'S BEHALF IN EXECUTING ANY AND ALL
CONVEYANCES AND OTHER SUPPORTING DOCUMENTS PERTAINING THERETO,
AND TO TAKE SUCH OTHER ACTIONS AS ARE NECESSARY TO EFFECTUATE AND
FINALIZE THE SETTLEMENT; AUTHORIZING THE CITY MANAGER TO RECEIVE AN
EASEMENT ON BEHALF OF THE CITY OF DENTON, TEXAS; AUTHORIZING THE
EXPENDITURE OF FUNDS THEREFOR; AND DECLARING AN EFFECTIVE DATE.
WHEREAS, the City of Denton, Texas and DBT Porcupine, L1, a Delaware Business
Trust ("DBT") have each advanced their claims of ownership regarding a certain tract of realty
upon which the City wishes to construct electric transmission line facilities in the future;
negotiations have occurred and the parties are now ready to consummate their settlement; and
WHEREAS, the City of Denton, Texas will acquire an easement of the necessary tract of
land for its electric easement from DBT Porcupine, L1; the City will execute a Quit Claim Deed
to extinguish its claim and clear title to DBT Porcupine, L1; and the City shall obtain the
easement at no charge from DBT; and
WHEREAS, on April 20, 2010 this matter was presented to the Council in a Closed
Meeting; and on September 7, 2010 a presentation was made regarding this settlement in a
Closed Meeting; and on September 7, 2010 the Council approved an ordinance, but desired to
make a change to the terms of the Settlement Agreement; and
WHEREAS, the City Council on September 14, 2010, having considered a motion to
reconsider the terms of the Settlement Agreement, is of the opinion that this compromise,
settlement and release of all claims is now well-taken and is the best interests of the citizens of
the City, NOW THEREFOR
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Council hereby approves the "Compromise Settlement
Agreement and Release of All Claims" (the "Agreement") attached hereto as Exhibit "A" and
made a part hereof by reference; and authorizes the City Manager to execute said Agreement on
behalf of the City of Denton, Texas.
SECTION 2. The City Manager and City Attorney are hereby authorized to act on the
City's behalf in approving, executing and receiving any and all documents, and to take other
actions as are necessary or appropriate, to finalize the Agreement.
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SECTION 3. The City Manager is hereby authorized to expend funds, if any, which
might be necessary or incidental, in accordance with the Agreement.
SECTION 4. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the M day of 52010.
A. URR YOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
By:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY AT-TORNI
By: A
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THE STATE OF TEXAS )
COUNTY OF DENTON )
COMPROMISE SETTLEMENT AGREEMENT & RELEASE OF ALL CLAIMS
KNOW ALL MEN BY THESE PRESENTS:
IT IS AGREED by and between Claimant, THE CITY OF DENTON, TEXAS, Texas, a
Texas Municipal Corporation and a Home-Rule City (hereafter the "CITY") whose business
address is 215 East McKinney Street, Denton, Texas 76201; and Claimant, DBT PORCUPINE, Ll,
a Delaware Business Trust, acting by and through an officer of its duly authorized agent, KAMIN
REALTY COMPANY, 409 South Highland Avenue, Pittsburgh, Pennsylvania 15206 (hereafter
"DBT"); and Transferee, BDC FAMILY LIMITED PARTNERSHIP, a Texas Limited Partnership
(hereafter `BDC"), whose business address is acting by and
through its General Partner, the BOBBY COX FAMILY TRUST; hereafter collectively, the
PARTIES, do by this "Compromise Settlement Agreement and Release of All Claims" desire to
settle on this date their respective claims to the real property commonly known as a 3.814 acre tract
of land described in Exhibit "A" attached hereto and incorporated herewith by reference; and
1. On February 5, 1996 the then record owner, Douglas and Associates, LLC dedicated to the
public's use forever that certain fee simple tract of land containing approximately 3.814 acres of
land, as shown on the Final Plat of Lowes Addition, Lot 1, Block 1, an addition to the City of
Denton, Texas, according to the Plats thereof recorded in Cabinet M, Page 8 and re-plat released in
Cabinet M, Page 235 of the Plat Records of Denton County, Texas. This action was ratified and
confirmed by the Denton City Council by Resolution R06-041 enacted on the 12'h day of December,
2006.
2. CITY bases its claims to the above-referenced real property based upon the execution of two
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Warranty Deeds; the first executed by Douglas and Associates, LLC as Grantor and the CITY as
Grantee on the 8th day of February, 1996, which deed is filed on the 23rd day of February, 1996 as
Document 96-RO12004 in the Public Records of Denton County, Texas. The second deed being
executed by Douglas and Associates, LLC as Grantor and the CITY as Grantee, on the 8t` day of
February, 1996, which deed is filed for record on the 18th day of December, 1996 as Document 96-
R088905 in the Public Records of Denton County, Texas, and which second deed was delivered to
the CITY and accepted by its Deputy City Manager. Both of the said Warranty Deeds contained a
covenant that stated: "(3) Grantee agrees that construction of new Loop 288 shall be commenced
on or before January 31, 2006 or the property shall automatically revert back to Grantor." The
CITY claims that that construction of new Loop 288 was commenced on or before January 31,
2006, and that the two above stated Warranty Deeds, described in this numbered paragraph, created
a fee simple conveyance, upon condition subsequent, and that the~condition expressed in the deed is
vague and unenforceable and should be construed against the owner of the remainder, now DBT,
and in favor of the CITY.
3. On the 7th day of February, 2001 DBT first acquired its claim to the above described real
property by Warranty Deed, executed by the then owner, PETULA ASSOCIATION, LTD., an
Iowa Corporation as grantor, to DBT as grantee, which Warranty Deed was filed on the 5d' day of
March, 2001, and recorded as Document Number 2001-R018527 in the Public Records of Denton
County, Texas. The Warranty Deed contained language in the granting clause that the conveyance
was "TOGETHER WITH AND SUBJECT TO COVENANTS AND RESTRICTIONS" as
contained in the two Warranty Deeds which were earlier granted in 1996 to the CITY, as set forth in
paragraph 2 hereinabove.
4. On the 20th day of October, 2009 PETULA ASSOCIATES, L.L.C. (hereafter "Petula"
formerly known as PETULA ASSOCIATES, LTD., an Iowa Corporation executed a Quit Claim
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Deed, filed on the 21St day of October, 2009, and recorded as Document Number 000123720 in the
Denton County Public Records. The granting clause to that deed contained the following language:
"...and by these presents BARGAIN, SELL, RELEASE, AND FOREVER QUIT CLAIM unto
TRANSFEREE all of Petula's right, title, interest and claim, if any, in and to the reservations and
reversionary right created under..." the two Warranty Deeds into the CITY, as more particularly
described in paragraph 2, hereinabove.
5. DBT then requested that the CITY sign a Quit Claim deed clearing DBT's title in and to said
tract of land. The CITY then refused to sign the Quit Claim deed and asserted its claims and
subsequently, serious potential litigation was discussed and negotiations were conducted.
6. Thereafter, the CITY then determined that the tract of real property in question would be
desirable for the construction of a separate Spencer Station to Pockrus Substation electric
transmission line that would provide a geographically separate transmission path between the two
stations, to be built in. the near future with the criteria and requirements of the National Electrical
Safety Code taken into account. The construction of a second transmission line is required by
NERC and ERCOT criteria in order to adequately support the electric system with overload for the
outage of any single line or transformer anywhere in the system. Denton Municipal Electric's
electric engineers have studied the requirements of this transmission facility and have proposed two
(2) written surveys of the desired route. The plans provide for an approximate 70-foot required
wide clearance for the transmission line which would run nearly the entire length of the subject real
property, along its east boundary with the Lowe's Store, as well as over into the Lowe's tract of real
property. That easement has been located and surveyed.
7. DBT has received and considered such surveys, and provided that the CITY executes a Quit
Claim Deed, conveying all of its right, title and interest in and to the subject 3.814 acres of real
property, to DBT, DBT is agreeable to granting the CITY an easement providing for the electric
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service and electric transmission line; and BDC is further also agreeable to that exchange and
consents to it.-
8. The Quit Claim Deed proposed to be executed by the CITY is attached hereto as Exhibit "B."
The Easement proposed to be executed by DBT is attached hereto as Exhibit "C." The PARTIES
agree that the two conveyances shall be executed and then delivered simultaneously into escrow at
the Title Resources, Denton, Texas office (hereafter the "Title Company") at the time the sale
transaction from DBT to BDC is closed, and not before. City and DBT shall simultaneously
execute the Quit Claim Deed and the Easement, thereby eliminating the cloud on DBT's title and in
granting the City its electric Easement. At the same time DBT shall then convey the agreed tract
unto BDC. Once these transactions involving the City, DBT and BDC have all occurred, then the
title company shall close escrow, but not before.
9. The City requires that it be provided with insured title that is acceptable to its City Attorney,
regarding its easement by the Title Company. Taking all the relevant circumstances into account,
the City agrees to pay to DBT and BDC jointly, the sum of $100,000 to be held in escrow at the
Title Company, pending the closing and the execution and delivery of the conveyances referenced
above in paragraph 8. The City is paying this amount of money in full and final settlement of the
claims of DBT regarding the contested title to the herein described premises. If for any reason the
transaction does not close at the Title Company, then the City shall be entitled to recover the entire
amount of $100,000 in escrowed funds and may demand that the Title Company immediately,
within 72 hours, return said funds to the City of Denton. In the event of any controversy with
regard to entitlement to the escrowed funds, this agreement shall constitute dispositive and
conclusive evidence of the intent of DBT and BDC that the City is entitled to the funds.
10. Both the CITY and DBT hereby further covenant that adequate consideration is provided by
their exchange of promises and by their execution of the Quit Claim Deed and the Easement
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described in paragraph 8, hereinabove. The CITY requires that DBT pay it the sum of $1.00 further
consideration in support of this Compromise Settlement Agreement and Release of All Claims, the
receipt and sufficiency of which consideration is hereby acknowledged. DBT requires that the
CITY pay it the sum of $1.00 further consideration in support of this Compromise Settlement
Agreement and Release of All Claims, the receipt of which consideration is hereby acknowledged.
11. For and in consideration of said payment, the CITY, hereby fully releases, discharges, and
acquits DBT, from, and agrees that the consideration so paid shall be in full and final satisfaction
and compromise of any and all actions, causes of action, and all claims owned or possessed by said
CITY against DBT, growing out of or in any way connected with the settlement of claims as
described herein.
12. For and in consideration of said payment, DBT, hereby fully releases, discharges, and
acquits the CITY, from, and agree that the consideration so paid shall be in full and final satisfaction
and compromise of any and all actions, causes of action, and all claims owned or possessed by DBT
against the CITY growing out of or in any way connected with the settlement of claims as described
herein.
13. Although originally drafted by attorneys for the CITY, this Compromise Settlement &
Release of All Claims is a contract between the CITY, DBT and BDC which is the product of
negotiations between the parties and attorneys for the parties and which shall, in the event of any
dispute over its meaning or application, be interpreted fairly and reasonably, and neither more
strongly for or against either party. This document contains the entire agreement of the parties
hereto. THE PROVISIONS OF THIS COMPROMISE SETTLEMENT AGREEMENT &
RELEASE OF ALL CLAIMS ARE CONTRACTUAL AND ARE NOT MERE RECITALS.
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WITNESS OUR HANDS this - 3aY of 52010.
CITY OF DENTON, TEXAS
A Texas Municipal Corporation
B.
GEORGE C. C BELL
CITY MANAGER
ATTESTED:
JENNIFER WALTERS, CITY SECRETARY
By: 'A iu'
APPR VD O LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
By:
DBT PORCUPINE, L1
A Delaware Business Trust
By and Through Its Agent
KAMIN REALTY COMPANY
By:
ATTESTED:
By:
APPROVED AS TO LEGAL FORM:
By:
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BDC FAMILY LIMITED PARTNERSHIP
A Texas Limited Partnership
By and Through its General Partner
BOBBY COX FAMILY TRUST
By:
ATTESTED:
By:
APPROVED AS TO LEGAL FORM:
By:
ACCEPTED:
TITLE RESOURCES
1112 Dallas Drive, Suite 402
Denton, Texas 76205
By:
Escrow Officer
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