SETTLEMENT AGREEMENT AND GENERAL RELEASE

THIS SETTLEMENT AGREEMENT AND GENERAL RELEASE (hereafter,

"Agreemenr or "Release") is made between the City of Carmel~by-the-Sea (which
includes wHhout limitation the City's legislative bodies, the City Council and its
members, and all other departments, commissions, agencies, boards, predecessors,
successors, subsidiaries, related entities, past, present, and future employees, officers,
directors, managers, agents, affiliates, assigns, and Insurers) (collectively, "the City'' or
"Carmen. and Karen Mcfnchak, Successor In Interest to Decedent Steven Mclnchak
pursuant to the Order of The Honorable Thomas

w. Wills, March 30, 2015, a copy of.

which is attached to this Agreement (hereafter referred. to as "PlaintifF).

RECITALS
1.

Steven Mplnchak was employed by Carmel as Information Systems

Network Manager;
2.

Steven Mclnchak sued the City alleging claims and causes of actlon as

set forth in the Superior Court of Monterey County Case Number 128962 (hereafter, the

Lawsuir);
3.

The City responded in the Lawsuit and denied ell claims asserted;

4.

During the pendency of the Lawsuit. Steven Mclnchak died on October 22,

5..

Plaintiff Karen Mclnchak was appointed Successor in Interest to Decedent

2014;

Steven Mclnchak on March 30, 2015;

6.

On May 16, 2014, Plaintiff filed a complaint or charge before the California

Department of Fair Employment and Housing; DFEH Number 251761-73463--R and

Seul!'ment Agreement and General Release

Mclnchakv. CannelM128062
Page 1 of9

EEOC Number 37A-2014-03845-C, charging discrimination as more fully set forth in the

charging statement;
7.

On May 12,2015, the OFEH issued its Notice of Case Closure and Right

to Sue;

8.

The allegations of Plaintiffs lawsuit and the DFEH and EEOC charge

relate to Steven Mclnchak's

9.

employmen~;

Plaintiff has indicated her desire to amend her existing complaint to add

additional causes of action, which City intends to oppQse;

10.

Plaintiff and City participated in a Court-ordered settlement conference on

May 29. 2015 and June 3, 2015, and on June 17, 2015 Plaintiff and City recited on the
record of the Court the basic terms of this Ag'reement that are more fully set forth
herein;

11.

Subject only to approval of this Agreement in the Workers' Compensation

Appeals Board, the parties now desire to resolve, fully and forever, any and all actual
and potential grievances, disputes, controversies, claims, actions and lawsuits which
exist among them, to settle all claims which were or could have been asserted by one
against the other; and to dismiss the Lawsuit with prejudice.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

TERMS
1.

The City and its joint powers authorities will pay to Karen Mclnchak,

Successor In Interest to Decedent Steyen Mclnchak, and her attorneys, the total sum of
$275,000.00 to be aHocated as set forth in this Agreement and a compromise and.

release agreement to be approved by the Workers Compensation Appeals B.oard. Any

money paid to Plaintiff and her attorneys pursuant to this Agreement that Is allocated to
Settlement Agreement and General Release

MciDcbak v. Cannel Ml28062

Page2.of9

any civil lawsuit or administrative discrimination charge after calculations set forth below
shall be paid to the trust account of Michelle A. Welsh, and any money paid pursuant to
a workers' compensation compromise and release agreement shall be paid as directed

by the WCAB. The total sum of-$275,000.00 as allocated in this Agreement is full and
complete consideration for any claims related to Steven Mclnchak's employment,
including but not lfmited to those previously set forth in the Lawsuit and the
DFEHIEEOC charge, and any claim for workers' compensation benefits.
2.

Except as set forth in any compromise and release In the Workers'

Compensation Appeals Board, the funds paid will be alfocated between Plaintiff and
attorneys among themselves, and City and its agents will

hav~

~er

no ffisponsibility for such

allocation. Any attorneys' fees paid in the Workers' Compensation Appeals Soard will
be. included In the total payment set forth in this agreement. Therefore, any allocation
for workers' compensation benefits must include statutory or other attorneys fees in the
calculatfon to total $275,000.00. Plaintiff's attorneys shall serve notice on City's
attorneys of the total amount ordered to be paid in the workers' compensation action,
Including benefits and attorneys fees. The Parties do not intend that additionci1 sums
will be paid for attorneys' fees or other benefits over and above a total settlement
amount of $275,000.00. Plaintiff and her attorneys in this action and any workers'
compensation action shall be solely responsible for completing such calculations and
allocations. The amount finally paid in the allocation for Piaintiffs civil actions will be an
amount that will, when added to all workers' compensation payments and workers'
compensation attorneys' fees, equal $275,000.00.
3.

Plaintiff shall be responsible for any and all applicable taxes. An Internal

Revenue Form 1099 will be issued to Plaintiff reporting the settlement payment of
Settlement Agreement and General Release

Mclnchak v. Carmel Ml28062

Page 3 of9

amount allocated to the civil action. Plaintiff understands and agrees that the City
makes no representation regarding the

tax consequences of Plaintiffs receipt of the

above-specified funds and that any tax liability thereon is the sole responsibility of the
Plaintiff.

4.

This Agreement will be subject.to approval or resolution.by the Workers'

Compensation Appeals Board. With such approval, this Agreement resolves and
forever settles all claims of Plaintiff, including any claims or rights arising from workers'
compensation law. Plaintiffs shall be responsible for 1he allocation of an amount for a
compromise and release of any workers' compensation claim on behalf of Steven
Mclnchak. Such allocation shall be an amount that includes the amount of the
compromise and release and any attorney's fees assessed, awarded or designated.

The arflount of $200,000 of the Settlement shall be allocated to the workers'

compensation venue. Plaintiff shall be solely responsible for initiating and pursuing any
workers' compensation claim in the WCAB for the sole purpose of obtaining approval of
this Agreement, and City agrees to cooperate.fuUy in seeking approval of the Workers'
Compensation Appeals Board.

5.

The payment(s) for any civil action and administrative claim not In the

workers' compensation jurisdiction identified in TERMS paragraph 1 through 4 above

shall be paid within thirty (30) days after attorneys for Clty are served with notice of the
approval of this Agreement by the Workers' Compensation Appeals Board that includes
the total amount of the benefits and attom~ys' fees to be paid for the workers'
compensation claim.
6.

Within five (5) business days of receipt o! the payment(s) identified in

TERMS paragraph 1 through 4 above, attorneys for Plaintiff will send to attorneys for
Settlement Agreement and General Releaae

Mclnchak v. Carmel Ml28062

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City a Request for Dismissal with Prejudice of the lawsuit flied in Superior Court of

Monterey County Case Number 128062 to be thereafter filed by attorneys for City.
7.

In addition to the Request for Dismissal and dismissal with prejudice of the

lawsuit, Plaintiff will dismiss any and all complaints, claims, charges, and any other
administrative or legal actions which are or may be pending relating to the allegations of
the Lawsuit or any DFEH or EEOC charge, or any claim related to the employment of
Steven Mclnchak, including but not limited to the DFEH and EEOC charges identified as
DFEH Number .251761-73463-R and EEOC Number 37A-2014-03845-C.
8.

Plaintiff and her heirs, executors, assigns and successors, fully and

forever release, discharge and covenant not to sueor otherwise institute in any way,
actively participate in or voluntarily assist in the participation of any legal or
administrative proceedings against City with respect to any matter arising out of,
connected with or related in any way to Plaintiff's employment with theCtty, including
any and all liabilities. claims, demands, contracts, debts, obligations and causes of
action of every nature, kind and description, in law, equity, or otherwise, whether or not
now known or ascertained, which heretofore do or may exist, and jncluding any matter,
cause or thing arising out of, relating to, or connected with the Lawsuit referred to
above, and any and allla'NSuits, complaints, claims, charges and grievances brought by
Plaintiff against the City not set forth herein, and all

past~

pending or contemplated

EEOC. DFEH, Workers' Compensation or other administrative charges relating to or

arising from Steven Mclnchak's employment with the City.

9.

Plaintiff agrees, acknowledges and recognizes that this Agreement is a

no fault" settlement in light of disputed claims. The City of Carmel and involved
individuals deny liability or wrongdoing. Nothing contained in.this Agreement and
Mclnchak v. Carmel Ml28062

Settlement Agreement and General Release

Page 5 of9

Release shall constitute or be treated as an admission of liability or wrongdoing by the

City (including its legislative bodies, the City Council and its members, departments,
commissions, agencies, boards, predecessors, successors, subsidiaries, related
entities, past, present, and future employees, officers, directors, managers, agents,
affiliates, assigns, and Insurers).

10.

Plaintiff understands and expressly agrees that this Agreement eXtends to

all claims of every nature and kind, known or unknown, suspected or unsuspected, past,
present or future, arising from or attributable to Steven Mclnchak's employment with the
City or any claim or charge in Plaintiffs Lawsuit or DFEH or EEOC charges. Plaintiff
acknowledges that any and all rights granted under Section 1542 of the California Civil
Code or any analogous state or federal law or regulation are hereby expressly waived.
Plaintiff recognizes and acknowledges that factors which have induced the entry into
this Agreement might turn out to be incorrect o.r different from what was previously
anticipated, and Plaintiff expressly assumes all of the risks of this waiver of Catrfornia
Civil Code Section 1542, which reads as follows:
A general releasa .does not extend to claims which the
creditor does not know or suspect to exist in his or her
favor at the time of executing the release, which if known
by him or her must have materially affected his or her
settlement with ~he debtor.

11 .

The

P~rties

agree to execute all documents and perform all acts

necessary to effectuate the terms and purposes of this Agreement, including, without
limitation, signing any documentation required by the Court, the Workers' Compensation
Appeals Board, or any administrative agency.

Settlement Agreement and General Release

Mclnchak:v. Cannel Ml28062

Page 6 of9

12.

The Parties agree that this Agreement has absolutely no precedential

value, and may not be introduced as evidence in connection with any claim, legal
proceeding, hearing or lawsuit, except in a proceeding to enforce this Agreement.

13.

In the event that any term, condition or provision of thfs Agreement shall

be held by a court of competent jurisdiction

to be invalid or against public policy, that

term, condition or provision shall be deemed to be deleted, and the remaining terms,
conditions and provisions shall continue in force and- effect.

14.

The validity, interpretation and performance of this Agreement shall be

construed and Interpreted according to the laws of the State of California.

15.

Plaintiff represents that there is no existing lien, nor is any person or entity

entitled to establish a lien for any payment or payments they have made or will make to
Plaintiff or on behalf of Plaintiff as a consequence of any other matters arising out of or
connected with Steven Mclnchak's employment with the City or the lawsuit and any
and all lawsuits and claims brought by Plaintiff not set forth herein. Plaintiff will
indemnify and hold the City harmless from any liens, claims, demands, rights or causes
of action of any kind or character against the City, whether for other causes of action,

medical care, unemployment and/or disability compensation, attorneys' fees or

otherwise, involving Plaintlff and arising from or ~nnected to Steven Mclnchak'~
employment or the Lawsuit and any and all lawsuits and claims brought by Plaintiff
against the City not set forth herein.
16.

Each signatory to this Agreement represen~ and warrants that she or he

has full power to make the releases and agreements contained herein. Plaintiff
expressly represents and warrants that she has not assigned, encumbered or In any
rnanner transferred all or any portion of the claims covered by the releases and
Settlement Agreement and General Releue

Mclnchakv. Camtel Ml28062

Page 7 of 9

agreements contained herein. In the event it is determined that Plaintiff made an

assignment, encumbrance or transfer contrary to the terms Qf this Agreement, Plaintiff
will defend and Indemnify the City for any resulting costs, including the costs of

judgment and reasonable attorneys' fees.

17.

This A~reement Incorporates the recitation of settlement on the record on

June 17, 2015. There are no agreements, written or oral, express or implied, between

the parties hereto, concerning the subject matter hereof, other than those set forth in
this Agreement. Any modifications may only be effected by a writing signed by all

affected parties, and this Agreement and Release supersedes any prior written or oral
agreement concerning the subject matter of Its provisions. The parties agree that there
are no representations, agreements, arrangements or understandings, either written or
oral, between or among the parties relating to the subject matter of this Agreement that
are not fully expressed herein.

18.

If it becomes necessary to engage in legal proceedings to enforce or

interpret any of the provisions of this Agreement, the prevailing party shall be entitled to
recover that party's reasonable attorneys' fees and all expenses including but not
limited to statutory costs incurred in connection with such proceedings.

19.

The Superior Court of Monterey County shall retain jurisdiction over the

,parties to enforce the settlement until performance in full of the terms of the settlement
pursuant to CCP 664.6.

20.

Each Party has had the opportunfty to participate In drafting the

Agreement Any terms, conditions or provisions of the Agreement shall not be

construed against.one party and in favor of another by virtue of who actually drafted or
circulated the Agreement.
Settlement Agreeme~t and General Release

Mclnchalt: v. Carmel Ml28062

21.

The Parties agree to execute in counterparts, with the same force and

effect as if executed in a single, complete document.

22.

The signature by the City below confirms that this settlement was

considered and approved by the City Council of the City of Cannel-by-the-Sea.

23.

Each Party acknowledges that she or it has been represented by counsel

in connection with this matter. Each signatory also acknowledges that this Agreement
has been carefully read and fully understands all of the provisions of this Agreement.
24.

Plaintiff acknowledges that the waivers and releases she has made are

knowing, conscious and with full appreciation that she is forever foreclosed from
pursuing any of the rights so waived.
Date:

7/~.~ 11

5"

..J
.

Date: "~ /s-

__ ...,..,..,.

KAREN MciNCHAK, Successor In Interest to

Decede!Jl. Steven Mclnc~ak

DOU
CHMITZ
City Administrator, C

Approved as to form:
Date:

) ....,.

z.:z- t 1.-()IL

STONER, WELSH & SCHMIDT

by Michelle Welsh, Attorneys for Plaintiff

Date:

DON FREEMAN
we-
City Attorney, City of Carmel-by-the-Sea
$

Date: ~.pi t;1

a0

s-

'

LAVJ OFFIC~ O.F VINCENT P. HURLEY

by VIncent P: Hurtey, Att'7)~ys for

City of Carmel-by-tha~Sea
Settlement Agreement and General Relea5e

Mc.Inchalc v. Cmmel Ml28062

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