SETTLEMENT AGREEMENT

CITY AND COUNTY OF SAN FRANCISCO et al. v. MEL MURPHY, et al.

SAN FRANCISCO SUPERIOR COURT NO. CGC-15-545031
I. INTRODUCTION

This Settlement Agreement ("AGREEMENT") is between CITY AND COUNTY OF

SAN FRANCISCO and PEOPLE OF THE STATE OF CALIFORNIA EX REL. DENNIS J.

HERRERA, CITY ATTORNEY FOR THE CITY AND COUNTY OF SAN FRANCISCO

(collectively, "CITY") and MEL MURPHY, Individually, :MEL MURPHY as Trustee of the

Murphy Family Revocable Trust, NUANNOI MURPHY, Individually, NUANNOI MURPHY,

as Trustee of the Murphy Family Revocable Trust, MURPHY'S 3418 26TH STREET LLC, 104

TARA LLC, MURPHY'S 1025 HAMPSHIRE STNO. 1 LLC, MURPHY'S 1025

HAMPSHIRE ST NO. 2 LLC (collectively "MURPHYS"). The CITY and MURPHYS may be

referred to collectively below as the "PARTIES."

The PARTIES have come to the following agreement:

II. RECITALS

This AGREE:MENT is the result of a negotiated resolution of all of the claims and

defenses that ·have arisen between the PARTIES related to MURPHYS' ownership, maintenance

and management of properties at 1025 Hampshire Street, 1346 Alabama Street, 125 Crown

Terrace, and 3418 26th Street, all in San Francisco, California (the "PROPERTIES"). In San

Francisco Superior Court Case No. CGC-15-545031 (''the ACTION"), the CITY has alleged that

MURPHYS violated the law in their use, maintenance and management of the PROPERTIES

under San Francisco Municipal Codes, the State Housing Law, the Unfair Competition law, and

public nuisance law. MURPHYS deny the CITY's allegations.

Each of the PARTIES has carefully read this AGREEMENT, and signs it freely and

voluntarily upon the advice of its own attorneys. Each of the PARTIES affirms that the only

consideration for its execution of this AGREEMENT are the terms stated in the body of this

AGREEMENT; that no other promise or agreement of any kind has been made by any person or

entity to cause them to execute this AGREEMENT; that it is competent to execute this

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AGREEMENT; that each party's agreement to execute this AGREEMENT has not been

obtained by any duress or undue influence; and that each party fully understands and voluntarily

executes this AGREE1\1ENT.

ACCORDINGLY, to settle and avoid the risks and costs ~flitigation, and in

consideration of the mutual agreements in this AGREE1\1ENT, and for good and valuable

consideration, the receipt and adequacy of which are acknowledged, the PARTIES agree to fully

settle their dispute on the following terms and conditions:

III. AGREEMENT
A. DEFINITIONS

Where terms are not defined, they shall have their ordinary accepted meanings within the

context with which they are used. All words in the plural number shall include the singular and

all words in the singular number shall include the plural unless the natural construction of the

wording indicates otherwise.

B. PARTIES AND ENTITIES BOUND BY TIDS AGREEMENT

The PARTIES agree to be bound by the terms of this AGREEMENT, without limitation

or restriction. The provisions of this AGREE1\1ENT will apply to MURPHYS, their agents,

assignees, employees, successors in interest, and all persons who are acting in concert with, on

behalf of, or in participation with MURPHYS.

C. NO ADMISSION

This AGREE1\1ENT is entered into for settlement purposes only. Neither the fact of, nor

any statement or provision contained in, this AGREEMENT, including monetary payments by

MURPHYS, nor any action taken by any of the PARTIES under this AGREEMENT, shall

constitute, be construed as, or be admissible in evidence as, any admission or concession

regarding any claim or allegafam of any wrongdoing, fault, violation of law, or liability of any

kind on the part of any of the PARTIES. But nothing stated here shall preclude any of the

PARTIES from seeking to introduce the terms of this AGREEMENT in any legal proceeding to

enforce this AGREE1\1ENT.

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 The PARTIES also agree that the PARTIES shall be bound by, and liable for, the

obligations arising out of this AGREEMENT as detailed herein. ·

D. SETTLEMENT AMOUNT & STIPULATED INJUNCTIO.N
. I
1. In consideration of the release herein, and all of the terms and conditions of this

AGREEMENT, MURPHYS agree to pay the CITY the total settlement sum of Two Hundred .

Twenty-five Thousand Dollars ($225,000) ("SETTLEMENT AMOUNT").

a. The SETTLEMENT AMOUNT shall be paid as follow: One Hundred

Sixty Thousand Dollars ($160,000) within 72 hours of a copy of the fully executed agreement

being transmitted to counsel for MURPHYS and the balance of Sixty-five Thousand Dollars

($65,000) paid on or before February 15, 2019. Payment shall be made by Zacks Freedman and

Patterson PC Attorney-client trust check, cashier~s check or money order, made payable to the

"City and County of San Francisco" and delivered to the City Attorney's Office, Attn: Deputy

City Attorney Peter J. Keith, 1390 Market Street, Sixth Floor, San Francisco, California 94102.

b. If MURPHYS fail to pay in the requisite time, manner or amount

("DEFAULT"), interest shall immediately accrue on the entire balance due as of the date of the

DEFAULT i;it the legal rate oflO per cent per annum, as provided by Code of Civil Procedure

Sections 685.010 and 685.020. Interest shall then continue to accrue until all sums due the CITY

are fully paid. All subsequent payments received shall be applied first to accrued interest. In

case of DEFAULT, MURPHYS consent to the San Francisco Superior Court entering a money

judgment in the ACTION in favor of CITY and against MURPHYS jointly and severally, for the

unpaid principal and accrued interest to the date of the judgment, which judgment shall be for

civil penaltes under the San Francisco Municipal Codes and the Unfair Competition Law.

2. In consideration of the release herein, and all of the terms and conditions of this

AGREEMENT, MURPHYS also agree to sign and enter into and abide by the terms of the

STIPULATED INJUNCTION attached hereto as Exhibit A. Upon termination of the

STIPULATED INJUNCTION, the CITY shall file a dismissal of the ACTION with prejudice,

all parties to bear their own costs per this AGREEMENT.

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 '.
1 '

3. In consideration of the release herein, and all of the terms and conditions of this
AGREEMENT, MURPHYS shall file a dismissal without prejudice of the Cross-Complaint for

Declaratory Relief (filed on August 22, 2016) in the ACTION, all parties to beartheir own costs

per this AGREEMENT.

E. JURISDICTION AND JUDICIAL OVERSIGHT OF TIDS SETTLEMENT
AGREEMENT

The PARTIES agree and stipulate that the San Francisco Superior Court ("COURT") has

and shall retain jurisdiction over the subject matter and personal jurisdiction over each of the

PARTIES to this AGREEMENT pursuant to Code of Civil Procedure Section 664.6 to enforce

any and all terms of this AGREEMENT. The COURT shall also have jurisdiction of this matter

to interpret any provision of this AGREEMENT, or to resolve any conflict with regard to the

performance of the terms of this AGREEMENT until final performance of all terms stated

herein.
F. MURPHYS' REPRESENTATIONS AND WARRANTIES

MURPHYS acknowledge that each of them is familiar with the provisions and

consequences of this AGREEMENT. MURPHYS further acknowledge that each of them

understands the terms of this AGREEMENT and believes that the terms are in their best

interests. MURPHYS knowingly and of their own free will stipulate to the terms of the

AGREEMENT.
G. RELEASES
1. Mutual Releases

It is the intention of the PARTIES that this AGREEMENT shall be effective as a full and

final accord and satisfactory release pf all claims between the PARTIES related to the

ownership, maintenance, and management of the PROPERTIES up to the date of execution of

this AGREEMENT, except for those matters not released, as detailed in Section I.3, below.

In furtherance of this intention, the PARTIES acknowledge that each, respectively, is

familiar with Section 1542 of the California Civil Code which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS A
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR
HER FAVOR AT THE TIME OF EXECUTING THE RE~EASE,
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 WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

Subject to the exceptions for those matters not released, detailed in Section G.3, below,

the PARTIES hereby waive and relinquish any rights and benefits which each has or may have

under Section 1542 of the California Civil Code to the full extent that each may lawfully waive

all such rights and benefits with respect to the subject matter of this AGREEMENT. The

PARTIES acknowledge that each is aware that it may hereafter discover facts in addition to or

different from those which he or she knows or believes to be true with respect to the subject

matter of this AGREEMENT, but it is the intention of the PARTIES to hereby fully and finally

settle and release any and all matters, disputes, difference, known or unknown, or which have

existed or will ever exist between the PARTIES regarding the released claims. In furtherance of

this intention, the AGREEMENT shall be and remain in effect as a full and complete general

release of such claims notwithstanding discovery or existence of any such additional or different

facts.
2. Release by MURPHYS

In consideration of the promises set forth in this AGREEMENT, together with good and

valuable consideration, the receipt, adequacy and sufficiency of which are hereby expressly

acknowledged, MURPHYS release and discharge the CITY, as well as its employees, officers,

directors, servants, insurers, attorneys, agents, representatives, and assigns from all civil claims,

counterclaims, demands, actions, lawsuits, causes of action, and liabilities of any nature, known

or unknown, suspected or unsuspected, including but not limited to civil penalties, damages,

punitive damages, costs, expenses and attorneys' fees arising in any way from CITY's

enforcement activities related to the ownership, use, maintenance and management of the

PROPERTIES, up to the date of the execution of this AGREEMENT.

Notwithstanding the releases set forth above, and as an express "carve-out" from this

release, if DEFENDANTS believe that the CITY' s denial of any corrective permit application is

contrary to law, DEFENDANTS shall promptly and diligently pursue their administrative

appeals. If DEFENDANTS' administrative appeals are denied and DEFENDANTS wish to seek

judicial review, DEFENDANTS may seek such judicial review within the applicable time frame
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provided by law and the release set forth herein shall have no force and effect as to any and all

claims of error related to the denials of the above referenced corrective permits.
3. Release by CITY

In consideration of the promises set forth in this AGREEMENT, together with good and

valuable consideration, the receipt, adequacy and sufficiency of which are hereby expressly

acknowledged, the CITY releases and discharges MURPHYS from any and all civil claims,

counterclaims, demands, actions, lawsuits, causes of action, and liabilities of any nature, known

or unknown, suspected or unsuspected, but not limited to civil penalties, damages, punitive

damages, costs, expenses and attorneys' fees arising in any way from the ownership, use,

maintenance and management of the PROPERTIES, up to the date of the execution of this

AGREEMENT, subject to the specific limitations set forth below in this section.

The aforementioned release includes the following: (i) any enforcement/investigation

costs incurred, or penalties for violations imposed, by the San Francisco Department of Building

Inspection or San Francisco Planning Department up to the date of execution of this

AGREEMENT; and (ii) any fees and costs incurred by the City Attorney's Office, including any

staff and employee time, up to the date of execution of this AGREEMENT.

Notwithstanding any other term of this AGREEMENT, the PARTIES acknowledge that

the CITY specifically does not release MURPHYS from the following:

• Fees charged by any CITY agency for permits for work on the PROPERTIES;

• Any municipal or state tax claims or liabilities, even those that relate to

ownership, use, maintenance, and management of the PROPERTIES;

• Any other state or municipal administrative, civil, or government claim or liability

unrelated to the ownership, use, maintenance, and management of the PROPERTIES;

• Any criminal liability; and

• Any violations of state or municipal law occurring or continuing after the date of

execution of this AGREEMENT.

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.,

The PARTIES further acknowledge that this release does not in any way relieve the

PARTIES of the obligation to abide by each and every term of this AGREEMENT or each

party's right to enforce this AGREEMENT.

H. GOVERNINGLAW

This AGREEMENT shall be governed by, construed and enforced in accordance with,

the laws of the State of California without giving effect to its principles of conflicts of laws.
I. ENTIRE AGREEMENT

This AGREEMENTcontains the entire agreement among.the PARTIES hereto with

respect to the matters covered hereby, and supersedes all prior agreements, written or oral,

among the PARTIES. No other agreement, statement or promise made by any party not

conta,ined herein shall be binding or valid.

J. CONSTRUCTION

The PARTIES acknowledge and agree that each party and any counsel for each party has

reviewed and revised this AGREEMENT and that any rule of construction to the effect that

ambiguities are to be resolved against the drafting party shall not apply in an interpretation of

this AGREEMENT or any amendment or exhibit hereto.

K. COUNTERPARTS

This AGREEMENT may be executed by facsimile or electronic (e.g., pdf) signatures in

separate counterparts and once executed shall constitute one agreement which shall be binding

upon all the PARTIES hereto, notwithstanding that the signatures of the PARTIES' designated

representatives do not appear on the same page and/or are not original signatures.
L. NOWAIVER OF RIGHT TO ENFORCE

The failure of any party to enforce any provision of this AGREEMENT shall in no way

be deemed a waiver of such provision or in any way affect the validity of this AGREEMENT.

The failure of any party to enforce any su~h provision shall not preclude such party from later

enforcing the same or any other provision of the AGREEMENT.

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•,

M. SEVERABILITY

In the event that any provision of this AGREEMENT, or part thereof, shall for any reason

be held to be unenforceable, invalid or contrary to public policy or any law, and the remaining

valid portions of the AGREEMENT, if enforced, will carry out the PARTIES' intentions as

reflected herein to release fully and finally the claims released in exchange for the consideration

described, the whole AGREEMENT shall not be invalidated but, instead, the AGREEMENT

shall be construed as if it did not contain the unenforceable or invalid portion.

N. WARRANTY OF AUTHORITY

Each of the signatories hereto warrants and represents that he or she is competent and

authorized to enter into this AGREEMENT on behalf of the party for whom he or she purports to

sign this AGREEMENT. Each party signing this AGREEMENT also represents and warrants

that no other person's signature is needed in order to bind the PARTIES to this AGREEMENT or

to release the claims and demands that such Party is purporting to release. No party will

challenge the right or authority of any other party or signatory to sign or execute this Agreement

on behalf of any other party.

CITY:

Dated: 1l {it\ \g
PETER J. KEITH, Chief Attorney
For CITY AND COUNTY OF SAN FRANCISCO
and PEOPLE OF THE STATE OF CALIFORNIA
Approved as to form:

Dated: \\\'l-\\l~
£~-·
PETER J. KEITH, Chief Attorney
For CITY AND COUNTY OF SAN FRANCISCO
and PEOPLE OF THE STATE OF CALIFORNIA

MURPHYS:

Dated:~

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Dated: \I / 1S/ I <;'
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Approved as to form:
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