Explanation
This ordinance is submitted to settle a civil action known as City of Columbus v. Refuel Environmental Services, LLC, Case No. 09-CVG-13342, which the City of Columbus filed against Refuel Environment Services, LLC, on September 2, 2009, in the Court of Common Pleas for Franklin County, Ohio. The case arises out of a leak of biodiesel fuel from an underground storage tank at the Division of Refuse Collection Transfer Station located at 2100 Alum Creek Drive. On June 21, 2007, while Refuel employees were cleaning the tank, a piece of equipment accidentally fell into it and punctured its wall. Because the Refuel employees erroneously concluded that the puncture would not cause the tank to leak, they left the facility without telling anyone what had happened.
Unaware that the tank had been punctured the day before, the City refilled it with fuel on June 22, 2007. Thus began a leak of fuel that was not discovered until September 18, 2007. As a consequence of this leak, the City has incurred damages, including the lost value of leaked biodiesel fuel, the expense of environmental clean-up and remediation, and the lost value of a working fueling station at the Alum Creek facility.
Although Refuel's insurer, Greenwich Insurance Company ("XL"), originally agreed to defend Refuel in this case under a liability policy, XL later determined Refuel had breached the policy's cooperation clause. Thus, XL has taken the position that is has been relieved of any obligation to further defend or indemnify Refuel in this matter. After extensive factual investigation, discovery, and negotiations, the City Attorney and the Public Service Director have determined that, absent insurance coverage, Refuel lacks the financial wherewithal to pay most of the judgment that the City would likely obtain in this civil action. Consequently, the City Attorney and the Public Service Director believe that it is in the City's best interest to settle this matter for a total of Three Hundred Fifty Thousand Dollars ($350,000.00).
Title
To authorize the City Attorney and the Director of Public Service to compromise and settle on behalf of the City of Columbus the litigation captioned City of Columbus v. Refuel Environmental Services, LLC, for Three Hundred Fifty Thousand Dollars ($350,000.00); to execute any necessary documents associated with the settlement and final resolution of that litigation; to authorize the City Auditor to deposit the settlement proceeds in the appropriate fund; and to declare an emergency.
Body
WHEREAS, on September 2, 2009, the City of Columbus filed a civil lawsuit against Refuel Environmental Services, LLC, in the Court of Common Pleas for Franklin County, Ohio;
WHEREAS, the City seeks compensation for damages incurred as a result of a fuel leak from one of its underground storage tanks at the Department of Public Service, Division of Refuse Collection Transfer Station located at 2100 Alum Creek Drive caused by Refuel employees when they punctured the wall of the City's tank; and
WHEREAS, Refuel and its insurer, Greenwich Insurance Company, have offered to settle this matter for a total payment of Three Hundred Fifty Thousand Dollars ($350,000.00) to the City; and
WHEREAS, the City Attorney and the Director of Public Service have determined it is in the City's best interest to settle this matter for such amount; and
WHEREAS, an emergency exists in the usual operations of the City in that it is immediately necessary for the City to compromise and settle this matter to receive compensation at the earliest possible date, and for further preservation of the public health, peace, property, safety, and welfare; now therefore
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1: That the City Attorney and the Director of Public Service be, and hereby are, authorized and directed to settle the civil action captioned City of Columbus v. Refuel Environmental Services, LLC, Case No. 09-CVG-13342, by the payment to the City in the total amount of Three Hundred Fifty Thousand Dollars ($350,000.00);
Section 2: That the City Attorney and the Director of Public Service be, and hereby are, authorized to execute any necessary agreements and court documents associated with the settlement and final resolution of the litigation on behalf of the City;
Section 3: That the City Auditor be, and hereby is, authorized to accept the settlement funds upon receipt and to determine the appropriate fund into which they shall be deposited to the credit and benefit of the City; and
Section 4: That for the reasons set forth in the preamble, which are incorporated by reference herein, this ordinance is hereby deemed to be an emergency measure and shall take effect and be in force from and immediately after its passage and signature by the Mayor, or within ten (10) days thereafter if the Mayor neither signs nor vetoes the same.