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HomeMy WebLinkAboutCO 2026-004 - RLI Insurance Company1 TENDER AGREEMENT This Tender Agreement (Agreement ) is made and entered into this 13th day of January 2026, by and between the CITY OF RANCHO CUCAMONGA CITY and RLI INSURANCE COMPANY (SURETY ). The CITY and SURETY are sometimes collectively referred to herein as the "Parties." RECITALS A. On or about November 5, 2024, the CITY entered into a written contract (Contract ) with MARJANI BUILDERS, INC. () for construction of the (Project ). The term Contract as used herein shall mean the aforementioned contract between the CITY and MARJANI, including all written contract documents and plans and specifications referenced therein, all of which are incorporated herein by reference. B. SURETY, as surety for MARJANI, executed and delivered a Faithful Performance Bond No. RCB0031131 in the penal sum of $679,000.00 (Performance Bond ) and a Labor and Materials Bond No. RCB0031131 in the penal sum of $679,000.00 (Payment Bond ) in favor of the CITY, as obligee, (sometimes collectively the Bonds ). C. On June 13, 2025, the CITY served its Notice of Termination on MARJANI and declared the Contract terminated based on, among other things, section 4107(b) of the Public Contract Code. D. On June 23, 2025, CITY has made demand upon SURETY under the Performance Bond for completion of the Project. E. SURETY represents it has solicited bids from qualified, licensed contractors to complete the remaining work required to be performed under the Contract for the Project in conformity with the requirements of the Contract Documents, together with the costs for work installed by MARJANI Remaining Work . F. SURETY desires to and the CITY agrees to accept the tender of a Completion Contractor to the CITY to complete the Remaining Work in fulfilment of SURETY obligations under the Performance Bond. AGREEMENT 1. NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, it is understood and agreed by the Parties as follows: 2. Incorporation of Recitals. The Recitals set forth above are hereby agreed to by each of the Parties and incorporated herein by this reference as though set forth in full. City of Rancho Cucamonga CONTRACT NUMBER 202ϲ-ϬϬ4 2 3. Tender and Acceptance. 3.1. SURETY hereby tenders COMPLETION CONTRACTOR to the CITY to complete the Remaining Work required to be performed under the Contract for the Project. 3.2. The CITY hereby accepts the SURETY's tender of the COMPLETION CONTRACTOR to complete the Remaining Work on the terms and conditions set forth herein. 4. Current Contract Amount. The CITY certifies to SURETY that the current contract accounting for the Project is as follows: Original Contract Amount $ 679,000.00 Change Orders 1, 2, & Paint $ 13,330.00 Adjusted Contract Amount $ 692,330.00 Total Completed and Stored to Date $ 284,500.00 Retention Paid to Escrow Account $ 14,225.00 Retention Billed but Unpaid $ -- Total Earned Less Retention $ 270,275.00 Amount Paid to Date, including Retention (in Escrow) $ 284,500.00 Contract Balance including Retention $ 407,830.00 The CITY certifies to SURETY that no other payments have been made under the CITY and will be dedicated for payment of completion of the Remaining Work as defined herein. The CITY acknowledges and agrees that SURETY has relied upon these representations in entering into this Agreement. 5. Payment. Six Hundred Forty-Eight Thousand Dollars ($648,000). exceeds the remaining Contract Balance. The CITY will dedicate the Contract Balance for completion of the Remaining Work and retain the Contract Balance in trust pending completion and close out of the Project. Promptly upon the full execution of this Agreement, SURETY will pay to the CITY the difference between Contract Balance including Retention and Completion (i.e., the Completion Excess in the amount of $240,170.00): Remaining Balance (inc. Ret.) $ 407,830 Completion Cost $ 648,000 Completion Excess $ 240,170 6. Exoneration of Performance Bond. Upon CITY execution of the Completion Contractor Agreement, execution of this Agreement by all Parties, except for the rights and claims specifically reserved by the CITY as set forth in Paragraph 7, below (Reserved Claims ), the Performance Bond issued by SURETY shall be and hereby is exonerated and of no 3 further force and effect. 7. Reserved Claims. 7.1 The CITY shall reserve all rights and claims under the Contract and Performance Bond for (a) Liquidated Damages, if any; and (b) additional costs incurred by the CITY, if any, including, but not limited to, construction management services, geotechnical services, and architectural services. As a condition precedent to any such claim specified under subparagraphs (a) and (b), above, the CITY shall immediately notify SURETY in writing of any such claims and provide the SURETY with documentation in support thereof, and SURETY reserves all of its rights and defenses regarding the Reserved Claims. 7.2 The SURETY reserves all of its rights and claims against the CITY under the Contract and the Performance Bond. 8. Payment Bond Obligations. SURETY s Payment Bond shall remain in full force and effect for work performed by MARJANI under the Contract, and SURETY retains all rights and defenses pursuant to the Payment Bond. SURETY s Payment Bond shall not apply to COMPLETION CONTRACTOR or any of its subcontractors or suppliers for any work performed or materials or equipment supplied by or for COMPLETION CONTRACTOR under Contract with CITY. 9. SURETY Not Contractor. It is understood and agreed that SURETY, by entering into this Agreement, is not acting as a contractor, but instead in its capacity as a performance bond surety. 10. SURETY s Maximum Performance Bond Liability. The Parties agree that the maximum performance bond liability of SURETY shall be the penal amount of SURETY s Performance Bond. Any payment by SURETY under this Agreement shall reduce by a like amount SURETY maximum liability under the Performance Bond. 11. Release. Except as to the Reserved Claims specified in paragraph 7 and upon payment of the Completion Excess sum, the CITY hereby releases, acquits, and forever discharges SURETY from any and all claims, expenses, debts, demands, costs, and other actions or liabilities of every nature, whether known or unknown, whether in law or in equity, that each has or may claim to have as a result of the Project. This Agreement is made notwithstanding section 1542 of the California Civil Code which provides: A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party. 12. Third Party Claims against CITY. To the extent allowed by law, the CITY 4 agrees that it will not pay any claim or charge that is based on work already performed under the Contract and that may affect the SURETY s continuing obligations under the Payment Bond and this Agreement, without the consent of SURETY, except by order of a court of competent jurisdiction or other agency such as the Division of Labor Standards Enforcement after due notice to SURETY. 13. Agreement to Cooperate. The Parties hereto agree to cooperate fully with each other, including executing any necessary documents, to the end that the work set forth in the Contracts may be completed as efficiently and quickly as reasonably possible under the circumstances. 14. Power to Execute. The Parties and each of their signatories hereto warrant that each has the power and authority to execute this Agreement. This Agreement is subject to CITY Board approval or ratification. 15. Invalid Provisions. The provisions of this Agreement shall be applied and interpreted in a manner consistent with each other so as to carry out the purposes and intent of the parties, but, if for any reason any provision is unenforceable or invalid, such provision shall be deemed severed from this Agreement and the remaining provisions shall be carried out with the same force and effect as if the severed portion had not been a part of this Agreement. 16. Entire Agreement. This Agreement constitutes the entire agreement between the Parties hereto and supersedes any and all prior agreements, arrangements, and/or understandings by and between the Parties. Except as herein modified, all terms and conditions of the Contract shall remain unchanged and in full force and effect. This Agreement may only be modified in a writing signed by all parties. 17. Binding on Successors and Assigns. This Agreement shall extend to and be binding upon the parties hereto and their respective successors and assigns. No rights shall accrue hereunder to or for the use of any other person, firm, corporation, or governmental entity other than the parties hereto and their respective successors, assigns, and reinsurers. Assignees of SURETY must be approved by CITY in writing, which approval shall not be unreasonably withheld. 18. Notices. All notices and correspondence shall be sent by first class U.S. mail postage prepaid, with a copy sent via facsimile or certified U.S. mail, return receipt requested, or overnight mail: To the CITY Fily Reyes City of Rancho Cucamonga Public Works Department 8794 Lion St, Rancho Cucamonga, 91730 909-774-4026 5 Email: Fily.reyes@cityofrc.us With copies to: Nick Ghirelli RWG Law 1 Civic Center Circle P.O. Box 1059 Brea, CA 92822-1059 Email: nghirelli@rwglaw.com To the SURETY Sarah Wilson RLI Insurance Company E-mail: Sarah.wilson@rlicorp.com Claim Dept: PO Box 3961, Peoria, IL 61612-3961 Telephone 860-652-3044 ex 1519 With copies to: Stacie L. Brandt Booth, Mitchel & Strange, LLP 701 South Parker, Suite 6500 Orange, CA 92858 (714) 480-8500 (714) 480-8533 Email: slbrandt@boothmitchel.com 19. Counterparts. The Parties may execute this Agreement in two or more counterparts, which shall, in the aggregate, be signed by all of the parties; each counterpart shall be deemed an original instrument as against any party who has signed it. 20. Fully Negotiated Agreement. This Agreement has been fully negotiated by the Parties and their counsel and shall not be construed in favor of or against either party, regardless of who may have drafted it or any of its terms. The failure of any of the Parties to exercise in any respect a right provided for in this Agreement shall not be deemed to be a waiver of the right or of any other right unless expressly agreed to by any of the Parties in writing. 21. Choice of Law. This Agreement is made, executed and performed in the County of San Bernardino, State of California, and shall be governed by the laws of the State of California. 6 IN WITNESS WHEREOF, the Parties hereto have hereunder set their hand and seal the day and year first hereinafter written. CITY OF RANCHO CUCAMONGA By: ____________________________________ L. Dennis Michael, Mayor RLI INSURANCE COMPANY By: ____________________________________ Sarah Wilson, Claim Director