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HomeMy WebLinkAbout45-93 RESOLUTIONRESOLlUTION NO. 4 5 - 9 3 A RESOLUTION AUTHORIZING THE EXECUTION OF THE STIPULATION OF SETTLEMENT SUBJECT TO COURT APPROVAL AGREED UPON BY THE PLAINTIFFS AND DEFENDANTS IN THE SALES TAX LITIGATION, HASHA, ET AL V CITY OF FAYETTEVILLE, ET AL, CASE NO. E91- 1052 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: liatiota. That the City Council hereby authorizes the execution of the Stipulation of Settlement Subject to Court Approval agreed upon by the plamtiffs and defendants in the sales tax litigation, Hasha, et al v. City of Fayetteville, et al, Case No. E91-1052. A copy of the agreement authorized for payment is attached hereto and made a part hereof. PASSED AND APPROVED this 20th day of Aoril , 1993. APPROVED: /te'CAsm". Fred Hanna, Mayor ATTEST: BY: JifrAtC? of -1 Sherry L °Thomas, City Clerk 96-t3 IN THE CHANCERY COURT OF WASHINGTON COUNTY, ARKANSAS ROBERT L HASHA, JIM McDONALD, MARLENE RAY, ANDRE MILLER, J. D. GOSNELL and BRADLEY L. LEWIS, Individually and on Behalf of all Other Persons Similarly Situated V. CASE NO. E-91-1052 CITY OF FAYETTEVILLE, ARKANSAS ARVEST TRUST COMPANY, NATIONAL ASSOCIATION FAYETTEV1LE SCHOOL DISTRICT NO. 1 PLAINTIFFS DEFENDANTS DEFENDANT IN INTERVENTION DEFENDANT IN INTERVENTION STIPULATION OF SETTLEMENT SURJECT TO COURT APPROVAL WHEREAS, Robert L. Hasha, Jim McDonald, Marlene Ray, Andre Miller, J. D. Gosnell and Bradley L. Lewis, individually and on behalf of all other persons similarly situated, are Plaintiffs in the captioned civil action; WHEREAS the Hasha Litigation was certified as a Class action pursuant to Rule 23 of the Arkansas Rules of Civil Procedure by Court Order dated November 4, 1991; WHEREAS the Plaintiffs (as hereinafter defined) and the Defendants (as hereinafter defined) desire to terminate all complex and protracted litigation and have agreed to settle, resolve and compromise their several claims and disputes on the terrns and conditions set forth herein ("Stipulation of Settlement"); NOW, THEREFORE, it is hereby stipulated and agreed as follows: 1. DEFINITIONS As used herein, the following terms shall have the following meanings unless the context otherwise requires: 1.1 "Bond Proceeds" shall mean all proceeds from the sale of the CIP Bonds plus income. received from the investment of such proceeds. 1.2 "CIP Bonds" shall mean the City of Fayetteville, Arkansas, Sales and Use Tax Capital Improvement Bonds, Series 1990, dated October 15, 1990, in the original aggregate principal amount of Thirty -Three Million Nineteen Thousand Dollars ($33,019,000). • 1.3 "Class" shall mean" (a) all Persons who at any time paid, directly or indirectly, any part of the Sales and Use Tax, (6) all Persons who are or have been citizens of Fayetteville who at any time may have been affected by the acts or omissions of the Defendants in connection with, directly or indirectly, the CIP Bonds, Trust Indenture, Bond Proceeds, Tax Receipts or Sales and Use Tax, and (c) all Persons who are or have been citizens of Fayetteville who at any time may have a claim against the CIP Bonds, Trust Indenture, Bond Proceeds, Tax Receipts, or Defendants in connection with, directly or indirectly, the CIP Bonds, Trust Indenture, Bond Proceeds, or use of the Tax Receipts or use of the Sales and Use Tax proceeds in connection with the CIP Bonds, Trust Indenture, or Bond Proceeds. 1.4 "Defendants" shall mean the City of Fayetteville, Arkansas ("Fayetteville" or the "City") and Arvest Trust Company, National Association ("Arvest" or the "Trustee") and the Fayetteville School District #1 and their respective past, present or future shareholders, directors, council members, officers, controlling persons, employees, agents, representatives, attorneys of record in the Hasha Litigation, assigns, beneficiaries, predecessors and successors in interest. 1.5 "Hasha 1 rogation" shall mean the action known as Robert L Hasha et al v City of Fayetteville, Arkansas Case No. E 91-1052, now pending in the Washington county Chancery Court, Arkansas (the "Court"). 1.6 "Plaintiffs" shall mean Robert L. Hasha, Jim McDonald, Marlene Ray, Andre Miller, J. D. Gosnell and Bradley L. Lewis, individually and on behalf of the Class and Class members they represent. 1.7 other entity. 1.8 "Person" shall mean any individual, corporation, partnership, association or "Refund Claim Period" shall mean the four month period beginning on June 1, 1993, and ending on September 30, 1993, unless a different period is ordered by the Court, during which Taxpayers must submit claims for refunds of Sales and Use Tax paid during the Refund Time Period. 1.9 "Refund Time Period" shall mean the time period beginning June 20, 1991, which was the time when the original complaint in the Hasha Litigat on was filed, and ending on April 1, 1993, which was the time when all collection of the Sales and Use Tax was enjoined. 1.10 "Sales and Use Tax" shall mean the local sales and use tax of one percent (1%) to a maximum of Twenty -Five Dollars ($25) on each single transaction levied and collected by or on behalf of the City levied pursuant to City Ordinance Na 3381 passed by.. FST 1306.03 STI Page 2 • the City Board of Directors on October 4, 1988, and voted upon by the City's electorate in a general election held November 8, 1988. 1.11 "Taxpayer" shall mean any Person who paid the Sales and Use Tax. 1.12 "Tax Receipts" shall mean all Sales and Use Tax in the possession or custody of the Trustee or the City on January 19, 1993, and all Sales and Use Tax which has come into or may in the future come into the possession or custody of the Trustee or the City after January 19, 1993, and interest income thereon. 1.13 "Trust Indenture" shall mean the Trust Indenture dated as of October 15. 1990, by and between the City and McIlroy Bank & Trust, the predecessor Trustee to Arvest. 1.14 As used herein, unless the context otherwise requires, the plural shall include the singular and the singular shall include the plural, so that (by way of example only and not by way of limitation) the phrase the "Defendants" shall be construed to mean the "Defendants, or any of them," or, as the case may be, the "Defendants and each of them," etc . FINAL ORDER AND JUDGMENT The Plaintiffs and Defendants stipulate and agree to be bound by and will jointly request that the Court enter a final order and judgment ("Final Order and Judgment"), which will contain the following substance and matters: 2.1 Sales; and IN. Tax Refund. (a) During the Refund Claim Period, Taxpayers must submit to the City any claim for refund of any Sales and Use Tax actually paid during the Refund Time Period (June 20, 1991 up to April 1, 1993). The City will pay all properly proven refund claims within sixty (60) days after the end of the Refund Claim Period unless extended by the Court. Only the City will pay Taxpayer refund claims and the Trustee. the CIP Bonds, Trust Indenture and Bond Proceeds will not have any liability for payment of any Taxpayer refund claims. (b) All Taxpayer refund claims shall be submitted on a Proof of Claim form to be approved by the Court and all Taxpayer refund claims shall be proven using the method, nature, extent, type and quality of proof as approved by the Court. (c) If a Taxpayer claim for refund is disputed as not meeting the requirements or not being adequately proven, all disputes will be resolved by the Court or a Master appointed by the Court. (d) Any refund to the Taxpayers will not be reduced -by any award of attorneys' fees and expenses to the Lisle Law firm (hereinafter defined) and will not be FST 1306.03 STI Page 3 reduced by any expenses of administering the refund, all of which will be borne by Fayetteville. 2.2 Attorneys' Fres and Expenses of 1 isle Law Firm. (a) The Lisle Law Firm, P.C., Springdale, Arkansas ("Lisle Law Firm"), which represents the Class, may apply to the Court for an award of attorneys' fees and expenses for representing the Class. The Defendants will not approve and will not object to the application of the Lisle Law Firm for attorneys' fees and expenses. (b) The City will pay the attorneys' fees and expenses awarded to the Lisle Law Firm by the Court. Only. the City will pay whatever attomeys' fees and expenses are awarded by the Court to the Lisle Law Firm. The Trustee, the CIP Bonds, Trust Indenture and Bond Proceeds will not have any liability for payment of any attorneys' fees or expenses awarded to the Lisle Law Firm by the Court. The fees and expenses awarded by the Court will be paid by the City to the Lisle Law Firm within ten (10) calendar days after the order awarding fees and expenses is entered. (c) For purposes of the court's hearing the application by the Lisle Law Firm for attorneys' fees and expenses, the City and the Trustee will stipulate the existence of any facts within their respective knowledge or records. But, the City and Trustee will not be required to acknowledge or agree to any conclusions or arguments which the Lisle Law Firm may wish to make from the facts. 2.3 Tax Reedy, s Paid into General Fund of City (a) All Tax Receipts which are now held by the Trustee or the City and all Tax Receipts which may be received by the Trustee hereafter. shall be paid into the general fund of the City within ten (10) calendar days after entry of the Final Order and Judgment and may be used by the City in any manner as its council may approve including, but not limited to, any payments required to be made by the City pursuant to the Final Order and Judgment. 2.4 Full and Complete Discharge of all Class Claims (a) Except for the specified rights granted to the Class and the Lisle Law Firm by the Final Order and Judgment, any and all claims, demands, and causes of action of the Class and each and every member -thereof of any kind or nature in connection with, directly or indirectly, any subject matter decided in the Hasha Litigation or in connection with, directly or indirectly, the CIP Bonds, Trust Indenture, Bondholders, Bond Proceeds, Sales and Use Taxes used by the Trustee or Tax Receipts are forever acquitted, discharged and released. (b) Except for rights granted to the Class and the Lisle Law Finn under the Final Order and Judgment, the Class and each and every member thereof are forever FST 1306.03 STI Page 4 (b) Except for rights granted to the Class and the Lisle Law Firm under the Final Order and Judgment, the Class and each and every member thereof are forever barred from the prosecution of any claim, demand, or cause of action against the Defendants, CIP Bonds, Trust Indenture, Bondholders, Bond Proceeds, Sales and Use Taxes used by the Trustee and Tax Receipts in connection with, directly or indirectly, any subject matter decided in the Hasha Litigation or in connection with, directly or indirectly, the CLP Bonds, Trust Indenture, Bondholders, Bond Proceeds, Sales and Use Taxes used by the Trustee or Tax Receipts. 2.5 Finality of Final Order and Judgment and no Appeal by Parties. (a) The Final Order and Judgment shall be a complete and final adjudication in accordance with its terms. (b) The Plaintiffs and the Defendants, and each of them separately, agree not to appeal and they shall not appeal the Final Order and Judgment or any action taken by the Court or any order entered by the Court pursuant to or in furtherance of the Stipulation of Settlement, including, but not by way of limitation, the Plaintiffs. City and Trustee, and each of them separately, will not appeal: (i) The Court's preliminary approval of the Stipulation of Settlement; (ii) The Court's final approval of the Class Certification; (iii) The Court's approval of the Notice of Settlement (as hereinafter defined); (iv) The Court's approval of a Proof of Claim form and the nature and quality of proof required by a Class member to obtain a refund; (v) The Court's resolution of any disputed claims by members of the Class; and (vi) The Court's award of attorneys fees and expenses to the Lisle Law Firm. 2.6 Retention of Limited Jurisdiction. The Court shall retain specific, linuted jurisdiction, because the Hada itigation is a class action, to administer certain events and rights ordered in the Final Order and Judgment as follows: (a) To consider and award a reasonable attorney's fee and expenses to the Lisle Law Firm; and (b) The resolution of any disputes of Taxpayer claims for refunds as to whether or not such claims are adequately proven. Page 5 FST 1306.03 STI 3. PROCEDURES AND CONDITIONS TO EFFECT STIPULATION OF SETTLEMENT 3.1 The parties will jointly request that the Court take the following actions and order the following events: (a) Conduct a hearing on April 16, 1993, beginning at 9:00 a.m. for the purposes of (i) Preliminary approving ("Preliminary Approval") this Stipulation of Settlement; (ii) Finally approving the Class Certification. (iii) Approving a Notice of Final Approval of Class Action Certification and Stipulation of Settlement and Hearing ("Notice of Settlement"); (iv) Find that since no record source is made or kept of the members of the Class, that notice by publication is the best notice practicable under the circumstances and that the Notice of Settlement should be published twice in the Northwest Arkansas Times, the Northwest Arkansas Morning News, and the Morning News The Notice of Settlement shall be released by the City as a press release on the same day it is first published and the press release be made to the Associated Press and Dow Jones New Service; (v) Set the date of April 28, 1993, as the cut-off date by which any and all objections to the Stipulation of Settlement and Class Certification must be filed with the Chancery Clerk, Washington County; and (vi) Set and conduct a hearing on April 30, 1993, in the Washington County Courthouse to consider final approval ("Final Approval") of the Stipulation of Settlement ("Final Approval Hearing"). (b) At the Final Approval Hearing consider and approve the Proof of Claim form and the nature and quality of proof necessary in order for a Class member to claim a refund and to specify the necessary procedures for the administration of claims and the Court's resolution of any disputed claims. (c) At the Final Approval Hearing set aslate for a hearing to consider approval of the application by the Lisle Law Firm for attorney's fees and expenses ("Attorneys' Fee Hearing"). (d) On or before May 14, 1993, enter the Court's Order of Final Order and Judgment. 4. MISCELLANEOUS 4.1 This Stipulation of Settlement shall be governed by and interpreted in accordance with the laws of the State of Arkansas. FST 1306.03 STI Page 6 4.2 This Stipulation of Settlement constitutes the whole agreement between the parties and supersedes all earlier agreements, oral or written. if any. The parties hereto state and acknowledge that they have not given or relied upon any representations, warranties or promises which are not set forth herein. 4.3 This Stipulation of Settlement may be modified, but such modification must be in writing and approved by the Plaintiffs and the Defendants or their respective counsel or may be modified by Court order. IN WITNESS WHEREOF. this Stipulation of Settlement has been executed and entered into as of the 16th day of April, 1993, by the undersigned parties and counsel of record for the parties hereto. PARTIES Robert L. Hasha, Jim McDonald, Marlene Ray, Andre Miller, 3 D Gosnell, and Bradley L. Lewis, Individually and on Behalf of the Class: WOL/rioa9.(C/41 Robert L Hasha Jim McDonald -01,0&*1-1 401— Marlene Ray On.42C0‘&- -h;LC/ZCA— Miller 3-64 c Bradley L. Lewis Page 7 FST 1306.03 STI • ATTEST: FST 1306.03 STI • CITY OF AYETTVILLE, ARKANSAS By: Fr Hanna, Mayor o rt P. Plummer Senior Vice President and Trust Manager ATTAIRNECSALLaECORD Lisle Law Firm, P.C. 2600 S. Thompso P. 0. Box Springd 72766-6877 (501) By: Jo Lisle Attorneys for Robert L Hasha, Jim McDonald, Marlene Ray, Andre Miller, J D Gosnell and Bradley L. Lewis, Individually and on Behalf of the Class Jerry E. Rose, Esq. City Attorney 113 West Mountai Fayetteville. A& 701 By: Je Attorney for City of Fayetteville Page 8 • • FST 1306.03 STI • Friday, Eldredge & Clark 2000 First Commercial Building 400 West C pitol Avenue Little Re Arkansas 72201 (501) 37. 011 By. /Leta I rY w Ics Attorneys for Arvest Trust Company, National Association Page 9