HomeMy WebLinkAbout5447 RESOLUTION NO. 5447
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
AUBURN, WASHINGTON RELATED TO FORFIETED
PROPERTY; DECLARING FORFEITED REAL PROPERTY
AS SURPLUS, AND AUTHORIZING THE MAYOR TO
NEGOTIATE AND EXECUTE AGREEMENTS.
WHEREAS, on or about February 19, 2019, the City of Auburn initiated
proceedings in the King County Superior Court to seize property located at 25322
Cumberland Way, in Black Diamond, Washington, pursuant to RCW 69.50.505, as the
property was used to manufacture of marijuana; and
WHEREAS, the owners of the property have agreed to forfeit their right, title, and
interests in the real property, pursuant to a settlement agreement; and
WHEREAS, state law restricts the use of such forfeited property, and the proceeds
from the sale of the property, to further activities related to the expansion and
improvement of controlled substances law enforcement; and
WHEREAS, the Auburn Police Department has determined that law enforcement
does not require use for the property and it is in the public interest to surplus the property
and sell it for its fair market value.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN,
WASHINGTON, RESOLVES as follows:
Section 1. The Mayor is authorized to enter into a Settlement Agreement
substantially in the form of Exhibit A, to execute a Promissory Note substantially in the
form of Exhibit B, and to accept the forfeited property on behalf of the City.
Section 2. The property described below is declared to be not necessary for law
enforcement purposes, is declared to be surplus. The Mayor is authorized to dispose of
Resolution No. 5447
August 14, 2019
Page 1 of 2 Rev.2018
the property through an appropriate fair market sale, and to deposit any remaining
proceeds in the City's drug forfeiture fund.
25322 CUMBERLAND WAY, BLACK DIAMOND, KING COUNTY,
WASHINGTON
PARCEL NO. 563600-0020
LOT 37, MORGAN CREEK I AND IV, ACCORDING TO THE PLAT THEREOF
RECORDED IN VOLUME 166 OF PLATS, PAGES 98 THROUGH 101,
INCLUSIVE, RECORDS OF KING COUNTY, WASHINGTON.
SITUATE IN THE COUNTY OF KING, STATE OF WASHINGTON.
Section 3. The Mayor is authorized to implement such other administrative
procedures as may be necessary to carry out this legislation.
Section 3. This Resolution shall take effect and be in full force upon passage
and signature.
Dated and Signed this day of�a , 2019.
CITY OF AUBURN
, I
ANCY =• , MA i
ATTEST: APPROVED AS TO FORM:
—p •
Shawn Campbell, MMC, City Clerk Steven L. Gro , ity Attorney
Resolution No. 5447
August 14, 2019
Page 2 of 2 Rev.2018
SETTLEMENT AGREEMENT
This Agreement is entered into by and between the CITY OF AUBURN,
Washington, a municipal corporation of the State of Washington ("the City"), YUHUA
WU and ZHAOWEN LIANG("the Claimants"), and FRANK BARON, HONG FAMILY
TRUST, AND DAVID ROSE, LLC ("Lender").
RECITALS
Yuhua Wu owns real property located at 25322 Cumberland Way in Black
Diamond, Washington(King County Tax Parcel No. 563600-0020 ("Property")).
On or about December 11, 2018,the Auburn Police Department executed a search
warrant at the above-referenced property under APD case number 18-13348.
On February 20, 2019, the City filed a civil action in the King County Superior
Court to seize the Property,which action is currently pending under Cause No. 19-2-04606-
6KNT.
The City, Claimants, and Lender desire to settle this matter and have agreed to the
disposition of the real property in consideration of the uncertainty of litigation,and the time
and expense associated with proceeding to a trial.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which is
mutually acknowledged, the City and Claimants agree as follows:
1. Good Faith Seizure. There was probable cause sufficient for the seizure of
the above described real property. Seizure of the property was lawful, and notice of the
seizures followed due process. It is undisputed that the Auburn Police Department acted
in good faith in pursuing the seizure and intended forfeiture of the real property.
2. Property Awarded to the City. The City is awarded real property located at
25322 Cumberland Way in Black Diamond, WA (King County parcel number 563600-
0020) through operation of this Settlement Agreement. The Property legal description is
as follows:
LOT 37, MORGAN CREEK I AND IV, ACCORDING TO THE PLAT
THEREOF RECORDED IN VOLUME 166 OF PLATS PAGES 98
THROUGH 101, INCLUSIVE, RECORDS OF KING COUNTY,
WASHINGTON
SITUATE IN THE COUNTY OF KING, STATE OF WASHINGTON
Claimants agree to forfeit to the City their right, title, and interest to the property,
including all fixtures appliances, and appurtenances to the Property existing on the date of
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seizure, and simultaneous to execution of this Agreement execute an agreed motion and
order to dismiss superior court cause number 19-2-04606-6 KNT. Claimants agree to
provide and execute any document reasonably necessary to facilitate a transfer of the
property. City agrees to take said property in "as-is" condition and claimants give no
warranties and makes no representations regarding the condition or habitability of the
property.
3. Property Access. On the date of Claimants' signature of this Agreement,
Claimants shall deliver to Plaintiff at 25 West Main Street, Auburn, WA, 98001, all of the
following that are in their possession: house keys, garage door openers, garage door codes,
all other security codes, and any written manuals or warranties for appliances, equipment,
or fixtures for the Property. On the date of Claimants' signature of this Agreement, the
Claimants will provide the City access to the Property for a full inspection.
3.1 Claimants will have one opportunity to enter into the home after
execution of the Settlement Agreement to retrieve personal property (such as clothing,
suitcases, and hygiene items) within five days after execution of this Agreement.
Claimants will be required to provide at least two business days' notice to the City of the
request to visit the home, limit the home visit to retrieve personal belongings to a two hour
window during normal business hours, and to be accompanied at all times on the Property
by two agents of the City's choosing including one Police Officer to secure the Property.
4. Division of Gross Proceeds After Sale of the Property. The parties agree
that upon execution of this settlement agreement,the City will sell the Property. Upon the
City's sale of the Property, the division of proceeds will be applied as follows:
4.1 Any taxes due and owing will be paid in full;
4.2 Any real estate commissions or closing costs will be paid in full;
4.3 Any utility liens, assessments including all Home Owners
Association dues and assessments, or bills due and owing will be paid in full;
4.4 Any other costs or liens secured by the property will be paid in full
including any outstanding mortgage payoff amount;
4.5 The costs, if any, of removing personal property from the home will
be paid in full, including but not limited to the cost of hiring contractors to remove personal
property and the cost of delivering and destroying personal property;
4.6 Any proceeds required to be remitted to the State Treasurer on
behalf of the seizing agency;
4.7 Legal fees incurred by Doris Eslinger, counsel representing
mortgaging entities, including Frank Baron,Hong Family Trust,and David Rose, LLC,the
holder of a Promissory Note secured by a Deed of Trust on the Property ("Lender"), as a
result of the negotiation with Parties and the sale of the Property in the amount of$1,749.35
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as of July 31, 2019, plus an additional amount to be paid consistent with Section 9(b) of
the Promissory Note;
4.8 Fifty (50) percent of the net sale will be retained by the City and
fifty(50)percent of the net sale will be retained by Claimants after Clauses 4.1 through 4.7
are satisfied, but in no event will Claimants sale proceeds exceed one hundred thousand
dollars($100,000).
The City shall not accept any purchase offer without Lender's prior written
consent if the City anticipates the proceeds of the sale is insufficient to fully satisfy the
total payment owed to Lender (i.e., outstanding principal and other costs incurred
relating to the loan). Lender agrees to forbear declaring the Deed of Trust in default
for six months after the date of the signatures on this Settlement Agreement.
5. Encumbrances. Claimants agree to be in compliance with the terms in the
Deed of Trust and Promissory Note prior to transferring the title of the said property to the
City. If Claimants are out of compliance with any term(s) in the Deed of Trust or
Promissory Note, any amount required to cure will be deducted from Claimants portion of
the sale proceeds including but not limited to, outstanding mortgage or interest payments,
hazard insurance, property insurance, lienable utilities, etc.
6. Dismissal of Lawsuit and Release of Lis Pendens. Within five (5)business
days following execution of this Agreement by all parties, the City will file a Motion and
Order of Dismissal with prejudice and without costs in King County Cause No. 19-2-
04606-6 KNT. The City will also release the recorded lis pendens under King County
recording no. 20190225000753 against the Property. The City and Claimants shall pay
their own attorneys' fees, costs, and expenses in connection with this matter.
6. Indemnification. The Claimants shall indemnify,defend,and hold harmless
the City, its agents, and employees from and against any and all liability arising from this
forfeiture action and sale of the Property. In the event that the City shall elect to defend
itself against any claim or suit arising from this agreement,the Claimant shall, in addition
to indemnifying and holding the City harmless from any liability, indemnify the City for
any and all expenses incurred by the City in defending such claim or suit, including
reasonable attorneys' fees.
7. Reliance Upon Own Judgment and Counsel. The City, Claimants, and
Lender have read this agreement and have knowingly, intelligently,and voluntarily entered
into said agreement with full knowledge of the consequences of such agreement. The City,
Claimants, and Lender agree that each of them was represented by counsel, or had the
opportunity to independently consult with counsel of their choosing. As such, this
agreement shall not be construed against any party as the drafter.
8. Release. The City hereby does completely and fully release,discharge, and
hold harmless Claimants from any and all demands, claims, causes of action, or potential
demands, claims,or causes of action, in law or equity,whether accrued or not and whether
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now known or unknown, which relate to the set of facts that give rise to King County
Superior Court Case No. 19-2-04606-6 KNT, meaning that the City agrees not to file any
further demands, claims, or causes of action against Claimants arising out of the facts that
led to the seizure and forfeiture of the real property.
9. No Admission of Liability. The Parties agree that this Agreement is a
compromise and settlement of potential and/or disputed claims,and neither this Agreement
nor any action taken to carry out this Agreement may be construed as, or used as an
admission or concession of, or constitute a finding of, civil or criminal liability, fault,
wrongdoing, or culpability by either party. Claimants deny all of the allegations contained
in King County Superior Court Case No. 19-2-04606-6 KNT, but for purposes of this
Agreement, agree that Claimants are entering into this Agreement knowingly, voluntarily
and intelligently.
10. Entire Agreement. This Agreement and the Promissory Note incorporated
in Exhibit A contains the entire agreement between the parties, and no other agreements,
oral or otherwise, regarding the subject matter of this Agreement shall be deemed to exist
or bind any of the parties. Either party may request changes to the Agreement. Proposed
changes which are mutually agreed upon shall be incorporated by written amendments to
this Agreement.
11. Binding on Successors and Assigns. All the terms and conditions of this
Settlement Agreement and its exhibits shall be binding upon and inure to the benefit of the
Claimants and the City and their respective heirs, successors, agents, and assigns.
12. Counterparts. This Settlement Agreement may be executed by multiple
counterparts, each of which shall be deemed an original, binding on the parties to the
Agreement, and all of which shall constitute one final agreement.
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13. Attorneys' Fees. In the event of a breach or a default under this Settlement
Agreement, the breaching or defaulting party agrees to pay all attorneys' fees and costs
incurred by the prevailing party in collecting amounts owed, or enforcing the agreement.
ct .5 •19
ANCY CUS, MAYOR DATE
State of Washington )
)ss.
County of King )
I certify that I know or have satisfactory evidence that NANCY BACKUS is the person
who appeared before me,and said individual acknowledged that she signed this instrument,
on oath stated that she was authorized to execute the instrument and acknowledged it as
the MAYOR OF THE CITY OF AUBURN to be the free and voluntary act for the uses
and purposes mentioned in this instrument.
Dated: q • 2O\\
1
-4V1
s '�fid`
C,U•A
d� 44b f"�6 Notary Public in and for the St to of Washington
' 5"
� 203917 � 40. Residing at }�. iO U,lYl
My appointment expires I • • ZZ
WASN'
APPROVED AS TO FORM:
LL111,_
Steven Gross, SBA- .58 Date
City Attorney
5
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YI,1 )140\ MA (rf
YUHUA WU DATE
State of Washington
)ss.
County of \\\
)
I certify that I know or have satisfactory evidence that Yuhua Wu
is the person who appeared before me, and said individual acknowledged that she signed
this instrument and acknowledged it to be her free and voluntary act for the uses and
purposes mentioned in this instrument.
Dated:A
tiquSt DOI 2 Cl
Carla Cervantes
Notary Public Notary Publican or he tate of Washington
State of Washington
Residing at icA/4
License#162176
Commission Expires: 03/09/2021 My appointment expires >/() /%2
2-1Itte (A.An 7/6,77(ri 4) 4) ( C
ZHAOWEN LlANG D: E
State of Washington )
)ss.
County of I )
I certify that I know or have satisfactory evidence that ZhaowcJdg
is the person who appeared before me, and said individual acknowledged that he signed
this instrument and acknowledged it to be his free and voluntary act for the uses and
purposes mentioned in this instrument.
Dated: INIU6— 7(,)/C/
1
Carla Cervantes
Notary Public ary Public ..arid for the State of Washington
State of Washington Residing at 5-eci /LA//I
License#162176 My appointment expires ' 37 ' , ZCommission Expires:03/09/2021
08/30/2019
EMIL TYSON-S I ,VVSBA 51350 DATE
ATTORNEY FOR CLAIMANTS
6
P-71/1:7.- 16/1A44,.
DORIS ESLINGER, BA 41804 DATE
ATTORNEY FOR FRANK BARON,
HONG FAMILY TRUST, AND
DAVID ROSE, LLC
State of Washington )
)ss.
County of )
I certify that I know or have satisfactory evidence that DORIS ESLINGER is the person
who appeared before me,and said individual acknowledged that she signed this instrument,
on oath stated that she was authorized to execute the instrument and acknowledged it as
the ATTORNEY FOR FRANK BARON,HONG FAMILY TRUST,AND DAVID ROSE,
LLC to be the free and voluntary act for the uses and purposes mentioned in this instrument.
Dated: 0-2-'7—20
11
2J7q.
Notary'Public in and for the St a of Washington
Residing at gores/�Ain-
My appointment expires 4'
• ANGELA M TANFERANI
NOTARY PUBLIC
STATE OF WASHINGTON .
COMMISSION EXPIRES •
+ DECEMBER 4. 2020
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EXHIBIT A TO THE SETTLEMENT AGREEMENT
PROMISSORY NOTE
FOR VALUE RECEIVED the City of Auburn ("City") promises to pay to the order of Frank Baron
(34%), Hong Family Trust (20%), and David Rose, LLC (46%), ("Lender"), the principal sum of
Two Hundred Fifty Thousand Dollars ($250,000.00) together with interest calculated following
the date that the Settlement Agreement is signed by Lender to the date of the sale of the
Property.
1. Definitions.
a. Promissory Note: This instrument may be referred to as "the Note."
b. Holder: The Holder of the Note is the Lender.
c. Property: This Promissory Note is secured by a first lien Deed of Trust on the
Property, recorded on December 7, 2016, under Auditor File No. 20161207002393, King
County,Washington, having a common address of 25322 Cumberland Way, Black
Diamond, Washington 98010. Legally described as:
LOT 37, MORGAN CREEK I AND IV, ACCORDING TO THE PLAT THEREOF
RECORDED IN VOLUME 166 OF PLATS PAGES 98 THROUGH 101,
INCLUSIVE, RECORDS OF KING COUNTY, WASHINGTON
SITUATE IN THE COUNTY OF KING, STATE OF WASHINGTON
2. Interest Rate. All interest on the outstanding principal balance of the Loan Amount shall
be calculated on the basis of a 30-day month and a year of 360 days and at a rate of 8.50% per
annum.
3. Payoff Loan Amount. Interest shall accrue from the date the Settlement Agreement is
signed to the date of the sale of the property when the entire principal and interest shall be due
no later than six months from the date of the execution of this Settlement Agreement("Maturity
Date"). Lender agrees to forbear declaring the Deed of Trust in default until the Maturity Date.
Interest from the date of the Settlement Agreement until the first day of the next month shall be
prorated on a per diem basis. Any unpaid interest shall be added to the principal of the Note
and compounded. The final payoff shall be made payable to Mortgage Equities Inc., the agent
of Lender, and sent to PO Box 407 Gig Harbor, WA 98335.
4. Payoff Deadline. The City shall have six (6) calendar months from the date of the
Lender signing the Settlement Agreement to pay the Payoff Loan amount in full, or if the
secured Property is sold before the Maturity Date, the Payoff Loan Amount, and all payments
incurred by Lender related to the Deed of Trust shall be disbursed to Lender by escrow at
closing. Notwithstanding anything to the contrary herein, interest shall continue to accrue
during the processing time until Lender receives the Payoff Loan Amount. The parties reserve
the right to mutually negotiate (an) extension(s) of the payoff deadline. If full timely payment is
not made under the Note, default interest shall be charged at 18% per annum. All default
interest will be added to the principal of the note. Timely payment includes six calendar months
plus an additional 4-6 weeks for the City to process a check and deliver it to Mortgage Equities,
Inc.
5. Pre-payment. This Note may be prepaid in whole or in part, at any time without penalty.
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6. Reconveyance. The City will pay the Lender two hundred thirty dollars ($230)for any
request for reconveyance and the processing of the reconveyance.
7. Commercial Purpose. This Note is not primarily for personal,family or household
purposes. This Note is for business, commercial and investment purposes. It is the specific
intent of the undersigned and the Holder that this Note bear a lawful rate of interest, and if any
court of competent jurisdiction should determine that the rate provided for in the Note exceeds
that which is statutorily permitted for the type of transaction evidenced by the Note, the interest
rate shall be reduced to the highest rate permitted by applicable law, with any excess interest
previously collected applied against the principal, or if the principal has been fully repaid,
returned to the City on demand.
8. No Waiver. The waiver by the Holder of any term, covenant or condition herein
contained shall not be deemed to be a waiver of such term, covenant or condition on any
subsequent breach of the same or any other term, covenant or condition herein contained. The
subsequent acceptance of payments hereunder by the Holder shall not be deemed to be a
waiver of any preceding breach by the undersigned of any term, covenant or condition of the
Note other than the failure of the undersigned to make the particular payment so accepted,
regardless of Holder's knowledge of such preceding breach at the time of the acceptance of
such payment. The acceptance of a partial payment by the Holder shall not be deemed a
waiver.
9. Attorneys'fees. In the event litigation is instituted, declaratory or otherwise in connection
with or arising out of the Note, the prevailing party will be awarded the costs thereof and
attorneys'fees actually incurred which may be determined and fixed by a court as part of the
judgment.
a. The parties agree that all pre-litigation consultation fees incurred by counsel for
the Holder of the note to the date of the Settlement Agreement will be paid according to
paragraph 4.7 of the Settlement Agreement.
b. The parties further agree that all pre-litigation consultation fees incurred by
counsel for the Holder of the Note from the date of the Settlement Agreement to the
date of the reconveyance will be the responsibility of the City. This amount is not to
exceed $1,000 and may be increased, if necessary, upon prior written agreement of the
Parties.
10. Jurisdiction. This Note shall be construed under the laws of the State of Washington and
the undersigned agrees that they will be subject to the jurisdiction of the State of Washington
and that if any litigation ensues in connection with or arising out of the Note, such litigation shall
take place in the Superior Court of King County for the State of Washington.
11. Waiver of jury trial. The Parties irrevocably waive any right to a trial by jury.
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NOTICE: ORAL AGREEMENTS, PROMISES OR COMMITMENTS TO LEND MONEY, TO
EXTEND CREDIT, TO MODIFY OR AMEND THE TERMS UNDER WHICH MONEY WAS
LENT OR CREDIT WAS EXTENDED,TO RELEASE ANY GUARANTOR TO FORBEAR WITH
RESPECT TO THE REPAYMENT OF ANY DEBT OR THE EXERCISE OF ANY REMEDY, OR
TO MAKE ANY OTHER FINANCIAL ACCOMMODATION PERTAINING TO A DEBT OR
OTHER EXTENSION OF CREDIT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
�` r , 2019.
EXECUTED on the CQ day of
CITY OF AUBURN LENDERS
atm
ancy s, Mayor Doris Eslinger on behalf f
Frank Baron, Hong Family Trust,
and David Rose, LLC
APPRO �� • TO FORM:
.t - �\
Steven L. Gross, City Attorney
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