*Authorize settlement of OnTrak Homes, LLC v. City of Portland litigation for $55,635

The City of Portland ordains: Section 1. The Council finds: In February 2020, the City Council authorized the Portland Water Bureau to sell a vacant parcel of real property (“Lot 1302”) with an assessed value of approximately $72,730. On October 15, 2021, OnTrak Homes, LLC, offered $115,000 to purchase the property. The City accepted that offer. The City and OnTrak Homes, LLC, closed the sale on October 29, 2021. After closing it was then discovered the closing documents prepared and recorded by the title company described two City-owned parcels adjacent to Lot 1302 but did not include Lot 1302 itself. The City notified the title company of that error on November 1, 2021, and the title company recorded a corrected warranty deed duly conveying Lot 1302 to OnTrak Homes, LLC, on November 5, 2021. OnTrak Homes, LLC, subsequently sued the City in OnTrak Homes, LLC v. City of Portland, Multnomah County Circuit Court Case No. 22CV05419 (“the Lawsuit”), asking the trial court to invalidate the November 5, 2021 corrected warranty deed and declare it the owner of the two parcels of land adjacent to Lot 1302. OnTrak Homes, LLC, alleged that it reasonably believed at the time that it was purchasing those two parcels in addition to Lot 1302. The City prevailed in the trial court, which held that the November 5, 2021 corrected warranty deed conveying Lot 1302 to OnTrak Homes, LLC, had been properly recorded, and that the earlier deed incorrectly conveying the two parcels of land adjacent to Lot 1302 was null and void. OnTrak Homes, LLC, appealed from the above trial-court judgment in Oregon Court of Appeals Case No. A181353 (“the Appeal”). The City Attorney’s Office and Portland Water Bureau recommend the payment of $55,635 to resolve this case without further legal proceedings. The bulk of that amount includes a refund of the $42,270 difference between the $115,000 OnTrak Homes, LLC, paid for Lot 1302 and the $72,730 assessed value of that property at the time. NOW, THEREFORE, the Council directs: The Portland Water Bureau Director and City Attorney’s Office are hereby authorized to enter into and execute a settlement agreement, in a form substantially similar to Exhibit A attached hereto, to resolve the Lawsuit and Appeal. The Mayor and Auditor are hereby authorized to draw and deliver a check in the amount of $55,635 to the McEwen Gisvold LLP trust account. Section 2. The Council declares that an emergency exists in order to avoid undue and costly delay in settling this matter; therefore, this Ordinance shall be in full force and effect from and after its passage by City Council.