Newport Beach and an advocacy group have reached a settlement agreement in a lawsuit related to rehabilitation home operator Morningside Recovery, the two entities announced Monday.

Under the agreement, which comes after years of discussion and litigation, the city must pay Maintain Our Residential Neighborhoods, or MORN, $60,000.

MORN entered into legal action against the city in February 2011, arguing that a 2010 zoning agreement allowing rehabilitation home operator Morningside Recovery to operate in residential areas was invalid.

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The city revoked the agreement in July 2011, finding that Morningside Recovery failed to comply with its stipulations.

In the fall of that year, Morningside consequently petitioned for court action, which was denied in June 2012, while the city called for the company, which it said was causing a "public nuisance" because it was operating without the necessary agreement, to cease operations, according to city records.

An Orange County Superior Court judge ruled in the city's favor in August 2013, finding Morningside Recovery in violation of municipal code.

This decision essentially removed the purpose of the MORN lawsuit, said City Attorney Aaron Harp.

"The issues in the lawsuit have already been resolved," he said.

Morningside Recovery plans to relocate four of its facilities in Lido Isle outside the city limits by Oct. 31. It will relocate three more from West Newport by Nov. 30.