Pettet et al v. State Farm Fire and Casualty Company, No. 4:2009cv00031 - Document 63 (E.D.N.C. 2010)
Court Description: CONSENT ORDER AND FINAL JUDGMENT approving class action settlement and attorneys' fees signed by Judge James C. Dever III on 10/29/2010. (Sawyer, D.)
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Pettet et al v. State Farm Fire and Casualty Company Doc. 63 t IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRlCT OF NORTH CAROLINA EASTERN DIVISION CNIL ACTION FILE NO.: 4:09-CV-0003I-D ELIZABETH S. PETTET, DIANE L. KATZENBERGER, and LYNWOOD H. KEITH, JR., individually and on behalf of all others similarly situated, Plaintiffs v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant ) ) ) ) ) ) ) ) ) ) ) ) SETTLEMENT ORDER AND FINAL JUDGMENT This action was heard on October 29,2010, before the undersigned, pursuant to the Order Preliminarily Approving Settlement and Approving Notice to Class Members (the "Preliminary Approval Order") entered on June 28, 2010, for the purpose of determining: (i) whether the settlement of the action, on the tenns and conditions set forth in the Stipulation and Agreement of Settlement previously submitted to the Court ("Settlement Agreement"), and attached hereto as Exhibit A, should be approved as fair, reasonable and adequate; (ii) the amount of attorneys' fees and expenses to award counsel for Plaintiffs; and (iii) whether a Settlement Order and Final Judgment should be entered. Having conducted the analysis required by the statute, the Court finds and concludes for purposes of settlement only that the requirements of Fed.R.Civ.P. 23(a) and Fed.R.Civ.P. 23(b)(3) have been satisfied, and that the settlement is fair, adequate, and reasonable. Having considered the record in this action, IT IS HEREBY ORDERED, ADJUDGED AND DECREED as follows: The "Definitions" section of the Settlement Agreement [Doc. No. 38-2 and Exhibit A 6983554vl Dockets.Justia.com hereto] is incorporated herein by reference. All capitalized terms used in this Order have the meaning set forth in the Settlement Agreement unless otherwise expressly indicated. 1. This action is maintainable as a class action for settlement purposes only on behalf of a class (lithe Settlement Class ll ) consisting of All persons who, during the Class Period, were insured by a State Farm Homeowners or PPC Commercial insurance policy covering a home, dwelling or other structure or personal property within the State ofNorth Carolina. Excluded from the Settlement Class are (a) all judicial officers in the United States and their families through the third degree of relationship; and (b) all officers, directors, employees or counsel of State Farm. 2. For settlement purposes only, the Court finds that the prerequisites of Fed.R.Civ.P. 23 are satisfied and the Court hereby certifies the foregoing defined Settlement Class pursuant to Fed.R.Civ.P. 23(b)(3). 3. The Court finds that counsel for the Plaintiffs, Pope, McGlamry, Kilpatrick, Morrison & Norwood, LLP and Ward and Smith, P.A. are competent to serve as Class Counsel and will fairly and adequately represent the interests of the class. 4. Based on the evidence presented at the hearing, the Court finds that notice has been given to the class pursuant to the Preliminary Approval Order, and that the mailing of the Notice of Proposed Class Action Settlement and Release of Claims in accordance with the methodology adopted pursuant to this Settlement Agreement was the best notice practicable, satisfied due process requirements, and provided Class Members with fair and adequate notice of the hearing and adequate information concerning the hearing, the right to be excluded from the Class, the settlement, and the right of counsel for Plaintiffs to apply for an award of attorneys· fees and expenses. 5. The terms of the settlement, as set forth in the Settlement Agreement, are hereby determined to be fair, reasonable, and adequate. Accordingly, said Settlement Agreement, 6983554,,1 2 including each of its respective tenns and conditions, is hereby finally approved. 6. The Court hereby enters judgment fully and finally dismissing and terminating all claims, on the merits, against State Farm Fire and Casualty Company ("State Farm"). 7. The Settling Class Members, those persons bound by the Settlement Agreement and subject to this Settlement Order and Final Judgment, consist of all persons included within the Settlement Class except such persons who requested to be excluded in a timely manner and who are identified on a list the parties hereto are ordered to maintain for a period of three (3) years from the date of this Order. 8. Pending the Effective Date, neither the Plaintiffs, nor any Settling Class Member, either directly, representatively, or in any other capacity, shall prosecute any action or proceeding in any court, tribunal or other forum asserting any of the Released Claims against the Released Parties. 9. As of the Effective Date: (a) All Settling Class Members are deemed to have released and forever discharged the Released Parties from any and all Released Claims. (b) All Settling Class Members are forever barred [TOm asserting any of the Released Claims against any of the Released Parties. (c) All Settling Class Members are deemed to have covenanted and agreed (a) that they will forever refrain from instituting, maintaining or proceeding against any Released Party on any Released Claim, including Released Claims known and not now known, suspected, or claimed, that they have or hereafter may have against the Released Parties; and (b) that they release the Released Parties from each and every such Released Claim. 10. As of the Effective Date, all Settling Class Members are permanently enjoined from filing, commencing, prosecuting, continuing, litigating, intervening in, participating in as 6983554vl 3 class members or otherwise, or seeking to certify a class in, or organizing owners of policies of State Fann into a separate class of persons, as a purported class action (including by seeking to amend a pending complaint to include class allegations) in or receiving any benefits or other relief from, any other lawsuit, arbitration or administrative, regulatory or other proceeding or order in any jurisdiction, based on or relating to the claims and causes of action, or the facts and circumstances relating thereto, in or underlying this action which qualify them as Class Members. 11. As of the Effective Date, all Settling Class Members are forever barred and pennanently enjoined from filing, commencing or prosecuting any other lawsuit as a class action (including by seeking to amend a pending complaint to include class allegations or by seeking class certification in a pending action in any jurisdiction), if such other lawsuit is based on or relates to the claims and causes of action, or the facts and circumstances relating thereto, in this action and/or the Released Claims. 12. In accordance with Section 15 of the Settlement Agreement, as of the Effective Date, the sum of $5,000,000 (and, if applicable, the Supplemental Fee referenced in Sections 15.2 and 15.5 of the Settlement Agreement) is hereby awarded as the entire attorneys' fees and costs in this action, covering all fees for legal services, all costs, all disbursements, all out~of pocket expenses and all other expenditures in connection with this litigation. This amount shall be allocated among all counsel representing Plaintiffs in accordance with their agreement. This sum shall be paid as provided in the Settlement Agreement. 13. State Farm has denied liability in this matter, and this settlement does not constitute an admission of liability or wrongdoing. Neither this Final Judgment, the Settlement Agreement, the fact of settlement, the settlement proceedings, settlement negotiations, nor any 6983SS4vl 4 related document, shall be used as an admission of any act or omission by State Farm or be offered or received in evidence as an admission, concession, presumption, or inference of any wrongdoing by State Farm in any proceeding other than such proceedings as may be necessary to consummate or enforce the Settlement Agreement. 14. State Farm shall have no responsibility for and shall have no liability whatsoever with respect to the allocation among Class Counsel and/or any other Person who may assert a claim thereto, of any attorneys' fees or expenses that the Court may award. 15. The parties are hereby authorized without further approval from the Court to adopt such amendments or modifications of the Settlement and all exhibits thereto as shall be consistent in all respects with this Settlement Order and Final Judgment and do not limit the rights of members in the Settlement Class. 16. Elizabeth S. Pettet, Diane L. Katzenberger, and Lynwood H. Keith, Jr. are hereby awarded $5,000 each as an incentive payment for their service as class representatives, to be paid in accordance with Section 15.7 of the Settlement Agreement. 17. The Court retains jurisdiction over this Settlement to the extent necessary to implement, effectuate and administer this Settlement and this Settlement Order and Final Judgment, including, but not limited to, any issues arising from the Court's award of attorneys' fees. This 1-.1 dayof~2010. 4.'DE~....Jo"I!...,;a.-1=--4·---United States District Judge 6983554vl 5 EXBI:BIT "A" IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA EASTERN DMSION CIVIL ACTION FU"E NO.: 4:09-CV-00031-D ELIZABETH S, PE'ITET, DIANE L. ) KATZENBERGER, and LYNWOOD H. ) KEITH, JR., individually and on behalf of ) all others similarly situated, ) Plaintiffs ) v. ) ) ) STATE FARM FIRE AND CASUALTY COMPANY, Defendant STIPULATION AND AGREEMENT OF SETILBMENT ) ) ) ) Elizabeth S. Pettet. DiaDe L. Katzenberger. Lynwood H. Keith, Jr., and State F8Im Fire and Casualty Company, by and through their undersigned Counsel, hereby enter into this Agreement of Compromise and Settlement, subject to the approval of tbe United States District Court for the Eastern District ofNorth Carolina, Eastem Division., and pwsuBIl1 to Federal Rule ofCivU Procedure 23. The undersigned Parties hereby stipulate BIld agree that, in cODsidc:mtion of 'the promises and COVlmBDts set forth in this Agreement, this ActioD shall be fully aDd finally settled and compromised upon the following tenns and conditions, subject to Court epproval. 1. Background 1.1. This Action, :filed on February 25, 2009. relates to how State Fmm utilizes Public Protection Classification ("PPC") ratings that it receives from the Insurance Services Office. Inc. (UISO") in its calculation of premiums for insuranoe policies. Plaintiffs have alleged that since FebIuary 25. 2005, State Fmm has not properly applied ISO PPC ratings as B factor in its calculation ofpremimns on some insurance polices issued in North Carolina. Plaintiffs oontend that as Ii result of State Farm's failure to apply ISO PPC ratings properly, certain State Farm policyholders iD North Carolina have been overcharged for their insU1'llI1ce premiwns, and that 69BD536vl ,. Case 4:09-cv-00031-D Document 38-2 Filed 06/23/10 Page 1 of 50 this overcharge constitutes a breach of contract by State Fenn. Plaintiffs further alleged that such firllures will result in overcharges on policy renewals if not corrected. 1.2. . This ActiOJl was initially filed as a proposed cluss action on behalf of all North Carolina policyholders who are currently insured or who have been insured under homeowners policies issued by State Farm during the three (3) yean preceding the filing of Plaintiffs' Complaint Plaintiffs further asserted allegations against State F'ann on behalf of a nationwide class of State Farm policyholders. After appropriate discovery, Plaintiffs have detcnnined that only North Carolina class can be properly certified in this case. Plaintiffs Imve lh«;:refore 8 agreed to EUllcnd their Complaint and delete Wly allegations relating to II. nationwide C11lS5. 1.3. State Farm has answered PlBiIltiffa' Complaint, denied all liability, and further alleged the defenses set forth in State Farm's answer. Although State Farm believes thlrt this Action Is without merit, it has concluded that resolving these claims under the tenus of this Agreement is desirable to reduce the time. risk and expense of defending the Action and to resolve finally and completely the Action and all ofthe Released Claims. 1.4. This Settlement is a compromise of disputed claims made to avoid the uncertainty, risks, costs, and delays of further litigation. State Farm does not admit liability to any Class Member (as defined herein) and State Farm does not admit liability in any case. l.5. After Wlalyzing the relevant facts and applicable law, and recognizing the burdens, risks, uncertainties, time and expense of litigatioD, as well as the advantages of terms anq procedures for a fair and efficient resolution of Class Members' claims under this Agreement, Class Counsel and State Farm have concluded thllt this Agreement is a fair, equitable and just resolution ofthe Released. Claims. 2. Definitions As used in this Agreement, including the foregoing background section and the appendices and exhibits to this Agreement, the following terms have the meanings set forth 698DS36vl 2 Case 4:09-cv-00031-D Document 36-2 Filed 06/23/10 Page 2 of 50 below. As used herein, the plural of any defined term includes the singular thereof, and the singular of any defined tenn includes the plural thereof as the context may require. 2.1. "Action" means the above-captioned lawsuit pending in the United States District Court for the Eastern District of North Carolina, EllStem Division, styled Elizabeth S. Pe/fet, et al. Farm Fire and Ca~alty Compa1TJ'. Case No. 4:09-CY-00031-D. 'Y. Slare 2.2. "Administrative Costs" means all costs associated with the implementation and administration of this Settlement, including. without limitatlon, cos~ of providing notice. fees and expenses of tbe Administrator, Taxes and Tax Expenses. IIAdministnrtive Costs" do not include payments to Class Counselor the Class Representative pursuant to Section 15 of thjs Agreemen1:y or payments to Settling Class Members pl.1l'SU8111: to Section 12 ofthis Agreement. 2.3. ~'AdminiB1ratorn means the entity appointed by the Court to administer the Notice Plan. as provided in Section 5 of this Agreement. It is anticipated that the Administrator will be Rust Consulting, Inc. 2.4. "Agreement" or "Settlement Agreement" means this Agreement of Compt'ornise and Settlement, together with all appendices fll'Id exhibits substantially in the fonns attached to this Agreement and including any modificatiDlls made with the written consent of all Parties, as provided forin pllI'8.graph 21.7 oftlds Agreement 2.5. "Business day" (whether capitalized or lower case) means any day except a Saturday, Sunday or other day on which federal courts are authorized by law to be closed, 2.6. "Class Counsel" means any member or BSsociate of Pope, MoG1lUD1'Y, Kilpatrick, Morrison & Norwood. LLP. and Ward BIld Smith. P.A. 2.7. "Class Period" means the time period from February 25, 2005 to the date of Preliminary Approval. [This will be idontified as a specific date in the Class Notice.] 2,8. "Class Member" means a person included within the Settlement Class. 2.9. "'Class RepreBerl1ative" means Elizabeth S. Pettet, Diane L. Katzenberger, and Lynwood H. Keith. Jr., and/or any other individuals approved by the Court as class representatives. 6PBOS36vl 3 Case 4:09-cv-00031-D Document 38-2 Filed 06/23/10 Page 3 of 50 2.10. "Complaict" means the Complaint filed mthe Aotion. together with any and all amendments and supplements thereto. 2,11. uCourt" means the United States District Court of the Eastern District of North Carolina. 2.12. "Current Policyholder" means a Class Member who is insured by State Fann on the day that the Court issues the Preliminary Approval Order. 2.13. "Defendant" means State FB11ll. 2.14. "Defendant's Counsel" means Leonard, Street IlI1d Deinard, P.A.. King and SpaJding, LLP. and Hedrick, Gardner. Kincheloe & Garofalo, LLP. ;U5. "Effective Date" means the date on which the time for appeal from the Final Judgment approving the Agreement has elapsed without any appeals being filed; Dr. if appeals are filed, the date on which all appeals from the Final Judgment approving this Agreement or from any appellate court decisions affirming the Final Judgment have been exhausted, and DO further appeal may be taken. 2.16., "Eligible CIBimanf' means a Potential Claimant wbom StEite Farm identifies as bemg due a premium refund under the terms of this Agreement 2.17. ''Fairness Hearing" means the bearing to be conducted by the Court. after notice to the Settlement Class, for the purpose of considering final approval of this Agreement pursuant to Federal R~lle of Civil Procedure 23(e) and Class Counsel's appllcatfon for an award of attorneys' fees IUld expenses. 2.18. "Final Judgment" has the same meaning as "Settlement Order and Final Judgment." 2.19. "Former Policyholders" means Class Members who are no longer insured by State Farm on a North Carolina HOmeowners or PPC Commercial policy on the day that the' Court issues the Preliminary Approval Order. 2.20. "Homeowners" Insurance policy DB used in this Agreement (including 8S used in the definition of the Settlement Class) excludes inslU'Bnce policies covering mobile bomes. 69BOS36vl 4 Case 4:09-cv-00031-D Document 38-2 Filed 06/23/10 Page 4 of 50 2.21. "rso" means the Insurance Services Office, Inc. 2.22. "ISO Locatioo®" means the proprietary computer database marketed and sold by the ISO which, when integrated into an inSW'el"S computer system, provides the insurer with PPC Codes. 2.23. "Location Integration Date" means the date upon which the integration ofthe ISO Locationtll database into State Fann's internal computer system is fuUy functional and being utilized in the production of rating information at State Farm. This integration shall be accomplished as soon as practicable. It is the Parties' intention that the Location Integrati'oo Date shall not be later then one year after the Eff'eCtive Date. In the event State Farm carmot through commercially reasonable means implement the JSO LocationGn database within this one year period. the Parties agree to petition "the Court for an extension of Uris time period not to exceed ninety (90) days. 2.24. UNCOr'means the North Carolina Departmentoflnsurance. 2.25. ''Notice Plan" means the plan for providing notice of class certification, the Settlement, and this Agreement to the Settlement Class, as described in Seation 2 of this Agreement, including the Settlement Notice substantially in the form attached hereto as Exhibit 2. 2.;26. "Qbjection Deadline" has the meaning given to that tenn in paragraph 7.1 of this Agreement. 2.27. "Opt-Out Deadline" has the meaning given to that term in paragraph 6.1 of this Agreement. 2.28. "Parties" means the Class Representatives and State Farm. 2.29. l"Pcrson" (whether capitalized or lower case) means a natural person, marital community, corporation, partnership, limited partnership, limited liability oompany, mutual company, associatiDn, joint stacie company, estate, legal representative, trust, unincorporated organization, governmental entity or department, public service corporatioD, and any other type of legal entity. 69BDSJ6vl 5 Case 4:09-cv~00031-D Document 3B~2 Filed 06/23/10 Page 5 of 50 2.30. WPotential Claimant'" means a Class Member whom State Farm, through its usc of the ISO Location@ database, identifies as having Ii PPC Code different from that currently maintained by State Fann in its underwriting system. 2.31. "Preliminary Approval Order" means the Court's order, in substantially the form attached hereto as Exhibit 1, preliminarily approving this Agreement pursuant to Federal Rule of Civil Procedure 23 (e). 2.32. "PPC Codes" mellrul the Public Protection Classification™ rating codes that the ISO maintains and distributes for fire protectiDn areas throughout the United States. 2.33. "PPC Commercial" po.1icies refers to those commercial insuranoe policies that, during the Class Period, had premiums that varied based upon PPC codes: rental dwelling policies and (fur a portion of ~e CIllSs Period) nmtal condaminiwn unit owners policies. Provided, however, if a PPC Commercial poJicy was only in force during a period when premiums were Dot a.ffeeted by PPC codes. then a policyholder insured by such a policy only during that period would Dot be included in the Settlement Class. 2.34. "Released Claims" means any and all past or present claims or causes of action, ·bowever denominated (including any claims in law, equity or arbitration), of whatever kind or description, direct or indirect, in Jawor equity. in tart, can'tTact, or otherwise, 1010wn or unknown, occurring at any time, which: (8) were or could ha"c been llS!lcrted in the Complaint or in any Amended Complaints; or (b) are based on or relate to excessi~ charges of or incorrect determinations of premiums for homeowners insurance coverage as II result of State Farm·s allegl:d failure to correctly apply the proper fire protection classes (including but not limited to PPC codes); or (0) 6!lB0S36vl assert fraud in the inducement of this Settlement, 6 Case 4:09-cv-00031-D Document 38-2 Filed 06/23/10 Page 6 of 50 Jlt'Ovided, however, that Released Claims do Dot include claims that have been reduced to judgment in a trial court, whether or not that judgment has been resolved an appeal. The tenn "or" as used in this definition ofReleased Claims (and in aJl releases and covenants not to sue) is inclusive. The release of claims In two Dr more categories connected by the tenn "or" will release all claims in each SUell catflgory. 2.35, "Released Parties" means State Farm and its parcIIts, subsidiaries, affiliates and re-insurers, and each and all such entities, each and all of their respective predecc~ors, successors and assignees, Httorneys, accountants, representatives, past or present officers, inside and outside dlrectors~ representatives, employees. and agents. To the extent of their liability for the alleged acts or omissions giving rise to the Released Claims, "Released Parties" also means State Fann Insurance Agents, together with each of their ourrent and fanner agents, employees, officers, direotors, attorneys, owners, shareholders, associated and affiliated companies, parents, divisions, subsidiaries, successors, assigns, and insurers. 2.36. "Rencwal Period" means the period of time beginning 10 days after the Location Integration Date and ending 365 da.ys thereafter. 2.37. "Request for Exclusion" means a vnlid, timely, written request to be eltcluded from the Settlement Class as set forth in paragmph 6.1 of this Agreement. 2.38. "Settlement" means the terms and conditions of settlement as set forth in this Agreement. 2.39. "Settlement Class" means all personB who, during the Class Period, were insured by a State Farm Homeowners or PPC Commercial insuranco policy covering a home. dwelling or other structure or personal property within the State of North Carolina. Excluded from the Settlement Class are (a) all judicial officers in the United States and their families through the third degree of relationship; and (b) all officers, directors, employees or counsel of State Fann. 69SD536v) 7 Case 4:09-cv-00031-D Document 38-2 Filed 06/23/10 Page 7 of 50 2.40. "Settling CIElSs Member" means any person falling within the definition of the Settlement Class, except for persons who file timely and valid Requests for Exclusion from the Settlement Class and do not timely withdraw such Requests for Exclusion. 2.41. "Settlement Fund" has the meaning given to that tenn in Section 8 of this Agreement 2.42. '·Settlcment Notice" means the fonn of notice substBIrtiaUy in the fonn attached hereto as Exhibit 2. 2.43. "Settlement Order BDd Final JudBJ11enf" meanll the order and final judgment approving and Incorporating this Settlement as binding upon the Parties entered by the Court In the fonn attached hereto as Exhibit 3 without material modification (except as agreed in writing by the signatories hereto). 2.44. "State Faun" means State Farm Fire und Casualty Company. 2.45. IIState Farm [nsurance Agent" means llI1y person authorized by written agreement with State Farm or State Farm's associated and affiliated companies to solicit npplications for 'insurance and financial services; collect premiums) fees and charges; countersign and deliver policies: reinstate and transfer insurancej Wld/or assist customers and COOperttto with representatives of State Fann or State Farm's associated Wld affiliated compWlies In reporting and handling claims. 2.46. "Taxes" has the meaning given to that term in paragraph 8.3 of this Agreement. 2.47. "Tax Expenses" has the meaDing given to that term in paragraph 8.3 of this Agreement. 3. Settlement Clus 3.1. Plaintiffs will seek, and State Farm will not oppose. certification of the Settlement Class by the Court, pursuant to Federal Rule of Civil Procedure 23, for the purpose of settlement only. At the same timCl, Plaintiffs will seek. and State Farm will not oppose, approval of 69B053fivl 8 Case 4:09·cv-00031-D Document 38-2 Filed 06/23(10 Page 8 of 50 plaintiffs as CIBBS Representatives and the following attomeys as Class C01IDsel: Pope, McGlamry, Kilpatrick. Morrison & Norwood, LLP, and Ward and Smith, P.A. 3.2. State Farm condItionally agrees and consents to cortification of the Settlement Class purSUllJ1t to Federal Rule of CIvil Procedure 23 for settlement purposes only. and for the sale purpose of creating the Settlement Class. State Farm's agreement is contingent upon: (1) the Parties' exeoution of this Agreemcot; (2) the Court's approval of this Agreement; and (3) the occurnmce of the Effective Date. If this Agreement is for any reason not approved or the Effective Date does not OCCl1tJ State Farm reserves its right to reassert all of its objections and defenses to certification of any class, lUld neither Plaintiffs nor CIBSS CO\D1sel will offer State Farm's cDnditional agreement to certification of the Settlement C1E1S5 as evidence in support of a motion to certify any class. 3.3. Plaintiffs will request that notice and an opportunity to request exclusion from the Settlement Class be provided to all persons within the Settlement Class. State Farm will not oppose such request. 4. Preliminary Appronl Plaintiffs, Class COWlSel, and State Fann shall promptly submit this Agreement and Settlement to the Court Bnd jointly request that the Cowt enter a Preliminary Approval Order substantially in the fonn attached hereto as Exhibit 1: 4,1. certifying the Settlement Class pursuant to Federal Rule of Civil Procedure 23 for purposes of settlement only; 4.2. preliminarily approving the Settlement; 4.3. setting a date for the Fairness Hearing, no earlier than 90 days after notice of fltis proposed Settlement Is provided to state and federal officials consistent with the requirements of 28 U.S.C. § 1715, to determine (a) whether the proposed Settlement shouJd be approved as fair, reasonable and adequBte to Class Members. (b) whether Final Judgment should be entered 69BDSJ6vl 9 Case 4:09-cv-00031-D Document 38-2 Flied 06/23/10 Page 9 of 50 dismissing with prejudice the Action and any other actions filed by Class Members, and (0) whether Class Counsel's application for fees and expenses should be approved; 4.4. approving the Notice Plan; 4.5. prescribing a period of time during which persons wlthin the settlement Class may file Requests for ExclusioD; 4.6. providing that any objections to the Agreement. the Settlement, or Class Counsel"s application for an award of attorneys' fees and I:lxp~nses sh.al] be considered by the Court at the Faimess Hearing only if, on or before a date to be specified in the Preliminary Approval Order, the Class Member making any objection shall mail B copy of his, her or its written objection(s) anellor notice of intent to a.ppear at the Fairness Hearing (any of which shall set forth briefly each objection and a.ll rcBSOOS and substantiation therefore) to the Administrator; 4.7. providing that, pending final detcm1inatlon of whether the Settlement should be ,approved, neither the Plaintiffs, nor any Class Member. either directly, representatively, or in 1lIly other capacity. shall commence or prosecute any action or proceeding in any court or ttibunal asserting any of the Released Clai111B against the Released Partiell. 5. Notice Plan 5.1. On or before (a) July] 6.201 OJ or (b) the date five business days after the entry of the Preliminary Approval Order, whichever da.te is lllter. State Farm shall deliver to the Administrator B list that includes the nwnes and addresses of all persons who during the Class Period, were insured by a State Farm Homeowners or PPC Conuncrcial insurance policy covering a home J dwelling or other structure or personal property within the State cf North Carolina (hereinafter "Potential Class Members.") For each Potential Class Member, State Farm shall include the most ClJlTel1t address that is in State Fenn's system as the mailing address in its list. 1i~8DS36vl 10 Case 4:09-cv-00031-D Document 38-2 Filed 06/23/10 Page 10 of 50 5.2. Prior to mailing the Settlement Notice, the Administrator shall update the addresses provided by State Fann through the use of the National Change of Address database, and shall use the most current address reasonably avallable to the Administrator. 5.3. Within 30 days following the Administrator's receipt ofthe list efPorentia! Class Members identified in Section 5.1, the Administrator shall mail, 01' cause to be mailed, copies of the Settlement Notice, substantially in the fonn attached hereto 8!l Exhibit 2, by first class United Statos mail, postage prepaid, to all Potential Class Members at the most recent address obtained by the methods described above. If B notice is teturned to the Administrator with a forwlU'ding address, the Administrator will re-send the notice and update its database to reflect the updated address infom:Jation for that Class Member. It is agreed by the Parties that this procedure constitutes an appropriate, reasonable, and practicable method to locate current addresses for Clalls Members and provide notice thereto. No additional efforts shaJi be required. 5.4. In addition to mailing notice to Potoutial Class Members, the Administrator shall establish a website and post on that website the Settlement Agreement, Settlement Notice and frequently-asked questions and answers. '5.5. The nomos, addresses, telephone numbers, and any other personal identifying information of all Potential Class Members shall be kept confidential by th6 Administrator and not disclosed to any person except as ordered by the Court upon good cause shown, and shall be used only for the purposes of this Agreement. Whenever \n a report, the Administrator or any other Party needs to identity a specific policyholder, it can refer to the policy number, which is not required to be redacted from publicly available documents. 5.6. The Administrator shall file with the Court a report on cffom undertaken to implement the Notice Plan at or before the Fairness Hearing. Copies ShaH be provided to Class CounsellUld State Fenn. 6980536vl 11 Case 4:09-cv-00031-D Document 38-2 Filed 06/23/10 Page 11 of 50 6. Requests for Exclusion 6.1. Any person within the Settlement Class definition who wishes to be excluded from the Settlement Class must mail a written Request for Exclusion from the Settlement Class to the Administrator by the deadline established in the Preliminary Approval Order (UOpt-Out Deadline"), The Pwties will ask the Court to establish an Opt-Out DeadUne of no later than 45 calendar days following the date on which the Settlement Notice is first mailed by the Administrator. Any Request for Exclusion must be signed by the person seeking exclusion. or the autborized representative of an entity seeking exclusion) flIld must clearly state hls) her or its desire to be excluded from the Settlement Class, and include his, her or its name, address and telephone number. A valid and timely Request for Exclusion mace by any co-insured on an insurance policy covered by this Agreement binds all other co--insureds on the same insurance policy. Any person within the Settlement Class definition who mails a Request for Exclusion to the Administrator may withdraw such Request for Exclusion, and thus elect to be included as a Settling Class Member. at any time prior to the Opt-Out Deadljne. 6.2. The Administrator will promptly provide unredacted copies of any Requests for Exclusion, and any withdrawals thereof, to State Farm and Class Counsel. On the date of the Fairness Hearing, counsel for State Farm and Class C01JI1sel will jointly submit to the Court a report identifying all persons making Requesta for Exclusion that were not thereafter timely withdrawn and the date on which each request was received by tlJe Administrator). To the extent the Court requires filing of the report, it shall be filed under seal. 6.3. Any person within the Settlement Class definition who does not file a timely Request 'for Exclusion from the Settlement Class, or who timely Withdraws a Request for Exclusion. shall be deemed Il Settling Class Member for all purposes under this Agreement. 7. Objections to Settlement 7.1. Any Class Member may object to the proposed Settlement. The Class Member, or persona! counsel retained at the Class Member's expCDse, must mall the objection to the 69BDS36Y I 12 Case 4:09·cv-00031-D Document 38-2 Flied 06/23/10 Page 12 of 50 Administrator by the deadline established in the Preliminary Approval Order (UObjection Deadline"). The Parties will ask the Court to establish an Objection Deadline of no later 111an 4S calendar days following the date on which the Settlement Notice is first mailed by the AdministrQtor. Objections must be in writing IUld must provide a detailed description of the nature and basis for each objection, the Class Member's nBme, address and telephone number, and, ifrepreseDted by personal cOUDael, counsel's name, address and telephoDe number. Prior to the Fairness Hearlng, the Administrator will file witl1 the Court any timely objections received, and wili promptly provide unredacted copies of any tlmely objeCtions received to Class Counsel and State Farm. 7.2. Any Class Member may appear at the Fairness Hearing, either in person or through personal counsel, retained at the Class Member's expense, to voice an objectlon to the Settlement, if the CIBSS Member has :tiled a timely objection pursuant to paragraph 7.1, or to comment on the Settlement. Class Members or their attorneys who wish to appear at the Fairness Hearing must make sucb a requeBt in writing and mail it to the Cierk of the United .States District Court for the: Eastern District of North Carolina with copies to counsel for State 'Farm and Class Counsel prior to the Objection Deadline. The written request to appear must include the name, address and telepbone number of the person who will appear Ilt the Fairness Hearing and a copy ofthe written objection to the Settlement. 7.3. Any Class Memb~r who fails to comply with the provisions of paragraphs 7.1 and 7.2 shall waive and forfeit any and all rights that be, she or it may have to appear separately and/or object to or commemt on the Settlement. S. Settlement Fund 8.1. Within teo (10) business days after the Effective Date, Stlrte Pann shall create a Settlement Fund in the amount of $30,000,000 for the purposes of paying: (a) the amolUlt that the Court awards Class Counsel as attorneys' fees and litigation expenses; (b) refunds to Eligible Claimants; and (c) any taxes due on the Settlement Fund as set forth in paragraph 8.3, li9aonlivl 13 Case 4:09-cv-00031-D Document 38-2 Filed 06/23/10 Page 13 of 50 8.2. If, at any time during the RenewaJ Period, the balance of the Settlement Fund, including interest, drops below $1,000,000, State Fmm agrees to contribute additional amounts in increments of $250,000 so that the balance at all times exceeds $1,000,000 until State Farm In good :t1rlth believes that all payments contemplated by pa.ragraph 8.1 hElve been made. The amounts set forth in paragraphs 8.1 and 8.2 (together with incentive payments, if any, awarded by the Comt in accordance with paragraph 15.7) shall be the exclusive monetary obligation of State FB1'l'I1 in connection with the Agreement and the Settlement, md Plaintiffs and Class Counsel agree that they shall not seek any further money, funds or other remuneration from State Farm in cOllOCctiOD. with this Settlement, whether for attomeys' fee!. litigation expenses, Administrative Costs, or anything else. 8,3. All Taxes arising with respect to the income earned on the Settlement Fund, including any Taxes that may be imposed upon State Farm and all expenses and costs incurred in connection with the operation and implementation of this Section 8 (including. without ·Iimltation, expenses of 8 tax attorney or consultant and mailing and distribution costs and ·expenses relating to filj.ng, or failing to file) and any return described in this Section 8 of this Agreement C'Tax Expenses"), shall be paid aut ofthe Settlement Fund as Administrative Costs. 8.4. Any check or draft to a Settling Class M6lllber that is returned wlth a forwarcllDg address will be re-sent to the address provided. Any check or draft that is ret'UJ1lod as undeliverable, with no forwarding address, or is stlll Wlcashed ninety (90) days after the date of the instrument, shall revert to State Farm. 8.5. State Farm shall close the Settlement Fund one hundred twenty (120) days following the issuance of the final check or draft issued PU1'BtUlDt to this Settlement. Any amount remaining in the Settlement Fund, including accrued interem, IlDd any settlement checks sent to Settling Class Members that are undeliverable after ninety (90) days of the date of the instrument or are not cl!Sbed by Settling Class Members within ninety (90) days of the date of the instrument, will revert back to State Farm.. 6980536\11 14 Case 4:09-cv-00031-D Document 38-2 Filed 06/23/10 Page 14 of 50 9. Prospective Implomentation ofEnhanced PPC Monitoring Program 9.1. The Parties acknowledge that State Farm calculates premiums in North CBIolina for Homeowners policies and PPC Commercial policics coveri~g a home, dwelling or other stNcl'Ure or personal property through the use ofPPC Codes maintained tmd updated by the ISO. The PPC Code is a factor in the calclllation of premiums for all Narth Carolina Homeowners policieB and PPC Commercial policies covering a home, dwelling Dr other structure or personal property in the State of North Carolina. The Parties further acknowledge and stipulate that the use of the ISO LocatlonOD database is a reasonable method for maintaining and updating PPC Codes for State Fann polioyholders in North Carolina. 9.2. Accordingly, State Farm agrees that as a condition of this Settlement it shall license the ISO LocationQ'O database. State Farm will thereafter integrate that database into State Farm's internal computer system so as to utilize the system to maintain and update PPC Codes for all North Carolina Homeowners policies and all PPC Commercial policies covering a home, dwelling or other structure or persona! property in the Stnte of North Carolina. '9.3. The Parties further acknowledge that State Farm may develop and aeek the NCDrs approval to use an alternative rating system or procedure fum: does not use PPC Codes to calculate Homeowners or PPC Commercial iIlSUl'ance premiums, such as sub-zone rating factors. I! the NCO] approves State Farm's use of an altemative rating system, nothing herein shall be construed to obligate Start Fann to maintain and use the ISO Location® database to assign poUcyboldet8 to ratiog classes prospectively. 9.4. Subject to Section 9.3, State Farm currently intends to maintain the ISO Location@ database for at least three (3) years following the Location Integration Date. State Farm shall, however, retain the discretion to change the method by which it acquires and updates protection classes (including its use of ISO LocE!tionlB), provided that, as a prerequisite for terminating the use of the ISO LocationaD database within three years from the Location 698D5J6vl 15 Case 4:09-cv-00031-D Document 38-2 Filed 06/23/10 Page 15 of 50 Integration Date, State Farm must seek and be granted IIpproya] by the NCDI, and provide written confinnation of such approval to Class Counsel prior to implementing any suoh change. 10. Statewide Audit of Current Policyholders and Identification of ElIgible Claimants 10.1, Belginning ten (10) days foUowing the Location Integration Date, State Farm shall commence a statewide audit of FPC Codes for all Homeowners policies and PPC Commercial policies covering a home, dwelling or other structure or personal property in the State of North Carolina as follows. State Farm shall run th~addreBs for each such property through the 1S0 Loeation@ database to determine the PPC Code for the address as of the dates corresponding to the beginning of each policy period during the Class Period that the policy was in force, Fer each of these dates, State Fann shall then compare the PPC Code in the ISO Location@ database in effect for that address at the beginning of that policy period to the FPC Code that was used for determining the premium for that address at the beginning ofthat policy 'Period. 10.2. If, for any of the dates identified in Section 10.1, the process identified in Section 10.1 returns El PPC Code for an address that is different from the PPC Code that was llsed in detennining the premium for that address, State Farm shall identify any such policyholder 85 a Potential Claimant. Statl' Farm soall compile a list of Potential Claimants including the policyholder's name" most recent address and policy number. 10.3: With respect to any Potential Claimant, State Fann shall u1llize its underwriting system to detennine whether the change in PPC Code for the Potential Claimant would have bad any effect on the Potential Claimant's premiums during the Class Period, Uthe chBJ1ge in PPC Code would have resulted in the policyholder paying a higher premium during the Class Period, State Farm will not seek to collect any additional premium for coverage during the Class Period. If the change in PPC Code would have resulted in the Policyholder paying a lower premium during the Class Period. State Fann will identify such policyholder as an Eligible Claimant. State Farm shall compile a list of Eligible Claimants including the policyholder's name, most recent l1ddTe!l9 and poUc)' number. 6980536v1 16 Case 4:09-cv-00031-D Document 38-2 Filed 06/23/10 Page 16 of 50 10.4. During the initial phase of the audit, State Farm will use the ISO LocationCl!> database to make those detennimrtions that can be made by comparing the PPC Code in the ISO Locatlon@ database to the PPC Code that was used for determin1ng the premium for that address.· State Farm anticipates that, as to most Class MCII1bers, this initial phase of the audit will result in a 'final determination as to whether the policyholder is an Eligible Claimant. State Fann will complete this initial phase ofthe audit within ninety (90) days following the Location Integration Date. 10.5. FOl: some Class Members, the initial phase of the audit described in Section 10.4 will not result in a final detcrminatiOIl as to whether the policyholder Is an Eligible Claimant. For example, if the ISO Location@ database produces a choice of two PPC codes for a particular address (e.g. 5/9, 6/9 or otherwise), State Pann will need to undertake a manuul review in an effort to dctennine the PPC code that would have been applicable during each relevant policy .term. State Farm will complete this manual review within one year following the Location .Integration Date. 10.6. Upon the renewal of all North Carolina policies during the Renewal Period, State 'Pann shllll apply the PPC Code as detennined through the proces5 described in Sections 10.1 through 10,5. U. Former Policybolders Il.l. Prior to the Location Integration Date, State Fann shall compile B list of all Former Policyholdors, and shall include the Former Polioyholder's name, last known address, and other appropriate identifying infonnation. 11.2. conduct 11 Beginning ten (10) days following the Location Integration Date, State Farm shall statewide audit of PPC Codes for all Fonner Policyholders identified on the list referenced in Section 11.1 in the SEUne manner it audits PPC Codes for CWTent Policyholders, as described in Sections 10.1 through 10.5. 6980536,,1 17 Case 4:09-cv-00031-D Document 38-2 Filed 06/23/10 Page 17 of 50 12. Payment to Eligible Claimants 12.1. Within sixty (60) days followlng State Farm's identification of a Current or Former Policyholder as an Eligible Claiman~ State Farm will calculate the amount of the refund due through use ofthe ISO Location@ database. Specifically, State FIU1ll will detennine through the use of data supplied by ISO when the PPC Code for the Eligible Claimant's address first differed from the PPC Code maintained inState FlUID's CUITCnt underwriting system. State Fann will theD calculate the premium difference for the period in which the PPC Code differed. The refund amoUDt to be paid to the policyholder shall be an amount equal to the premlwn difference from (a) the beginning ofthe first policy period during which application of the PPC Code in the ISO Location® database would have resulted in lower premiums (set! Sections 10.1 to 10.3) or (b) February 25, 2005, whichever is later, to the beginning of the first policy period when the application of the PPC Code in the ISO Location<!D database would no longer have resulted in lower premiums (see Sections 10.1 to 10.3). ·U.2. The refwds specified in Section 12.1 shall be increoscd by simple interest. The interest.shall be applied to the premium overcharge on each policy term. The interest rate shall bedetennincd separately for each policy term. The interest rate shall be the average quarterly interest rate for the quarter in which thatpoUcy term began, based on the 26-week U.S. Treasury Bill rate, as published on the . ,Qltlpjllwww.treasurydireot.goy/RI/OFAuctions?fonn""histOuery). TreasuryDirect website The time period 'for the interest for each policy term shall be from the begi~ing date ofthat policy term or February 25, 2005, whichever is later, to the date the refund is calculated. 12.3. If an Eligible Claimant has already received a ref1.1J1d from State Farm due to State Fann's application of PPC Codes, the amount of the previously issued refund will be deducted from the amount payable to the Class Member. If a Class Member is an Eligible Claimant on more than one policy during the Class Period, the Class Member will be issued a refimd for each such qualifying eligible claim. State Fann may combine any such payments due to Class 61JIIOS36vl 18 Case 4:09-cv-OOD31-D Document 38-2 Flied 06/23/10 Page 18 of 50 Members into one check or draft for the qualifyiDg claims, so long as State Farm identifies the qualifying olaims negotilrted thereby, 12.4. State Farm will issue a check or draft to the Eligible Claimant from the Settlement Fund equal to the premium refund due plus interest liS set forth in these sections. Tho check or draft will contain tenns requiring negotiation within ninety (90) days of the instrl.UT1ent's date and shall be accompanied by a letter to the Eligible Claimant. By application oithe time periods set forth In Sections operation of Sections lOA and 12.1, State Farm will issue checks to those Eligible Claimants that can be identified as set forth in Section 10.4 (i.e. without the Deed for manual review) no later than] 50 days following the Location Integration Date. 13. Reporting Dod MonitoriDg 13.1. During the Renewal Period, Plaintiffs' Cmm!!el shall monitor State Farm's compliance with the tenus of the Settlement and the implementation ofthe meUlOdology used to identify Eligible Claimants. calculate refunds and interest, and issue refunds. 13.2. Within thirty (30) days after State FIUln bas completed 1he initial phase of the audit as described in Section 10.4, State Fann will provide Plaintiffs' counsel with 8 report containing the following information: (a) the number of polioyholders whose PPC Codes were examined, (b) the number of policyholders who were determined to be Eligible Claimants based' on the initial pbase of the audit, (c) the number of policyholders who were detennined not to be Eligible Claimants based on the initial phase of the audit, and (d) the number of policyholders as to whom fl, determination could DOt be made without a manual rt:view. 13.3. On or before one hundred eighty (180) days following the Location Integration Date, and again on or before one year after the Location Integration Dote, State Fann will provide Plaintiffs' counsel with 8 report containing the folJowing infurmation with regard to the policyholders identi:fied in Section 13.2(d): (8) the number of poJlcyholders as to whom State Farm had completed its audit (including any manual review) and (b) the number of such policyholders who were detennined to be Eligible ClaImants. 6980536vl 19 Case 4:09-cv-00031-D Document 38-2 Flied 06/23/10 Page 19 of 50 13.4. On or before one hundred fifty (150) days following the Location Integration Date, and every sixty (60) days thereafter (until the final report referenced in Section 13.5 is provided), State Fann will provide Plaintiffs' counsel with a report containing the following infonnatien as to Eligible ClaimBDts: (a) the number ofEIigibJe Claimants who have been paid refunds and (b) the amount ofrefunds and interest paid. 13.5. After State Farm has completed the process identified in Seotions 10-12, State Fann will provide Plaintiffs' Counsel with a report containing the following infutmation: (a) the number of policyholders who have been audited pursuant to Sections 10 and 11 of the Agreement~ (b) the number of Potentia] Claimaots Identified; (c) the number of Eligible Claimants identified; flIJd (d) the amounts ofrefunds and interest paid to Eligible Claimants. 13.6, ]f at any time during the Renewal Period Plaintiffs' Counsel question State Farm's implementation of the methodology used to identify Eligible Claimants. calculate refunds and interest, and cause the issuance of reflmds, Plaintiffs will first discuss these concerns with State Fann. State FEIIlIl agrees to cooperate with Plaintiffs' Counsel in these monitoring efforts. and Plaintiffs' Counsel agree that their requests for cooperation wlll be reasonable and not unoeccssarily burdensome. 14. Agreemepts of Plaintiffsl Counsel 14.] . If a Class Member or fonner Class Member wh(l has opted out of the Settlement Agreement Initiates contact with Plaintlffs' CoUnsel regarding legal representation as to a matter unrelated to the subject matter of this Action, PlaintiffiJ' COlDlseJ are not prohibited by this Settlement Agreement from providing such unrelated representation. This provision shall be construed 50 Ii! not to violate any professional or ethical considerations 14.2. Within sixty (60) days after the Renewnl Period, Plaintiffs' Counsel shall return to State Fann all docwnents and all copics of sucb documents produced by State Farm to Plaintiffs during the course oftbis litigation, including, but not limited to, aU electronic data, and all copies thereof. including any copies provided by Plaintiffs' Counsel to third persoOll. 6980S3livl 20 Case 4:09-cv-00031-D Document 38-2 Filed 06/23/10 Page 20 of 50 15. Attorneys' Fee! & Expenses; Award to Class Representative 1S.l. The amount of attorneys' fees and litigation expenses to be paid to Class Counsel shell be determined by the Court. 15.2. Prior to the Effective Date, Class Counsel shall file an Application for Attorneys' Fees and Expenses sec:king attorneys' fees and expenses in the amount of (a) $5,000,000, and,lfBpplfcable, (b) a contingent SupplementaJ Fee equal to 20% of the difference between: (i) the estimated amount ofthe payments to be made by State Farm to Eligible Claimants under Section 12.1. and (ll) $25,000,000. If the amount of the payments made by State Farm under Section 12. J do not exceed $25,000,000, then (1) there is no Supplemental Pee and (2) Class Counsel shaJl have no obligation to return to State FIII1D any portion of the fees and expenses awarded pursuWlt to Section 15.2(a) above. State Fann agrees that it will not oppose Class Counsel's Application for Attorneys' Fees WId litigation expenses, provided that the request does not eXceed the amounts stated in this paragraph. 15.3. Attorneys' fees and litigation expenses awarded by the Court to Class Counsel pursuant to pnragraphs 15.1 and 15.2 will be paid from the Sett.lement Fund. Class Members who are personally represented by their own attorneys in connection with the Settlement shaH be responsible for the fees and expenses oftheir individuul attorneys. 15.4. Payment to CI8$s Counsel of all Court-awarded attomeys' fees and litigation expenses pmsuant to pamgraph 15.2(a) shaJl occur within ten (10) days after the Effective Date. 6lJB0S36vl 21 Case 4:09-cv-00031-D Document 38-2 Filed 06123/10 Page 21 of 50 15.5. If the amount of the payments made by State Farm UDder Section 12.1 exceed $25,000.000, then. within thirty days after making an additional contribution to the Settlement Fund pursuant to Section 8.2, State Fann will estimate the total amount it expects to pay to Eligible Claimlltlts as set forth above In Section lS.2(b). State Farm will elltimate that amount based on 1he information State Fann will have learned in conducting the audit dellcribed in Section 10. Within thirty (30) days after making that estimate, State Farm will provide written notice of the estimate to Class Counsel. Witbin thirty (30) days of Class Counsel being , provided with Bny estimate: made by Sune Fann pursuant to paragraph lS.2(b) oftbis Agreement, Class Counsel shall have the right to question any such estimate. If such questions are raised, the parties agree to cooperate to reaoh agreament on 1he amount State Farm expects to pay to Eligible Claimants and the amount of attorneys' fees and expenscs, if any, State FBmI will pay pursuant to paragraph 15.2(b) of this Agreement. State Farm agrees to cooperate with C[BSB Counsel by providing commercially reasonable infonnation to Class Counsel regarding State Farm's .estimates, and Class Counsel agree that their requests for cooperation will be reasonable and not. unduly burdensome. ·15.6. Within thirty (30) deys following agreement between State Farm and Class Counsel as to the estimates set forth in paragraphs l5.2(b) and 15.5 of this Agreement, State Fann shalJ pay any attorneys' fees and expenses awarded pursuant to paragraph lS.2(b) of this Agreement. This payment will not be subject to a subsequent adjustment based on any later calcuJations of the actual amounts ofpayments made to Eligible Claimants. 15.7. Class Counsel may petition the Court for payment ofan awlU'd to each Plaintiffto compensate him or her for the effort, time.and expense spent by him or her in cOMcction with the proseoution of this action. Plaintiffs and Class Counsel egree thBt they will not seek an award in excoss of $5,000 faT each Plaintiff. State Farm agrcl:JS 1hnt it will not oppose PlaIntiffs' and Class Counsel's petition for an awam to Plaintiffs, provided that It does not exceed the amoW11 stated in this paragraph. Ally amount awarded by the Court to Plaintiffs pursuant to this 22 6980S36vl Case 4:09-cv-00031 D Document 38-2 M Filed 06/23/10 Page 22 of 50 plUllgraph will be paid separately by State Farm to the Plaintiffs within ten (10) business days after the Effective Date. 16. Release, Waiver DDd COYllUllDt Not to Sue 16.1. Upon the Effective Date of this Agreement. in consideration of this Settlement and the benefits extended to the Settlement Class pursuant 10 this Agreement, wI Settling Class Members retease and forever discharge the Released Parties from any and all Released Claims. 16.2. Upon the Effective Date of this Agreement, the Released Parties are not, and in the future shall not be, subject 10 liability or expense of any kind to Settling Class Members with respect to any of the Released Claims. The provisions oftbis Agreement shall be the exclusive remedy of all Settling Class Members against the Released Parties. Upon the Effective Date, each Settling Class Member shall be forever barred from asserting any of the Released Claims against any of the Released Parties. Settling Class Members expressly agree that this release shall be. and may be raised as, a complete defense to and will preclude any action or proceeding encompassed within the terms ofthis release. 16.3. UPOD the Effective Date of this Agreement) each Settling Class Member shall be deemed to have covenan1ed and agreed (8) that he. she or it will forever refrlli.D from instituting, maintaining or proceeding against any Released Party on any Released Claim, including Released Claims known and DOt now Imown, suspected, or claimed, that he, ahe or It has or hereafter may have against the Released Parties; nnd (b) that he, she or it releases the Released Parties from each and every such Released Claim. 16.4. Settling Class Members acknowledge and agree that the Released Claims include claims that Settling Class Mombers do not know or Suspect to exist in their favor fit the time of the relellSe of the Released Parties and wluch, if known by them, might bave affected their decision to settle: and release the Released Claims or take my other action, including, but not limited to, the decision not to object to this Agreement. Settlinu Class Members expressly waive any IlI1d all rights that they may have \Ulder any statute, regulation, administl'atJve adjUdication. 6980536Vl 23 Case 4:09"cv-00031-D Document 38-2 Filed 06/23/10 Page 23 of 50 or common law principle that would limit the effect of the Release provided in this Agreement to the claims actually la10wn or suspected to exist at the time ofthis Agreement. 17. Finnl JUdf!J!lent 17. I. If the Settlement is approved by the Court following the Fairness Hearing. the Parties shall request that the Court enter a Final Judgment, substantially in the form attached hereto 8.!l Exhibit 3: 17.1.1. (a) co11fin:oUtg certification of the Settlement Class pursuant to Federal Rule of Civil Procedure 23 and applicable law; 17. 1.2. (b) finding that notice was provided to the Settlement Class in accordance with the Preliminary Approval Order and that the Notice Plan fully satisfies the requirements of Federal Rule ofCivil Procedme 23 and due process; 17.1.3, (c) finding that notification to appropriate federal and state officials was given in accordance with the Class Action Faimess Act of 2005, 28 U,S.C. § 1715j 17.1.4. (d) approving the Settlement as fair, reasonable and adequate to Class Members in accordance with Federal Rule of Civil ProcedW'e 23; (e) directing implementation of the Settlement in accordance with Its 17.1.6. (f) dismissing with prejudice the Action; 17.1.7. (g) providing that all Settling 17,1.5. tem15; Class Members cOIJolusively compromiseJ settle. discharge, dismiss IlDd release the Released Claims; 17.1.8. (h) permanently enjoining Settling Class Members from initiating, asserting. prosecuting, or litigating against the Released PBrties any actions involving the Released Claims; 17.1.9. (i) providing that neither this Agreement, approved or not approved. nor BIly exhibit. document or instrument delivered hereunder. nor any statement, transaction C;9BllSJ6vl OT proceeding in connection with the negotiation. execution 24 Case 4:09-cv-00031-D Document 38-2 Filed 06/23/10 Page 24 of 50 or implementation oftMs Agreement, sbaH be admissible in evidence far lilly PUipose in tWs or any other proceeding, except that this Agreement, and any order granting preliminary or final approval of this Agreement, will be admissible for the pW'pose of obtaining approval of, implem_g, and/or enforcing this Agreement and as otherwise provided in paragraph 16.4; 17.1.10. 0) reserving jurisdiction, without affecting the finality of the Final Judgment, over implementation, administration 8Ild enforcement of the Settlement, and other matters ancillary to the Settlement; 17.1.11. (k) finding that the Final Judgment Is a fmal judgment pursuant to Federal Rule of Civil Procedure 54{a) or, aJternatively. that there is no just reason for delay and the Final Judgment is a final judgment pursuant to Federal Rule of Civil .Procedure 54(b). 17.2. Entry of a Final Judgment approving this Agreement is a condition precedent to the Parties' respective rights and obligations under this Agreement. 18. .TtlrmiulltioD 18.1. State Fann shall have the right, in its sole discretion after reviewing the munber of opt·outs, objectors, and pending litigation. to withdraw from this Agreement if the nwnber of Class Members who eject to be excluded from the Settlement Class exceeds the number set forth in a ::lupplemental letter agreement executed, but not filed, herewith. State Fann may exercise this right within ten (10) busmess days after the Opt·Out Deadline. In order to invoke this right, State Fann must file and serve by facsimile and U.S. Mail a document entitled Notice of Nullification of Settlement. Neither Plaintiffs nor any Class Member DOl" CIllSS Counsel shall be permitted to seek enforcement of the Settlement or any of its terms against State Farm should State Farm elect to nullify the Settlement pursuant to this paragraph. 18.2. Tbis Agreement shall terminate and become null and void upon the occurrence of any of the following events: fi!lBOS36vl 25 Case 4:09-cv·00031-D Document 38-2 Filed 06/23/10 Page 25 of 50 18.:2..1. (a) State FlUID exercises its right to nullify the Settlement as provided in paragraph 18.1 ; 18.2.2. (b) The Court refuses to certify the Settlement Class; 18.2.3. (c) The Court denies preliminary approval of the Settlement; 18.2.4. (d) The Court denies approval of the Settlement following the Fairness Hearing; 18.2.5. (e) Certifioation of the Settlement Class and/or approval of the Settlement fs reversed on appeal; or 18.2.6. (t) the Effective Date does not occur. 18.3. If this Agreement should terminate or become null and void for any reason. then: 18.:3.1. (a) This Agreement and nIl negotiations and proceedings and ·;releases relating thereto shall be without prejudice as to the rights of any and oll PBrtics to this Agreement, and Parties to thIs Agreement shall be restored to their -respective positions existing as of October 29,2009; 18.3.2. (b) Plaintiffs and State Farm shall jointly move that any order -entered pursuant to this Agreement be vacated and void and all findings withdrawn; and 18.3J. (0) All amounts remaining in the Settlement Fund. together with accrued interest, shall be returned to Stm FBl1J1. 18.4. 19. No Admissions 19.1. Neither this Agreement. nor any exhibit. document or instrument delivered hereunder, is intended to be or shall be construed as or deemed to be evidence of an admission or concession by State Farm or the ReJeflSed Parties of an interpretation of. or coW"Se of conduct in connection with, the policy language and forms of the Subject lnsurance Policies, or of any 6!180S36vl 26 Case 4:09-cv-00031-D Document 38-2 Flied 06/23/10 Page 26 of 50 liability or wrongdoing by State FID1D, or of the truth of any allegations IlSserted by Plaintiffs. Class Members, or any other person. 19.2. The Parties expressly aclmowledge.and agree that this Agreement, along with all related drafts, motions, court papers, conversatiOD~ negotiations, mediations and correspondencc, including statements made in mediatioDS or written submissions to the mediator, constitute an offer to compromise and a compromise within the mClaning of Federal Rule of Evidence 408, North Carolina RuJe ofEvidcoce 408, and any equivalent rule of evidence of any state. 19.3. Neither this Agreement, approved or not approved, nor any exhibit, doctuncnt or instrument delivered hereunder, nor any statement. transaction or proceeding in COI1Dcction with the negotiation, execution or implementation of this Agreement, shall be admissible in evidence in this .or any other proceeding for any purpose, including as evidence of an interpretation of, or course 'pf conduct in connection with, tb~ policy language and fOl'ID! of the Subject Insurance Policies. Without limitation of the foregoing. nothing contained in this Agreement, approved or not approved, por any exhibit, document or instrument delivered hereunder, nor any statement, transaction or proceeding in cOMecUon with the negotiation, execution or implementation ofthis Agreement, shall be given any form of resJ~ldicala. collateral estoppel or judicial estoppel effect against State Penn or the lWleased Parties in any administrative or judicial forum or proceeding. 19.4. Notwithstanding the foregoing, this Agreement, any order gmnting preliminary or final approval to this Agreement and any Rppellate decision affinning Final Judgment is admissible as provided in this paragraph. 19.5, This A~cement is admissible by any party for the purpose of obtaining approval of. implementing, andlor enforcing this Agreement. 19.6, This Agreement, any order granting preliminary or tinal approval of this Agreement, any appellate decision affuming Final Judgment. and any proceedings and submissions in connection with this Agreement, 69BOSJ6Yl Bre admissible for purposes of determining 27 Case 4:09~cv-00031-D Document 38-2 Filed 06/23/10 Page 27 of 50 Class Counsel's appUcBtion for attorneys' fees and costs or in connection with my appeal of an award of Class Counsel's attorneys' fees and costs in this Action. 19.7. TIlis Agn:ement, any order granting prcliminElI')' or final approval of this Agreement, and any appellate decision affimJing Final Judgment, may be pleaded by State Farm Dr the Released Parties 8S a fuIJ and complete defense Cmclllding any defense based upon release, res jlldicata, Of injunction) to any actioD, suit or other proceeding that has been or may be instituted, prosecuted or attempted with respect to any of the Released Claims; BOd this Agreement, MY order granting preliminary or finaJ approval to this Agreement. and any appellate decision affirming Final Judgment, or any other proceedings in coTUlcction therewith, may be filed, offered or submitted by State Farm or the Released Parties or otherwise used in support of such defense. 10. 'Deadlincs Bnd Notices 20.1, Whenever this Agreement requires notice or a docmnent to be given to State Farm, It.shall be sent to: Todd A. Noteboom LEONARD, STREET & PEINARD, P.A. 150 South Fifth Strecrt, Suite 2300 Minneapolis, MN 55402 ArtorneysjiJl'Defendant 20.2. C. Neal Pope POPE, MCOLAMRY, KILPATRICK, MORRJSON & NORWOOD, LLP 31B 11th Street, 2nd Floor Columbus, GA31901-251S Attorneys for Plalnlfffi Whenever this Agreement requires notice or a document to be given to the Administrator, it shell be sent to the address stated in the Settlement Notice. 20.3. Whenever this Agreement provides for a document or fonn to be sent to the Administrator. State Farm, or Class Counsel prior to a certain date or deadline, the document or form will be deemed timely (a) if sent by Firllt Class U,S. Mail and postmarked by the U.S. Postal Service on or before the applicable deadline or (b) if sent by any other method and received by the Administrator, State FIIJ'1Il, or Class Counsel, whichever is applicable, on or before 1he applicable deadline. If a postmark is not legible, the document shall be deemed to 69B0536vl 28 Case 4:09-cv-00031-D Document 38-2 Filed 06/23/10 Page 28 of 50 have been postmarked three business days before it is lllceived by the person to whom it was sent 21. Gegeral Provisions 21.1, Class Representatives, Class Counsel, and State Fann shall cooperate, assist and undertake their best efforUI to completo any actions implementing the terms of tWa Agreement or any order of the Court related to the Implementation oftbis Agreement 2] .2. Plaintiffs, Class Counsel, and State Farm agree that the terms of this Agreement WIml not based solely on the consideration provided, but were also based on (a) vigorous arm's length negotiations among counsel for the Parties; (b) the assessment of counsel for the Parties of the s1rengths and weaknesses aftbe claims asserted in the Action and the Released Claims; and (c) the expense and burden of ongoing Utigation. .21.3. The undersigned attorneys for Plaintiffs represent and warranl that they have the authority to enter into this Agreement on behalf of the propDsed Class Representatives. .21.4. State Fann represents and warrants tbat it has all requisite power and authority to execute~ deliver and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivtlry and ptlrfonnlUlQCI by State Fann of this Agreement and the consummation by it of the actions contemplated hereby have been duly authorized by all necessary corporate action on the part of State Fann. This Agreement has been duly and validly executed and delivered by State Fann's authorized agent. 21.5. State Farm, Plaintiffs, and Class Counsel agree that they will not issue any press releases or otherwise advise the press or media of this Agreement, but that they can respond to media inquiries. If this Agreement is approved by the Court following the Fairness Hearing. State Farm and Class Counsel agree that' if State Fann chooses to do so, they will attempt to issue mutually agreed upon. joint press releases announcing such approval. State Farm and Class Counsel agree that they will not make any statements on their respective external websites regarding this Agreement. 698DS36vl 29 Case 4:09-cv-00031-D Document 38-2 Flied 06/23/10 Page 29 of 50 21.6. This Settlement Agreemem is intended to and shall be go"Vemed solely and exclusively by the laws ofilia State ofNorth Carolina. 21.7. The terms and conditions set forth In this Settlement Agreement constitute th~ complete and exclusi"Vc agreement between the Parties relating to the subject matter of this Settlement Agreement. superseding ell previous negotiations, representations, and understandings, and may not be contradieted or supplemented by e"Vidcncc of any prior or contemporaneous agreement. The Parties further intend that this Settlement Agreement constitutes the complete and exclusive statement of its tenns BS betwcen the Parties and that no extrinsic evidence whatsoever may be introduced In any judicial proceeding involving this Settlement Agreement Prior or contemporaneous representations not contained in this Settlement Agreement shall be of no force or effect. Any modification of the Settlement Agreement must be in writing signed by Class Counsel, the Representative Plaintiffs, and State Fmm. "21.8. The detennination of the tenus of, and the drafting of, this Settlement Agreement has been by mutual agreement after negotiation, with consideration by and participation of all Parties and their counsel. In the e"Vent of a dispute cOIlcerning the meaning of a tCtrn contained herein. no adverse inference or presumption shall be drawn based on any oontention that a particular party supposedly drafted suoh term. 21.9. This Settlement Agreement shall be binding upon and inure to the benefit of the representative heirs, successors, and assigns of the Parties. 21.10. The waiver by one Party of any provision or breach ofthis Settlement Agreement shall not be deemed a. waiver of any other provision or breach of this Settlement Agreement. 21.11. nus Settlement Agreement shall become effective upon its execution by all of the undersigned. The Parties may execute this Settlement Agreement In counterparts, and exeeution of counterparts shall have the same force IUld effect as if all Parties bad signed the same instrument. IiPB05JCivI 30 Case 4:09-cv-00031-D Document 38-2 Flied 06/23/10 Page 30 of 50 IN WITNESS HEREOF. the W1dersigned, being dUly authorized, have caused this Settlement Agreement 10 be executed on the dates ShOWII below IlDd agree that it shall talte effect on the date it is e~ecuted by all oftbe undersigned. Dated:~I1e. 2.1,2010. Todd A. Noteboom LEONARD, STREET &; DEmARD, P.A. 150 South Fifth Street, Suite 2300 Minneapolis, MN 55402 Attorneysfor Deftndant 69BOSJ6vl A.ttorneys/ol· PlainffjJS 31 Case 4:09~cv-00031 ~D Document 38-2 Filed 06/23/10 Page 31 of 50
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