united states district court eastern district of … · melissa d. gunning (“plaintiff”), class...

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF KENTUCKY

NORTHERN DIVISION

AT COVINGTON

MELISSA D. GUNNING, )

on behalf of herself and a class of )

similarly situated persons, )

)

Plaintiffs, ) No. 08-153-DLB

)

v. )

)

FIRST AMERICAN TITLE )

INSURANCE COMPANY, )

)

Defendant. )

SETTLEMENT AGREEMENT

THIS AGREEMENT, entered into as of the Execution Date, is by and between

Defendant, First American Title Insurance Company (“FATIC”), Counsel for FATIC, Plaintiff,

Melissa D. Gunning (“Plaintiff”), Class Counsel, and the Settlement Class Members, by Class

Counsel.

WHEREAS, Melissa D. Gunning, et al. v. First American Title Insurance Company, No.

08-C1-1647, was filed in the Circuit Court of Boone County, Commonwealth of Kentucky,

alleging FATIC collected from purchasers of title insurance local government taxes on title

insurance, that were either not owed or at rates higher than permitted, allegedly in violation of

Ky. Rev. Stat. 91A.080 et seq.;

WHEREAS, the Case was removed and is now captioned Melissa D. Gunning, et al. v.

First American Title Insurance Company, United States District Court, Eastern District of

Kentucky, Northern Division at Covington, Civil Action No.: 08-153 (DLB);

WHEREAS, Plaintiff claims that FATIC improperly collected from her and the putative

class members local government taxes on title insurance that were either not owed or at rates

higher than permitted by the local county or municipality;

WHEREAS, FATIC has denied and continues to deny the material allegations asserted

against it by Plaintiff;

WHEREAS, FATIC and Plaintiff, through their respective counsel, have conducted an

examination and investigation of the facts and law relating to the matters set forth in Plaintiff’s

Complaint;

Case: 2:08-cv-00153-DLB Doc #: 58-2 Filed: 12/30/14 Page: 1 of 22 - Page ID#: 351

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WHEREAS, FATIC and Plaintiff, through their respective counsel, also have conducted

arm’s-length negotiations, which negotiations have resulted in this Agreement to settle Plaintiff’s

and Settlement Class Members’ claims as set forth below;

WHEREAS, based on extensive analysis of the facts and the law applicable to Plaintiff’s

allegations, and taking into account the burdens and expense of the Case, including the risks and

uncertainties associated with protracted trial and appeal, as well as the fair, flexible, speedy, cost-

effective, and assured method of resolving the claims of the Settlement Class, Plaintiff and Class

Counsel have concluded that this Agreement provides substantial benefits to the Settlement Class

and is fair, reasonable, adequate and in the best interests of Plaintiff and the Settlement Class;

WHEREAS, FATIC and its Counsel have similarly concluded that this Agreement is

desirable to avoid the time, risk and expense of defending the Case, and to resolve finally and

completely the pending and potential claims of Plaintiff and the Settlement Class against FATIC;

and

NOW, THEREFORE, FATIC and Plaintiff stipulate and agree that any and all Claims

of the Plaintiff and the Settlement Class against FATIC shall be finally resolved on the terms and

conditions set forth in this Agreement, subject to Court approval of this Agreement as a good

faith, fair, reasonable and adequate settlement under Rule 23 Fed. R. Civ. P.

1. DEFINITIONS

As used in this Settlement Agreement, the following capitalized terms and phrases have the

meanings specified below:

1.1 “Case” means Melissa D. Gunning, et al. v. First American Title Insurance Company,

United States District Court, Eastern District of Kentucky, Northern Division at

Covington, Civil Action No.: 08-153 (DLB).

1.2 “Claim” means a request through a Claim Form by Plaintiff or a putative Settlement

Class Member for a benefit under this Settlement Agreement.

1.3 “Claim Form” means the form approved by the Court that putative Settlement Class

Members must complete in order to receive a benefit under this Agreement. The Claim

Form shall contain a release of each claimant’s claims against the Released Parties and,

to the extent reasonably possible, shall accommodate multiple signatories, as necessary.

1.4 "Complaint" means the complaint filed by Plaintiff, docketed as document #1-1 in the

Case.


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1.5 “Counsel for FATIC” means:

Charles A. Newman

Elizabeth T. Ferrick

DENTONS US LLP

One Metropolitan Square, Suite 3000

St. Louis, Missouri 63102

P: (314) 241-1800 F: (314) 259-5959

1.6 “Court” means the United States District Court for the Eastern District of Kentucky,

Northern Division at Covington.

1.7 “Defendant” means FATIC.

1.8 “Effective Date” means the first date by which all of the events and conditions specified

in Section 11.1 of this Settlement Agreement have been met or have occurred.

1.9 "Execution Date" means the date on which the final required signatory (i.e. Plaintiff,

FATIC, Class Counsel, and Counsel for FATIC) executes the Agreement.

1.10 “Excluded Person” means a putative Settlement Class Member who submits a valid and

timely Request for Exclusion, i.e., a request to be excluded from the Settlement Class

under Rule 23(c)(2)(B) Fed. R. Civ. P. and has not revoked such a request.

1.11 “FATIC” means First American Title Insurance Company.

1.12 "Fee and Costs Award" shall mean the attorneys' fees, Rule 54 costs, including the costs

of claims administration, and the Plaintiff's incentive award, all as ultimately determined

by the Court.

1.13 “Final” means, with respect to the finality of the Judgment, that the following events have

occurred: (a) the Court has entered the Final Approval Order and Judgment in the form

attached hereto as Exhibit B, in its exact form or without material change, dismissing

with prejudice the Case; and (b) the latest of: (i) the expiration of the time to seek review

or appeal of the Judgment (including the period allowed for service by mail under Fed. R.

Civ. P. 6(a) and (e)) without any review or appeal having been sought or taken; or (ii) the

final affirmance on any appeal of the Judgment and either the expiration of the time for a

petition for a writ of certiorari to review the Judgment or the denial of certiorari or, if

certiorari is granted, the final affirmance of the Judgment following review pursuant to

that grant; or (iii) the expiration of the time to file a motion under Fed. R. Civ. P. 59(e) to

alter or amend the Judgment dismissing with prejudice the Case (or any other motion

described in Fed. R. App. P. 4(a)(4)) (including the period allowed for service by mail

under Fed. R. Civ. P. 6(a) and (e)) without any such motion having been filed; or (iv) if

such motion to alter or amend is filed, or if review, appeal or writ of certiorari of any

decision on such motion is sought or taken, the final determination of such motion,

review or appeal, including any review by certiorari, in such a manner as to permit the

implementation of the Settlement in accordance with the terms set out in this Settlement


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Agreement. For purposes of this Settlement Agreement, an “appeal” shall not include

any appeal that concerns only the Fee and Costs Award. Any proceeding or order, or any

appeal or petition for a writ of certiorari, pertaining solely to the Fee and Costs Award

shall not in any way delay or preclude the Judgment from becoming Final.

1.14 "Final Approval Hearing" shall mean the hearing to be held by the Court pursuant to Rule

23(e)(2) Fed. R. Civ. P.

1.15 “Final Judgment,” “Final Order and Judgment” and “Judgment” mean the judgment to be

rendered by the Court, under Rule 54 Fed. R. Civ. P., in the form attached hereto as

Exhibit B (or in substantially identical form).

1.16 "Motion for Preliminary Approval" shall mean Class Counsel's motion seeking the entry

of the Preliminary Approval Order substantially in the form of Exhibit A hereto.

1.17 “Notice” means, collectively, the communications by which the Settlement Class is

notified of the existence and terms of the Settlement in conformity with Rule 23(e)(1)

Fed. R. Civ. P.

1.18 “Notice Date” means the date on which Notice is first mailed to the Settlement Class.

1.19 “Notice Plan” means the program, submitted to the Court with the motion for Preliminary

Approval, for notifying the Settlement Class of the Settlement described in the Long

Form Notice attached hereto as Exhibit A-2.

1.20 “Opt-Out Period” means the time required by Rule 23(c)(2)(B) Fed. R. Civ. P. that shall

be the 45th day after the Notice Date, computed in accordance with Rule 6 Fed. R. Civ.

P., by which a Request for Exclusion must be postmarked.

1.21 “Parties” or “Settlement Parties” means Plaintiff, the Settlement Class Members, and

FATIC.

1.22 “Person” means any individual, corporation, partnership, limited partnership, association,

joint stock company, estate, legal representative, trust, unincorporated association,

government entity or any political subdivision or agency thereof, and any business or

legal entity; with respect to individually owned businesses, each of their spouses, heirs,

predecessors, successors, representatives or assigns; and with respect to corporate

entities, each of their parents, subsidiaries, affiliates, assignees, predecessors, successors,

officers, directors, employees, agents, and attorneys.

1.23 “Plaintiff” means Melissa D. Gunning.

1.24 “Preliminary Approval” and “Preliminary Approval Order” mean the Court's conditional

certification of the Settlement Class, preliminary approval of this Agreement,

appointment of Settlement Class Counsel and the Settlement Class Representative, and

approval of the form of Notice, in accordance with Rule 23(e) Fed. R. Civ. P. and Class

Counsel's motion seeking the entry of an order, substantially in the form of Exhibit A

hereto, requesting, inter alia, (i) certification of the Settlement Class for settlement


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purposes only; (ii) appointment of Class Counsel and the Class Representative; (iii)

preliminary approval of the Settlement set forth in the Settlement Agreement; (iv) a stay

of consideration of all other motions and deadlines pending in the Case; and (v) approval

of the proposed Notice Plan for the mailing and publication of notices, substantially in

the form of Exhibit A-1 (Postcard Notice for mailing) , Exhibit A-2 (Long Form Notice

for website publication) and Exhibit A-3 (Summary Notice for print publication) hereto,

which will include the general terms of the Settlement set forth in the Settlement

Agreement, the general terms of the application for a Fee and Costs Award (as described

in Section 10), the date of the Final Approval Hearing, and a description of putative

Settlement Class Members’ rights to exclude themselves from the Settlement or to object

to the Settlement and/or appear at the Final Approval Hearing.

1.25 “Released Claims” means the release and discharge of the Released Parties, jointly and

severally, from any and all claims asserted, or which could have been asserted, in the

Case and any and all claims and potential claims, demands in law or equity, rights, suits,

petitions, allegations of liability and causes of action that have arisen or could arise

hereafter, whether known or unknown, whether asserted or that could have been or could

hereafter be asserted by any member of the Settlement Class or any parent, affiliate or

subsidiary of any of such member against the Released Parties and any of thier

subsidiaries, affiliates, directors, officers, employees and/or agents, concerning or relating

in any way to or arising in any way from any omission, inclusion, determination, and/or

calculation of local government taxes on title insurance; but excluding from this release

any claim for enforcement of this Agreement and/or the Final Order and Judgment and

claims relating to any alleged claim arising from an occurrence that is covered under the

title insurance policy.

1.26 "Released Parties" shall mean FATIC and each of its parents, subsidiaries, divisions,

affiliates, assignors, assignees, predecessors, and successors, and each and all of its

present and former officers, directors, employees, agents, brokers, attorneys,

stockholders, insurers, and representatives, and each and all of their respective

successors, heirs, and assigns.

1.27 “Request for Exclusion” means a request to be excluded from the Settlement Class,

submitted in accordance with instructions provided in the Notice.

1.28 “Settlement” means the settlement contemplated by the terms, conditions and provisions

set forth in this Settlement Agreement.

1.29 “Settlement Administrator” means the entity selected by the Parties to administer the

Notice Plan, the distribution plan in Section 7, the claims administration process in

Section 8, and other related services reasonably necessary to effectuate the Settlement.

1.30 “Settlement Agreement” or “Agreement” means this Settlement Agreement, including all

Exhibits hereto.

1.31 “Settlement Amount” means a maximum cap of $673,000, that may be necessary for

FATIC to pay for everything under this Settlement. It includes, by example and not


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limitation, the total of all valid and timely Claims and the Fee and Costs Award, which

shall include, by way of example and not limitation, the costs of Notice, the Notice Plan

and the Settlement Administrator. After FATIC pays all of the valid and timely Claims

and the Fee and Costs Award, any remaining balance of the Settlement Amount shall not

be disbursed or subject to any claim by Plaintiff, the Settlement Class, Class Counsel or

Person, and shall be the sole property of FATIC.

1.32 “Settlement Class” means all persons, including individuals and corporations, in the

Commonwealth of Kentucky, who purchased title insurance underwitten by FATIC and

who, during the Settlement Class Period, were charged local government taxes on their

payments of premiums for title insurance that were either not owed or at rates higher than

permitted by the local government where the insured risk was located. Excluded from

the Settlement Class are: (1) FATIC and any entity in which FATIC has a controlling

interest or which has a controlling interest in FATIC, and the legal representatives,

assigns and successors of FATIC; (2) the Judge to whom this case is assigned and any

member of the Judge’s immediate family; and (3) all Persons who, in accordance with the

terms of this Agreement, properly request exclusion from the Settlement Class.

1.33 “Settlement Class Counsel” or “Plaintiff’s Counsel” means these lawyers and their

respective law firms who shall apply to the Court for appointment under Rule 23(g) Fed.

R. Civ. P.:

Alexander F. Edmondson

Jason V. Reed

EDMONDSON & ASSOCIATES

28 West Fifth Street

Covington, KY 41011

P: (859) 491-5551 F: (859) 491-0187

Christopher S. Nordloh

NORDLOH LAW OFFICE, P.L.L.C.


Covington, KY 41011

P: (859) 491-9991 F: (859) 491-0187

Gary E. Mason

John C. Whitfield

WHITFIELD BRYSON & MASON LLP

19 N. Main Street

Madisonville, KY 42431

P: (270) 821-0656 F: (270) 825-1163

1.34 “Settlement Class Member” means any person or entity, including but not limited to the

individual representative Plaintiff, that satisfies all of the requirements for inclusion in

the Settlement Class.


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1.35 “Settlement Class Period” means the period from June 14, 2001 through and including

December 31, 2013.

1.36 "Settlement Overcharge" means the amount a Settlement Class Member paid for a local

government tax on title insurance in excess of the amount permitted by the local

government where the insured risk was located at the time of the transaction. The

Settlement Overcharge shall be the difference between the amount of local government

tax on title insurance actually paid by the Settlement Class Member and the amount

permitted by the local government where the insured risk was located at the time of the

transaction.

1.37 “Settling Parties” means, collectively, the Plaintiff, on behalf of herself and each

Settlement Class Member, and FATIC.

1.38 “Term of Agreement” means the period commencing on the date of Preliminary

Approval and lasting until such time that the payment on the last timely and valid Claim

is paid, unless otherwise directed by the Court.

2. AGREEMENT FOR SETTLEMENT PURPOSES ONLY

2.1 FATIC and Plaintiff understand and agree that, pursuant to this Agreement, they are

compromising and settling disputed claims asserted by Plaintiff and the Settlement Class

against FATIC. Accordingly, FATIC and Plaintiff understand and agree that neither this

Agreement, nor its performance by any party thereto is, or shall be construed as an

admission by or binding on FATIC of: (1) the validity of any claim, theory or fact; (2)

liability, fault or responsibility; (3) the existence, cause or extent of any damages and/or

losses alleged or suffered by any Settlement Class Member; (4) the existence, cause or

extent of any damage and/or losses suffered by Plaintiff or any Settlement Class Member;

or (5) the proposition that class certification is appropriate other than for the purpose of

the Settlement under this Agreement. Further, FATIC and Plaintiff understand and agree

that neither this Agreement (including all terms thereof and Exhibits thereto), nor

performance under the terms of this Agreement by any party thereto is, or shall be

construed as, an admission by the Plaintiff, Settlement Class Members or Class Counsel

of the validity of any fact or defense asserted against them in this Case.

2.2 This Agreement is without prejudice to the rights of FATIC to: (a) oppose class

certification in this Case should this Agreement not be approved or implemented by the

Court for any reason (including, but not limited to, termination or the exercise of

withdrawal rights by FATIC); (b) oppose class certification in any other proposed or

certified class action; or (c) use the certification of a Settlement Class in the Case to

oppose certification of any other proposed or existing class relating to or purporting to

assert any Released Claim(s).

3. SETTLEMENT CONSIDERATION

3.1 The Settlement Amount is a compromise of the Parties who have agreed to: (a) apply

certain reasonable assumptions concerning the gross amount of local government taxes

on title insurance projected to have been overpaid by FATIC between September 1, 2002


8

and December 31, 2013; (b) an assumed error rate of ten (10) percent in the charges for

local government taxes on title insurance; and (c) a calculation that multiplies the gross

amount of local government taxes on title insurance paid by FATIC between September

1, 2002 and December 31, 2013 times ten (10) percent, plus eight (8) percent simple

interest. Further the Parties have agreed to utilize only FATIC’s reasonably available

electronic data to determine the Settlement Amount.

3.2 Within ten (10) business days after the Execution Date, FATIC will provide Class

Counsel with the available tax reconciliation data to allow Class Counsel to determine the

total amount of local government tax on title insurance paid by FATIC during the time

period September 1, 2002 through December 31, 2013

3.3 This Settlement is on a claims-made basis only. All Settlement Class Members must

timely submit a valid Claim Form to receive payment of any Settlement Overcharge, or

the applicable pro rata share of the Settlement Overcharge pursuant to Section 6.

Following the submission of Claim Forms, FATIC will pay only the valid Claims timely

submitted by eligible Settlement Class Members, as described in Section 8.

3.4 Class Counsel will hire (with the consent of FATIC’s Counsel), advance and pay all fees

and costs of the Settlement Administrator, including all costs of the Notice and the Notice

Plan, reviewing and paying claims, reporting and monitoring functions and

administration of the Settlement out of the Fee and Costs Award.

3.5 Notwithstanding the foregoing, should Class Counsel's application for a Fee and Cost

Award submitted in accordance with Section 10.2 of the Agreement be denied or

modified by the Court such that the costs of notice and claims administration exceed the

Fee and Cost Award, FATIC shall pay the excess amount of costs of notice and claims

administration. FATIC shall have no additional responsibility for, and no liability

whatsoever with respect to, any costs of the Settlement. The Fee and Costs Award shall

be paid out of the Settlement Amount.

.

4. PRELIMINARY APPROVAL ORDER, NOTICE, AND FINAL APPROVAL

HEARING

4.1 Within thirty (30) days of the Execution Date or as otherwise ordered by the Court, Class

Counsel will submit this Settlement Agreement to the Court and will prepare and file a

motion seeking entry of the Preliminary Approval Order. Class Counsel will submit the

proposed forms of notice to the Court for approval together with the Motion for

Preliminary Approval. FATIC will be permitted to file papers related to Preliminary

Approval, in its sole discretion, no later than five (5) business days after Class Counsel

files the motion seeking preliminary approval.

4.2 Within ten (10) days after the filing of the Motion for Preliminary Approval, FATIC shall

provide notice of the Settlement Agreement, consistent with the requirements of 28

U.S.C. § 1715, to the Attorney General of the United States, the Kentucky Attorney

General, and the Kentucky Department of Insurance.


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4.3 Within thirty (30) days after the date the Preliminary Approval Order is entered, the

Settlement Administrator shall disseminate Notice to putative Settlement Class Members

by direct mail and by electronic and print publication, using the forms attached hereto as

Exhibit A-1, Exhibit A-2 and Exhibit A-3 in their exact form or without material

change. For notice by direct mail, the Settlement Administrator shall use the available

data extracted from FATIC's data systems into Excel spreadsheets that contain, to the

extent available from a reasonable search of FATIC's data systems, the policy number,

premium and electronically available mailing addresses of Persons who paid for a title

insurance policy issued by FATIC and a local government tax on title insurance in

Kentucky during the Settlement Class Period.

4.4 After Notice is given and the time for submission of Claim forms has expired pursuant to

Section 8.1, Plaintiff will request that, the Court hold the Final Approval Hearing under

Rule 23(e)(2) Fed. R. Civ. P. to approve the Settlement. Class Counsel shall prepare and

file, at least ten (10) business days before the Final Approval Hearing, a motion seeking

entry of the Final Order and Judgment, in the form of Exhibit B hereto, including (i) a

determination that the notice given to the Settlement Class was adequate and complied

fully with the requirements of Federal Rule of Civil Procedure 23 and satisfied due

process; (ii) final approval of the Settlement set forth in this Settlement Agreement as

fair, reasonable and adequate, and in the best interests of the Settlement Class; (iii)

dismissal with prejudice of the Case; (iv) entry of a permanent injunction preventing

members of the Settlement Class from maintaining any action against FATIC relating to

or arising from the Released Claims and (v) a provision that the Court shall maintain

jurisdiction of the Case for the sole purpose of enforcing the permanent injunction.

FATIC shall be permitted to file papers related to final approval, in its sole discretion, at

least five (5) business days before the Final Approval Hearing. At the Final Approval

Hearing, Class Counsel also will request that the Court consider and rule on the

application for a Fee and Costs Award.

5. RELEASES

5.1 On the Effective Date, each Settlement Class Member, on behalf of themselves and, with

respect to individuals or individually owned businesses, on behalf of each of their agents,

heirs, executors, administrators, predecessors, successors, assigns, guardians and

representatives, and, with respect to corporate entities, on behalf of each of their parents,

subsidiaries, affiliates, assignees, predecessors, successors, officers, directors, employees

and agents, shall be deemed to have, and by operation of the Judgment shall have, fully,

finally and forever released, relinquished and discharged the Released Parties and their

attorneys from any and all Released Claims. On the Effective Date, each Settlement

Class Member, on behalf of themselves and, with respect to individuals or individually

owned businesses, on behalf of each of their agents, heirs, executors, administrators,

predecessors, successors, assigns, guardians and representatives, and, with respect to

corporate entities, on behalf of each of their parents, subsidiaries, affiliates, assignees,

predecessors, successors, officers, directors, employees and agents, will be deemed to

have agreed not to sue the Released Parties or their attorneys with respect to the Released

Claims and to have covenanted and agreed that it will not thereafter seek, and shall be


10

enjoined from seeking, to establish liability against any of the Release Parties or their

attorneys based on any of the Released Claims.

5.2 Plaintiff for herself and on behalf of the Settlement Class also releases, without

limitation, all of the causes of action against the Released Parties alleged in the

Complaint together with any other claim under state or federal law that could have been

asserted in the Case against FATIC based on or in any way related to any omission,

inclusion, determination, and/or calculation of local government taxes on title insurance.

Plaintiff is aware that she may hereafter discover claims that existed during the

Settlement Class Period that may be unknown or unsuspected, or facts in addition to or

different from those which she now knows or believes to be true with respect to the

allegations and subject matter of the Complaint. Nevertheless, it is the desire of Plaintiff

for herself and on behalf of the Settlement Class to fully, finally, and forever settle and

release all such matters and all Released Claims which exist or might have existed.

5.3 Except for the obligations expressly provided for in this Settlement Agreement, Class

Counsel fully and finally release, as of the Effective Date, the Released Parties, jointly

and severally, from any and all claims in favor of Class Counsel arising from this Case,

including by way of example only, any and all claims for attorneys’ fees, Rule 54 costs,

consultant’s fees, expert witness fees and any other costs incurred or to be incurred by

Class Counsel in connection with the Case.

5.4 Upon the Effective Date, FATIC will be deemed to have, and by operation of the

Judgment shall have, fully, finally and forever released, relinquished and discharged

Plaintiff, each Settlement Class Member, and Class Counsel from all claims arising out

of, relating to or in connection with the institution, prosecution, assertion, settlement or

resolution of the Case or the Released Claims.

5.5 The release and covenant not to sue set forth in Sections 5.1, 5.2 and 5.4 herein shall be

effective as to any Class Member that has not timely exercised the right to be excluded

from the Settlement Class, regardless of whether that Class Member has submitted a

Claim Form or received any benefit under this Agreement.

6. SUPERVISION AND DISTRIBUTION

6.1 The Settlement Administrator, subject to such supervision and direction of Class

Counsel, Counsel for FATIC and the Court as may be necessary or as circumstances may

require, shall oversee the distribution of the Settlement Amount in accordance with the

Distribution Plan in Section 7.

6.2 The Settlement Administrator shall calculate the Settlement Overcharge due to each

Settlement Class Member who submits a valid and timely Claim based on figures

provided by FATIC from a review of its electronic data against the results yielded from

its geo-coding software (except as provided in Section 8);

6.3 No Person shall have any claim against Class Counsel, Counsel for FATIC or the

Settlement Administrator, or other agent designated by Class Counsel, based on the


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distributions made in their good faith implementation of the Settlement Agreement and

the orders of the Court.

7. DISTRIBUTION PLAN

7.1 All Settlement Class Members who timely submit a valid Claim Form shall be eligible to

receive an award from the Settlement Amount equal to their respective Settlement

Overcharge. For any eligible Settlement Class Member whose claim is held by joint or

multiple borrowers or property owners, the total award will not be more than 100% of the

Settlement Overcharge. If the total amount to be awarded for all approved claims of the

Settlement Class Members exceeds the balance available from the Settlement Amount,

the Settlement Overcharge for each Settlement Class Member shall be reduced pro rata.

In that event, counsel for the Parties will meet and confer with the Settlement

Administrator to determine the agreed pro ration for each approved claim. Further, if all

co-borrowers or co-owners do not submit valid Claim Forms, each co-borrower or co-

owner who submits a valid Claim Form will be awarded only a pro rata share, based on

the total number of borrowers or owners involved in the transaction at issue, of the

Settlement Overcharge.

7.2 If a Claim Form is submitted, pursuant to the Claims Administration Process described in

Section 8, the Settlement Class Member shall be eligible to receive an amount described

in Section 7.1.

7.3 Should any checks awarded to Settlement Class Members not be negotiated within 90

days of issuance, they shall be deemed void and replacement checks shall not be issued.

8. CLAIMS ADMINISTRATION PROCESS

8.1 Claim Forms must be mailed to the Settlement Administrator and postmarked no later

than 60 days from the Notice Date. Settlement Class Members who wish to make a claim

must submit a completed Claim Form to the Settlement Administrator in which he/she

provides current address and contact information and attests, under penalty of perjury,

that he/she: (a) paid for (and was not reimbursed) local government tax on a policy of

title insurance underwritten by FATIC; (b) during the Settlement Class Period; (c) for

property located in Kentucky. Each claimant must attest on the completed Claim Form

under penalty of perjury that he/she has: (a) attached all documentary evidence

supporting his/her Claim to the Claim Form, including a HUD-1 Settlement Statement; or

(b) conducted a diligent search and was unable to locate any supporting documentary

evidence supporting his/her Claim.

8.2 Claim Forms that comply fully with Section 8.1 shall be processed as follows:

(a) Within ten (10) days of receipt, the Settlement Administrator shall provide

Counsel for FATIC and Class Counsel with the street address and city of the physical location of

the property at issue listed on the claim form. Thereafter, FATIC will use its geo-coding

software to determine the current taxing authority, the local government tax rate applicable to the

property and the amount charged to the Settlement Class member for local government tax on a

policy of title insurance underwritten by FATIC, if available in the electronic data, and will


12

provide such information to the Settlement Administrator and Class Counsel within twenty (20)

days of the date the physical property information is provided to FATIC.

(b) Within thirty (30) days after the Court has entered the Final Order and Judgment,

the Settlement Administrator shall (i) using the information provided by FATIC pursuant to

Section 8.2(a) make a determination of the Settlement Overcharge, if any, due in response to

each Claim Form and (ii) give written notice of each such determination to FATIC, Counsel for

FATIC, and to Class Counsel. Within thirty (30) days after the Settlement Administrator notifies

counsel for the Parties of its determination of the Settlement Overcharge due in response to any

Claim Form, FATIC may review the determination of the Settlement Overcharge, if any, due in

response to that Claim based in whole or in part on any deficiency in the information provided in

the Claim Form. If FATIC identifies any such deficiency, it shall notify the Settlement

Administrator who will then notify and provide the Class Member the opportunity, pursuant to

Section 8.2(c), to correct the deficiency.

(c) A putative Settlement Class Member who receives a determination of a deficiency

shall have twenty (20) days after the Settlement Administrator mails the determination to cure

any deficiencies noted. If the deficiency is not timely cured, the putative Settlement Class

Member shall not receive payment.

(d) Within sixty (60) days after the Effective Date, FATIC shall make payment to

eligible Settlement Class Members or to the Settlement Administrator on their behalf, in

accordance with the distribution plan set forth in Section 7 of this Agreement. Within ninety

(90) days of the Effective Date, Settlement Administrator shall make payments to the eligible

Settlement Class Members.

8.3 Claim Forms that are untimely will not be considered for payment and the individual

Settlement Class Member will be provided written notice.

8.4 The Settlement Administrator shall provide Class Counsel and Counsel for FATIC with a

detailed written summary of the charges for its services and any expenses.

8.5 The Settlement Administrator shall submit to Class Counsel and Counsel for FATIC a

monthly report summarizing the work performed by the Settlement Administrator.

8.6 Counsel for FATIC shall have the right, at their sole expense, during the Term of

Agreement to independently review the documents supporting the performance and

findings of the Settlement Administrator.

8.7 The Settlement Administrator and Class Counsel, and FATIC shall retain all returned

Individual Notices, Claim Forms, and correspondence relating thereto, for a period of up

to three (3) years after the Effective Date. After this time, the Settlement Administrator

and Class Counsel may destroy documentary records that they have in their possession.

Nothing in this Agreement shall be construed to require the Settlement Administrator or

Class Counsel, to retain records beyond their respective discretionary record retention

policies.


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9. OPT-OUT RIGHTS AND OBJECTIONS TO THE SETTLEMENT

9.1 A putative Settlement Class Member may opt-out of the Settlement Class at any time

during the Opt-Out Period. In order to exercise the opt-out right, the putative Settlement

Class Member must execute and submit a Request for Exclusion to the Court postmarked

on or before the end of the Opt-Out Period. A Request for Exclusion must be personally

signed by each putative Settlement Class Member requesting exclusion. Additionally, a

Request for Exclusion must include the putative Settlement Class Member’s present

name and address, a clear and unequivocal statement that the putative Settlement Class

Member wishes to be excluded from the Settlement Class, and the signature of the

putative Settlement Class Member or, in the case of a putative Settlement Class Member

who is deceased or incapacitated only, the signature of the legally authorized

representative of the putative Settlement Class Member. A Request for Exclusion by a

putative Settlement Class Member shall apply only to the individual who submits the

valid Request for Exclusion. In the case of co-owners or co-borrowers involved in the

same transaction involving FATIC title insurance, each such individual must submit a

separate valid Request for Exclusion to be excluded from the class. Except for those

putative Settlement Class Members who have timely and properly opted out, all other

putative Settlement Class Members will be Settlement Class Members for all purposes

under this Agreement. Any putative Settlement Class Member who elects to opt-out of

the Settlement Class shall not: (i) be bound by any orders or judgments entered in this

Case; (ii) be entitled to relief under or be affected by this Agreement; (iii) gain any rights

by virtue of this Agreement; or (iv) be entitled to object to any aspect of this Agreement.

9.2 The Settlement Administrator shall provide Class Counsel and Counsel for FATIC with

copies of all completed Requests for Exclusion within three (3) business days of receipt.

9.3 Any putative Settlement Class Member who timely submits a Request for Exclusion may,

within the Opt-Out Period, submit to the Settlement Administrator a written revocation of

the Request for Exclusion, such revocation to simply bear the putative Settlement Class

Member’s name, address, signature and state that it is a revocation of a Request for

Exclusion.

9.4 The Settling Parties shall ask that the Court set a deadline for the submission of Requests

for Exclusion forty-five (45) days after the Notice Date.

9.5 Only Settlement Class Members who do not timely submit a valid Request for Exclusion

may object to the Settlement. Settlement Class Members who choose to object to the

Settlement must file and serve, within forty-five (45) days after the Notice Date: (1) a

written statement objecting to the Settlement or to Class Counsel’s application for a Fee

and Costs Award; (2) a written notice of intention to appear if they expect to present

objections, and (3) the entry of appearance by any counsel intending to represent the

Class Member.

9.6 Neither FATIC nor Plaintiff, nor their respective counsel will encourage any putative

Settlement Class Member to opt-out of the Settlement Class.


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10. PLAINTIFF’S ATTORNEYS’ FEES, REIMBURSEMENT OF RULE 54 COSTS

AND PLAINTIFF’S INCENTIVE AWARD

10.1 Class Counsel may submit an application or applications for distributions from the

Settlement Amount for a Fee and Cost Award.

10.2 Twenty (20) days before filing any fee and cost application pursuant to Section 10.1,

Class Counsel will provide Counsel for FATIC with business records that detail the costs

incurred or paid under Fed. R. Civ. P. 54, as well as summaries (e.g., timekeeper’s name,

position, time expended and applicable hourly rates) of all other Case costs and attorneys’

fees incurred throughout the pendency of the Case. If the documentation supports Class

Counsel’s representation regarding the fees and Rule 54 costs, FATIC will not oppose

application for a Fee and Costs Award by Class Counsel for a total award of attorneys’

fees and Rule 54 costs, including the costs of notice and claims administration, that in

combination do not exceed twenty (20) percent of the Settlement Amount.

10.3 FATIC will not oppose an incentive award to the Plaintiff of two thousand dollars

($2,000.00).

10.4 The Fee and Costs Award shall be paid to Class Counsel solely from the Settlement

Amount, within fifteen (15) business days after the Effective Date. In the event that the

Effective Date does not occur, or the Judgment or the order making the Fee and Coss

Award is reversed in its entirety, or the Settlement Agreement is canceled or terminated

for any other reason, Plaintiff shall not be entitled to an incentive award and Plaintiff’s

Counsel shall not be entitled to any Fee and Costs Award.

10.5 The procedure for and the allowance or disallowance by the Court of any application by

Plaintiff’s Counsel for a Fee and Costs Award is to be considered separately from the

Court’s consideration of the fairness, reasonableness and adequacy of the Settlement.

Any order relating to the Fee and Costs Award, or any appeal from any order relating

thereto, shall not operate to terminate or to cancel the Settlement or affect the finality of

the Court’s Judgment approving the Settlement Agreement and the Settlement set forth

herein, or any other orders entered pursuant to the Settlement Agreement.

10.6 FATIC shall have no responsibility for and no liability for payment to Plaintiff’s Counsel

or any other counsel or Person that receives the opportunity to receive payment, directly

or indirectly, from the Settlement Amount.

10.7 FATIC shall have no responsibility for and any liability for the allocation among

Plaintiff’s Counsel and/or any other Person that may assert some claim thereto, of any

Fee and Costs Award.

11. CONDITIONS OF SETTLEMENT, EFFECT OF DISAPPROVAL,

CANCELLATION OR TERMINATION

11.1 The Effective Date of the Settlement Agreement shall be conditioned on the occurrence

of all of the following:


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(a) The Court has entered the Preliminary Approval Order attached hereto as Exhibit

A in its exact form or without material change, as required by Section 4.1;

(b) FATIC has not given notice of intent to withdraw from this Settlement pursuant to

Section 11.2;

(c) The Court has entered the Judgment in the form attached hereto as Exhibit B in

its exact form or without any material change; and

(d) The Judgment has become Final.

11.2 Within fourteen (14) business days after notice of the occurrence of any of the following

events, FATIC shall have the right, exercisable in its sole discretion, to terminate this

Agreement by delivering written notification of such election to Class Counsel:

(a) If the Court, or any appellate court, rejects, denies approval, disapproves,

modifies or attempts to modify the Agreement or any portion of this Agreement that FATIC, in

its sole judgment and discretion, believes is material, including, but not limited to, the terms of

the Settlement Class relief, the provisions relating to notice, the definition of the Settlement

Class, and the Released Claims;

(b) If the Court, or any appellate court, does not enter or completely and

unconditionally affirm any portion of the Agreement, Preliminary Approval Order or Final

Judgment that FATIC, in its sole judgment and discretion, believes is material;

(c) If any regulatory agency or governmental agency seeks a modification or

challenges any term of the Agreement that is, in FATIC’s sole judgment and discretion, material

to it;

(d) If the number of putative Settlement Class Members who opt-out equals or

exceeds two thousand (2000);

(e) If Plaintiff or any Class Member with an attorney-client relationship to Class

Counsel, or their firms, opts-out of, excludes him/her/itself from or objects to the Settlement

Class or the Agreement; or

(f) If any obligation is imposed on FATIC in addition to and/or greater than those

specified in this Agreement.

11.3 If FATIC elects to exercise its right to terminate this agreement pursuant to Section 11.2,

FATIC agrees to reimburse Class Counsel for all notice and claims administration costs

actually incurred, up to the date of such election.

11.4 Within fourteen (14) business days after notice of the occurrence of any of the following

events, Plaintiff shall have the right, to be exercisable within her own discretion, to

terminate this Agreement by delivering written notification of such election to Counsel

for FATIC, if:


16

(a) The Court, or any appellate court, rejects, denies approval, disapproves, modifies

or attempts to modify the Agreement or any portion of this Agreement that Plaintiff, in her sole

judgment and discretion, believes is material, including, without limitation, the terms of the

Settlement Class relief, the provisions relating to notice, the definition of the Settlement Class,

and the Released Claims; or

(b) The Court, or any appellate court, does not enter or completely and unconditionally

affirm any portion of the Preliminary Approval Order or Final Judgment that Plaintiff, in her sole

judgment and discretion, believes is material (other than the fee and cost applications or the

Plaintiff's incentive award).

11.5 If an option to withdraw from and terminate this Agreement arises under Sections 11.2

and 11.3, none of the Parties are required to exercise that option.

11.6 In the event that the Settlement Agreement is not approved by the Court or any

provisions of any orders necessary to effectuate the Settlement are not entered by the

Court in the form attached hereto (or without material change), or approval of the

Settlement is modified or reversed in any material respect by any appellate court, or this

Settlement Agreement is terminated or fails to become effective in accordance with its

terms: (a) the Settling Parties shall be restored to their respective positions in the Case as

of the day before the Execution Date except as otherwise provided; and (b) the terms and

provisions of the Settlement Agreement herein shall have no further force and effect with

respect to the Settling Parties and shall not be used in the Case or in any other proceeding

for any purpose, and any Judgment or order entered by the Court in accordance with the

terms of the Settlement Agreement shall be deemed to be vacated, nunc pro tunc. No

order of the Court or modification or reversal on appeal of any order of the Court

concerning the Fee and Costs Award by the Court to the Plaintiff or any of her counsel

shall constitute grounds for cancellation or termination of the Settlement Agreement.

12. MISCELLANEOUS PROVISIONS

12.1 The Settling Parties (a) acknowledge that it is their intent to consummate this Agreement

and (b) agree to cooperate to the extent reasonably necessary to effectuate and implement

all terms and conditions of the Settlement Agreement and to exercise their best efforts,

including all steps and efforts contemplated by this Settlement Agreement and any other

steps and efforts that may become necessary, by order of the Court or otherwise, to

accomplish the implementation of the Settlement Agreement.

12.2 The Settling Parties intend this Settlement to be a final and complete resolution of all

disputes between them with respect to the Case. The Settlement compromises claims that

are contested and shall not be deemed an admission by any Settling Party as to the merits

of any claim or defense. The Settling Parties agree that the Settlement was negotiated in

good faith by the Settling Parties that have equal bargaining power and that agreement

was reached voluntarily after consultation with competent legal counsel.

12.3 Plaintiff, on behalf of herself and all Settlement Class Members, and FATIC agree that

this Settlement Agreement (whether it becomes final), the settlement provided for herein,


17

and any negotiations, discussions, documents, and proceedings associated herewith or

therewith, are not, and shall not be construed or invoked by anyone as, an admission or

evidence of liability, wrongdoing, or damages on the part of any person or entity,

including, without limitation, FATIC, or as an admission or evidence as to the truth or

validity of any facts or claims asserted in any of the complaints or other pleadings filed

against FATIC. Excepting the assertion by a person seeking to enforce the terms hereof

including by any Settling Party seeking to enforce the Release, neither this Settlement

Agreement, nor any orders or documents contemplated herein or related hereto, nor any

of the terms hereof or thereof shall be offered or received in evidence: 1) as an admission

of liability, damages, or wrongdoing on the part of FATIC; or, 2) to assert any argument

or claim of collateral estoppel, res judicata, or like contention of fact, claim, or issue

preclusion, or by any counsel with respect to a legal dispute in which the Settlement or

the Settlement Agreement is in issue. In no event shall this Settlement Agreement or any

other settlement-related document be construed as, or deemed to be evidence of, an

admission or concession by FATIC of any fault, wrongdoing or liability whatsoever or an

admission or concession by FATIC that any claim that was brought or could have been

brought against FATIC has any merit whatsoever.

12.4 FATIC has indicated its intent to vigorously contest each and every claim in the Case.

FATIC maintains that it has at all times consistently acted in accordance with the

governing laws and regulations of each State in which it does business. FATIC denies

each and every material allegation in the Case. FATIC nonetheless has concluded that it

is in its best interests that the Case be settled on the terms and conditions set forth in this

Agreement. FATIC reached this conclusion after considering the factual and legal issues

in the Case, the substantial benefits of a final resolution of the Case, and the expense that

would be necessary to defend the Case through trial and through any appeals that might

be taken.

12.5 FATIC enters into this Agreement without admitting, conceding or acknowledging any

fault, liability, or wrongdoing of any kind. Neither this Agreement, nor any of its terms

or provisions, nor any of the negotiations or proceedings connected with it, shall be

construed as an admission or concession by FATIC of the truth of any of the allegations

in the Case, or of any liability, fault, or wrongdoing of any kind on the part of FATIC. In

the event the Settlement is not finally approved for any reason, FATIC shall retain the

right to object to the maintenance of the Case and/or any other case as a class action and

to contest the Case and/or any other case on any ground.

12.6 FATIC may file the Settlement Agreement and/or the Judgment in any action that may be

brought against it in order to support a defense or counterclaim based on principles of res

judicata, collateral estoppel, release, good faith settlement, judgment bar or reduction or

any other theory of claim preclusion or issue preclusion or similar defense or

counterclaim.

12.7 Immediately after the Execution Date, the Settling Parties agree to seek a stay of

discovery and a stay of any and all other proceedings other than those incident to the

settlement process, and agree to extensions of time with respect to any court filings

necessary to effectuate such stays.


18

12.8 Neither Class Counsel nor Plaintiff shall make any statements to the media about the

Case or the settlement, except to refer media inquiries to the public record of the Case, or

through a press release mutually agreed on by the parties. FATIC and/or Counsel for

FATIC shall be permitted to communicate with any member of the Settlement Class on

any subject and may make regulatory disclosures deemed necessary.

12.9 As their agent for the receipt of notices, court filings or other communications between

the parties relating to this Settlement Agreement, Plaintiff, on behalf of herself and the

Settlement Class, appoints:

Jason V. Reed, Esq.

EDMONDSON & ASSOCIATES


Covington, KY 41011

P: (859) 491-9991 F: (859) 491-0187

FATIC appoints:

Charles A. Newman

Elizabeth T. Ferrick

DENTONS US LLP

One Metropolitan Square

St. Louis, Missouri 63102

P: (314) 259-5399 F: (314) 259-5959

Any communication made in connection with this Settlement Agreement shall be deemed

to have been made when sent, if sent by overnight delivery or by registered, certified or

first class mail (with postage pre-paid), or when delivered in person or by facsimile (with

confirmed receipt), to the counsel designated in this Section at the addresses and/or

facsimile numbers designated for them in this Section. The persons designated in this

Section as agents and their addresses may be changed by the represented party by written

notice to the other signatories hereto in accordance with this Section.

12.10 In the negotiation and the implementation of this Agreement, Plaintiff and Class Counsel

have received confidential information regarding FATIC’s internal practices, procedures

and certain available customer data and financial information all of which was compiled

solely to reach and implement this Agreement. Accordingly, neither Plaintiff, Class

Counsel nor anyone in privity with them shall allege, suggest, or attempt to prove that

FATIC engaged in, aided, abetted, or conspired in any wrongdoing of any kind regarding

the calculation of any local government tax on title insurance that was due from any

Class Member.

12.11 Plaintiff and Class Counsel acknowledge that any representation, encouragement,

solicitation or other assistance, including but not limited to referral to other counsel, to

any person seeking exclusion from the Settlement Class, or any other person seeking to

litigate with FATIC over any of the Released Claims in this matter, prior to the Final


19

Approval Hearing, could place Class Counsel in a conflict of interest with the Settlement

Class. Accordingly, Plaintiff and Class Counsel agree not to represent, to encourage, to

solicit or otherwise to assist, in any way whatsoever, including but not limited to referrals

to other counsel, any person in requesting exclusion from the Settlement Class or to

object to the Settlement Agreement.

12.12 If any administrative proceeding or action is commenced by any federal, state or local

government authority in a parens patriae function or otherwise asserting claims within

the scope of this Case, Plaintiff and Class Counsel shall intervene in that action at the

request of FATIC. They shall intervene to fully support FATIC by asserting that the

governmental action is within the scope of this Settlement Agreement, the Complaint and

the judgment entered herein. Any time and cost incurred by Plaintiff and Class Counsel

shall be deemed to be within the amount awarded as a Fee and Costs Award.

Additionally, in the event any action is commenced by a governmental authority as stated

in this Section, FATIC shall have the option, at its sole discretion, to immediately

suspend the implementation of this Settlement Agreement pending the outcome of the

action brought by the governmental authority.

12.13 All of the Exhibits to the Settlement Agreement are material and integral parts hereof and

are fully incorporated herein by this reference.

12.14 This Settlement Agreement constitutes the full and entire agreement among the parties

hereto with regard to the subject hereof and supersedes any prior promises,

representations, or warranties (oral or otherwise) made by any party. No party shall be

liable or bound to any other party for any prior or contemporaneous representation,

promise or warranty (oral or otherwise) except for those expressly set forth in this

Settlement Agreement.

12.15 This Settlement Agreement shall not be amended or modified orally, it may be amended

or modified only by a written instrument signed by or on behalf of all Settling Parties or

their respective successors-in-interest, and approved by the Court as necessary.

12.16 The headings herein are for convenience only and shall not affect the interpretation or

construction of this Settlement Agreement.

12.17 The time periods and/or dates described in this Settlement Agreement with respect to the

giving of Notice and hearings are subject to approval and change by the Court or by

agreement of the Settling Parties consistent with any order of the Court.

12.18 Except as otherwise provided herein, each party shall bear its own costs.

12.19 Class Counsel represent that they have been fully authorized by the Plaintiff to take all

appropriate action required or permitted to be taken pursuant to the Settlement

Agreement to effectuate its terms. Counsel for FATIC represent that they have been fully

authorized by FATIC to take all appropriate action required or permitted to be taken by

FATIC pursuant to the Settlement Agreement to effectuate its terms.


12.2A Everyone executing this Settlernent Agreement or any of its Exhibits on behalf of anyparty hereto hereby warrants that he or she has the full authority to do so.

12.21 The Settlement Agreement rnay be executed in one or more counterparts. All executedcounterpails and each of them shall be deemed to be one and the same instrument. Acomplete set of original executed counterpafts shall be filed with the Court.

12.22 The Settlement Agreement shall be binding on, and inure to the benefit of, the heirs,representatives, successors and assigns ofthe parties hereto.

12.23 This Settlement Agrcement is not intended to and shall not be construed to create anyrights of or obligations to any Person other than the rights of the Settling Parties toenforce tlre perforrnance of the Settlement Agreement in substantial compliance with itsterms.

12.24 The Court shall retain jurisdiction with respect to implementation and enforcement of the

terms of the Settlernent Agreement, and all parties hereto submit to the jurisdiction of theCourt for purposes of implementing and enforcing the Settlement ernbodied in theSettlement Agreernent.

12.25 Tlre Settlement Agreement shall be considered to have been negotiated, executed arddelivered, and to be wholly performed, in the Commonwealth of Kentucky, and the rightsand obligations of lhe parties to the Settlernent Agreement shall be construed andenforced in accordance with, and govemed by, the internal, substantive laws of theCommonwealth of Kentucky, without giving effect to that State's choice of lawprinciples.

12.26 The failure of any parly hereto to enforce at any time any provision of this SettlementAgreement shall not be construed to be a waiver of such or any other provision or breach

by the breaching party or anyone else, nor in any way to affect the validity of thisSettlement Agreement or any part hereof or the right of any party thereafter to enforceeach and every such provision"

The undersigned, being duly authorized, have se€n and agreed to Recitals l.l -12.26,inclusive, and have caused this Settlement Agreement to be executed on the datesshown belorv and agree tkat it shall take effect on that date upon which it has beenexecuted by the last ofall ofthe undersigned.

DArED: krmtk-- rr7. zat* DATED:/o?- /J -/4 ,20t4

MELISSA D. CUNNING


united states district court eastern district of … · melissa d. gunning (“plaintiff”), class...

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