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Brown v. Homesite Group Inc.

United States District Court, W.D. Arkansas, Texarkana Division

April 27, 2017

HARLAN BROWN and DONNA BROWN, individually and on behalf of all others similarly situated PLAINTIFFS
v.
HOMESITE GROUP INCORPORATED d/b/a HOMESITE HOME INSURANCE DEFENDANT

          FINAL ORDER AND JUDGMENT

          Susan O. Hickey United States District Judge.

         Before the Court is Plaintiffs' Motion for Final Approval of Stipulation of Settlement (“Motion for Final Approval”). (ECF No. 58). Also before the Court is Plaintiffs' Application for Attorneys' Fees and Reimbursement of Costs Related to the Stipulation and Settlement and for Class Representative's Participation Fee (“Class Counsel's Application for Fees”). (ECF No. 57). Plaintiffs and Defendant Homesite Insurance Company of the Midwest (“Homesite”) have agreed-subject to Court approval-to settle this litigation pursuant to the terms and conditions stated in the Amended Stipulation of Settlement filed with the Court on December 16, 2017. (ECF No. 56-1). On April 19, 2017, the Court held a final approval hearing on the motions. The Court finds the matter ripe for consideration.

         I. BACKGROUND

         1. Plaintiffs filed this action alleging that Homesite wrongfully depreciated the cost of labor when resolving structural claims in the State of Arkansas. Homesite has denied all wrongdoing and has maintained throughout this litigation that it has at all times paid claims when reasonable and appropriate to do so and has consistently acted in accordance with the governing laws and regulations of Arkansas and each State in which it does business.

         2. After litigation between the parties and arms-length negotiations between Class Counsel and counsel for Homesite, the parties have reached a settlement that provides substantial benefits to a Settlement Class, in return for a release and dismissal of claims against Homesite.

         3. On March 24, 2016, Plaintiffs and Homesite executed and filed a Stipulation of Settlement and accompanying exhibits. On December 16, 2016, the parties filed an Amended Stipulation of Settlement (the “Stipulation”) in accordance with the Court's order.

         4. The Stipulation is hereby incorporated by reference in this Final Judgment, and definitions and terms set forth in the Stipulation are hereby adopted and incorporated into this Final Judgment.

         5. On March 24, 2016, Plaintiffs filed with the Court the original stipulation of settlement and exhibits thereto along with a motion for preliminary approval of the proposed settlement (the “Proposed Settlement”).

         6. On December 5, 2016, the Court entered an order preliminarily approving class settlement (“Preliminary Approval Order”), preliminarily approving the Stipulation, preliminarily certifying the Settlement Class as a class action for settlement purposes only, and scheduling a hearing for 9:00 am on March 22, 2017 to consider final approval of the Proposed Settlement and other actions described in the Preliminary Approval Order and the Stipulation (the “Final Approval Hearing”). On January 9, 2017, the Court entered a text order rescheduling the Final Approval Hearing for April 19, 2017.

         7. As part of its Preliminary Approval Order, the Court certified a Settlement Class defined as follows:

All persons and entities who received actual cash value (“ACV”) payments, directly or indirectly, from Homesite Insurance Company of the Midwest for physical loss or damage to their dwelling or other structures, such dwellings or other structures located in Arkansas, at any time during the Class Period, where the cost of labor was depreciated and never subsequently reimbursed by Homesite.
Excluded from the Settlement Class are: (1) All persons and entities who received a replacement cost payment from Homesite Insurance Company of the Midwest; (2) All persons and entities who received a payment at least equal to the applicable policy limits on a total loss claim; (3) Homesite and its affiliates, officers, and directors; (4) Members of the judiciary and their staff to whom this action is assigned; and (5) Plaintiffs' counsel.
“Class Period” means the period of November 22, 2008 through the date of Preliminary Approval.

         8. As part of the Preliminary Approval Order, this Court approved a proposed notice, which provided Class Members with notice of the Proposed Settlement and Stipulation (the “Individual Notice”). In accordance with the Stipulation, the Individual Notice also explained the opportunity for Class Members to file objections to the Proposed Settlement and the process by which Class Members could exclude themselves from the Settlement Class. The Court also approved published notice of the Settlement in the Arkansas Democrat-Gazette (the “Publication Notice”), which further provided Class Members with information about the Proposed Settlement.

         9. The Court ordered the Individual Notice, in the form attached to the Stipulation of Settlement as Exhibit “2”, be mailed by Homesite, by first-class mail, postage prepaid, not less than sixty (60) days before the Final Approval Hearing (the “Notice Mailing Date”) to all potential Class Members whose names and last known addresses were ascertained by Homesite through a reasonable search and inquiry of its records of claims by Class Members during the Class Period, with supplementation of those addresses as described in the Stipulation.

         10. On April 7, 2017, Plaintiffs moved the Court for final approval of the terms of the Proposed Settlement and for the entry of this Final Judgment. (ECF No. 58). In support of the Motion for Final Approval, Plaintiffs submitted, among other things, evidence concerning the dissemination and adequacy of Individual Notice, evidence regarding the names of potential Class Members who timely submitted requests for exclusion from the Settlement Class, evidence regarding the negotiation of the Stipulation, evidence regarding the fairness, reasonableness, and adequacy of the terms of the Stipulation, and evidence regarding the fairness, reasonableness and adequacy of Class Counsel's Application for Fees. Plaintiffs als o submitted a Brief in Support of Motion for Final Approval, setting forth extensive argument and authority along with various Exhibits attached thereto. Plaintiffs also filed Class Counsel's Application for Fees (ECF No. 57), which contained extensive argument and authority, with various exhibits attached thereto.

         11. On April 19, 2017, the Court held the Final Approval Hearing in accordance with the Preliminary Approval Order.

         12. At the Final Approval Hearing, Plaintiffs offered the following evidence in support of the Motion for Final Approval and Class Counsel's Application for Fees:

Ex. #

ECF Doc. No.

Description

1
51

Motion to Certify and exhibits thereto

2
52

Memorandum Brief in Support of Motion to Certify

3
52-1

Keil Declaration and Exhibits thereto

4
52-2

Harlan Brown Declaration

5
52-3

Donna Brown Declaration

6
55

Order Granting Preliminary Approval

7
56-1

Amended Stipulation of Settlement and Exhibits thereto

8
57-4

Keil Declaration in Support of Fee Application

9
57-5

Harlan Brown Declaration in Support of Fee Application

10
57-6

Donna Brown Declaration in Support of Fee Application

         13. On April 12, 2017, Homesite filed a declaration that the mailing of the Court-approved Individual Notice was completed on February 16, 2017. The Individual Notice was mailed via First Class United States mail to 163 Class Members and the class representative, for a total of 164 mailings. Homesite received a total of 29 individual notices returned as undeliverable through April 5, 2017. With the assistance of Heffler Claims, a search of the names of the 29 class member whose Individual Notices were returned as undeliverable was performed using the commercial address database Transunion. A second notice was mailed to 21 of the 29 class members whose notices were returned. The remaining eight class members who did not receive a second mailing were determined to be deceased. None of the 21 second notices that were mailed have been returned. The Court finds that the percentage of Individual Notices that were returned without forwarding addresses (approximately 4.87%) is reasonable. As of April 11, 2017, Homesite had received no requests for exclusion, and the Court had received no objections. No objections were made at the Final Approval Hearing.

         14. The parties have satisfactorily demonstrated that Individual Notices were mailed, and the Publication Notice was published, in accordance with the Stipulation and Preliminary Approval Order.

         15. The Court finds that the Proposed Settlement provides substantial monetary benefits to Class Members. The maximum monetary liability of Homesite for settlement payments to Class Members, attorneys' fees, costs, and expenses of the litigation, and Court-approved participation awards to the Class Representatives is $173, 127.36. In addition, Homesite has agreed to fund the costs of claims notice and administration. The payment procedure established under the Stipulation ...


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