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Goodner v. Shelter Mutual Insurance Co.

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

June 6, 2017

MICHAEL GOODNER and ROBBIE GOODNER, individually and on behalf of all others similarly situated PLAINTIFFS


          Susan O. Hickey United States District Judge

         Before the Court is Plaintiffs' Agreed Motion for Final Approval of Class Action Settlement, Class Certification for Settlement Purposes, Appointment of Class Representatives and Appointment of Class Cousnel (“Motion for Final Approval”). (ECF No. 69). Also before the Court is Class Counsel's Motion for Attorneys' Fees and Costs Related to the Stipulation of Settlement and Request for Fee Award to Class Representatives (“Class Counsel's Application for Fees”). (ECF No. 71). Plaintiffs and Defendant 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 March 3, 2017. (ECF No. 67). On May 25, 2017, the Court held a final approval hearing on the motions. The Court finds the matter ripe for consideration.

         I. BACKGROUND

         1. Plaintiffs filed a Complaint in this Action alleging that Defendant Shelter Mutual Insurance Company (“Shelter”) violated applicable law and breached its contracts with insureds by wrongfully depreciating the cost of labor when resolving structural claims in the State of Arkansas. Shelter 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 Shelter, the parties have reached a settlement that provides substantial benefits to a Settlement Class, in return for a release and dismissal of claims against Shelter.

         3. Plaintiffs and Shelter executed and filed a Stipulation of Settlement and exhibits thereto, dated January 17, 2017 (the “Stipulation”). In accordance with the Court's order entered on February 23, 2017, the parties executed and filed an Amended Stipulation of Settlement on March 3, 2017 (the “Amended Stipulation”).

         4. The Amended 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 January 17, 2017, Plaintiffs filed with the Court the Stipulation and exhibits thereto along with a motion for preliminary approval of the Proposed Settlement.

         6. On February 23, 2017, the Court entered an order (“Preliminary Approval Order”), preliminarily approving class settlement, preliminarily approving the Stipulation, preliminarily certifying the Settlement Class for settlement purposes only as a class action, and scheduling a hearing for May 25, 2017 at 9:00 a.m., to consider final approval of the Proposed Settlement and other actions described in the Preliminary Approval Order and the Stipulation (“Final Approval Hearing”).

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

Persons who had a Covered Loss where the claim was paid at less than the limit of liability (accounting for deductible), and where Shelter or its Affiliate made an indemnification payment that included a deduction for estimated depreciation of labor.

         Excluded from the Class are:

(1) Persons who received indemnification payment(s) for full replacement cost;
(2) Persons who received indemnification payment(s) in the full amount of limit of liability shown on the declarations page;
(3) Shelter and its Affiliate, officers, and directors;
(4) Members of the judiciary and their staff to whom this action is assigned; and
(5) Class Counsel.
“Covered Loss” means a first party insurance claim for physical damage that occurred during the Class Period on Arkansas property insurance policy forms HO-3 (03 04); HO-3 (01 07); HO-5 (B-826); HO-6 (03 04); HO-6 (01 07); B-450.3; MHO (I-31.4) issued by Shelter or its Affiliate, that resulted in an indemnity payment by Shelter or its Affiliate under Coverage A or B.
“Affiliate” means Shelter General Insurance Company.
“Class Period” means the period of December 11, 2008 through December 15, 2015.

         8. As part of the Preliminary Approval Order, this Court approved a proposed Individual Notice, which provided Class Members with notice of the Proposed Settlement and Stipulation. 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”), and required that an automated toll-free phone number and settlement website to be set up, all of which further provided Class Members with information about the Proposed Settlement.

         9. The Court ordered the Individual Notice and Claim Form, in the forms attached to the Stipulation of Settlement as Exhibits “2” and “3”, be mailed by the independent third-party settlement administrator for the Proposed Settlement, Kurtzman Carson Consultants LLC (“KCC”), by First Class United States mail, postage prepaid, on or before March 31, 2017, 55 days before the Final Approval Hearing, to all potential Class Members whose names and last known addresses were ascertained by Shelter through a reasonable search and inquiry of their records of claims by Class Members during the Class Period, with supplementation of those addresses as described in the Stipulation.

         10. On May 15, 2017, Plaintiffs moved for final approval of the terms of the Proposed Settlement and for the entry of this Final Judgment. In support, Plaintiffs submitted, among other things, evidence concerning the dissemination and adequacy of Class 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. In further support of the Motion for Final Approval, Plaintiffs submitted a Brief in Support of Motion for Final Approval, setting forth extensive argument and authority, along with various exhibits attached thereto. Class Counsel's Application for Fees likewise contained extensive argument and supporting authority.

         11. In accordance with the Preliminary Approval Order, the Court held the Final Approval Hearing on May 25, 2017.

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

Exhibit No.



Declaration of Matt Keil


Declaration of Michael Goodner


Declaration of Robbie Goodner


Declaration of Karen Rogan

         13. Class Counsel filed with the Court the declaration of Karen Rogan, KCC's senior project manager. Ms. Rogan declared that the mailing of the Court-approved Individual Notice was completed on March 31, 2017. The Individual Notice, along with a Claim Form, was mailed via First Class United States mail to 27, 867 Class Members. KCC received a return of 4, 681 Individual Notices as undeliverable and without forwarding addresses. KCC then conducted address searches using credit and other public source databases to attempt to locate new addresses for all of these Class Members. As of May 17, 2017, these searches resulted in 3, 466 updated addresses. KCC then re-mailed Individual Notices and Claim Forms to each of the updated addresses. The Court finds that the percentage of Individual Notices that were returned without forwarding addresses is reasonable. As of May 22, 2017, KCC had received ten valid and timely Requests for Exclusion, and the Court had received zero objections. No objections were made at the Final Approval Hearing.

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

         15. The Court further finds that all notices concerning the Settlement required by the Class Action Fairness Act of 2005, 28 U.S.C. §§ 1715, et seq., have been sent and that Shelter has fully complied with the notice requirements under that Act.

         16. The Settlement provides substantial monetary benefits to Eligible Class Members who timely submit completed and signed Claim Forms. The monetary liability of Shelter for settlement payments to Class Members; attorneys' fees, costs, and expenses of the Litigation; and Court-approved participation awards to the Class Representatives meets or exceeds $24, 529, 071. In addition to the $24, 529, 071, Shelter has agreed to fund the costs of claims notice and administration. The claims procedure established under the Stipulation is uniform and fair, and provides Class Members with the opportunity to receive settlement payments as described in the Stipulation.

         17. All Persons who wished to be excluded from the Settlement Class were provided an opportunity to request exclusion as described in the Individual Notice and Publication Notice. The Court finds that the individual interests of the ten Class Members who sought exclusion from the Settlement Class are preserved and that no Class Member was precluded from being excluded from the Settlement Class if he or she so desired. Those ten Class Members ...

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