Opinion ID: 1720565
Heading Depth: 1
Heading Rank: 13

Heading: order and final judgment

Text: A Settlement Hearing having been held before this Court on January 20, 21 and 24, 1994 pursuant to this Court's order of June 16, 1993, as thereafter amended by subsequent orders, to determine whether this Court should approve as fair, adequate and reasonable a settlement of this action upon the terms and conditions of the Stipulation and Agreement of Compromise and Settlement dated June 16, 1993 and executed by all parties, as thereafter amended (Stipulation or Stipulation of Settlement); it appearing that due notice of said Settlement Hearing was given in accordance with the terms of the aforesaid order; the Court having determined that notice to the Class, as described in the aforesaid order and subsequent orders, was the best practicable notice under the circumstances, and fully complies with all requirements of Due Process, and all requirements of Alabama Rule of Civil Procedure 23; the respective parties having appeared by their attorneys of record; the Court having received and considered arguments and evidence in connection with the proposed compromise and settlement of the action; the attorneys for the respective parties having been heard; and opportunity to be heard having been given to all of the persons requesting to be heard in accordance with the aforesaid order; and the proposed Settlement and all other matters of record in this action having been heard and considered by the Court; and based on the Findings of Fact and conclusions of Law set forth in a separate order entered contemporaneously herewith, it is therefore ORDERED, ADJUDGED AND DECREED as follows: 1. For purposes of considering, approving and effectuating the Stipulation of Settlement and to fairly and adequately protect the interests of the members of the class, this Court has previously ordered, and hereby orders and confirms, that this action is to be maintained as a class action pursuant to Ala. R.Civ.P. 23(b)(2), for a Plaintiff Class consisting of: All persons who now or in the past were insured under any cancer policy which (1) was issued by Liberty National Life Insurance Company (Liberty National) on or before August 29, 1986, and (2) which provided benefits for radiation, chemotherapy, prescription chemotherapy drugs, and other out-of-hospital prescription drugs without monetary limits, and (3) was paid and in force (or in the grace period) on or after August 29, 1986, regardless of whether such policy remains in force, thereafter lapsed or was replaced by a different Liberty National cancer policy after that date; provided, however, that (i) any insured who is or was a named plaintiff in any separate lawsuit which was filed on or before March 10, 1993 and which alleges fraud, concealment, failure to disclose or misrepresentation in connection with the purchase, sale, issuance, exchange or replacement of any one or more Liberty National cancer insurance policies is excluded from the Class unless such lawsuit has been voluntarily dismissed without prejudice on or before the date this Settlement is finally approved by the Circuit Court of Barbour County, Alabama; (ii) any insured whose old policy lapsed prior to August 29, 1986 and was not thereafter reinstated (after payment by the insured of all delinquent premiums) by Liberty National is excluded from the Class; and (iii) any insured whose first Liberty National cancer policy was a new policy form issued after August 29, 1986 is excluded from the Class. 2. On February 4, 1994, this Court entered an Order Conditionally Approving Class Action Settlement, the full text of which is incorporated herein by reference. The findings and conclusions set forth in that Order are hereby reaffirmed, and made final, the named parties and their counsel having notified the Court of their acceptance of the modifications to the class action settlement set forth therein. Pursuant to said Order of February 4, 1994, the class action certification pursuant to Rule 23(b)(2) was reaffirmed and the class action was additionally certified pursuant to Rule 23(b)(1)(A) and Rule 23(b)(1)(B) for purposes of settlement, all of which is hereby reaffirmed, incorporated herein by reference and made final. 3. The Court has heretofore found and hereby finds and reaffirms for purposes of settlement that the Named Plaintiff is an adequate representative of the Class and that all requirements of Ala.R.Civ.P. 23(a), 23(b)(1)(A), 23(b)(1)(B), and 23(b)(2) are met. The Court expressly finds for purposes of settlement that the Class is so numerous that joinder of all members is impracticable; that there are questions of law and fact common to the Class; that the claims of the Named Plaintiff are typical of the claims of the Class; that the Class Representative and Class Counsel have fairly and adequately represented and protected the interests of the Class and will continue to do so; that the prosecution of separate actions by individual class members would create a risk of varying or inconsistent adjudications which would establish incompatible standards of conduct for the defendant, and would as a practical matter be dispositive of the interests of other class members or substantially impair or impede their ability to protect their interests; that, assuming the allegations of the complaint (which Liberty National denies) to be true, Liberty National has acted on grounds generally applicable to the class, thereby making appropriate final equitable and injunctive relief with respect to the class as a whole; that the nature of the interests of the class members, the nature of the Settlement, and the fact that the vast majority of class members have not suffered any actual out-of-pocket monetary losses or damages (other than allegations concerning increased premiums) at this time, make this action inappropriate for certification under Ala.R.Civ.P. 23(b)(3); and that maintenance of this action pursuant to Ala.R.Civ.P. 23(b)(1)(A), 23(b)(1)(B) and 23(b)(2), separately and severally, is superior to any other method of proceeding with these claims. 4. Subject to the terms and conditions of the Stipulation, as amended and modified, Liberty National Life Insurance Company is hereby enjoined and ordered to perform its obligations under the Stipulation of Settlement (as heretofore amended by the parties, including those modifications set forth in this Court's February 4, 1994 Order Conditionally Approving Class Action Settlement), which Stipulation of Settlement (as so amended and modified) is hereby affirmed and approved in its entirety and incorporated herein by reference. The Court expressly finds that the primary relief provided for by the Stipulation and Settlement, and the primary relief which would be justified by the alleged (but denied) conduct, is injunctive and further equitable relief in the nature of declaratory relief, reformation of certain insurance policies, and ancillary restitution. The provisions in the Stipulation of Settlement for incidental monetary relief and supplemental extracontractual monetary relief are ancillary to the primary equitable and injunctive relief. 5. Subject to the terms and conditions of this Court's Order of February 4, 1994 and of the Stipulation of Settlement, as modified and amended, Liberty National Life Insurance Company and its successors and assigns, and all other entities and individuals acting in concert with Liberty National are hereby permanently ENJOINED: (a) From instituting, engaging or participating in, maintaining, authorizing or continuing any of the alleged cancer policy exchange programs as defined in the Settlement and Stipulation; (b) From instituting, engaging or participating in, maintaining or authorizing any future program relating to the exchange, substitution, switching or attempting to exchange, substitute, or switch Liberty National cancer insurance policies whereby the substituted Liberty National cancer policy excludes or limits any benefits that are provided in the replaced Liberty National cancer policy, without full disclosure of the benefits and coverages in the replaced and substituted policies, including disclosure of any benefits in the original policy which are excluded or limited benefits in the substituted policies; (c) With respect to those Class Members specified in paragraph II-6 of the Stipulation, to provide benefits without monetary limits for claims incurred after June 16, 1993 for radiation, chemotherapy, prescription chemotherapy drugs, and out-of-hospital prescription drugs prescribed in connection with the treatment of cancer under the new policies of such Class Members currently in force, so long as the new policies remain in force and premiums are paid, subject to the terms and conditions of the Stipulation, as amended and modified, and the terms and conditions of this Court's Order of February 4, 1994; (d) With respect to those Class Members specified in paragraph II-6 of the Stipulation, to reform (or treat as having been reformed) the new policies (as defined in the Stipulation) of Class Members presently in force to provide prospective coverage without monetary limits (so long as each such new policy is kept in force and all premiums are paid) for otherwise covered radiation, chemotherapy, and prescription chemotherapy drugs administered to the named insured or any covered person under the new policy in connection with the treatment of cancer, and to provide coverage without monetary limits for other out-of-hospital prescription drugs prescribed to the named insured or any covered person under the new policy in connection with the treatment of cancer, for claims incurred subsequent to June 16, 1993, such reformation to be implemented upon the later of (i) the expiration of the time appeal from this Order and Final Judgment, or (ii) the final binding affirmance of this Order and Final Judgment in the event of any appeal or other petition for review, if any appeal or petition for review is taken regarding this action. No additional premium shall be charged for this additional coverage; provided, however, that claims paid under this additional coverage or waiver may be considered as claims experience for the purposes of future premium adjustments, subject to the provisions of paragraph II-8 of the Stipulation. This paragraph shall require reformation to be implemented upon the later of the expiration of the time for appeal from this Order or final binding affirmance in the event of appeal, with an effective date of June 16, 1993, such that all claims incurred after June 16, 1993 will be eligible for the reformed coverage. (e) From increasing the premiums on the old cancer policies or the new cancer policies of Class Members prior to the later of (i) January 1, 1996; (ii) one year from the date of this Order; or (iii) one year after entry of judgment or final order by the Alabama Supreme Court, without regard to whether any petition for certiorari or appeal to the United States Supreme Court is filed with respect thereto; (f) With respect to those Class Members specified in paragraph II-10 of the Stipulation, to make restitution to the named insured for otherwise valid benefit claims accrued under the new policies of Class Members on or before June 16, 1993, based upon 150% of the amount by which the total benefits that would have been received under the class member's old policy for the same overall cancer treatment exceeds the total benefits actually paid by Liberty National for the class member's overall cancer treatment under the new policy, subject to the terms, conditions and procedures set forth in paragraphs II-10 and II-11 of the Stipulation, as amended by this Court's Order of February 4, 1994. (g) With respect to those Class Members specified in paragraph II-6 of the Stipulation, from applying or enforcing any exclusion of benefits for out-of-hospital prescription drugs prescribed in connection with the treatment of cancer and from applying or enforcing any monetary limits or caps upon the benefits for radiation, chemotherapy or prescription chemotherapy drugs which are contained in any new policy owned by such Class Member, to any claim incurred after June 16, 1993, subject to the terms and conditions of Stipulation and this Court's Order of February 4, 1994. (h) Subject to any regulatory jurisdiction of any insurance department within the states in which Liberty National's cancer policies were approved for issuance, to pool the experience of all Class Members in all states and file all future premium rates based on the pooled claims and premiums experience of all Class Members in all states in which the old and new cancer policies were approved for issuance, and to use its best efforts to obtain acceptance from all state insurance departments to allow Liberty National to pool the experience of all Class Members for rate making purposes. The provisions of subsections (a), (b) and (e) of this paragraph 4 shall be effective unless and until such time as this Order and Final Judgment is vacated, modified, reversed or remanded on appeal, in whole or in part. All other aspects of the final relief set forth in this Order shall be automatically stayed in the event of appeal as contemplated by the terms and conditions of the Stipulation. 6. Consistent with the Findings of Fact and Conclusions of Law entered contemporaneously herewith, and subject to this Court's retention of jurisdiction to enforce this Order and the Stipulation of Settlement, as amended and modified, all claims asserted in this action, including those claims asserted in Named Plaintiff's Amended Complaint, and all claims which have been or could be asserted (by intervention or otherwise) by or on behalf of any Class Member relating to the alleged cancer exchange programs or the Released Claims (as those terms are defined in the Stipulation), are DISMISSED in their entirety on the merits, with prejudice, and defendant Liberty National (and the related beneficiaries of the Release set forth in Section III of the Stipulation of Settlement) are hereby RELEASED from all claims, actions, causes of action and liabilities which were or could be asserted by or on behalf of any Class Members, which relate to the alleged cancer exchange programs or the Released Claims as defined in the Stipulation of Settlement. The Release provided in Section III of the Stipulation is hereby approved and made effective and incorporated herein by reference. 7. Named Plaintiff and each and all Class Members are hereby permanently ENJOINED, precluded and barred from filing, initiating, asserting, maintaining, pursuing, or continuing or participating as a litigant (by intervention or otherwise) in any action, whether an individual lawsuit or class action, in any court, asserting any of the claims dismissed herein or any of the Released Claims as defined in the Stipulation of Settlement; provided, however, that neither this injunction, nor the settlement benefits provided by the Stipulation of Settlement described in this Order, shall apply to any individual who was a named plaintiff in any separate action filed on or before March 10, 1993 which alleges fraud, concealment, failure to disclose or misrepresentation in connection with the purchase, sale, issuance, exchange or replacement of any one or more Liberty National cancer policies, unless said action has been voluntarily dismissed without prejudice prior to the date of this Order and Final Judgment. 8. The Escrow Agreement entered into June 16, 1993, between Liberty National and the First Commercial Bank attached as Exhibit E to the Stipulation is approved and its terms and conditions are ratified by the Court, and the amendment to said agreement provided for by the Court's Order dated March 28, 1994 requiring escrow of an additional $10,000,000.00 is hereby ratified and approved by the Court. Subject to the terms and conditions of the Stipulation, Liberty National is hereby enjoined to implement and honor the terms of the Escrow Agreement, as amended, and the Stipulation, as amended and modified, with respect to each of the $2,000,000 and $9,000,000 monetary relief funds. 9. All Proof of Claim Forms submitted on or before December 20, 1993 by each Class Member entitled under the Stipulation (and the instructions contained in the Proof of Claim Form) to submit a Proof of Claim Form shall be processed in the manner as designated in the administrative procedure set forth in the Stipulation of Settlement. Subject to the terms of the Stipulation, persons who did not submit a Proof of Claim Form on or before January 20, 1994 shall be forever barred from claiming or receiving any of the restitution or any other monetary benefits set forth in paragraphs II-9, II-10 and II-12 of the Stipulation, as amended and modified. Subject to the terms of the Stipulation, Proof of Claim Forms submitted after December 20, 1993 but on or before January 20, 1994 shall be processed in accordance with the Stipulation after all timely Proof of Claim Forms have been processed, subject to Liberty National's right to object to the Proof of Claim Form as being untimely. Any such objection to the timeliness of Proof of Claim forms shall be filed and ruled upon once all timely Proof of Claim forms have been processed. The Proof of Claim Form attached to the Notice is hereby finally approved as to form and content. 10. There being no reason for delay, the Clerk of the Court is hereby directed, pursuant to Ala.R.Civ.P. 54(b), to enter this order as a FINAL JUDGMENT. Subject to the terms and conditions of the Stipulation, Plaintiff's counsel, heretofore approved by the Court as Class Counsel, being Jere Beasley, Beasley, Wilson, Allen, Main & Crow, P.C. and Walter R. Byars, Steiner, Crum & Baker, are jointly awarded $4,500,000 in full payment of all attorneys' fees which sum has been paid by Defendant Liberty National Life Insurance Company to the Escrow Agent in accordance with the terms of the Escrow Agreement and the Stipulation of Settlement, and $35,000 in full payment of all expenses incurred or to be incurred by Class Counsel in this action, which shall be paid within 5 days to the Clerk of Court, to be disbursed upon expiration of the time for appeal or final binding affirmance in the event of appeal. Said attorneys fees together with interest or investment proceeds shall be disbursed in accordance with any subject to the terms and conditions of the Stipulation and the Escrow Agreement. 11. Subject to and in accordance with the terms of the Stipulation, court costs are taxed against Defendant Liberty National Life Insurance Company, which costs shall include all fees and expenses of actuarial or other experts or consultants employed by Class Counsel. Class Counsel shall submit an invoice for such expenses to Liberty National which Liberty National shall pay within five days, of receipt, unless the amount of the invoice or Class Counsel's entitlement under the Stipulation in any respect in which case such dispute shall be resolved by this Court pursuant to its retention of continuing jurisdiction. Pursuant to Paragraph 12 hereof, the Court reserves jurisdiction to award additional fees and expenses set forth in the Stipulation of Settlement. 12. This Court reserves and maintains continuing jurisdiction over all matters relating to the Settlement or the consummation of the Settlement; the validity of the Settlement; the construction and enforcement of the Settlement and any orders entered pursuant thereto; any disputes which may arise between Class Members with respect to the persons entitled to receive the proceeds of any amounts payable to Class Members under the Stipulation; and the entry and enforcement of this FINAL JUDGMENT, including, in the event of reversal, vacation or modification of this final judgment, jurisdiction to revoke this Order and Final Judgment in its entirety and to reinstate all claims dismissed or claims, actions, causes of action and liabilities released pursuant to paragraph 5 hereof; to tax court costs (subject to the terms and conditions of the Stipulation) which shall consist of all expenses for the Class notice, fees and expenses of actuarial or other experts or consultants, fees and expenses of the Special Master, and all other matters pertaining to the Settlement or its implementation and enforcement. 13. All pending motions of objectors and intervenors not previously ruled upon are hereby denied and overruled. The Court incorporates by reference herein its specific rulings on pending motions set forth in the transcript of the May 19, 1994 hearing. The Court further incorporates by reference herein and makes final its Order of February 4, 1994. The Court has set forth its Findings of Fact and Conclusions of Law in a separate order entered contemporaneously herewith. Done this 26th day of May, 1994. /s/ William H. Robertson Circuit Judge