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Chastain v. Union Security Life Insurance Co.

March 23, 2009

DONALD R. CHASTAIN, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
UNION SECURITY LIFE INSURANCE COMPANY, AMERICAN BANKERS LIFE ASSURANCE COMPANY OF FLORIDA, DEFENDANTS.



The opinion of the court was delivered by: Honorable Audrey B. Collins United States District Court Judge

[CLASS ACTION]

FINAL APPROVAL ORDER AND JUDGMENT

Hearing Date: March 23, 2009 Time: 10:00 a.m.

Court: Western Div., Roybal Federal

Bldg., Courtroom 680

Following a hearing on December 15, 2008 and a continued hearing on January 5, 2009, this Court entered its Amended Order of Preliminary Approval of Class Action Settlement and Related Orders (Doc. No. 233), ("Preliminary Approval Order"), preliminarily approving the Settlement and Release Agreement entered into by and on behalf of the parties in the above-captioned action ("Settlement"), and scheduling a hearing to determine whether the said settlement was fair, reasonable, adequate, in the best interests of the class, and free from collusion, ("Final Approval Hearing"), and to consider a petition by Class Counsel for an award of attorneys' fees and litigation expenses and for an incentive award to be paid to the class representative.

The Court has considered: (i) the points and authorities submitted in support of the motion for final approval of the Settlement, ("Final Approval Motion"); (ii) the points and authorities submitted in support of the present motion for an award of attorneys' fees and litigation expenses, and approval of an incentive award for the class representative, ("Fee Motion"); (iii) the declarations and exhibits submitted in support of said motions; (iv) Defendants' joinder in seeking final approval of the Settlement and entry of judgment herein, on the terms set forth herein; (v) Defendants' non-opposition to Class Counsel's petition for an award of attorneys' fees and litigation expenses, and to the request for approval of the incentive award to be paid to the class representative; (vi) the Settlement itself; (vii) the entire record in this proceeding, including but not limited to the points and authorities, declarations, and exhibits submitted in support of preliminary approval of the Settlement, (Doc. Nos. 221-226); (viii) the absence of any objections by the class members to the Settlement; (ix) the absence of any requests for exclusion from the class; (x) the representations and arguments of Class Counsel and Counsel for Defendants at the Final Approval Hearing; (xi) this Court's experiences and observations while presiding over this matter; and (xii) the relevant law, and based upon the findings of fact and law below and implicit in this Order.

Therefore, good cause appearing, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED, as follows:

1. Except where specifically defined herein, the capitalized terms used in this Final Approval Order and Judgment, ("Final Approval Order") shall have the meanings and/or definitions given to them in the Settlement.

2. Plaintiff, Defendants, and all members of the Settlement Class who have not timely and properly requested exclusion from said class in accordance with the provisions of Settlement, (hereafter, the "Settlement Class"), have submitted to the jurisdiction of the Court for purposes of the Settlement. The Court has personal jurisdiction over Plaintiff, Defendants, and the Settlement Class. The Court has subject matter jurisdiction to release all claims and causes of action as set forth in the Settlement and to dismiss the above entitled action, ("Action"), with prejudice, in its entirety. The Court has subject matter jurisdiction to approve the Settlement.

3. The Court finds that the Settlement was not the product of collusion or any other indicia of unfairness, is fair, reasonable, and adequate to the Settlement Class in light of the complexity, expense, and likely duration of the litigation, and the risks involved in establishing liability, damages, and in maintaining the Action as a class action through trial and appeal. The Court finds that the Settlement represents a fair and complete resolution of all claims asserted in a representative capacity on behalf of the Settlement Class and should fully and finally resolve all such claims. In support of these findings, the Court further specifically finds that:

A. There is no evidence of collusion. The Settlement, as set forth in the Agreement, resulted from extensive arms-length negotiation. The action was extensively and vigorously litigated prior to discussion of any possible settlement, and settling parties engaged in intensive arms-length negotiation prior to reaching the Settlement;

B. The Settlement makes substantial funds available for payment of direct cash relief to the Settlement Class. Settlement payments are not "claims made", meaning that each Settlement Class member who can be located will automatically be mailed his or her settlement payment without any requirement to take any affirmative action to claim said settlement payment. No portion of this class relief will be consumed by attorneys' fees, litigation expenses, notice expenses, settlement administration expenses, or the class representative incentive award, since such amounts are all separately provided for by the Settlement;

C. Before reaching the Settlement, the Settling Parties fully and vigorously litigated their claims and defenses in extensive law and motion proceedings, including but not limited to litigation of a petition to compel arbitration (and full briefing of an interlocutory appeal to the Ninth Circuit with regard to denial of said petition), numerous discovery motions, a hard fought class certification motion, a petition to the Ninth Circuit for review of class certification pursuant to Federal Rules of Civil Procedure, Rule 23(f), and a motion for judgment on the pleadings. Full adversarial litigation and preparation for the January 2009 trial set in this action continued up to the eve of reaching the proposed settlement. At the time of mediation and settlement (August 14, 2008), the action had advanced to the stage of the deadline for expert disclosures (July 22, 2008), the discovery cut-off (August 11, 2008), and the eve of the law and motion cut-off (September 1, 2008).*fn1 Based upon this full litigation in law and motion of relevant legal issues affecting this litigation, the Settling Parties were fully informed of the legal bases for the claims and defenses herein, and capable of balancing the risks of continued litigation and the benefits of the Settlement;

D. Before reaching the Settlement, the Settling Parties also conducted extensive discovery. Inter alia, three different Rule 30(b)(6) designees were produced by Defendants for depositions in nine examination categories, (approximately five full days of examination). Plaintiff propounded five sets of documents requests (cumulatively 82 requests); six sets of interrogatories (cumulatively 24 interrogatories); and a set of requests for admissions. Voluminous documentary evidence, approximately 2,500 pages, has been produced by defendants and the various defense deponents in the action. Properly authenticated and verified claims data was produced for every single individual class member. Based upon this extensive completed discovery, the Settling Parties were fully informed of the evidentiary bases for their respective claims and defenses herein, and capable of balancing the risks of continued litigation and the benefits of the Settlement.

E. The certified class is and was at all times adequately represented by Plaintiff and Class Counsel. Class Counsel have fully and competently prosecuted all causes of action, claims, theories of liability, and remedies reasonably available to the Settlement Class. Further, both Class Counsel and Defendants' Counsel are highly experienced trial lawyers with specialized knowledge in the insurance and consumer rights issues implicated by this litigation and complex class action litigation, generally. Class Counsel and Defendants' Counsel are capable of properly assessing the risks, expenses, and duration of continued litigation, including at trial and on appeal. Class Counsel and Defendants' Counsel agree that the proposed settlement represents a fair and reasonable resolution to this matter in light of the various risks and costs to the respective parties of continued litigation.

F. As further addressed below, through the mailing of the Settlement Notice in the form and manner ordered by this Court, the Settlement Class has received the best practicable notice of the pendency of this class action, of the Settlement, and of their rights and options as Settlement Class members. Said notice fully satisfied all notice requirements under the law, including all due process rights under the U.S. Constitution, and;

G. The response of the Settlement Class to this Action, and to the Settlement, including Class Counsel's application for an award of attorneys' fees, litigation expenses, and the class representative's incentive award, after full, fair, and effective notice thereof, strongly favors final approval of the Settlement. In response to the 1,111 Settlement Notices mailed to the Settlement Class, as of March 5, 2009, (nine days after the deadline for requesting exclusion or objecting to the Settlement), no requests for exclusion and no objections have been received by the Settlement Administrator or the Settling Parties.

4. On May 6, 2008, in its Order re: Plaintiff's Motion for Class Certification, dated May 6, 2008, Document No. 207, the Court granted Plaintiff's motion for class certification in the Chastain Action, certifying a class with respect to Plaintiff's claims for breach of contract and declaratory relief, defined as:

"All persons to whom Union Security Life Insurance Company issued credit insurance certificate form H-D-Z while they were California residents, whose total disability benefits reached "Insured Indebtedness" on or after September 15, 2002, but for whom USLIC did not pay or paid late interest accruing on Insured Indebtedness."

The Court additionally certified a subclass with respect to Plaintiff's fraud claims, defined as:

"All persons to whom Union Security Life Insurance Company issued credit insurance certificate form H-D-Z while they were California residents, whose total disability benefits reached "Insured Indebtedness" on or after September 15, 2003, but for whom USLIC ...


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