United States District Court for the Eastern District of Kentucky (Covington) LEGAL NOTICE OF PROPOSED CLASS ACTION SETTLEMENT

Transcription

1 United States District Court for the Eastern District of Kentucky (Covington) LEGAL NOTICE OF PROPOSED CLASS ACTION SETTLEMENT If You Purchased Title Insurance From First American Title Insurance Company in Kentucky and Paid a Local Government Premium Tax, a Proposed Class Action Settlement May Affect Your Rights. A court authorized this notice. This notice is being sent to you to inform you of a proposed settlement of the class action lawsuit known as Melissa D. Gunning, et al. v. First American Title Insurance Company, No DLB. The lawsuit involves the claims of persons who purchased title insurance from First American Title Insurance Company ( First American ) in Kentucky and paid local government premium taxes between June 14, 2001 and December 31, 2013 that were either not owed or at rates higher than permitted. You can find the local government premium tax amount that you paid, if any, on your Settlement Closing Statement under the subheading 1100 Title Charges. The settlement resolves a lawsuit over whether First American collected these taxes in error; it avoids costs and risks to you from continuing the lawsuit, pays money to Class Members, and releases First American from liability. The two sides disagree on whether First American would be found liable and the amount of monetary relief that would have been awarded if the Class Members had won at trial. Your legal rights are affected whether you act, or don t act. Read this notice carefully. YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT SUBMIT A CLAIM FORM EXCLUDE YOURSELF OBJECT GO TO A HEARING DO NOTHING The only way to find out if you qualify for a payment Get no payment. This is the only option that allows you to ever be part of any other lawsuit against First American about the claims resolved in this settlement. Write to the Court about why you don t like the settlement. Ask to speak to the Court about the fairness of the settlement. Get no payment. Give up rights. These rights and options and the deadlines to exercise them are explained in this notice.

2 The Court in charge of this case still has to decide whether to approve the settlement. Payments will be made if the Court approves the settlement and after all appeals are resolved. Please be patient. For more information, you can view the court file in the Clerk s Office at the courthouse identified below, call Please do not contact the Court, the Clerk of Court, or the Defendant concerning this Notice. BASIC INFORMATION 1. Why did I get this notice package? You or someone in your family purchased a title insurance policy from First American between June 14, 2001, and December 31, 2013 (the "Class Period"), and a review of First American s records indicates that you may have been charged for local government premium taxes. The Court authorized this notice because you have a right to know about a proposed settlement of a class action lawsuit, and about all of your options, before the Court decides whether to approve the settlement. If the Court approves it and after all objections are resolved, First American will make the payments the settlement allows. This package explains the lawsuit, the settlement, your legal rights, what benefits are available, who is eligible for them, and how to get them. Judge David L. Bunning of the U.S. District Court for the Eastern District of Kentucky, Northern Division (Covington) is in charge of the case, and the case is known as Melissa D. Gunning, et al. v. First American Title Insurance Company, No DLB. The person who sued is called the Plaintiff, and the company they sued, First American, is called the Defendant. 2. What is this lawsuit about? The lawsuit claims that First American collected local government premium taxes in Kentucky that were either not owed or at rates higher than legally permitted. The lawsuit seeks refunds of these amounts during the Class Period. First American denies all of the claims, asserts that it did not act wrongfully or unlawfully, and has asserted legal defenses to the claims. 3. Why is this a class action? In a class action, one or more people called Class Representatives (in this case, Melissa D. Gunning), sue on behalf of all people who have similar claims. All these people are a Class or Class Members. One court resolves the issues for all Class Members, except for those who specifically exclude themselves from the class. This case was filed as a class action because it was alleged that First American s billing policies and methods of determining the amount of local government premium taxes to collect were resulting in a number of people being overcharged

3 4. Why is there a settlement? The Court did not decide in favor of Plaintiff or Defendant. The Plaintiff thinks she could have won an undetermined amount of money if she had won at trial. The Defendant thinks the Plaintiff would not have won at trial. There was no trial in this matter. Instead, both sides agreed to a settlement. That way, they avoid the cost of a trial, and the people affected will get compensation. The Class Representative and the attorneys for the class believe the settlement is best for all Settlement Class Members. WHO IS IN THE SETTLEMENT To see if you will get money from this settlement, you first have to decide if you are a Class Member. 5. Who is included in the class? You may be a Settlement Class Member if you purchased title insurance from First American in Kentucky during the class period, and, as a part of your premium payment, you paid local government premium taxes on your insurance premiums that were either not owed or at a rate higher than you were legally required to pay. You can find the local government premium tax amount on your Settlement Closing Statement under the subheading 1100 Title Charges. First American has conducted an extensive review of its records to determine which purchasers may have been charged a Kentucky local government premium taxes. Class Counsel has investigated to verify the general accuracy of First American s review and analysis. This Notice is being sent to persons who were identified by First American as having purchased a policy to determine if an overpayment occurred. If you are still not sure whether you are included, you can ask for free help. You can call for more information or to see if you qualify. THE SETTLEMENT BENEFITS WHAT YOU GET 6. What does the settlement provide? First American has agreed to a Settlement Amount of $673,000, which is equal to ten percent (10%) of the total local government premium taxes it paid for the period September 1, 2002, to December 31, 2013, plus 8% simple interest, to be divided among all Settlement Class Members. All purchasers of a title insurance policy from First American who have been verified to have overpaid on their Kentucky local government premium taxes will be eligible to receive a refund from the Settlement Amount equal to the full amount of overcharged tax, or a prorated share, that has been determined to have been included in the premiums collected during the Class Period. To qualify for a refund, you must sign and timely submit under penalty of perjury the settlement claim form enclosed with this notice stating that you: (1) paid for (and were not reimbursed) - 3 -

4 local government premium tax on a policy of title insurance underwritten by First American; (2) during the Class Period; (3) for property located in Kentucky. You also must attach all documentary evidence supporting your claim, such as a copy of your Settlement Closing Statement, or state that you have conducted a diligent search and were unable to locate any supporting documentary evidence. A settlement administrator approved by the Court will review each claim form and determine its validity. First American may challenge the validity of your claim with data or documents disputing your eligibility for an award. If First American does challenge your claim, you will be informed and will have 20 days to submit further documentary evidence supporting your claim. Affidavits and declarations are not documentary evidence and will not be considered. 7. How much will my payment be? Your share of the refund, if any, will depend on when and how much you overpaid during the relevant time period specified above, and on the number of claims filed. Refunds will be paid by check to all Class Members. Each Class Member who submits a verified Claim Form within 60 days of mailing will receive a distribution from the Settlement Amount in an amount up to 100% of the tax overpayment, depending on the number of claims filed. If the total number of valid claims exceeds the settlement amount available to pay claims, each qualified claimant will receive a pro rata share of the amount they paid in excess of the applicable tax rate, if any. First American is not required to pay more than the total amount of all valid claims. If there was more than one borrower on your loan, or more than one owner of your real property, First American will not pay more than 100% of the approved award for that transaction. If all co-borrowers or co-owners do not sign and submit timely and valid claim forms, First American will only pay a pro rata share of the award (e.g., if there were three borrowers and only one submits a valid claim, only one third of the amount will be paid). As part of the Settlement, First American has also agreed to pay reasonable attorneys fees and costs, in an amount not to exceed 20% of the Settlement Amount, to Class Counsel, and a service award, in an amount not to exceed $2,000.00, to the named Plaintiff. Please see question 16 below for more information about payments to Class Counsel and Plaintiff. 8. Are there any other benefits of the settlement? Beyond the refunds described above, First American has agreed to comply with Kentucky Revised Statutes 91A.080, for future transactions. HOW YOU GET A PAYMENT SUBMITTING A CLAIM FORM 9. How can I get a payment? - 4 -

5 To qualify for a payment, you must complete and return a claim form. A claim form can be found here [link to claim form]. The claim form requires you to confirm your identity, your current address, that you purchased a First American policy during the time period covered by this settlement, and your address and proper taxing jurisdiction during that period. You may also obtain a claim form by calling Read the instructions carefully, fill out the form, include all of the information and documents it asks for, sign it, and mail it postmarked no later than May 4, After you submit the form, the settlement administrator will review the information you provide and determine if you are eligible to receive a payment. If you are eligible, you will be added to the Settlement Class and receive payment. If you are not eligible, you will receive a letter notifying you of that fact. 10. When would I get my payment? The Court will hold a fairness hearing on June 30, 2015 at 11:00 a.m., to decide whether to approve the settlement. If the Court approves the settlement after that, there may be appeals. It s always uncertain whether these appeals can be resolved, and resolving them can take time, perhaps more than a year. Please be patient. Payments to eligible Settlement Class Members will be made no more than 60 days from the day the Court grants final approval and appeals, if any, are decided. 11. What am I giving up to get a payment or stay in the class? Unless you specifically exclude yourself, you are staying in the class, and that means that you can t sue, continue to sue, or be part of any other lawsuit against First American about the claims settled in this case. It also means all of the Court s orders will apply to you and legally bind you. If you stay in the class, you will agree to a dismissal and release of First American of all claims in this case, as described in the Settlement Agreement, which describes exactly the legal claims that you give up if you get settlement benefits. A complete copy of the Settlement Agreement can be obtained by calling Talk to Class Counsel or your own lawyer if you have questions about the released claims or what they mean

6 EXCLUDING YOURSELF FROM THE SETTLEMENT If you don t want a payment from this settlement, but you want to keep the right to sue or continue to sue First American, on your own, about the legal issues in this case, then you must take steps to get out. This is called excluding yourself or is sometimes referred to as opting out of the Settlement Class. 12. How do I get out of the settlement? To exclude yourself from the settlement, you must send a letter by mail saying that you want to be excluded from Melissa D. Gunning, et al. v. First American Title Insurance Company, No DLB. Be sure to include your name, address, telephone number, First American policy number, and your signature. You must mail your exclusion request postmarked no later than April 19, 2015, to: Tilghman & Co., P.C., P.O. Box 12983, Birmingham, Alabama Failure to follow these instructions for requesting exclusion will result in a waiver of your right to exclude yourself from the Settlement Class. If you ask to be excluded, you will not get any settlement payment, and you cannot object to the settlement. You will not be legally bound by anything that happens in this lawsuit. You may be able to sue, or continue to sue, First American on your own in the future. 13. If I don t exclude myself, can I sue First American for the same thing later? No. Unless you exclude yourself, you give up any right to sue First American for the claims that this settlement resolves. If you have a pending lawsuit relating to this matter speak to your lawyer immediately. You must exclude yourself from this Class to continue your own lawsuit. Remember, the exclusion deadline is April 19, If I exclude myself, can I get money from this settlement? No. If you exclude yourself, you cannot ask for any money and you will not receive any money from this settlement, even if you would otherwise qualify as a Settlement Class Member. But, you may sue, continue to sue, or be part of a different lawsuit against First American. THE LAWYERS REPRESENTING YOU 15. Do I have a lawyer in this case? The Court has appointed Alexander F. Edmondson and Jason V. Reed of Edmondson & Associates (Covington, KY); and John C. Whitfield and Gary E. Mason of Whitfield Bryson & Mason LLP (Madisonville, KY), to represent you and other Settlement Class Members. These lawyers are called Class Counsel. You will not be charged for these lawyers. If you want to be represented by your own lawyer, you will have to hire one at your own expense

7 16. How will the lawyers be paid? Class Counsel will ask the Court to approve payment of up to 20% of the Settlement Amount to Class Counsel and payment of $2, to Melissa D. Gunning for her services as Class Representative. The fees would pay Class Counsel for investigating the facts, litigating the case, and negotiating the settlement. The Court may award less than these amounts. These amounts will be paid out of the Settlement Amount prior to any payments to Settlement Class Members. If, after paying these costs, the remaining Settlement Amount is insufficient to pay the refunds to the Settlement Class Members in full, then the refunds will be reduced on a pro rata basis. First American will not be obligated to pay any amount of the Settlement Amount that remains after all claims, costs and fees have been paid pursuant to the Settlement Agreement. OBJECTING TO THE SETTLEMENT You can tell the Court that you don t agree with the settlement or some part of it. 17. How do I tell the Court that I don t like the settlement? If you re a Settlement Class Member, you can object to the settlement and give reasons why you think the Court should not approve it. The Court will consider your views. To object you must send a letter saying that you object to Melissa D. Gunning, et al. v. First American Title Insurance Company, No DLB. Your objection must include: (1) the name of the case; (2) your full name, current address, and telephone number; (3) your signature and the date of your signature; (4) a clear and detailed description of each of the reasons you object to the settlement; and (5) any documents you wish to have considered in support of the objection. Mail the objection to the three different places listed below postmarked no later than April 19, Any Settlement Class Member who does not make his or her written objections in the manner outlined above will be deemed to have waived any objections. Objections postmarked after the date specified above will not be considered. Any Class Member failing to submit a timely objection will be deemed to have waived any objection they might have. COURT CLASS COUNSEL DEFENSE COUNSEL Clerk of Court U.S. District Court (EDKY) 35 West Fifth Street Covington, KY Jason V. Reed, Esq. EDMONDSON & ASSOC. 28 West Fifth Street Covington, KY Elizabeth T. Ferrick Dentons US LLP One Metropolitan Square Suite 3000 St. Louis, MO It is OK for you to both file a claim form to seek a monetary award under the Settlement Agreement and also object to the terms of the settlement. Your objection will not affect your eligibility for an award. Objectors are not required to attend the Fairness Hearing, but if you intend to appear or have your separate attorney appear, you must state in your written objection, I intend to appear at the hearing. If you do not comply with these procedures, or miss the deadline to file an objection, - 7 -

8 you lose the opportunity to have your objection considered by the Court or to appeal from any order or judgment entered by the Court regarding the Settlement. 18. What s the difference between objecting and excluding? Objecting is simply telling the Court that you don t like something about the settlement. You can object only if you stay in the Class. Excluding yourself is telling the Court that you don t want to be part of the Class. If you exclude yourself, you have no basis to object because the case no longer affects you. THE COURT S FAIRNESS HEARING The Court has given its preliminary approval to the proposed settlement, has conditionally certified the Settlement Class, has approved appointment of a Class Representative and Settlement Class Counsel, and has directed the sending of this notice. However, the Court must still give final approval to the settlement before it is effective. 19. When and where will the Court decide whether to approve the settlement? The Court will hold a Fairness Hearing at 11:00 a.m. on June 30, 2015, at the United States District Court for the Eastern District of Kentucky, Covington Division, 35 West Fifth Street, Covington, KY 41011, in Courtroom 4 (West). At this hearing, the Court will consider whether the settlement is fair, reasonable, and adequate. If there are objections, the Court will consider them. The Court will listen to people who have asked to speak at the hearing. The Court will also decide how much to pay Class Counsel and the Class Representative. After the hearing, the Court will decide whether to approve the settlement. We do not know how long these decisions will take. 20. Do I have to come to the hearing? No. Attendance at the hearing is not necessary. Class Counsel will answer questions the Court may have. But, you are welcome to come at your own expense. Any Settlement Class Member who has filed an objection and asked to speak may be allowed to do so. If you send an objection, you don t have to come to Court to talk about it. As long as you mailed your written objection on time, the Court will consider it. You may also pay your own lawyer to attend, but it s not necessary. 21. May I speak at the hearing? You may ask the Court for permission to speak at the Fairness Hearing. To do so, you must send a letter saying that it is your Notice of Intention to Appear in Melissa D. Gunning, et al. v. First American Title Insurance Company, No DLB. Be sure to include your name, address, telephone number, and your signature. Your Notice of Intention to Appear must be postmarked no later than April 19, 2015, and be sent to the Clerk of the Court, Class Counsel, - 8 -

9 and Defense Counsel, at the three addresses in section 17. Please be advised that the Court may continue the Fairness Hearing to another date without further notice to class members, so you should check the Court s calendar to confirm the date if you plan on attending the hearing. You cannot speak at the hearing if you excluded yourself. IF YOU DO NOTHING 22. What happens if I do nothing at all? If you do nothing, you ll get no money from this settlement. But, unless you exclude yourself, you won t be able to start a lawsuit, continue a lawsuit, or be part of any other lawsuit against First American about the legal issues resolved in this case, ever again. GETTING MORE INFORMATION 23. Are there more details about the settlement? This notice summarizes the proposed settlement. More details are in a Settlement Agreement, which can be found here [link to settlement agreement]. You can also get a copy of the Settlement Agreement by calling You can examine and copy any other Court document filed in this case at any time during the regular office hours of the clerk of the U.S. District Court for the Eastern District of Kentucky (Covington), 35 West Fifth Street, Covington, KY The case name is Melissa D. Gunning, et al. v. First American Title Insurance Company, No DLB. If you have any questions concerning any matter raised in this Notice, please call , where you can obtain answers to common questions about the settlement claim form, plus other information to help you determine whether you are a Class Member and whether you are eligible for payment. PLEASE DO NOT CALL OR WRITE THE COURT OR THE DEFENDANT FOR INFORMATION OR ADVICE. Dated: March 5, 2015 By Order of the U.S. District Court for the Eastern District of Kentucky, Northern Division (Covington) - 9 -