case: 1:06-cv-00552 document #: 858-1 filed: 05/11/17...

Case: 1:06-cv-00552 Document #: 858-1 Filed: 05/11/17 of 6 PageID #:17034

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SETTLEMENT AGREEMENT

This Settlement Agreement ("Settlement Agreement") is signed and effective as ofMay 9, 2017, by Illinois National Insurance Company, the Insurance Company of t.he State of Penn ylvania, Lexington Insurru1ce Company, AIG Claims, Inc. (f/k/a Chartis Claims, luc. and AI'G bomestic Claims, Inc.), and AIG, Inc., on the one hand (collectively the "Defendant ")and Allen Gonnan, Carl Gray Bradley Hytrek, Ronald Johnson, Wil1iam Jones, Gerrad Lam our, Matthew Liptak, Lee Mercado, and K im Yotmg, individua11y and for the classes, and class n1embers previous ly certified in ihe case styled Young v. County ofCook, No. 06 C 552 (N.D. Ill.) (collectively, "the Relators"), and Cook County, on the other hand. Cook County and the Relators are collectively referred to as "Plaintiffs." Plaintiffs and Defendants are collectively referred to as the "Parties."

In furtherance of the Partjes 1 intent to resolve all claims asserted in and related to Plaintiffs' lawsuit against Defendants in the Circuit Court of Cook County, No. 12 L 2765, originally filed on March 13,201 2(the ''Lawsuit"), and in consideration of the mutual covenants and ther terms contained iu this Settlement Agreement, the sufficiency of which is hereby acknowledged, and intending to be legally bound, lhe Parties hereby agree as follows:

1. No admission of liability . Nothing in this Settlement Agreement will be construed as an admission of liability by any Party with respect to the claims asserted in the Lawsuit or any other matter. The Pmties agree that this Settlement Agreement will not be used against any Party to this Settlement Agreement in any action except to enforce the tenns of the Settlement Agreement.

2. Mutual release. In consideration for the settlement payments described in Paragraph 5 below, Plaintiffs, 011 their own behalf and on behalf of their present, former, and future spouses, heirs, executors, administrators, representatives, agents, attorneys, partners, successors, predecessors-in-interest, and assigns, and also 011 behalf of the class certified in the l'oung action, te lease and forever discharge the Defendants, along with their current and former affiliates, related companies, parents subsidiaries, officers directors, employees insm-ers, reins11rers attorneys, predecessors, and successors, :fi·om all claims of any nature they have or may have against the Defendants that were or could have been asserted in the Lawsuit. Plaintiff.c; and tl1eir counsel represent that, as of the date of this Agreement, they have no lmowledge, awareness, or suspicion that any future claim will be brought against the Defendants related to the insuJance policies issued to Cook County that were at issue in the Lawsuit.

In consideration of Plaintiffs' dismissal with prejudice of all claims against the Defendants in the Lawsuit, the Defendants release and forever discharge Plaintiffs from aiL claims of any nature they have or may have against l'L~tintiffs thnt were or coukl have been asse1ted in the Lawsuit. This release is binding on the Defendants and their past, present and future partners, subsidiaries, attorneys, agents, owners, members, shareholders, representatives, employers, predecessors, successors in interest, heirs, trustees, assignors assignees, and insurers, or anyone else who may attempt to bring claims by or on behalf of the Defendants.

3. Waiver of right to bring unknown claims. Plaintiffs waive tbe rights and benefits of any provision ofthe laws of the United State, or of auy state which provides that a general release does not extend to claims which a Party does 110t lmow or suspect to exist at the time of agreei ng to the relea e, which if known to the Party may have materially affected the

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decision to provide the release. The immediately preceding sentence refers to, among all other similar statutes and n.lles, Section 1542 of the Califomia Civi l Code, which provides :

A general release does not extend to claims which the credLtor does not know or suspect to exist in his or her favor at the time of executing the release, which if knowu by him or her must have materially affected his or her settlement with the debtor.

4. Relators' Authority to Sign. Notwithstanding any other provision of this agreement, the Parties acknowledge that the Relators have authority to enter only an agreement ln principle at this time, and that their authority to execute a final agreement is contingent on first obtaining authority under Federal Rule of Civil Procedure 23 from the United States District Court for the Northern District of Illino is (the "District Cou11") pursuant to its jurisdiction over the case styled Young v. County of Cook, No. 06 C 552 (N.D. Ill.), as well as in any appeal of an order by lhe District Court respecting that authodty. The Relators agree that, as soon as practicable, they will in good faith take all steps necessary to seek authority to enter lhe settlement fi·om the District Court ot an indication fi.·om the District Court that no additional authority is necessary, including pursuing any appeal of an order declining to grant such authority. The Relators also agree that they will indicate by signature their final agreement to the terms of this Settlement Agreement as soon as practicable after obtaining authority from the federal court, or after an indication from the federal court that obtaining additional authority is not nece sary. Fh1ally, Relators agree that their final agreement to the l.enn of this Settlement Agreement is not contingent upon any award of attorney's fees by the federal court.

5. Settlement Payment. Within 30 days of the Relators' final signature Defendants shall make the following payments (collectively the "Settlement Payments"):

a. $26 million to the State Treasury, to be paid by check pursuant to written instructions to be provided by the Illinois Attorney General ("FCA Settlement Payment") as agreed by the Parties.

b. $26 million to Cook County. This payment shall be delivered by check pursuant to instructions to be agreed by counsel.

These Settlement Payments represent the full and final settlement of the claims against Defendants that were or could have been asserted in the Lawsuit and are the only monetary payment to be paid to Plaintiffs or their counsel by Defendants. All Parties will bear their own costs and attorneys' fees in connection with the Lawsuit.

6.' Relator's Share. Pursuant to 740 !LCS 175/4(d)(l ), the Attorn~y General shall, within thirty (30) days of receip t of the FCA Settlement Payment, direct the State Treasurer to disburse an amount equal to 25% of the FCA Settlement Payment ($6 500,000) to Rust Consulting for the benefit of Relator.

7. Payment to Cook County. Within five days of the Relators final signature, the Parties agree to jointly seek an order with the lll iuois Attorney General fi·om the CoW't directing disbursement of5/ J2ths of the FCA Settlement Payment ( $10,833,333) from the State Treasury to Cook County pursuant to 740 ILCS 175/4(d)(l).


8. Dismissal. The Parties have informed the Circuit Court of Cook County that the case has been settled, and the Court has previously entered an Order dismiss ing the matter without prejudice pursuant to the settlement, and vacating certain non-fmal (interlocutory) orders entered in the case, subject to reinstatement by the Parties if any necessary settlement approval is not obtained from the federal comt. Within five days of the receipt of payment by the State Treasury and Cook COlmty, tl1e Pattie shall seek dismissal of all claims in the Lawsuit with prejudice. Plaintiffs agree that neither they nor their delegates, agents, heirs, or assigns will ever seek to revjve the Lawsuit or fi.le new proceedings of any kind against the Defendants that refer· or relate to the claims that were or could have been asserted in the Lawsuit. The Parties further agree that they will jointly oppose any motion to vacate the dismissal entered by the Circuit Court.

9. Allocation. Plaintiffs allocate the Settlement Payments as follows: $26 million is allocated to the relief allowed under the False Claims Act comprised of $8.667 million in single damages, $8.666 million in double damages, and $8.666 million in treble damages, $14 million is allocated to the waiver ofPlaintiffs' right to appeal the Circuit Court's order finding that there was insufficient evidence to support an award of punitive damage, $6 million is allocated to prejudgment interest, and $6 million is allocated towards consequential damages that Cook County suffered (including fees and costs among oilier things) as a result of the failure to pay $20 million first and second layer excess coverage under the 2007 policies.

10. Effect on USI. Nothing in this Settlement Agreement shall be construed to release any claims relating to or against USI Insurance Services Corp. of Illinois, Inc. ("US~"). It is the Parties' intent that this Settlement Agreement shall have no effect on the claims of any Party against US I. The Parties agree that USI was a broker hired by Cook County with respect to the procurement of the insurance policies at issue in the Lawsuit and wa not an agent of the Defendants, or any of its affiliates.

11. Confidentiality. Cook County, Cook County's counsel, Relators, and Relators' counsel agree that they will not issue press releases, hold press conferences, or otherwise take steps to publicize the settlement in the media or on websites. Relators' counsel may describe generically on their website the total amount recovered in connection with the Yow1g litigation, provided that such a descr iption does not mention or allude to Defendants, the County's insUJance, or tllis Settlement Agreement in any way. If contacted by any media, all Parties and their counsel agree that they will not issue any comment other than to say that the matter has been resolved. It is understood that the District Court may order that notice of the settlement and/or request for attorneys' fees from the settlement :fimds be given to the class, and this paragraph is not intended to lim it or control the methods of notice that the court may order.

12. Entire Agreement. This Settlement Agreement constitutes the entire agreement between the Parties and supersedes all prior negotiations, written or oral, as well as the agreement signed by the Parties on March 16, 2017. The Parties represent that they received independent legal advice in connection with this Settlement Agreement and ~~ny Tights that they may be relinquishing through it and that, in entering into this Settlement Agreement, they have not relied on any representations or statements made by any other Party or by coullScl for any other Party, except for representations or statements expressly made in this Settlement Agreement.


13. Continuing Effect. The invalidity, illegality or unenforceability of any provision or part of any provision of this Settlement Agreement under any law shall not affect the other provisions or parts of this Agreement, whkb sl1all remain in full force and effect.

14. Modification and Amendment. No amendments, modifications or supplements to this Settlement Agreement may be made other than by a writing signed by all Parties.

15. Construction. Any ambiguity in this Settlement Agreement is not to be construed against any Pruty on the grounds that it drafted the Settlement Agreement. The Settlement Agreement shall be construed as though all Parties joimly prepared it.

16. Execution. This Settlement Agreement may be executed in faxed ore-mailed counterparts, each of which will be considered an original and all of which will constitute one document.

17. Authority w Enter into Agreement. The undersigned represent that they have full authority to execute this Settlement Agreement and that they have not assigned any of their t1gbts in this seltlement to any other person.

18. Tax Consequences. The DP.fendants make no warranties or representations regarding the tax consequences of the benefits provided through this AgreemenL. In tbe evem any taxing authority deem.s such benefits to be taxable, in whole or in part, the Defendants shall not be responsible for the payment of any such taxes.

19. Choice of Law. This Agreement shall be govemed, interpreted, and enforced pursuant to the laws of the State of Illinois, without giving effect to choice of law principles.

IN WITNESS WHEREOF, the Parties do hereby execute this Settlement Agreement intending to be bound hereby.

ILLINOIS NATIONAL INSURANCE COMPANY; INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA; LEXINGTON INSURANCE COMPANY; AIG CLAIMS; AIG, INC.

By: ______________________ __ Dated:

Printed Name and Title: ___ -"-----------

Relators (as to agreement in principle) Dated: 05/09/2017

~ q ) C\L~~.~~ By: _____ ~ __ ~-=----~---------


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CookCo,m;;~ ~ By: --,-r-=t._j=:=..;_~-f-f~+--=--1------

Print<d Name and "!l~eo iA+ '5. j2 =! , ! I

Loevy & Loevy (as to agreement in principle) Daled: 5/Y / J-Q()

Much Shelist, P.C. Dat!!d:

Byqe~ Printed Name and Title: s~w~ ~\o~)qf \ :rrw~~j(

Relators (as Lo final agreement) Dated:

By:--------.......----

Printed Name and Title: ___________ _

Loevy & Loevy (as to final agreement) Dated:

By: _ _ _ ..;___ ____ _ __ _


13. Continuing Effect. The invalidity, illegality or unenforceability of any provision or part of any provision of this Settlement Agreement under any law shall not affect the other provisions or parts of this Agreement, which shall remain in full force and effect.

14. Modification and Amendment. No amendments, modifications or supplements to this Settlement Agreement may be made other than by a writing signed by all Parties.

15. Construction. Any ambiguity in this Settlement Agreement is not to be construed against any Party on the grounds that it drafted the Settlement Agreement. The Settlement Agreement shall be construed as !bough all Parties jointly prepared it.

16. Execution. This Settlement Agreement may be executed in faxed or e-mailed counterparts, each of which will be considered an original and all of which will constitute one document.

17. Authority to Enter into Agreement. The undersigned represent that they have full authority to execute this Settlement Agreement and that they have not assigned any of their rights in this settlement to any other person.

18. Tax Consequences. The Defendants make no warranties or representations regarding tbe tax consequences oftbe benefits provided tbrough this Agreement. In tbe event auy taxing authority deems such benefits to be taxable, in whole or in part, the Defendants shall not be responsible for the payment of any such taxes.

19. Choice of Law. This Agreement shall be governed, interpreted, and enforced pursuant to the laws of the State of Illinois, without giving effect to choice of law principles.

IN Wl1NESS WHEREOF, tbe Parties do hereby execute this Settlement Agreement intending to be bound hereby.

ILLINOIS NATIONAL INSURANCE COMPANY; INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA; LEXINGTON INSURANCE COMPANY; AIG CLAIMS; AIG, INC.

By:~~ Dated: -v-;o-!1

PrintedNarueandTitle: dos~ph Lorel1z.OJ itSJOOCik Ge11end Coun.re /

Relators (as to agreement in principle) Dated:

By: ___________ _

case: 1:06-cv-00552 document #: 858-1 filed: 05/11/17...

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