At this point in Katrina litigation, it takes a long memory or short search to come up with enough background to give context to recent developments in a case such as Kuehn v State Farm.
Henry and June Kuehn were among the hundreds of policyholders who attempted to resolve their claim right up to the day the August 29, 2008 SOL would have prevented filing suit. SLABBED published Double Trouble – Kuehn v State Farm, the first of 20 mentioning the case, the following February. Sop’s Henry and June and the Topic of State Farm’s Cancerous Claims Handling: A Kuehn v State Farm Update (Updated) and Well here is another nice mess you’ve gotten me into Part Deux: Judge Senter lowers the boom on the topic of State Farm’s cancerous Katrina claims handling. Slabbed Congratulates Henry and June Kuehn were the last summarizing the issues.
From August 2009 forward, Kuehn v State Farm has been headed to trial on the remaining issues with State Farm attempting to settle. The Company made two Offers of Judgment, the second this past April, and the case settled – or so it seemed until the Kuehn’s filed a Motion to Enforce Settlement . Ironically, the sticking point is State Farm’s insistence the terms of the settlement are confidential – and what we learn is that all along it has been State Farm, not plaintiffs, requiring confidential agreements to settle Katrina claims litigation!
On approximately May 13, 2010, State Farm conveyed an offer of settlement through its attorney, John Banahan. No mention of confidentiality whatsoever was made in defense counsel’s conveyance of the offer. On May 17, 2010, counsel for the Kuehns, Earl Denham, accepted the offer of settlement. Thus, the case was settled. State Farm is now, after the fact, attempting to require that the settlement should be confidential, when those terms simply were not even discussed as part of the settlement offer which was accepted by the Kuehns.
Because the offer was made by State Farm and accepted by the Kuehns, the Kuehns would ask that the Court enforce the terms of the settlement as agreed upon, with no after-the-fact condition of confidentiality. Confidentiality in this case is inappropriate, among other things, since State Farm has paid no consideration to the Kuehns for it, and State Farm had a duty to raise the issue prior to settling.
State Farm has taken the position that because the last Hurricane Katrina case that Bryan, Nelson, Schroeder, Castigliola & Banahan settled with Denham Law Firm contained a confidentiality provision, that the Kuehns “should have known” that it intended confidentiality to be a condition of settlement. Aside from the fact that the Kuehns’ lawsuit is not remotely similar to a typical Hurricane Katrina case, the Kuehns are in no way obligated to settle on the same or similar terms as the single prior case Bryan, Nelson, Schroeder, Castigliola & Banahan litigated with Denham Law Firm. See Platcher v. Health Professionals, Ltd., 549 F. Supp. 2d 1040, 1043-1044 (C. Dist. Ill. 2008) (holding that settlement should be enforced without confidentiality clause, reasoning that if confidentiality were material, it should have been specifically raised during settlement negotiations, and fact that plaintiffs’ counsel had been involved in prior similar litigation in which confidentiality provision was included in settlement was not considered to put plaintiffs themselves on notice of such practice).
State Farm simply cannot seek to add new conditions to the settlement agreement with the Kuehns, as its offer has already been accepted.
Naturally, State Farm filed a my-way-or-the-highway Response opposing the Kuenhs’ position:
After months of continued negotiations, State Farm made its final offer to the Plaintiffs to resolve this case on May 13, 2010. In response to State Farm’s offer, counsel for the Plaintiffs responded in writing on May 17, 2010, accepting the monetary figure offered by State Farm, but added an additional condition that confidentiality language would not be included in the release. See Exhibit A, May 17, 2010, letter from Earl Denham [monetary figure redacted]. Contrary to the representations in Plaintiffs’ motion, State Farm is not “adding new conditions to an agreement”, but rather Plaintiffs are adding a condition to their acceptance of State Farm’s offer to settle the case resulting in a counteroffer to State Farm…
Further, settling a case without confidentiality is contrary to the course of dealing under which State Farm and the Denham Law Firm have been operating under for years since Hurricane Katrina. In their motion, Plaintiffs state that State Farm’s position is in reliance on “the last Hurricane Katrina case” that Bryan, Nelson, Schroeder, Castigliola & Banahan settled with the Denham Law Firm. However, not only did the last Hurricane Katrina case that State Farm settled with the Denham Law Firm contain confidentiality language, but each and every one of the thirtyfour (34) Hurricane Katrina cases settled with the Denham Law Firm has included confidentiality language. Attached as Exhibit B is a list of each plaintiff represented by the Denham Law Firm who have settled a Hurricane Katrina case with State Farm Fire and Casualty Company. Every single release related to the resolution of each of the plaintiffs listed in Exhibit B included confidentialitylanguage. In fact, a substantially identical release was used in each and every one of those cases. It is clear that the Kuehns, through their attorneys, should in fact have known that confidentiality was to be a condition of settlement.
In this case, there was no meeting of the minds as to the confidentiality provision, and therefore a settlement has not been reached.
In conclusion, the Plaintiffs’ response to State Farm’s offer on May 17, 2010, constituted a counter-offer rather than acceptance. In addition, State Farm is able to rely on the course of dealing with the Denham Law Firm in thirty-four (34) prior Hurricane Katrina settlements, and the Plaintiffs’ motion should be denied.
Also, naturally, given Denham’s reputation for not making a claim he can’t back up, the Kuehns filed a Reply countering State Farm’s Response:
At no time had there ever been any discussion of State Farm receiving any type of confidentiality agreement from the Plaintiffs.
In accepting the offer Plaintiffs’ counsel wrote,
“Dear John: My folks have considered your offer over the weekend and are willing to accept $XXX,XXX to settle their claim with State Farm. The release language should simply be standard language without any reference to confidentiality, as that has not been any part of our discussion.”
See attached Exhibit “A,” Letter from Denham to Banahan dated May 17, 2010, with settlement amount redacted.
State Farm makes no assertion to the contrary, but instead attempts to spin the letter as an attempt by the Plaintiffs to add new conditions to the settlement agreement, which isentirely contrary to the facts as pleaded by both sides.
The only agreement the parties had was to settle the claim for a specified amount of money. If State Farm wished to receive in the settlement negotiations a confidentiality
agreement, this would have formed a part of the discussions which led to the final settlement, but State Farm never one time expressed any interest in receiving or paying the Kuehns for a confidentiality agreement.
The case of Platcher v. Health Professionals, Ltd., 549 F. Supp. 2d 1040, 1043-1044 (C. Dist. Ill. 2008), cited by the Plaintiffs in the  Motion to Enforce Settlement, is identical in fact to the instant case and ought to be controlling in this matter.
The Plaintiffs are entitled to receive their money without additional conditions being placed on their receipt of their settlement by State Farm apart from their giving up their right to trial.
SLABBED eagerly awaits the Court’s decision!