Kuehns put State Farm's foot in the other shoe with Motion to Enforce Settlement

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 [108] 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!

3 thoughts on “Kuehns put State Farm's foot in the other shoe with Motion to Enforce Settlement”

  1. Nowdy. Not to make this about JP again but State Farm sure sounds like their attorneys went to the same “Keep it all secret and screw our opponents” law firm as did JP’s .
    I have often wondered how much precedent has been lost by these confidentiality agreements over all the years.
    And I have always believed that keeping secrets about bad things someone did to you was never a good idea. Think Pedophile Priests Confidential settlements. Tends to allow the bad things to rock on.
    Always taught my child that if ANYONE including me told her not to tell anyone about something bad that happened that she was to RUN to every adult and child she knew and immediately tell them.
    Works for me.
    Exactly what is State Farm afraid of? ( I know that sounds like a rhetorical question but I really am asking because I have never understood the rationale)
    The number of times you commit certain no-nos determines your intent and customary operation and in criminal cases can result in multiple billing

    Maybe judges should begin refusing to allow confidentiality clauses. Would have caught the revolving door pedophile priests trick a lot sooner. And it serves no purpose other than to protect the guilty bastards.

    I know in some cases the plaintiffs might want the c clause. I am speaking of where the defense demands it.

  2. One day I will describe the utter non-sense I experienced when settling a case (non-hurricane) only to have the defendant insurer engage in some of the most egregious conduct one could imagine after we moved to enforce the settlement.

    Anywho, I don’t know why plaintiffs’ counsel wrote that extra language about no confidentiality agreement. It was unnecessary— he should have simply written “accepted” and then dated and signed the letter from State Farm and faxed it back.

    Seems like plaintiffs’ counsel created more of a problem than necessary.

  3. I hope this post serves as a good lead in to answer Alan Lange’s rhetorical question regarding why more newspapers were not supporting his efforts to unseal the State Farm / Jim Hood settlement, a post Nowdy has had in the works for over 2 weeks. The answer is 2 fold, part of which is contained in this post.

    In Hood, the confidentiality provision was an agreed upon part of the settlement, such provision State Farm is evidently willing to breach when they perceive a tactical advantage.

    We don’t believe in confidential settlements here at Slabbed. The courts are a public accommodation and as such we feel that seal should be used rarely to shield the public from information presented in their courts.

    That said I think it is clear that Judge Bramlet had his mind made up in Hood before that now infamous Natchez hearing. If he is going to selectively break confidential settlements IMHO he puts the whole enchilada in play. Simply put all the confidentiality settlements in the policyholder litigation should be broken if Bramlet breaks one. After all, I’m certain folks like Dr McFarland would love to talk about how much money State Farm paid him.

    So why aren’t more media outlets are not helping Lange besides 3 Raycom communications stations here in Mississippi? Probably the reasons I cited. I’m told Raycom is owned by Blue Cross though their website says they are employee owned. Such ownership would certainly explain some of David Vincent’s sillier editorials on insurance and that hit piece Marsha Thompson did on the Rigsby sisters back when.

    While I agree with Nowdy any effort to peel back secrecy in the courts is a worthy effort, the more we dig on this the more the more questions we have.


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