Amid allegations of breached ethics rules and conflicts of interest, Swiss insurance group Zurich Financial Services AG ( ZURN) and its U.S. subsidiary Farmers Group, Inc. were recently asked to post a complete set of the ex parte motions submitted to the Los Angeles County Superior Court on the official Fogel v. Farmers settlement website.
The request was made in connection with an ongoing controversy surrounding the concurrent legal representation by Farmers Group, Inc.'s legal counsel (Law Offices of Skadden Arps) of Thomas Girardi and Girardi & Keese in the Ninth Circuit matter of In Re Girardi throughout the entire time the Fogel v. Farmers Group, Inc. matter was being litigated.
According to an ethics complaint submitted to the State Bar of California, despite their respective roles as plaintiffs' counsel and defendants' counsel in Fogel v. Farmers, Girardi & Keese and Skadden Arps entered into a wholly separate agreement by which Skadden Arps represented Girardi & Keese and Thomas Girardi before the Ninth Circuit in the matter of In re Girardi ( Ninth Circuit case number 08-80090) following that court's issuance of an order to show cause why Girardi & Keese, Engstrom Lipscomb & Lack, Thomas Girardi, and Walter Lack should not be suspended, disbarred, or otherwise sanctioned as a result of the massive fraud which took place in litigation pursued by them against Dole Food Company.
The Ninth Circuit issued a decision heavily sanctioning both Walter Lack and Thomas Girardi (and their respective firms) almost $500,000; the court also reprimanded Mr. Girardi and suspended Mr. Lack from practicing before the court for a period of 6 months.
In order to conceal the relationship from class members in the Fogel class action (approximately 12.5 million Americans) , the day after the Ninth Circuit issued its published decision, Skadden Arps (on its behalf as well as on behalf of its clients, Girardi & Keese and Thomas Girardi) officially asked the court to remove its name from the decision. The court rejected the unusual request, noting that redaction was not merited.
Additionally, on April 28, 2011, after Zurich Financial Group and Farmers Group, Inc. realized that a complaint had been filed with the State Bar of California alleging ethical violations, attorneys for both Zurich and Farmers approached the Los Angeles County Superior Court judge overseeing the Fogel matter (Judge William Highberger), seeking and obtaining an ex parte order modifying the settlement agreement, with little or no opposition from the plaintiff class. (Thomas Girardi, Walter Lack, as well as several attorneys form the state of Texas)
Additionally, per the ex-parte order, the class was notified that once the court approves the settlement, class members will be prohibiting from alleging in the future that they were not adequately represented by their attorneys due to the prior attorney client relationship between Girardi & Keese and Skadden Arps.
According to sources familiar with the situation, the request to post a complete set of the ex parte motion on the official Fogel settlement website was made to provide class members notice of all relevant events. "It is only fair that the class and objectors be afforded an opportunity to review those documents in order to formulate replies and state their positions in an educated manner at the upcoming fairness hearing," the source stated.
The settlement of Fogel v. Farmers Group, a nationwide class action lawsuit pending in Los Angeles County Superior Court, will resolve all claims dating back to 1999, in a complaint originally filed in August 2003.
According to Farmers Group, Inc., " under the terms of the settlement a sum of $455 million will be made available to up to 13 million policyholders who may qualify for distributions under the settlement, with any residual amount going to the Exchanges owned by their respective policyholder subscribers. While the allocation plan for payments to class members has not yet been determined, and while actual individual payments may vary considerably, this averages out to a mere estimated $35 per class member or policyholder subscriber. Zurich also will pay attorneys' fees to class counsel of up to $90 million.
As part of the settlement, plaintiffs have agreed to dismiss the case and drop all claims against FGI and its parent, Zurich. All terms of the proposed settlement are subject to execution of a formal settlement agreement and court approval.
Robert Woudstra, Farmers Group Chief Executive, stated that his company settled rather than prolonging the uncertainty and cost of a legal battle that has already lasted seven years. Farmers Insurance Group of Companies is the nation's third-largest insurer of both personal lines passenger automobile and homeowners insurance, and also provides a wide range of other insurance and financial services products."
*Farmers is a trade name and may refer to Farmers Group, Inc. or the Farmers Exchanges, as the case may be. Farmers Group, Inc., a management and holding company, along with its subsidiaries, is wholly owned by the Zurich Financial Services Group. The Farmers Exchanges are three reciprocal insurers (Farmers Insurance Exchange, Fire Insurance Exchange and Truck Insurance Exchange), including their subsidiaries and affiliates, owned by their policyholders, and managed by Farmers Group, Inc. and its subsidiaries.
For more information about Farmers, visit its website at www.farmers.com.
For more information about the Fogel settlements, including links to the official settlement web-site, please visit: http://tinyurl.com/fogelvfarmersgroup