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HomeMy WebLinkAbout94-907 civilDAUPHIN DEPOSIT BANK AND · TRUST COMPANY, ' Plaintiff ' o VS. RALPH W. HESS, JOAN B. PATTISON and JERED L. HOCK, individually and on behalf of all others similarly situated, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 907 CIVIL 1994 , ACTION FOR DECLARATORY JUDGMENT CLASS ACTION ORDER AND NO W, this ~, .4. day of September, 1999, it is hereby ordered as follows' 1. If not already provided, counsel for plaintiff will forthwith provide an updated mailing list of Class Members to counsel for defendants. Likewise, counsel for plaintiff shall provide an updated list of surviving spouses who are entitled to the benefits of paragraph 9 of the Settlement Agreement and Mutual Release. · 2. On or before October 15, 1999, counsel for defendants shall mail this settlement implementation order to all Class A and Class B members (including surviving spouses). In memorandum format, counsel for defendants shall notify the recipient that he or she is a member of Class A or Class B and subject to the provisions of the Settlement Agreement and Mutual Release which are applicable to that class. 3. In light of the bank's acceptance of all Class A affidavits, there will be no hearing on disputed Class A affidavits. Accordingly, the settlement approval date as defined by the Settlement Agreement and Mutual Release shall be the date of this order. 4. If B&R Advisers, Inc., is unable to complete the descriptive pamphlet, identified in paragraph 3.B. of the Settlement Agreement and Mutual Release, the parties shall retain the services of a similar entity to prepare the descriptive pamphlet, subject to the bank's obligations to pay the reasonable costs as set forth in the Settlement Agreement and Mutual Release. , 5.A. The settlement effective date shall be November 1, 1999. The remaining obligations of the parties shall flow directly from this settlement effective date except as set forth in 5.B. and 5.C. B. The three settlement certificates for Class A and Class B members shall mature on October 1, 2006. C. The three settlement certificates for the surviving spouses and designated beneficiaries of deceased account holders shall mature ten (10) years after the closing of the eighteen-month variable account with appropriate credit to be given for interest paid during the pendency of the apPeal of our earlier order. 6. Pursuant to paragraph 15 of the Settlement Agreement and Mutual Release, a judgment of dismissal of the above-referenced action is hereby entered, with prejudice, and the bank and all class members are conclusively bound by such dismissal with the matters alleged in the legal action being deemed thereby to have been fully litigated, concluded and settled. This court shall retain jurisdiction over any matters related to the enforcement of this order including, but not limited to, payment of counsel fees and the implementation of the Settlement Agreement and Mutual Release. James J. Kutz, Esquire LeRoy S. Zimmerman, Esquire Bridget E. Montgomery, Esquire F or the Plaintiff Christopher C. Conner, Esquire Daniel L. Sullivan, Esquire For the Defendants :rlm BY THE COURT, Hess, J. DAUPHIN DEPOSIT BANK AND · TRUST COMPANY, Plaintiff VS. RALPH W. HESS, JOAN B. PATTISON and JERED L. HOCK, individually and on behalf of all others similarly situated, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 907 CIVIL 1994 ACTION FOR DECLARATORY JUDGMENT CLASS ACTION MEMORANDUM AND ORDER As both sides to this controversy are acutely aware, this matter resided in the appellate courts for some three years prior to being returned to us for an implementation of a settlement. The settlement, by its terms and conditions, was to have been in effect in 1996. It is now 1999. The parties take diametrically opposed views concerning the implementation of the settlement. Both arguments have merit. Dauphin Deposit Bank seeks enforcement of the settlement as of September 1, 1996, and requests an immediate "disgorgement" of overpaid interest. While an easy approach, this would occasion serious financial repercussions for account holders who have done absolutely nothing to bring this matter upon themselves. The bank's position also fails to acknowledge any validity in the depositors' argument that implementation of this settlement ought to be prospective. The defendants would implement the settlement beginning today. They argue that parties to this sort of litigation are on notice concerning the mechanics of settlement, that the possibility existed all along that the court would not approve a settlement and that this matter would find review in the highest court of Pennsylvania. Their argument loses sight of the fact that the Supreme Court determined that this court abused its discretion by not approving the settlement. NO. 907 CIVIL 1994 We, seeking some middle ground, have explored the feasibility of a prospective reduction in interest rates on the individual accounts to compensate for overpaid interest. These reduced rates would apply through the balance of the term of the instrument, if any. Upon reflection, we have concluded this method is fraught with difficulty. It would, for example, remove from the accounts amounts deposited since the filing of the appeal. This requires the court to speculate as to whether the bank should have accepted these deposits in the first place. The bank also seeks certain actuarial adjustments which were not contemplated in the original settlement agreement. We agree with the depositors that the attempt to resolve this matter by adjusting interest rates, in futuro, presents them with virtually insurmountable problems in monitoring the settlement. It is the role of the court in all cases to apply the law. Unfortunately, our research has revealed no other case like this one. Where, however, there is no legal guidance, it seems that, at the very least, the court ought to seek a result which is fair. This result, in turn, may be one which is not necessarily embraced by either side. With respect to this case, in particular, we have searched for a resolution which, while perhaps not acceptable to either side, may be sufficiently palatable so as to finally bring an end to this litigation. We are satisfied that the most workable method of implementation is to shorten the term of the certificates which are the subject of this settlement. By this method, the bank's obligations under the settlement agreement would cease on the same day as they would have had this court approved the settlement in 1996. We realize that this dramatically shortens the term of the benefits to which the depositors now say they are entitled. By the same token, the bank may have overpaid interest during the pendency of the appeal which they will not now be in a position 2 NO. 907 CIVIL 1994 to recover. It is by no means a perfect resolution. Nor is it, however, some insouciant attempt on the part of the court to bring closure to this matter. Rather, we believe it is a readily understandable method of implementation which will not bring undue hardship to either side. ORDER AND NOW, this day of September, 1999, it is hereby ordered as follows' 1. If not already provided, counsel for plaintiff will forthwith provide an updated mailing list of Class Members to counsel for defendants. Likewise, counsel for plaintiff shall provide an updated list of surviving spouses who are entitled to the benefits of paragraph 9 of the Settlement Agreement and Mutual Release. 2. On or before October 15, 1999, counsel for defendants shall mail this settlement implementation order to all Class A and Class B members (including surviving spouses). In memorandum format, counsel for defendants shall notify the recipient that he or she is a member of Class A or Class B and subject to the provisions of the Settlement Agreement and Mutual Release which are applicable to that class. 3. In light of the bank's acceptance of all Class A affidavits, there will be no hearing on disputed Class A affidavits. Accordingly, the settlement approval date as defined by the Settlement Agreement and Mutual Release shall be the date of this order. 4. If B&R Advisers, Inc., is unable to complete the descriptive pamphlet, identified in paragraph 3.B. of the Settlement Agreement and Mutual Release, the parties shall retain the services of a similar entity to prepare the descriptive pamphlet, subject to the bank's obligations to pay the reasonable costs as set forth in the Settlement Agreement and Mutual Release. 3 NO. 907 CIVIL 1994 5.A. The settlement effective date shall be November 1, 1999. The remaining obligations of the parties shall flow directly from this settlement effective date except as set forth in 5.B. and 5.C. B. The three settlement certificates for Class A and Class B members shall mature on October 1, 2006. C. The three settlement certificates for the surviving spouses and designated beneficiaries of deceased account holders shall mature ten (10) years after the closing of the eighteen-month variable account with appropriate credit to be given for interest paid during the pendency of the appeal of our earlier order. 6. Pursuant to paragraph 15 of the Settlement Agreement and Mutual Release, a judgment of dismissal of the above-referenced action is hereby entered, with prejudice, and the bank and all class members are conclusively bound by such dismissal with the matters alleged in the legal action being deemed thereby to have been fully litigated, concluded and settled. This court shall retain jurisdiction over any matters related to the enforcement of this order including, but not limited to, payment of counsel fees and the implementation of the Settlement Agreement and Mutual Release. BY THE COURT, K~Hess, J. NO. 907 CIVIL 1994 James J. Kutz, Esquire LeRoy S. Zimmerman, Esquire Bridget E. Montgomery, Esquire For the Plaintiff Christopher C. Conner, Esquire Daniel L. SUllivan, Esquire For the Defendants :rlm