SETTLEMENT AGREEMENT. Vehicle Insurance Company, Allstate Country Mutual Insurance Company, Northbrook

Transcription

1 SETTLEMENT AGREEMENT This Settlement Agreement ("Agreement") is made by and between Robert Jacobsen, on behalf of himself and all others similarly situated (the "Settlement Class," as defined below), and defendants Allstate Insurance Company, Allstate Indemnity Company, Allstate Property & Casualty Insurance Company, Allstate Fire & Casualty Insurance Company, Allstate Property & Vehicle Insurance Company, Allstate Country Mutual Insurance Company, Northbrook Indemnity Company, and Allstate New Jersey Insurance Company (collectively referred to as "Allstate" as defined below), by and through their respective counsel. RECITALS WHEREAS, Jacobsen filed an action entitled Jacobsen v. Allstate Insurance Company, et a!., Case No. ADV (d) (the "Action"), which is now pending in the Montana Eighth Judicial District Court for Cascade County (the "Court"), that alleged that Allstate, through the use of its Claims Core Process Redesign ("CCPR"), including fast track, had unfairly settled Jacobscn's claim; and WHEREAS, Jacobsen filed a Fourth Amended Complaint adding class action allegations that asserted that Allstate, through the use of CCPR, including fast track, had unfairly settled the claims of a class of Montana unrepresented bodily injury claimants; and WHEREAS, the Court has certified certain claims for declaratory and injunctive relief as appropriately maintained by Jacobsen as class claims pursuant to Montana Rule of Civil Procedure 23; and WHEREAS, Jacobsen has filed a Fifth Amended Complaint that modifies the class claims and definition and adds additional Allstate-related entities which have settled class members' claims; and EXHIBIT

2 WHEREAS, Allstate has denied the allegations of the Fifth Amended Complaint, denying that the action is properly maintained as a class action, and denying that it unfairly settled Jacobsen's or the putative class members' claims, or acted wrongfully in any way; and WHEREAS, Jacobsen, through counsel, while believing that the claims asserted in the Action have substantial merit, has examined the benefits to be obtained under the terms of the Proposed Settlement, and believes that, in consideration of all the circumstances, the Proposed Settlement embodied in this Agreement is fair, reasonable, adequate and in the best interests of the Class Members; and WHEREAS, Allstate, while denying wrongdoing of any kind, and without admitting liability, nevertheless has agreed to enter into this Agreement to avoid further expense, inconvenience and the distraction of burdensome and protracted litigation. NOW, THEREFORE, IT IS HEREBY AGREED by and between the parties, through their respective counsel, that the Action be settled and compromised as between Jacobsen, the Class and Allstate, upon approval by the Court after hearing as provided for in this Agreement, on the following terms and conditions: I. DEFINITIONS 1. "Allstate" means Allstate Insurance Company, Allstate Indemnity Company, Allstate Property & Casualty Insurance Company, Allstate Fire & Casualty Insurance Company, Allstate Property & Vehicle Insurance Company, Allstate Country Mutual Insurance Company, Northbrook Indemnity Company, and Allstate New Jersey Insurance Company. 2. "Bodily injury Claim" means an insurance claim that was submitted to Allstate under either the Bodily Injury, Underinsured Motorist or Uninsured Motorist insurance policy coverages for bodily injuries suffered by a Person related to a motor vehicle accident.

3 3. "Claim Re-adjustment Request Form" means the blue form that a Class Member must timely complete, sign and send to the Settlement Administrator, or submit on the Class Settlement website, in order to be eligible to have his/her Bodily Injury Claim re-adjusted, in the format attached hereto as Exhibit A. 4. "Claims Filing Deadline" means 30 days after the entry of Final Judgment. 5. "Class" means all Class Members who have not validly and timely requested exclusion. 6. "Class Counsel" means Larry Anderson, Attorney at Law, P.C, Dan Buckley of Buckley Law Office, P.C, and David Berardinelli of Berardinelli Law Firm. 7. "Class Member" means all Persons: (1) who made Bodily Injury Claims to Allstate; (2) relating to an underlying motor vehicle accident that occurred in Montana or involved an Allstate automobile insurance policy issued in Montana; (3) who did not hire a lawyer to help them settle their Bodily Injury Claims; (4) whose Bodily Injury Claims were adjusted by Allstate to a settlement less than the applicable policy limits from July 1,1995 to the date of entry of the Preliminary Approval Order; and (5) who are not Dempsey Settlement Class Members or Cazares Settlement Class Members. 8. "Class Notice" or "Notice" means the notice of the preliminary approved settlement, in a format materially similar to that attached hereto as Exhibit B, which shall be mailed to Potential Class Members, in an 8 x 11 envelope, in a format substantially similar to that attached hereto as Exhibit C, and shall also be available on the Class Settlement Website. 9. "Class Period" means from July 1, 1995 to the date of entry of the Preliminary Approval Order. -3

4 10. "Class Settlement Website" means the website identified in the Class Notice as (if still available, or another similar website address if not available), which Allstate must maintain and populate with the information and/or documents specified in paragraphs 38 and "Cover letter" means the letters that Class Members will receive with their "Class Notice" in formats materially similar to Exhibit D attached hereto. 12. "Cazares Settlement Class Members" shall mean all Persons that fall within the class definition set forth in the settlement agreement resolving the matter styled Alberto Cazares et al., v. Allstate Ins. Co., et al. (Miller County, Arkansas, Case No. CV ) staled as follows: a. Each and every person who, during the Class Period [defined as January 1, 1994 though February 17,2009] (a) was an Insured Person [defined as (i) any Person [defined as "any natural person, individual, corporation, association, partnership, trust, or any other type of legal entity"] covered under the UM/UIM provisions of a policy of automobile insurance written or issued by Allstate [defined as including every Allstate entity set forth in paragraph 1 above] which was in effect during the Class Period, and (ii) any Person covered under the UM/UIM provisions of a personal insurance policy issued by CNA which was in effect during the Class Period"; and (b) submitted a Bodily Injury Claim [defined as "claim for loss from bodily injury or injuries submitted under UM/UIM coverage"] under UM/UIM coverage; and (c) such Bodily Injury Claim under UM/UIM coverage was evaluated using a Computerized Claims Assessment System [defined as "any past, present or future version of Colossus, Claims Outcome Advisor, ClaimslQ, or any other similar computerized system used to assist in the evaluation of General Damages in the adjustment of Bodily Injury Claims under UM/UIM coverage"]; (d) excluding (i) any Person whose Bodily Injury Claim under UM/UIM coverage is still pending, in whole or in part, as of the date of the Preliminary Approval Order [February 17, 2009], but not if the UM/UIM claim is pending because of the assertion of a claim, demand or cause of action against Allstate or CNA that would be released under the terms of this Settlement; (ii) any Person having a Bodily Injury Claim under UM/UIM coverage for

5 which Allstate or CNA made one or more payments totaling an amount greater than or equal to the applicable singular or aggregate policy limits for the Bodily Injury Claim(s); (iii) any Person who received no payment on a Bodily Injury claim under Uninsured Motorist ("UM") coverage; (iv) any Person whose only bodily injury claim(s) was settled in the CNA Commercial Lines Settlement; (v) any Person who is in the settlement class in the case Wells et al. v. Allstate Insurance Co. et al., Case No (LFO), which was finally approved on May 28, 2008; and (vi) all officers, employees and agents of Allstate or CNA, Neutral Evaluators; Class Counsel and their immediate family; any member of the Arkansas judiciary and their immediate family; Allstate or CNA's counsel of record and their immediate family; any Persons who filed Bodily Injury Claims in their official capacity as employees of federal, state or local governmental entities; and (vii) all Persons who make a timely election to be excluded from the [Cazares] Settlement Class. 13. "Dempsey Settlement Class Members" shall mean all Persons that fall within the class definition set forth in the settlement agreement resolving the matter styled Tyler Dempsey et al. v. Allstate Insurance Company (Butte County, Montana, Case No. CV BU-SEH) stated as follows: a. All Persons [defined as "any natural person, individual, corporation, association, partnership, trust, or any other type of legal entity"] (and their heirs, executors, administrators successors and assigns) who were an insured under a motor vehicle insurance policy or policies issued by Allstate [defined as "Allstate Insurance Company, and any of its past, present or future subsidiary, controlled, affiliated, related and/or parent corporations, business entities or divisions, and/or any other successors, assigns or legal representatives thereof] insuring one or more vehicles for medical payment coverage (MPC), and/or uninsured motorist coverage (UM) or underinsured motorist coverage (UIM), and who made a claim under the applicable coverage(s) during the period of August 1, 1995 through December 31, 2004, and were denied payment of covered losses under the applicable coverage(s) up to the aggregate limits of available coverages, and do not validly and timely request exclusion from the Class, in accordance with the provisions of the Class Notice [in the Dempsey case]. -5

6 14. "Effective Date" means that date defined in paragraph 77 of this Agreement or 30 days after the Final Judgment, whichever is later. 15. "Final Judgment" means the Court's Final Approval Order and Final Judgment, that finally approves the Settlement and dismisses the Action with prejudice, which shall be in the form attached hereto as Exhibit E to this Agreement, without material alteration. 16. "Final Settlement Hearing" means the hearing at which final approval of the settlement in this matter is ruled upon. 17. "Fixed Payment" means, for Class Members whose Bodily Injury Claims were originally settled for $1, or less, the amount that they are entitled to receive under this Agreement (as more fully explained in paragraph 61 below) if they timely complete, sign and send the Fixed Payment Request Form to the Settlement Administrator or submit it on the Class Settlement Website on or before the Claims Filing Deadline. 18. "Fixed Payment Request Form" means the yellow form that a Class Member must timely complete, sign and send to the Settlement Administrator, or submit on the Class Settlement Website on or before the Claims Filing Deadline in order to be eligible to receive a Fixed Payment, in the format attached hereto as Exhibit F. 19. "Person" means any natural person, individual, corporation, association, partnership, trust or any other type of legal entity. 20. "Potential Class Members" means all Persons who could qualify as a Class Member, prior to the date by which exclusion from the Class must be requested. 21. "Preliminary Approval Order" shall mean an order in the form attached hereto as Exhibit G to this Agreement, without material alteration, that the Court enters preliminarily

7 approving the Agreement, appointing the Settlement Administrator, and authorizing the issuance of Class Notice and publication notice as set forth in Section III below. 22. "Proposed Settlement" means the terms and conditions set forth in this Agreement. 23. "Released Claims" means and includes any and all Unknown Claims, known claims, rights, demands, actions, causes of action, suits, debts, liens, contracts, liabilities, agreements, interest, costs, expenses, penalties or losses for the acts alleged or which are or could have been alleged by the Class Members in the Action as they pertain or relate to the motor vehicle accident and the adjustment or payment of their Bodily Injury Claims, including, but not limited to, statutory and non-statutory attorneys' fees, breach of contract, improper claim handling and/or bad faith claim handling with respect to the Bodily Injury Claims and payments made under this settlement, fraud, misrepresentation, deception, consumer fraud, punitive damages, interest, injunctive relief, declaratory judgment, costs, unfair trade practices, mental or emotional distress, which were brought or could have been brought in the Action. 24. "Released Persons" means Allstate, and any of its past, present or future officers, stockholders, attorneys, insurers, directors, agents, employees and/or independent contractors, and/or any other successors, assigns or legal representatives thereof. 25. "Settlement Administrator" shall mean Epiq Systems, Inc. The Settlement Administrator shall be approved by the Court in its Preliminary Approval Order and Final Judgment. 26. "Settlement Class" means all Persons (and their heirs, executors, administrators, successors and assigns): (1) who made Bodily Injury Claims to Allstate; (2) relating to an underlying motor vehicle accident that occurred in Montana or involved an Allstate automobile insurance policy issued in Montana; (3) who did not hire a lawyer to help them settle their

8 Bodily Injury Claims; (4) whose Bodily Injury Claims were adjusted by Allstate to a settlement less than the applicable policy limits from July 1, 1995 to the date of entry of the Preliminary Approval Order; (5) who do not validly and timely request exclusion from the Class, in accordance with the provisions of the Class Notice and (6) who are neither Dempsey Settlement Class Members nor Cazares Settlement Class Members. The Settlement Class shall exclude current and former employees and directors of Allstate. 27. "Umpire(s)" means neutral third parties, mutually acceptable to Class Counsel and Allstate and appointed by the Court, who will hear and be the binding arbiters of any appeal from a Notice of Determination, as more fully described in paragraphs below. 28. "Unknown Claims" means claims arising out of facts found hereafter to be other than or different from the facts now believed to be true, relating to any matter covered by this Agreement, as to any of the Released Claims, as specifically defined in paragraph 23 above, so that each Class Member shall be deemed to have expressly waived any and all Unknown Claims relating to any matter covered by this Agreement. H. PRELIMINARY CERTIFICATION OF SETTLEMENT CLASS 29. For settlement purposes only, the parties hereto stipulate that the Court may enter a Preliminary Approval Order appointing Jacobsen as representative of the Class and appointing the following counsel as Class Counsel: Lawrence A. Anderson Attorney at Law, P.C 300 4th Street North P. O. Box 260S Great Falls, Montana (406) Daniel P. Buckley Buckley Law Office, P.C. 125 W. Mendenhall Street Suite 201

9 Bozeman, Montana (406) David J. Berardinelli Berardinelli Law Firm P.O. Box 2084 Santa Fe, New Mexico For settlement purposes only, the parties hereto stipulate that the Court may enter an order modifying the class definition set forth in the Court's January 30, 2012 certification order as follows: all Persons: (I) who made Bodily Injury Claims to Allstate; (2) relating to an underlying motor vehicle accident that occurred in Montana or involved an Allstate automobile insurance policy issued in Montana; (3) who did not hire a lawyer to help them settle their Bodily Injury Claim; (4) whose Bodily Injury Claims were adjusted by Allstate to a settlement less than the applicable policy limits from July 1, 1995 to the date of entry of the Preliminary Approval Order and (5) who are neither Dempsey Settlement Class Members nor Cazares Settlement Class Members. 31. By entering into this Agreement, Allstate does not concede or acknowledge that the Action is properly maintainable as a class action. In the event that this Agreement is terminated pursuant to its terms, or a Final Judgment and Approval of the Settlement and Dismissal of the Action for any reason does not occur, Allstate reserves all of its rights to challenge the appropriateness of class certification. HI. NOTICE. COSTS OF NOTICE. AND ADMINISTRATION OF SETTLEMENT 32. Notice of the pendency of the Action and of the Settlement shall be made by the Settlement Administrator in the manner more fully described in this Section III.

10 A. Mailing of Class Notice. 33. The Class Notice, along with a designated Cover Letter, in a format materially similar to that attached hereto as Exhibit D, shall be sent to the last known address of each Person Allstate has determined may be a Class Member in this case, along with the Claim Re adjustment Request Form and, if applicable to that class member, the Fixed Payment Request Form. The documents will be sent in the following order: 1) Cover Letter, 2) Claim Re adjustment Request Form and Fixed Payment Request Form (if applicable) and 3) Class Notice. The Class Notice will also be available for access and review on the Class Settlement Website, at (if still available, or another similar website address if not available). The last known address shall be determined from information available in Allstate's computerized data bases, as updated through the National Change of Address database and an advanced search database prior to the Class Notice being sent (along with the Cover Letter). The advanced search database will be approved by Class Counsel, and such approval shall not be unreasonably withheld. Mailing of Class Notice shall be completed within 45 days of the dale of entry of the Preliminary Approval Order. 34. The parties agree that upon preliminary approval of the modified class definition and appointment of Class Counsel, the form of order submitted by the parties for approval of the Class Notice and mailing of the Class Notice shall include the finding that the Class Notice is an authorized communication with persons who may or may not be represented by counsel, olher than Class Counsel, in matters that may or may not be affected by this Agreement. B. Publication, Radio Notice, and Internet banners. 35. The Class Notice shall be supplemented by publication notice, in the form materially similar to that attached hereto as Exhibit H, which will be published as a 54 page notice at least once a week for four consecutive weeks, on Fridays, if possible, in the following -10-

11 papers: Great Falls Tribune; Billings Gazette; Bozeman Daily Chronicle; Helena Independent Record; Missoulian; Kalispell Daily Inter Lake; Sidney Herald; Miles City Star; Glendive Ranger-Review; Montana Standard and Havre Daily News. Publication notice shall be completed within 45 days of the date of entry of the Preliminary Approval Order. 36. The publication notice will contain a toll free number which any Potential Class Member may call to receive the Class Notice, and the name, address and telephone number of Class Counsel. 37. Publication notice shall also include radio announcements with the content set forth to that attached hereto as Exhibit I, which shall be placed by the Settlement Administrator on the following local radio stations during a 2 week period, with an aggregate total of between 75 and 100 radio spots, each not to exceed 30 seconds: KBOW (AM 550 Butte); KYUS (FM 92.3 Miles City); KBBZ (FM 98.5 Kalispell); KKBR (FM 97.1 Billings). Internet banner announcements with the content set forth similar to that attached hereto as Exhibit J, shall be placed by the Settlement Administrator on the news websites of the newspapers identified in paragraph 35 above (except the Miles City Star) during a 2 week period, with an aggregate total of approximately 100,000 impressions. Radio and internet banner publication notice shall be completed within 45 days of the date of entry of the Preliminary Approval Order. C. Toll Free Call Center and Class Settlement Website. 38. Allstate, through the Settlement Administrator, will establish and pay for a toll free number which any Potential Class Member may call to receive the Agreement and Class Notice. Operators will be available during regular business hours (6am - 6pm PST) to answer questions and provide responses consistent with the Class Notice. The Settlement Administrator shall also create and maintain a Class Settlement Website, with the website address of if still available, containing the information concerning the -11-

12 Proposed Settlement specified in paragraph 39. The Class Settlement Website will not mention Allstate in its title and/or URL address. The toll free number and Class Settlement Website referred to herein will be established and operational by a date no later than the date the Class Notice is initially mailed. They will remain operational until 30 days after the Claims Filing Deadline, or until 30 days after an order resolving all appeals from the Final Approval Order, whichever is later. 39. The Class Settlement Website will include downloadable, digital copies, of the following: a) the Class Notice; b) this Settlement Agreement; c) the Fixed Payment Request Form; d) the Claim Re-adjustment Request Form; e) the Class Settlement Website FAQ's, which are substantially similar to the ones attached hereto as Exhibit K; f) the Motion for Preliminary Approval and supporting brief; g) Class Counsel's fee petition; h) the District Court's January 30, 2012 Order certifying Rule 23(b)(2) Class Action; i) the Montana Supreme Court's August 29, 2013 opinion, affirming the class certification, but modifying the certified class relief on remand; j) and such other pleadings or documents agreed upon by Class Counsel and Allstate's Counsel. D. Costs of Notice. 40. Allstate shall pay all costs associated with providing notice of the pendency of the Action and the settlement embodied herein to the Class Members in accordance with the terms of the Court's Preliminarily Approval Order, which is anticipated to be in the form attached hereto as Exhibit G without any material alterations. -12

13 IV. SETTLEMENT BENEFITS FOR ELIGIBLE CLASS MEMBERS A. Claim Rc-adjustmcnt Process. 41. Any Class Member who is not eligible for a Fixed Payment (because they originally settled their Bodily Injury Claim for more than $1,000), or who does not request a Fixed Payment described in paragraphs below, may request to have his or her Bodily Injury Claim re-opened and re-adjusted by completing, signing and returning, or submitting on the Class Settlement Website, the Claim Re-adjustment Request Form that will accompany the Cover Letter and Class Notice. The Claim Re-adjustment Request Form shall be in the form materially similar to the form hereto attached as Exhibit A. Claims Re-adjustment Request Forms must be postmarked or submitted on-line on or before the Claims Filing Deadline. Claim Re-adjustment Request Forms postmarked or submitted on-line after the Claims Filing Deadline shall not be considered or processed, and the Bodily Injury Claim to which such untimely forms relate shall not be re-evaluated or entitled to any further payment. The Class Settlement Website will not accept submission of Claim Re-adjustment Request Forms after the Claims Filing Deadline. 42. If a Class Member does not return a Claim Re-adjustment Request Form prior to the entry of the Final Approval Order, or submit the Claim Re-adjustment Request Form on the Class Settlement Website prior to the entry of the Final Approval Order, then a post card reminder, in materially similar format to that attached hereto as Exhibit L, will be sent to the Class Member within 7 days of the Final Judgment to advise and remind of the pending deadline and his/her option to have his/her claim re-adjusted. Postcard reminders shall not be sent to any Class Member who is eligible to receive a Fixed Payment and has submitted a Fixed Payment Request Form. 13

14 43. The re-adjustment process will be overseen by a supervisor and conducted by persons with bodily injury adjustment experience who have retired from Allstate and were not involved in the original adjustment of any of the Class Members' Bodily Injury Claims in any way, either directly or in a supervisory role (the "Adjusters"). An adequate number of Adjusters will be retained to effectively and efficiently conduct the re-adjustment of the claims. Allstate will contract with Kelly Services, a temporary personnel agency, for the hiring of such individuals, and pay all costs associated with their retention. Class counsel will be provided with resumes of the proposed Adjusters that detail their employment history before they are retained. Class counsel may, on a good faith basis, object to a particular proposed Adjuster's participation in the readjustment process within 7 days after receipt of the proposed Adjuster resume, and request that he or she be replaced by another Adjuster. The Adjusters shall be provided with the re-adjustment guidelines set forth in paragraph 44 below in their orientation to the re-evaluation process. Class counsel, at their option, may be present for and participate in the Adjuster orientation session. 44. Although Allstate believes that its claims handling practices have been and are lawful and appropriate, the following re-adjustment guidelines shall govern the claims re adjustment process in the Class Settlement: a. The adjustment process will resolve every reasonable doubt in favor of the claimant on all matters concerning the claim, including, but not limited to, liability, causation, fault, comparative fault, the reasonableness and necessity of medical bills incurred, and any pre-existing conditions. b. The adjustment process shall review each claim de novo, meaning that there will be no assumption that the initial amount paid on the claim was correct, or that the personal opinion or conclusion of any Allstate employee reflected in the original claim file was necessarily correct. 14-

15 c. The adjustment process shall encourage adjusters to seek additional information from the claimant when the adjuster has reason to believe that there may be additional relevant information. d. No "Fast Track Worksheet" will be used in the readjustment process, though the adjuster may consider facts contained on the Fast Track Worksheet (if any) contained in the original claim file. e. Neither Colossus nor any other computerized adjustment software will be used in the re-adjustment process, though the adjuster may consider facts contained on the Colossus consultation (if any) contained in the original claim file. f. The readjustment process shall include analysis of any additional information provided by the Class Member in the Class Member's Claim Re-adjustment Request Form or by way of supporting documentation, but shall not view a Class Member's inability or decision not to provide additional information as in any way diminishing the Class Member's entitlement to additional payment, if supported by the record. g. The readjustment process will include appropriate written explanation to the claimant of the basis of the readjustment decision. h. Class Counsel shall be provided the written explanation of the re adjustment provided to the claimant and, on request, access to all documents and digital data reviewed during the re-adjustment of that claim, including the original claims file. i. Adjusters shall exercise that degree of professional diligence and care for a claimant's interest as is to be reasonably expected of any trained, competent and experienced auto casualty BI adjuster whose primary duties include the adjustment of auto BI claims under the standards required under established Montana law including, but not limited to, MCA (Montana Unfair Claims Practices Act). 45. In connection with the re-adjustment process, copies of all written communications between the Adjusters and Class Members shall be promptly provided to Class Counsel. Among other relevant matters to the normal course of the adjustment process, the Adjusters shall be entitled to make written requests to Class Members for medical and wage -15-

16 authorizations for release of medical and employment information, but said release shall be limited to authorizing the Adjusters to secure only information relevant and necessary to the Bodily Injury Claim at issue. The Class Member or Class Counsel shall also be given the option to provide the requested relevant information him/herself. In the event that such an authorization or requested information is not provided by the Class Member as requested, or the Class Member or Class Counsel does not provide the requested information of his or her own volition, the Adjusters' review will be limited to the information in the claim file. 46. Once a Claim Re-adjustment Request Form is submitted, or filed on-line, the Adjusters shall, within 180 days of the Effective Date, make a determination of the amount to pay on the re-adjusted claim. The Adjusters will undertake a reasonable investigation of the claim(s) based upon the information contained in its files and provided by the Class Member. The Adjusters may seek reasonable documentation and information in connection with their determination. The Adjusters will give written notice to each affected Class Member and Class Counsel of all determinations affecting that Class Member (a "Notice of Determination"). If the result of the re-adjustment is a determination that the Class Member is entitled to a larger payment than was previously received, the Notice of Determination shall inform the Class Member of the additional payment he/she is entitled to receive, the basis for the calculation, and the applicable policy limits. If the result of the re-adjustment is a determination that the Class Member is entitled to an amount equal to, or less than, previously paid on the claim, the Notice of Determination will inform the Class Member that no additional payment will be forthcoming. In no event will a Class Member ever have to pay back or reimburse Allstate for any settlement monies originally paid for the Bodily Injury Claim should the re-adjustment process determine that the claim value is less than that originally paid. The Notice of Determination shall contain an 16-

17 explanation of the basis of the determination and the applicable policy limits. It shall also inform the Class Member that he/she has the right to submit an objection within 45 days, as explained more fully in paragraph 49 if he/she is dissatisfied with the amount set forth in the Notice of Determination. 47. Copies of all Notices of Determination will be simultaneously sent to Class Counsel and Allstate's Counsel. 48. The Settlement Administrator shall mail checks to applicable Class Members who do not submit an Objection (as defined in paragraph 49) within 75 days of the postmark of the Notice of Determination in the amounts set forth in the Notice of Determination. If a Class Member submits an Objection postmarked within 45 days of the postmark date of the Notice of Determination, no payment shall be made until the claim is either resolved by agreement or by a decision of the Umpire, as described in paragraphs Any Class Member who receives a Notice of Determination and is dissatisfied with the amount set forth in the Notice of Determination may, within 45 days from the date on which the respective Class Member's Notice of Determination is postmarked, send to the Settlement Administrator an "Objection" to the Notice of Determination. The Objection shall set forth the reasons, facts and documents supporting the Objection, and the amount the Class Member believes he/she should be paid. 50. All Objections received by the Settlement Administrator will be provided to Class Counsel and Allstate's Counsel by the Settlement Administrator within 3 business days. 51. By submitting an Objection, the Class Member agrees that in the event that the Objection is not sustained, meaning that the Umpire does not select the class member's Umpire Number as described in paragraph 53, he/she will forfeit $ of the amount set forth in the 17

18 Notice of Determination. In the event that a Class Member is objecting to a Notice of Determination indicating that no further payment is due, the Class Member must pay $ at the time that the Objection is sent to the Settlement Administrator; in (he event the Class Member prevails in his/her objection, the $ will be refunded as part of the Umpire's Award. If an Objection is resolved at any point prior to an Umpire's Award, a Class Member who pays the $ appeal fee will have it returned as part of the settlement. 52. Allstate shall have 45 days from the date the Objection is provided to Class Counsel and Allstate's Counsel by the Settlement Administrator to submit an Objection Response to the Settlement Administrator, which shall either: (a) agree to pay the amount specified in the Objection, or (b) indicate why Allstate believes the Objection is without merit, stating the reasons, facts and documents that support its response. Class Counsel will also be afforded an opportunity to indicate why the Objection is with merit, if submitted to the Settlement Administrator within 30 days from the date the Objection is provided to Class Counsel and Allstate's Counsel by the Settlement Administrator. The Settlement Administrator shall promptly transmit copies of Objections, Objection Responses, and any supporting material from Class Counsel to the affected Class Member, Class Counsel and Allstate's Counsel. 53. Both parties shall have 21 days from the date the Objection Response is sent to the Class Member to submit to the Settlement Administrator in writing the exact and total amount they request the Umpire to award on the claim (the "Umpire Number"). The Umpire Number cannot exceed the amount indicated in the Objection or the applicable policy limit, or be less than the amount indicated in the Notice of Determination. The parties have a 30-day cooling off period after submission of the Umpire Numbers to attempt to resolve the claim. 18-

19 54. A panel of three Umpires shall be selected and agreed to by Class Counsel and Allstate prior to presentment of this Agreement to the Court for preliminary approval. An Umpire will be randomly assigned by the Settlement Administrator to resolve an Objection submitted by a Class Member that is not resolved within the 30-day cooling off period after submission of the Umpire Numbers. 55. If not resolved, the Umpire shall have 30 days after the cooling off period to resolve the dispute. The Umpire may only select the Umpire Number of either Allstate or the Class Member, based upon the Umpire's opinion about which is best supported by the facts and documents submitted in support of the Objection or Objection Response. If one Umpire Number submitted violates the limitations set forth in paragraph 53 above, or if one party has failed to submit an Umpire Number, the Umpire shall select the remaining compliant Umpire Number. 56. The Umpire's decision will be sent by the Settlement Administrator to the Class Member, Class Counsel and Allstate's Counsel. 57. Allstate shall pay the fee of the Umpire, which may not exceed $ per objection. 58. The decision of the Umpire is final and binding on all parties. The Settlement Administrator shall mail checks to affected Class Members consistent with the Umpire's decision within 30 days of the decision. B. The Fixed Payment Option. 59. Class Members who were paid $1,000 or less on their Bodily Injury Claims may elect to receive a Fixed Payment in lieu of a re-opening and re-adjustment of their claims by filling out, signing, and sending to the Settlement Administrator a Fixed Payment Request Form. which will accompany the Class Notice. Fixed Payment Request Forms must be postmarked or submitted on the Class Settlement Website on or before the Claims Filing Deadline. Fixed -19-

20 Payment Request Forms that are postmarked or submitted on-line after the Claims Filing Deadline will not be considered or processed, and no fixed payments shall be made with regard to such untimely submissions. 60. If a Class Member does not return a Fixed Payment Request Form prior to the entry of the Final Approval Order, or submit the Claim on the Class Settlement Website prior to the entry of the Final Approval Order, then a post card reminder, in materially similar format to that attached hereto as Exhibit L will be sent to the claimant within 7 days of entry of Final Judgment to advise and remind the Class Member of the pending deadline and his/her option to either receive a Fixed Payment or request re-adjustment. Post card reminders shall not be sent to any Class Member that is eligible for claim re-adjustment and has submitted a Claim Re adjustment Request Form. 61. A Class Member who was paid less than $500 for his/her Bodily Injury Claim and who properly submits a timely Fixed Payment Request Form shall receive $ A Class Member who was paid between $ $1, for his/her Bodily Injury Claim and who properly submits a timely Fixed Payment Request Form shall receive $ The Settlement Administrator will mail checks in the appropriate amounts to eligible Class Members who properly submit timely Fixed Payment Request Forms within 45 days of the Effective Date. 62. A Class Member who elects to submit a Fixed Payment Request Form cannot have his/her claim re-adjusted. 63. In the event that a Class Member who was paid more than $1,000 on his/her Bodily Injury Claim submits a Fixed Payment Request Form, the Settlement Administrator shall send to that Class Member a letter, in materially similar form to that attached hereto as Exhibit M, informing the Class Member that he/she is not eligible to receive a Fixed Payment, but that the -20

21 Class Member can request that his/her claim be re-adjusted if a Claim Re-adjustment Request Form is filled out, signed and sent back to the Settlement Administrator within 30 days of the letter's postmark. If the Class Member fails to send a completed Claim Re-Adjustment Request Form postmarked within 30 days of the postmarked date of the Settlement Administrator's letter, that Class Member's Bodily Injury Claim shall not be re-adjusted. 64. In the event that a Class Member who was paid less than $ 1,000 on his/her Bodily Injury Claim submits both a Fixed Payment Request Form and a Claim Re-adjustment Request Form, the Settlement Administrator shall send to that Class Member a letter, in materially similar form to that attached hereto as Exhibit N, informing the Class Member that he/she may only request either a Fixed Payment or a Claim Re-adjustment, but not both, and asking the Class Member to send back a letter within 30 days of the letter's postmark to (he Settlement Administrator selecting only one of those options. If the Class Member does not submit a response postmarked within 30 days of the postmarked date of the Settlement Administrator's letter, the Class Member will be deemed to have waived any right to have his/her Bodily Injury Claim re-adjusted, and will receive a Fixed Payment. C. Class Member Validation. 65. The Settlement Administrator shall make (he initial determination as to whether persons submitting claims for fixed payment and/or claim re-adjustment arc members of the Class by referring to the list of Class Members to whom Class Notice was sent. If a claimant's name does not appear on the list of Class Members to whom Class Notice was sent, the Settlement Administrator shall, in conjunction with Class Counsel and Allstate's Counsel, endeavor to verify that the claimant is included within the Class. If unable to so verify the claimant's class membership, the Settlement Administrator shall send a letter to the claimant and Class Counsel requesting additional information that would assist in determining class -21-

22 membership, including, but not limited to approximate date and location of accident, the names of persons involved in the accident, and any documentation the claimant has concerning the accident. a. If the claimant (or Class Counsel on claimant's behalf) fails to send back additional information within 30 days of the postmarked date of the Settlement Administrator's letter, the claimant will be ineligible for any relief under this Agreement. b. If the claimant sends back additional information, but it is insufficient for the Settlement Administrator, in consultation with Class Counsel and Allstate counsel, to determine class membership, the Settlement Administrator shall send the claimant a letter explaining why the claimant is not a member of the Class and not entitled to any benefits under the V. INVESTIGATION OF CLAIMS Agreement (a "Class Member Determination"). The claimant may send the Settlement Administrator a letter within 14 days of the postmarked date of the Class Member Determination, seeking a review of the Class Member Determination by an Umpire. Such a letter shall set forth all of the reasons the claimant believes he/she is a member of the Class and be accompanied by a $100 appeal fee, which will be returned to the claimant if the claimant's appeal is successful, but will be used to pay the Umpire's fee if the appeal is unsuccessful. No Umpire review of a Class Member Determination will occur without the $100 appeal fee submitted by the claimant. Within three business days of the receipt of the claimant's request for review and $100 appeal fee, the Settlement Administrator shall provide a copy of the Class Member Determination and the claimant's request for review to the Umpire. The Umpire shall issue a written decision as to the claimant's status as a Class member within 14 days of receipt. The Umpire's decision shall be final and binding on all parties. In the event that the claimant's appeal is successful, Allstate shall pay the Umpire's fee, which shall not exceed $ Allstate agrees that it will conduct reasonable investigations of unrepresented claims before settling them as required by , MCA, and case law interpreting the same..")").

23 VI. DECEASED CLASS MEMBERS 67. Claims may be submitted by any attorney, personal representative or interested person on behalf of a deceased Class Member's estate. If no estate is established on behalf of the deceased Class Member, a relative or interested person may contact Class Counsel to discuss their options. Before any funds will be distributed by Allstate, the Court shall approve the party submitting such a claim as the proper party to receive distribution of funds. VII. MINOR SETTLEMENT PROVISIONS 68. If a Class Member is a minor, pursuant to the applicable Montana rules court approval of any payment under this Agreement to that Class Member will be required. Allstate shall pay for all fees associated with such court approval. In addition, Allstate reserves the right to require appointment of a conservator and/or guardianship to sign for the funds to be distributed to minor Class Members and Allstate shall pay for all fees associated with such appointment. Allstate may, through counsel, draft papers to be used in connection with the appointment of a conservator and/or guardianship, subject to Class Counsel's approval, and, without acting in any way as counsel for the conservator, shall take all necessary steps to have the conservator and/or guardianship appointed by the Court. VIII. INCAPACITATED CLASS MEMBERS 69. Claims may be submitted by any attorney, guardian, conservator, heirs, beneficiaries or interested person on behalf of an incapacitated Class Member. Before any funds will be distributed by Allstate, the Court shall approve the party submitting such a claim as the proper party to receive distribution of funds. 23

24 IX. COMMUNICATIONS WITH THE CLASS 70. The Class Notice shall list Class Counsel's addresses. Communications relating to the Action or this settlement with Persons receiving Class Notices and Class Members shall be handled through Allstate and Class Counsel, as necessary, consistent with the terms of this Agreement. Nothing in this Agreement shall be construed to prevent Allstate, its employees, agents or representatives from communicating with Class Members in the normal course of its business operations. X. FEES AND COSTS AND REPRESENTATIVE FEE 71. Plaintiffs will file a motion with the Court prior to final approval hearing requesting an award in a total amount not to exceed $9,975,000 (USD) for the following: attorneys fees to Class Counsel, contribution of $75,000 towards costs and expenses, representative fees to the Class representative of $20,000, and, consistent with the constructive common fund relief to the Class Members, reimbursement to the Class representative for his payment of attorney's fees and costs (with interest at the authorized statutory rate of 10%) in the amount of $153,264 he incurred to have his underlying case reopened and re-adjusted (the "class representative reimbursement"). Allstate will not object to Plaintiffs' motion requesting a total award of fees, costs, expenses, class representative fees, and class representative reimbursement to be paid to Class Counsel not to exceed the amounts set forth in this paragraph, which amounts are to be paid by Allstate within seven days after the Effective Date. For the disbursement to David Berardinelli, see Addendum 1. XI. CLASS DISCOVERY 72. Prior to entering into negotiations regarding settlement of this class action. Class Counsel conducted discovery into Allstate's claims handling practices, tried Jacobsen's individual case, and after remand obtained additional class related discovery. During negotiations, Class -24-

25 Counsel was also informally given additional information about the composition of the class. Class counsel shall be afforded an opportunity to conduct additional confirmatory class discovery to confirm that Class Members have been identified by Allstate appropriately. XII. CONDITIONS OF SETTLEMENT AND EFFECT OF DISAPPROVAL, CANCELLATION OR TERMINATION OF AGREEMENT 73. Jacobsen, Class Members and Allstate consent to the entry of a Final Approval and Final Judgment in the form attached hereto as Exhibit E, without material alteration. 74. If the Court disapproves this Agreement in whole or fails to rule, or if the Court enters the Final Judgment but it is materially reversed or vacated on appeal, this Agreement shall be null and void, of no force or effect, and all of Allstate's and the Class obligations under this Agreement will terminate, including, but not limited to any obligation to pay attorneys' fees, expenses, class representative fee, and class representative reimbursement. Subject to the provisions of paragraph 75 below, if the Court materially modifies any provision of the Agreement or proposed Final Judgment, or if either is materially modified on appeal or remanded to the Court for modification, or if any of the terms of this Agreement is impaired in any material way, Allstate or the Class shall have the option of terminating this Agreement and withdrawing its consent to the entry of the Final Judgment, in which case this Agreement shall be null and void, of no force or effect, and all of Allstate's and the Class obligations under this Agreement will terminate, including, but not limited to any obligation to pay attorneys' fees, expenses, class representative fee, and class representative reimbursement. Allstate and the Class shall have the right to determine, in each of their respective discretions, materiality in connection with the above provision, except that such determination shall be made in good faith and in compliance with prevailing law regarding the standards for determining materiality. -25

26 75. In the event that the amount of attorneys' fees, expenses, class representative fee and class representative reimbursement awarded by the Court to Class Counsel is more than the maximum amount agreed to by Allstate and the Class as set forth in paragraph 71, (the "Maximum Agreed Fee Award") it is expressly agreed that Allstate will only be obligated to pay an amount equal to the Maximum Agreed Fee Award. The Class and Class Counsel waive any attorneys' fees, expenses, class representative fee and class representative reimbursement in excess of the Maximum Agreed Fee Award, agree that they will not seek to enforce or recover any attorneys' fees, expenses, class representative fee, and class representative reimbursement awarded in excess of the Maximum Agreed Fee Award, and agree to return to Allstate within 7 days any attorneys' fees, expenses, class representative fee, and class representative reimbursement paid to Jacobsen, the Class or Class Counsel by Allstate in excess of the Maximum Agreed Fee Award. In the event that Class Counsel receives attorneys' fees, expenses, class representative fee and class representative reimbursement in excess of the Maximum Agreed Fee Award and fails to return such excess amount to Allstate within 7 days, Class Counsel shall be liable to Allstate for twice the amount of such excess, along with attorneys' fees and costs, in the event that Allstate files suit to recover such excess. If the Court should award Class Counsel attorneys fees, expenses, class representative fee and class representative reimbursement in an amount less than the Maximum Agreed Fee Award, Allstate shall only be obligated to pay Class Counsel the amount awarded by the Court, but Class Counsel may appeal from such an award to seek an award not greater than the Maximum Agreed Fee Award. 76. Upon the preliminary approval of the Proposed Settlement by the Court, as evidenced by entry of the Preliminary Approval Order, all proceedings in the Action shall be 26-