Barton v. Premium Payment Services, Inc
NOTICE OF PROPOSED SETTLEMENT OF CLASS ACTION
To: All persons who received a Disclosure Statement in the form represented by Exhibit A, on or after December 20, 1998.
PLEASE READ THIS NOTICE CAREFULLY.
THIS IS NOT AN ATTEMPT TO COLLECT MONEY FROM YOU. THIS IS NOT A NOTICE OF A LAWSUIT AGAINST YOU. YOU MAY BENEFIT FROM READING THIS NOTICE.
Pursuant to Rule 23(c)(2) of the Federal Rules of Civil Procedure, you are hereby notified that a class action lawsuit is pending in this Court. You may be a member of the class.
This lawsuit contends that PPSI violated the Truth in Lending Act ("TILA") and implementing Federal Reserve Board Regulation Z by entering into credit agreements with individuals and not providing any disclosure statements at the time the agreements were entered into.
DEFINITION OF THE CLASS
The Court has determined that this case and pending settlement should go forward as a class action on behalf of all persons who received TILA disclosures from PPSI in the form representing by Exhibit A, on or after December 28, 1998 (one year prior to the filing of this action).
To be a member of the class, you must meet the criteria listed above. If you do not meet the class definition, this notice does not apply to you. If you are uncertain whether you are a class member, contact counsel for the class or your own attorney.
WHAT THIS LAWSUIT AND SETTLEMENT ARE ABOUT
On February 8, 1999, plaintiff Lachisa Burton entered into a credit agreement with defendant premium Payment Services, Inc. ("PPSI"). On that date, no disclosure statement as required by TILA was shown or given to plaintiff. Plaintiff did not receive any disclosure statement until approximately one and a half weeks after February 8, 1999, when Exhibit A was received by plaintiff via U.S. Mail. Exhibit A is a standard form document and does not contain plaintiff's signature, nor did plaintiff authorize her signature to be placed on Exhibit A.
Plaintiff contends that Exhibit A violates TILA, 15 U.S.C. 1638, and Regulation Z, 12 C.F.R. 226.17-226.18, in that it was not provided to plaintiff until well after the transaction, which prevented disclosure of and familiarity with the financial arrangements concerning the credit agreement, and that there is no disclosure of a "finance charge," labeled as such.
Plaintiff filed this class action against PPSI, seeking, on behalf of herself and the class: a) appropriate statutory damages, b) attorney's fees, litigation expenses and costs, and c) any other relief the Court deems appropriate.
You are being sent this notice because you appear to be a member of the class. This notice explains the nature of the lawsuit and terms of the settlement and informs you of your legal rights and obligations.
NO ADMISSION OF LIABILITY
By settling this lawsuit, PPSI is not admitting that it did anything wrong. PPSI expressly denies that it did anything wrong.
THE PROPOSED SETTLEMENT
MS. BARTON AND THE DEFENDANT HAVE AGREED TO THE SETTLEMENT DESCRIBED BELOW. FOR YOU TO BE A PART OF THIS SETTLEMENT, YOU WILL NEED TO FILL OUT THE CLAIM FORM AT THE BACK OF THIS NOTICE AND SEND IT TO THE DESIGNATED ADDRESS. NO FURTHER ACTION IS REQUIRED ON YOUR PART. IF YOU SEND IN A COMPLETED CLAIM FOR AND THE SETTLEMENT IS FINALLY APPROVED, YOU WILL BE SENT A CHECK FOR YOUR PORTION OF THE SETTLEMENT.
The attorneys for the class believe that this settlement is fair, reasonable, and in the best interests of the class members. The terms of the settlement are:
1. Relief to the Class. This is a pro rata share settlement and each participating class member will receive an equal share of the settlement fund: if every single class member participates each class member would receive approximately $0.70, but if only one class member participates they would receive the entire $7,000. Accordingly, the amount of class members who can be located and choose to participate in the settlement will determine the amount each class member receives. PPSI agrees to pay $7,000 to the class to be divided pro rata among all class members who (i) do not opt-out of the settlement, (ii) do not have their notice returned by the Postal Service without a valid forwarding address, and (iii) submits a Proof of Claim Form. Based on defendant's best efforts and investigation to identify the class, there are no more than 10,000 class members. Under TILA, the maximum possible award for the class is the lesser of $500,000 or 1% of defendant's net worth. Defendant represents that is has a negative net worth, however, plaintiff's analysis shows that defendant may have a maximum net worth of approximately $1,100,818.00. Accordingly, the parties have agreed to a settlement of $7,000 for the class (1% of $700,000). If each of the estimated class members are located, and return a claim form, each class member would receive approximately $0.70. In class action settlements, however, it is very common for substantially fewer class members to participate. Accordingly, each of the participating class members will receive a greater pro rata share of total settlement fund. The settlement checks shall be void after 120 days from the date of issuance. Any funds remaining in the class fund after the void date will revert to PPSI to defer the costs of mailing.
2. Relief to Ms. Barton. PPSI shall pay $500 to plaintiff as her statutory award for bringing this action, and she may also take part as a class member.
3. Release. A. Class Members. Each class member not opting out shall, as of the effective date of this settlement, be deemed to release and discharge forever defendant, its past or present parent companies, affiliates, subsidiaries, successors, predecessors, and assigns, and its present or former directors, officers, employees and agents ("Released Parties"), of and from all claims, causes of action in tort, contract, statute, or otherwise arising from the acts or omissions alleged in the complaint. This release is conditioned upon the performance by defendant of its obligation toward the class members set forth in this agreement. This release is limited to the individuals listed on the class list, which will be provided no later than 20 days after the execution of this agreement. B. Additional Release by Named Plaintiff. Plaintiff Lachisa Barton further releases defendant and other Released Parties from all claims whatsoever from the beginning of time to the effective date of this agreement, whether or not known now, anticipated, unanticipated, suspected, or claimed, fixed or contingent, whether yet accrued or not, and whether damage has resulted from such or not arising from the acts or omissions alleged in the complaint. This release is conditioned upon the performance by defendant of its obligation toward the plaintiff set forth in this settlement agreement.
4. Attorneys' Fees and Expenses. PPSI shall pay plaintiff's counsel, subject to the Court's approval, a sum not to exceed $5,000, which is intended to cover all reasonable attorneys' fees and costs. Defendant will not oppose or cause to be opposed the approval of $5,000 in reasonable attorneys' fees and costs.
OPINION OF CLASS COUNSEL CONCERNING THE VALUE OF THE SETTLEMENT
The claim asserted on behalf of the class against defendant is under the Truth in Lending Act ("TILA").
The Truth in Lending Act provides for both individual actions and class actions. In a class action, the maximum possible recovery is (I) any actual damages suffered by the class members and (ii) statutory damages determined by the court, based on the culpability of the defendant's conduct and the amount of harm caused by the defendant. The penalty cannot exceed the smaller of $500,000 or 1% of the defendant's net worth. The court has the discretion to award anything between the maximum amount and zero, depending on the egregiousness of the violation.
Due to the disputed net worth of the defendant and the identified size of the class, together with the uncertain outcome of litigation (including the fact that there is no minimum award the Court could award), class counsel believes that this settlement is fair and reasonable in light of the constraint on recovery, and that the class members should accept this settlement.
The attorneys for Ms. Barton and the class are:
Daniel A. Edelman EDELMAN, COMBS & LATTURNER 120. LaSalle Street, 18th Floor Chicago, IL 60603 (312) 917-4504 (312) 419-0379 (FAX)
YOUR OPTIONS
You have the choice of staying in the class and participating in the settlement or excluding yourself from the class. Each choice has certain risks and consequences. You have the right to discuss your decision with class counsel. Or you may discuss this matter with your own attorney at your own expense.
A. If you want to be a part of the settlement and receive a portion of the $7,000 settlement fund, you must complete and sign the form at the end of this notice, and return it to the address given below, postmarked on or before ***DATE***. You will be bound by the terms of settlement as contained in the Settlement Agreement, including receiving a portion of the $7,000 settlement fund, and you will be represented by the attorneys for Lachisa Barton at no charge. You may have your own attorney enter an appearance if you choose, but you are not required to do so. If you stay in the class, you will be bound by the result of the lawsuit and its settlement, whether that result is favorable or unfavorable. You will not have to pay any money as a result of staying in the class. If you become part of the settlement, you will receive a share of the $7,000 settlement fund which will be divided equally among the approximately ***#*** class members who return the claim form. The exact amount of money which you will receive will be determined by how many people return the claims form. There is no guarantee that you will receive any specific amount. If you return the claim form, you will receive a settlement check sometime after ***DATE***. You must return the claim form to receive money.
B. If you exclude yourself from the class, you (a) will not be bound by any judgment or disposition of this case, (b) will retain any claims you may have against PPSI and (c) will not share in any recovery awarded by the Court or under any settlement with PPSI in this action.
If you wish to exclude yourself, send Edelman, Combs & Latturner (above address) and Beermann, Swerdlove, Woloshin, Barezky, Becker, Genin & London at 161 North Clark Street, Chicago, Illinois 60601-3221 a letter containing the name and number of this case and stating that you wish to be excluded. The letter must be received on or before ___________, 2000. If you mail a request for exclusion, you bear the risk of any problem with the mails.
C. If you elect to be excluded from the class, you may file an individual action (or intervene in this action). If you intend to choose this option, consult with an attorney prior to the expiration of the opt-out period. The one-year statute of limitations with respect to the TILA claim, which stopped running on December 20, 1999 when this action was filed, will begin running again upon your filing of the exclusion. You will have the same number of days to file suit as you had on December 20, 1999. If you want your own lawyer to represent you in an individual case, the terms of such representation are a matter for you and your lawyer to negotiate.
You also have the right to file an appearance yourself or through an attorney.
D. This notice and the lawsuit do not by themselves permit you to stop making payments. Plaintiff's counsel makes no representations as to the invalidity or validity of any debts owed to PPSI.
CORRECT ADDRESS
If this Notice was sent to you at your current address, you do not have to do anything further to receive any further notices concerning this case except to fill out and return the claim form as instructed. If it was forwarded by the postal service, or if it was otherwise sent to you at an address which is not current, you should immediately send a letter to each of the attorneys for the plaintiff and for the defendant listed below, stating your past and current addresses.
ATTORNEYS FOR DEFENDANT: Christopher A. White, Alvin R. Becker, BEERMANN, SWERDLOVE, WOLOSHIN, BAREZKY, BECKER, GENIN & LONDON, 161 North Clark Street, Chicago, Illinois 60601-322
AVAILABILITY OF FILED PLEADINGS
All papers filed in this case are available for you to inspect and copy at the office of the Clerk of the United States District Court for the Northern District of Illinois on the 20th floor of the Dirksen Federal Building, 219 S. Dearborn, Chicago, IL 60604, during regular business hours.
INQUIRIES
Any question you or your counsel have concerning this notice should be directed to Edelman, Combs & Latturner. Please include your return address on any letters, not just the envelopes.
DO NOT ADDRESS ANY QUESTIONS ABOUT THE CASE TO THE CLERK OF THE COURT OR TO THE JUDGE. They are not permitted to answer your questions.
