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Coleman v. Sentry Insurance A Mutual Co.

United States District Court, S.D. Illinois

October 27, 2016

WILLIAM A. COLEMAN, MARY A. COLEMAN, ALAN LEMKE, and KAREN LEMKE, on Behalf of Themselves and all Others Similarly Situated, Plaintiffs,


          STACI M. YANDLE United States District Judge

         This matter is before the Court on Plaintiffs' Motion for Award of Attorneys' Fees and Class Representative Incentive Fees (Doc. 54), and the Court being duly advised, finds that the motion should be, and hereby is, GRANTED.


         This class action was originally filed in Madison County, Illinois in November 2015 (Notice of Removal, Doc. 1) before being removed to this Court under the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2). The Amended Complaint alleges that the Defendant, Sentry Insurance a Mutual Company (“Sentry”), breached its auto insurance “Payback Agreement” with the Class of Plaintiffs, who were Sentry insureds (Doc. 43). Specifically, the Amended Complaint alleges that Sentry's “Payback Agreement” provided that an insured would receive at the end of each consecutive five-year claim-free period a refund of one-half of the premium paid for the first year of that period, and that the insured would continue to receive a one-half refund in each subsequent claim-free year thereafter. The Amended Complaint alleges that the Payback Agreement also provided that Sentry would renew the policy as long as the insured resided in a state in which the policy was offered, met Sentry's eligibility requirements, and met Sentry's underwriting standards. Id. The Amended Complaint alleged that Sentry breached this agreement when it non-renewed all Payback Agreement policies. Sentry subsequently answered the complaint and denied all liability.

         In the course of litigation, the parties agreed to engage in settlement negotiations at the suggestion of Magistrate Judge Stephen C. Williams (Doc. 28). After a full day of mediation on April 28, 2016, the parties had not reached a settlement but had made significant progress (Docs. 32, 33). Over the following days, the parties continued to negotiate until a final agreement was reached. Id. Thereafter, the Court granted the parties' joint motion to stay proceedings pending the finalization of comprehensive, formal settlement documents and the Court's consideration of final approval of the settlement (Doc. 48).

         On June 6, 2016, the Plaintiffs filed an unopposed motion for preliminary approval of the class action settlement under Fed.R.Civ.P. 23(e) (Doc. 40) attaching the Amended Class Action Settlement Agreement with Sentry Insurance a Mutual Company (the “Settlement Agreement”) (Doc. 40-1) for the Court's review. The terms of the Settlement Agreement provide for Sentry to pay $5, 718, 825 million in cash into a Settlement Fund for the benefit of the Class Members, which Sentry has done. In addition, Sentry will pay all costs of notice and distribution of the Settlement Fund to the 6, 847 Class Members. Id. The Settlement calls for the Net Settlement Fund to be distributed to Class Members on a pro-rata basis, based on the amount of Disputed Premium paid by each Class Member. Checks will be mailed directly to Class Members without the need for any Class Member to complete a claim form or present any additional evidence or information. The average check to a Class Member, after payment of all requested fees and expenses, will be approximately $555.

         On June 29, 2016, the Court conducted a hearing on preliminary approval of the Settlement Agreement, and the Court then granted preliminary approval to the Settlement, finding that it was within the range of possible final approval (Doc. 46, ¶ 4). The Court certified the Plaintiff Class, approved the form of notice to the Class, set deadlines for Class Members to object to or opt out of the Settlement, and set a Fairness Hearing for October 26, 2016. Id.

         Class Members' addresses were provided by Sentry and updated by the Notice and Settlement Administrator chosen by the parties, and the Court-approved notice was mailed to Class Members on July 29, 2016. (Declaration of Karen Rogan (“Rogan Decl.”) at 2, 3 ¶¶ 4-5.) The Notice reached 6786 of the 6847 unique Class Member addresses. Id. Class Members were given 30 days to exclude themselves from the Settlement or to object to the Settlement. One Class Member chose to be excluded and only two Class Members out of 6, 847 objected to the Settlement (Docs. 49, 50, 51). One objection did not expressly challenge the fairness or adequacy of the settlement, and the second expressed the view that any recovery which did not provide for 100% of actual damages together with interest and punitive damages would not be acceptable.

         The Plaintiffs have now moved for final approval of the Settlement, which the Court has granted by separate order, and for an award of $1, 906, 275 in attorneys' fees and a $3, 000 class representative fee to each class representative to be paid from the $5, 718, 825 million Settlement Fund, with the remainder to be distributed pro rata to the Class Members.


         I. Incentive Award

         Because a named plaintiff is an essential ingredient of any class action, an incentive award is appropriate to compensate a named plaintiff for the time and expense in bringing the suit and to reward the named plaintiff for the benefits achieved for other class members. Cook v. Niedert, 142 F.3d 1004, 1016 (7th Cir. 2009). When deciding whether an incentive award is reasonable, courts consider the actions the plaintiff has taken to protect the interests of the class, the degree to which the class has benefited from those actions, and the amount of time and effort the plaintiff expended in pursuing the litigation. Id.

         The Class Representatives each played an essential role in obtaining this comprehensive recovery on behalf of Sentry's insureds for claims that would not been economically worthwhile for them to pursue on an individual basis. The requested incentive fee is well within the range of class representative fees in class action litigation.[1] Under the circumstances, the Court authorizes and directs payment of a $3, 000 incentive fee to each class representative from the Settlement Fund.

         II. ...

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