Lakin team wants to 're-write' Bemis settlement agreement for late filer, defendants say

Amelia Flood Dec. 17, 2010, 12:13am


An insurance company that settled a 2005 Preferred Provider Organization (PPO) discount class action brought by chiropractor Frank Bemis claims that Bemis and the class want to "re-write the parties' Settlement Agreement," because one class member didn't follow its terms.

Defendants The Cincinnati Insurance Co. and Cincinnati Casualty Co. filed their opposition Tuesday to a move to resolve a disputed claim under that 2009 settlement that is set for hearing today at 9 a.m. before Madison County Circuit Judge Barbara Crowder.

Class counsel Brad Lakin of Wood River and his team were awarded $770,000 in attorneys' fees in the settlement.

Bemis sued the Cincinnati defendants on behalf of a class of chiropractors and health care providers who claimed they were gypped out of fees due to improper PPO discounts the company took from workers' compensation claims.

The settlement mandates that the defendants were to pay up to 90 percent of reduced bills not to exceed $3.5 million.

Class notice was sent to at least 33,000 class members, according to filings in the case.

Bemis and fellow chiropractor Lawrence Shipley led a number of PPO class actions filed earlier this decade by Lakin and his former partners from the Chicago firm of Freed & Weiss.

That partnership broke up in 2007.

Freed & Weiss withdrew from the Cincinnati suit the following year.

Lakin moved Nov. 1 to have Crowder decide a disputed settlement claim filed by class member Illinois Bone & Joint (IBJI).

Lakin claimed that Cincinnati denied IBJI time to fix problems a settlement administrator found with the company's claim documents.

The motion asks the judge to resolve the matter.

In its Dec. 14 motion, Cincinnati disputes the entire purpose of Lakin's Nov. 1 motion.

"Plaintiff's motion does not seek to resolve disputed claims," Cincinnati argues. "Instead, the motion seeks to re-write the parties' Settlement Agreement to accommodate a single class member that failed to comply with the settlement's terms. The law does not permit a party to unilaterally modify a settlement agreement. Nor should this Court ignore the plain language that expresses the parties' agreement."

The company claims that under the 2009 settlement, class members seeking a pay out had to submit documentation of the bill that saw the wrongful PPO reduction.

Claims that did not meet the standards for documentation were to be rejected.

Cincinnati claims that Crowder found that all class members except the four that opted out were bound by the settlement's terms.

According to the defendants, IBJI submitted a deficient claim on the last day of the claims period.

After the company notified IBJI of the deficiencies as required by the settlement, IBJI failed to correct the errors by the February date Cincinnati set.

Cincinnati notified IBJI of its denial in March.

The company claims that IBJI does not attempt to show that its claim met the conditions set by the settlement for payment and that the terms Crowder previously approved for the settlement's payout must be honored.

"IBJI had the opportunity to opt out of the settlement if it was unhappy with the settlement's terms," the motion concludes. "Having elected to stay in the Settlement Class, it is bound to the Court-approved terms and conditions of the Settlement Agreement."

The Cincinnati defendants are represented by Daniel Litchfield, Omar Odland, Steven Schwartz and John Cunningham.

Lakin and others represent the class.

The case is Madison case number 05-L-178.

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