Mudge cuts LakinChapman fee in Pekin Insurance settlement

Steve Korris Sep. 2, 2011, 5:34am



Madison County Circuit Judge William Mudge reduced the LakinChapman firm's fee in a class action settlement from $200,000 to $166,666.

On Aug. 31, he decided to award the firm one third of a $500,000 settlement with Pekin Insurance, rather than 40 percent as the firm requested.

He wrote that class counsel did a significant amount of work.

"However, this court must ensure that class recovery is optimized, while considering this case carefully in the context of its circumstances as well as other similar actions filed by class counsel and others in this and other circuits," he wrote.

LakinChapman filed an affidavit of hourly charges totaling $218,291.45, but Mudge found fault with it.

"Class counsel's affidavit regarding time expended in this matter, and the hourly rates charged by various attorneys, paralegals and clerks, is different than the rates detailed in another recent affidavit filed by said firm regarding their current hourly rates," he wrote.

"While the court is mindful that rates are subject to change, the hourly rates for legal services would not have been at those rates throughout the pendency of this action – a span of six years dating back to early 2005," he wrote.

The former Lakin Law firm sued Pekin on behalf of chiropractors Frank Bemis, Dale Fischer and Thomas Kaltenbronn.

They claimed Pekin broke a promise to steer patients to members of a preferred provider network in exchange for discounts on payments it made.

Mediation led to settlement this year, and Mudge granted preliminary approval in May.

He certified a class of providers in Illinois, Indiana, Iowa, Ohio and Wisconsin, who submitted bills under workers' compensation or automobile policies since 1998.

Pekin mailed notices to 8,565 class members.

Four requested exclusion.

At a fairness hearing on Aug. 23, no one objected.

Mudge approved a $2,500 incentive payment for each plaintiff, and he awarded Lakin Chapman $7,467.27 in costs.

He didn't grant the firm's fee request, taking it under advisement for eight days.

His order declared the settlement fair, reasonable and adequate.

"Given recent appellate decisions in this district, and the fact that a little more than one million dollars was in dispute, the court further finds that the class counsel's ability to obtain a mediated settlement of this matter to be commendable, because of the risks, associated with further motion practices and a trial on the merits, posed," he wrote.

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