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In re All Kelley & Ferraro Asbestos Cases12/30/2004
Submitted September 14, 2004
{ } Two issues are presented for consideration in connection with this appeal, which concerns the resolution of some 15,000 asbestos-related claims settled for approximately $120 million between the law firm of Kelley & Ferraro, L.L.P., and the Center for Claims Resolution ("CCR") as agent for 19 member companies: first, regarding the nature of the liability incurred by the members of the CCR, and second, regarding whether the trial court had jurisdiction to enter judgment for each claimant against all CCR members.
{ } The record before us reveals that in 1988, a consortium of former asbestos-producing or distributing companies entered into an agreement styled the "Producer Agreement Concerning Center for Claims Resolution" ("Producer Agreement"), which created the CCR, a nonprofit Delaware organization, to administer and resolve asbestos-related claims. The agreement-as amended on February 1, 1994-governs the relationships between and among the CCR members and designates the CCR as each member's sole agent to "administer and arrange [on its behalf] for the evaluation, settlement, payment or defense of all asbestos-related claims * * *."
{ } The agreement containsa formula for calculating each member's percentage share of liability payments and allocated expenses "attributable to each claim handled by the as sole agent for such Participating Producer." And it requires any dispute among the members concerning the agreement, including disputes involving the allocation of percentage shares of liability payments, to be resolved through alternative dispute resolution.
{ } On July 26, 1999, pursuant to the authority conferred by the Producer Agreement, the CCR negotiated a settlement agreement on behalf of 19 member companies with the law firm of Kelley & Ferraro to resolve the asbestos-related claims of approximately 15,000 claimants. At that time, these claimants had individual cases pending in Ohio, Florida, Mississippi, and Massachusetts, among other jurisdictions.
{ } That settlement agreement estimated the dollar value of the settlement at a total of $120 million to be paid in equal biannual installments of $10 million each commencing September 1999 and ending December 2004. The parties arrived at the total settlement amount based upon Kelley & Ferraro's approximation of the number of claimants who would qualify for payment in each disease category. And, further, a condition of payment required each claimant to provide documentation of an asbestos-related illness, exposure to "asbestos-containing materials that were manufactured, sold, marketed or distributed by one or more members of the CCR," and "compliance * * * with the applicable statute of limitations or other applicable timeliness doctrines" and a release of all CCR member companies from liability. Upon failure to tender the requisite documentation or refusal to accept the settlement amount for an individual claim, the installment payments would be adjusted.
{ } Against this contract posture, the CCR in connection with the amounts due in 1999 submitted a payment to Kelley & Ferraro deficient by $987,295.27, stating that the shortfall arose because GAF refused to pay its allocated share. GAF had disputed the CCR's calculation of its share in accordance with the Producer Agreement. In response, Kelley & Ferraro filed a motion to enforce the settlement agreement. After a hearing, the trial court granted that motion and entered a $987,295.27 judgment against all CCR members, including GAF. The court concluded that, because the CCR had promised to deliver a lump sum on specified dates in exchange for settlement of individual claims, an
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