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In re All Kelley & Ferraro Asbestos Cases

12/30/2004

d because the settlement agreement did not apportion the sums among the members, GAF's disagreement over its allocated share constituted an internal dispute to be decided by alternative dispute resolution, pursuant to the terms of the Producer Agreement. Members of the CCR timely appealed that decision to the appellate court.


{ } When the next payment became due, the CCR tendered an installment deficient by $2,210,154.62, explaining that GAF had again failed to pay its share as calculated by the CCR. Consequently, Kelley & Ferraro filed another motion to enforce the settlement agreement, which the trial court granted, entering judgment for all claimants against all CCR members in the amount of the shortfall. Members of the CCR again appealed.


{ } Regarding the next four installments, an increasing number of members failed to pay their shares as determined by the CCR, resulting in larger shortfalls. For the December 2000 installment, GAF and Asbestos Claims Management Corporation ("ACMC") did not pay their allocated shares. And in May 2001, the CCR sent Kelley & Ferraro another deficient payment, as GAF, ACMC, and Armstrong World Industries ("Armstrong") failed to pay their shares. At that point, both Armstrong and GAF had filed for bankruptcy protection, and, at a hearing, the members described ACMC as insolvent.


{ } By December 2001, in addition to GAF and Armstrong, four more CCR members had filed bankruptcy petitions or their foreign equivalent: United States Gypsum Corporation, Turner & Newall, plc, Ferodo America, Inc., and Flexitallic, Inc. Consequently, none paid the shares allocated to them by the CCR. For that installment, ACMC and Shook & Fletcher Insulation Company, which subsequently filed for bankruptcy in April 2002, also failed to pay. This time, however, although it had collected shares from the non-defaulting companies, the CCR, instead of forwarding a deficient payment to the law firm, sent Kelley & Ferraro a letter requesting that it pursue one of the options contained in paragraph 13 of the settlement agreement. The CCR sent Kelley & Ferraro a similar letter regarding the June 2002 installment and again withheld the amounts it had collected from non-defaulting members.


{ } As a result of the foregoing events, Kelley & Ferraro filed four additional motions to enforce the settlement agreement. The trial court, consistent with its earlier decisions, granted these motions and awarded the claimants the deficient amounts plus interest. Again, members of the CCR separately appealed each judgment to the appellate court. Not all of the trial court's orders, however, entered judgment against all CCR members, primarily due to pending bankruptcy proceedings; nonetheless, in every instance, the trial court entered judgment against all 11 members appealing to this court.


{ } The appellate court eventually consolidated eight separate appeals arising from the trial court's decisions to grant Kelley & Ferraro's six separate motions to enforce the settlement agreement. In its opinion, the court affirmed the trial court's judgments and held that the agreement provided for joint and several liability among the CCR members. In re All Kelley & Ferraro Asbestos Cases, 153 Ohio App.3d 458, 2003-Ohio-3936, 794 N.E.2d 729, 57. It explained that, although the phrase "each CCR member shall be liable under this Settlement Agreement only for its individual share" appeared to indicate several liability, the words read in context and in conjunction with other settlement provisions imposed joint and several liability among the members. Id. at 42-43, 56.


{ } The court interpreted the first sentence in paragraph 13 of

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