Singleton v. SplitFire Inc.
Stipulation of Settlement and Compromise

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© 1998 Brian F. Schreurs
Even we have a disclaimer.

There's no screwing worse than being screwed by a screwer who said he was screwing someone else.
ALVIN E. SINGLETON and JULIE A. MASSIER, individually and on behalf of all others similarly situated,

Plaintiffs,

vs.

SPLITFIRE, INC., et al.,

Defendants.

IN THE CIRCUIT COURT

FRANKLIN COUNTY, ALABAMA

CIVIL ACTION NO.
CV-97-033

STIPULATION OF SETTLEMENT AND COMPROMISE

Subject to the terms and conditions hereof, the individually named plaintiffs Alvin E. Singleton and Julie A. Massier (referred to individually herein as "plaintiffs"), on behalf of themselves and the class that each represents (as further defined herein), and the defendants SplitFire, Inc.; Old World Industries, Inc.; AlliedSignal, Inc. and AlliedSignal Automotive, by their attorneys of record, and in consideration of the covenants and agreements set forth herein, agree to the settlement of this action, subject to court approval, upon the following terms and conditions, and do hereby stipulate and agree as follows:

I. DEFINITIONS

A. The term "SplitFire" shall mean defendant SplitFire, Inc.

B. The term "Defendants" shall mean SplitFire, Inc., Old World Industries, Inc., AlliedSignal, Inc. and AlliedSignal Automotive.

C. The term "Stipulation" shall mean this Stipulation of Settlement and Compromise duly executed by the attorneys of record for the plaintiffs and Defendants.

D. The term "Action" shall mean the above-styled civil action filed by plaintiffs against Defendants.

E. The term "Class Period" shall mean that period of time between and including January 1, 1990 and December 31, 1997.

F. The term "Class Members" shall mean all persons who are included in the Settlement Class as described in paragraph 1 of this Stipulation.

G. The term "Class Counsel" shall mean plaintiffs' counsel in this Action.

H. The term "Settlement Consideration" shall mean the products and discounts for which SplitFire is obligated under the terms and conditions of this Stipulation.

I. The term "Effective Date" shall mean the later of the following: (1) the day after the expiration date for any appeals from the orders and judgments described in paragraphs 9 and 10, provided no appeal or post-judgment motion is pending; or (b) if an appeal or post-judgment motion is taken from any of the orders or judgment referred to in paragraphs 9 and 10, then the day after all such appeals or post-judgment motions and any subsequent appeals shall have been finally determined by the highest court by which such review has been or can be sought, provided that each such appeal or appeals shall have been finally determined in a manner permitting the consummation of the settlement in accordance with the terms of this Stipulation.

J. The term "Claims Closing Date" shall mean sixty (60) days from publication of final notice to the class, Exhibit D.

K. The term "SplitFire sparkplug" shall mean the SplitFire brand sparkplug with a "V" or "Split" side electrode marketed and/or sold to consumers during the Class Period.

L. The term "Released Claims" shall mean those claims, lawsuits and causes of action referred to in Section III, paragraph 8(b) of this Stipulation.

II. RECITALS

WHEREAS, representative plaintiffs Alvin E. Singleton and Julie A. Massier have commenced an action against Defendants currently pending in the Circuit Court of Franklin County, Alabama under Civil Action No. CV 97-033, which has been brought and conditionally certified as a class action and which asserts multiple claims arising out of consumer purchases of SplitFire sparkplugs; and

WHEREAS, the claims in this Action grow or arise out of certain advertising and marketing claims made respecting SplitFire sparkplugs in particular; and

WHEREAS, Defendants deny all the material allegations of the complaint in this Action, deny any and all liability or wrongdoing in connection with the conduct described in the complaint and have asserted and assert that each of their conduct with respect to the matters complained of was in all respects, and at all times, entirely proper and lawful; and

WHEREAS, plaintiffs' counsel has made an extensive factual and legal investigation with respect to the claims asserted against Defendants and have engaged in substantial discovery and proceedings herein; and

WHEREAS, plaintiffs and their counsel, following extensive negotiations with counsel for Defendants, consider the settlement of this Action, on the terms set forth herein, to be in the best interest of the class they purport to represent, and have concluded that, in light of the benefits from such settlement, and in light of the uncertainty of continuing the litigation against Defendants, it is desirable to compromise and settle the claims alleged in the Action against Defendants, and any and all claims that could have been alleged in the Action, upon the terms and conditions hereinafter set forth; and

WHEREAS, Defendants vigorously assert and maintain that the claims in the complaint are not meritorious, but consider it desirable to compromise and settle the claims alleged in the Action, and any and all claims that could have been alleged in the Action, in the manner and upon the terms and conditions hereinafter set forth, to avoid further expense, inconvenience, and the distraction of burdensome litigation and finally to put to rest any and all claims that were asserted or could have been asserted in the Action; and

WHEREAS, the plaintiffs and their counsel and Defendants and their counsel recognize that the intent, objective, goal and consideration of this Stipulation is the complete settlement, compromise, resolution, release, waiver and termination of any and all claims, lawsuits, demands or causes of action (with the exception of those relating to personal injury or property damage) that were asserted or could have been asserted against Defendants or any other person, by reason of, or in connection with the manufacture, distribution, advertising, promotion or sale of SplitFire sparkplugs, or any cause of action relating to the matters described in the complaint (other than claims of those Class Members who opt out as provided in paragraph 10 below); and

WHEREAS, the plaintiffs and the Defendants desire to settle this Action; and

WHEREAS, Class Counsel has fully analyzed and evaluated the merits of the relative parties' contentions and this settlement as it impacts upon all parties, including the members of the plaintiffs' Settlement Class. Plaintiffs and plaintiffs' counsel, after taking into account the foregoing, along with the substantial risks of continued litigation and the likelihood that this Action, if not settled now, will be protracted and expensive, are satisfied that the terms and conditions of this agreement are fair, reasonable and equitable and that a settlement of this Action is in the best interests of the Settlement Class.

III. TERMS OF SETTLEMENT

NOW, THEREFORE, IT IS MUTUALLY STIPULATED AND AGREED between plaintiffs Alvin E. Singleton and Julie A. Massier, individually and on behalf of the class that each represents, and Defendants, acting through their respective attorneys, that the Action shall be dismissed on the merits with prejudice and without court costs and shall be settled and released together with any and all claims, lawsuits, demands and causes of action that have been asserted or could have been asserted against Defendants or any other person by reason of, or in connection with, the manufacture, distribution, advertising, promotion or sale of SplitFire sparkplugs or any cause of action relating to the matters described in the complaint (hereinafter "PLAINTIFFS' CLAIMS"). It is understood that the benefits of this release and settlement shall extend to (1) each of the Defendants; (2) each of their respective predecessors, successors, subsidiaries (and other affiliated companies), assigns and stockholders; (3) each of their present and former directors, officers, attorneys, employees, agents, representatives, and insurers; (4) all vendors who sold SplitFire sparkplugs during the Class Period; and (5) all consultants, publicists, product reviewers and publications which may have published any articles, news or advertisements relating to SplitFire sparkplugs. Claims for personal injuries or for property damage are not encompassed in this Stipulation and are, therefore, retained by the Class Members.

1. Certification Of Settlement Class. Plaintiffs shall propose, and Defendants shall not oppose, for settlement purposes only, that the Court shall modify its previous conditional certification order and shall certify this Action as a class action and define a settlement class, under Rule 23(b)(3) of the Alabama Rules of Civil Procedure, composed of all persons or entities in the United States who, at any time in the Class Period, purchased at retail SplitFire sparkplugs (the "Settlement Class"). The Court's certification of the Settlement Class shall not be deemed to be the adjudication of any fact or issue for any purpose other than the accomplishment of the settlement provisions set forth herein and shall not be considered as law of the case, res judicata, or collateral estoppel in this or any other proceeding unless the settlement receives final approval and the Final Order and Judgment contemplated in paragraph 10 hereof is entered. In the event the settlement provided for herein is not accomplished according to all the terms of this Stipulation, the Court's modification of its prior certification order made pursuant to the application for modification of certification herein contemplated shall be null and void and shall be vacated.

2. Consideration To Be Paid. Although the benefits of this settlement are to inure to all Defendants and other released parties, the obligation to pay the consideration herein provided (including attorney's fees and expenses) shall be that of SplitFire alone.

A. Consideration To The Settlement Class. Each Class Member submitting a Claim Form with proof of purchase (as further described in paragraph 4 below) shall have the option of receiving:

  • (i) 2 free SplitFire Plugs and the option to purchase up to 6 at ¼ off the suggested retail price from Splitfire or
  • (ii) 1 free SplitFire Platinum Plug and the option to purchase up to 7 at ¼ off the suggested retail price from SplitFire or
  • (iii) 1 free Hard Driver oil filter and the optionto purchase 2 additional filters at ¼ off the suggested retail price from SplitFire

No additional purchase is necessary to receive the "free" products.

B. For those Class Members with proof of claim only, they have the option of:

  • (i) ¼ off the suggested retail price on the purchase of up to 8 SplitFire Plugs from Splitfire or
  • (ii) ¼ off the suggested retail price on the purchase of up to 8 SplitFire Platinum Plugs from SplitFire or
  • (iii) 1/3 off the suggested retail price on the purchase of 3 Hard Driver oil filters from SplitFire

Class members may also use other published discount coupons or rebates that may be in effect during the claims submission period.

C. Costs Of Administration. SplitFire shall pay all costs of any notice relating to the settlement and all necessary and reasonable costs of administering the processing of claims, disbursement of consideration and other administrative expenses, including, but not limited to, postage charges, printing costs, telephone charges, publication and all other notice costs and other charges as may be approved by the parties subject to further approval by the Court. In the event tha this Stipulation receives preliminary but not final approval and expenses are incurred by SplitFire, payment of those expenses shall remain the sole obligation of SplitFire notwithstanding the fact that the settlement here contemplated has not been consummated.

3. Settlement Administrator. Claim forms will be sent to an addressee designated by SplitFire and approved by the Court and processed solely by SplitFire or its designee; provided that SplitFire shall advise Class Counsel of any claims which it proposes to reject as non-qualifying. Disagreements over the qualification of claims shall be resolved by submission to an arbitrator or other third party mutually acceptable to Class Counsel and SplitFire. SplitFire or its designee shall complete processing of all claims within one hundred twenty (120) days of the Claims Closing Date and shall provide Class Counsel with a final accounting of all claims, approved and unapproved, within one hundred fifty (150) days of the Claims Closing Date. SplitFire and/or its designee shall in good faith (a) administer the Settlement; (b) oversee the provision of all notices to Class Members; and (c) oversee distributions of the Settlement Consideration to Class Members, all as set forth herein.

4. Conditions For Payments Of The Settlement Consideration. The following conditions shall be met by a Class Member before he, she or it is to receive any Settlement Consideration:

(a) The Class Member shall complete a claim in the form attached as Exhibit D hereto (the "Claim Form") setting forth their name, address and location, type, dollar amount and date of purchase and the Class Member shall have foregone any opportunity to opt out of the class. No Claim Form shall be accepted unless received by SplitFire or its designee within sixty (60) days of the Claims Closing Date.

(b) A Class Member claiming consideration under paragraph 2.A above must also furnish adequate proof of purchase in the form of a store receipt or credit card statement showing product purchased or a purchase amount approximating the retail cost of one set (4, 6 or 8) of SplitFire sparkplugs from a source which sells SplitFire sparkplugs.

(c) Only one claim will be allowed per household.

(d) Notice of the proposed settlement (which may at SplitFire's option contain a denial of liability by defendants) will be sent by first class mail, postage prepaid, to Class Members known to SplitFire, and notice shall also be published as required by the Court. (Class Members are "known to SplitFire" if SplitFire has a record of the customer's name and an address known to be current as of January 1, 1996 or after).

5. Adequate Representation. It is hereby agreed that plaintiffs Alvin E. Singleton and Julie A. Massier are, for purposes of this agreement only, adequate representatives of all Class Members.

6. Attorney's Fees And Expenses. SplitFire agrees to pay such attorney's fees and expenses as may be ordered by this Court, subject to the following:

(a) SplitFire will join with plaintiffs' counsel in recommending that plaintiffs' counsel receive a minimum of $750,000 in attorney's fees and that such minimum fee be awarded at such time as the Class Settlement is approved. The minimum fee will be paid within ten (10) days of the Effective Date. In the event of an appeal, the minimum fee will accrue interest at the prime rate during the appeal.

(b) Upon conclusion of the final accounting of all claims, plaintiffs' counsel may petition for an additional fee not toexceed 20% of the retail value of benefits received by the class; provided, however, that the total fees (minimum and additional) will not exceed $2 million. The retail value of benefits received by the class shall be determined based upon the suggested retail prices in effect at the Claims Closing Date.

(c) The petition for additional fees shall not include time devoted to seeking attorney's fees and shall not take the position that SplitFire has agreed to an award of any additional fee by virtue of this agreement. The additional fee, if any, shall be determined by the Court in accordance with Alabama law and shall be paid within ten (10) days of the date upon which any such award becomes final and is not subject to further appellate review. Notwithstanding anything contained in this agreement, SplitFire reserves the right to object to and appeal from the award of any additional fee.

(d) In the event that plaintiffs' counsel are awarded an additional fee in excess of 20% of the retail benefits received by the class or in excess of $2 million in total fees (minimum and additional), they agree to waive all rights to and/or refund the excess to SplitFire.

(e) SplitFire will reimburse reasonable costs and expenses incurred by plaintiffs' counsel in pursuing relief on behalf of the class (but not for attorney's fees), not to exceed $20,000.

(f) SplitFire will reimburse plaintiffs' counsel for reasonable expert's fees incurred as of September 3, 1997, not to exceed $20,000.

7. Election To Implement. If the settlement contemplated herein is approved by the Court, the parties hereto, by mutual consent and with Court approval, may elect to implement some or all of the provisions of settlement to effectuate its benefits notwithstanding the filing of any appeals.

8. Consideration To Defendants. In consideration of the benefits to the Settlement Class provided for hereunder:

(a) The Action shall be dismissed on the merits, with prejudice and without costs, as to all Defendants.

(b) As an express element and condition of this Stipulation and the benefits conferred upon the Settlement Class, the plaintiffs, individually and on behalf of the Settlement Class (other than those persons who opt out as provided in paragraph 9 below), hereby settle, compromise, resolve, release, waive, discharge and terminate any and all claims, lawsuits, demands and causes of action (the "Released Claims") that were asserted or could have been asserted by any of the Class Members by reason of the manufacture, distribution, advertising, promotion or sale of SplitFire sparkplugs against: (1) each of the Defendants; (2) each of their respective predecessors, successors, subsidiaries (and other affiliated companies), assigns and stockholders; (3) each of their present and former directors, officers, attorneys, employees, agents, representatives, and insurers; (4) all vendors who sold SplitFire sparkplugs during the Class Period; and (5) all consultants, publicists, product reviewers and publications which may have published any articles, news or advertisements relating to SplitFire sparkplugs (hereinafter referred to collectively as the "Released Parties"). Any claims for personal injury or property damage are to be retained by the Class Members.

(c) The failure of any Class Member to claim or obtain any Settlement Consideration here made available shall not affect the releases herein, including without limitation the release of such Class Members' claims and the settlement shall retain its full, binding effect. As to any class member who otherwise would be entitled to Settlement Consideration and who for any reason, including failure to submit a Claim Form, fails to mail their claim for Settlement Consideration within sixty (60) days from the date of the last publication (the Claims Closing Date), all rights of such Class Member to consideration in this Action shall lapse and be forfeited. SplitFire shall not be required to remit any additional consideration to claiming Class Members on account of the forfeiture by any Class Members.

9. Order On Settlement Hearing; Notice To Class. Promptly upon the execution of this Stipulation, Class Counsel shall make application to the Court for an order (substantially in the form annexed hereto as Exhibit A): (1) granting preliminary approval of this Stipulation; (2) directing notice to the Settlement Class; (3) providing a reasonable period of time for any member of the Settlement Class to exclude himself or herself from this Action by exercising the right to opt out; (4) providing a reasonable procedure for the submission of comments and/or objections by members of the Settlement Class; and (5) setting a hearing for the final approval of this Stipulation and Settlement, said hearing to be the first date convenient to the Court after the expiration of the time allowed for opt outs, comments and objections. A Notice of the proposed settlement to the Settlement Class, in substantially the form annexed hereto as Exhibit B shall be presented to the Court with the proposed Order, Exhibit A, and, after approval by the Court and entry by the Court of the proposed order, shall be provided to the Settlement Class as provided by the Court. Unless the Court for good cause shown enlarges the time to do so, within ninety (90) days of the date of the order directing notice, the notice shall be sent to each Class Member for whom SplitFire has a record of the customer's name and address known to be current as of January 1, 1996 or after. In addition to the prescribed notice by mail, Exhibit B, a notice in the form attached as Exhibit C shall be published as required by the Court.

Upon any final approval of this Stipulation, a notice in the form attached as Exhibit D shall be published once in each of the ten (10) magazines in which SplitFire advertised most heavily during the Class Period identified in Exhibit F, or as otherwise required by the Court. Such notice shall be printed in advertisement size and format equivalent to SplitFire's prior advertisments in such publications and may, at SplitFire's option, contain a denial of liability. Such notice may be accompanied by any other advertisement or communication which SplitFire may choose to publish, which shall be approved by the Court.

10. Final Order And Judgment. Following notice to the Class Members as provided above, all parties shall petition the Court for final approval of this proposed settlement as fair, reasonable and adequate to the Settlement Class. If, after notice and a hearing as scheduled in the order described in paragraph 9, or any resetting of the same, this Stipulation and Settlement is finally approved by the Court, a Final Order and Judgment of Dismissal with Prejudice shall be entered by the Court substantially in the form annexed hereto as Exhibit F.

11. Stipulation Conditioned On Approval. If the proposed order annexed hereto as Exhibit A is not entered or if this settlement is not finally approved and consummated as provided herein or if the Final Order and Judgment of Dismissal with Prejudice, Exhibit F, referred to in paragraph 10 is not entered or is reversed on appeal, this Stipulation shall be null and void for all purposes. In the event that the Court certifies a class for settlement purposes other than as defined herein or in the event that the Court enters an order or judgment on settlement at variance with the terms hereof, then this Stipulation shall be null and void for all purposes.

12. Full And Complete Settlement. Plaintiffs expressly acknowledge that, in providing the benefits to the Settlement Class set forth in this Stipulation, SplitFire intends to achieve a complete settlement, compromise, resolution, release and termination of Plaintiffs' Claims against the Released Parties, including but not limited to each of the Defendants. SplitFire shall have the right to withdraw from this Stipulation if Class Members representing more than five percent (5%) of the SplitFire sparkplugs purchased during the Class Period have elected to be excluded from, or opt out of, the Settlement Class, pursuant to Rule 23(b)(3) of the Alabama Rules of Civil Procedure. If SplitFire elects to exercise this right, it must do so in writing, with copies to Class Counsel and to the Court, no later than ten (10) days before the date set by the Court, including any adjournment thereof, for the conduct of the hearing on final approval of this Stipulation. If SplitFire exercises this right, this Stipulation shall be null and void for all purposes. (Nothing herein is intended to limit the discretion of the Court to consider opt outs in whatever percentage the Court deems material in deciding whether to grant final approval to the Stipulation and Settlement).

13. Settlement Self-Effectuating. Upon the Effective Date hereof, this settlement shall be in all respects self-effectuating such that, except as expressly required hereunder, no document need be created or delivered, no filing(s) or recording(s) need be made and no other action need be pursued for the purpose of validating, ratifying, effectuating, preserving or perfecting any and all rights contemplated by this Stipulation.

14. Best Efforts. All parties and counsel shall use their best efforts to cause the Court to give preliminary approval to this Stipulation as promptly as possible and to take all steps contemplated by the Stipulation to effectuate the settlement contemplated herein on the stated terms and conditions and further to obtain final approval of the settlement contained in this Stipulation. Specifically, the plaintiffs and Class Counsel agree to recommend the settlement contained in this Stipulation as being in the best interests of the Class Members under the circumstances. No Class Member, however, other than the plaintiffs, shall be precluded from questioning or objecting to the proposed settlement at the hearing for final approval thereof by the Court, notwithstanding Class Counsel's recommendation.

15. Parties Bound. This Stipulation shall be binding upon, and inure to the benefit of, all Class Members and all Defendants and their respective heirs, predecessors, successors and assigns and upon any corporation or other entity into which or with which any of the Defendants may merge or consolidate.

16. Continuing Jurisdiction Of The Court. It is agreed that the parties shall petition the Court to retain jurisdiction over the interpretation, effectuation and implementation of this Stipulation.

17. Effect Of Settlement. This Stipulation and the settlement provided for herein are not a concession or admission of wrongdoing or liability by any party hereto and shall not be used or construed as an admission of any fault, omission, liability or wrongdoing on the part of any party hereto in any statement, release or written document or financial report issued, filed or made. Neither this Stipulation nor the exhibits hereto nor the fact of settlement nor any settlement negotiations or discussions nor the judgments to be entered approving this settlement nor any related document shall be offered or received in evidence as an admission, concession, presumption, or inference against any party to this Stipulation -- provided that this Stipulation and the settlement provided for herein and the orders and judgments entered pursuant hereto may be introduced by any party in any proceeding to enforce the terms hereof, including introduction to support the assertion of the bar of collateral estoppel or res judicata against any action now being prosecuted (or hereafter commenced) by, or on behalf of, Class Members who have not opted out of the Settlement Class in accordance with the procedures described in paragraph 10 above.

18. Class Counsel shall return or verify to defendants' counsel the destruction of all documents or exhibits obtained through discovery from SplitFire (and all copies thereof) within twenty (20) days of Class Counsel's receipt of the final accounting referenced in paragraph 3 above.

19. Entire Agreement. The foregoing constitutes the entire agreement between the plaintiffs and Defendants with regard to the subject matter hereof and may not be modified or amended except in writing signed by all parties hereto.

20. Applicable Law. This Stipulation, which has been made and delivered in the State of Alabama, shall be deemed to be under seal and to be a contract under the laws of the State of Alabama. This Stipulation, for all purposes, including, but not limited to, its validity, construction and enforceability, shall be governed by the laws of the State of Alabama and the rights of the parties hereunder shall be governed in all respects by said laws.

21. Counterparts. This Stipulation may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all such counterparts together shall constitute one and the same document.

IN WITNESS WHEREOF, and as evidence of our understanding and voluntary execution of this document, we have hereunto set our hands and seals to this Stipulation on the 17th day of February, 1998.

BURR & FORMAN LLP
D. Frank Davis
E. Clayton Lowe, Jr.
3100 SouthTrust Tower
420 North 20th Street
Birmingham, Alabama 35202
(205) 251-3000

BEDFORD, ROGERS & BOWLING, P.C.
Robert I. Rogers, Jr.
Post Office Box 669
Russellville, Alabama 35653
(205) 332-2880

BY: [signed by E. Clayton Lowe, Jr.]
Attorneys for Plaintiffs

SQUIRE, SANDERS & DEMPSEY, L.L.P.
Scott T. Kragie
1201 Pennsylvania Avenue, N.W.
Washington, D.C. 20044-0407
(202) 626-6600

MAYNARD, COOPER & GALE
George G. Lynn
Suite 2400, 1901 6th Avenue North
Birmingham, Alabama 35203-2602
(205) 254-1000

GUIN, BOULDIN & ALEXANDER
William M. Bouldin
Post Office Box 940
Russellville, Alabama 35653
(205) 332-2552

BY: [signed by William M. Bouldin]
Attorneys for SplitFire, Inc.; Old World Industries, Inc.; AlliedSignal, Inc.; AlliedSignal Automotive