1992-031washna
ORDINANCE NO ~
AN ORDINANCE OF THE CITY OF DENTON, TEXAS, APPROVING A SETTLEMENT
AGREEMENT AND RELEASE BETWEEN THE CITY OF DENTON AND WASHINGTON
NATIONAL CASUALTY, AND DECLARING AN EFFECTIVE DATE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I That the attached Settlement Agreement and Release
with PreDudlce of all Pending and Future Claims between the City of
Denton and Washington National Casualty, providing for the
settlement and compromise of the litigation now pending between the
parties before the United States District Court for the Eastern
District of Texas, Sherman
approved in accordance with its terms The City Manager is
authorized to execute the agreement and all other documents and
take such action as is necessary to comply with the terms of said
agreement
~ That this ordinance shall become effective immedi-
ately upon its passage and approval
PASSED AND APPROVED this the ~day-- of February, 1992
BOB CASTLEBERRY, MAY
ATTEST
JENNIFER WALTERS, CITY SECRETARY
DEBRA A DRAYOVITCH, CITY ATTORNEY
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
THE CITY OF DENTON,
Plaintiff, §
VS § C A NO 4 91CV61
WASHINGTON NATIONAL
INSURANCE COMPANY, §
Defendant §
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release (the "Agreement") is
entered into by and between Washington National Insurance Company
("Washington National") and the City of Denton, Texas ("Denton") on
the date last acknowledged below
WI TN ES SETH
WHEREAS, Denton established a self-funded employee welfare
benefit plan providing comprehensive medical expense benefits to
Denton's employees,
WHEREAS, Denton solicited bids to provide individual stop-loss
and aggregate stop-loss insurance for the Plan,
WHEREAS, by City Ordinance number 87-177 Denton accepted
Washington Natlonal's proposal for the stop-loss insurance and
authorized the expenditure of funds for the insurance coverage,
SETTLEMENT AGREEMENT AND RELEASE - Page 1
WHEREAS, an individual stop-loss and aggregate stop-loss
agreement (the "Stop-Loss Agreement") was entered into between
Washington National and Denton,
WHEREAS, a dispute arose between Washington National and
Denton as to the terms and provisions of the Stop-Loss Agreement,
WHEREAS, Denton submitted lndlvldual and aggregate stop loss
claims to Washington National under the Stop-Loss Agreement,
WHEREAS, Washington National denied certain claims and certain
expenses for which claims had been submitted to it under the Stop-
Loss Agreement,
WHEREAS, a dispute arose between Denton and Washington
National as to the respective obligations of the parties to the
Stop-Loss Agreement regarding the claims submitted and amounts
sought for reimbursement,
WHEREAS, on or about March 8, 1991, Denton filed suit in the
211th Judicial Dlstrlct Court of Denton County, Texas, said action
being numbered 91-30147-211 on the docket of the 211th Judlclal
Dlstrlct Court,
WHEREAS, on Aprll 5, 1991, Washington National removed the
action to the Un~ted States District for the Eastern D~strlct of
Texas, Sherman Dlvlslon there bearing civil actlon number 4 91CV61
on the docket of the United States Dlstrlct Court (the "Lawsuit"),
SETTLEMENT AGREEMENT AND RELEASE - Page 2
WHEREAS, in the Lawsuit, Denton sought damages for alleged
breach of contract, breach of the duty of good faith and fair
dealing and alleged violations of the Texas Deceptive Trade
Practices Consumer Protection Act, Tex Bus Com Code § 17 41
et seq, (the "DTPA") and Tex Ins Code Art 21 21, and sought to
recover actual damages, punitive damages, consequential damages,
statutory damages, attorney's fees, interest, and costs of court,
WHEREAS, Washington National denied Denton's allegations in
the Lawsuit,
WHEREAS, Washington National and Denton desire to settle and
resolve the controversies herein between them, and
WHEREAS, Washington National and Denton intend that the full
terms and conditions of the compromise and settlement be set forth
in this Agreement
NOW, THEREFORE, in cons~deratlon of the promises and covenants
herein set forth, and for other good and valuable conslderatlon, it
is AGREED AS FOLLOWS
1 payment of $175,000 00 Washington National has herewith
paid to Denton the total sum of $175,000 00 by and through
Washington Natlonal's check no 010634 in the amount of $83,000 00,
check no 0106332, in the amount of $83,000 00 and check no
0106333 in the amount of $9,000 00, all made payable to "The City
of Denton, Texas and its attorney, R William Wood" (the
SETTLEMENT AGREEMENT AND RELEASE - Page 3
"Settlement Draft") Denton expressly acknowledges and represents
that it has received the Settlement Draft as consideration for this
Agreement
2 Release bY De~to~, Denton, for ltself and lts legal
representatives, successors, assigns, employees, agents, and
citizens, hereby RELEASES, ACQUITS, AND FOREVER DISCHARGES
Washington National, and ~ts legal representatives, successors,
assigns, affiliated companies, employees, officers, shareholders,
directors, and attorneys from any and all claims, demands, debts,
and causes of action, known or unknown, against Washington National
arlslng out of or relating to (1) the Stop-Loss Agreement and any
version thereof including all amendments, supplements and addenda
thereto, (2) any and all individual or aggregate stop-loss claims
or claims of any nature submitted or which could have been
submitted by Denton under the Stop-Loss Agreement speclflcally
including, but without l~mltatlon, all claims lncurred, paid,
handled, den~ed, or administered in any manner by Denton or its
employees, representatives, or agents for the period from October
1, 1987 through October 31, 1988, (3) any and all claims arlslng
out of or relating to the Plan, and (4) any and all claims asserted
or assertable in the Lawsuit
3 Release bv Wash~naton National Washington National, for
Itself and its legal representatives, successors, assigns,
employees, officers, directors, shareholders, and attorneys
SETTLEMENT AGREEMENT AND RELEASE - Page 4
RELEASES, ACQUITS, AND FOREVER DISCHARGES Denton, and its
employees, agents, successors, legal representatives, assigns, and
citizens from any and all claims, demands, debts, and causes of
action, known or unknown, against Denton arising out of or relating
to (1) the Stop-Loss Agreement and any version thereof Including
all amendments, supplements and addenda thereto, (2) any claim for
past due premlum on the Stop-Loss Agreement, and (3) and all claims
asserted or assertable ~n the Lawsuit
4 RePresentation and Indemnification Washington National
and Denton represent to one another that they are the owners and
holders of the clalms belng released herein and that they have not
assigned any claims belng released herein and in that regard agree
to indemnify and hold one another harmless from any loss, cost or
expense lncludlng, wlthout l~mltat~on, attorney's fees, from any
claim that may be asserted by, through or under them
5 NO Prequ~%ce The releases by the part~es hereto of one
another shall be wlthout prejudice, without waiver of, and without
any affect whatsoever upon any claim which Washington National or
Denton may have against any other party
6 Dlsmlssal Washington National and Denton agree to
dismiss their claims, demands, debts, and causes of action asserted
against one another in the Lawsult WITH PREJUDICE, with costs taxed
against the part~es ~ncurrlng them
SETTLEMENT AGREEMENT AND RELEASE - Page 5
7 Blndina Effect It is understood and agreed that thas
Agreement shall be banding upon and inure to the benefit of
Washington Nataonal and Denton and thear respectave helrs,
employees, agents, representatives, successors, assigns, employers,
darectors, officers, shareholders, catazens and attorneys
8 No Admission Payment of the consaderataon herein is
merely a settlement of disputed claims and is not to be considered
an admlsslon of llablllty, the same being expressly den~ed
9 Choace of Law The partaes mutually agree that thls
Agreement shall be construed and enforced under the laws of the
State of Texas
10 No Other Aareements It as understood and agreed that
thas Agreement contains the entire agreement between Washlngton
National and Denton and supersedes any and all praor agreements,
arrangements, or understandings between the parties relatlng to its
subject matter Thls Agreement cannot be changed or termlnated
orally
11 CouDterDarts The Agreement may be signed in multiple
counterparts, each of whlch shall be an original
IN WITNESS WHEREOF, the parties have executed thas Agreement
on the date acknowledged below
SETTLEMENT AGREEMENT AND RELEASE - Page 6
WASHINGTON NATIONAL INSURANCE
COMPANY
£
Its /V~ce Pres~_dent /~d Counsel
STATE OF Illinois
COUNTY OF Cook
BEFORE ME, the undersigned Notary Public, in and for the State
of Illinois , on this day personally appeared
Gerl M Gaughan , known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that
she executed the same in the capacity therein stated for the
purposes and consideration therein expressed
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 27th day of
OFFIC,AL
0M_ IROSE M KIRONKOW ~ Notary Publt~c in and for
NOTARY PUBLIC STATE OF ILLINOIS, the State of Illinois
ISS[ON EXPIRES 1/16/94}
Rose Iv[ Kronkow
Printed Name of Notary
My Commission Expires
January 16, 1994
SETTLEMENT AGREEMENT AND RELEASE - Page 7
THE CITY OF DENTON
~~ ~~~ Mayor
C~retary -
(Printed' Name)
C W G T
STATE OF TEXAS
COUNTY OF DENTON
BEFORE ME, the undersigned Notary Public, in and for the State
of Texas, on this day personally appeared ~0~ ~.~E~ ,
known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the
same in the capacity therein stated for the purposes and
consideration therein expressed
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this /~ day of
O~~_ , 1992
~ Botary ~ic in and for
the State of Texas
I'~ ~-.''-"-~'"'- Printed Name of Notary
My Commission Expires
SETTLEMENT AGREEMENT AND RELEASE - Page 8
APPROVED AS TO LEG~AL FORM
~ty Attorney U
(Printed Name) ~/
SETTLEMENT AGREEMENT AND RELEASE - Page 9