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damages for deceptive trade practices, punitive damages, and
plaintiffs’ attorney’s fees. Fourth, class action cases are more
expensive to defend than routine insurance cases, because there
are many parties involved, a great deal of discovery, a lengthy
certification process, and a lengthened time frame for final
resolution of the case.
The cost of legal fees was a substantial concern to
petitioner. Petitioner’s defense counsel provided an estimate of
attorney’s fees in excess of $100,000. The actual legal fees
that were paid for petitioner’s defense were $9,982, $6,816, and
$5,294 in 1995, 1996, and 1997, respectively.
While petitioner’s defense counsel was concerned about the
credit life insurance scenario in which petitioner participated,
counsel was of the opinion that petitioner had not participated
in deceptive trade practices. Petitioner’s officers maintained
that they did not participate in deceptive trade practices and
were comfortable with what they had done.
The class action lawsuit was removed to bankruptcy court,
because the primary defendants filed bankruptcy. Petitioner’s
defense counsel advised petitioner, in a letter dated June 19,
1995, that plaintiffs filed a Motion to Dismiss and that
“plaintiffs may be considering dismissal of the adversary
proceeding in the bankruptcy case so that they can refile in
another court” or a “less restrictive forum”. Petitioner was
dismissed from the lawsuit in 1995. In a letter dated
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