IN THE SUPERIOR COURT OF THE STATE OF ARIZONA
IN AND FOR THE COUNTY OF MARICOPA
GERD A. ZIMMERMANN and BIRGIT ZIMMERMANN, NO. CV 96-08760
husband and wife, and RACHEL E. PETERSON,
on behalf of themselves and all others similarly situated,
(Assigned to the Hon.
BANK ONE, ARIZONA, N.A., a national banking Rebecca A. Albrecht)
NOTICE OF PENDENCY OF CLASS ACTION,
PROPOSED SETTLEMENT, AND HEARING
TO: THE MEMBERS OF THE "SETTLEMENT CLASSES":
IMPORTANT NOTICE: YOUR LEGAL RIGHTS MAY BE AFFECTED BY THIS NOTICE. PLEASE READ
CAREFULLY. IF YOU CURRENTLY HAVE A LOAN WITH BANK ONE ARIZONA, N.A., THIS NOTICE DOES NOT
AFFECT YOUR OBLIGATION TO MAKE TIMELY PAYMENTS IN ACCORDANCE WITH THE TERMS OF YOUR
LOAN. FOR FURTHER INFORMATION, PLEASE CALL THE CLAIMS ADMINISTRATOR AT 1-800-447-7657. DO
NOT CALL BANK ONE ARIZONA OR THE CLERK OF THE COURT.
THIS IS NOT A LAWSUIT AGAINST YOU. This Notice contains information regarding the proposed settlement of the
lawsuit captioned Gerd Zimmermann, Birgit Zimmermann, and Rachel Peterson v. Bank One Arizona, in the Superior Court of
Arizona for Maricopa County, Case No. CV 96-08760 (the "Lawsuit"). You may be in one of the classes of people defined below
("Settlement Classes") covered by a proposed settlement of the Lawsuit, and you may be entitled to receive certain benefits in
accordance with the proposed settlement (the "Settlement") of the Lawsuit. This notice describes who is covered by the proposed
Settlement, describes the Lawsuit and the benefits of the proposed Settlement, and gives notice that the Judge who has jurisdiction
over this case will hold a hearing to decide whether to approve the Settlement. This Notice describes your legal rights in connection
with the hearing and the Lawsuit. All members of the Settlement Classes who choose not to timely exclude themselves from the
Settlement Classes (as described below in Section VIII(3) of this Notice) will receive the benefits of this Settlement and will be
bound by the resulting order in the Lawsuit.
I. DESCRIPTION OF THE LAWSUIT
Plaintiffs Gerd and Birgit Zimmermann, on behalf of themselves and all others similarly situated, filed the Lawsuit against
Defendant Bank One Arizona, N.A. and its predecessor in interest, the Valley National Bank of Arizona ("BOAZ") on May 18,
1996. The Lawsuit was amended, adding Plaintiff Rachel Peterson as a Plaintiff, on December 9, 1996.
BOAZ is and was a lender of loans secured by deeds of trust on Arizona real property. Plaintiffs alleged in their Complaint
that BOAZ has wrongfully required certain of its borrowers to pay reconveyance fees on their loans when such loans were repaid.
Plaintiffs further alleged that the charging of reconveyance fees was not permitted by any written document or applicable law.
Plaintiffs alleged claims of breach of contract, a pattern of unlawful activity, deceptive trade practices, breach of fiduciary duty,
unjust enrichment and fraud, and also sought injunctive relief.
BOAZ has denied all of Plaintiffs' claims and continues to deny any wrongdoing and any liability to Plaintiffs or any
members of the Settlement Classes, in any amount, in connection with the claims asserted in the Complaint. BOAZ contends that it
was and is permitted to charge and collect reconveyance fees. Nevertheless, BOAZ has agreed to settle the Lawsuit on the basis
proposed herein in order to, among other things, put to rest all future controversy and to avoid the expense and uncertainty of
Counsel for Plaintiffs and the Settlement Classes has and continues to conduct a thorough investigation of the facts and the
applicable law relating to the acts, events, and conduct that is the subject matter of the Lawsuit and has concluded that the proposed
Settlement is fair to and is in the best interests of the Settlement Classes. Therefore, Counsel for Plaintiffs, acting as Class Counsel,
have entered into a Settlement Agreement with BOAZ dated December 16, 1996 (the "Settlement Agreement"), which, if approved
by the Court, will fully and finally resolve the claims asserted by Plaintiffs, on behalf of themselves and the Settlement Classes,
against BOAZ in this Lawsuit.
II. CONDITIONAL CERTIFICATION OF SETTLEMENT CLASSES
The Parties have stipulated, and the Court has ordered upon such stipulation, that, for purposes of this proposed Settlement
only, this case may proceed as a class action and that the classes of plaintiffs (as defined herein and referred to as the "Settlement
Classes") shall be conditionally certified. The Court has made no determination as to the merits of the Lawsuit, however, and this
Notice and proposed Settlement do not imply that BOAZ is liable to Plaintiffs or any member of the Settlement Classes for the
conduct alleged by Plaintiffs in the Lawsuit. Furthermore, if this proposed Settlement is not finally approved or is withdrawn at any
time, the parties have agreed to withdraw their stipulation for conditional class certification and to return the Lawsuit to its same
status as before the Settlement.
The Settlement establishes four Settlement Classes. The Settlement Classes consist of:
A. All individuals who had a loan with BOAZ secured by a deed of trust on Arizona real property, whether or not BOAZ
originated the loan, and such deed of trust contained a provision or terms identical or similar to the language (the “Subject
Language”) set forth below (a "Closed End Loan"), and who BOAZ charged a reconveyance fee upon repayment of such
loan at any time during the period from May 18, 1990 until the present when such loan was repaid (the "Closed End Loan
Damages Settlement Class"). The provision of the Deed of Trust which contains the Subject Language states as follows:
FULL PERFORMANCE. If Trustor pays all the Indebtedness when due, and otherwise performs all the obligations
imposed upon Trustor under this Deed of Trust, Lender shall execute and deliver to Trustee a request for full
reconveyance and shall execute and deliver to Trustor suitable statements of termination of any financing statements on
file evidencing Lender’s security interest in the Rents and the Personal Property. Any reconveyance fee required by law
shall be paid by Trustor, if permitted by applicable law.
B. All individuals who have a loan with BOAZ secured by a deed of trust on Arizona real property, whether or not BOAZ
originated the loan, and such deed of trust contains the Subject Language and who have not yet been charged reconveyance
fees by BOAZ, but who would be charged such fees under BOAZ's current practices (the "Closed End Loan Injunctive
Settlement Class") if such loan was repaid.
C. All individuals who had a loan with BOAZ secured by a deed of trust on Arizona real property, whether or not BOAZ
originated the loan, and such deed of trust is identical or substantially similar to the deed of trust attached as Exhibit "2" to
the Settlement Agreement and such deed of trust is entitled “Deed of Trust and Home Modernization Sales Contract” or
“Deed of Trust and Home Improvement Sales Contract” (a "Swimming Pool/Home Improvement Loan"), and who BOAZ
charged a reconveyance fee upon repayment of such loan at any time during the period from May 18, 1990 until the present
which such loan was repaid (the "Swimming Pool/Home Improvement Damages Settlement Class").
D. All individuals who have a loan with BOAZ secured by a deed of trust on Arizona real property, whether or not BOAZ
originated the loan, and such deed of trust is identical or substantially similar to the deeds of trust described in Paragraph C
above, and who have not yet been charged reconveyance fees by BOAZ, but who would be charged such fees under BOAZ's
current practices if such loan was repaid (the "Swimming Pool/Home Improvement Injunctive Settlement Class").
III. COUNSEL FOR THE SETTLEMENT CLASSES
For purposes of the proposed Settlement only, the Court has appointed the following attorneys as Counsel for the Settlement
Rosemary J. Shockman Mark D. Svejda
John N. McKeegan NORLING, KOLSRUD, SIFFERMAN,
SHOCKMAN & MCKEEGAN, P.C. SVEJDA & DAVIS, P.L.C.
7373 North Scottsdale Road, Suite 130C 3101 North Central Avenue, Suite 690
Scottsdale, Arizona 85253-3550 Phoenix, Arizona 85012-2639
(602) 596-1986 (602) 264-5866
IV. COUNSEL FOR BOAZ
Counsel for BOAZ are:
Richard Lustiger Jeffrey M. Tillotson
JOHNSTON MAYNARD GRANT AND LYNN STODGHILL MELSHEIMER &
PARKER, P.L.C. TILLOTSON, L.L.P.
3200 North Central Avenue, Suite 2300 750 North St. Paul Street, Suite 1400
Phoenix, Arizona 85012 Dallas, Texas 75201
(602) 279-8500 (214) 981-3800
V. REASONS FOR ENTERING INTO SETTLEMENT AGREEMENT
Plaintiffs and BOAZ agreed on all of the terms of the proposed Settlement after extensive arms-length negotiations between
Class Counsel and Counsel for BOAZ. Class Counsel has entered into the proposed Settlement after weighing the benefits of the
Settlement against the probabilities of success or failure in the Lawsuit and the delays that would be likely if the Lawsuit proceeded
Class Counsel has concluded that the proposed Settlement provides substantial benefits to Plaintiffs and the Settlement
Classes, resolves substantial issues without prolonged litigation, and provides the Settlement Classes with significant individual
benefit as well as in the aggregate; and have concluded that the Settlement is fair to and in the best interests of the Settlement
Classes. Plaintiffs and Class Counsel have concluded that the proposed Settlement is fair, reasonable, and adequate.
Although BOAZ denies any wrongdoing and any liability whatsoever, BOAZ believes that it is in its best interests to settle
this Lawsuit on the terms set forth in the Settlement Agreement in order to avoid further expense and inconvenience in connection
with the Lawsuit.
VI. SUMMARY OF THE MAJOR TERMS OF THE PROPOSED SETTLEMENT
The proposed Settlement contemplated by the Settlement Agreement provides as follows:
1. Agreed Certification of a Class.
The parties agree to seek certification of the classes of individuals as described above. The Settlement Classes are
limited to the individuals meeting the criteria set forth therein.
2. Creation of the Escrow Accounts
BOAZ has agreed to deposit into two separate escrow accounts identified by Class Counsel the following amounts:
• The sum of $50.00 (FIFTY DOLLARS) for each member of the Closed End Loan Damages Settlement Class.
BOAZ will determine the number of members of the Closed End Loan Damages Settlement Class but, in no event,
will BOAZ deposit less than $700,000 into this account.
• The sum of $50.00 (FIFTY DOLLARS) for each member of the Swimming Pool/Home Improvement Damages
Settlement Class. BOAZ will determine the number of members of the Swimming Pool/Home Improvement
Damages Settlement Class but, in no event, will BOAZ deposit less than $135,000 into this account.
• Class Counsel will have the opportunity to confirm the number of Closed End Loan Damages Settlement Class
members and the number of Swimming Pool/Home Improvement Damages Settlement Class members as
determined by BOAZ through reasonable discovery.
3. Distribution of the Escrow Accounts.
If the proposed Settlement Agreement receives final approval by the Court, the Escrow Accounts as described above (less
any attorneys' fees, costs, and expenses approved by the Court) will be distributed, subject to Court approval, pro-rata to any class
members receiving this Notice and any members filing a valid proof of claim (subject to the provisions of paragraph 4 below). For
those class members receiving this Notice through the mail, the distribution will be made without the necessity of the filing of
a claim and will be sent via check by the Claims Administrator made payable to the eligible member to the same mailing
address to which this Notice is sent. BOAZ also has agreed, at its expense, to have this Notice published in certain newspapers so
that class members not receiving this Notice can file valid proofs of claim.
4. The amount of each check.
Each check mailed to a class member shall be for an amount equal to a pro-rata share of the appropriate Escrow Account
from which the recipient is a class member less any attorneys' fees and/or costs as specified herein, but in no event shall any member
of the Damages Classes receive a check for less than $63.00 each, less attorneys' fees and applicable costs as specified herein, or a
check for more than $75.00 each.
Each check mailed to a member of the Damages Classes shall bear on its face the following language: "THIS CHECK IS
VOID IF NOT CASHED WITHIN 90 (NINETY) DAYS OF THE DATE OF THIS CHECK."
If it becomes apparent that either of the Escrow Accounts contains insufficient funds to satisfy the conditions set out above,
BOAZ shall deposit funds sufficient to allow the Class Administrator to comply with the terms of this Settlement Agreement except
that, under no circumstances, shall BOAZ be required to contribute a sum totaling more than $63.00 (SIXTY-THREE DOLLARS)
for each member of the Damages Classes.
5. Proofs of Claim.
If you are receiving this Notice because you requested it, you must complete, sign, and return a valid proof of claim on the
form enclosed with this Notice to receive any distribution. Your proof of claim should be sent to:
BANK ONE LITIGATION
c/o Gilardi & Co. LLC
P.O. Box 5100
Larkspur, California 94977-5100
IT IS YOUR RESPONSIBILITY, AS THE PARTY FILING THE PROOF OF CLAIM, TO SEE THAT THE ENCLOSED
FORM IS POSTMARKED (FIRST CLASS U.S. MAIL) TO THE DESIGNATED ADDRESS ON OR BEFORE AUGUST 1, 1997.
If you submit a valid Proof of Claim form and the Settlement Agreement becomes final, you will receive your distribution via check
as determined by Class Counsel or their appointed agent/administrator. If you do not file a Proof of Claim form, or if you file a
Proof of Claim form that is incomplete or untimely, and the Settlement Agreement is approved and becomes final, you will not be
eligible to receive any portion of the Escrow Accounts.
6. Settlement for Injunctive Classes.
BOAZ agrees that it will not charge a reconveyance fee to any member of the Settlement Classes who has a current Loan
with BOAZ, except that BOAZ can charge each such Settlement Class member the amount of any actual recording fee required to be
paid by any state, local, or county government to file a Deed of Release and Reconveyance if the Settlement Class member is paying
off his or her loan and, as part of that pay off, BOAZ would otherwise be required to pay such fee.
7. Attorneys' Fees.
If the Court approves the proposed Settlement, it will determine what amount of attorneys' fees and reimbursement of costs
and expenses (if any) should be paid to Class Counsel for their work in connection with the Lawsuit and the Settlement. Class
Counsel will seek attorneys' fees to be paid out of the Escrow Accounts not to exceed thirty percent (30%) of the first $750,000
deposited in the Closed End Loan Damages Settlement Escrow Account and the first $135,000 deposited in the Swimming Pool
Home Improvement Damages Settlement Escrow Account. In addition, Class Counsel intends to seek Court approval for a payment
of an additional $110,000 by BOAZ to Class Counsel as additional compensation in fees for obtaining the "Injunctive Settlement"
described herein. This amount is to be paid by BOAZ and is not deducted from the Escrow Accounts. This amount was negotiated
at arm's-length between Counsel for the Settlement Classes and Counsel for BOAZ.
Class Counsel's representation in this case was on a contingent fee basis. In other words, Class Counsel's recovery for their
investment of considerable time and expense is and was wholly contingent upon a recovery in this action. In the event this action
was not resolved by litigation or settlement, Class Counsel would not have received any fee for their time and expenses associated
with seeking relief for the Settlement Classes.
VII. CLERK OF THE COURT
Clerk of the Superior Court
101/201 West Jefferson Avenue
Phoenix, Arizona 85003-2205
VIII. RIGHTS AND OPTIONS OF CLASS MEMBERS
If you are a member of any of the Settlement Classes, you have the following options:
1. You may remain a member of the Settlement Class(es) and receive any benefits of the Settlement to which
you are entitled.
If you wish to receive any benefits under the Settlement to which you are entitled, then you may choose to remain a member
of the Settlement Classes. To remain a Settlement Class Member, you need take no action unless you have received this Notice
pursuant to your own request, in which case you must file a proof of claim to receive any distribution. If you receive this
Notice via mail at your current address you will receive your share of the Escrow Account without any further action on your
behalf. Your interests as a member of the Settlement Classes will be represented by the class representative and the above-listed
Counsel for the Settlement Classes. You will not be charged for their services. You will be bound by any judgment or other final
disposition of this case and may participate as a member of the Settlement Class in any settlement.
2. You may retain your own attorney to represent you at your own cost.
If you want to hire your own attorney, you should immediately retain your own attorney and should immediately discuss
your options with him or her. You will be responsible for paying your own attorney's fees.
3. You may elect not to receive any benefits under the Settlement and request exclusion from the Settlement
If you elect not to receive any benefits under the Settlement, then you must request exclusion from the Settlement Classes.
You will not be bound by any judgment, disposition, or settlement of the class actions, nor will you receive any of the benefits of this
class action, including the payments of any monies. You will retain, and will be free to pursue, any claims you may have on your
own behalf. You may wish to retain your own attorney to represent you in connection with pursuing any such claims. If you wish to
exclude yourself from the Settlement Classes, you must mail a written Request for Exclusion to Counsel for the Settlement Classes
listed above and Counsel for BOAZ listed above. Requests for Exclusion must contain the full name, current address, loan account
number, and telephone number of the person requesting exclusion. The written request for exclusion must be sent by U.S. Mail,
first-class and postage prepaid, postmarked on or before August 1, 1997.
4. You may object to the Settlement.
If you object to the Settlement, you must comply with paragraph X below.
IX. FINAL FAIRNESS HEARING
A Final Fairness Hearing will be held on August 15, 1997 at 1:30 o'clock p.m. before the Hon. Rebecca A. Albrecht,
presiding judge for this action, Superior Court of Arizona, Maricopa County, 101 West Jefferson Avenue, 8th Floor, Phoenix,
Arizona 85003 for the purpose of determining whether the proposed Settlement is fair, reasonable, and adequate and should be
finally approved, a final judgment entered and the Lawsuit dismissed. The hearing may be continued or adjourned without further
notice other than announcement at the Final Fairness Hearing or at any adjournment or continuance thereof. The Settlement may be
approved by the Court with modifications, if any, consented to by Plaintiffs and BOAZ without further notice.
X. RIGHT TO OBJECT TO SETTLEMENT, APPEAR AT FINAL SETTLEMENT HEARING
If you do not exclude yourself from the Settlement Classes, you may object to the Settlement. Any member of the
Settlement Classes who does not elect timely and valid exclusion from the Settlement Classes and who objects to the proposed
Settlement must file such objection and any supporting papers with the Clerk of the Court. Such objections must be postmarked on
or before August 1, 1997. The objection must set forth the full name, current address, and telephone number of the person making
the objection. In addition, the objection must include: (a) a written statement of the position the objector wishes to assert; (b) a
written statement of the grounds therefor; and (c) copies of any papers, briefs, or other documents the objector wishes to submit in
support of his/her position. Copies of the objection and supporting papers must be mailed to Counsel for Plaintiffs and the
Settlement Classes and Counsel for BOAZ identified above on or before August 1, 1997. Any member of the Settlement Classes
who intends to appear at the Fairness Hearing personally (or through separate counsel) to object to the Settlement on any grounds
whatsoever must file with the Court a Notice of Intention to Appear. This notice must be filed with the Clerk of the Court,
postmarked on or before August 1, 1997 at the address listed above. Copies of the Notice of Intention to Appear must be mailed to
Counsel for Plaintiffs and the Settlement Classes and Counsel for BOAZ identified above on or before August 1, 1997.
Any member of the Settlement Classes who does not file and serve a Notice of Intent to Appear at the Fairness Hearing will
be prohibited from appearing at any Final Hearing concerning this Settlement. Any member of the Settlement Classes who does not
file objections in the time and manner described above or validly exclude themselves from this settlement is forever foreclosed from
raising any objection to such mattes.
XI. EFFECT OF SETTLEMENT APPROVAL
If the Settlement is approved, it will be binding upon Plaintiffs and every member of the Settlement Classes who does not
timely and validly request exclusion from the Settlement Class, will end any and all claims for damages or equitable relief of any
nature that Plaintiffs and such members of the Settlement Classes (or any of them) made or could have made arising out of BOAZ's
charging of reconveyance fees (or its practice generally of charging such fees) and will release and forever discharge:
(i) BOAZ and all of its former or present officers, directors, principals, agents, representatives, attorneys, employers,
employees, divisions, affiliates, owners, subsidiaries, parents, assigns, predecessors, and successors;
(ii) any predecessor in interest, predecessor servicer, successor servicer, or assignee of any Closed End Loan, Swimming
Pool/Home Improvement Loan or related loan collateral of any Settlement Class member that is part of the Settlement Agreement
(except that nothing herein shall be construed as releasing said successor servicer or assignee from liability for their own acts,
conduct, or omissions after the date of transfer of any loan to the same); and
(iii) each and all members of the Settlement Classes and Class Counsel, from any and all past, present, and future claims,
actions, causes of action, rights or liabilities, whether known or unknown, asserted or unasserted, based on, arising out of, or in any
way relating or pertaining to:
(a) the collection by BOAZ of any reconveyance fee upon repayment of Closed End Loans or Swimming
Pool/Home Improvement Loans;
(b) any effort or action (actual or attempted) by BOAZ to charge or collect a reconveyance fee in connection with
Close End Loans or Swimming Pool/Home Improvement Loans;
(c) BOAZ's practices, policies, and procedures, as well as all actions taken by BOAZ in connection with the same
regarding the collection, accumulation, handling, custody, control, distribution or use of any reconveyance fees
collected, assessed or attempted to be charged by BOAZ in connection with Close End Loans or Swimming
Pool/Home Improvement Loans;
(d) any of the claims stated in the Complaint; and
(e) all claims arising out of, relating to, or in connection with the institution, prosecution, assertion, settlement or
resolution of the Lawsuit.
XII. INFORMATION YOU MUST INCLUDE IN ANY DOCUMENT YOU SEND REGARDING THIS CASE
In sending any document to the Court or to Counsel for Plaintiffs and the Settlement Classes and Counsel for BOAZ, it is
important that both your envelope and any documents inside contain the following case name and identifying numbers:
Zimmermann, et al. v. Bank One Arizona, N.A., No. CV96-08760
In addition, you must include your full name, address, and telephone number.
XIII. FOR MORE INFORMATION
THIS NOTICE IS ONLY A SUMMARY. The full Settlement Agreement, the First Amended Complaint, Orders, and
other documents on file in this case, may be inspected and copies made thereof at the Court Clerk's office at the address listed above.
DO NOT WRITE OR TELEPHONE BANK ONE ARIZONA, N.A. OR THE CLERK'S OFFICE if you have any
questions about this Notice or the Settlement. Inquiries regarding the Lawsuit, this Notice or the proposed Settlement should be
BANK ONE LITIGATION
c/o Gilardi & Co. LLC
P.O. Box 5100
Larkspur, California 94977-5100
BY ORDER OF THE COURT
Hon. Rebecca A. Albrecht
Judge of the Superior Court
DATED: January 3, 1997
BANK ONE LITIGATION
c/o Gilardi & Co. LLC
P.O. Box 5100
Larkspur, California 94977-5100