# Appendix — Ballard v. Martin

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_0536%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 2003
- **Citation:** 537 U.S. 1105

## Text

v / ries”

of

02 542 0c -3 2009
No.

| OFFICE OF THE CLERK

IN THE
Supreme Court of the Gnited States

TERESA BALLARD, ET AL.,
Petitioners,

¥.
SHEILA MARTIN, ET AL., AND WESTARK FINANCIAL
CONSULTANTS OF JONESBORO, INC., ET AL.,
Respondents.

ON PETITION FOR WRIT OF CERTIORARI
TO THE SUPREME COURT OF THE
STATE OF ARKANSAS

Appendix to
PETITION FOR WRIT OF CERTIORARI

RICHARD A. FISHER DAVID G. NIXON
Counsel of Record

THE FISHER LAW FIRM THE NIXON LAW FIRM

1510 STUART ROAD 2340 GREEN ACRES RD.

SUITE 210 SUITE 12

CLEVELAND, TN 37364 FAYETTEVILLE, AR

72703

TEL: (423) 479-7009 TEL: (479) 582-0020

Counsel for Petitioners Counsel for Petitioners

sittin Poca

APPENDIX A

SUPREME COURT OF ARKANSAS

No. 01-1185
TERESA BALLARD, et al., Opinion Delivered JUL 02
and STEPHEN CAIN, et al., 2002
APPELLANTS, 7

VS. APPEAL FROM THE

CRAIGHEAD COUNTY
SHEILA MARTIN, et al,and | CIRCUIT COURT,
WESTARK FINANCIAL NO. CIV 2000-0669
CONSULTANTS OF HON. DAVID N. LASER,
JONESBORO, INC., et al., JUDGE,

APPELLEES,
AFFIRMED

ROBERT L. BROWN, Associate Justice

This is a check-cashing case that presents the issue of
whether a class-action settlement was fair and adequate. The
appellants are two groups of intervenors, Teresa Ballard et al.
and Stephen Cain et al. (Collectively referred to as Ballard and
Cain). The appellees are Sheila Martin and Jimmie Sue
Spencer, individually and on behalf of the class (collectively
referred to as Martin), who represent the original class of
plaintiffs in this litigation, as well as Westark Financial
Consultants of Jonesboro, Inc. (Westark), together with
eighteen other check-cashing businesses which voluntarily
submitted to the jurisdiction of the Craighead County Circuit
Court as defendants as part of Martin’s amended motion for
class certification (collectively referred to as Westark
defendants). Westark and the other eighteen check-cashing
businesses will be referred to jointly as “Westark appellees.”

On appeal, Ballard and Cain challenge the fairness and
adequacy of the class settlement between Martin and the

la

Westark defendants. Ballard and Cain raise three additional
points: (1) the adequacy of Martin, and class counsel to
represent the interests of the class; (2) whether the trial court
adequately enforced subpoenas against the Westark appellees;
and (3) whether the notice to potential class members was
adequate.

On December 8, 2000, Martin, both individually and
on behalf of a class, filed the complaint against Westark in
Craighead County Circuit Court. According to the complaint,
each potential class member had engaged in deferred-
presentment check-cashing with Westark. The _ typical
deferred-presentment transaction allowed the customer to
write a check for the cash amount exchanged plus a “service
charge,” which the check-casher would defer cashing until the
customer's “payday.” On payday, the customer was instructed
to pick up the held check in exchange for cash in the face
amount of the check. The customer could defer payment by
writing a second check for the amount owed, the original
service charge, and the new service charge. Martin alleged that
these service charges were interest and that Westark had
engaged in usurious lending practices in violation of Arkansas
Constitution Article 19, section 13. She sought damages on that
basis and alleged that the class met the requirements of Rule
23 of the Arkansas Rules of Civil Procedure. On January 8,
2001, she also moved for class certification.

Following the filing of the complaint, Martin
commenced discovery. Through one set of interrogatories and
requests for production propounded by Martin, information
about the arbitration provisions in the customer contracts was
elicited. Martin did request limited information relating to
Westark’s financial condition. However, it is unclear from the
record whether Martin ever received this information. The
class was later estimated to include approximately 18,500
members. On April 26, 2001, Martin filed an amended motion
for class certification in which the Westark defendants were
added as parties defendant. Martin also filed a second
amended complaint that same date with the Westark
defendants listed as parties defendant.

2a

Sometime in mid-to-late April 2001, Martin and the
Westark appellees reached a settlement agreement. On April
30, 2001, the trial court entered an order certifying the class
pursuant to Ark. R. Civ. P. 23, adopting the settlement, and
requiring notice to the class by publication in the Arkansas
Democrat-Gazette and by individual notices to be mailed no
later than May 14, 2001. In the settlement, the eighteen
Westark defendants agreed to submit to the jurisdiction of the
Craighead County Circuit Court with Westark for purposes of
settling all claims against them. The settlement was as follows:
the nineteen check-cashing businesses would deposit $605,000
into a settlement pool. $435,000 of the amount would be used
to purchase Series E bonds totaling $870,000 to pay the claims
of aggrieved customers at a rate of one and one-half times any
fees paid by those customers.! Claims exceeding the face
amount of the bonds would not be paid. This settlement
amount would be subject to set-off for any outstanding
balance due the defendant check-casher for cash advanced and
unpaid. The settlement amount, if any remained after the set-
off, would be paid to the customer in the form of a Series E
savings bond. The savings bonds were worth one-half of their
face value until their maturity in sixteen years, and the class
member was required to wait six months to cash the bond for
the initial one-half value. Class counsel for Martin would
immediately receive a fee of $170,000.

The settlement agreement further provided that the
Westark appellees would continue to operate their businesses
for the next ninety days after the date of the settlement in
order to collect any outstanding checks. The settlement
provided additionally that if any appellate court ruled that the
service charges associated with these transactions were not
usurious, then the defendants would be free to operate in any

1 The appellants assert for the first time on appeal that the United States
Treasury discontinued Series E bonds in 1980, and thus the settlement is
impossible to perform as written. Martin responds that the class of bonds
is now called Series EE instead of Series E, and that this oversight should
not be a basis for invalidating the settlement. We agree.

3a

legal manner. The final “opt-out date” for nonparticipation in
the class or settlement was fixed at August 15, 201.

After this order was entered, notice was given to the
class members together with the conditions of the proposed
settlement. Martin accomplished notice by placing an
advertisement in the Arkansas Democrat-Gazette newspaper on
May 21, 2001. Class counsel also mailed an individual
notification to each potential class member by standard mail
on May 16, 2001.2

Two groups of objectors moved to intervene after
receiving notice. The Ballard group of objectors involved five
members and the Cain group of objectors involved twelve
members. The Ballard objectors filed a motion to intervene on
May 25, 2001. On that same date, they issued subpoenas for
the financial records of the Westark appellees. The Cain
objectors filed their motion to intervene on June 1, 2001. The
trial court granted both motions to intervene on June 1, 2001,
at the beginning of the fairness hearing on the proposed
settlement.

At the fairness hearing, the trial court allowed the
Martin class as well as the Westark appellees to put on
evidence supporting the settlement. The Martin class
presented the testimony of Martin herself, as well as the
testimony of Chris Lawson, a partner at the law firm of Friday,
Eldredge, & Clark in Little Rock. As class representative,
Martin testified that she had been kept abreast of the litigation
and had approved the settlement.3 On cross-examination, she
admitted to a lack of knowledge about some of the details of
the litigation and the settlement agreement. For his part,
Lawson testified that he was involved in class actions against
check-cashing firms, and that he would advise any clients

2 Notice was mailed apparently two days after the May 14, 2001 date
specified in the trial court’s order. This two-day delay is not an issue on
appeal.

3 The record does not reveal whether Jimmie Sue Spencer, the other
class representative, was present at the fairness hearing.

4a

affected by the proposed settlement to remain in the
settlement and not opt out.

The Westark defendants presented the testimony of
one witness, Jeff Forsey, who testified in his capacity as the
chief executive officer of fourteen of the Westark appellees and
as custodian of financial documents for all nineteen Westark
appellees. Forsey did not bring all of the subpoenaed financial
documents with him but did appear in person at the fairness
hearing. The Ballard intervenors moved io enforce the
subpoenas, and Westark defendants moved to quash them.
The trial court ruled that Forsey’s personal appearance and his
partial production of financial records satisfied the subpoenas,
considering how abbreviated the time was that the Westark
defendants had to respond to the subpoenas.

On the stand, Forsey testified that the decision to enter
into the settlement with the Martin class was a cost/benefit
business decision for the Westark appellees. He further
testified that the reason that they chose savings bonds as the
method of payment was in hope that the settlement would
foster “a different perspective on money” among the low-
income class members. He added that the businesses he
represented at the hearing would have difficulty producing
the $605,000 to fund the settlement. On cross-examination,
Forsey testified to the financial condition of the Westark
appellees. Among other things, he testified that the receipts of
the Westark appellees during the ninety-day period after
approval of the settlement could exceed the settlement amount
of $605,000.

On August 7, 2001, the trial court entered its final order
approving the settlement. Ballard and Cain now appeal that
order.

I. Fairness of the Settlement

Ballard and Cain first assert that the trial court abused
its discretion when it approved the class settlement because
the settlement was not fair, reasonable, and adequate. They

5a

urge this court, in measuring the fairness of the settlement, to
adopt the Eighth Circuit Court of Appeal’s standards set out in
Grunin v. Int'l House of Pancakes, 513 F. 2d 114 (8th Cir. 1975).

In Grunin, the Eighth Circuit adopted four factors to
assist in assessing whether a class settlement is fair and
adequate. Those four factors are listed below, with the first
factor being the primary measure of fairness and the
remaining three being secondary to the first:

(1) the strength of the case for the plaintiffs on the merits,
balanced against the amount offered in the settlement;

(2) the defendant's overall financial condition and ability
to pay;

(3) the complexity, length, and expense of further
litigation; and

(4) the amount of opposition to the settlement.

Grunin, 513 F.2d at 124 (citing West Virginia v. Chas. Pfizer &
Co., 440 F.2d 1085 (2d Cir. 1971); City of Detroit v. Grinnell Corp.,
495 F.2d 448 (2d Cir. 1974); Young v. Katz, 447 F.2d 431 (5th Cir.
1971)).

The Eighth Circuit further stated in Grunin that the
fairness of a class settlement is a discretionary matter that rests
with the trial court, and an appellate court should not reverse
a trial court's approval of a class settlement absent an abuse of
its discretion. Grunin, 513 F.2d at 123 (citing Ace Heating &
Plumbing Co. v. Crane Co., 453 F.2d 30 (3d Cir. 1971)). The
Grunin Court quoted the Ace Heating case for the following
proposition:

Such determination is committed to the sound
discretion of the trial judge. Great weight is
accorded his views because he is exposed to
the litigants, and their strategies, positions and
proofs. He is aware of the expense and possible

6a

legal bars to success. Simply stated, he is on the
firing line and can evaluate the action
_accordingly.

Grunin, 513 F.2d at 123 (quoting Ace Heating, 453 F.2d at 34).
The Eighth Circuit continued that the trial court is accorded
deference, but that deference is accompanied by a duty to act
as a fiduciary who must serve as guardian of the rights of
absent class members. Grunin, 513 F.2d at 123 (citing Greenfield
v. Village Indus., Inc., 483 F.2d 824 (3d Cir. 1973); Norman v.
McKee, 431 F.2d 769 (9th Cir. 1970); Percodani v. Riker-Maxon
Corp., 50 F.R.D. 473 (S.D.N.Y. 1970), affd sub nom. Farber v.
Riker-Maxon Corp., 442 F.2d 457 (2d Cir. 1971)). It concluded
that no court should accept a settlement that is unfair or
inadequate, and the burden is on the proponents of the
settlement to show that the proposed settlement meets
standards of fairness and adequacy. Grunin, 513 F.2d at 123
(citing City of Detroit v. Grinnell Corp., supra; United Founders Life
Ins. Co. v. Consumers Nat’L Life Ins. Co., 447 F.2d 647 (7th Cir.
1971); Young v. Katz, supra).

We adopt the Grunin factors and wili proceed to
analyze this issue using those factors.

a. The strength of the case for plaintiffs on the merits, balanced
against the amount offered in settlement.

Ballard and Cain first argue that the plaintiff class’s
chance of success on the merits is great. They also point out the
many differences between a possible litigation-generated
recovery versus the settlement agreement, including
differences in financial benefit to class members and
differences to the future of the appellees’ check cashing
businesses. They conclude that the likelihood of success on the
merits versus the offered settlement weighs heavily in favor of
this court's finding that the trial court abused its discretion.

7a

(i) Strength on the merits.

We observe, as an initial matter, that this court has
never directly spoken to the issue of whether the deferred-
presentment transactions, such as we have in the instant case,
are usurious and violate the Arkansas Constitution. However,
many of this court's cases point to the strong constitutional
policy against usury established by Article 19, section 13 of the
Arkansas Constitution, both before and after the adoption of
Amendment 60 in 1982. Article 19, section 13, of the Arkansas
Constitution states in relevant part:

(a) General Loans:

(i) The maximum lawful rate of interest on any
contract entered into after the effective date
hereof shall not exceed five percent (5%) per
annum above the Federal Reserve Discount
Rate at the time of the contract.

**e

(b) Consumer Loans and Credit Sales: All
contracts for consumer loans and credit sales
having a greater rate of interest than seventeen
percent per annum shall be void as to principal
and interest and the General Assembly shall
prohibit the same.

Ark. Const. Art. 19, § 13. See also Luebbers v. Money Store, Inc.,
344 Ark. 232, 40 S.W.3d 745 (2001) (citing this portion of Article
19, section 13, as potentially applicable to the transactions at
issue, but not reaching the merits of the usury dispute).
Historically, this court has closely scrutinized what appeared
to be a non-usurious transaction on its face to reveal the true
usurious nature of the transaction. See Bunn Lumber Co. v.
Weyerhaeuser Co., 268 Ark. 445, 598 S.W.2d 54 (1980) (finding
transaction usurious where interest on account payable was
masked as a service charge); Arkansas Savings & Loan Ass'n v.
Mack Trucks of Arkansas, Inc., 263 Ark. 264, 566 S.W.2d 128

8a

(1978) (finding transaction usurious where interest on loan was
masked as a pre-loan “commitment fee”); Sosebee v. Boswell, 242
Ark. 396, 414 S.W.2d 380 (1967) (finding transaction usurious
where a forfeiture of money placed in escrow was actually
interest, but was masked as liquidated damages, processing
fees, and expenses); Smith v. Eason, 223 Ark. 747, 268 S.W.2d
389 (1954) (finding transaction usurious where interest on loan
was masked as a commission payable to lender's agent);
Strickler v. State Auto Finance Co., 220 Ark. 565, 249 S.W.2d 307
(1952) (finding transaction usurious where interest on loan
policy was masked a service charge and pro rata share of
overhead expenses); Wilson v. Whitworth, 197 Ark. 675, 125
S.W.2d 112 (1939) (finding transaction usurious where interest
charges were masked as insurance and service fees). We
conclude that for decades this court has been willing to delve
into the particulars of a financial arrangement to expose its
usurious nature. As we said in Sparks v. Robertson, 66 Ark. 460,
463-64, 51 S.W. 460, 462 (1899), “The law shells the covering,
and extracts the kernel. Names amount to nothing when they
fail to designate the facts.” As a result, it is obvious that the
transactions presented in this case would receive exacting
scrutiny if they were presented to this court for a merits
determination.

Recently, this court rejected an attempt by the General
Assembly to rename deferred-presentment interest as a non-
usurious fee under Act 1216 of 1999, then codified at Ark. Code
Ann. § 23-52-104(b) (Repl. 2000). See Luebbers v. The Money
Store, Inc., supra; (holding that the determination of what is
interest and what is not interest is for the courts, not the
legislature). See also Strickler v. State Auto Finance Co., supra
(holding statute unconstitutional as violative of separation of
powers where General Assembly tried to deem installment
loan fees as non-interest). The Westark appellees may have
relied on Act 1216 of 1999 in proceeding to do business in this
state. The effect of that reliance, if any, is an issue that has not
been resolved by the courts of this state.

The Westark apellees argue that their agreements with
their customers provide that any customer disputes must be

9a

resolved by arbitration. They note that at the time of the
settlement negotiations, only the case of Showmethemoney Check
Cashers, Inc. v. Williams, 342 Ark. 112, 27 S.W.3d 361 (2000),
which held that the arbitration agreements at issue could not
be enforced due to lack of mutuality of obligation, had been
decided by this court. They further refer to the general release
of claims signed by most of their customers as a defense
against the class-action litigation. Finally, they advance a
practical argument. They underscore the fact that eighteen of
the nineteen Westark appellees voluntarily submitted to the
venue of the Craighead County Circuit Court in order to take
advantage of the terms of the settlement. Those eighteen
defendants assert that despite their voluntary appearance, they
have preserved an objection to venue in the trial court, should
the settlement not be consummated. They further assert that if
this settlement is thwarted, they will seek to withdraw from
the jurisdiction of the Craighead County Circuit Court. If that
happens, any success on the merits will be applicable only to
Westark and not to the other eighteen Westark defendants.

The arbitration defense seems less valid today than it
might have appeared on April 30, 2001, in light of this court's
recent decisions. See, e.g., The Money Place, LLC v. Barnes,
__ Ark. __, ___ S$.W.3d___, 2002 WL 1339861 (Jun. 20, 2002);
Cash in a Flash Check Advance of Arkansas, LLC v. Spencer, 348
Ark. 459, 74 S.W.3d 600 (2002); E-Z Cash Advance, Inc. v. Harris,
347 Ark. 132, 60 S.W.3d 436 (2001). In addition, this court has
yet to consider the viability of the general-release defense. The
point, according to the Westark appellees, is that had they not
settled, they would have contested class certification based on
these two defenses and appealed any adverse order.

Being mindful of this court's strong jurisprudence
against usury as well as Article 19, section 13 of the Arkansas
Constitution, we conclude that Ballard and Cain have a bona
fide argument on the merits. However, we quickly add that by
concluding as we do, we are not deciding the merits of the
usury question in their favor. This distinction was noted by the
Grunin court:

[NJeither the trial court in approving the
settlement nor this Court in reviewing that
approval have the right or duty to reach any
ultimate conclusions on the issues of fact and
law which underlie the merits of the dispute.

Grunin, 513 F.2d at 123 (quoting City of Detroit v. Grinnell Corp.,
495 F.2d at 456 (2d Cir. 1974)). Nor can we proceed in our
analysis with any assumption that the class will prevail and
collect all damages claimed. Armstrong v. Board of School
Directors, 616 F.2d 305 (7th Cir. 1980).

(11) Potential litigation recovery compared to settlement.

Ballard and Cain also contend that the settlement is
inadequate, unfair, and unreasonable when compared to a
likely recovery after litigation. They mount two primary
arguments to support their position. The first concerns the
monetary value of the settlement as opposed to a potential
litigation recovery. The settlement agreement contemplates a
cash outlay of $605,000 by the Westark defendants, including
$170,000 in attorneys’ fees. The face value of the bonds
available for claims is $870,000. Ballard and Cain claim that, in
contrast, a damage recovery following litigation could be as
high as $27 million, based on doubling the fees collected by the
Westark appellees. They also emphasize that the $605,000
settlement is subject to a set-off for the amount of any
outstanding cash advances owed by individual class members.
In a litigated recovery, Ballard and Cain contend that those
outstanding debts would be void as consumer loans under
Article 19, section 13. Finally, they assert that it is unfair to
distribute the settlement funds in the form of savings bonds
which will not mature for sixteen years.

Ballard and Cain further point to the continuing
viability of the Westark appellees following the settlement.
They argue that under the terms of the settlement agreement,
the defendant check-cashing establishments will be free to
continue their businesses so long as they simply re-name the
transactions. For example, instead of calling the transactions

lla

“deferred presentment transactions,” they claim the Westark
defendants could rename the same transactions “pay-day
loans” and still comply with the settlement. Indeed, they point
out that Jeff Forsey, as CEO of fourteen of the nineteen Westark
businesses, testified that he and his board of directors were
looking into that very option. By contrast, Ballard and Cain
assert that a victory on the merits following litigation would
shut down the businesses permanently, either through a
judgment that would bankrupt the corporations or through a
judgment that concluded the business practices were
unconstitutional.

The Westark appellees make three arguments in
response. First, they argue that a settlement is always lower
than a potential litigation recovery, because otherwise there
would be no incentive to settle. They also claim that their
ability to pay a larger sum is limited, and that a large jury
verdict would be unrecoverable in any event, because the
affected businesses would seek bankruptcy protection.
Therefore, they assert that as a practical matter, litigation of the
case would be futile. In addition, the Westark appellees cite
Petrovic v. Amoco, 200 F.3d 1140 (8th Cir. 1999), for the
proposition that once a trial court has determined that a
settlement is fair and adequate, the fact that a defendant could
have paid more is not a legitimate reason to reject the
settlement.

The Westark appellees’ second argument is that the
settlement contains a significant benefit to the class that Ballard
and Cain do not discuss. Under the settlement, the class
members would be able to write off any outstanding debt after
the ninety-day period from the settlement date has expired.
Thus, class members who did not make a claim under the
settlement agreement would not face collection on their checks.
Third, they argue that the settlement agreement hastens the
class members’ recovery and avoids the delays of litigation.

While we are attuned to the legitimacy of the
arguments made by Ballard and Cain, the Westark defendants
also make valid points about their defenses. We recognize that

12a

the purpose of a settlement is to avoid the delay, expense, and
risk of trial. Grunin v. Int'l House of Pancakes, supra. We further
are reluctant to hold that this settlement does not fall within
the range of reasonableness when compared to what the class
might have ultimately recovered. A full recovery of $27 million
based on collecting twice the amount of interest paid under
section (b) of Article 19, section 13, of the Arkansas
Constitution for all other loans is-somewhat speculative,
considering that the merits of their constitutional claim have
never been decided. But even assuming full recovery, a
settlement which embraces Series EE Bonds totaling $870,000
and forgiveness of debt after ninety days has considerable
value. As one court has put it:

While plaintiffs cannot predict what each
claimant will receive, the Second Circuit has
held that a settlement can be approved even
though the benefits amount to a small
percentage of the potential recovery sought.
Grinnell, 495 F.2d at 455. “The fact that a
proposed settlement may only amount to a
fraction of the potential recovery does not, in
and of itself mean that the proposed
settlement is grossly inadequate and should
be disapproved.” Id. (footnote omitted). The
Court explained: “In fact there is no reason,
at least in theory, why a satisfactory
settlement could not amount to a hundredth
or even a thousandth part of a single percent
of the potential recovery.” Id. at 455 n.2. In
the District Court decision in City of Detroit v.
Grinnell Corp., 356 FSupp. 1380, 1386
(S.D.N.Y. 1972). affd in part, rev'd in part, 495
F.2d 448 (2d Cir. 1974), Judge Charles
Metzner of the Court found a proposed
settlement of 3.2% to 3.7% of the potential
recovery “well within the ball park.”’

13a

In re Milken & Assoc. Securities Litigation, 150 F.R.D. 46, 54
(S.D.N.Y. 1993). In short, we do not find this — to be
dispositive of the issue.

b. The defendant's overall financial condition and ability to pay.

To a lesser extent, the fairness of the class settlement
turns on the Westark appellees’ ability to pay more than the
$605,000 to settle the matter under Grunin. Here, Ballard and
Cain assert that Jeff Forsey’s own testimony swings this factor
in their favor. They point to his statement that during the
ninety-day window alone, the Westark appellees could receive
check-cashing revenues that exceed the value of the cash
outlay - $605,000. They also claim that Forsey’s testimony
revealed such liquidity in the Westark appellees’ businesses
that a far greater settlement agreement could have been
negotiated. According to his figures, the businesses were worth
some $2.7 million as of December 31, 2000, after deducting bad
debt that they would not be able to collect. The Westark
appellees dispute these figures. They also claim that they have
little cash on hand and that operating overhead reduces the
amount available for the settlement fund. We do not consider
the disputed claim that the Westark appellees could have paid
more than $605,000 to be a persuasive reason for overturning
the settlement.

C. The complexity, length and expense of further litigation.

The third factor in determining the fairness of a class
settlement is the burden of litigating the case. This factor is also
subordinate to the first factor but should still be considered in
determining whether the trial court abused its discretion in
approving the settlement. The Westark appellees emphasize
that further litigation would have caused delay, and that delay
would have caused more members of this low-income
transient class to become lost due to relocation. They further
point to the immediate benefit of a settlement versus the
contingency of protracted litigation. We agree that this bird-in-
the-hand argument militates in favor of the settlement.

14a

d. Opposition to the settlement.

The fourth and final factor in determining the fairness
and adequacy of a class settlement is the degree of opposition
to the settlement. Again, this factor is less important than the
first factor. The Westark appellees contend that only seventeen
members of the approximately 18,500 member class objected.
This is true. However, one court has sounded a note of caution
in this regard:

[A] low level of vociferous objection is not
necessarily synonymous’ with jubilant
support. In many class actions, the vast
majority of class members lack the resources
either to object to the settlement or to opt out
of the class and litigate their individual cases.

In re Corrugated Container Antitrust Litigation, 643 F.2d 195,
217-18 (Sth Cir. 1981) See also Bell Atlantic Corp. v. Bolger, 2
F.3d 1304, n.15 (3d Cir. 1993) (noting that absent class
members “have an insufficient incentive to contest an
unpalatable settlement agreement because the cost of
contesting exceeds the objector’s pro rata benefit”).

Again, it was the trial judge who was in the trenches
and lived with this class litigation. He assessed the risk of
litigation, the delay in recovery, the amount of recovery
claimed versus the settlement that was struck, as well as the
other Grunin factors, and concluded that the settlement was
fair and reasonable. We accord the trial court deference in
these matters and are unwilling to second-guess the decision
based on the arguments presented by Ballard and Cain in
this appeal.

é. Collusion

Though not a factor in the Grunin analysis, Ballard
and Cain make the further charge of collusion between
Martin and the Westark appellees due to the fact that the
settlement was reached before the class was certified. Other

15a

jurisdictions have held that when a settlement is entered into
before a class is certified, the settlement should be subject to
heightened scrutiny. See, e.g., In re General Motors Corp. Pick-
up Truck Fuel Tank Products Liability Litigation, 55 F.3d 768 (3d
Cir. 1995); Bowling v. Pfizer, Inc., 143 F.R.D. 141 (S.D. Ohio
1992). Though it is apparent that the settlement under review
was hurried and ultimately global in the number of check-
casher businesses involved, there is no proof that the
settlement was not made at arm’s length. There are definitely
benefits accruing to the class in the form of reimbursements
and debt forgiveness. The fact that the class could have
gotten more does not translate into collusion. We affirm on
this point.

II. Adequacy of Class Representatives

Ballard and Cain next contend that Martin and
Spencer were inadequate representatives to protect the
interests of the class members and that Martin's class counsel
was likewise inadequate.‘ This issue is decided by our recent
case of USA Check Cashers of Little Rock, Inc. v. Island, 349 Ark.
__, __S.W.3d___(May 30, 2002). As we said in that case, we
review a trial court’s grant of class certification under an
abuse-of-discretion standard. See USA Check Cashers, supra.

Rule 23(a) of the Arkansas Rules of Civil Procedure
has as one of the four prerequisites to a class action:

(4) the representative parties will fairly and
adequately protect the interests of the class.

Ark. R. Civ. P. 23(a)(4). See also BPS Inc. v. Richardson, 341
Ark. 834, 20 S.W.3d 403 (2000). This court has previously
interpreted that subsection to require three elements:

(1) the representative counsel must be
qualified, experienced, and generally able to

4 At the fairness hearing, the adequacy of Martin as class representative
was specifically attacked.

16a

conduct the litigation; (2) that there be no
evidence of collusion or conflicting interest
between the representative and the class; and
(3) the representative must display some
minimal level of interest in the action,
familiarity with the practices challenged, and
ability to assist in decision making as to the
conduct of the litigation.

Mega Life & Health Ins. Co. v. Jacola, 330 Ark. 261, 275, 954
S.W.2d 898, 904 (1997). In a similar vein, this court has held that
the element of adequacy is met if the class representative
displays a minimal level of interest in the action, familiarity
with the challenged practices, and the ability to assist in
litigation decisions. See Direct Gen. Ins. Co. v. Lane, 328 Ark. 476,
944 S.W.2d 528 (1997).

Martin testified at the fairness hearing that she was
pleased with the legal representation provided to her and that
her attorneys had kept her informed of what was going on the
case. She also stated that her goal in suing the defendants was
to put an end to the check-cashing practices of the Westark
appellees. She testified that she talks to her attorneys regularly
and is kept abreast of the proceedings. Based on this testimony,
we fail to discern any abuse of discretion in the trial court's
finding that Martin is an adequate class representative.

Furthermore, the allegation that the law firm of Orr,
Scholtens, Willhite & Averitt is inadequate class counsel is
meritless. These attorneys are currently handling a raft of cases
against Arkansas check cashing businesses. They have
extensive class-action experience, and there is nothing to
suggest that they are inadequate counsel for the class in this
case. This court has held that absent a showing to the contrary,
we presume that the class representative’s counsel will
vigorously and competently pursue the litigation. See Mega Life
& Health Ins. Co. v. Jacola, supra (citing Herbert B. Newberg,
Newburg on Class Actions, §§ 3.24, 3.42 (3d ed. 1992)).

We affirm the trial court on this point.

17a

Il. Subpoenas

Ballard’s third point, which Cain does not join, relates
to the subpoenas for financial documents issued five days
before the fairness hearing on June 1, 2001. Ballard sought
full disclosure of the Westark appellees’ financial
information in order to determine their ability to pay more
than the settlement. At the hearing, the businesses, acting
through CEO Forsey, only produced a portion of the
financial documents sought. Nevertheless, the trial court
ruled that this partial production, in addition to the personal
appearance and testimony of Forsey, was sufficient in light of
the short period of time that the companies had to respond.
Ballard argues that this ruling was an abuse of the trial
court's discretion. She points out that it was the short notice
to the class—roughly two weeks before the fairness hearing—
-that prevented her from intervening sooner and from
issuing subpoenas in a more timely manner.

It is boilerplate law that a trial court has broad
discretion in matters pertaining to discovery, and the
exercise of that discretion will not be reversed by this court
absent an abuse of discretion that is prejudicial to the
appealing party. Loghry v. Rogers Group, Inc., 348 Ark. 369, 72
S.W.3d 499 (2002) (citing Alexander v. Flake, 322 Ark. 239, 910
S.W.2d 190 (1995); Rankin v. Farmers Tractor & Equipment Co.,
Inc., 319 Ark. 26, 888 S.W.2d 657, (1994); Jenkins v. Int'l Paper
Co., 318 Ark. 663, 887 S.W.2d 300 (1994)). In the instant case,
Ballard does not illuminate how she was prejudiced by the
lack of additional financial information. Nor does she assert
how her challenge to the settlement would have been
different if she had obtainec full compliance with the
subpoenas. We note that Ballard did argue both to the trial
court and to this court that total liability to the 18,500 class
members was $27 million and that the Westark appellees
would bring in more than $605,000 in revenue during the
ninety-day period following the settlement date. Certainly,
the financial information that she had on hand enabled her to
fully mount her arguments against the settlement. In light of
the fact that the subpoenas came less than a week before the

18a

fairness hearing, it was within the trial court’s discretion to
deem partial compliance sufficient. The trial court's ruling on
this issue is affirmed.

IV. Adequacy of the Notice

Ballard and Cain’s fourth point is that notice of class
certification, the settlement, and the date of the fairness
hearing to class members was inadequate for two reasons.
First, they maintain that the notice came too close in time to
the fairness hearing itself to be effective. Secondly, they
argue that the method of notifying the class-~standard U.S.
mail rather than first-class mail—was inadequate, and thus,
did not meet the due process requirements of Rule 23.

Again we turn to the Grunin case for guidance on this
point. Due process requires that notice of a proposed
settlement be given to a class. Grunin v. Int'l House of
Pancakes, supra. The notice given must be “reasonably
calculated, under all of the circumstances, to apprise
interested parties of the pendency of the action and afford
them an opportunity to present their objections.” Id. at 120
(quoting Mullane v. Central Hanover Bank & Trust Co., 339 US.
306, 314 (1950)). The notice must also reasonably convey the
necessary information about the settlement and give
interested class members a reasonable opportunity to make
their appearance and voice any objections. Id.

This court has addressed a related notice issue before.
In SEECO, Inc. v. Hales, 334 Ark. 307, 973 S.W.2d 818 (1998),
we said:

The mechanics of notice to class members is
left to the discretion of the trial court and is
subject only to the reasonableness standard
of due process. See Grunin v. Int'l House of
Pancakes, 513 F.2d 114, 121 (8th Cir. 1975),
cert. denied, 423 US. 864, 96 S.Ct. 124, 46
L.Ed.2d 93 (1975). Arkansas Rule of Civil
Procedure 23(c) provides in part that “the

19a

court shall direct to the members of the class
the best notice practicable under the
circumstances, including individual notice to
all members who can be identified through
reasonable effort.” The United States
Supreme Court has made reference to the
fact that the “best notice practicable” under
Federal Rule 23 is individual notice. Eisen v.
Carlisle & Jacquelin, 417 U.S. 156, 94 S.Ct. 2140,
40 L.Ed.2d. 732 (1974) Notice by publication
is used to supplement individual notice
when class members cannot be identified by
reasonable efforts. See Eisen v. Carlisle &
Jacquelin, Id.

SEECO, Inc. v. Hales, 334 Ark. at 312, 973 S.W.2d at 820-21. In
SEECO, Inc., this court held that notice given thirty days prior
to the opt-out date was adequate under these standards.

In the case before us, Ballard and Cain claim notice was
not timely mailed so as to afford due process protection. The
notice was mailed on May 16, 2001, and the fairness hearing
was held on June 1, 2001. A two-week notice period was
simply too short, they claim. On this point, we note that courts
have approved notices given to a class within a comparable
period before the fairness hearing. See, e.g., Grunin v. Int'l House
of Pancakes, supra (holding that notice sent out nineteen days
before fairness hearing was not a violation of due process);
Armstrong v. Board of School Directors, 616 F.2d 305 (7th Cir.
1980) (holding that notice sent out twelve days before fairness
hearing was not a violation of due process). Further, the notice
contained an opt-out provision which advised the class
members that they could always choose to opt out of the settlement
so long as they did so by August 15, 2001. Thus, class members
had approximately three-months notice of the opt-out
deadline. Opting out of the settlement gave them the recourse
to pursue their own claims against the particular check-casher
businesses with which they were involved.

20a

There is also the point that Ballard and Cain had an
opportunity to appear at the fairness hearing, because they did
so through counsel. Ballard even issued subpoenas to the
Westark appellees five days before the fairness hearing. Had
the abbreviated notice hampered their ability to participate in
the fairness hearing on June 1, 2001, it seems that the
particulars on how they were handicapped would been made
known to the trial court or to this court.

Next, we consider the method of the individual
mailing. In this case, individual notices were mailed to all
potential class members by standard mail. Ballard and Cain,
however, urge that due to the transient nature of this particular
class, the notice should have been mailed first-class U.S. mail,
so that the class members could take advantage of forwarding
addresses, and class counsel could have undeliverable notices
returned to them. We disagree. Martin, in her mailing to class
members, claims that she requested return service for
undeliverable notices at an additional cost. This was for the
purpose of forwarding the notice to transient class members,
according to Martin. Ballard and Cain reply that nothing
regarding remailing returned notices to new addresses is in the
record. But what the record does support is that forwarding
addresses were requested by Martin at an added cost which
presupposes this was for the purpose of remailing. Though,
forwarded notice may have been too late for the June 1 fairness
hearing, it certainly was timely notice of the right to opt out of
the class. Plus, notice of class certification, the settlement, and
the opt-out date (but not the fairness hearing) was
supplemented by published notice in the Arkansas Democrat-
Gazette, a newspaper with statewide circulation, on May 21,
2001. Granted, published notice may not have been read by
some members of the class, but we are unwilling to denigrate
published notice completely as offering no due process
protection. Because individual notices were sent and the notice
was published in a newspaper with a statewide circulation, we
conclude that the notice given comported with minimum
standards of due process. We affirm the trial court on this point
as well.

2la

As a final point, we note that Ballard and Cain have
asserted a number of other deficiencies in the notice, the terms
of the settlement, and the adequacy of class counsel. Those
arguments are as follows: the terms of the settlement are
inadequate because the unclaimed funds revert to the Westark
appellees; the terms of the settlement make no provisions for
claimants with judgments pending against them or whose
debts have been discharged in bankruptcy; class counsel was
inadequate for failing to bring claims against the stockholders
of the Westark appellees and their sureties; and the notice to
class was contradictory because it stated both that class
members would still need to pay their unsatisfied debt and
that collections would cease ninety days after the settlement
date. These arguments are largely unsupported by authority
and are not fleshed out in the briefs. None of them provides a
convincing basis for holding that the trial court abused its
discretion in approving the settlement. Furthermore, it is
axiomatic that a settlement does not have to be perfect in order
to fair. See, e.g., Joel A v. Giuliani, 218 F.3d 132, 144 (2d Cir. 2000)
(“[A] settlement agreement achieved through good-faith, non-
collusive negotiation does not have to be perfect, just
reasonable, adequate, and fair.”); Halderman v. Pennhurst State
School & Hospital, 610 F.Supp. 1221, 1222 (D.C.Pa. 1985) (“As
with all things of this world, the settlement is not perfect. It is,
however, a fair, adequate, and reasonable settlement . . . .”).

Affirmed.

GLAZE, J., not participating.

APPENDIX B

IN THE CIRCUIT COURT OF CRAIGHEAD COUNTY,
ARKANSAS
WESTERN DISTRICT
CIVIL DIVISION

SHEILA MARTIN and JIMMIE

SUE SPENCER, Individually and

0/b/o a Class of Similarly

Situated Persons PLAINTIFFS

TERESA BALLARD, CRYSTAL LUEBBERS,
CHERYL KING, KENISHA BRYANT, and
RICHARD LYNN INTERVENORS

STEVEN CAIN and TERESA CAIN,

ALBERT ANDERSON and LINGI ANDERSON,

JOHN BROWN and MARY BROWN, BRYAN CLAYPOOL
and TRACY CLAYPOOL, LARRY COCHRAN and
REBECCA COCHRAN, JOHN S. FULLER and

DOTTIE MAE REED INTERVENORS

VS. NO. CIV-00-669 (L)

WESTARK FINANCIAL CONSULTANTS OF
JONESBORO, INC., d/b/a AMERICAN

CHECK CASHERS, et al. DEFENDANTS

FINAL JUDGMENT AND ORDER OF DISMISSAL
7 (FILED AUGUST 7, 2001) =

On this 1st day of June, 2001, this cause came on to be
heard pursuant to notice pursuant to the application of
counsel for the parties for final approval of the settlement set
forth in the class—settlement stipulation filed herein.
Plaintiffs’ class representatives appeared in person and by

23a

class counsel, Orr, Scholtens, Willhite & Averitt, P.L.C. and
defendants appeared by company/ corporate
representative(s) and by counsel, Jones, Jackson and Moll,
P.L.C. Intervenors appeared by counsel only, the Ballard
intervenors appearing by the Nixon Law Firma and by
Logan, Thompson, Miller, Bilbo, Thompson and Fisher, P.C.
of Cleveland, Tennessee, and the Cain intervenors appearing
by attorney Robert R. Cloar. Whereupon, a “fairness
hearing” was conducted in order that the Court might
determine whether or not the proposed settlement in this
case should be approved and to otherwise address
challenges made by the intervenors as to the adequacy of the
settlement, class counsel, notice and otherwise. After
consideration of the settlement stipulation, all papers filed
and proceedings had herein, the objections of the intervenors
as set out in the pleadings filed herein and considering the
testimony of witnesses at the hearing along with the
excellent post-trial briefs of all of the parties, and without
considering the supplemental exhibit in support of plaintiffs’
reply to intervenors’ opposition to settlement agreement
filed July 13, 2001, the Court finds, considers, orders and
adjudges as follows:

1. Upon joint motion of the parties and upon finding ©

that all requirements of Arkansas Rule of Civil Procedure 23
(a) and (b) are satisfied, the Court certified a conditional
settlement class on or about April 30, 2001, for settlement
purposes only. The conditional settlement class consists of
all persons who have paid a fee to any of the defendant
businesses for the time periods as set out in the notice
introduced at the hearing as “Exhibit A” as subsequently
modified by the Court so as to insert a closing date of May
14, 2001, rather than June 10, 2001, exclusive of any
customers who have timely requested exclusion from the
conditional settlement class under Arkansas Rule of Civil
Procedure 23 and the terms of the settlement stipulation.
The settlement period is up to and including May 14, 2001.

2. The Court further finds that plaintiffs, Sheila
Martin and Jimmy Sue Spencer, and class counsel, Orr,

24a

a hem wer ee eeernE I Swe om

Scholtens, Willhite, & Averitt, P.L.C., are adequate class
representatives under Arkansas Rule of Civil Procedure 23
(a) (4). Plaintiffs’ counsel have vigorously pursued this case
and other class action “check cashing” litigation and have
negotiated a settlement which brings substantial benefit to
the settlement class when considering the unsettled legal
questions involved, the limited resources of defendants and
the cost and risk of further protracted litigation.

3. The Court approved class counsel as the entity
responsible for receipt of notice of claims, “opt outs,”
objections and other documentation from class members
with responsibility for furnishing claim forms to Westark
Financial Consultants, Inc., for calculation of damages owing
to each claimant and to insure collection of said damages
pursuant to the settlement.

4. The Court has jurisdiction over the subject matter
of the litigation, the plaintiff and all members of the
conditional settlement class, the defendant, and _ the
intervenors for purposes of enforcing the settlement
stipulation and this final judgment.

5. The Court finds that the mailing and publication
of notice and summary of notice in accordance with the
Court’s April 30, 2001, Order constitutes the best notice
practicable under the circumstances to all person who are
members of the conditional settlement class, and fully
satisfies the requirements of Arkansas Rule of Civil
Procedure 23 (c), due process under the Arkansas and
United States Constitutions and other applicable law.
Intervention was permitted and intervenors were afforded a
full hearing in connection with the proposed settlement,
during which intervenors’ counsel vigorously represented
the intervenors’ interests (and the interests of anyone else in
the position of objecting to the proposed settlement) with
full and complete opportunity to present and cross-examine
witnesses, put on additional evidence, fully brief legal issues
and otherwise.

25a

6. Pursuant to, and in accordance with the
requirements of Arkansas Rule of Civil Procedure 23(e), the
Court approves the settlement of this litigation as set forth in
the settlement stipulation and each of the releases and other
terms set forth therein as fair, reasonable and adequate to
the conditional settlement class. The parties to the settlement
stipulation shall complete and finalize the settlement in
accordance with the terms of the settlement stipulation.

7. Except for claims by persons who have validly
and timely requested exclusion from the conditional
settlement class, all claims that are asserted or could have
been asserted in this litigation are dismissed with prejudice,
with each party bearing their own costs.

8. Each member of the conditional settlement class is
hereby deemed to have fully, finally and forever released
and discharged all claims against the named defendants
herein, their agents, stock holders, servants, employees,
bonding companies or otherwise, arising out of this class
action lawsuit or in any way based on their transactions with
any of the defendants through the date of the settlement.

9. All members of the conditional settlement class
are permanently barred and enjoined from filing or
prosecuting, in any capacity and in any court, administrative
tribunal or other form, any action or proceeding which
involves or asserts any of the claims released herein.

10. All persons who file valid and timely requests for
exclusion from the conditional settlement class shall not be
bound by this final judgment or by the settlement
stipulation. |

11. The Court approves as fair and reasonable class
counsel’s attorney's fees and costs as set forth in the
settlement stipulation, which shall be paid in accordance
with the settlement stipulation.

26a

12. The Court retains continuing jurisdiction over the
litigation, the plaintiffs, the conditional settlement class, and
the defendants for the purposes of supervising the
implementation, enforcement, construction and
interpretation of the settlement stipulation.

13. The motion of the Ballard intervenors to appoint
class representatives, class counsel and to reconsider and
certify the class filed (June 18, 2001), should be, and it is,
hereby denied given the hereinabove findings to the effect
that the settlement herein involved is fair, equitable,
reasonable and adequate, and as relates to the adequacy of
present class counsel. Intervenors and others who do not
wish to participate in the settlement have the prerogative to
“opt out” pursuant to the terms of the settlement/ notice.

CONSIDERED, ORDERED AND ADJUDGED this 7
day of August, 2001.
“s/David Laser”
Circuit Judge

Law Bk 56 Pg 520-524
DATE: 08-08-2001

TIME: 09:58:23 AM
RECORDED IN

OFFICIAL RECORDS OF
CRAIGHEAD COUNTY, AR.
ANN HUDSON

CIRCUIT CLERK

“s/ Bridget Haines”, D.C.

27a

APPENDIX C

IN THE CIRCUIT COURT OF CRAIGHEAD COUNTY,
ARKANSAS
WESTERN DISTRICT

~. ea ——-

SHEILA MARTIN, and JIMMIE SUE SPENCER,
individually and 0/b/o a class of similarly situated
persons PLAINTIFFS

VS. NO. CIV-2000 0669(L)

WESTARK FINANCIAL CONSULTANTS OF LITTLE
ROCK, INC., WESTARK FINANCIAL CONSULTANTS
OF NORTH LITTLE ROCK, INC; WESTARK
FINANCIAL CONSULTANTS OF JONESBORO, INC.;
WESTARK FINANCIAL CONSULTANTS OF
JACKSONVILLE, INC.; WESTARK FINANCIAL
CONSULTANTS OF PINE BLUFF, INC.; WESTARK
FINANCIAL CONSULTANTS OF ROGERS, INC,;
WESTARK FINANCIAL CONSULTANTS OF
SPRINGDALE, INC.; WESTARK FINANCIAL
CONSULTANTS OF RUSSELLVILLE, INC.; WESTARK
FINANCIAL CONSULTANTS OF FAYETTEVILLE, INC.;
WESTARK FINANCIAL CONSULTANTS, INC.; CASH
ADVANCE OF BENTON, INC.; CASH ADVANCE OF
NORTH LITTLE ROCK, INC.; CASH ADVANCE OF |
LITTLE ROCK, INC.; EXECUTIVE CASH ADVANCE OF ‘
LITTLE ROCK, INC.; C & B ENTERPRISES, INC., H&S i’)
ENTERPRISES OF ROGERS, INC.; H&S ENTERPRISES '
OF FAYETTEVILLE, INC.; H&S ENTERPRISES OF
SPRINGDALE, INC.; AND PAYDAY ADVANCE OF
FORT SMITH, INC. DEFENDANTS

ORDER PRELIMINARILY CERTIFYING CLASS
AND APPROVING SETTLEMENT OF CLASS

28a

ACTION, DIRECTING NOTICE OF PENDENCY AND
SETTLEMENT, AND SETTING DATE FOR HEARING
ON FINAL APROVAL OF SETTLEMENT OF CLASS
ACTION
(FILED APRIL 30, 2001)

On April 27, 2001, the parties appeared, by and
through counsel for the Plaintiffs, and moved this Court to
certify a conditional settlement class for purposes of
settlement only. Having considered the joint request of the
parties, the settlement that has been entered into by the
Plaintiffs and the Defendants which is attached to the Joint
Motion to Certify Class, Approve Settlement of Class Action,
Direct Notice of Pendency and Settlement, and Set Date for
Hearing on Final Approval of Settlement of Class Action
(“Joint Motion”) as Exhibit A, and statements of counsel, the
Court hereby enters this Order preliminarily certifying a
settlement class, directing notice of pendency and
settlement, and setting a date for a hearing for the Court to
consider the final approval of the settlement agreed to by the
parties herein.

IT IS HEREBY ORDERED as follows:

1. For purposes of this Order, the Court adopts the
Settlement Agreement entered into by the parties and
incorporates it by reference herein.

2. For purposes of settlement only, the Court
preliminarily certifies this cause as a class action and
preliminarily certifies a settlement class as detailed in
Exhibit A to the Joint Motion. The conditional settlement
class shall consist of all customers who have engaged in
check cashing transactions with any of the defendants
herein, exclusive of any customers who request exclusion
from the conditional settlement class pursuant to Arkansas
Rule of Civil Procedure 23 (c).

3. Plaintiffs are approved as the representatives of
the settlement class, and the law firm of Orr, Scholtens,

29a

Willhite & Averitt, PLC is approved as counsel for the
settlement class.

4. The Court finds that the requirements of Rule 23
of the Arkansas Rules of Civil procedure have been satisfied
and has made a preliminary determination that Plaintiffs are
adequate class representatives of the settlement class.

5. The Court preliminarily approves the settlement
of this class action lawsuit, as being fair, just, reasonable and
adequate as to the settlement class and its members, subject
to further consideration at the settlement hearing described
below.

6. The Court approves as to form and content, and
for distribution to the settlement class, the Notice of
Pendency and Proposed Settlement of Class Action and
Settlement hearing (“Notice”) and the Proof of Claim and
Release (“Proof of Claim”) substantially in the forms
attached to the Joint Motion as Exhibit B and C.

7. Defendants shall identify all persons who are part
of the settlement class as provided herein. The Defendants
shall cause to be mailed by U.S. Standard Mail the Notice to
Settlement Class Members to the last known addresses
provided by Defendants. The Defendants shall also cause a
summary of the Notice to be published one time in the
Arkansas Democrat-Gazette. The mailing and publication of
the Notice and summary of Notice shall be completed no
later than May 14, 2001. Defendants shall file with the Court
and serve upon Plaintiffs’ Counsel no later than ten (10)
days prior to the settlement hearing a declaration stating
that the mailings and the publication have been completed
in accordance with the terms of this Order.

8. The Court finds that dissemination of the Notice
in the manner required by the preceding paragraph
constitutes the best notice practicable under the
circumstances to settlement class members and meets the
requirements of Rule 23 of the Arkansas Rules of Civil

30a

=

ee TT te ees

Procedure, due process under the Untied States
Constitution, and any other applicable law, and shall
constitute due and sufficient notice to all persons entitled
thereto.

9. Any person falling within the definition of the
settlement class, as defined herein, may, upon request, be
excluded from the settlement. Any such person must submit
to Plaintiffs’ Counsel a request for exclusion (“Request for
Exclusion”), postmarked no later than August 15, 2001. A
Request for Exclusion must state: (1) the name, address,
social security number and telephone number of the person
requesting exclusion, and (2) that the person wishes to be
excluded from the settlement class. All persons who submit
valid and timely Requests for Exclusion in the manner set
forth in this paragraph shall have no rights under the
settlement and shall not be bound by the settlement or the
final judgment. Plaintiffs’ Counsel shall provide copies of
any and all Requests for Exclusion to Defendants’ Counsel.

10. Any settlement class member who objects to the
proposed settlement set forth herein shall have a right to
appear and be heard at the settlement hearing. No later than
three (3) days before the settlement hearing, any such person
must file with the Court and deliver to plaintiffs’ Counsel
and Defendants’ Counsel a written notice of objection and
any brief opposing the settlement. The manner by which a
notice of objection should be prepared, filed and delivered
shall be stated in the Notice. Only settlement class members
who have filed and delivered valid and timely written
notices of objection will be entitled to be heard at the
settlement hearing unless the Court orders otherwise.

11. The settlement hearing will be held on June 1,
2001, at 8:00 a.m., or as soon thereafter as possible, at the
Craighead County Courthouse, 511 South Main Street,
Jonesboro, Arkansas 72401, to determine whether the
proposed settlement of this cause of action, as set forth
herein, should be approved as fair, reasonable and adequate
to the members of the settlement class, and whether the

~ 3la

judgment approved in the settlement should be entered. The
Court may adjourn or continue the settlement hearing
without further notice to settlement class members.

13. The proceedings connected with this action shall
not be construed as an admission or concession by
Defendants of the truth of any of the allegations made by the
Plaintiffs herein or of any liability, fault or wrongdoing of
any kind.

14. The judgment will permanently bar and enjoin
the Plaintiffs and all members of the settlement class from
instituting or prosecuting, in any capacity, any action or
proceeding that involves or asserts any of the claims that
were’ asserted, or that could have been asserted, in this
action.

15. The Court may, for good cause, extend any of the
deadlines set forth in this order without further notice to the
settlement class members.

16. In the event the Court disapproves the settlement,
the rights and duties of the parties will continue as if no
settlement had been entered into and the conditional
settlement class will be decertified without further order of the
Court, and Defendants will not be prohibited from pursing
any of the objections raised in their answer, including but not
limited to, objections to venue and class certification.

IT ISSO ORDERED.
Dated: 4/30/01 “s/ David N. Laser”

HONORABLE DAVID N. LASER
CRAIGHEAD COUNTY CIRCUIT JUDGE

32a

“s/Chris A. Averitt”
Chris A. Averitt
Attorney for Plaintiffs

“s/ Mark Moll”
Mark Moll
Attorney for Defendants

PO ADD SDA DL EAP LAS I A ANE BRO

33a

APPROVED AS TO SUBSTANCE AND TO FORM

Law Bk 55 Pg 927-932

DATE :0501-2001

TIME :10:35:31 AM
RECORDED IN

OFFICIAL RECORDS OF
CRAIGHEAD COUNTY, AR
ANN HUDSON

CIRCUIT CLERK

“s/ Bridget Haines”, D.C.

APPENDIX D

IN THE CIRCUIT COURT OF CRAIGHEAD COUNTY,
ARKANSAS
WESTERN DISTRICT

SHEILA MARTIN, and JIMMIE SUE SPENCER,
individually and o/b/o a class of similarly situated
persons PLAINTIFFS

vs. NO. CIV-2000 0669(L)

WESTARK FINANCIAL CONSULTANTS OF LITTLE
ROCK, INC., WESTARK FINANCIAL CONSULTANTS
OF NORTH LITTLE ROCK, INC; WESTARK
FINANCIAL CONSULTANTS OF JONESBORO, INC.;
WESTARK FINANCIAL CONSULTANTS OF
JACKSONVILLE, INC; WESTARK FINANCIAL
CONSULTANTS OF PINE BLUFF, INC.; WESTARK
FINANCIAL CONSULTANTS OF ROGERS, INC;
WESTARK FINANCIAL CONSULTANTS OF
SPRINGDALE, INC.; WESTARK FINANCIAL
CONSULTANTS OF RUSSELLVILLE, INC.; WESTARK
FINANCIAL CONSULTANTS OF FAYETTEVILLE, INC.;
WESTARK FINANCIAL CONSULTANTS, INC.; CASH
ADVANCE OF BENTON, INC.; CASH ADVANCE OF
NORTH LITTLE ROCK, INC.; CASH ADVANCE OF
LITTLE ROCK, INC.; EXECUTIVE CASH ADVANCE OF
LITTLE ROCK, INC.; C & B ENTERPRISES, INC., H&S
ENTERPRISES OF ROGERS, INC.; H&S ENTERPRISES
OF FAYETTEVILLE, INC.; H&S ENTERPRISES OF
SPRINGDALE, INC.; AND PAYDAY ADVANCE OF
FORT SMITH, INC. DEFENDANTS

JOINT MOTION TO CERTIFY CLASS,
APPROVE SETTLEMENT OF CLASS ACTION, DIRECT
NOTICE OF PENDENCY ANDSETTLEMENT, AND SET
DATE FOR HEARING
| ON FINAL APPROVAL OF SETTLEMENT OF CLASS
ACTION
(FILED APRIL 27, 2001)

Comes now all of the parties involved herewith, by
and through their attorneys of record, and state the
following as their Joint Motion to Certify Class, Approve
Settlement of Class Action, Direct Notice of Pendency and

| Settlement, and Set Date for Hearing on Final Approval of
Settlement of Class Action:

1. The parties have entered into a Settlement
Agreement resclving all issues raised herein. Attached
hereto as Exhibit “A” is a true and correct copy of the
Settlement Agreement.

2. The parties jointly request the Court preliminarily
certify this cause as a class action and preliminarily certify a
settlement class as detailed in Exhibit A. The conditional
settlement class should consist of all customers who have
engaged in check cashing transactions with any of the
Defendants herein, exclusive of any customers who request
exclusion from the settlement class pursuant to Arkansas
Rule of Civil Procedure 23(c).

3. The parties jointly request the Court to approve
Plaintiffs as the representatives of the settlement class, and
the law firm of Orr, Scholtens, Willhite & Averitt, PLC as

counsel for the settlement class.

4. The parties jointly request the Court to find that
the requirements of Rule 23 of the Arkansas Rules of Civil
Procedure have been satisfied and that Plaintiffs are
adequate class representatives of the settlement class.

35a

5. The parties jointly request the Court to
preliminarily approve the settlement of this class action
lawsuit, as being fair, just, reasonable and adequate as to the
settlement class and its members.

6. The parties jointly request the Court to approve as
to form and content, and for distribution to the settlement
class, the Notice of Pendency and Proposed Settlement of
Class Action and Settlement Hearing (“Notice”) and the
Proof of Claim and Release (“Proof of Claim”) substantially
in the forms as attached hereto as Exhibit B and C. The
parties also jointly request the Court to preliminarily certify
the class and approve the settlement of the class action. The
parties also jointly request the Court to direct notice of
pendency and settlement, and to set a date for hearing on
the final approval of the settlement of the class action. See
Exhibits B and C.

7. The parties jointly request the Court find that the
dissemination of the Notice in the manner required by the
Proposed Order Preliminarily Certifying Class and
Approving Settlement of Class Action, Directing Notice of
Pendency and Settlement, and Setting Date for Hearing on
Final Approval of Settlement of Class Action constitutes the
best notice practicable and meets the requirements of Rule
23 of the Arkansas Rules of Civil Procedure, due process
under the United States Constitution, and any other
applicable law, and shall constitute due and sufficient notice
to all persons entitled thereto.

8. The parties jointly request that a settlement
hearing be held on June 1, 2001, at 8:00 a.m., or as soon
thereafter as possible, at the Craighead County Courthouse.

9. The parties jointly request that the proceedings
connected with this action not be construed as an admission
or concession by Defendants of the truth of any of the
allegations made by the Plaintiffs herein or of any liability,
fault or wrongdoing of any kind.

36a

hee I.

WHEREFORE, the parties hereto jointly request the
Court approve the Settlement Agreement, Notice of
Settlement, and enter a Proposed Order Preliminarily
Certifying Class and Approving Settlement of Class Action,
Directing Notice of Pendency and Settlement, and Setting
Date for Hearing on Final Approval of Settlement of Class
Action.

RESPECTFULLY SUBMITTED,

ORR, SCHOLTENS, WILLHITE
& AVERITT, PLC

P.O. Box 1267

Jonesboro, AR 72403

(870) 972-1500

By:_“s/Chris A. Averitt”
Chris A. Averitt AR Bar #398-123
ATTORNEYS FOR PLAINTIFFS

JONES, JACKSON & MOLL, PLC
P.O. Box 2023

Fort Smith, AR 72902

(501) 782-7203

By: “s/Mark Moll”
Mark Moll AR Bar #79-210
ATTORNEYS FOR DEFENDANTS

Approved:

“s/Chris A. Averitt”

Chris A. Averitt, Attorney for Plaintiff

“s/ Mark Moll”

Mark Moll, Attorney for Defendant
Law Bk 55 Pg 756-757
DATE: 04-02-2001
TIME: 10:57:26 AM
RECORDED IN OF
OFFICIAL RECORDS
CRAIGHEAD COUNTY, AR
ANN HUDSON

37a

CIRCUIT CLERK
“s/ Bridget Haines” D.C.

RII OBES Rate a isk AGO aN ie BY AAT LPR cant Bea AE be SBE Sn Site eats

Senile

38a

[EXHIBIT A TO APPENDIX D]

IN THE CIRCUIT COURT OF CRAIGHEAD COUNTY,
ARKANSAS
WESTERN DISTRICT

SHEILA MARTIN and JIMMIE SUE
SPENCER, individually and
0/b/o a class of similarly situated persons PLAINTIFFS

v. Case No. CIV-200-0669(F)
WESTARK FINANCIAL CONSULTANTS

OF JONESBORO, INC. d/b/a AMERICAN
CHECK CASHERS DEFENDANT

[CONFIDENTIAL]
DEFENDANT'S SETTLEMENT OFFER

Payment to members of Defendants will purchase E

class: Series Bonds having a total face
value of up to but not exceeding
$870,000.00. The smallest bond to
be purchased will have a face
value of $50.00. A claimant will
be entitled to receive a bond
based on the following formula:
Fees paid X 1.5 less balance of
amount financed on any unpaid
Deferred Presentment
Agreement rounded to the
nearest increment of $25.00. Any
claim which iotals $37.50 or less
will receive a check in that
amount as opposed to a bond. If
the claims made by the members
of the class exceed the total

Payment of attorneys
fees:

Stores involved:

amount of the settlement fund,
then the claims will be prorated.

Defendants would pay the law
firm of Orr, Scholtens, Willhite &
Averitt, PLC the sum of
$170,000.00, to be paid $85,000.00
immediately following the
court's approval of the class
action settlement and the balance
of $85,000.00 on the day the
savings bonds and, if applicable,
checks are mailed to the
claimants.

The class will consist of
customers of the stores owned by
the following corporations; WFC
of Little Rock, WFC of North
Little Rock, WFC of Jonesboro,
WEC of Jacksonville, WFC of
Pine Bluff, WFC, Inc., WFC of
Rogers, WFC of Springdale,
WFC of Russellville, and WFC of
Fayetteville, (“WFC” is an
abbreviation for Westark
Financial Consultants), Cash
Advance of Benton, Inc., Cash
Advance of North Little Rock,
Inc., Cash Advance of Little
Rock, Inc., Executive Cash
Advance of Little Rock, Inc., C&B
Enterprises, Inc., H&S
Enterprises of Rogers, Inc., H&S
Enterprises of Fayetteville, Inc.,
and Payday Advance of Fort
Smith, Inc. (Collectively
“Defendants” )

40a

Notice:

(1) Counsel will agree on one
notice to be sent to potential
members of the class, notifying
them of the litigation, their
opportunity to opt out of the
class, the terms of the proposed
settlement, and a claim form will
be enclosed.

(2) Plaintiff's counsel will be
responsible for obtaining the
court’s permission to send the
notice.

(3) Defendants will use their
computer databases and
archived files to obtain a list of all
customers’ name and addresses
that Defendants can reasonable
(sic) obtain and take
responsibility for mailing the
notices to the customers by
regular mail.

(4) Defendants will run one
display ad in the Arkansas
Democrat. The ad will contain a
summary of the mailed notice
and notify potential members of
the class that they can obtain a
copy of the complete notice by
contacting plaintiffs’ counsel.

(5) Defendants will pay the cost
of the newspaper advertisement.
Plaintiffs’ counsel will be
responsible for paying one-half
of the cost of the notice to class
members, but defendants will
advance all of the expenses and
deduct plaintiffs’ share of the
cost from the first payment due
to plaintiffs’ counsel.

(6) The notice will expressly state

4la

Claim Procedure:

Time period for counsel
to agree on form of
notice and claim form;
Defendants to work on
computer software and
acquire address cf
customers:

Deliver notices, claim
forms and mailing
labels to printer:

Preparation and mailing
of notices:

Final preparation of
spreadsheet showing-
names of customers and
calculation of damages:

Opportunity for
plaintiffs counsel to

review spreadsheet:

that a class member's obligation
to pay the Defendants has not
been eliminated.

A member of the class must
complete a claim form in order to
be entitled to participate in the
distribution of the settlement
funds. A customer who wants to
make a claim fills out the claim
form and sends or delivers it to
plaintiffs’ counsel. The claim
forms will then be sent to
Westark Financial Consultants,
Inc. in Fort Smith for calculation
of the damages.

April 24 - May 4, 2001.

May 5, 2001.

May 6 - May 14, 2001.

September 15 through October
30, 2001.

November 1 through November
15, 2001.

42a

Purchase and mailing of November 15, 2001.
savings bonds:

Release: The class will release the
defendants and their
shareholders, directors, agents,
employees and bonding
company of all causes of action
and claims that have been
alleged in the pleadings or which
could have been alleged in the
pleadings. The releases will
specifically provide that the
defendants have paid
compensatory and not punitive
damages.

Collections: Ninety (90) days following the
date that the court enters an
order approving the settlement,
the Defendants will no longer
use deferred presentment
agreements and will write-off
and not attempt to collect any
unpaid deferred presentment
agreements unless a customer
has, prior to that date, agreed to
a partial payment plan.

“s/ Mark Moll”

Mark Moll

JONES JACKSON & MOLL, PLC
P.O. Box 2030

401 North 7* Street

Fort Smith, AR 72902-2023

For Each Offeror

43a

Accepted subject to court approval:

“s/Chris A Averitt”

ORR, SCHOLTENS, WILLHITE
& AVERITT, PLC

113 East Jackson Avenue (72401)

P.O. Box 1267

Jonesboro, AR 72403-1267

[EXHIBIT B TO APPENDIX D]

IN THE CIRCUIT COURT OF CRAIGHEAD COUNTY,
ARKANSAS
WESTERN DISTRICT

SHEILA MARTIN, and JIMMIE SUE
SPENCER, individually and o/b/o
a class of similarly situated persons PLAINTIFFS

WESTARK FINANCIAL CONSULTANTS OF LITTLE ROCK,
INC.; WESTARK FINANCIAL CONSULTANTS OF NORTH
LITTLE ROCK, INC; WESTARK FINANCIAL
CONSULTANTS OF JONESBORO, INC; WESTARK
FINANCIAL CONSULTANTS OF JACKSONVILLE, INC.;
WESTARK FINANCIAL CONSULTANTS OF PINE BLUFF,
INC; WESTARK FINANCIAL CONSULTANTS OF ROGERS,
INC.; WESTARK FINANCIAL CONSULTANTS OF
SPRINGDALE, INC.; WESTARK FINANCIAL
CONSULTANTS OF RUSSELLVILLE INC; WESTARK
FINANCIAL CONSULTANTS OF FAYETTEVILLE, INC;
WESTARK FINANCIAL CONSULTANTS, INC; CASH
ADVANCE OF BENTON, INC.; CASH ADVANCE OF
NORTH LITTLE ROCK, INC., CASH ADVANCE OF LITTLE
ROCK, INC.; EXECUTIVE CASH ADVANCE OF LITTLE
ROCK, INC., C&B ENTERPRISES, INC.; H&S ENTERPRISES
OF ROGERS, INC.; H&S ENTERPRISES OF FAYETTEVILLE,
INC.; H&S ENTERPRISES OF SPRINGDALE, INC.; AND
PAYDAY ADVANCE OF FORT SMITH, INC.
DEFENDANTS

TO: PERSONS WHO RECEIVED PAYDAY LOANS OR
DEFERRED PRESENTMENT OPTION
TRANSACTIONS (“CASH ADVANCES”) AT ANY
OF THE STORES LISTED BELOW AND DURING
THE TIME PERIOD LISTED BELOW.

45a

CHECK CASHING STORE TIME PERIOD DURING
WHICH CLAIMS HAVE |
ARISEN UNDER THE |
SETTLEMENT |
AMERICAN CHECK DECEMBER 8, 1995
CASHERS THROUGH JUNE 10, 2001
CASH ADVANCE OF DECEMBER 8, 1995
BENTON THROUGH JUNE 10, 2001
CASH ADVANCE OF DECEMBER 8, 1995 |
LITTLE ROCK THROUGH JUNE 10, 2001 |
CASH ADVANCE OF DECEMBER 8, 1995
LITTLE ROCK 2 THROUGH JUNE 10, 2001
CASH ADVANCE OF DECEMBER 8, 1995
NORTH LITTLE ROCK THROUGH JUNE 10, 2001
CHECKS 2 CASH DECEMBER 8, 1995
THROUGH JUNE 10, 2001
PAYDAY MONEY STORE OCTOBER 27, 2000
THROUGH JUNE 10, 2001
PAYDAY ADVANCE OF NOVEMBER 20, 2000
FORT SMITH THROUGH JUNE 10, 2001
RIVER VALLEY CHECK APRIL 29, 2001 THROUGH
CASHERS JUNE 10, 2001

READ THIS NOTICE CAREFULLY, AS IT MAY AFFECT

YOUR RIGHTS.

I. INTRODUCTION

This notice is provided pursuant to Rule 23 of the Arkansas
Rules of Civil Procedure and the Order of the Circuit Court of
Craighead County, Arkansas (“the Court”) to advise you of

46a |

the conditional certification, for purposes of settlement only, of
the plaintiff class described below, the proposed settlement of
the litigation with the Defendants (‘the settlement”), as well as
to describe the rights you may have under the settlement and
what steps you may take with respect to the settlement.

The following description of the Litigation and its background
and the summary of the settlement have been prepared by
counsel for the parties to the settlement. The Court has made
no finding with respect to such matters, and the Notice is not
an expression by the Court as to the merits of any claim or
defense asserted by the parties in this litigation. This litigation
relates to the business of “payday lending” or “deferred
presentment option transactions” in which the Defendants are
engaged in locations throughout the state of Arkansas.
Plaintiffs claim that the Defendants’ customers have been
subjected to fees which exceed the usury limit set forth in the
Arkansas Constitution. These claims are discussed below.

The parties to the settlement are (i) the representative
Plaintiffs, Sheila Martin and Jimmie Sue Spencer (“Plaintiffs”)
and the members of the plaintiff class described herein, and (ii)
the Defendants in this litigation which operate under the
fictitious names listed above. The settlement Agreement is on
file and available for inspection in the Office of Clerk of the
Court.

Il. BACKGROUND AND A DESCRIPTPION
OF THE LITIGATION

Defendants are engaged in businesses of originating payday
loans or Deferred Presentment Option Transactions. Typically,
the customers write checks which are held by the Defendants
for different periods of time. The checks are written for the
amount of the cash advanced to the customer, plus a finance
charge (also called check cashing fees and deferred
presentment fees).

Plaintiffs commenced this litigation on December 8, 2000 by
filing a complaint on behalf of current and former customers

47a

of Westark Financial Consultants of Jonesboro, Inc. who have
engaged in deferred presentment option transactions.
Plaintiffs later amended their complaint to include all of the
above companies operating as any of the above fictitious
names. Plaintiffs claim that Defendants charge interest rates in
excess of the legal limit. Defendants deny any wrongdoing
and contend that the fees charged do not constitute interest for
purposes of Arkansas usury law. Prior to filing this action,
Plaintiffs’ counsel conducted an_ extensive informal
investigation which included inspection of documents
obtained from non-parties and consultation with prospective
witnesses and research of the applicable law. Plaintiffs’
counsel have also engaged in formal discovery pursuant to the
Arkansas Rules of Civil Procedure. Plaintiffs’ counsel have
engaged in arm’s length settlement negotiations with counsel
for Defendants. All of the pleadings involved in this action are
available on file for inspection at the Craighead County
Courthouse located at 511 Main Street, Jonesboro, Arkansas
72401.

Ill. SHE PROPOSED SETTLEMENT

A proposed settlement of the litigation has been reached by
Plaintiffs’ counsel and Defendants’ counsel. Defendants have
vigorously denied, and continue to deny, all liability with
respect to any and all of the facts or claims alleged in the
complaint, but consider it desirable to settle and dismiss the
claims on the merits with prejudice, thereby eliminating the
substantial expense, inconvenience and distraction of
continued litigation.

DEFENDANTS WILL PURCHASE E SERIES U.S. SAVINGS
BONDS HAVING A TOTAL FACE VALUE OF UP TO BUT
NOT EXCEEDING $870,000. The smallest bond to be
purchased will have a face value of $50.00. A claimant will be
entitled to receive a bond based upon the following formula:
Fees paid X 1.5 less the balance of amount financed on any
unpaid deferred presentment agreement rounded to the
nearest increment of $25.00. Any claim which totals $37.50 or
less will receive a check in that amount as opposed to a bond

48a

ee

which will be offset against the acquisition price of the bonds
available for settlement. If the claims made by the members of
the class exceed the total amount of the settlement fund, then
the claims will be prorated. THE SETTLEMENT DOES NOT
ELIMINATE ANY OBLIGATION THAT A CLASS MEMBER
HAS TO PAY ANY OF THE CHECK CASHING STORES
LISTED ABOVE.

IN ORDER TO BE ELIGIBLE TO RECEIVE A PORTION OF
THE SETTLEMENT FUND, A CLASS MEMBER MUST
COMPLETE, EXECUTE AND MAIL TO ORR, SCHOLTENS,
WILLHITE & AVERITT, PLC, P.O. BOX 1267, JONEBORO,
ARKANSAS 72403, A PROOF OF CLAIM AND RELEASE
WHICH IS ENCLOSED WITH THIS NOTICE. SUCH PROOF
AND RELEASE MUST BE POSTMARKED BY AUGUST 15,
2001.

A CLASS MEMBER WHO WISHES TO BE EXCLUDED
FROM THE TERMS OF THIS SETTLEMENT MUST GIVE
NOTICE IN WRITING AND MAIL THE NOTICE TO ORR,
SCHOLTENS, WILLHITE & AVERITT, PLC, P.O. BOX 1267,
JONESBORO, ARKANSAS, 72403. THIS NOTICE MUST BE
POSTMARKED BY AUGUST 15, 2001. Other than this notice
and a display ad to be run in the Arkansas Democrat Gazette,
no further notice of the settlement will be provided to class
members if the Court approves the settlement.

A class member's obligation to pay the Defendants has not
been eliminated by the terms of this settlement.

After all of the claims have been received, Defendants shall
prepare a spreadsheet which shall demonstrate the names,
addresses, and damages for each class member by October 30,
2001. Plaintiffs’ counsel shall review the spreadsheet and
approve it by November 15, 2001.

Defendants shall purchase the savings bonds for claims over
$37.50 and will mail the checks for claims in the amount of
$37.50 or less on November 15, 2001. The savings bonds will
be issued to the class members by the U.S. Treasury

49a

Department and, therefore, Defendants have no control over
when the class members will receive the bonds. Class
members should consult with a tax preparer or certified public
accountant of ‘heir choice with regards to any tax
consequences of this settlement that may or may not exist.

As part of this settlement, participating class members will
release Defendants from any and all claims which include any
claims which were, or which could have been asserted in the
litigation during the time periods listed above. All class
members who do not timely and validly request exclusion will
be bound by the settlement. If the settlement is approved by
the Court, at the conclusion of the settlement payout, this
litigation will be dismissed with prejudice as to all of the class
members who have not exercised their right to be excluded
from the terms of the settlement. Each class member shall be
permanently barred from instituting any action against any of
the Defendants which in any way relates to any released
claims. If the settlement is disapproved of by the Court, the
rights and duties of the parties will continue as if no settlement
had been entered into.

COLLECTIONS: Ninety (90) days following the date that the
court enters an order approving the settlement, the
Defendants wil’ no longer use deferred presentment
agreements and will write-off and not attempt to collect any
unpaid deferred presentment agreements unless a customer
has, prior to that date, agreed to a partial payment plan.
However, in the event an Arkansas Appellate court should
issue an opinion holding that the fees associated with deferred
presentment agreements do not constitute interest subject to
the usury limit in Article 19, Section 13 of the Arkansas
Constitution, Defendants shall be free to operate in any legal
manner.

ORR, SCHOLTENS, WILLHITE & AVERITT, PLC has been
approved by the Court as counsel for the class. The Court has
also approved this notice and the notice procedure used
herewith.

50a

IV. NOTICE OF THE SETTLEMENT HEARING

The Settlement Hearing will be held on June 1, 2001, at 8:00
a.m., or as soon thereafter as possible, at the Craighead County
Courthouse, 511 South Main Street, Jonesboro, Arkansas
72401, to determine whether the proposed settlement of this
cause of action, as set forth herein, should be approved as fair,
reasonable and adequate to the members of the settlement
class, and whether the Judgment approving the settlement
should be entered. The Court may adjourn or continue the
Settlement Hearing without further notice to settlement class
members. IF YOU APPROVE OR DO NOT OPPOSE THE
SETTLEMENT, YOU DO NOT NEED TO APPEAR AT THE
SETTLEMENT HEARING.

If you have questions concerning this notice, please write to
ORR, SCHOLTENS, WILLHITE & AVERITT, PLC, P.O. BOX
1267, JONESBORO, ARKANSAS 72403. Do not contact the
clerk of the Court or Judge David Laser.

V. ATTORNEYS’ FEES AND EXPENSES

Defendants shall pay the law firm of Orr, Scholtens, Willhite &
Averitt, PLC the sum of $170,000 to be paid $85,000.00
immediately following the Court's approval of the class action
settlement and the balance of $85,000.00 on the day the savings
bonds and checks are mailed to the claimants. Defendants will
pay the cost of the newspaper advertisement. Orr, Scholtens,
Willhite & Averitt, PLC will be responsible for paying one-half
of the cost of the notice to class members, but Defendants will
advance all of the expenses and deduct Orr, Scholtens, Willhite
& Averitt, PLC’s share of the cost from the first payment of
attorneys’ fees.

**If You Wish Tc Make A Claim, Fill Out The Enclosed Claim
Form**

5la

TO:

OFFICIAL COURT NOTICE

ALL PERSONS WHO RECEIVED PAYDAY LOANS

OR DEFERRED

PRESENTMENT

OPTION

TRANSACTIONS (“CASH ADVANCES’) AT ANY
OF THE STORES LISTED BELOW AND DURING
THE TIME PERIOD LISTED BELOW.

CHECK CASHING TIME PERIOD DURING

STORE WHICH CLAIMS HAVE
ARISEN UNDER THE
SETTLEMENT

AMERICAN CHECK DECEMBER 8, 1995

CASHERS THROUGH JUNE 10,
2001

CASH ADVANCE OF DECEMBER 8, 1995

BENTON THROUGH JUNE 10,
2001

CASH ADVANCE OF DECEMBER 8, 1995

LITTLE ROCK THROUGH JUNE 10,
2001

CASH ADVANCE OF DECEMBER 8, 1995

LITTLE ROCK 2 THROUGH JUNE 10,
2001

CASH ADVANCE OF DECEMBER 8, 1995

NORTH LITTLE ROCK THROUGH JUNE 10,
2001

CHECKS 2 CASH DECEMBER 8, 1995
THROUGH JUNE 10,
2001

PAYDAY MONEY OCTOBER 27, 2000

STORE THROUGH JUNE 10,
2001

PAYDAY ADVANCE NOVEMBER 20, 2000

OF FORT SMITH THROUGH JUNE 10,
2001

RIVER VALLEY CHECK APRIL 29, 2000

CASHERS THROUGH JUNE 10,
2001

52a

READ THIS NOTICE CAREFULLY, AS IT MAY AFFECT

YOUR RIGHTS

Notice is hereby given that a proposed settlement has been
reached in the class action entitled Sheila Martin, and Jimmie
Sue Spencer v. Westark Financial Consultants of Little Rock,
Inc.; Westark Financial Consultants of North Little Rock,
Inc.; Westark Financial Consultants of Jonesboro, Inc.;
Westark Financial Consultants of Jacksonville, Inc.; Westark
Financial Consultants of Pine Bluff, Inc.; Westark Financial
Consultants of Rogers, Inc.; Westark Financial Consultants
of Springdale, Inc; Westark Financial Consultants of
Russellville, Inc.; Westark Financial Consultants of
Fayetteville, Inc.; Westark Financial Consultants, Inc.; Cash
Advance of Benton, Inc.; Cash Advance of North Little Rock,
Inc.; Cash Advance of Little Rock, Inc.; Executive Cash
Advance of Little Rock, Inc.; C&B Enterprises, Inc.; H&S
Enterprises of Rogers, Inc.; H&S Enterprises of Fayetteville,
Inc.; H&S Enterprises _of Springdale, Inc.; and Payday
Advance of Fort Smith, Inc., Craighead County Circuit Court
Case No. CIV-2000-0669(L).

ARE YOU A CLASS MEMBER?

You are member of the settlement class if you have entered
into a payday loan or deferred presentment agreement
(“cash advance”) from any of the Defendants listed above
operating under any of the above names during the dates
listed above.

WHAT ARE THE TERMS OF THE SETTLEMENT?

Defendants will purchase E Series U.S. savings bonds having
a total face value of up to but not exceeding $870,000.00. The
smallest bond to be purchased will have a face value of
$50.00. A claimant will be entitled to receive a bond based
upon the following formula: Fees paid X 1.5 less balance of
any amount financed on any unpaid deferred presentment
agreement rounded to the nearest increment of $25.00. Any

53a

claim which totals $37.50 or less will receive a check in that
amount as opposed to a bond, which will be offset against
the acquisition price of the bonds available for settlement. If
the claims made by the members of the class exceed the totai
amount of the settlement fund, then the claims will be
prorated.

WHEN MUST I MAKE A CLAIM?

In order to be eligible to receive a portion of the settlement
fund, a class member must complete, execute and mail a pre-
addressed proof of claim and release form which can be
obtained from Orr, Scholtens, Willhite & Averitt, PLC, P.O.
Box 1267, Jonesboro, Arkansas 72403. CLAIMS MUST BE
POSTMARKED BY AUGUST 15, 2001.

THIS NOTICE IS ONLY A SUMMARY.

If you think you may be a member of the class and you did
not receive the written settlement notice by mail, you should
request one by writing to Orr, Scholtens, Willhite & Averitt,
PLC, P.O. Box 1267, Jonesboro, Arkansas 72403.

WHAT IF I STILL OWE ONE OF THE STORES LISTED
ABOVE?

If you currently have an obligatior. to any of the check
cashing stores listed above, then your obligation to pay still
exists; it has not been eliminated by the terms of the
settlement.

THE LAST DAY TO OPT OUT OF THE SETTLEMENT IS
AUGUST 15, 2001.
PLEASE DO NOT CONTACT THE COURT OR THE
COURT CLERK.

[EXHIBIT C TO APPENDIX D]
IN THE CIRCUIT COURT OF CRAIGHEAD COUNTY,
ARKANSAS
WESTERN DISTRICT

SHEILA MARTIN, and JIMMIE SUE
SPENCER, individually and o/b/o
a class of similarly situated persons PLAINTIFFS

WESTARK FINANICAL CONSULTANTS OF LITTLE ROCK,
INC.; WESTARK FINANCIAL CONSULTANTS OF NORTH
LITTLE ROCK, INC.; WESTARK = FINANCIAL
CONSULTANTS OF JONESBORO, INC; WESTARK
FINANCIAL CONSULTANTS OF JACKSONVILLE, INC.;
WESTARK FINANCIAL CONSULTANTS OF PINE BLUFF,
INC; WESTARK FINANCIAL CONSULTANTS OF ROGERS,
INC.; WESTARK FINANICAL CONSULTANS- OF
SPRINGDALE, INC.; WESTARK FINANCIAL
CONSULTANTS OF RUSSELLVILLE INC.; WESTARK
FINANCIAL CONSULTANTS FAYETTEVILLE, INC;
WESTARK FINANCIAL CONSULTANTS, INC.; CASH
ADVANCE OF BENTON, INC.; CASH ADVANCE OF
NORTH LIETLE ROCK, INC.; CASH ADVANCE OF LITTLE
ROCK, INC.; EXECUTIVE CASH ADVANCE OF LITTLE
ROCK, INC; C&B ENTERPRISES, INC.; H&S ENTERPRISES
OF ROGERS, INC.; H&S ENTERPRISES OF FAYETTEVILLE,
INC.; H&S ENTERPRISES OF SPRINGDALE, INC.; AND
PAYDAY ADVANCE OF FORT SMITH, INC.

DEFENDANTS

CLAIM FORM

The Proposed claim form shall be a separate document
included with the notice. The claim form shall be
preaddressed to ORR, SCHOLTENS, WILLHITE & AVERITT,
PLC, P. O. BOX 1267, JONESBORO, ARKANSAS 72403. Each
claimant shall be responsible for postage. The following shall
be clearly printed on each form. This claim form may be
modified to include information necessary for Defendants to
discover and calculate each claimants’ claim as well as

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information that may be necessary to purchase the appropriate
savings bonds on behalf of each claimant. :

CLAIM FORM

My name is:

My current address is:

My current phone number

(if available) is:

My social security number is:

I did business with the following
Check cashing store(s):_

I believe I have a claim arising out of the settlement
entered in Craighead County Circuit Court Case No. CIV-
2000-0669(L). Please accept this as my proof of claim and
mail me the amount that I am due, if any, to the above
address. I acknowledge that, as a member of the class, I am
releasing any and all claims that I may have as the release
is described in the notice that I have received. :

My signature.

*THIS CLAIM FORM IS VOID UNLESS POSTMARKED
BY AUGUST 15, 2001*
I AM AWARE THAT I AM RESPONSIBLE FOR
POSTAGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_0536%3A2. Public record. Not legal advice.