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BEECHER v. ABLE

June 23, 1977

Lawrence J. BEECHER et al., Plaintiffs,
v.
Charles R. ABLE et al., Defendants. Harry H. LEVY, Plaintiff, v. DOUGLAS AIRCRAFT COMPANY, INC., et al., Defendants. Lillian GOTTESMAN, Plaintiff, v. A. V. LESLIE et al., Defendants. Lawrence KOBRE, Plaintiff, v. Wellwood E. BEALL et al., Defendants. Mac HERBST et al., Plaintiffs, v. Charles R. ABLE et al., Defendants



The opinion of the court was delivered by: MOTLEY

MEMORANDUM OPINION

 MOTLEY, District Judge.

 On February 11, 1976 the parties entered into a Stipulation of Settlement which was subsequently approved by this court on August 25, 1976. That settlement provided that Douglas would establish a fund in the amount of $5 million to be paid to the three plaintiff classes in accordance with the settlement plan. On November 22, 1976 Douglas notified the court that the number of claims filed had fallen substantially below expectations. On January 17, 1977 this court ordered the parties to make further attempts through media advertising to locate additional claimants. This advertising elicited only a relatively small number of additional claims (approximately $.3 million in addition to the previous claims which totalled approximately $1 million).

 Plaintiffs now move that the $5 million (less expenses and fees) be reallocated among the three classes in light of the paucity of claims. Defendant Douglas cross moves for a limited reallocation. It also requests that a substantial portion of the settlement revert to Douglas.

 There are no allegations of fraud or misrepresentation made by any party. Rather, Douglas claims that in agreeing to the settlement, it had no idea that so few claims would be filed. Furthermore, in light of the parties' mutual mistake says Douglas, the court should revise the settlement.

 The court finds that there was no mutual mistake. At the outset, plaintiffs heartily deny that they did not foresee the possibility of so few claims. *fn1" The plaintiffs assert that this risk was one which both parties accepted by the terms of the contract. The settlement agreement explicitly notes that no part of the settlement shall revert to Douglas in the event that fewer claims are filed than anticipated. (Para. 8)

 The Settlement Notice (p. 5) states, in pertinent part:

 
The entire amount of the Fund allocated to each class will be distributed among members of the applicable class, notwithstanding that distributions may exceed allowed claims. . . . In no event will any part of the Fund revert to Douglas.

 In connection with this provision in the Notice, the Allocation Plan contains the following language (pp. 8-9):

 
Each Class's allocation from the Fund . . . will be distributed pro rata according to the allowed claims of members of the Class. Distributions may be less or more than allowed claims, depending upon the total claims filed by members of each Class and allowed against the Fund. In case the allocation from the Fund to one or more Classes exceeds the total allowed claims of members of such Class or Classes, the excess will be redistributed in accordance with the following:
 
* * *
 
C. Excess in all Classes: Pool all the excesses and redistribute them, 51/100ths to Class 1, 9/100ths to Class 2 and 40/100ths to Class 3.

 Thus, the possibility of fewer than all claims was a risk which Douglas expressly took when it agreed to a fixed settlement figure as opposed to paying separately for each claim filed. Although Douglas may have been mistaken as to its estimate of the number of claims that would be filed, "there must be excluded from consideration mistakes as to matters which the contracting parties had in mind as possibilities and as to the existence of which they took the risk. With respect to any matter not made a basic assumption of the contract, the parties take their chances." 13 Williston on Contracts, 3d Ed., ¬ß 1543, p. 75; Wright & Pierce v. Town of Wilmington, Mass., 290 F.2d 30, 32 (1st Cir. 1961).

 Uncertainty as to the number of claimants was specifically dealt with in the agreement. Douglas is now complaining that, since it did not have the foresight to estimate that the actual number of claimants would be ...


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