HomeMy WebLinkAboutResolution - 2012-R0163 - Mutual Release And Settlement Agreement - Healthsmart - 04_23_2012Resolution No. 2012-RO163
April 23, 2012
Item No. 2.1
RESOLUTION
WHEREAS, HealthSmart Holdings, Inc., formerly The Parker Group, Inc., ICON Benefit
Administrators 11, L.P., HealthSmart Benefit Solutions, Inc. formerly American Administrative
Group, Inc., HealthSmart Preferred Care, II, L.P. initiated arbitration proceedings against the
City of Lubbock, Texas, American Arbitration Association No. 71 193 Y 00084 08; and
WHEREAS, the City of Lubbock thereafter filed a counterclaim against Q-elements
Management Services, L.P., HealthSmart Care Management Solutions, Inc, formerly Q-elements
Ltd., HealthSmart Preferred Care, Inc., HealthSmart Preferred Care II, LLC, HealthSmart
Information Systems, Inc. formerly CareVu Corporation, Care ATC Texas, Inc., HealthSmart
Primary Care Clinics, L.P. formerly Free First Healthcare Clinics, L.P. and HealthSmart
Holdings, Inc., formerly The Parker Group, Inc., ICON Benefit Administrators 11, L.P.,
HealthSmart Benefit Solutions, Inc. formerly American Administrative Group, Inc., HealthSmart
Preferred Care, II, L.P, all said parties hereinafter referred to as ("HealthSmart"); and
WHEREAS, HealthSmart on December 12, 2011, dismissed all but one claim against the
City of Lubbock; and
WHEREAS, the City of Lubbock filed a Motion to Stay said claim; and
WHEREAS, on March 9, 2012, the 72"d District Court, Lubbock County, Texas stayed
the arbitration of said claim; and
WHEREAS, the City of Lubbock and HealthSmart acknowledge that they are involved in
two other cases currently pending in Courts of Appeal and enumerated as Cause No. D-1-GN-
11-001866; Travis County — ICON Benefit Administrators Travis County — ICON Benefit
Administrators 11, L.P. v. Greg Abbott, City of Lubbock v. Lubbock Avalanche Journal,
Intervenor; and CC-08-01067-B ICON Benefit Administrators 11, L.P. and American
Administrative Group, Inc. v. Joella Mullin, Stanley Self, Andrea Davenport, Lee Ann
Dumbauld, Scott Snider, Leisa Hutcheson and Unknown Others, in the County Court at Law No.
2, Dallas County, Texas, hereinafter referred to as the ("Reaves Audit Litigation"); and
WHEREAS, said Courts of Appeal have restricted release of the subject matter of said
appeals until a final determination is made; and
WHEREAS, the City of Lubbock finds that the Citizens of Lubbock should have access
to the information contained in the Reaves Audit Litigation; and
WHEREAS, the only way to have the Reaves Audit Litigation information released to the
public is to continue to pursue said release through the appellant channels; and
WHEREAS, except for the Reaves Audit Litigation, HealthSmart and the City of
Lubbock seek to avoid the uncertainties of arbitration and litigation; and
WHEREAS, HealthSmart and the City of Lubbock desire to enter into a Mutual Release
and Settlement Agreement in order to provide for certain payments in full and final settlement
and discharge of all claims as provided in an executed Mutual Release and Settlement
Agreement.
NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
LUBBOCK:
THAT the Mayor of the City of Lubbock is hereby authorized and directed to execute for
and on behalf of the City of Lubbock, a Mutual Release and Settlement Agreement with
HealthSmart, as well as any related documents. Said Mutual Release and Settlement Agreement
is attached hereto and incorporated in this resolution as if fully set forth herein and shall be
included in the minutes of the City Council.
� Passed by the City Council this April 23 , 2012.
Tom Martin, Mayor
ATTEST.
Rebe ca Garza, City ecretary
APPROVED AS TO FORM AND CONTENT:
Sam Medina, City ey
vw/RES,HealthSmart Settlement
April 20, 2012
Resolution No. 2012—RO163
THE ARBITRATION TRIBUNALS
OF THE
AMERICAN ARBITRATION ASSOCIATION
In the Matter of the Arbitration between
HealthSmart Holdings, Ine. formerly
The Parker Group, Inc.,
ICON Benefit Administrators 11, L.P.,
HealthSmart Benefit Solutions, Inc.
formerly American Administrative Group, Inc.,
HealthSmart Preferred Care, 11, L.P.,
Claima► is/Counter- Respondents
V.
City of Lubbock, Texas,
Resl)o►rdents/Counter-Claimants
V.
Q-elements Management Services, L.P.,
HealthSmart Care Management Solutions, Inc.
for►nerly Q-elements Ltd., HealthSmart Preferred
Care, Inc., IealthSmart Preferred Care 11, LLC,
HealthSmart Information Systems, Inc, formerly
CareVU Corporation, Care ATC Texas, Inc.,
HealthSmart Primary Case Clinics, L.P.
formerly Free First Healthcare Clinics, L.P.,
Third -Party Respondents
No. 71 193 Y 00084 08
MU`1'UAL RELEASE AND SETTI,EMENT AGREE, MENT
1, SETTLING PARTIES:
This Mutual Release and Settlement Agreement (hereinafter "Settlement Agreement") is
entered into on this 23rdday of'April, 2012, by the following parties, their agents and/or
employees:
Mutual Release and Settlement Agreement Page 1
1.1 HEALTI ISMART HOLDINGS, INC. formerly T1 iE PARKER GROUP,
INC., ICON BENEFIT ADMINISTRATORS II, L.P. (ICON"),.
HEALTHSMART BENEFIT SOLUTIONS, INC. formerly AMERICAN
ADMINISTRATIVE GROUP, INC. ("AAG"), HEALTI-ISMART PREFERRED
CARE, 11, L.P. (collectively "HEALTHSMART") and Q-ELEMENTS
MANAGEMENT SERVICES, L.P., HEALTI-ISMART CARE MANAGEMENT
SOLUTIONS, INC, formerly Q-ELEMENTS LTD., HEALTHSMART
PREFERRED CARE, INC., HEALTHSMART PREFERRED CARE 11, LLC,
I-IEALTHSMART INFORMATION SYSTEMS, INC. formerly CAREVU
CORPORATION, CARE ATC TEXAS, INC., HEALTHSMART PRIMARY
CASE CLINICS, L.P. formerly FREE FIRST HEALTHCARE CLINICS, L.P.,
(collectively "THIRD -PARTY RESPONDENTS"), including
HEALTHSMART's and THIRD -PARTY RESPONDENTS' past, present and
future predecessors, parents, affiliates, directors, officers, assigns, agents,
servants, representatives, and heirs (ail of the foregoing hereinafter collectively
referred to as the "CLAIMANTS/COUNTER-RESPONDENTS");
1.2 THE CITY OF LUBBOCK, its officials, assigns, agents, servants, employees,
consultants, attorneys, auditors and representatives (hereinafter referred to as the
,1RF.SPONDF,NT/COUNTER-CLAIMANT");
2. RF('ITALS:
2.1 HEALTHSMART initiated the above -captioned Arbitration against
RESPONDENT/COUNTER-CLAIMANT seeking damages arising out of certain
alleged breaches of contracts by RESPONDENT/COUNTER-CLAIMANT. On
December 23, 2011, ICON and AAG tiled an Amended Supplement to Demand
for Arbitration ("Amended Complaint"), which dismissed all but one claim
against RESPONDENT/COUNTER-CLAIMANT, seeking to recover actual
damages, attorney fees, and costs of court. On March 9, 2012, the 72"d District
Court of Lubbock, Texas stayed the arbitration of the claim in the Amended
Complaint;
2.2 RESPONDENT/COUN'rER-CLAIMANT thereafter filed a counterclaim against
HEALTHSMART and in the same pleading also Filed claims against THIRD -
PARTY -RESPONDENTS seeking damages arising out of certain alleged acts or
omissions of CLAIMANTS/COUNTER-RESPONDENTS including, but not
limited to, fraud, breach of contract, and negligence. On July 15, 2011,
RESPONDENT/COUNTER-CLAIMANT tiled its First Amended Counterclaim
and Third Party Claim ("Amended Counterclaim"), which expanded upon its
original counterclaim against CLAIMANT'S/COUNTER-RESPONDENTS,
seeking to recover actual damages, exemplary damages, attorney fees, and costs.
2.3 C LAIMANTS/COUNTER-RESPONDENTS and RESPONDENT/COUNTER-
CLAIMANT shall hereinafter be referred to collectively as "Settling Parties."
Mutual Release and Settlement Agreement Page 2
2.4 The Settling Parties, seeking to avoid the uncertainties of arbitration and
litigation, desire to enter into this Settlement Agreement in order to provide for
ccitain payments in full and final settlement and discharge of all claims or causes
of action which are, have been or could have been, the subject of the Amended
Complaint or the Amended Counterclaim, under the terms and conditions as set
ioilh herein.
3. SE'F-FI.EMENT AGREEMENT:
The Settling Parties agree as follows:
3.1 Release and Discharge:
A. In consideration of the payments called for herein and the
execution of this Settlement Agreement, CLAIMANTS/COUNTER-
RESPONDENTS, and each of their respective affiliates, directors, board
members, officers, agents, employees, servants, representatives, consultants,
accountants, lawyers, investors and heirs hereby completely release and forever
discharge RESPONDENT/COUNTER-CLAIMANT, and each of its respective
of iicials, agents, employees, servants, representatives, consultants, accountants,
lawyers and heirs of and from any and all past, present and future claims,
demands, liabilities, obligations, promises, representations, rights, actions, causes
of action, claims for relief, agreements, fees, damages, costs, losses, expenses,
attorneys' fees and compensation of any nature whatsoever, whether based in tort,
contract or other theory of recovery, at law or in equity, contingent or certain, and
for all damages of whatsoever nature, which the CLAIMANTS/COUNTER-
RESPONDENTS now have, or which may hereafter accrue or otherwise be
acquired, on account, or in any way arising out of, or which are connected in any
way to the prior contracts and business relationship between the Settling Parties,
including without limitation the subject of the Complaint, the Amended
Complaint, and any and all other known or unknown claims for damages to
CLAIMANTS/COUNTER-RESPONDENTS which have resulted or may result
from the prior contracts and business relationship between the Settling Parties,
including without fimitation the alleged acts or omissions set forth in the
Amended Complaint or which could have been set forth in the Amended
Complaint, or is set forth or could have been set forth by the
CLAIMANTS/COUNT i:R-RESPONDENTS in the City of Lubbock v, The
Parker Group, Inc., et. al., Cause No. 2007-538,383 (72n, Judicial District,
Lubbock County, Texas) and In re ICON 1Jenefil Administrators, et. al., Cause
No. 2007-540,024 (72'a Judicial District, Lubbock County, Texas).
B. In consideration of the payments called for herein and the
execution of this Settlement Agreement, RESPONDENT/COUNTER-
CLAIMANT, and each of its respective officials, agents, employees, servants,
representatives, consultants, accountants, and lawyers hereby completely release
and forever discharge the CLAIMANTS/COUNTER-RESPONDENTS, and each
Mutual Release and Settlement Agreement Page 3
of their respective affiliates, directors, board members, officers, agents,
employees, servants, representatives, consultants, accountants, lawyers, investors,
insurers and heirs of and from any and all past, present and future claims,
demands, liabilities, obligations, promises, representations, rights, actions, causes
of action, claims for relief, agreements, fees, damages, costs, losses, expenses,
attorneys' fees and compensation of any nature whatsoever, whether based in tort,
contract or other theory of recovery, at law or in equity, contingent or certain, and
for all damages of whatsoever nature, which the RESPOND9Nf/COUN'I'E11-
CLAIMANT now has, or which may hereafter accrue or otherwise be acquired,
on account, or in any way arising out of, or which are connected in any way to the
prior contracts and business relationship between the Settling Parties, Including,
Without limitation the subject of the Counterclaim, the Amended Counterclaim ,
and any and all other known or unknown claims for damages to
RE,SPONDENT/COUNTER-CLAIMANT which have resulted or may result
from the prior contracts and business relationship between the Settling Parties,
including, without limitation the alleged acts or omissions set forth in the
Amended Counterclaim or which could have been set forth in the Amended
Counterclaim or is set forth or could have been set forth by
IZESPONDI NT/COUNTER-CLAIMANT in Ted Pcarkea• v. City of Lubbock,
Cause No. 141-241793-09 (141"Judicial District, Tarrant County, Texas).
C. In consideration of the payments called for herein and the
execution of this Settlement Agreement, RESPONDENT/COUNTER-
CLAIMANT (and each of its respective officials, agents, employees, servants,
representatives, consultants, accountants, and lawyers) hereby completely releases
and forever discharges the GREAT AMERICAN E&S INSURANCE
COMPANY ("GREAT AMERICAN"), and each of its respective affiliates,
directors, board members, officers, agents, employees, servants, representatives,
consultants, accountants, and lawyers, of and from any and all past, present and
future claims, demands, liabilities, obligations, promises, representations, rights,
actions, causes of action, claims for relief, agreements, fees, damages, costs,
losses, expenses, attorneys' fees and compensation of any nature whatsoever,
whether based in tort, contract or other theory of recovery, at law or in equity,
contingent or certain, and for all damages of whatsoever nature, which
RESPONDENT/COUNTER-CLAIMANT now has, or which may hereafter
accrue or otherwise be acquired, on account, or in any way arising out of, of
which are connected in any way with the claim made upon the Counterclaim
and/or the Amended Counterclaim, to RESPONDENT/COUNTER-CI_AIMAN'i',
including, without limitation the alleged acts or omissions set forth in the
Counterclaim and/or the Amended Counterclaim, or is set forth or could have
been set forth in any other pending litigation between the parties,
D. Except as provided in subsection 3.3.13. of this Settlement
Agreement, the Settling Parties hereby acknowledge and agree that this release is
a general release, and they further expressly waive and assume the risk of any and
Mutual Release and Settlement Agreement Page 4
all claims for damages which exist as of this date, including those which they do
not know or suspect to exist, whether through ignorance, oversight, error,
negligence or otherwise, and which, if known, would materially affect their
respective decisions to enter into this Settlement Agreement. The Settling Parties
further agree that payment of the amount specified herein is and shall be a
complete compromise of all matters that they have or could have alleged arising
out of matters in any way related to the affairs between the Settling Parties,
whether involving issues of law or fact or otherwise. The Settling Parties further
assume the risk that the facts or law may be otherwise than they believe. The
Settling Parties also acknowledge that by accepting the terms of this Settlement
Agreement, they waive their right to the resolution by arbitration or by the courts
(including trial by jury) of any matters that any Settling Party made, makes or
could have made arising out of matters in any way related to the affairs between
the Settling Parties,
E. Except as provided in subsection 3.3.13. of this Settlement
Agreement, is the intention of the Settling Parties that this Release be as general
as possible, and that the same shall cover every conceivable contingency that
might arise in the future or which may have arisen in the past, whether known or
unknown. It is further understood and agreed that this is a full and final release
and discharge of each Settling Party, and of each Settling Party's agents, servants,
and representatives that are not expressly named herein, from any matter or thing
dealt with herein and that the same may be pleaded as an absolute bar to any and
all suit or suits pending, or which may hereinafter be pending or prosecuted, by
any such Settling Party or by anyone claiming by, through or under such Settling
Party.
3.2 Cash Payments;
A. CLAIMANTSICOUNTER-RESPONDENTS, jointly and
severally, hereby agree to pay the sum of Four Million and no1100 Dollars
($4,000,000) to RESPONDENT/COUNTER-CLAIMANT as follows: (i) the sum
of Three Million and no/100 Dollars ($3,000,000) payable on or before April 23,
2012; (ii) the sum of Five Hundred Thousand and no/100 Dollars ($500,000)
payable on or before May 10, 2012; and (iii) the sum of Five hundred Thousand
and no/100 Dollars ($500,000) payable on or before June 10, 2012. It is hereby
agreed and understood that no interest charge of any kind will be assessed upon
any of the payments under this subparagraph 3.2. A.
B. The CLAIMANTS/COUN"fER-RESPONDENTS acknowledge
and represent that at the time of entering into this Agreement, each entity set forth
in Section 1.1 above, is solvent and the payment of any of the sums of money
referenced above will not, at the time made, render them insolvent.
3.3 Additional Litigation.
Mutual Release and Settlement Agreement Page S
A. It is further agreed that the Settling Parties shall file an Order of
Dismissal with Prejudice with the American Arbitration Association and with the
courts in the following matters: City of Lubbock v. The Parker Group, Inc,, et. al ,
Cause No. 2007-538,383 (72" " Judicial District, Lubbock County, Texas) and In
re, ICON Benefit Administrators, el. al., Cause No. 2007-540,024 (72" `1 Judicial
District, Lubbock County, Texas) (hereinafter the "Lubbock County Cases"), and
7'ed Parker v. C'ily of Lubbock, Cause No. 141-241793-09 (141" Judicial District,
Tarrant County, Texas) (hereinafter the "Tarrant County Case").
B. The Parties acknowledge that they are also involved in litigation in
two other cases currently pending in Texas:
(1) Cause No. D-1-GN-11-001866; Travis County -- ICON Llenefil
Administrators - Travis County - ICON Benefrt Administrators 11,
L,P v. Greg Abbott, City of Lubbock v. Lubbock Avalanche
,journal, Intervenor;
(2) CC;-08-01067-13ICON 13engfil Administrators 11, L.P. and
American Adminisirallve Group, Inc. v. ,Joella Mullin, Stanley Self,
Andrea Davenport, Lee Ann Dumbauld, Scott Snider, Leisa
flutcheson and Unknown Others In the County Court al Lain Noy,
2, Dallas County, Texas.
Collectively, the two cases listed above in this subsection 3.3.13. shall be referred
to in this Settlement Agreement as the "Reaves Audit L.itigation." The Settling
Parties agree by this Settlement Agreement to Release one another from any and
all claims for monetary recovery, whether by way of damages, court costs,
attorneys' fees or otherwise, in any way relating to or arising out of the above -
referenced Reaves Audit Litigation. I lowever, the Settling Parties also agree that:
(1) the foregoing Release shall not extend to the substantive claims either party
had made or may snake in the Reaves Audit Litigation, (ii) the foregoing
substantive claims in the Reaves Audit Litigation are not being released; and (iii)
nothing contained in the Settling Parties' agreement to Release any and all claims
for monetary recovery in the Reaves Audit Litigation shall prevent any ofthe
parties to this Release from pursuing any and all remedies, other than monetary
recoveries, that may be available to them in the Reaves Audit Litigation.
C. CLAIMANTS/COUN'ITER-RESPONDENTS understand and
acknowledge that they are aware that RESPONDENT/ COUNTER -CLAIMANT
intends to pursue claims against Covenant llealth System, University Medical
Center and Highland Hospital. Claimants/Counter-Respondents agree to provide
RESPONDENT/ COUNTER -CLAIMANT with the documents referred to in
Exhibit "A", which RESPONDENT/ COUNTER -CLAIMANT will use to pursue
said clauns against Covenant Health System, University Medical Center and
liibhtand Hospital. This obligation to provide documents extends only to
Mutual Release and Settlement Agreement Page 6
documents in the possession, custody or control of ChAIMANTS/COUNTER-
RESPONDENTS.
3.4 Sole and Sufficient Consideration.
All parties acknowledge that the covenants herein represent the sole
valuable and sufficient consideration for this Settlement Agreement.
3.5 Good faith Settlement:
1'he Settling; Parties jointly, severally, and mutually agree by and through their
attorneys and represent that (his Settlement Agreement is entered into in good
faith and to the satisfaction of each of the Settling; Parties,
3.6 Entire Agreement and Successors in Interest:
A. This Settlement Agreement, together with all exhibits, contains and
constitutes the entire agreement between the Settling Parties with regard to the
matters set forth in it and may not be modified or amended except in a writing
signed by the Settling Parties or their successors in interest.
B. This Settlement Agreement, together with all exhibits, supersedes
all prior representations, conditions, understandings, proposals, agreements, or
promises, written or oral, express or implied.
C. The Settling Parties, having read and understood this Settlement
Agreement, along with its exhibits, agree that there are no other representations,
conditions, understandings, proposals, agreements, or promises, written or oral,
express or implied, that exist outside of this Settlement Agreement that have been
made by either of the parties hereto, which have induced any of the Settling;
Parties or have led to the execution of this Settlement Agreement by any of the
Settling Parties. Any conditions, understandings, proposals, agreements, or
promises, written or oral, express or implied that may have been heretofore made
by any of the Settling Parties, and which are not expressly contained or
incorporated by reference herein, are void and of no effect.
D. This Scttlement Agreement shall be binding upon and inure to the
benefit of the executors, administrators, personal representatives, heirs, successors
and assigns of each.
3.7 Representation of Comprehension of Document:
In entering into this Settlement Agreement, the Settling Parties represent that they
are not acting; under duress. Further, the Settling Parties also represent that they
have relied upon the legal advice of their attorneys, who are the attorneys of their
own choice and that the terms of the Settlement Agreement have been explained
Mutual Release and Settlement Agreement Page 7
to them by their attorneys, and that those terms are fully understood and
voluntarily accepted by them.
3.8 Governing Law:
This Settlement Agreement shall be construed and interpreted in accordance with
the laws of the State of Texas, without regard to convict of law principles,
3.9 Disposition of Litigation/Additional Documents:
The Settling Parties agree that the Arbitration, the Lubbock County Cases, and the
"Tarrant County Case shall be disposed of through entry of agreed Orders of
Dismissal with Prejudice. All parties hereto agree to cooperate fully and
promptly execute any and all supplementary documents, including but not limited
to the Orders of Dismissal with Prejudice, and to take all additional action that
may be necessary or appropriate to give full force and effect to the basic terms
and intent of this Settlement Agreement.
3.10 Confidential and/or Proprietary Information:
A. During the course of the Arbitration and other litigation between
the parties, certain documents have been produced by Claimants/Counter-
Respondents which they claim constitute confidential and/or proprietary
information. The documents which Claimants/Counter-Respondents deem to be
confidential and/or proprietary are set forth in the attached Exhibit "B".
As part of the consideration for this agreement, Respondent/Counter-
Claimant agrees to return the original of all such documents and to destroy any
and all copies which may be in its possession. Respondent/Counter-Claimant
acknowledges that the documents in Exhibit "B" are confidential and/or
proprietary. Respondent/Counter-Claimant further agrees to not divulge or
disclose the contents of any such documents in the future. This obligation to
return or destroy documents extends only to documents in the possession, custody
or control of Respondent/Counter-Claimant.
B3 Nothing in this paragraph dealing with confidential and/or
proprietary information shall limit or prevent Respondent/Counter-Claimant from
participating to the fullest extent provided by law in the above -referenced
litigation pending in Dallas County and Travis County in which
Respondent/Counter-Claimant is attempting to make public the "Reaves Audit".
Claimant/Counter-Respondents agree that by entering into this agreement, the
City has not waived or prejudiced any rights or claims it may have regarding the
release of the "Reaves Audit" in either the Dallas County or 'Travis County
litigation. To (lie extent the "Reaves Audit" has utilized, relied on or is based on
any of the documents set forth above, such documents can continue to be held
and/or utilized by Respondent/Counter-Claimant to the extent necessary to
Mutual Release and Settlement Agreement Page 8
support and defend the "Reaves Audit". Nevertheless, at all times,
Respondent/Counter-Claimant agrees to take all reasonable steps to protect the
confidential and proprietary nature of any of the foregoing documents that
Respondent/Counter-Claimant continue to hold and/or utilize to support and
defend the "Reaves Audit". At such time as the Dallas and Travis County
litigation are concluded by Final order or mandate, such documents shall be
returned or destroyed. Respondent/Counter-Claimant agrees that at the time that
the Dallas and "Travis County Litigation are concluded by final order or mandate,
Respondent/Counter-Claimant shall not at any time thereafter divulge or disclose
the contents of any such documents. This paragraph shall not prohibit the release
of the "Reaves Audit" if such release is allowed or compelled by Court order.
C. Subject to 3.1013, above, the Settling Parties shall comply with subsections
3.3C and 3,10A. by returning or producing the respective document within 45
days from receipt by Claimants/Counter-Respondents of the claim information.
The Arbitrator shall retain jurisdiction over the parties after entry of the agreed
Order of Dismissal of the Arbitration with Prejudice for the sole and exclusive
purpose of enforcing the Settling Parties' agreements in subsections 3.3.C. and
3.10.A. However, the Arbitrator's tenure to enforce these provisions shall end
immediately after both of the following occur: (i) CLAIMANTS/COUNTER-
RESPONDL'NTS provide to RESPONDENT/COUNTERCLAIMANT the
documents detailed in Exhibit "A" to the extent those documents are in the
possession, custody or control of CLAIMANTS/COUNTER-RESPONDENTS as
required by subsection 3.3.C.; and (ii) RESPONDENT/COUNTERCLAIMANT
returns or destroys the documents detailed in Exhibit "B", consistent with the
terms of subsection 3.10.A.
3.11 Non Disparagement
A. Respondent/Counter-Claimant will utilize its best efforts to prevent its senior
personnel from making false or defamatory remarks regarding
Claimants/Counter-Respondents. For purposes of this paragraph, "senior
personnel" shall mean the Mayor of Lubbock, any member of the Lubbock City
Council, the Lubbock City Manager, any Assistant Lubbock City Manager, the
Lubbock City Secretary, the Lubbock City Attorney or any City of Lubbock
officials reporting directly to any of the foregoing individuals. However, should
Claimants/Counter-Respondents believe false or defamatory remarks have been
made after the execution of this Settlement Agreement, nothing in this Settlement
Agreement prevents ClaimantslCounter-Respondents from filing it suit in a Court
of competent jurisdiction seeking recovery of damages. Provided, however,
nothing in this Settlement Agreement shall give Claimants/Counter-Respondents
a cause of action for breach of contract should a false or defamatory remark be
made. Performance by Claimants/Counter-Respondents of any of their
obligations under this Settlement Agreement, past or future, including payment of
Mutual Release and Settlement Agreement Page 9
settlement funds in the future, shall not be excused as a result of any alleged or
perceived false or defamatory comment.
13. Release of t11e Reeves Audit, either as allowed by Court Order.or Compelled by
Court Order or other applicable law, shall not be considered a false or defamatory
remark by "senior personnel" of Respondent/Counter-Claimant or its auditor,
Sally Reeves.
4.0 Other Provisions:
A. The Settling Parties have prepared the press release attached hereto
as Exhibit "C" (which has been reviewed and approved by the Settling Parties)
and agree to distribute such press release to the Lubbock news media within
twenty-four (24) hours of final execution of this Settlement Agreement. With
regard to that press release or other public statement, the parties expressly agree
that a material term of this Settlement Agreement shall be full compliance with
the terms of Paragraph 3,11 of this Settlement Agreement.
B. The Settling Parties acknowledge that this Settlement Agreement is
not an admission of any liability on the part of any other Settling Party. This
Settlement Agreement shall not be admissible in any forum except in an action to
enforce it, and shall not be admissible in any forum in any circumstance as an
admission.
C. The Settling Parties further warrant and represent that, in entering
into this Settlement Agreement, they have not relied upon any statement,
representation or promise made by any of the parties released hereby but rather
have relied solely upon their own judgment and the advice of their attorney.
D. ']'his Settlement Agreement shall be deemed to have been jointly
drafted by the Settling Parties and shall not be construed against any person as the
drafter hereof.
F. The provisions of this Settlement Agreement are severable. If one
or more provisions are determined to be invalid, illegal, or otherwise
unenforceable, in whole or in part, the remaining provisions, and any partially
enforceable provisions, shall be binding and enforceable. Notwithstanding the
foregoing, if the payment provisions (Section 3.2) or the release provisions
(Section 3.1) are found to be unenforceable or invalid by a court of competent
jurisdiction, then such invalidity or unenforceability shall be cause for rescission
of the entire Agreement at the election of the Party whose interests are injured by
the finding of invalidity or unenforceability. In such case, the settlement
payments made hereunder shall be returned and the releases and indemnifications
made null and void.
Mutual Release and Settlement Agreement Page 10
F. This Settlement Agreement shall be construed according to the
laws of the State of Texas. With the exception of application of the provisions of
Subsection 3.10.C., any action to enforce, construe or interpret the provisions of
the Settlement Agreement shall be brought in State District Court in Luhbock
County, Texas, notwithstanding any agreement to arbitrate contained in any other
contracts or agreements. It is the intent of the parties that upon execution of this
agreement the pending Arbitration shall be dismissed and the Arbitrator shall
have no continuing authority or jurisdiction over the parties, with the exception of
application of the provisions of Subsection 3.10.C.
G. This Settlement Agreement may be executed in multiple
counterparts; each, when taken together, shall constitute but one agreement.
1-1. Each Setting Party represents and warrants that it has full power
and authority to execute this Settlement Agreement. Each of the utidersigned
represents that he or she is fully authorized to enter into and execute this
Settlement Agreement for and on behalf of the entity that he or she represents and
that such entity has duly authorized hint or her to sign on its behalf, as reflected
on the attached signature pages.
I. Each Settling Party represents and warrants that it has not
transferred or otherwise assigned, by operation of law or otherwise, any claim that
is to be released by such Settling Party pursuant to this Settlement Agreement.
FXF.CUTED on the 23rd day of April, 2012
HealthSmart Holdings, lne. formerly The Parker Group, Inc.,
ICON Benefit Administrators II, L.P.,
IlealthSmart Benefit Solutions, Inc. formerly American Administrative Group, Inc.,
HealthSmart Preferred Care,11, L.P.,
lly : G 1---
Their: G ► gig='
Mutual Release and Settlement Agreement 1 Page 11
Q-elements Management Services, L.P.,
HealthSmart Care Management Solutions, Inc. formerly Q-elements Ltd.,
HealthSmart Preferred Care, Inc.,
HealthSmart Preferred Care I1, LLC,
HealthSmart Information Systems, Inc. formerly CareVu Corporation,
Care ATC Texas, Inc.,
IlealtliSmart Primary Case Clinics, L.P, formerly Free First healthcare Clinics, L.P
By: 1 '�
Their: C/
City of Lubbock, Texas
By:
TOM MARTIN
Its: Mayor
Mutual Release and Settlement Agreement rage 12
Resolution No. 2012-RO163
EXHIBIT "A"
Claimants agree to provide the following documents for each of the claims on the sample
worksheet, that Shall be provided to Claimants attorney under separate cover as the worksheet
contains protected health information. The worksheet will contain less than 500 claims from the
City of Lubbock, Plan for the years 2004 - 2006. Claimants may write the item # on each ofthe
documents provided:
1) UB92 — Hospital Bill. Please provide bill detail (super bill), if available.
Please drop electronic bills to paper.
2) Any documentation submitted with the UB92 to facilitate payment, e.g. invoice for
implants or correspondence.
3) Provider's h.xplanation of l3enefits for each claim.
4) Repricing sheet, if any for each claim.
Mutual Release and Settlement Agreement^ Page 13
Resolution No. 2012-RO163
EXHIBIT "B"
Provider Agreements
I . Ameril'ath Lubbock.pdf
2. Arthritis and Osteoporosis Assoc - I-ISPC.pdf
3, Attaya Nabil M - HSPC.pdf
4, BG Anesthesia - I-ISPC.pol'
5. Brogan Walter Chuck - I-ISPC.pdf
6. Brothers Jorge R - HSPC.pdf
7. Cardiologist of Lubbock PA - HSPC.pdf
8. Christus Health - HSPC.pdf
9. Clinical Pathology Laboratory - I-ISPC.pdf
10. Columbia St David - HSPC.pdf
11. Covenant Medical Group - NSPC.pdf
12. Crosbyton Clinic Hospital - 1-ISPC.pd1'
13. Dihenia Bhupesh H - I-ISPC.pdf
14. Freedom to Go - HSPC.pdf
15. Gandhi Sham - I1S1'C.pdf
16, Highland Medical Center - HSPC.pdf
17, 11111 Damon H - HSPC.pdf
18. 1-Iogan Greg N - HSPC,pdf
19, Karkoutly Ayman - I-ISPC.pdf
20. Khater Timothy - HSPC.pdf
21. Klepper, Douglas - HSPC.pdf
22. Laboratory Corp of America - IiSPC.pdf
23. Lamb Healthcare - IHSPC.pdf
24. Lampkin Douglas - HSPC.pdf
25. Laurentz David - HSPC.pdf
26. Lubbock Digestive Disease Associates - HSPC.pdf
27. Lubbock Surgical Assoc - HSPC.pdf
28. McIlroy Larry - 11SPC.pdf
29. McNeil Buck Wayne - HSPC.pdf
30. MD Anderson Cancer Center - 1-1SPC.pdf
31, Nguyen, 1-1oa (Peter) - HSPC.pdf
32, Nordyke Mark - I-ISPC.pdf
33. Ordonez Robert L - HS13C.pdf
34. Patel Mahendra N - IISPC.pdf
35. Phillips Benny - HSPC.pdf
36. Physicians Network Services - HSPC (2).pdf
37. Premier Physicians Alliance - HSPC.pdf
38. Qubty Johnny - HSPC.pdf
39. Radiation Oncology of (lie South Plains PA - I-ISPC.pdf'
40. Rauth Virginia - l-ISIyC.pdi'
41. Ravi I lima B - l ISPC.pdf
Mutual Release and Settlement Agreement Page 1h
42. Rozean Randolph (Randy) - I-ISPC.pdf
43, Sardella Paul - HSPC.pdf
44. Shoukfeh Fawwaz - HSPC.pdf
45. Southwest Medical IPA - 1 ISPC.pdf
46. Southwestern Cardiovascular Surgical Assoc - HSI'C.pdf
47. Spikes Samuel C - I ISPC.pdf
48. Support Medical.pdf
49. Texas Oncology (TOPA) - 1996 11SPC.pdf
50. Texas Orthopedics - HSPC.pdf
51. Texas Tech Physician Associates -Lubbock and Amarillo - I ISPC.pdf
52. University Medical Center - HSPC.pdf
53. Ward Sanford T - HSPC,pdf
54. Wolcott Randall D - HSPC,pdf
55. Lubbock Diagnostic Radiology - HSPC.pdf
56. MD Anderson Cancer Center - HSPC.pdf
57. Phillips Benny - HSPC.pdf
58. Physicians Network Services - HSPC (2).pdf
59. Premier Physicians Alliance - I-ISPC.pdf
60. Radiation Oncology of the South Plains PA - HSPC.pdf
61. Southwest Medical IPA - HSPC.pdf
62. System Health Providers.pdf
63. 'Texas Health System - N'FHN.pdf
64, Texas Tech Physician Associates -Lubbock and Amarillo - HSPC.pdf
65, University Medical Center - HSPC.pdf
66, Baylor - NI'HN.pdf
67, Center for Orthopedic Surgery - HSPC.pdf
68, Consultants of Infectious Diseases - HSPC.pdf
69. Covenant Health System - HSPC.pdf
70. Family Oxygen -1996 - I ISPC.pdf
71. 1 iighland Medical Center - 1 ISPC.pdf
72. Laboratory Corp of America - I ISPC.pdf
73. Laurentz David - HSPC.pdf
74, Radiation Oncology of the South Plains PA - HSPC.pdf
75, Texas Tech Physician Associates -Lubbock and Amarillo - HSPC.pdf
76. Baylor - NTTTN.pdf
77. Family Oxygen -1996 - HSPC.pdf
78. Laboratory Corp of America - HSPC.pdf
79. Laurentz David - HSPC.pdf
Other Documents
80. AAG internal quality assurance program
81. "Trilogy Claims Administration I landbook
Mutual 11clease and Settlement Agreement Page 1S
Resolution No. 2012-R0163
EXHIBIT "C"
LUBBOCK — The City of Lubbock and IlealthSmart said today that the two entities have
resolved their dispute over the administration by The Parker Group of the City's employee health
insurance program from 2004-2006.
Lubbock City iManager, Lee Ann Dumbauld, made the following statement, "Based on the
advice from our legal team we believe that this is a fair resolution that compensates the City for
the Parker Group's handling of our health care relationship. The City Council has been steadfast
in its attempt to make sure that the citizens oi' [,uhhock recover any money that the City is owed.
Today we have taken another step in that direction with the substantial amount we have
recovered."
Dan Crowley, Executive Chairman of I-lealthSmart's Board, said, "The Company's leaders and
its Board of Directors has substantially changed since the period of time in which this dispute
arose. We are a terrific Company today and are pleased we were able to work with the City
Council to resolve our differences. We look forward to opportunities in the future to have a
positive, constructive relationship with the City.
Mutual Release and Settlement Agreement ___ Page 16