West Virginia Record

Sunday, January 19, 2020

Individual defendants dismissed in VALIC litigation, lawsuit settled

By Kyla Asbury | Sep 30, 2016

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CHARLESTON – As part of a settlement agreement with the defendants, the individual defendants named in the VALIC litigation have been dismissed.

Ramona Cerra (Ward), John Cook, Greg Garrett, Roland Rich, George Edwards and Clarence Burdette were the six named individual defendants in the lawsuit, which was filed in 2008 against them and American International Group.

It was originally filed in Marshall Circuit Court, was removed twice to federal court and brought back to state court and then finally transferred to Kanawha Circuit Court, where it was brought before Circuit Judge Carrie Webster.

Harry Bell, the plaintiff’s attorney, said a settlement was reached that awarded the named plaintiff, Cheryl Dougherty, as well as other class members, money for their damages. As part of the settlement, the named defendants were dismissed from the lawsuit.

The order dismissing the named defendants was filed in January. Bell said last year, after a three-day hearing, Webster had denied the class certification. However, because he had collected plaintiff fact sheets from each of what would have been class members, a tolling agreement was made and the case was mediated where a class settlement was reached.

“You can still settle as a class even if the class certification was denied,” Bell said. “And no one objected to the settlement.”

Bell said the remaining money from the settlement in the account will be donated to Legal Aid once all claims had been paid out.

The lawsuit involved teachers who had been persuaded to switch from the state’s Retirement Board benefit plan to a new defined contribution plan in the early 1990s.

In April 2008, Dougherty, as well as other teachers and former teachers, found out in a letter from AIG that the decision to switch had not worked out as well as expected.

Dougherty "detrimentally relied on the misrepresentations of defendants as they were actually losing retirement funds with defendants' annuity, and/or that defendants' annuity would in reality perform significantly below the levels" guaranteed by the defendants, according to the suit.

"Had they maintained their previously established accounts and not switched to defendants' annuity, they would have earned significantly more over time and up to their retirement," the complaint stated.

AIG's lawyer gave system members an option to switch back, he wrote, "but at significant personal cost."

Dougherty claimed AIG recruited and trained "undisclosed, prominent representatives" to misrepresent characteristics of the annuities.

Cerra, and the other individually named defendants, met with school employees at Dougherty's place of work, “at which time said misrepresentations were made."

"Cerra led plaintiff to believe Cerra was a representative from the WV Retirement Board," the complaint stated.

The individually named defendants stated that the teachers' retirement system was in grave danger and there would be no retirement by the time they reached the age 55, according to the suit.

Bell said the retirement fund cannot go bankrupt, but that a lot of people are not aware of that.

Charles “Rusty” Webb, another of the plaintiff’s attorneys, said the defendants threw everything but the kitchen sink at them during litigation.

“Once it was clear that the defendants would have to deal with thousands of individual cases since the class certification was denied, a settlement was reached,” Webb said. “It was a good outcome given the law and facts of the case.”

Webb said it was one of the longest cases he had ever been a part of.

“I’m sure other lawyers have done longer cases, but this was definitely the longest once I have been involved with,” he said. “It was eight years. I remember the day we drove to Moundsville to file it.”

Webb said they fought hard and had a good judge who handled the case well.

“We are happy that people can now get on with their lives,” Webb said.

Kanawha Circuit Court case number: 08-C-2080

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Organizations in this Story

The Bell Law Firm, PLLCThe Webb Law Firm, PLLCState of West Virginia