A $21 million settlement has been approved in a class action suit against the United Methodist Church and its agencies by elderly residents and former residents of a bankrupt, church-run nursing home chain.
Judge James L. Focht of San Diego Superior Court called the settlement an "extraordinary result" for the plaintiffs, about 1,400 persons who bought lifelong contracts for housing and medical care only to be told they had to pay more when the chain, Pacific Homes, ran into financial trouble.
Under the settlement, about $5 million is to go to the elderly parties to the class-action suit to offset damages suffered when Pacific Homes reneged on its lifelong care contracts. Some had paid as much as $100,000.
The judge also approved payment of $4.3 million in legal fees -- including $2,278,000 for the plaintiffs' main firm, $1,122,000 for another firm appearing for the plaintiffs and $900,000 for another that represented an intervener in the lawsuit.
That money is to come out of the $21 million, which the United Methodist Pacific and Southwest Conference has agreed to make available beginning with $7 million deposited in an escrow account Monday.
The judge also approved expenses of $189,416 for plaintiffs' attorneys, but that amount is to come out of a separate fund set up by Pacific Homes' accountants, who settled their part of the suit before trial.
The way for final settlement was cleared last week when the Pacific and Southwest Conference, including nearly 200,000 Methodists in Southern California, Southern Nevada, Arizona and Hawaii, accepted the terms.
The conference plans to raise the $21 million by shifting $1 million from its own budget to Pacific Homes, by delaying a $6 million ministers' pension drive, by cutting down on costs in transferring pastors, curtailing meetings and generally trimming expenses.