Carton v. LNU, et al.

Filing 24

REPORT AND RECOMMENDATIONS by Chief Magistrate Judge Karen B. Molzen. Objections to R&R due by 7/24/2017. Add 3 days to the deadline if service is by mailing it to the person's last known address (or means described in Fed. R . Civ. P. 5(b)(2)(D) and (F)); if service is by electronic means, no additional days are added. (Fed. R. Civ. P. 6(d); Fed. R. Crim. P. 45(c).) Attachments: (1) Attachment A - Carton agreement with LMFS (2) Attachment B - Carton agreement with Pomeranz (3) Attachment C - Pomeranz agreement with LMFS (eh)

Litigation Funding Agreement

LITIGATION FUNDING AGREEMENT

J_

This Litigation Funding Agreement ("Agreement") is entered into this
day of _l_I_, 2016, by
and between Alyssa Carton ("Claimant") and Litigation Management and Financial Services, LLC
("Company") (collectively referred to herein as "Parties") as follows :

RECITALS
1. On July 26, 1990, the Americans with Disabilities Act ("ADA") was signed into law. The
ADA is a comprehensive civil rights law prohibiting discrimination on the basis of disability.
a. The ADA contains four sub-parts. The first three sections of the statute, Titles I, II, and
IIJ, bar discrimination on the basis of disability in different areas of public life. ADA Title
III addresses disability discrim ination in public accommodations, defined to include
places of educat ion including post-graduate private schools, and bars disability
discrimination by "any person who owns, leases (or leases to), or operates a place of
public accommodation."§§ 12181 (7)(J), 12182. The enforcement provision of Title III,
§ 12188, incorporates the remedies of Title II of the Civil Rights Act, 42 U.S.C. § 2000a-

3.
2. Title III of the ADA contains a list of general activities that it defines as discrimination: the
denial of an opportunity to participate, 42 U.S.C. §§ 12182(b)(l)(A)(i), 12182(b)(l)(C); the
provision of an unequal benefit, id. § l 2 l 82(b)(1 )(A)(ii); and the provision of a separate
benefit, unless doing so is necessary to provide a benefit that is as effective as that provided to
others. Id. § l 2182(b )(1 )(A)(iii).llFurthermore, the statute requires benefits provided to people
with disabilities to be afforded in the most integrated setting appropriate to the needs of the
individual. Id. § 12182(b)( 1)(B).
3. Title 1II of the ADA prohibits discrimination on the basis of disability by those who own or
operate places of public accommodation. 42 U.S .C. § J2182(a). In enacting the ADA,
Congress found that "historically, society has tended to isolate and segregate individuals with
disabilities." 42 U.S.C. § 12 101(a)(2). The ADA' s legislative history states that " [i]ntegration
is fundamental to the purposes of the ADA. Provision of segregated accommodations and
services relegate persons with disabilities to second-class citizen status." H. Rep. 101-485(III),
101st Cong., 2d Sess., at 56, reprinted in 1990 U.S.C.C.A.N. 445 , 479. " ' [T]he goal [is to]
eradicat[e] the "invi sibility of the handicapped." ' Separate-but-equal services do not
accomplish this central goal and should be rejected." Id. at 50, 1990 U.S.C.C.A.N. at 473.
The ADA provides a "broad mandate" to "eliminate discrimination against disabled
individuals, and to integrate them ' into the economic and social mainstream of American life.'
" PGA Tour, Inc. v. Martin, 532 U.S. 661 , 675, 121 S.Ct. 1879, 149 L.Ed.2d 904
(2001) (quoting H.R.Rep. No. 101-485 , pt. 2, p. 50 (1990) ,reprinted in 1990 U.S.C.C.A.N.
303, 332).
4. This integration mandate is found in two sections of the statute. Title III makes it
discriminatory to provide individuals with disabilities "with a good, service, facility, privilege,
advantage, or accommodation that is different or separate from that provided to other
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Litigation Funding Agreement

individuals, unless such action is necessary" to provide facilities, accommodations and the like
that are as effective as those provided others. 42 U.S.C. § 12182(b)(l)(A)(iii). lt also requires
that "[g]oods, services, facilities, privileges, advantages, and accommodations shall be
afforded to an individual with a disability in the most integrated setting appropriate to the needs
of the individual." Id., § 12182(b)(l)(B).
5. Section 303 of the ADA required that all facilities designed and constructed after January 26,
1993 must be "readily accessible to and useable by" individuals with disabilities. 42 U.S.C. §
12183(a)(l). The statute further instructed the DOJ to adopt implementing standards and
regulations. 42 U.S .C. § 12186(b). On July 26, 1991 , the DOJ adopted the Americans with
Disabilities Act Accessibility Guidelines as the 1991 Standards. 28 C.F.R. § 36.406(a) (1991).
The 1991 Standards are now published as Appendix D to title 28, part 36 of the Code of Federal
Regulations. On September 15, 2010, the DOJ amended its regulations and adopted the 2010
Standards.
6. The ADA also provides a private right of action for preventative relief, including an
application for a permanent or temporary injunction or restraining order for 'any person who
is being subjected to discrimination on the basis of disability in violation of Title III." 42
USC§§ 12182(a)(I), 2000a-3(a)).
7. Virtually all individual States have passed legislation similar in intent and scope to the ADA.
8. Private enforcement suits are the primary method of obtaining relief under the ADA.
9. The Claimant wishes to pursue Claims including private rights of action against places of
public accommodation with barriers to people with disabilities.
10. Claimant wishes to pursue Claims on their own behalf, but with the understanding that
enforcement of Claims may cause compliance by places of public accommodation which may
lead to the removal of barriers to other persons with disabilities who have not yet, or could
not bring their own claims.
11. Claimant wishes to pursue the Claims. However, Claimant does not wish to carry the financial
burden of the litigation, nor the risk associated with legal costs.
12. Company is not entitled to or obliged to provide legal advice to Claimant. The preparation
and conduct of litigation which is funded by Company is the responsibility of the Claimant
and the Claimant's lawyer.
NOW, THEREFORE, the Parties enter the following
AGREEMENT

1. Object and Limitations of Engagement: This Agreement is limited to providing funding to
Claimant and to Claimant's attorney for legal services. The Claimant does not wish to bear
the litigation risk in pursing the Claims. For this reason, the Parties have agreed that
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Litigation Funding Agreement

Company shall bear the costs so that Claimant may pursue the Claims. This cooperation
commences on the date indicated above in this Agreement and ends once the Claims have
been determined and the Proceeds have been distributed or this agreement is terminated by
Company. If the Claims are successful, the Proceeds will be distributed in accordance with
this Agreement.

2. Duties and Representations
a. The Claimant represents:
1. that it has the full right, power and authority to pursue the Claims and that
it has not sold, transferred, assigned, or otherwise disposed of its interest in
the Claims;
ii. there is no agreement with a third party preventing the Claimant from
assigning the Claims or its financial interest in the Claims and the Claimant
is free to assign Claims or financial interests without obtaining the consent
of a third party;
rn. the Claimant is not aware of any circumstances other than those listed in the
recital above, which could affect the validity or enforceability of the Claims.
iv. The documents which the Claimant has supplied, or will supply, provide a
true, accurate and complete representation of the circumstances giving rise
to the Claims;
v. There is no other dispute between the Claimant and the Opponent, whether
past, current, or future, which could have an impact on the Claims;
v1. There are no enforceable judgment against the Claimant which may result
in insolvency proceedings being commenced against the Claimant.
b. Claimant Duties
i. Claimant shall carry out all appropriate and necessary acts which support
the favorable determination of the Claims with reasonable care and will
fully support the proceedings
11. Claimant shall obtain Company' s consent in advance ofincurring costs. The
Claimant shall pass this obligation on to its lawyer.
iii. Claimant shall obtain Company' s consent before disposing of the Claims.
iv. Claimant may only discontinue the Claims with the prior consent of
Company.
v. Claimant is obliged at the request of Company to pursue enforcement of
any judgments obtained.
vi. Claimant hereby releases its lawyer from any duties of confidentiality as
concerns communication and disclosure between the lawyer and Company
of information relating to the Claims.
vii. Claimant shall inform Company promptly and on an ongoing basis via its
lawyer on the status of proceedings and shall send to Company, promptly
and without need for Company request, of new circumstances which have
come to light and which have an impact on the assessment of the merits or
the validity of the Claims or the legal risk. The Claimant shall pass on these
obligations to its lawyer. The Claimant agrees to execute a separate power
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Litigation Funding Agreement

3.

of attorney which shall entitle Company to request and view official and/or
court documents.
c. Company Duties
i. Company shall carry out a review free of charge to assess whether the
Claims are capable of funding. Company shall not provide legal advice to
Claimant. Company's review is purely for its own benefit and for the
purposes of assessing the prospects of success of the Claims. Company is
not obliged to justify its acceptance or rejection of any case.
11. Funding: Subject to the terms set out in this agreement, Company shall pay
the costs of pursuing the Claims including costs of legal advice and
representation, court fees, costs arising from a court order in relation to
evidence and costs payable to the Opponent, providing the costs arise after
this agreement comes into force. Costs of legal advice and representation
must be pre-approved by Company including a review of Claimant' s
attorney-client agreement. Company shall make such payments for costs
directly to Claimant' s lawyer. The Claimant hereby authorizes its lawyer to
accept receipt of the payments.
iii . Subject to the terms set out in this agreement, Company shall pay to
Claimant $50.00 for each of Claimant's claims that result in a filed
complaint initiating a civil action. This advance of costs is not required to
be repaid to Company and is to be kept by Claimant regardless of the
outcome of the action
1. Pay Schedule: Company shall pay to Claimant $50.00 for each of
Claimant's claims that result in a filed complaint within twenty-one
(21) calendar days of filing a complaint.
1v. Company shall not be obligated to pay Claimant's travel costs, transfer fees
or other bank charges, costs arising from a set-off, or any other costs or fees
not specifically outlined in this agreement.
v. Company shall pay the prescribed costs of enforcing a judgment where
Company deems enforcement to be necessary and to have sufficient
prospects of success.
Distribution of Proceeds
a. From the Proceeds of any successful Claims, Company shall first be entitled to
deduct all costs which Company has already incurred and any costs which it has
yet to pay in accordance with this Agreement.
b. Claimant shall be entitled to all remaining Proceeds.
c. Claimant hereunder acknowledges the existence of an attorney-client agreement.
This Agreement, including this section discussing the distribution of Proceeds, shall
not supersede any promise of payment made between Claimant and his/her
attorney.
d. Claimant hereunder fully consents and agrees for Company to pay to Claimant's
attorney all or any portion of Claimant' s promised fee to Claimant' s attorney as
agreed in Claimant's attorney-client agreement.
e. The term Proceeds shall include financial gains (including interest) which the
Claimant' s attorney is able to recover as a result of the court's or any other official
judgment, a court approved or out-of-court settlement, or an admission by the

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Litigation Funding Agreement

Opponent. Proceeds, as described in this Agreement, shall only refer to monetary
funds and shall not include causes of action for the Claimant's benefit, financial
gain which is the result of being released from a claim, or the expiration of a claim
against Claimant.
f. Each party shall be responsible for the taxation of its share of the Proceeds.
g. Company, in its judgment, is entitled to determine the date on which Proceeds are
to be paid, but shall be paid no later than 60 days after Proceeds are in the control
of Claimant, Claimant' s agent, or Claimant's attorney.
h. The Claimant is obliged to provide information to Company, whether requested
by Company or not, confirming the receipt, the nature and the value of any
Proceeds, including any pecuniary advantage obtained as a result of the successful
Claims funded by Company.
i. Payment of the Proceeds shall be made into the Claimant's lawyer's client
account and shall remain held until the distribution of the Proceeds has been
calculated and approved by Company. The Claimant shall require all Proceeds to
be paid directly to its lawyer.
4. Assignment of Claims to Company as Security
a. The Claimant shall assign all Claims, rights to claim costs and all subsidiary
rights to Company by way of security if at any point an assignment agreement is
requested by Company
b. The Claimant shall, if so required by Company, execute a deed or other notarized
document which gives effect to such assignment.
c. The Claimant shall, if so required by Company, execute and convey power of
attorney to Company.
5. Confidentiality
a. All discussions between Company with Claimant, Company with Claimant' s
attorney, and any of Company' s representative with any of Claimant' s
representatives, including this agreement are confidential and intended to remain
confidential. Except as expressly permitted herein, The Parties agrees not to
disclose the existence of this Agreement, any of its terms, or any other details
learned while engaged with one another, to any person or entity not a party to this
Agreement excepting the Parties' legal representatives. The Parties shall maintain
in strict confidence any and all information disclosed. The Parties agree that if
asked about directly, the Parties may state that they entered into a confidential
agreement for litigation support.
6. Termination
a. Claimant shall only be entitled to terminate this agreement for good cause. The
Parties agree that improved prospects of success in relation to the Claims or a
change in Claimant's financial standing are not good causes. Death of Claimant
shall not result in a termination of this agreement. All rights and obligations under
this agreement shall pass to the Claimant' s personal representatives.
b. Following termination of this agreement by Claimant, Company, at its own risk
and for its sole benefit may continue the proceedings without the participation of
Claimant. Company shall be entitled to require Claimant to continue proceedings
if Company does not wish to continue proceedings in its own name and if
Company does not wish to disclose the fact that the proceedings are being funded.

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Litigation Funding Agreement

In this case, Company will indemnify Claimant for all legal costs associated with
the proceedings and the Proceeds shall be paid in full to Company.
c. Company has taken on the legal costs risks known as of the date of this
Agreement. In the event that new circumstances come to light or are brought to
Company's attention for the first time, and as a result of such circumstances the
prospect of success are lower than at the time of entering into this agreement,
Company shall be entitled to terminate this agreement in whole or in part without
notice and to cease any further funding of Claimant's Claims.
d. In any event, Company shall be entitled to terminate this Agreement in whole or
in part at the conclusion of proceedings at each instance and to cease funding
from that point onwards.
e. In the event of termination of this agreement by Company, Company shall pay the
costs incurred to the date of termination and which apply to discontinue the
Claims or part of the Claims immediately and most cost-effectively. The Claimant
shall be entitled to continue with the proceedings to pursue the Claims at its own
costs. In the event that the Claimant succeeds, the Claimant shall reimburse
Company for all costs incurred by Company.
f. Company shall release or return any such securities as have been provided to
Company once Company has no further interest in or reason to require a security.
7. Settlement
a. Claimant affirms that it has had full and lengthy opportunity to discuss with
Company the options for and likelihood of settlement of Claims. Claimant
believes that settlement of Claims gives the greatest chance that defendants will
comply with the ADA.
b. Claimant therefore gives Company full and complete authorization to negotiate
and accept any settlements of Claims. Claimant agrees to cooperate and consent
to any settlement deemed reasonably by Company.
c. Claimant agrees to direct his/her attorney to settle Claims as directed by Company
if so directed .
d. Claimant and Company jointly reaffirm their mutual goal to bring about ADA
compliance through the filing of complaints asserting Claimant' s Claims, and
entering into settlement agreements with covenants to rectify ADA violations.
8. Dispute Resolution
a. In the event of disagreement arising during the negotiation, execution or
performance of this agreement, the Parties shall first attempt to find an amicable
solution by submitting a notice of dispute in writing.
b. If the Parties are unable to find an amicable solution within 30 days of a notice of
dispute, the Parties agree to submit to a private and confidential mediation and
shall mediate the matter no later than 120 days after the date of the notice of
dispute.
c. If the Parties are unable to successfully mediate any dispute the parties agree to
submit any claims or causes of action to private binding arbitration.
d. Each party shall bear their own costs at mediation and shall share the costs of the
mediator.
e. If arbitration is necessary, the successful party shall be entitled to recover from
the losing party its costs, fees, and expenses related to the arbitration.
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Litigation Funding Agreement

9. Miscellaneous
a. This agreement constitutes the entire Agreement between the parties and
supersedes and terminates any previous agreements whether written or oral. Any
modification or variation to this Agreement must be in writing.
b. If any portion of this agreement is found to be void or unenforceable or a
provision of the Agreement is missing, the remaining provisions of this
Agreement shall continue in full force and effect.
c. The Parties agree that this agreement shall be governed by Arizona law with
venue of any dispute resolution proceeding to take place in the state and county in
which Claimant resides at the time the Agreement was executed.

The parties have executed this Agreement as of the date first written above.

Name: Alyssa Carton
On behalf of Li igation Management
and Financial Services, LLC

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Litigation Funding Agreement

9. Miscellaneous
a. This agreement constitutes the entire Agreement between the parties and
supersedes and terminates any previous agreements whether written or oral. Any
modification or variation to this Agreement must be in writing.
b. If any portion of this agreement is found to be void or unenforceable or a
provision of the Agreement is missing, the remaining provisions of this
Agreement shall continue in full force and effect.
c. The Parties agree that this agreement shall be governed by Arizona law with
venue of any dispute resolution proceeding to take place in the state and county in
which Claimant resides at the time the Agreement was executed.

The 1>arties have executed this Agreement as of the date first written above.

Name:

Fi' GM~
L: i;::uon

Qt

On behalf of

Managemen

and Financial Services, LLC

/

7 f Page

Name: Alyssa Carton