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Behind the scenes at the Tri-State Crematory trial in Rome, Ga., a fierce battle has been raging between Georgia’s largest casualty insurance company and Tri-State Crematory operator T. Ray Brent Marsh. As much as $160 million was at stake if the Georgia Farm Bureau Mutual Insurance Co. had to provide coverage for the crematory’s mishandling of bodies. For that reason, the Georgia Farm Bureau sued Marsh and his late father’s estate even as it hired lawyers to defend them in the federal class action litigation. Since 1998, the Georgia Farm Bureau has underwritten a homeowner’s policy for 18 acres near Noble, Ga., owned by Brent Marsh’s parents, the late Tommy Ray Marsh and his wife, Clara. That policy included the Marsh home and “other structures,” according to court records, among them the 20-year-old crematory and a cluster of sheds and outbuildings where, two years ago, authorities discovered 339 corpses. Those discarded corpses, shipped to Tri-State for cremation, were at the center of a class action trial in U.S. District Court in Rome that abruptly ended Thursday. Late Wednesday, the Georgia Farm Bureau reached a $3.5 million settlement on the Marshes’ behalf with an estimated 1,600 family members whose relatives’ bodies were shipped to Tri-State for cremation between 1988 and 2002. That agreement removed the last two defendants from the case, Brent Marsh and his father’s estate, according to attorney McCracken K. Poston Jr. of Ringgold, Ga. Poston, a former state legislator, is defending Brent Marsh in a criminal case stemming from the discovery of the corpses. WHY THEY SETTLED The Georgia Farm Bureau’s Atlanta attorney, Charles A. Wiley Jr., on Thursday called the settlement “a compromise resolution in an effort to avoid the continuing expense of litigation.” Wiley insisted that the Georgia Farm Bureau ultimately would have been exempt from liability concerning the Tri-State corpses. But “we could take that [litigation] money and create a limited [settlement] fund,” he said. “It helps bring closure to the victims, and it’s being a good corporate citizen, frankly.” The last two of 56 funeral home defendants in the class action settled Wednesday morning, after two days of often graphic testimony. In a statement Robert H. Smalley III read on behalf of the plaintiffs after the case was resolved Thursday, the Dalton, Ga., attorney said that the total settlement fund�including contributions from the funeral homes and the Georgia Farm Bureau�totals more than $36 million. Smalley said the attorneys for the plaintiff families decided to settle because the Marshes had no money and homeowner’s insurance typically doesn’t cover intentional conduct or business activities. The more the case focused on Brent Marsh’s operation of the crematory, the less likely the chances that the homeowner’s policy would cover plaintiffs’ claims associated with the corpses, he said. As part of the settlement, the Marshes’ interest in two properties in northwest Georgia, not including the Tri-State property, will be conveyed to class members and sold. Once the criminal charges against Brent Marsh are resolved, the crematory buildings and sheds will be torn down, and the property “returned to a natural condition in perpetuity to honor the families wronged by Tri-State,” Smalley said in his statement. Though not formally a party to the class action, the Georgia Farm Bureau has provided the Marshes with defense attorneys and has been an important backroom player in settlement negotiations. Until Wednesday, those negotiations apparently had little room for compromise. Last week, after the jury was selected but before opening statements, U.S. District Judge Harold L. Murphy ordered the Marshes, their attorneys, Georgia Farm Bureau lawyers and the plaintiffs to a mandatory settlement conference, according to court records. The parties came close to reaching an agreement at that meeting, but plaintiffs’ co-counsel Robert M. Darroch said the families couldn’t settle with the Marshes until all the funeral homes had settled. WORKING WITH THE ENEMY The Marshes and the Georgia Farm Bureau have been in the awkward position of working in tandem to fight the class action in federal court while litigating against each other in Walker County Superior Court over whether the insurance company is obligated to pay any damages or a settlement. In the Walker suits, the Georgia Farm Bureau has contested whether it has any obligation to pay damages in the class action. It has sought a declaratory judgment absolving it from paying claims associated with the Tri-State corpses — despite the homeowner’s coverage it afforded the estate of Clara and Tommy Ray Marsh and renewed in 2002 even as bodies were being removed from the property. The Walker suits have revolved around the terms of the Marshes’ homeowner’s policy. Under those terms, the company offered liability coverage of $100,000 “per occurrence.” Darroch said plaintiffs intended to convince the jury that each of the approximately 1,600 bodies shipped to the crematory from 1988 to 2002 counted as a separate occurrence. Under that scenario, the Georgia Farm Bureau could have been liable for as much as $160 million. And $100,000 per corpse was not unreasonable given some defendant funeral homes agreed to pay the plaintiff families that amount for each corpse that authorities were able to identify. Attorneys representing the families have been keenly aware of the Marshes’ homeowner’s policy and last year formally intervened in the Walker cases. Earlier this week, they suggested during breaks in the trial that each uncremated corpse discovered at Tri-State should be considered a single occurrence. In a parallel criminal case, a judge determined last January that Brent Marsh is indigent, meaning that the plaintiffs’ best opportunity to collect damages from the Marshes has rested with the Georgia Farm Bureau. POSSIBLE END TO 100 SUITS Poston said Thursday that the Georgia Farm Bureau’s settlement agreement will end the Walker litigation. The omnibus settlement also should resolve more than 100 similar suits filed by relatives of the Tri-State corpses in other courts in Georgia, Alabama and Tennessee. Until Wednesday, the Georgia Farm Bureau had fought vigorously to avoid liability in the class action. Marsh defense lawyers Frank E. Jenkins III of Cartersville, Ga., and Stuart F. James of Chattanooga, Tenn., both hired by the Georgia Farm Bureau, were not authorized to enter into settlement negotiations on the Marshes’ behalf, Jenkins said last week. Wiley said he negotiated in those private settlement conferences only on behalf of the Georgia Farm Bureau. “I would not be interested in representing the Marshes, nor did I,” Wiley said, insisting that Poston alone represented Brent Marsh and his father’s estate during federal settlement talks. Poston said he had no authority to settle the class action on the Marshes’ behalf. “I can’t conceive of a scenario in which I would have the authority to tell Georgia Farm Bureau what amount to settle for because we were in adversary positions in Walker County.” POLICY LIMITS The Georgia Farm Bureau sued Brent Marsh’s parents in September 2002. The company claimed that the Marshes’ policy did not cover damage claims stemming from the discovery of the corpses because they arose out of “a business pursuit” of the insured and a “failure to render professional services” — both circumstances that constituted coverage exemptions. According to an affidavit signed by Clara Marsh, neither she nor her husband had any connection to the operation of the crematory after 1997, when her husband was incapacitated by a series of strokes and dementia. Ray Marsh died last year. Georgia’s chief medical examiner has testified that no corpses recovered on the Marsh property had been delivered prior to 1997, when Brent Marsh assumed control of the crematory. As families began suing the Marshes, the Georgia Farm Bureau provided them with legal representation. But in February 2003, a company district claims manager sent Poston a letter saying the Georgia Farm Bureau had made a mistake. Although Georgia Farm Bureau attorneys by then had made numerous appearances on behalf of Brent Marsh in suits arising from the operation of the crematory, the letter said the company provided attorneys only because “we believed that T. Ray Brent Marsh was an insured” under the provisions of his parents’ policy. “We have now become aware of matters which create doubt about whether T. Ray Brent Marsh was an insured,” the letter stated. As a result, the company sought the declaratory judgment, according to Walker court records. Poston insisted in letters to the Georgia Farm Bureau and in court filings that by assigning attorneys to represent Brent Marsh, the insurance company had accepted responsibility to cover him. As the class action trial drew closer, the Georgia Farm Bureau faced liability for a potentially huge judgment against the Marshes, but was reluctant to settle. It hoped to convince the Walker court that it shouldn’t have to pay for the crematory’s mishandling of bodies. UNDER PRESSURE TO SETTLE At the same time, pressure to cut a deal with the plaintiffs increased as the 56 funeral home defendants settled. “Negotiations were getting to the point that everybody seemed to be heading toward a trial,” Poston said. “I didn’t want that. My clients didn’t want that.” So Poston fired off a letter to the Georgia Farm Bureau placing the company on notice that if it did not attempt a settlement of the class action within the limits of the Marshes’ policy, and a jury rendered a substantial judgment against them, the family would countersue. “If there is bad faith on the part of the insurer, there’s potential liability to the insured,” he said. Poston said that Murphy’s decision to require Georgia Farm Bureau attorneys to attend a settlement conference last week�and the judge’s refusal to delay the trial for more than a day�helped persuade the insurance company to settle on the Marshes’ behalf. “The court early on set a very close date for a trial that was only moved a couple of times,” Poston said. “Towards the end, it wasn’t going to be moved for anything.” When the last of the funeral homes settled, Poston said he asked Murphy to delay the trial for several days so that “hopefully, we could get more settlement negotiations going on. “As wise as Judge Murphy was,” Poston said, “he knew better.”

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