SETTLEMENT AGREEMENT

This Settlement Agreement is made on the 5th day of July , 2017,

between Ryan Ferguson (hereinafter referred to as Ryan); Jeffrey L.

Nichols, William J. Westbrook, John R. Short, Lloyd Simmons III, Latisha

M. Stroer, Bryan E. Liebhart (hereinafter referred to collectively as

Defendants or Officers); the City of Columbia, Missouri (Columbia);

and Clarendon American Insurance Company (Clarendon).

WHEREAS, on or about March 10, 2014, Ryan filed a lawsuit styled:

Ryan Ferguson v. John Short, et.al., Case No. 2:14-CV-04062-NKL, in

the US District Court for the Western District of Missouri (hereinafter the

Lawsuit), against the Officers and other parties seeking money damages

for injury sustained by Ryan commencing on March 10, 2004, when he was

arrested, charged, and prosecuted for the Heitholt homicide, for which he

was convicted on December 5, 2005, and imprisoned through November 12,

2013; and

WHEREAS, in the Lawsuit, Ryan contended that the Officers caused

or contributed to cause personal injury, bodily injury, emotional distress, and

damage to him through a number of wrongful acts by them which resulted in

Ryans wrongful conviction for the homicide of Kent Heitholt, which

1
homicide occurred on the night of October 31/November 1, 2001, in

Columbia, Missouri; and

WHEREAS, at the time of the Officers alleged respective acts,

errors, and omissions which caused or contributed to cause injuries to Ryan

each was an employee of the City of Columbia, Missouri within its Police

Department, and acting in a law enforcement capacity within the course and

scope of their respective official duties; and

WHEREAS, the Lawsuit has reached a critical juncture, in that the

District Court denied the Officers motion for summary judgment on or

about August 14, 2015, which resulted in the Officers taking an interlocutory

appeal to challenge the District Courts order denying their affirmative

defense of qualified immunity, which interlocutory appeal resulted in a

second order by the District Court, dated January 17, 2017, explicitly

denying qualified immunity to the Officers, and a second appeal to the

Eighth Circuit Court of Appeals, which interlocutory appeal is pending at

the time the parties enter this agreement; and

WHEREAS, the Officers deny having engaged in any wrongful acts

in their respective roles in the investigation or prosecution of Ryan,

including each and every allegation of fabrication of evidence or pressuring

witnesses; and

2
 WHEREAS, the Officers deny having participated in a reckless

investigation of Ryan and state that they investigated the Heitholt murder in

a thorough, diligent and professional manner; and

WHEREAS, the Officers deny any and all other liability to Ryan; and

WHEREAS, the Officers recognize that their chances of prevailing in

the Court of Appeals on their affirmative defense of qualified immunity are

uncertain, and that if they do not prevail, that Ryan will have a jury trial in

the District Court on his claims against them, and the outcome of any jury

trial is uncertain; and

WHEREAS, Clarendon issued one or more policies of liability

coverage (the Clarendon Policy, whether in the singular or plural), naming

the City of Columbia as the named insured, with each of the Officers as

additional insureds or otherwise insured under the Clarendon Policy, which

Policy is applicable to the alleged injuries and damages Ryan sustained,

Insurance Policy No. XLA00310078, for the policy period of October 31,

2003 through October 1, 2004, which included law enforcement liability

coverage with a limit of coverage in the amount of $2,250,000.00 per

occurrence, with the actual Declarations of Coverage and Policy or Policies

to govern; and

WHEREAS, Columbia timely notified Clarendon of Ryans claims and

Lawsuit; and
3
WHEREAS, Columbia has self-insured retention under the Clarendon Policy

of $500,000 for Law Enforcement Liability, whereby Columbia is

responsible up to that amount for the costs of defending Ryans claims and

suit, and for indemnifying the Officers for any judgment against them

collectively, with the actual Declarations of Coverage and Policy or Policies

to govern; and

WHEREAS, Clarendon has accepted and acknowledged that it has a duty to

defend and indemnify the Officers, subject to the limit of its coverage and

Columbias self-insured retention duties under the Clarendon Policy and

applicable declarations of coverage; and

WHEREAS, St. Paul Fire and Marine Insurance Company, and or a

company named St. Paul Travelers Companies, Inc., and/or companies

called The Travelers Companies, together with any officers, directors,

agents, and employees of any one or more of these companies will be

collectively referred to herein as Travelers, because that is how they are

identified in a letter dated April 4, 2014, wherein Travelers denied liability

coverage for Ryans damages and refused to provide a defense to the

Officers, as more fully described below; and

WHEREAS, Travelers issued one or more policies of liability coverage

which may be applicable to the injuries and damages Ryan sustained,

4
Insurance Policy No. GP06301913, for the initial policy period of October 1,

2006 through October 1, 2007, and renewed annually for a total of five

separate one year policy periods, ending on October 1, 2011, which included

law enforcement liability coverage issued on Travelers Form 47292, as

revised October, 2002, with an annual limit Total Limit of $3,000,000.00,

Each Wrongful Act Limit of $2,000,000.00; and

WHEREAS, Columbia timely notified Travelers of Ryans claims and

Lawsuit; and

WHEREAS, on April 4, 2014, Travelers, by its authorized representative,

notified Columbia that Travelers was refusing to defend or indemnify the

Officers and Columbia, a fair copy of that Letter is attached to this

agreement and incorporated within it for all purposes, as Exhibit A; and

WHEREAS, there are other policies of insurance issued to Columbia which

do or may provide a duty to defend and indemnify the Officers, and this

agreement contemplates their existence as well; and

WHEREAS, Columbia and the Officers assert that Travelers

wrongfully denied them a defense and wrongfully denied coverage for

Ryans claims and damages, which Travelers Policy or Policies would have

provided $10,000,000.00 or more of additional liability protection for the

Officers of additional liability protection over and above that provided by

5
Clarendon; and, as a result of this wrongful denial of a defense and

coverage, the Officers have entered into this agreement in order to protect

their personal assets.

WHEREAS, the Officers have been informed by their defense counsel, and

acknowledge being aware, that as a result of the District Courts denial of

summary judgment for the officers, there is an evidentiary basis for and

material risk that, should the Lawsuit be tried to a jury it could find for Ryan

in the Lawsuit, and if a jury so finds, that based on the history of cases

brought by wrongfully convicted individuals in the District Court and

elsewhere in the United States, that their liability will almost certainly

exceed the amount of Clarendons Policy and the Citys self-insured

retention, leaving them individually exposed to an excess judgment; and

WHEREAS, Clarendon tendered the limit of Clarendons Policy to Ryan,

and Columbia tendered the remaining balance on its self-insured retention to

Ryan in exchange for a full and complete release of Ryans claims and

causes of action of every sort against the Officers; and

WHEREAS, Ryan has rejected that offer as inadequate to compensate him

for his injuries and damages,

6
NOW, THEREFORE, the Officers, Ryan, Columbia, and Clarendon, for

consideration of the mutual promises set out in this agreement, agree as

follows:

1. In order to avoid a lengthy, difficult, and uncertain trial on the issue of

liability, wherein the Officers and Ryan each have evidence in support of

their respective positions, the Officers and Ryan agree to settle the liability

portion of the Lawsuit. The Officers and Ryan further agree that District

Court may enter judgment based on this settlement by consent without

further evidentiary basis.

2. The parties waive their right to a jury trial, and agree that the District

Court may hold an evidentiary hearing on the issue of damages and

plaintiffs litigation expenses, including reasonable attorneys fees, with

Ryan and the Officers each having the right to put on evidence, to make

motions to the District Court, to object to testimony, and to propose

alternative and conflicting requests as to the amount of the judgment,

interest, litigation expenses, and attorneys fees.

3. This agreement is not contingent upon the District Court awarding

damages at all or in any set or minimum amount. The findings on damages

and all other relief which Ryan may request that the District Court decide

shall be committed by this agreement to the District Courts discretion. The

parties do agree and stipulate that any such judgment is a legal liability of
7
each of the Officers, fully enforceable against them except as set out in this

agreement.

4. Upon entry of final judgment in the District Court, regardless of the

damage judgment amount or if the District Court awards damages at all,

Clarendon and the City of Columbia agree that they shall immediately pay to

Ryan, as Ryans legal counsel requests, one or more checks in the amount of

$2,250,000.00 representing the limit of coverage on the Clarendon Policy,

together with the remaining balance of Columbias self-insured retention,

which Columbia shall reasonably verify on request of Ryans counsel.

5. The parties waive in advance their respective rights to appeal the final

judgment contemplated but not required by paragraph 3, or to submit any

authorized post-trial motions except as necessary to clarify the judgment or

to correct any perceived errors in computations or verbiage.

6. From the amounts set out above, Ryan agrees to authorize his legal

counsel to escrow $100,000.00 in her trust account for up to three years from

the date of the District Courts Judgment, which shall be available to the

Officers or Columbia in the event of any civil litigation seeking a money

judgment against them by or on behalf of any individual or entity

whatsoever arising out of any criminal proceedings, charges, or prosecutions

for the homicide of Kent Heitholt. In the event there are no such civil

proceedings commenced within three years, then the Officers claims to such
8
funds shall terminate by operation of law and the funds may be released to

Ryan, his successors or assigns.

7. Provided Clarendon and Columbia timely comply with paragraph 4,

Ryan agrees to timely file a full or partial satisfaction of judgment upon

receiving the payment or payments set out in paragraph 4. Ryan agrees to

file a full satisfaction of judgment after receiving the amounts in paragraph 4

if the District Courts Judgment is equal to or lower than the amounts set

forth in paragraph 4.

8. By execution of the agreement, Clarendon hereby consents to the

Officers entering into this Agreement under the particular facts and

circumstances of allegations of the Lawsuit, as an authorized, fair, and

reasonable settlement of Ryans claims against them based on the risk of a

judgment in excess of Clarendons coverage limit and the limit of

Columbias self-insured retention.

9. Ryan agrees that neither he nor any person, firm or corporation

claiming by or through him, shall levy execution by garnishment or

otherwise provided by law on any property, asset or right of the Officers,

Columbia, or Clarendon except as follows:

a. The assets of any insurer (other than Clarendon) or entity which

insures the Officers legal liability or otherwise has a duty to indemnify

them, including but not limited to Travelers;

9
b. The assets of any insurer, re-insurer, syndicate, individual or entity

which insures the legal liability of Travelers (other than Clarendon);

c. The proceeds of any cause of action or claim that the Officers may

have against Travelers, or any other insurer (other than Clarendon) or entity

which insures or owes a duty to indemnify the Officers for Ryans claims or

judgment, which the Officers or Columbia may possess against such insurers

or indemnitors, including but not limited to, any extra-contractual claims for

bad faith in connection with: 1) refusal to provide coverage, 2) refusal to

defend, 3) refusal to settle, or 4) any other conduct, error, omission, or act in

the process of evaluating or handling its obligations to Columbia or the

Officers.

10. From the date the Judgment described above is entered, the Officers

and Columbia will, within 15 days, assign to Ryan, all rights, claims, actions

and causes of action Columbia and the Officers have or may have against

Travelers or others arising from the actions of Travelers or any other insurer

in failing defend and cover Ryans claims and Lawsuit, and to take no part in

attempting to settle the same for the limits of Travelers Policy, or any other

claims handling conduct. Columbia and the Officers agree in accordance

with this paragraph to execute, within the aforesaid time, an Assignment in

substantial compliance with that attached hereto as Exhibit B. If any of the

Officers or Columbia contends that he, she, or it, has sustained damage as a
10
result of the conduct of Travelers or any other insurer in addition to the

amount of any judgment entered, he or she, or Columbia, may elect to

participate with Ryan in the cause of action against Travelers or any other

insurer to claim such damages.

11. Upon final adjudication or settlement of the causes of action

contemplated by this agreement against Travelers or any other insurer or

party obligated to indemnify Columbia or the Officers, whether by action to

garnish the Travelers Policy, or any claim assigned to Ryan by the Officers

and Columbia, Ryan will file a Final Satisfaction of Judgment in the

Lawsuit. Further, Ryan will execute a satisfaction of Judgment in favor of

the Officers which shall be held by the Officers attorney. Ryan hereby

explicitly authorizes the Officers attorney to file said satisfaction if more

than two years passes with no pending litigation involving any claim which

involves the issues contemplated by this agreement.

12. Partial Release: Ryan for the sole consideration of the amounts to

be paid as described in paragraph 4, does hereby and for his heirs, executors,

administrators, successors and assigns, and all persons, firms, corporations,

partnerships, or other entities related to one or any of them in any way,

releases, acquits and forever discharges Stephen Montecelli, Randy Boehm,

the City of Columbia Missouri, and all other current or former employees of

the City of Columbia (other than the Officers), Clarendon and each of their
11
agents, employees, officers, servants, successors, heirs, executors,

administrators, assigns, directors, and all other persons or entities related to

any of them in any way, and all other persons, firms, corporations,

associations, partnerships, or other entities, of and from any and all claims,

actions, causes of action, demands, rights, damages, costs, loss of service,

expenses, and compensation whatsoever, whether known or unknown, which

Ryan has now or which may hereafter accrue, including, but not limited to,

any and all claims, actions, causes of action, demands, rights, damages,

costs, loss of service, expenses, and compensation on account of or in any

way growing out of any and all known and unknown, foreseen and

unforeseen bodily and personal injuries and property damage and the

consequences thereof resulting or to result from the accident, casualty or

event which is more particularly described above. This Partial Release shall

not in any fashion release or discharge any claim, cause of action or damage

which Ryan has against the Officers, or the Judgment which the District

Court may enter for Ryan against the Officers, except to the extent of Ryans

obligation to execute and file documents according to the provisions of

paragraphs 7, 9, and 11, as Ryan recovers from or concludes litigation

against Travelers and possibly other insurers.

Reservation of Claims: Ryan hereby reserves and preserves any and all

claims against Clarendon and the City of Columbia for failure to pay the
12
amounts described in paragraph 4, including any and all breach of contract

actions, motions to enforce settlement agreements, or other cause of actions

pertaining to any alleged failure to pay the amounts set forth in paragraph 4.

Mutual Release: Ryan and the Officers in consideration of $10.00 and

other valuable consideration, the receipt of which is hereby acknowledged,

release any all claims that they may have, both now or in the future,

regarding their respective opinions about the Heitholt murder investigation

and each others conduct. Except as set forth herein, Ryan hereby reserves

and preserves any and all claims against the Officers set forth the in the

Lawsuit and nothing in this paragraph alters those claims whatsoever.

13. Ryan, the Officers, Columbia, and Clarendon agree that this

Agreement is contractual in nature and shall be construed pursuant to the

laws of the State of Missouri, with venue in any enforcement proceeding

between the parties to be in the Circuit Court of Cole County, Missouri.

14. This Agreement shall be binding on the parties respective officers,

directors, employees, legal representatives and successors in the case of

Clarendon; the elected and appointed officials, employees, legal

representatives and successors of Columbia; and the heirs, assigns, and legal

representatives in the case of Ryan and the Officers. In the event of the

death or disability of Ryan or any of the Officers, any proceeding

contemplated by this agreement shall proceed in and through a duly

13
appointed legal representative for that purpose. The parties hereby agree

and authorize the Circuit Court of Cole County, Missouri to make any such

appointment and the parties consent to venue in the Circuit Court of Cole

County, Missouri.

15. The parties agree that this Agreement is specifically authorized by

Missouri law, including Section 537.065, RSMo., as in effect at the time of

the execution of this agreement.

16. The parties agree that in the event that this Agreement or any

provision of this Agreement shall be invalidated by any court, the remaining

terms of this Agreement shall remain in full force and effect.

17. Columbia, Clarendon, and the Officers are aware that Michael G.

Berry, of the law firm Berry Wilson, LLC, who previously represented a

different defendant in the Lawsuit, has assisted and may continue to assist

Ryans counsel in connection with this agreement and proceedings under it,

and that he may eventually serve as counsel for Ryan and others in

proceedings that this agreement contemplates. They acknowledge that there

is no conflict of interests in his doing so, or alternatively, they knowingly

and with full information and advice of counsel waive the same to the extent

a conflict exists.

18. The parties acknowledge that they enter into this Agreement

voluntarily and without any collusion and/or coercion from any party to the
14
Lawsuit or any other person, firm or corporation including Travelers, and

that each party has been fully and regularly advised as to every aspect of this

agreement and its effect, present and future.

19. The effective date of this Agreement shall be the date of when the last

signature is obtained or dated. The parties acknowledge that separate

signature pages are appropriate for convenience and for efficient execution.

The parties stipulate that facsimile signatures, so long as duly acknowledged

in person, are fully valid and that a photocopy or facsimile copy of this

agreement is fully valid for all purposes, including any legal proceedings

under it. To foreclose any future issue over this agreement by Travelers or

any other third party, the parties agree to prepare two duplicate originals of

this agreement, each of which is valid.

20. This agreement may be recorded in the Office of the Recorder of

Deeds in any county.

15
STATE OF H ,SSQUr' i'

COUNTY OF &cn-e....
BEFORE ME, a Notary Public in and for the county and state aforesaid, personally
appeared, known to me to be the individual named herein and that ~ is of lawful age and
executed tbe foregoing document as k free and voluntary act and deed.

fNWITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, the
date last above written.

t O\)J<tl--=t 8"' _
My Commission Expires
C~IAMCLANE
My Commission Expires
October 28, 201~
Boone COOlly
Commission 114631131

17
 Lloyd Sifuoons III

STATE OF Y, l, I rrrrr* 7

)ss.
COUNTY OF )

BEFORE ME, a Notary Public in and for the county and state aforesaid, personally
appeared, known to me to be the individual named herein and that Y+L is of lawful age and
executed the foregoing document as ll\S free and voluntary act and deed.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, the
date last above written.

4 AA al
My Commission Expires

T7
 The~MIL
By: Mike Matthes
Title: City Mana~r f "'7..........--
Date: '1-:- --- 1
Attest:

Sheela Amin, City Clerk

Approved as to Form:

STATE OF MISSOURI )
)ss.
COUNTY OF _BOONE )

BEFORE ME, a Notary Public in and for the county and state aforesaid, personally
appeared Mike Matthes, City Manager of the City of Columbia, Missouri, known to me to be
the individual named herein and stated that he is of lawful age and executed the foregoing
document as his free and voluntary act and deed on behalf of said City for the purposes stated
therein, doing so with the full authority as an official of the City of Columbia, Missouri.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, the
date last above written.

H~ATHER L COLE
Notary Public Notary Seal
Stitt of Mi11our1, Boont County
Comm1111on # 12287591
t\9=9~
NOTARY PUBLIC
d 'QI~
My Commission Explrt1 Jan 3, 2020

\ -~-20
My Commission Expires

19