Ever since the initial leak of the settlement documents in 2004, speculation has spread that it was in fact one or more insurance carriers that ultimately negotiated and paid for the settlement, not Michael Jackson himself. In a 2005 legal document filed in court by Michael Jackson's defense, this theory grew feet.
When Diane Dimond initially leaked the settlement documents in the summer of 2004, mysteriously enough the only eight pages missing from it were the pages that specifically described the payment agreements and conditions. In place of these pages, Diane Dimond (or the editor of the posted documents) wrote:
[Editor's note: The terms of the settlement payment was not disclosed. Please note this section and the next eight redacted pages pertaining to the settlement payment were subsequently omitted for the reader's convenience.]
However, in the written report included alongside the actual settlement agreement documents as published on CourtTV.com, Diane Dimond stated that "It is unknown whether Jackson paid the settlement from his own pocket or if it was funded by his insurance company." In addition, on a Web chat conducted by Diane Dimond on June 16, 2004, the following questions and answers were given which seemed to strengthen the possibility of insurance involvement:
Question from jenni: Diane, do you know if the insurance paid the whole amount of the settlement?
Diane Dimond: No, there's no way to tell. But I'm told that maybe more than one insurance company was involved.
...
Question from Angel: Did the insurance company do an investigation of their own before they agreed to pay?
Diane Dimond: I have no way of knowing that, and I don't know which insurance company was involved. I wish I did.
...
Question from Incognito: Did you say that an insurance company paid the money? What kind of insurance would that be?
Diane Dimond: Note that Jackson agreed to pay on the allegation of negligence. Check out your homeowner's policy. If you negligently leave out a banana peel that someone trips and falls over, your insurance company will pay out for your negligence. They will not, however, pay out if you committed a crime. That's probably why he agreed only to the negligence claim. So his insurance company would have to kick in.
Little more was said about the insurance settlement theory until the trial of 2005. On March 22, 2005, a motion was filed in court on behalf of Michael Jackson titled: "Mr. Jackson’s Memorandum in Support of Objection to Subpoena to Larry Feldman for Settlement Documents." This legal motion was released to the public on April 18, 2005. Within said court document, numerous statements were made that an insurance carrier had negotiated and settled the 1993 civil case. The relevant section from the document is transcribed below:
C. The 1993 Civil Settlement was Made by Mr. Jackson's Insurance Company and was Not Within Mr. Jackson's Control.
The plaintiff seeks to introduce evidence of the civil settlement of the 1993 lawsuit through the testimony of Larry Feldman, attorney for the current complaining family and attorney for the plaintiff in the 1993 matter. The settlement agreement was for global claims of negligence and the lawsuit was defended by Mr. Jackson's insurance carrier. The insurance carrier negotiated and paid the settlement, over the protests of Mr. Jackson and his personal legal counsel.
It is general practice for an insurer to be entitled to control settlement negotiations and the insured is precluded from any interference. Shapero v. Allstate Ins. Co., 114 Cal. App.3d 433, 438 (1971); Ivy v. Pacific Automobile Ins. Co., 156 Cal. App.2d 652, 660 (1958)(the insured is precluded from interfering with settlement procedures). Under the majority of contracts for liability insurance, the absolute control of the defense of the matter is turned over to the insurance company and the insured is excluded from any interference in any negotiation for settlement or other legal proceedings (emphasis added). Merritt v. Reserve Ins. Co., 34 Cal. App.3d 858, 870 (1973). An insurance carrier has the right to settle claims covered by insurance when it decides settlement is expedient and the insured may not interfere with nor prevent such settlements. 44 Am. Jur. 2d, Insurance, sec. 1392, at 326-27 (rev. ed 2002)
In Brown v. Guarantee Ins. Co., 155 Cal. App. 2d 679, 685 (1957), the court stated:
"It is generally understood that these are rights and privileges which it is necessary for the insurer to have in order to justify or enable it to assume obligations which it does in the contract of insurance. So long as recovery does not exceed the limits of the insurance, the question of whether the claim be compromised or settled, or the matter in which it shall be defended, is a matter of no concern to the insured."
The insurer's right to control the defense of any action against the insured includes the right to negotiate settlement, and to otherwise conduct defense of the action. The consent of the insured is usually superfluous. "Liability policies usually specifically prohibit the insured from settling or negotiating for a settlement or interfering in any manner with the defense except upon request of the insurer unless the insurer is in breach of contract. By accepting a liability insurance policy, the insured is bound by these terms." (Croskey, et. al, Cal. Practice Guide: Insurance Litigation 3, supra, section 12:207, p. 12B-2.) "For this reason, it is common practice for insurance counsel and an adjuster to handle the negotiation of insurance funded settlements with out the superfluous involvement of a fully protected insured." Fiege v. Cooke, __ Cal. App. 4th __ (2004).
It is unfair for an insurance company's settlement to be now held against Mr. Jackson or for the Settlement Agreement to be admitted as evidence of Mr. Jackson's prior conduct or guilt. Mr. Jackson could not control nor interfere with his insurance carrier's demand to settle the dispute. No admission against interest nor acknowledgment of criminality can be inferred regarding Mr. Jackson from the act of the insurance carrier in the settling the litigation.
It is worth mentioning that full details about the settlement negotiation and payment method(s) have not yet been disclosed to the public. Over the years, various other reasons and explanations have been given by Michael Jackson and his attorneys as to why the settlement was made, in addition to the insurance claim above. Several of these other explanations can be found in the following section. Sources close to the Chandler family, including Ray Chandler, told the press back in 1998 that the settlement was actually being paid out over a period of 40 years, and that payments first began in August-September of 1998 (there is no confirmation of this theory).
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Since the 1993 settlement, Michael Jackson has spoken very little about the conditions set forth within the agreement due in part to the confidentiality of said agreement. However, he and his attorneys have spoken numerous times, in general terms, about the motives behind the civil settlement.
While many people ask why an innocent many would settle a civil case as such, few ask why an alleged victim and his family would push for a civil settlement with a high profile attorney and then refuse to testify criminally against said abuser in a court of law. As Katherine Jackson asked, "If you think about it yourself, and Michael molested your son, would you ask for money? Would you?"
The general reasons that Michael and at least one of his attorneys has given as to why the civil case was settled in 1993, was that he just wanted to put the nightmare behind him. At the time, his attorneys advised him that the proceedings could drag on for seven years and that there was no guaranteed outcome in the court of law. This reason, combined with the fact that Michael Jackson was on tour and bringing in huge amounts of money at the time (enough to make any personal or insured settlement amount look small in comparison), is why Michael Jackson has stated he agreed to settle the civil portion of the case. Quotes from various interviews are below.
On the Primetime Live interview with Diane sawyer (which aired in the United States on June 14, 1995), Diane Sawyer asked Michael Jackson about the 1993 civil settlement. The conversation went as follows:
Primetime Live With Diane Sawyer
June 14, 1995
Sawyer: Why did you settle the case, then? Why did you settle the case? And, it looks to everyone as if you paid a huge amount of money, to get silence.
Jackson: Well, most of that's folklore. I talked to my lawyers, and I said, "Can you guarantee me that justice will prevail?" And they said, "Michael, we cannot guarantee you that a judge, or a jury will do anything. And with that, I was like catatonic. I was outraged. Totally outraged! So what I said, "I have got to do something to get out from under this nightmare." All these lies, and all of these people coming forward to get paid. And these tabloid shows. Just lies. Lies, lies, lies! So, what I did--we got together again with my advisers, and they advised me; it was hands-down a unanymous decision, "Resolve the [civil] case. This could be something that could go on for seven years!" He said, "Let's get it behind us." Get it--
Sawyer: Can you say how much?
Jackson: It's not what the tabloids have printed. It's not all of this crazy, outlandish-- no, it's not at all. The terms of the agreement are very confidential... The idea, it just isn't fair what they put me through. Because there wasn't one piece of information that said I did that in any way. They turned my room upside down, went through all my books, all my video tapes, all my private things, and they found nothing. Nothing, nothing that could say, "Michael Jackson did this." Nothing! To this day, nothing. Still, nothing. Nothing, nothing, nothing.
On the Martin Bashir documentary, Living With Michael Jackson (which aired in the United States on February 6, 2003), Michael Jackson was questioned about the 1993 financial settlement. While much of the questions entered areas of confidentiality, the televised conversation went as follows:
Living With Michael Jackson
February 6, 2003
Bashir: The reason that's been given, for why you didn't go to jail, was because you reached a financial settlement with the family.
Jackson: Yeah, yeah. I don't want to do a long, drawn out thing on T.V. like O.J., and all that stupid stuff. And, it wouldn't, it wouldn't look right. I just said, "Look, get this over with. I want to go on with my life. This is ridiculous. I've had enough. Go!"
Bashir: I questioned him much further. But the confidentiality agreement he signed means we cannot show that part of the interview. My questions had upset him deeply.
In a press release dated June 17, 2004, Michael Jackson expressed his disgust with the stream of prosecution-sided leaks that were pouring out in the media without consequences. In the statement, Michael expressed regrets of the prior civil settlement(s).
Statement of Michael Jackson Regarding 1993 Proceedings, Gag Order
June 17, 2004
I respect the obligation of confidentiality imposed on all of the parties to the 1993 proceedings. Yet, someone has chosen to violate the confidentiality of those proceedings. Whoever is now leaking this material is showing as much disrespect for the Santa Maria Court's "gag order" as they are a determination to attack me.
No action or investigation has been taken to determine who is leaking this information or why they are permitted to violate the law in such a manner. I respectfully request that people see these efforts for what they are.
These kinds of attacks and leaks seek to try the case in the press, rather than to a jury who will hear all of the evidence that will show that I did not, and would not, ever, harm a child. I have always maintained my innocence, and vehemently denied that these events ever took place. I reluctantly chose to settle the false claims only to end the terrible publicity and to continue with my life and career.
I ask all of my neighbors in Santa Maria, the people whom I give my loyal trust and admiration, to keep an open mind, and give me a chance to show that I am completely innocent of these charges. I will not let you down.
In a press statement released to the media on September 3, 2004, Michael Jackson again commented on past civil settlements (relating to the Chandler and Francia family):
Michael Jackson Press Release Regarding Past Settlements
September 03, 2004
It is unfortunate that yet, again, I must respond to untruths and sensationalism.
Years ago, I settled with certain individuals because I was concerned about my family and the media scrutiny that would have ensued if I fought the matter in court.
These people wanted to exploit my concern for children by threatening to destroy what I believe in and what I do. I have been a vulnerable target for those who want money...
In a press conference held by attorney Thomas Mesereau on September 17, 2004, he addressed the passed settlements, why they may have occured, and how much Michael Jackson now regrets making such settlements as it has opened the doors for countless frivilous civil lawsuits by opportunistic individuals. The statement, in part, is transcribed below:
Statement of Attorney Thomas Mesereau; Lead Counsel For Michael Jackson
September 17, 2004
Mr. Jackson has been a target of frivolous lawsuits throughout his career. To date, well over a thousand ridiculous lawsuits have been filed or threatened against Mr. Jackson for all kinds of reasons by those who sought to obtain money by exploiting his achievements and love for people. None of these claims involved allegations that he ever harmed a child. However, they involved, for the most part, creative and outrageous attempts to take money from Mr. Jackson. Throughout his career, Mr. Jackson's desire to create and help our world has been subjected to efforts to exploit, undermine and take advantage of this wonderful human being.
Mr. Jackson has been repeatedly advised by those who stood to make fortunes in his business affairs to pay money, rather than face certain false allegations. As a result, many years ago, he did pay money, rather than litigate, two false allegations that he had harmed children. People who intended to earn millions of dollars from his record and music promotions did not want negative publicity from these lawsuits interfering with their profits. These two false allegations must be placed in a proper perspective. Mr. Jackson has interacted with millions of children. Many millions of children around the world love Michael Jackson and never alleged that he harmed them in any way.
Those who wanted to profit from his good deeds and vulnerabilities were also threatening to destroy his ability to raise his own children and to champion the welfare, integrity, humanity and interests of children around the world. Michael Jackson occupies a world where his privacy is continually violated.
Michael Jackson now regrets making these payments. Nevertheless, these efforts to settle are now being used against him regardless of the merits or the truth behind them. These settlements were entered into with one primary condition. That condition was that Mr. Jackson never admitted any wrongdoing. Mr. Jackson always denied doing anything wrong. Mr. Jackson had hoped to buy peace in the process. He was advised that while these sums of money appeared large, they were actually very small compared to money he could make in music. Mr. Jackson has earned well over one billion dollars in his career. Placed in this perspective, they were very small sums, indeed.
Greed begets greed. Mr. Jackson now realizes that the advice he received was wrong. He should have fought these actions to the bitter end and vindicated himself. The recent publicity about these settlements is unfair and damaging to him, his family and his dedication to the world's children. The false charges he is facing will be battled in a court of law within our justice system. He is innocent and will be vindicated.
