Johnson-Klein Amends Deal: Settlement with CSU System Cancels $100k Annuities For Her Six Children

Jul. 22--Stacy Johnson-Klein has amended her $9 million settlement with Fresno State to cancel $100,000 for each of her six children, opting instead to take the money over 25 years.

Johnson-Klein lawyer Warren Paboojian said Monday that the former Fresno State women's basketball coach, who won a sexual harassment case against the university, never wanted the deferred payments.

The language mentioning the children -- providing each with $25,000 a year for four years once they turn 18 -- was not legally binding, and was included only because Fresno State wanted it, he said.

Paboojian added that Johnson-Klein's six children will not suffer because she will set up trusts for them and finance their college educations herself.

"The kids will be taken care of through the cash portion of the settlement," Paboojian said.

The settlement included a provision that permitted Johnson-Klein to amend how various annuity payments are made as long as there is no additional cost to the California State University system. Paboojian said the provision, inserted at the end of a long day of negotiations, was designed to give Johnson-Klein more time to decide how she wanted to structure the payments.

Paboojian said Johnson-Klein decided to exercise that option, but didn't say why.

"The original proposal by Fresno State did not guarantee the money to the kids, but to Stacy," Paboojian said.

He said the amended settlement does not change the total amount of money to be paid.

Susan Westover, a California State University system lawyer representing Fresno State, said the university would not comment on Johnson-Klein's decision.

However, Westover added, it was clear throughout the settlement talks that Johnson-Klein wanted a provision that secured financing for her children's higher education.

"It was very important to us to recognize the importance to her of her children's education," Westover said.

Westover said in an e-mail that Johnson-Klein was represented at the settlement talks by six lawyers, including Paboojian, Dan Siegel of Oakland and celebrity attorney Gloria Allred.

The original settlement signed June 17 had three parts:

The California State University system was to pay $5.4 million cash to Johnson-Klein.

CSU was to buy an annuity paying her $12,500 a month for 20 years, beginning in September 2011. Total -- $3 million.

CSU was to buy an annuity "that will pay to Johnson-Klein, $25,000 for four years guaranteed, for each of her six children, starting when each reaches age 18."

The amended settlement retains the $5.4 million lump-sum payment to Johnson-Klein. But the structure of annuity payments has changed.

CSU is now required to buy an annuity that makes periodic payments to Johnson-Klein in the amount of $12,074.63 per month for 25 years, beginning March 8, 2009. Total -- $3,622,389.

The provision mentioning her six children has been deleted.

CSU noted in June that the settlement has a $9 million value to Johnson-Klein, but the cost to CSU is about $7.3 million because a portion is spread over several decades.

Johnson-Klein was fired in March 2005 for allegedly violating university policies. She sued in August 2005, alleging she was harassed and the victim of retaliation for her advocacy of gender equity.

A jury in December awarded her $19.1 million. It was later reduced by a judge to $6.6 million, which she accepted. Fresno State appealed, and Johnson-Klein filed a cross-appeal. This set the stage for June's settlement talks.

Last week, Johnson-Klein was named an executive with the Lawton-Fort Sill Cavalry of the Continental Basketball Association.

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