CARMEN MARTINEZ V. SYR SERVICING COMPANY, LLC, ET AL

Case Number

21CV03118

Case Type

Hearing Date / Time

Wed, 02/07/2024 - 10:00

Nature of Proceedings

Final approval of Class Action and PAGA Settlement Motion for attorneys’ fees, costs and expenses, and class representative service payment

Tentative Ruling

Carmen Martinez v. SYR Servicing Company, LLC, et al., # 21CV03118

Carmen Martinez v. SYR Servicing Company, LLC, et al., # 21CV04034

Michael H. Boyamian / Heather M. Zermeno of Boyamian Law, Inc. and Raul Perez / Robert J. Drexler / Molly A. DeSario / Jonathan Lee of Capstone Law APC for Plaintiff Carmen Martinez

Paul K. Wilcox / Jared M. Katz / Christina M. Behrman of Mullen & Henzell LLP for Defendants SYR Service Company, LLC, San Ysidro BB Property, LLC, and Ty Warner Hotels & Resorts

RULING

The Court will grant both motions.

BACKGROUND

These actions consist of (a) a wage and hour action (Case No. 21CV03118) filed August 4, 2021, alleging causes of action for (1) failure to pay compensation for all hours worked, (2) failure to pay minimum wages, (3) failure to pay overtime compensation, (4) failure to furnish accurate wage and hour statements, (5) failure to provide meal and rest periods, (6) unreimbursed business expenses, (7) violation of Labor Code section 2810.5, and (8) unfair competition; and (b) a PAGA action (Case No. 21CV04034) seeking civil penalties against the same Defendants, and based on the same operative facts. The Court ordered the cases related on December 7, 2021.

After a hearing on July 12, 2023, the Court granted Plaintiff’s motion for preliminary approval of class action and PAGA settlement, finding the settlement to be within the range of acceptable settlements. Under the terms of the settlement, Defendants will pay $350,000 to resolve the litigation. The settlement defines the class as “all persons employed by Defendant SYR Service Company, LLC within California and classified as nonexempt at any point during the Class Period,” which was defined to mean the period from August 4, 2017, through the earlier of the date of preliminary approval of the settlement or June 14, 2023. At the time of the preliminary approval, the parties estimated that there were approximately 554 class members during the Class Period. The Aggrieved Employees for purposes of PAGA penalties include “All persons employed by Defendant SYR Service Company, LLC within California and classified as non-exempt at any point during the period from October 8, 2020 through May 31, 2022.”

The amount to be contributed by Defendants is non-reversionary. The “Net Settlement Amount”

available for distribution to the class is the Gross Settlement Amount, less the Attorneys’ Fees and Costs (not more than $116,667.00 in fees, and not more than $30,000.00 in costs), the Class Representative Incentive Award ($10,000.00 to Plaintiff), Settlement Administration Fees (flat rate of $11,500.00), and 75% of the LWDA payment (a total of $15,000.00, which is 75% of the total PAGA settlement of $20,000.00). Each class member’s share of the net settlement amount will be calculated and apportioned from the Net Settlement Amount based upon the number of workweeks the member worked during the class period as a non-exempt employee in California. Defendants will pay their payroll tax obligations on the wage portions of the individual class payments. Similarly, the payments of the $5,000 in PAGA penalties to the Aggrieved Employees, will be determined by dividing the $5,000 share by the total number of PAGA Period Pay Periods worked by all Aggrieved Employees during the PAGA Period, and multiply the result by each Aggrieved Employee’s PAGA Period pay periods.

Plaintiff has now moved for final approval of the Class Action and PAGA Settlement Agreement, and for orders approving the settlement payments to participating class members aggrieved employees, and the LWDAA, and approval of the administration costs to the settlement administrator. Simultaneously, Plaintiff has moved for orders approving the award of attorneys’ fees and litigation expenses, and the Class Representative Service Payment. While the attorneys’ fees and Class Representative Service Payment for which approval is sought are unaltered from the Preliminary Approval, the final total of litigation expenses sought by Plaintiff—for which the Court preliminarily approved an award of up to $30,000.00—is $27,898.53.

The Settlement Administrator, Phoenix Settlement Administrators, submitted evidence that Notice Packets were mailed to 526 Class Members identified in the Class List obtained from Defendants. A total of 34 Notice Packets were returned by the post office. For those with forwarding addresses, Notice Packets were remailed. For those without forwarding addresses, skip traces were performed to locate new mailing addresses. A total of 30 Notice Packets were remailed because better mailing addresses were found, and 4 Notice Packets were unable to be delivered. Phoenix received 1 valid Request for Exclusion, and no objections to the settlement. As a result, a total of 525 Class Members will be paid their portion of the Net Settlement Amount.

The class members were notified of the Court’s preliminary approval of the settlement and provided with an opportunity to opt out of the class or object to the settlement. Only one class member timely and properly opted out of the class, and no one objected to the settlement. Consequently, the entire net settlement amount will be disbursed to the participating class members. According to Defendants’ records, Class Members worked a total of 33,606 Workweeks during the Class Period, each of which is valued at $4.82. The average estimated payment to Class Members is $308.25, and the highest is $1,160.56. A total of 262 Aggrieved Employees will share in the PAGA Fund. The Aggrieved Employees worked a total of 6,220.91 PAGA pay periods during the PAGA Period, each of which is valued at $0.73. The average estimated payment is $19.08, and the highest is $31.05.

ANALYSIS

The Court will grant both motions.

After having given preliminary approval of the class action settlement and provided notice to the class, the final approval hearing is the final step in the approval process. During the final approval hearing, the Court conducts a more detailed inquiry into the fairness of the proposed settlement. (Cal. Rules of Court, Rule 3.769(g).) If the Court approves the settlement agreement at the final approval hearing, the Court must make and enter a judgment that includes a provision for the Court to retain jurisdiction over the parties to enforce the terms of the settlement. (Cal. Rules of Court, Rule 3.769(h).)

“[A] trial Court has broad powers to determine whether a proposed settlement in a class action is fair.” (Mallick v. Superior Court (1979) 89 Cal.App.3d 434, 438.) A class action settlement is presumptively fair if it was reached through arm’s-length negotiations between experienced counsel after extensive investigation, litigation, and discovery. (Dunk v. Ford Motor Company (1996) 48 Cal.App.4th 1794, 1802; in accord, Wershba v. Apple Computer (2001) 91 Cal.App.4th 224, 245 [a presumption of fairness exists where (1) the settlement is reached through arm’s-length bargaining, (2) investigation and discovery are sufficient to allow counsel and the Court to act intelligently, (3) counsel is experienced in similar litigation, and (4) the percentage of objectors is small].)

The first three elements for the presumption of fairness were established at the time of the preliminary approval. No evidence has been presented which would alter the Court's preliminary determination of each of these elements. With respect to the fourth element, the parties have presented evidence that the settlement administrator received only one request for exclusion from the settlement, and no member of the putative class objected to the class action settlement. As a result, all the factors are present to give rise to a presumption that the class action settlement was fair, and the Court finds the class action settlement to be fair.

Apart from the presumption of fairness, the Court must still determine the adequacy of a class action settlement by independently satisfying itself that the consideration being received for the release of the class members’ claims is reasonable in light of the strengths and weaknesses of the claims and the risks of the particular litigation. (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 129.) The Court has reviewed the evidence and arguments presented, and is satisfied that the settlement is fair and reasonable in light of the strengths and weakness of the claims.

Based upon the totality of the circumstances present here, the Court finds that the stipulated settlement preliminarily approved is fair and reasonable to all concerned and will grant the motion for final approval. The Court has certified the class for settlement purposes only. It will further affirm named Plaintiff Carmen Martinez as Class Representative. In light of the time and efforts expended by the Class Representative in assisting Class Counsel in pursuing this matter, at substantial risk should the actions have been unsuccessful and resulted in personal liability for Defendant’s costs, and with a small financial interest in the outcome of the litigation, the Court finds the Class Representative Service Payment of $10,000 to be paid to the Class Representative to be reasonable, and will approve it.

The Court further affirms and approves the allocation of $20,000 of the Gross Settlement Amount to the PAGA claims and affirms and approves the payment of the amount of $15,000 to the LWDA, as required by law.

The Court will also affirm both Boyamian Law, Inc. and Capstone Law APC, as Class Counsel. The stipulated settlement provided for an award of attorneys’ fees to Class Counsel of $116,667 (one/third of the Gross Settlement Amount), and costs not to exceed $30,000. Plaintiff's separate motion for fees and costs seeks approval of these fees and of litigation expenses and costs totaling $27,898.53, which is within the amount for which preliminary approval was granted. Plaintiff presented evidence that the lodestar amount of fees incurred by both firms (hours expended times hourly rate) totals $151,425.00, which is more than the amount of fees Plaintiff is seeking. “[T]he Court’s task in a negotiated settlement of fees is to determine if the negotiated fee is fair. That task requires the Court to review the settlement, including the fee award, to ensure that it was fairly and honestly negotiated, is not collusive and adequately protects the interests of the [parties].” (Robbins v. Alibrandi (2005) 127 Cal.App.4th 438, 444.) The Court finds that, under the totality of the circumstances, the attorney’s fees and costs sought by Plaintiff’s counsel are fair and reasonable, and the Court will approve the $280,000 fee award and the $14,561.51 cost award.

The Court further affirms payment of administration costs to settlement administrator Phoenix Settlement Administrators, in the amount of $11,500.00.

As requested by the parties, the Court will reserve jurisdiction over the parties for the purposes of implementing, enforcing, and or administering the Settlement or enforcing the terms of the Judgment.

The Court has reviewed the Proposed Order submitted by Plaintiff, which addresses both motions, and intends to execute it.