Tyler Firth vs Yardi Systems Inc

Case Number

23CV03558

Case Type

Hearing Date / Time

Fri, 07/11/2025 - 10:00

Nature of Proceedings

Motion for Approval

Tentative Ruling

The motion for preliminary approval of class action and PAGA settlement is granted as follows:

The court has reviewed the proposed order submitted with the motion and intends on signing the same. The relevant terms include:

1. Preliminary approval of the settlement set forth in the Class Action and PAGA Settlement Agreement is granted;
2. The proposed settlement class is conditionally certified;
3. Tyler Firth is appointed as the class representatives of the settlement class;
4. Larry W. Lee and Simon L. Yang of Diversity Law Group, P.C. and William L. Marder of Polaris Law Group are appointed as class counsel;
5. Distribution of the proposed notice of class action settlement to the settlement class is approved;
6. Phoenix Settlement Administrators is appointed as the third-party settlement administrator;
7. A hearing on Final Approval of Class Action Settlement shall take place on November 7, 2025, at 10:00 a.m.;
8. All papers filed in support of Final Approval, including supporting documents for attorneys’ fees and costs shall be filed no later than 16 court days before the hearing on Final Approval of Class Actions Settlement;

Background:

This action commenced on August 15, 2023, by the filing of the original complaint by plaintiff Tyler Firth (“plaintiff”), individually and on behalf of all others similarly situated, against defendant Yardi Systems, Inc. (“defendant”).

Following a stipulation and order to do so, on October 30, 2023, plaintiff filed his operative first amended complaint (“FAC”) against defendant for: (1) Unpaid Overtime, (2) Inaccurate Itemized Wage Statements, (3) Unfair or Unlawful Business Practices, and (4) Violations of the California Labor Code. Plaintiff also brings the FAC under the Private Attorneys General Act of 2004 (“PAGA”) seeking statutory civil penalties on behalf of the State of California.

As alleged in the FAC:

Defendant misclassified plaintiff and other computer software employees as overtime exempt employees and routinely fail to pay overtime wages. (FAC, ¶ 2.) Defendant also failed to routinely provide accurate itemized wage statements to plaintiff and other computer software employees. (Id. at ¶ 4.)

Plaintiff began working for defendant in May 2019, as a software development engineer, until his employment ended in December 2022. (FAC, ¶ 9.) Plaintiff was compensated as an exempt employee, even though his employment did not qualify for any overtime exemption. (Ibid.) Plaintiff was not paid overtime, was not paid due wages upon separation from employment with defendant, and plaintiff was furnished wage statements that failed to show and itemize required information. (Ibid.)

On November 30, 2023, defendant answered the FAC with a general denial and 40 affirmative defenses.

On June 17, 2024, the parties attended mediation with Steven G. Pearl and agreed to settlement terms. (Yang Decl., ¶ 5 & Exh. 1.)

The parties now seek preliminary court approval of that settlement, an order provisionally certifying the proposed class for settlement purposes, an order appointing plaintiff as class representative for the class, an order appointing plaintiff’s attorneys as class counsel for the class, an order appointing Phoenix Settlement Administrators as the third-party settlement claims administrator, an order approving the Notice being sent to the class, and an order scheduling the hearing for final approval of the settlement, including approval of incentive awards to the representative plaintiffs, settlement administration costs, fees and costs to class counsel, and payment of PAGA penalties to the Labor and Workforce Development Agency (“LWDA”). The motion is supported by the declarations of class counsel Larry W. Lee, Simon L. Yang and William L. Marder.

The motion, and supporting declarations, establishes that plaintiff’s counsel has extensively investigated the claims, including engaging in substantial informal discovery, reviewed detailed information and payroll data relevant to plaintiff’s claims, and the analysis by the parties of the class-wide data to investigate the merits of plaintiff’s claims and the potential liability. In addition, there have been numerous conferences between counsel, review of payroll, time records, and other records produced by defendant to plaintiff’s counsel for purposes of litigation and mediation, and extensive discussions between counsel regarding strengths and weaknesses of claims and defenses.

Under the terms of the settlement, defendant has agreed to pay a gross settlement amount of $950,000.00, on a non-reversionary basis, to settle and release all claims asserted by plaintiffs in the class action on behalf of the class, as well as the PAGA action on behalf of the State of California. The settlement defines the Class members as “all current and former exempt employees of Defendant in the State of California who were employed as computer software employees and earned less that (i) $3,632.80 per biweekly pay period at any time after August 15, 2019, (ii) $3,724.00 per biweekly pay period at any time in 2020, (iii) $3,798.40 per biweekly pay period at any time in 2021, (iv) $4,000.00 per biweekly pay period at any time in 2022, or (v) $4,304.00 per biweekly pay period at any time in 2023.” There are approximately 82 Class Members that worked approximately 8,214 relevant workweeks during the Class Period. The Class Period is “August 15, 2019, through December 31, 2023.” The “Net Settlement Amount” available for distribution to the class is the Gross Settlement Amount, less the Attorneys’ Fees and Costs (not more than $316,666.67 in fees, and not more than $20,000.00 in costs), the Class Representatives Incentive Award ($15,000.00 to plaintiff Firth), Settlement Administration Fees (not more than $6,000.00), and 75% of the LWDA payment (a total of $60,000.00, which is 75% of the total PAGA settlement of $80,000.00).

The “Individual Settlement Payment”, i.e., 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. 20% of individual class payments shall be allocated to wages and subject to IRS Form W-2 reporting; the remainder of the individual class payments shall be allocated to interest and penalties and subject to IRS Form 1099 reporting.

Counsel Yang’s declaration sets forth defendant’s estimated exposure on the various types of claims, including the PAGA and unfair business practices claims, and notes the evidentiary difficulties of each of the types of claims, the difficulty in certifying a class for the various claims and maintaining certification through trial, and taking into account defendant’s defenses, that the total amount of damages the class could reasonably expect to be awarded could be significantly less than the maximum exposure.

The settlement amount was a compromise figure. However, after considering the facts, strengths, and weaknesses of the case, the risks and delays posed by further litigation, and class counsels’ experience, counsel concluded that the recovery for each class member is fair and reasonable, taking into consideration the amounts received in other wage and hour class actions, the inherent risks, and the reasonable tailoring of each member’s claim to the settlement award the member will receive.

The motion seeks certification of the class for settlement purposes only, asserting that the class is easily ascertainable from defendant’s records, and that there is a well-defined community of interest in the questions of law and fact involving the parties to be represented. Defendant does not dispute these facts, for settlement purposes only. Plaintiffs further contend, and defendant does not dispute for settlement purposes, that the named plaintiff’s claims are typical of the class claims, because they arose from the same factual basis and are based upon the same legal theories, and plaintiffs were employed by defendant during the class period and subject to the allegedly unlawful policies and practices at issue in the litigation.

The Yang declaration attaches the Notice of Proposed Class Action Settlement, as exhibit A to the settlement agreement, which will be provided to the class members. The notice explains the settlement and provides class members with the opportunity to dispute the calculation of their share and produce evidence to support their contention that the information contained in their packet is inaccurate. Defendant’s records will be presumed determinative, in the absence of evidence to rebut their records, but the Settlement Administrator will evaluate the evidence and determine the validity of the evidence. The Notice also explains the manner in which class members may either opt-out from the settlement agreement, or object to the settlement agreement.

The settlement will be administered by Phoenix Settlement Administrators. The details of the manner in which it will mail the notice, process exclusions and objections, and distribute the settlement funds to class members, is detailed in the settlement agreement. If any settlement checks sent to class members are left uncashed, for 180 days after mailing by the settlement administrator, and cancelled after issuance, the parties shall request that the court order the principal for any expired checks to be distributed pursuant to Code of Civil Procedure section 384 to the Santa Barbara Food Bank.

There is no opposition or other response filed to this motion.  

Analysis:

The purpose of the preliminary approval hearing is to determine whether the settlement is within the range of reasonableness for preliminary approval and to approve or deny certification of a provisional settlement class. A full inquiry into the fairness of the proposed settlement occurs at the final approval hearing. (Rules of Court, rule 3.769, subd. (g).)

“‘The court has a fiduciary responsibility as guardians of the rights of the absentee class members when deciding whether to approve a settlement agreement.’” (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 129.) The court has broad discretion to determine whether the settlement is fair. (Dunk v. Ford Motor Co.) (1996) 48 Cal.App.4th 1794, 1801.) “The well-recognized factors that the trial court should consider in evaluating the reasonableness of a class action settlement agreement include ‘the strength of plaintiffs’ case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and stage of the proceedings, the experience and views of counsel, the presence of a governmental participant, and the reaction of the class members to the proposed settlement.’ [Citations.] This list ‘is not exhaustive and should be tailored to each case.’ [Citation.]” (Kullar v. Foot Locker Retail, Inc., supra, 168 Cal.App.4th at p. 128.)

A PAGA action is a type of qui tam action, in which a private party is authorized to bring an action to recover a penalty on behalf of the government and receive part of the recovery as compensation. (Huff v. Securitas Sec. Servs. USA, Inc. (2018) 23 Cal.App.5th 745, 753.) In doing so, the employee acts as proxy for the state labor law enforcement agency; the proceeding is designed to protect the public, not to benefit private parties. (Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court (2009) 46 Cal.4th 993, 1003.) The dispute is between the employer and the state. (Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 81.) The purpose of PAGA is not to recover damages, restitution, or redress the employees’ injuries, but to recover civil penalties to remediate present violations and deter future ones. (Id. at p. 86.) While a PAGA case is representative in nature, it is not a class action, and may be brought without the procedural requirements involved in class actions.

Labor Code section 2699(k) mandates that PAGA civil penalties be allocated 75% to the LWDA, for enforcement of labor laws and education of employers and employees about their rights and responsibilities under the code, and 25% to the aggrieved employees. Section 2699(l)(2) requires that the superior court review and approve any penalties sought as part of a proposed settlement agreement, pursuant to that part of the code.

The Court has carefully analyzed the terms of the settlement, including the nature and scope of the release it requires of absent class members and the representative plaintiffs. The Court finds that it is within the range of acceptable settlements.

Substantial investigation and discovery were conducted, giving rise to an informed settlement, in light of the risks of further litigating the action through trial. The case involves experienced class counsel, who believe the settlement is fair, reasonable, and in the best interests of the class members. The settlement was achieved through extensive arms’-length negotiations and was not collusive.

The motion asks the Court for an order certifying the settlement class. As noted above, the class is comprised of  “all current and former exempt employees of Defendant in the State of California who were employed as computer software employees and earned less that (i) $3,632.80 per biweekly pay period at any time after August 15, 2019, (ii) $3,724.00 per biweekly pay period at any time in 2020, (iii) $3,798.40 per biweekly pay period at any time in 2021, (iv) $4,000.00 per biweekly pay period at any time in 2022, or (v) $4,304.00 per biweekly pay period at any time in 2023.” The settlement class period is “August 15, 2019, through December 31, 2023.” The Court finds that certification of the class for settlement purposes is appropriate and will grant the motion to provisionally certify the proposed class for settlement purposes. The class is ascertainable from defendant’s records and is so numerous that joinder of all members is impracticable. There are questions of law or fact common to the proposed class, and there is a well-defined community of interest among its members with respect to the subject matter of the litigation.

It appears to the Court that the claims of the Class Representative are typical of the claims of the members of the proposed class, and that they fairly and adequately protect the interests of the class members. It also appears to the Court that proposed class counsel is experienced and qualified in wage and hour class litigation and will properly and adequately represent the interests of the absent class.

The Court further approves the PAGA claim class and approves the PAGA Settlement Payment, finding that the terms of the PAGA settlement are fair and reasonable.

The motion further seeks approval of the proposed Notice of Proposed Class Action Settlement to be provided to the absent class members. The Notice is attached as Exhibit A to the settlement agreement, which is attached to the Yang declaration. Under Trotsky v. Los Angeles Fed. Sav. & Loan Assn. (1975) 48 Cal.App.3d 134, 151-152, the notice provided to a class must fairly apprise the class members of the terms of the proposed compromise and of the options open to dissenting class members. The Court has analyzed the contents of the Notice and finds that it meets the standard for approval in clearly outlining what the recipient must do in order to object to the settlement, or to opt out of the settlement, and the time within which each must be accomplished. The Notice of Proposed Class Action Settlement is therefore approved.

The motion seeks a hearing date for the court’s consideration of final approval of the settlement, as well as counsel’s application for an award of attorneys’ fees and reimbursement of costs, and the incentive award to the representative plaintiff. The court will set the hearing for final approval to take place on November 7, 2025, at 10:00 a.m. All documents related to the final approval, fees, costs, and enhancement award, shall be filed no later than 16 court days prior to the final approval hearing date.