Maria Celia Hernandez Campoverde vs Montecito Bank & Trust

Case Number

24CV03118

Case Type

Hearing Date / Time

Mon, 11/03/2025 - 10:00

Nature of Proceedings

CMC; Motion: Approval

Tentative Ruling

Maria Celia Hernandez Campoverde, et al. v. Montecito Bank & Trust                                                                                               

Case No. 24CV03118

           

Hearing Date: November 3, 2025                                          

HEARING:              Plaintiff’s Motion for Preliminary Approval of Class Action and PAGA Settlement

ATTORNEYS:        For Plaintiff Maria Celia Hernandez Campoverde individually and on behalf of the putative class and aggrieved employees: Danny Yadidsion, Labor Law PC

                             For Defendant Montecito Bank & Trust.: Jeffrey A. Dinkin, Jared W. Speier, Lindsay L. Bowden, Stradling Yocca Carlson & Rauth LLP                      

TENTATIVE RULING:

The motion for preliminary approval of class action and PAGA settlement is granted.

The court has reviewed the proposed order submitted with the motion, along with the timeline attachment, 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, and consists of all current and former hourly-paid, non-exempt employees who worked for defendant in California from June 4, 2020, through February 17, 2025;
3. Maria Celia Hernandez Campoverde is appointed as the class representative of the settlement class;
4. Danny Yadidsion of Labor Law PC is appointed as class counsel;
5. Distribution of the proposed notice of class action settlement to the settlement class is approved;
6. Apex Class Action LLC is appointed as the third-party settlement administrator;
7. A hearing on Final Approval of Class Action Settlement shall take place in this department on April 6, 2026, 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:

Plaintiff Maria Celia Hernandez, individually and on behalf of the putative class (plaintiff) filed her original class action complaint against defendant Montecito Bank & Trust (defendant) on June 4, 2024, alleging various violations of the Labor Code and Business & Professions Code. On November 8, 2024, plaintiff filed her first amended complaint, and on July 22, 2025, plaintiff filed the operative second amended complaint (SAC), setting forth nine causes of action, again for violations of the Labor Code and Business & Professions Code. The causes of action are: (1) Failure to Pay Wages for all Hours Worked; (2) Failure to Pay Overtime Wages; (3) Failure to Provide Meal Periods; (4) Failure to Provide Rest Periods; (5) Failure to Furnish Timely and Accurate Wage Statements; (6) Failure to Pay all Compensation Due upon Discharge; (7) Unfair, Unlawful, or Fraudulent Business Practices; (8) Private Attorneys’ General Act (PAGA); and (9) Failure to Reimburse for Business Expenses.

On November 19, 2024, the parties participated in a mediation that resulted in a settlement in principle. (Yadidsion Decl., ¶ 11.) On March 6, 2025, the parties executed a joint stipulation of class action and PAGA settlement and release. (Id. at ¶ 13.)

Plaintiff now moves for preliminary approval of the settlement. Defendant has filed a notice of non-opposition.

Analysis:

            Initial Concerns

The memorandum of points and authorities is more than double the allowable pages. California Rules of Court, rule 3.1113(d) mandates that, except for motions for summary judgment or summary adjudication, no opening memorandum may exceed 15 pages. Plaintiff’s memorandum is 36 pages long, not counting the notice, table of contents, table of authorities, or signature page, and she did not apply for permission to file a longer memorandum. While the court appreciates that the memorandum is well organized and contains all the information necessary for ruling on the motion, it is quite repetitive, and all the information could easily have been presented in 15 pages or less.

Further, including exhibits, the declaration of plaintiff’s counsel is 82 pages long and the exhibits are not bookmarked as required by California Rules of Court, rule 3.1110(f)(4) and Santa Barbara County, Local Rules, rule 1012 (c)(1). “Compliance with all of the formatting requirements for electronic documents is extremely important for the court’s timely consideration of e-filed documents. In cases of noncompliance, the court may, in its discretion, order any, or all, of the following in addition to any other sanction permitted by law: (i) the noncomplying document to be stricken as improperly filed; (ii) the continuance of the hearing to which the noncomplying document pertains; or, (iii) the imposition of monetary sanctions for violation of the California Rules of Court or these Local Rules, following adequate notice and an opportunity to be heard.” (Super. Ct. Santa Barbara County, Local Rules, rule 1012 (c)(2).)

Finally, the declaration itself, excluding exhibits, is 34 pages long and improperly consists of a great deal of legal argument. “We recognize that it is very common for [attorneys] to include argument in their declarations (we know it is done all the time, and we do not want to single out the trial lawyers in this regard), but it is a sloppy practice which should stop. Even at its most benign, it is a practice that forces the trial and appellate courts, and opposing counsel, to sort out the facts that are actually supported by oath from material that is nothing more than the statement of an opinion ostensibly under oath. More fundamentally, however, it makes a mockery of the requirement that declarations be supported by statements made under penalty of perjury. The proper place for argument is in points and authorities, not declarations.” (In re Marriage of Heggie (2002) 99 Cal.App.4th 28, 30, fn. 3.)

Counsel is reminded of the obligation to comply with the California Rules of Court, the Santa Barbara County Local Rules, and all other relevant legal authority for any future filings, and bear in mind the potential consequences of ignoring these obligations.

            Preliminary Approval

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.

As noted above, on November 19, 2024, the parties participated in mediation that resulted in a settlement in principle of the class action and PAGA claims, which was put into writing on March 6, 2025, by way of a Joint Stipulation of Class Action and PAGA Settlement and Release (agreement). Pursuant to the agreement, which is attached as Exhibit 1 to the Yadidsion declaration, the parties agreed:

The settlement class consists of all current and former non-exempt employees that were employed by defendant in California at any time from June 4, 2020, through the date of preliminary approve of the settlement or February 17, 2025, whichever is sooner (class period). (Agreement, ¶ 2B.)

The maximum settlement amount is $625,000.00 and is inclusive of class counsel fees, class counsel costs, the class representative service award to plaintiff, settlement administration costs, individual class member settlement payments, PAGA payments to the Labor & Workforce Development Agency (LWDA), and the PAGA eligible employees. (Agreement, ¶ 11.) The amount excludes defendants’ contribution of payroll taxes due on the settlement payments apportioned as wages, which defendant will pay in addition to the maximum settlement amount. (Ibid.)

Proposed Class Counsel, Labor Law PC, requests attorneys’ fees in an amount not to exceed 33.33 percent of the maximum settlement amount, or $208,333.31, plus reasonable costs not to exceed $25,000.00. (Agreement, ¶ 12.) In the event the court awards class counsel less than this requested amount, the difference shall become part of the net settlement amount and shall be distributed to participating class members as part of their individual settlement awards. (Ibid.)

For settlement purposes only, the parties agree to the designation of plaintiff as the class representative and request a class representative service award not to exceed $12,500.00. (Agreement, ¶ 13.) Plaintiff shall be solely responsible for paying all applicable taxes due on her class representative service award. (Ibid.) In the event the court awards plaintiff less for a class representative service award, the difference shall become part of the net settlement amount and shall be distributed to participating class members as part of their individual settlement awards. (Ibid.)

The parties agree that defendant shall reimburse the settlement administration costs, not to exceed $5,500.00, to be paid from the maximum settlement amount. (Agreement, ¶ 14.)

The parties agree that defendant will pay a total of $25,000.00 to resolve the PAGA claims, with 75 percent, or $18,750.00, to be paid to the LWDA and the remaining 25 percent, or $6,250.00 to be distributed to the PAGA eligible employees based on their proportionate share of the compensable pay periods worked during the PAGA period. (Agreement, ¶ 15.)

The settlement administrator will distribute the individual class payments to the participating class members from the net settlement amount and will calculate the amounts payable to each of the participating class members by determining the total number of compensable workweeks worked by the participating class members during the class period, dividing that number into the net settlement amount to determine the per-workweek value of each compensable workweek, and then multiplying that sum by the number of compensable workweeks worked by each participating class member during the class period. (Agreement, ¶ 16.)

The settlement administrator will calculate each eligible employee’s individual PAGA payment by dividing the 25 percent portion of the PAGA payment to be distributed by the total number of compensable workweeks worked by all of the PAGA eligible employees during the PAGA period to derive the per-workweek value of the individual PAGA payments, and then multiply that sum by the number of compensable workweeks worked by each such employee during the PAGA period. (Agreement, ¶ 17.)

Individual settlement awards shall be allocated as 10 percent for unpaged wages, subject to all applicable tax withholdings and 90 percent as unpaid interest and penalties. (Agreement, ¶ 18.)

Defendant shall be responsible for paying defendant’s share of the payroll taxes on the portion of the individual settlement awards that constitute wages. (Agreement, ¶ 19.)

The parties agree that the settlement administrator shall be Apex Class Action LLC. (Yadidsion Decl., ¶ 33.)

The putative class is estimated to be 349 persons. (Yadidsion Decl., ¶ 106(a).)

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. The class totals approximately 349 members who will share in the approximately $354,916.69 in Net Settlement Amount, according to the formula set forth in the settlement, which is dependent upon the number of pay periods worked by the class member within the class period. The net settlement amount is the amount which will remain after deducting from the $625,000.00 maximum settlement amount: attorneys’ fees of up to $208,333.31, litigation costs of up to $25,000.00, administration costs of  $5,500.00, the class representative incentive award of $12,500 to plaintiff, and $18,750.00 to be paid to the Labor and Workforce Development Agency under the $25,000 settlement of any PAGA claims.

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. 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 representatives 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 agreement that is attached to the Yadidsion 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 will be granted.