Morris et al v. Trugreen, Inc.

Filing 85

REPORT AND RECOMMENDATIONS re 84 MOTION TO APPROVE REVISED SETTLEMENT AGREEMENT AND TO DISMISS ACTION WITH PREJUDICE. Failure to file written objections to the proposed findings and recommendations contained in this report within fourteen days from the date of its filing shall bar an aggrieved party from attacking the factual findings on appeal. If the parties have no objection to this Report and Recommendation, they may promptly file a joint notice of no objection in order to expedite the final disposition of this case. Signed by Magistrate Judge Gregory J. Kelly on 6/3/2019. (HMK)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
GEORGE MORRIS, SHANNON BOYD,
RYAN COLEMAN, KELVIN CARTER,
and BARRY DAMICO,
Plaintiffs,
v.

Case No: 6:17-cv-1465-Orl-40GJK

TRUGREEN LIMITED
PARTNERSHIP,
Defendant.

REPORT AND RECOMMENDATION
This cause came on for consideration without oral argument on the following motion:
MOTION:

MOTION TO APPROVE REVISED SETTLEMENT
AGREEMENT AND TO DISMISS ACTION WITH
PREJUDICE (Doc. No. 84)

FILED:

May 30, 2019

THEREON it is RECOMMENDED that the motion be GRANTED.
I.

BACKGROUND.
On March 8, 2019, Plaintiffs and Defendant jointly moved the Court to approve their

settlement agreement (the “Agreement”) pursuant to the Fair Labor Standards Act (“FLSA”) and
to dismiss this case with prejudice (the “Motion”). Doc. No. 79.

The parties provided a copy

of the Agreement with their Motion. Doc. No. 79-1. On March 12, 2019, the Court entered an
Order denying the Motion because the Agreement contained more than one impermissible
provision. Doc. No. 80. The Court found that the Agreement contained an overly broad general
release, language that indicated the Agreement could be modified in writing by the parties,

language that permitted Defendant to unilaterally void the Agreement under certain circumstances,
and a no reemployment clause that had no explanation for the fairness of the provision. Doc. No.
80. The Court also found that the Agreement contained no severability clause. Doc. No. 80 at
6. The Court directed the parties to file a renewed motion to approve any settlement they may
reach that addressed the issues raised in the Order. Doc. No. 80.
On April 22, 2019, the parties filed a Motion to Approve Modified Settlement Agreement
and to Dismiss Action with Prejudice (the “Second Motion”). Doc. No. 82. The Second Motion
was denied because the Agreement still contained language that reserved the parties’ right to
modify the agreement in writing. Doc. No. 82-1. On May 30, 2019, the parties filed the instant
Motion to Approve Revised Settlement Agreement and to Dismiss Action with Prejudice (the
“Third Motion”). Doc. No. 84. The revised Agreement (“Revised Agreement”) no longer
contains the language regarding the parties’ reservation of right to modify the Revised Agreement.
Doc. No. 84-1.
II.

LAW.
In Lynn’s Food Stores, Inc. v. United States Department of Labor, 679 F.2d 1350, 1352-

53 (11th Cir. 1982), the Eleventh Circuit addressed the means by which an FLSA settlement may
become final and enforceable:
There are only two ways in which back wage claims arising under
the FLSA can be settled or compromised by employees. First, under
section 216(c), the Secretary of Labor is authorized to supervise
payment to employees of unpaid wages owed to them . . . . The only
other route for compromise of FLSA claims is provided in the
context of suits brought directly by employees against their
employer under section 216(b) to recover back wages for FLSA
violations. When employees bring a private action for back wages
under the FLSA, and present to the district court a proposed
settlement, the district court may enter a stipulated judgment after
scrutinizing the settlement for fairness.

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Thus, unless the parties have the Secretary of Labor supervise the payment of unpaid wages owed
or obtain the Court’s approval of the settlement agreement, the parties’ agreement is
unenforceable. Id.; see also Sammons v. Sonic-North Cadillac, Inc., No. 6:07-cv-277-Orl-19DAB,
2007 WL 2298032, at *5 (M.D. Fla. Aug. 7, 2007) (noting that settlement of FLSA claim in
arbitration proceeding is not enforceable under Lynn’s Food because it lacked Court approval or
supervision by the Secretary of Labor). Before approving an FLSA settlement, the Court must
scrutinize it to determine if it is a fair and reasonable resolution of a bona fide dispute. Lynn’s
Food Store, 679 F.2d at 1354-55. If the settlement reflects a reasonable compromise over issues
that are actually in dispute, the Court may approve the settlement. Id. at 1354.
In determining whether the settlement is fair and reasonable, the Court should consider the
following factors:
(1) the existence of collusion behind the settlement;
(2) the complexity, expense, and likely duration of the litigation;
(3) the stage of the proceedings and the amount of discovery
completed;
(4) the probability of plaintiff’s success on the merits;
(5) the range of possible recovery; and
(6) the opinions of counsel.
Leverso v. SouthTrust Bank of Ala., Nat’l Assoc., 18 F.3d 1527, 1531 n.6 (11th Cir. 1994);
Hamilton v. Frito-Lay, Inc., No. 6:05-cv-592-Orl-22JGG, 2007 WL 328792, at *2 (M.D. Fla. Jan.
8, 2007), report and recommendation adopted, 2007 WL 219981 (M.D. Fla. Jan. 26, 2007). The
Court should be mindful of the strong presumption in favor of finding a settlement fair. See Cotton
v. Hinton, 559 F.2d 1326, 1331 (5th Cir. 1977). 1
In FLSA cases, the Eleventh Circuit has questioned the validity of contingency fee

1

In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the Eleventh Circuit adopted as
binding precedent all decisions of the former Fifth Circuit handed down prior to the close of business on September
30, 1981.

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agreements. Silva v. Miller, 307 F. App’x 349, 351 (11th Cir. 2009) (citing Skidmore v. John J.
Casale, Inc., 160 F.2d 527, 531 (2d Cir. 1947) (“We have considerable doubt as to the validity of
the contingent fee agreement; for it may well be that Congress intended that an employee’s
recovery should be net[.]”)). In Silva, the Eleventh Circuit stated:
That Silva and Zidell entered into a contingency contract to establish
Zidell’s compensation if Silva prevailed on the FLSA claim is of
little moment in the context of FLSA. FLSA requires judicial review
of the reasonableness of counsel’s legal fees to assure both that
counsel is compensated adequately and that no conflict of interest
taints the amount the wronged employee recovers under a settlement
agreement. FLSA provides for reasonable attorney’s fees; the
parties cannot contract in derogation of FLSA’s provisions. See
Lynn’s Food, 679 F.2d at 1352 (“FLSA rights cannot be abridged
by contract or otherwise waived.”) (quotation and citation omitted).
To turn a blind eye to an agreed upon contingency fee in an amount
greater than the amount determined to be reasonable after judicial
scrutiny runs counter to FLSA’s provisions for compensating the
wronged employee. See United Slate, Tile & Composition Roofers
v. G & M Roofing & Sheet Metal Co., 732 F.2d 495, 504 (6th Cir.
1984) (“the determination of a reasonable fee is to be conducted by
the district court regardless of any contract between plaintiff and
plaintiff’s counsel”); see also Zegers v. Countrywide Mortg.
Ventures, LLC, 569 F. Supp. 2d 1259 (M.D. Fla. 2008).
Silva, 307 F. App’x at 351-52. 2 For the Court to determine whether the proposed settlement is
reasonable, counsel for the claimant must first disclose the extent to which the FLSA claim has or
will be compromised by the deduction of attorney’s fees, costs or expenses pursuant to a contract
between the plaintiff and his counsel, or otherwise. Id. When a plaintiff receives less than a full
recovery, any payment (whether or not agreed to by a defendant) above a reasonable fee
improperly detracts from the plaintiff’s recovery. 3 Thus, a potential conflict can arise between

2

In this circuit, “[u]npublished opinions are not considered binding precedent, but they may be cited as persuasive
authority.” 11th Cir. R. 36-2.

3

From a purely economic standpoint, defendants are largely indifferent as to how their settlement proceeds are divided
as between plaintiffs and their counsel. Where a plaintiff is receiving less than full compensation, payment of fees
necessarily reduces the plaintiff’s potential recovery.

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counsel and their client regarding how much of the plaintiff’s total recovery should be allocated to
attorney’s fees and costs. 4 It is the Court’s responsibility to ensure that any such allocation is
reasonable. See id. As the Court interprets Lynn’s Food and Silva, where there is a compromise
of the amount due to the plaintiff, the Court should decide the reasonableness of the attorney’s fees
provision under the parties’ settlement agreement using the lodestar method as a guide. In such a
case, any compensation for attorney’s fees beyond that justified by the lodestar method is
unreasonable unless exceptional circumstances would justify such an award.
An alternate means of demonstrating the reasonableness of attorney’s fees and costs was
set forth in Bonetti v. Embarq Management Co., 715 F. Supp. 2d 1222 (M.D. Fla. 2009). In Bonetti,
the Honorable Gregory A. Presnell held:
In sum, if the parties submit a proposed FLSA settlement that, (1)
constitutes a compromise of the plaintiff’s claims; (2) makes full and
adequate disclosure of the terms of settlement, including the factors
and reasons considered in reaching same and justifying the
compromise of the plaintiff’s claims; and (3) represents that the
plaintiff’s attorneys’ fee was agreed upon separately and without
regard to the amount paid to the plaintiff, then, unless the settlement
does not appear reasonable on its face or there is reason to believe
that the plaintiff’s recovery was adversely affected by the amount of
fees paid to his attorney, the Court will approve the settlement
without separately considering the reasonableness of the fee to be
paid to plaintiff’s counsel.
Bonetti, 715 F. Supp. 2d at 1228 (emphasis added). Judge Presnell maintained that if the matter of
attorney’s fees is “addressed independently and seriatim, there is no reason to assume that the
lawyer’s fee has influenced the reasonableness of the plaintiff’s settlement.” Id. The undersigned
finds this reasoning persuasive.

4

This potential conflict is exacerbated in cases where the defendant makes a lump sum offer which is less than full
compensation, because any allocation between fees and the client’s recovery could become somewhat arbitrary.

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III.

ANALYSIS.
A. Settlement Amount.
This case involves disputed issues of FLSA liability, which constitutes a bona fide dispute.

Doc. No. 84 at 6. The parties are represented by independent counsel. Id. Under the Revised
Agreement, Plaintiffs are receiving the following amounts:
Plaintiff

Unpaid Wages

Liquidated Damages 5

Ryan Coleman

$1,079.70

$1,079.70

Kelvin Carter

$1,079.70

$1,079.70

Shannon Boyd

$1,079.70

$1,079.70

Barry Damico

$2,591.50

$2,591.50

George Morris

$3,017.80

$3,017.80

$8,848.40

$8,848.40

Doc. No. 84-1 at 3-4. Plaintiffs’ claimed unliquidated overtime wages and liquidated damages
were $11,340.00, $8,400.00, $18,375.00, $35,550.00, and $54,660.00 respectively. Doc. No. 84
at 1-2.
Since Plaintiffs are receiving less than the amounts they claimed, they may have
compromised their claims under the FLSA. See Caseres v. Texas de Brazil (Orlando) Corp., 6:13cv-1001-Orl-37KRS, 2014 WL 12617465, at *2 (M.D. Fla. April. 2, 2014) (“Because [plaintiff]
will receive under the settlement agreement less than she averred she was owed under the FLSA,
she has compromised her claim within the meaning of Lynn’s Food Stores.”). After receiving
sufficient information to make informed decisions, the parties decided to settle their dispute. Doc.

5

The Revised Agreement indicates that this amount includes “liquidated damages, interest, and any other non-wage
relief . . . .” Doc. No. 84-1 at 3-4.

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No. 84 at 5-6. Considering the foregoing, and the strong presumption favoring settlement, even if
Plaintiffs compromised their claims, the settlement amounts are fair and reasonable.
B. Attorney’s Fees and Costs.
Under the Revised Agreement, Plaintiffs’ counsel will receive $16,303.20 in attorney’s
fees and costs. 6 Doc. No. 84-1 at 4. The parties represent that attorney’s fees and costs were
negotiated separately from Plaintiff’s recovery. Doc. No. 84 at 7. The settlement is reasonable on
its face, and the parties’ representation adequately establishes that the issue of attorney’s fees and
costs was agreed upon separately and without regard to the amount paid to Plaintiff. See Bonetti,
715 F. Supp. 2d at 1228. Thus, the Revised Agreement is a fair and reasonable settlement of
Plaintiffs’ FLSA claims.
IV.

CONCLUSION.
Accordingly, it is RECOMMENDED that Third Motion (Doc. No. 84) be GRANTED

and the case be DISMISSED with prejudice.
Failure to file written objections to the proposed findings and recommendations contained
in this report within fourteen days from the date of its filing shall bar an aggrieved party from
attacking the factual findings on appeal. If the parties have no objection to this Report and
Recommendation, they may promptly file a joint notice of no objection in order to expedite
the final disposition of this case.
Recommended in Orlando, Florida, on June 3, 2019.

6

Defendant has also agreed to pay Plaintiffs’ portion of the cost of mediation, $1,350.00 directly to Mediation
Services, LLC. Doc. No. 84-1 at 4.

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Copies furnished to:
Counsel of Record
Unrepresented Parties

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