Villarroel et al v. Sri Siva Vishnu Temple et al

Filing 30

MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 12/31/2014. (kns, Deputy Clerk)

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IN THE UNITED STATES I)ISTRICT COURT
FOR THE DISTRICT OF MARYLAND

Drc 312014

SOllthem Dil'isioll

ALEXANDER

VILLARROEL,

ATGREENIilElr

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et :/1.

(

ClEAt< u.s. DISTRICT CO
OISTllICT OF "'AF1YlA~RT
DEPuTY

Plaintiffs,

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v.

Case No.: G,JH-I-t-026I7

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SRI SIVA VISHNU TEMI'LE,

et al.

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Defendants.

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MEMORANDUM

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OPINION

Plaintiffs Alexander Villarroel. Gorgonio Miguel Velazquez. Xavier Cabrerra. Marino
Gonzales Dias. and Gudiel Rodrigues Aguilar tiled this action against their former employers Sri
Siva Vishnu Temple. Moffett Contracting. LLC. and John C. Moffett. seeking damages and other
relief for Defendants' alleged failure to pay them overtime wages in violation of the Fair Labor
Standards Act ("FLSA").

29 V.S.c.

*

201 el self .. the Maryland

("MWHL"). Md. Code. Lab. & Emp!. Artiele ("LE")
Payment and Collection

Law ("MWPCL").

* 3-401

Md. Code. LE

Wage and lIour Law

el seq.. and the Maryland Wage

*

3-50 I el seq. ECF No. I.

Defendants answered the Complaint. and the parties jointly requested a stay to engagc

III

meaningful settlement efforts in October 2014. ECF Nos. 13. 1G. & 2 I.
The parties now jointly move lor approval of a settlement agrecment and dismissal of the
action with prejudice. ECF No. 29. The Court has rcvicwed thc Complaint. the Answers tiled by
Defendants. the parties' Joint Motion to Approve Settlement Agreement and to Dismiss Action
with Prejudicc. and the Settlemcnt Agreement and Mutual General Release. ECF Nos. I. 13. 1G.
29. & 29-1. For the reasons explained below. the Court tinds that a
regarding

liability

undcr the FLSA. the settlement

agreement

hOlla

.fide dispute exists

is a fair and rcasonable

compromise of the dispute, and the attorney's fees are reasonable. See Leigh
LLc' DKC-IO-0218, 2012 WL 460468 at

*

4 (D. Md. Feb. 10,2012); Lopez

F.Supp. 2d 471, 478 (D. Md. 2010); Lynn's Food Stores. Inc.

1'.

1'.

1'.

Bottling Group.
NT!. LLC, 748

United States, 679 F.2d 1350,

1355 (II th Cir. 1982). Therefore, the Court will GRANT the motion and instruct the clerk to
elose this ease.
L

FACTUAL BACKGROUND
Aecording

to Plaintiffs,

Defendant Sri Siva Vishni Temple ("Temple")

hired each

Plaintiff to work in different areas of the Temple from, at least, July 2011 through March 31,
2014. ECF No. I at 2. Plaintiffs also allege that from July 2011 through December 2012.
Defendant

Temple and Defendants

Moffett Contracting,

employed

Plaintiffs. It!. at 2-3. Plaintiffs'

Inc. and John C. Moffett jointly

duties included washing and cutting fruits and

vegetables, cooking rice and legumes, cleaning dishes, and performing general maintenance. Id
Plaintiffs contend that from July 2011 through March 3 I, 2014, they worked in excess of forty
hours each week but were not paid one and one half their hourly rate lor those excess hours as
required by law. Id
II. DISCUSSION

A, FLSA Settlements
The FLSA does not permit settlement or compromise over alleged FLSA violations
except with (1) supervision by the Seeretary or Labor or (2) a judicial finding that the settlcment
reflects "a reasonable compromise of disputed issues" rather than "a mere waiver of statutory
rights brought about by an employer's

overreaching."

Lynn's Food Stores. Inc.. 679 F.2d at

1354; see a/so Lopez, 748 F. Supp. 2d at 478. (explaining that courts assess FLSA settlements for
reasonableness). These restrictions help carry out the purpose of the FLSA, which was enacted

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"to protect

workers

inequalities

in bargaining

PWG-13-3496,
settlement,

...

the poor

wages

and

long hours

power between employers

2014 WL 2174751

courts

employees

from

must

that can result

Duprey \'. Scotts Co. LLC.

and employees:'

at *2 (D. Md. May 23. 2014). Before approving

evaluate

whether

is a fair and reasonable

the

"settlement

proposed

of a honajide

resolution

there

settlement,
(internal

are FLSA

issues

actually

and the reasonableness
citations

"assurance

in dispute.

of the attorney's

omitted).

'"These

factors

of an adversarial

context'

and the employee

protect [his J rights under the statute:"

an FLSA

by an employer

and

dispute over FLSA provisions:'

Lynn's Food Stores. Inc.. 679 F.2d at 1355 (italics not in original).
whether

from significant

the fairness

To do so, courts examine
and reasonableness

fees. Duprey, 2014

WL 2174751

are most likely to be satisfied
is 'represented

of the
at *2

where there is an

by an attorney

who can

Ill. (citing Lynn's Food Stores. Inc.. 679 F.2d at 1354).

B. Bona Fide Dispute
In determining
the pleadings,

whether a honafide

any subsequent

court tilings, and the parties'

LOII/asc% \'. Parsons Brinkernolll
28, 2009).
entitled

Here. a review

to wages.

Defendants
difference
willfillness

in these calculations

statute of limitations.

demonstrates

and liquidated

argue that Plaintitfs

recitals in the proposed

settlement.

Inc., 1:08cv131 O. 2009 WL 3094955 at * 10 (E.D. Va. Sept.

of the filings

overtime.

of any violation

dispute over FLSA liability exists, the Court reviews

damages

that while

in the aggregate

are owed no more than $13.874.00.
is primarily

attributable

and the resulting

Plaintiffs

to the parties'

impact on liquidated

contend

amount

they are

of $91.467.00,

ECF No. 29 at 2-3. The

honafide dispute over the
damages

and the applicable

Ill. Thus. a honafide dispute exists regarding liability under the FLSA.

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C. Fairness & Reasonableness
In determining whether a selliement of FLSA claims is fair and reasonable, the
Court may consider the following:
(1) the extent of discovery that has taken place; (2) the stage of the proceedings,
including the complexity, expense and likely duration of the litigation: (3) the
absence of Ii-aud or collusion in the selliement; (4) the experience of counsel who
have represented the plaintiffs; (5) the opinions of class counsel and class
members alier receiving noticc of the selliement whether expressed directly or
through failure to object; and (6) the probability of plaintiffs' success on the
merits and the amount of the selliement in relation to the potential recovery.

LOJ1/a.l'c%, 2009 WL 3094955 at * IO. Here, the parties have not exchanged formal discovery,
but have informally exchanged wage and hour calculations, cancelled checks, timesheets, and
allorney billing statements. ECF No. 29- I at 8. Given the current stage of the litigation,
signilicant expenses would be incurrcd if the parties engaged in formal discovery, dispositivc
motions, and possibly trial. See. e.g., SaJ1/an v. LBDI', DKC-12-1083, 2013 WL 2949047 at *3
(D. Md. June 13, 2013). Additionally,

there has been no evidence to suggest any fi-mld or

collusion in the selllemenL and counscls' filings demonstrate their competencc and expcricnce.
See ECF No. 29 at 3 ("The allached

selliement

agreement

was made aller signilicant

negotiations between the parties. Further, Plaintiffs have been represented by able counsel who is
familiar

with

such

litigation.").

Finally,

the selliement

agreement

entitles

$68,5 11.00. See ECF No. 29 at 2. This figure represents approximately

Plaintiffs

to

75% of Plaintiffs'

potential recovery, which Plaintiffs estimate to be $91.467.00. See IJ. As was the case in .'laman,
"[i]n light of the risks and costs associated with proceeding further and Defendants' potentially
viable defenses. this amount appears to renect a reasonable compromise over issues actually in
dispute." 2013 WL 2949047 at *5 (citation and internal quotation marks and brackets omilled).

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Although the settlement agreement contains a general release of claims beyond those in
the Complaint, and a general release can render an FLSA settlement agreement unreasonable, the
Court is not required to evaluate the reasonableness of the settlement as it relates to non-wagedispute claims if the employee is compensated reasonably for the release executed. Duprey. 2014
WL 217475 I at *4. As explained above. the Court tinds that $68,511.00 is reasonable for the
release exeeuted. (f id.

C...

Duprey was compensated for almost eighty percent of his back pay

when calculated using the lluctuating workweek method, plus an additional $2.250 in liquidated
damages. This percentage fairly compensates Duprey for the general release executed'').

D. Attorncy's Fccs
Traditionally, "[i]n calculating an award of attorney's fees, the Court must determine the
lodestar amount. defined as a 'reasonable hourly rate multiplied by hours reasonably expended'"
Lopez \'. ,\TEL Const. Grp .. LLC. 838 F. Supp. 2d 346. 348 (D. Md. 20 12) (citinx Grisso/lll'. The
,Hills Corp., 549 F.3d 313, 320-21 (4th Cir. 2008); Plyler \'. Emil, 902 F.2d 273, 277 (4th Cir.
1990)). An hourly rate is reasonable if it is "in line with those prevailing in the community fiJr
similar services by lawyers of reasonably comparable skill, experience and reputation." Blu/II \'.
Stenson. 465 U.S. 886.890 n. I I (1984). This Court has establishcd rates that are presumptively
reasonable for lodestar calculations. See Local Rules. App. 13.
Here, Plaintiffs were originally represented by Daniel Katz and Laura Varela-Addeo of
the Law Offices of Gary M. Gilbert & Associates. P.C., but have been represented by Ken C.
Gauvey since October 30. 2014. Id. Plaintiffs' fornler attorneys spent approximately 157 hours
on this case. at various rates but never more than $450.00 an hour. resulting in $40,534.00 in
legal fees. ECF No. 29-2 at 3-23. Mr. Gauvey spent approximately 28 hours on this case. at the
rate of $250.00 an hour. resulting in $7.000.00 in legal fees. Id. at 2. Notwithstanding

5

these

totals, the parties have negotiated a separate settlement of $20,000.00 for attorney's fees to be
split such that Katz and Varela-Addeo receive $15.000.00 and Gauvey receives $5,000. See ECF
No. 29 at 3. Thus, it appears that as part of the negotiations in this case, the attorneys have
agreed to a discounted rate. In light of the facts of this case and the disputes explained above, the
Court finds this sum to be fair and reasonable under the lodestar approach.
III. CONCLUSION
For the reasons stated above, the Joint Motion to Approve Settlement Agreement and to
Dismiss Action with Prejudice, ECF No. 29. is GRANTED.
A separate Order shall issue.

/f-/I----

Dated: December 31. 2014

,
GEORGE J. HAZEL
United States District Judge

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