Llamas-Lopez et al v. Amerigal Construction Co., Inc. et al

Filing 7

MEMORANDUM OPINION. Signed by Judge Peter J. Messitte on 5/4/2015. (aos, Deputy Clerk)

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FILED

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ENTERED

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LOGGED __

RECEIVED

MAY
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

NEMECIO

LLAMAS LOPEZ, ET AL.,
Plaintiffs

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42015

Ai GREENBELT
CLERK, U.S. DISTRICT COURT
DISTRICT OF MARYLAND
BY
DEPUTY

Civil No. PJM 15-520

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v.
AMERIGAL CONSTRUCTION
INC., ET AL.
Defendants

CO.,

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MEMORANDUM

OPINION

Nemecio Llamas Lopez and Ramiro Bravo ("Plaintiffs") have sued Amerigal
Construction Co., Inc., and Luis A. Ezequiel (collectively, "Amerigal"), alleging violations of
the Maryland Wage Payment and Collection Law ("MWPCL"), Md. Code Ann., Lab. & Empl.

SS 3-501

el seq., and the Fair Labor Standards Act ("FLSA"), 29 V.S.c.

SS

206,207. Plaintiffs

and Amerigal have now reached a settlement, and ask for the Court to approve the settlement and
dismiss with prejudice all claims in the Complaint. For the reasons that follow, the Court
GRANTS the Joint Motion for Settlement, ECF No. 19, and DISMISSES WITH PREJUDICE
the remaining counts of the Complaint, ECF No. I, as to all Defendants.
I.
Factual and Procedural Background
Amerigal is a construction company with its principal place of business in Maryland, and
Ezequiel was an owner, agent, or principal of Amerigal. The Plaintiffs are both former
employees of Amerigal who worked as concrete laborers, and were paid at an hourly rate.

Plaintiffs allege that Amerigal failed to pay each plaintifTany overtime premium for
hours worked in excess of 40 in the work week. The Complaint sought relief not only for the
named Plaintiffs, but also, per 29 V.S.c. ~ 2l6(b), a class of similarly situated opt-in litigants
(the "Putative Plaintiffs"). No such Putative Plaintiff opted-in to the action. Neither the Joint
Motion for Settlement nor the Settlement Agreement purported to resolve any claims asserted on
behalf of the Putative Plaintiffs.
Plaintiffs filed the Complaint on February 24, 2015. ECF NO.1. Amerigal did not answer
the Complaint. Instead, the parties engaged in informal discovery and settlement discussions, and
on March 24, 2015, submitted the pending Joint Motion for Settlement, ECF NO.6.
II.

Standard of Review
Congress enacted the FLSA to protect workers from the poor wages and long hours that
may result from significant inequalities in bargaining power between employers and employees.
To that end, the statute's provisions are mandatory and generally not subject to bargaining,
waiver, or modification by contract or settlement.
697, 706 (1945).

Court-approved

See Brooklyn Sav. Bank v. 0 'Neil, 324 V.S.

settlement is an exception to that rule, "provided that the

settlement retlects a 'reasonable compromise of disputed issues' rather than 'a mere waiver of
statutory rights brought about by an employer's overreaching.'''

Saman v. LBDP, Inc., 2013 WL

2949047, at *2 (D. Md. June 13,2013) (quoting Lynn's Food Stores, Inc. v. United States, 679
F.2d 1350, 1354 (11th Cir. 1982)).
In reviewing FLSA settlements
employ the considerations

for approval, "district courts in this circuit typically

set forth by the Eleventh Circuit in Lynn's Food Stores."

Saman,

2013 WL 2949047, at *3 (citing Holjinan v. First Student, Inc., 2010 WL 1176641, at *2 (D.

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Md. Mar. 23,2010);

Lopez v. NT!, LLC, 748 F. Supp. 2d 471, 478 (D. Md. 2010)).

The

settlement must "reflect(] a fair and reasonable resolution of a bona fide dispute over FLSA
provisions:'

Id. The Court considers (I) whether there are FLSA issues actually in dispute, (2)

the fairness and reasonableness of the settlement in light of the relevant factors from Rule 23,
and (3) the reasonableness of the attorneys' fees, if included in the agreement.
Food Stores, 679 F.2d at 1355; Lomasc%

1'.

Id. (citing Lynn's

Parsons BrinckerhojJ, Inc., 2009 WL 3094955, at

*10 (E.D. Va. Sept. 28, 2009); Lane v. Ko-Me, LLC, 2011 WL 3880427, at *2-3 (D. Md. Aug.
31,2011)).
III.
Bona Fide Dispute
In deciding whether a bonafide dispute exists as to a defendant's liability under the
FLSA, courts examine the pleadings in the case, along with the representations and recitals in the
proposed settlement agreement. See Lomasc%,

2009 WL 3094955, at *16-17.

The parties stipulate that, after exchange of informal discovery, they agree on the number
of hours and amounts paid to Plaintiffs during each week of their employment by Amerigal. See
ECF No. 6-1, at 3-4. Based on these figures, Plaintiff Llamas Lopez argues that he was
underpaid for overtime in the amount of $2,577 .22; Plaintiff Bravo argues that he was underpaid
for overtime in the amount of$I,771.75.

See id. Other than Amerigal's statement that it seeks to

settle the matter "solely" in order to avoid the inconvenience and costs of litigation of Plaintiffs'
claims, see id. at 2, the parties' submissions are unclear about what, if any, bona fide dispute
exists as to Amerigal's liability under the FLSA. However, there appear to be a few
discrepancies between the number of overtime hours alleged in the Complaint, and the number
of overtime hours to which the parties stipulate in the Joint Motion for Settlement. Compare,

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e.g., ECF No. I, at 4 (alleging that Llamas-Lopez worked 65 hours in the week ending October
19,2013)

with ECF No.6-I,

ending October 19,2013).

at 3 (stipulating that Llamas Lopez worked 56 hours in the week
The Court therefore presumes that, were this case to go to trial, the

parties would dispute the actual number of overtime hours worked during certain weeks.
Accordingly, the Court finds that a bonafide dispute exists as to Amerigal"s liability
under the FLSA, whose resolution would depend on both further factual development as well as
rulings of law.
IV.
Fairness and Reasonableness
If a bona fide dispute is found to exist, courts must then evaluate the fairness and
reasonableness of the settlement based on the following factors:
"( I) 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 fraud or collusion in the settlement; (4) the experience of counsel who
have represented the plaintiffs; (5) the opinions of [] counsel ... ; and (6) the
probability of plaintiffs' success on the merits and the amount of the settlement in
relation to the potential recovery."
Saman, 2013 WL 2949047, at *3 (quoting Lomascolo, 2009 WL 3094955, at *10).
Having reviewed the parties' submissions and after considering the relevant factors
enumerated by the Lomascolo court, the Court concludes that the Settlement Agreement is a fair
and reasonable compromise of the parties' bonafide dispute.
The case is settling at an early stage; indeed, the parties do not represent that any formal
discovery has taken place. In Saman, which settled at a similarly early stage, plaintiffs

counsel

averred that he had the opportunity through mediation to review wage/hour records of sufficient
quantity and quality to determine the potential range of recovery in the case. See Saman, 2013
WL 2949047, at *3. On this basis, Judge Chasanow of this Court concluded that the parties had

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had sufficient opportunity to obtain and review evidencc, to evaluate their claims and defenses
and to engage in informed arms-length settlement negotiations. See id. (citing Lomascolo, 2009
WL 3094955, at *11). Counsel in the present case represent that they engaged in informal
discovery, and have thereby reached agreement on the number of overtime hours workcd in each
week at issue. The Court is therefore satisfi-ed the parties have had sufficient opportunity to
evaluate their claims and defenses as to these disputed legal and factual issues and to engage in
informed arms-length settlement negotiations.
Similarly, the Court finds no fraud or collusion in the proposed settlement, given the
experience of Plaintiffs' counsel, and the endorsement of settlement by counsel for both parties,
and the quality of the filings submitted to date.
Finally, as to the probability of plaintiffs' success on the merits and the amount of the
settlement in relation to the potential recovery, the Court is satisfied that the settlement of each
Plaintiff s claim is fair and rcasonable under the circumstances. The proposed settlement is as
follows: PlaintilT Llamas Lopez will receive unpaid wages for overtime in the amount of
$2,577.22. This exceeds the amount that Llamas Lopez claimed he was owed in the Complaint
by $70.22. Plaintiff Bravo will receive unpaid wages for overtime in the amount of $1 ,771.75.
This exceeds the amount that Bravo claimea he was owed in the Complaint by $4.75. These
unpaid wages will be subject to applicable taxes and deductions. In addition, Plaintiffs will
receive, as liquidated damages, payments equaling twice their unpaid overtime wages: $5,154.44
as to Llamas Lopez and $3,543.50 as to Bravo. In return, Plaintiffs agree to waive any claims
against Amerigal relating to their overtime compensation, unpaid wages, or any other wagerelated claim which arose prior to the execution date of the settlement agreement. See ECF No.
6-3, at 2-3.

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While some courts have held that an overly broad release provision can render an FLSA
agreement unreasonable if the release includes claims unrelated to those asserted in the
complaint, Saman, 2013 WL 2949047, at *5 (citing cases), if the employee is compensated
reasonably for the release executed, the settlement can be accepted, and the Court is not required
to evaluate the reasonableness of the settlement as to the non-FLSA claims. See Duprey v. Scolls
Co. LLC, 2014 WL 2174751, at *4 (D. Md. May 23, 2014). In Duprey, the plaintiff was
compensated for almost eighty percent of his claimed back pay, plus an additional sum in
liquidated damages. Judge Grimm of this Court found that this percentage fairly compensated the
plaintiff for the general release executed. See id. Here, Plaintiffs will be compensated for 100%
of their claimed unpaid overtime and 100% of their claimed liquidated damages. In addition,
rather than broadly releasing Amcrigal from all liability, the release provision pertains only to
wage-related claims that arose prior to the settlcment agreement. Accordingly, the Court linds
that the settlement rcasonably compcnsates Plaintiffs for the release executed.
In sum, the scttlemcnt agreement would recover the actual amounts that each Plainti ff
alleges he is owed, plus thc full liquidated damages that would be owcd were thc Plaintiffs to
win on the issue at trial. Thc Court linds this scttlement reasonable in rclation to the potential
recovery in thc casc.

v.
Attorneys' Fecs
The reasonableness of the fee award proposcd in an FLSA settlement must be
independcntly assessed, regardless of whether thcre is any suggestion that a "contlict of interest
taints the amount the wronged employce recovers under a settlemcnt agreement." Lane, 2011
WL 3880427, at *3 (citing Dees v. Hydrad,y, Inc., 706 F.Supp.2d 1227, 1243 (M.D. Fla. 2010)).

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In making that assessment, courts typically usc the principles of the traditional lodestar method
as a guide. fd. (citing cases).
Traditionally, in 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.
Duprey v. Scolls Co. LLC, 2014 WL 2174751, at *6 (D. Md. May 23, 2014) (citing Lopez v.
)'TEL COllsl. Grp., LLC, 838 F. Supp. 2d 346, 348 (D. Md. 2012)). An hourly rate is reasonable
if it is "in line with those prevailing in the community for similar services by lawyers of
reasonably comparable skill, experience, and reputation." fd. (citing BlulIl v. Slensoll, 465 U.S.
886,890 n. II (1984)). In Appendix B to its Local Rules, this Court has established rates that arc
presumptively reasonable for lodestar calculations. fd. (citing Poole ex rei. Ellioll v. Texlroll,
fIlC.,

192 F.R.D. 494, 509 (D. Md. 2000)). Plaintiffs should also provide all documentation

necessary for the Court to make a lodestar determination as to the hours reasonably expended,
including but not limited to declarations establishing the hours expended by counsel, broken
down for each task. See Samail, 2013 WL 2949047, at *7; Local Rule 109.2; Appendix B to the
Local Rules.
The parties submit that Plaintiffs' counsel has been a member of the Bar of the Court of
Appeals for Maryland for 18 years, and his hourly rate is $425. ECF

No. 6-1,

at 5. Per Appendix

B, a presumptively reasonable rate for lawyers admitted to the bar for fifteen to nineteen years is
$275-$425. Accordingly, the Court finds Plaintiffs counsel's hourly rate to be reasonable.
The parties failed to provide documentation-including
hours expended by counsel, broken down for each task-for

declarations establishing the
the Court to make a lodestar

determination as to the hours reasonably expended. However, the parties submit that Plaintiffs'
counsel spent more than 14 hours preparing this case, and has incurred $420 in reimbursable

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expenses. The Court finds fourteen hours a reasonable period of time for Plaintiffs' counsel to
have investigated the Plaintiffs' claims, drafted a Complaint, and engaged in informal discovery
and settlement negotiations with counsel for Amerigal. Fourteen hours at a $425 hourly rate
($5,950) plus $420 in expenses yields a final total 01'$6,370. The parties have agreed to settle the
attorneys fees award for $6,420.
The Court, in its discretion, is satisfied that the settlement amount 01'$6,420 for over 14
hours expended by Plaintiffs' counsel is reasonable, especially in light of the speedy resolution
of the case, and the fact that Plaintiffs obtained what appears to be a complete recovery of both
their unpaid overtime wages and claims for liquidated damages. Accordingly, the Court finds the
attorney fee award in the proposed settlement to be reasonable.

VI.
Conclusion
For the foregoing reasons, the Court GRANTS the Joint Motion for Settlement and
DISMISSES

WITH PREJUDICE

Counts I and III the Complaint (pertaining to Plaintiffs

Llamas Lopez and Bravo) as to all Defendants. The Court DISMISSES
PREJUDICE

WITHOUT

Count 11of the Complaint (pertaining to the Putative Plaintiffs). A separate Order

will ISSUE.

lsI
P TER.J. MESSITTE
D SATES DISTRICT JUDGE

UNI

k
. -'

May

2015

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