Guardado v. Unicorn Cleaning Co., Inc. et al
Filing
11
MEMORANDUM OPINION. Signed by Judge Peter J. Messitte on 8/30/2017. (jf3s, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
MARIA ADELA GUARDADO,
Plaintiff
V.
Civil No.: PJM 16-3983
UNICORN CLEANING CO., INC., ET AL.,
Defendants
MEMORANDUM OPINION
Maria Adela Guardado ("Plaintiff') has brought suit against Unicorn Cleaning Company
("Unicorn") and Rosa Ivette Clabaugh (formerly Vasquez) ("Defendants"), alleging violations of
the Maryland Wage and Hour Law ("MWHL"), Md. Code Ann., Lab. & Empl. §§ 3-401 et seq.,
the Maryland Wage Payment and Collection Law ("MWPCL"), Md. Code Ann., Lab. & Empl.
§§ 3-501 et seq., and the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201, et seq. Plaintiff
and Defendants 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 and Dismissal Without Prejudice, ECF No. 10, and
DISMISSES WITH PREJUDICE all counts of the Complaint, ECF No. 1, as to both
Defendants.
I.
Factual and Procedural Background
Unicorn is a commercial and residential cleaning company owned by Clabaugh that
operates and does business in Maryland. ECF No. 1 ¶IJ 4, 5. Plaintiff worked as a cleaning
-1-
laborer for Unicorn from approximately October 21, 2013 through September 15, 2016. ECF No.
1 If 17.
Plaintiff filed a Complaint on December 13, 2016, alleging that during the time of her
employment, she was paid at an hourly rate of $6.00 and $7.00, rates below Maryland's
minimum wage of $7.25 as of January 1, 2013. Id. ¶ 18. She also alleges that she worked
approximately fifty (50) hours per week and was never compensated at the required overtime
rate for those hours worked over forty hours. Id. If 19. On August 7, 2017, before Defendants
filed responsive pleadings, the parties filed a Joint Motion for Approval of Settlement and
Dismissal with Prejudice, ECF No. 10.
Standard of Review
Congress enacted the FLSA to protect workers from the poor wages and long hours that
may result from the 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. See Brooklyn Say. Bank v. 0 'Neil,
324 U.S. 697, 706 (1945). Court-approved settlement is an exception to that rule, "provided that
the settlement reflects 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., No.
DKC 12-1083, 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 for approval, "district courts in this circuit typically
employ the considerations set forth by the Eleventh Circuit in Lynn's Food Stores." Beam v.
Dillon's Bus Serv., Inc., No. DKC 14-3838, 2015 WL 4065036, at *3 (D. Md. July 1, 2015)
-2,
(citing Hoffman v. First Student, Inc., No. WDQ-06-1882, 2010 WL 1176641, at *2 (D. Md.
Mar. 23, 2010)); Lopez v. NTI, 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."
Beam, 2015 WL 4065036, at *3 (quoting Lynn's Food Stores, Inc. v. US. By & Through US.
Dep't of Labor, Employment Standards Admin., Wage & Hour Div., 679 F.2d 1350, 1355 (11th
Cir. 1982)). The court considers (1) whether there are FLSA issues actually in dispute, (2) the
fairness and reasonableness of the settlement, and (3) the reasonableness of the attorneys' fees, if
included in the agreement. Id.
Bona Fide Dispute
In deciding whether a bona fide dispute exists as to a defendant's liability under the
FLSA, the court examines the pleadings in the case, along with the representations and recitals in
the proposed settlement agreement. See Lomascolo v. Parsons Brinckerhoff Inc., et al., No.
1:08CV1310 (AJT/JFA), 2009 WL 3094955 at *16-17 (E.D. Va. Sept. 28, 2009).
In this case, the parties dispute the individual liability of Defendant Clabaugh. Plaintiff
argues that Clabaugh can be held liable because she had economic control over the employment
relationship. Ford v. Karpathoes, Inc., No. ELH-14-00824, 2014 WL 6621997 at *3 (D. Md.
Nov. 20, 2014) ("Generally, where an individual exercises control over the nature and structure
of the employment relationship, or economic control over the relationship, that individual is an
employer within the meaning of the FLSA and is subject to liability.") (quotation and citation
omitted). Specifically, Plaintiff alleges that Clabaugh had such control because she owned
Unicorn, had the power to hire, fire, suspend, and discipline Plaintiff, and directly or indirectly
-3-
set and controlled her work schedule and pay. ECF No. 1 ¶¶ 5, 10-14. Defendants dispute these
facts.
The parties also dispute the total numbers of overtime hours Plaintiff worked and
Plaintiffs status as an employee of Unicorn.
The parties thus stipulate, and the Court finds, that a bona fide dispute exists as to
Defendants' liability under the FLSA, the resolution of which would require further factual
development and rulings of law.
IV.
Fairness and Reasonableness
If a bona fide dispute is found to exist, the court must then evaluate the fairness and
reasonableness of the settlement based on the following factors:
(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 fraud or collusion
in the settlement; (4) the experience of counsel who have represented the plaintiffs; (5) the
opinions of class counsel and class members after receiving notice of the settlement whether
expressed directly or through failure to object; (6) the probability of plaintiffs' success on the
merits and the amount of the settlement in relation to the potential recovery.
Lomascolo, 2009 WL 3094955, at *10 (quoting Flinn v. FMC Corp., 528 F.2d 1169, 1173 (4th
Cir.1975)). Having reviewed the parties' submissions and after considering the relevant factors
enumerated by the Lomascolo court, the Court concludes that the proposed settlement is a fair
and reasonable resolution of the parties' bona fide dispute.
The extent of the discovery that has taken place is important to the Court because "it
ordinarily assures sufficient development of the facts to permit a reasonable judgment on the
possible merits of the case." Flinn v. FMC Corp., 528 F.2d 1169, 1173 (4th Cir. 1975). However,
parties may settle an FLSA case at an early stage, before discovery, provided that the plaintiff
-4-
has had sufficient opportunity to evaluate the viability of claims and the potential range of
recovery. Saman, 2013 WL 2949047, at *4.
In this case, formal discovery has not yet begun. However, in investigating settlement
possibilities, Plaintiff's counsel reviewed employment records provided by Unicorn and
discussed such records with Plaintiff. ECF No. 10-2 at 4-5. This limited discovery gave both
parties an approximate idea of how much Plaintiff worked, which allowed them to estimate the
potential damages in the case and permit "a reasonable judgment on the possible merits of the
case." Flinn, 528 F.2d at 1173; see also Saman, 2013 WL 2949047, at *4 ("[a]lthough the parties
agreed to settle at an early stage in the proceedings and before conducting any formal discovery,
they represent that Defendants produced payroll records in connection with mediation and that
all counsel are 'satisfied that they have had ample opportunity to evaluate and consider the
viability of claims and defenses raised in this case.") (internal citations omitted). This suggests
that the settlement is fair and reasonable.
Similarly, though the proceedings are still in their early stages, their expected expense
and duration militate towards approving the proposed settlement. The parties are aware that a
significant factual investigation, including depositions of Plaintiff and former co-workers, would
be needed to substantiate Plaintiff's claims of hours worked and wage rates. ECF No. 10 at 3.
Given that Defendants have demonstrated to Plaintiff an inability to satisfy a judgment should
Plaintiff prevail in her lawsuit, the parties have agreed to resolve this matter expeditiously in
order to avoid the cost and time of litigation. Id.
In addition, the parties note that there is no claim or indication of fraud or collusion in the
settlement, which suggests that the settlement is fair and reasonable. Id. at 4.
-5-
The Court also finds that Plaintiffs Counsel are experienced and competent. For
example, Jonathan F. Lieberman, Esq., one of Plaintiff's counsel, focuses his practice on
personal injury and employment law and has handled such cases through trial and appeal. Id. at
4. He has also spoken to trade groups regarding employment issues. Id. Plaintiff is also
represented by Mary Lombardo, Esq., who has been actively practicing law for over fifteen years
and has also spoken to trade groups regarding employment issues.
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, after considering Plaintiffs
burden to produce sufficient documentary evidence of hours worked and her obstacles in
recovering a full monetary judgment from the Defendants, that the settlement of Plaintiffs
claims is fair and reasonable.
V.
Attorneys' Fees
The FLSA provides that "in addition to any judgment awarded to the plaintiff or
plaintiffs," the Court must "allow a reasonable attorney's fee to be paid by the defendant, and
costs of the action." 29 U.S.C. § 216(b). The reasonableness of the fee award proposed in an
FLSA settlement must be independently assessed, regardless of whether there is any suggestion
that a "conflict of interest taints the amount the wronged employee recovers under a settlement
agreement." Lane v. Ko-Me, LLC, No. 10-2261, 2011 WL 3880427, at *3 (D. Md. Aug. 31,
2011) (quoting Dees v. Hydradry, Inc., 706 F. Supp. 2d 1227, 1243 (M.D. Fla. 2010)). In making
that assessment, courts typically use the principles of the traditional lodestar method as a guide.
Id. (citing cases).
-6-
The lodestar amount is the "reasonable hourly rate multiplied by hours reasonably
expended." Grissom v. Mills Corp., 549 F.3d 313, 320 (4th Cir. 2008). 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." Duprey v. Scotts Co. LLC, 30 F.
Supp. 3d 404, 412 (D. Md. 2014) (quoting Blum v. Stenson, 465 U.S. 886, 890 n.11 (1984)). In
Appendix B to its Local Rules, this Court has established rates that are deemed reasonable for
lodestar calculations. Id. (citing Poole ex rel. Elliott v. Textron, Inc., 192 F.R.D. 494, 509 (D.
Md. 2000)). Plaintiffs are expected to 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 performed.
Saman, 2013 WL 2949047, at *7; Local Rule 109.2; Appendix B to the Local Rules.
Plaintiffs counsel, Mary Craine Lombardc, Esq., has been practicing law since 1999.
She is admitted to practice in state and federal courts in Maryland, the District of Columbia,
Virginia, Pennsylvania, and New Jersey (inactive). Lombardo's colleague, Jonathan F.
Lieberman, Esq., who handled the initial intake of the matter, was also admitted to the bar in
1999 and is admitted in state and federal courts in Maryland, the District of Columbia, and
Virginia. Lombardo and Lieberman worked with a jtulior associate, Eduardo Garcia, an attorney
with three years of experience who primarily handled the case once the Complaint was filed.
Moreover, certain tasks in this case were delegated to paralegals and appropriate support staff.
Per Appendix B, lawyers admitted to the bar for fifteen (15) to nineteen (19) years may
reasonably bill $275-425 per hour, and those admitted to the bar for less than five (5) years may
reasonably bill $150-225. Paralegals and law clerks may reasonably bill $95-150 per hour.
-7-
Counsel for Plaintiff filed sufficient documentation of the fees and costs incurred in the
form of a detailed billing statement. This statement indicates that counsel billed 22.6 hours total
on this matter, and also specifies the hours billed by each professional. At their hourly rates, Ms.
Lombardo incurred $954.00 in fees for 2.1 hours of work (averaging about $454 per hour), Mr.
Lieberman incurred $1,364.00 in fees for 3.1 hours of work (averaging about $440 per hour), and
Mr. Garcia incurred $2,933.00 in fees for 9.1 hours of work (averaging about $322 per hour).
Support staff (including paralegals) billed $1,447.50 in fees for 8.3 hours of work (averaging
about $174 per hour). Counsel for Plaintiff also incurred $475 in costs. The total in attorneys'
fees and costs thus amounts to $7,174.00. However, Plaintiff's counsel, in the interest of
reaching a settlement, agreed to reduce the attorneys' fee award by $2,699 to $4,475.00.
The Court, in its discretion, is satisfied that the settlement allocation of $4,475.00 for
attorneys' fees and costs is reasonable despite the average billing rates for Plaintiff's counsel
being above those provided by the Local Rules. Using the rates provided in Appendix B, the
Court calculates that Plaintiff's counsel would be entitled to $5,501.00, $1,026 more than the
settlement allocation. Accordingly, and in light of the speedy resolution of the case, the Court
finds the attorney fee award in the proposed settlement to be reasonable.
-8-
VI.
Conclusion
For the foregoing reasons:
The Joint Motion for Approval of Settlement and Dismissal with Prejudice, ECF No. 10,
is GRANTED and the Complaint, ECF No. 1, is DISMISSED WITH PREJUDICE;
FINAL JUDGMENT is awarded in favor of Maria Adela Guardada and against
Defendants in the amount of $4025.00;
FINAL JUDGMENT for attorneys' fees in the amount of $4,475.00 is ENTERED in
favor of Plaintiffs' counsel and against Defendants;
A separate Order will ISSUE.
/s/
PETER J. MESSITTE
STATES DISTRICT JUDGE
August 30, 2017
-9-
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?