Belmont v. Homes of Opportunity, Inc et al

Filing 31

OPINION and ORDER Granting the Parties' 28 Joint Motion for Approval of Settlement Agreements and Entry of Stipulated Order of Dismissal. Signed by District Judge Linda V. Parker. (RLou)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
SUSAN BELMONT, on behalf of
herself and others similarly situated,
Plaintiff,
v.

Civil Case No. 18-10854
Honorable Linda V. Parker
Magistrate Judge Mona K. Majzoub

HOMES OF OPPORTUNITY, INC.,
and LAWRENCE A. MANIACI,
Defendants.
______________________________/
OPINION AND ORDER GRANTING THE PARTIES’ JOINT MOTION
FOR APPROVAL OF SETTLEMENT AGREEMENTS AND
ENTRY OF STIPULATED ORDER OF DISMISSAL [ECF NO. 28]
Plaintiff filed this putative collective action on March 14, 2018, claiming
that Defendants violated the Fair Labor Standards Act (“FLSA”) by failing to pay
Plaintiff’s overtime wages. All parties stipulated to conditional certification on
May 15, 2018. (ECF No. 13.) Additionally, the parties agreed to exchange
extensive discovery documents and submitted the case to a settlement conference
with Magistrate Judge Mona K. Majzoub on October 17, 2019. Presently before
the Court is a joint motion seeking the Court’s approval of the parties’ proposed
settlement. (ECF No. 28.) On December 4, 2018, the Court held a fairness
hearing with the parties. Following the hearing, the Court approved the parties’
proposed settlement and granted the parties’ joint motion. The Court articulated its

reasoning on the record and, for further detail and clarity, provides the instant
opinion and order.
I.

Applicable Law
Pursuant to 29 U.S.C. § 216(b), the parties move for an order granting

approval of their proposed Settlement Agreement. (ECF No. 28.) In determining
whether a proposed class action settlement is fair, reasonable, and adequate, the
Sixth Circuit has identified seven factors that may aid the Court in its
determination:
(1) the risk of fraud or collusion;
(2) the complexity, expense, and likely duration of the litigation;
(3) the amount of discovery engaged in by the parties;
(4) the likelihood of success on the merits;
(5) the opinions of class counsel and class representatives;
(6) the reaction of absent class members; and
(7) the public interest.
Byers v. Care Transp., Inc., 2017 U.S. Dist. LEXIS 25233, at *2 (E.D. Mich. Feb.
23, 2017). “The Court may choose to consider only those factors that are relevant
to the settlement at hand and may weigh particular factors according to the
demands of the case.” Redington v. Goodyear Tire & Rubber Co., 2008 U.S. Dist.
LEXIS 64639, at *31 (N.D. Ohio Aug. 22, 2008) (citation omitted). Where the
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settlement agreement includes the payment of attorney’s fees, the court must assess
the reasonableness of that amount. Wolinsky v. Scholastic Inc., 900 F. Supp. 2d
332, 336 (citing 29 U.S.C. §216 (b) and cases finding judicial review of the fee
award necessary). “[T]he Court must carefully scrutinize the settlement and the
circumstances in which it was reached, if only to ensure that ‘the interest of
Plaintiff’s counsel in counsel's own compensation [did not] adversely affect the
extent of the relief counsel [procured] for the clients.’” Id. (quoting Cisek v. Nat’l
Surface Cleaning, Inc., 954 F. Supp. 110, 110-11 (S.D.N.Y. 1997)). On balance,
the factors evaluated by the Court strongly weigh in favor of the Court granting
final approval of the parties’ settlement.
II.

Analysis
After reviewing the pleadings and the parties’ joint motion, the Court finds

that the parties’ proposed settlement represents a “fair and reasonable resolution of
a bona fide dispute over FLSA provisions.” Lynn's Food Stores, Inc. v. U.S., 679
F.2d 1350, 1355 (11th Cir. 1982). As such, the Court will articulate its reasoning
as to the factors it considered.
First, the Court has found no reason to suspect fraud or collusion nor have
the parties advanced any such reason. A bona fide dispute between the parties is
evident and remains. Whether Defendants violated the FLSA by failing to pay
overtime and whether Plaintiff was properly classified as a managerial employee
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remains in dispute. Due to these disputes, bona fide issues remain as to the amount
of wages, if any, still owed Plaintiff and the ultimate amount she could recover if
she prevails. Additionally, the parties reached their settlement during a settlement
conference before Magistrate Judge Majzoub. Therefore, the Court agrees with the
parties that this settlement is the product of adversarial, non-collusive, arm’slength bargaining.
Next, the Court looks to the extent that settlement will enable the parties to
avoid additional burdens and expenses. With the proposed settlement, the parties
will avoid the significant burden and expense of trial—costs anticipated to be more
than $100,000 that would likely dwarf the Plaintiff’s potential award. Thus, the
settlement serves as a means for the parties to minimize future litigation costs.
The Court notes that formal discovery had not commenced in this case.
Still, as mentioned, the parties exchanged several documents and other data
relevant to the FLSA claims. Ultimately, the parties used these to evaluate the
merits of their respective claims and defenses. Clearly, settlement will allow the
parties to avoid incurring further costs associated with conducting formal
discovery.
Since a genuine dispute between the parties remains, Plaintiff’s likelihood of
success on the merits and potential award are uncertain. Here, both parties face
risks if the Court determines the appropriate calculation of overtime pay. Plaintiff
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is concerned that the Court may identify her as a managerial employee. (Id. at
PgID 224.) Defendant faces the risk that the Court could find them liable for
damages that exceed the settlement amount. Thus, settlement would preclude the
potential risks to both parties.
Finally, the Court notes that (1) named Plaintiff and all opt-in plaintiffs
believe the settlement to be “fair and reasonable,” (ECF No. 28 at PgID 226.); (2)
settlement is consistent with the purpose and intent of the FLSA and serves the
public interest; and (3) the incentive award sought is reasonable and appropriate
for the efforts of the class representative, Plaintiff Susan Belmont.
In addition to the foregoing factors, the Court also approves the parties’
proposed settlement with respect to attorneys’ fees and costs. “In an individual
FLSA action where the parties settled on the fee through negotiation, there is ‘a
greater range of reasonableness for approving attorney’s fees.’” Wolinsky, 900
F.Supp.2d at 336 (internal citation omitted). The Court is required, however, to
carefully examine the settlement “to ensure that the interest of Plaintiff’s counsel
in counsel’s own compensation [did not] adversely affect the extent of the relief
counsel [procured] for the clients.’” Id. (internal citation omitted). Here, the Court
notes that the amount of each plaintiff’s settlement represents more than the unpaid
overtime each is owed as documented by Defendants. (ECF No. 28 at PgID 223.)

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Therefore, the Court finds that the amount allocated for attorneys’ fees is fair and
reasonable.
For these reasons, the Court finds that the parties’ proposed settlement
reflects a fair and reasonable resolution of a bona fide dispute, and therefore
approves the settlement and dismisses this case.
III.

Conclusion
Accordingly,
IT IS ORDERED, that the Joint Motion for Approval of Settlement (ECF

No. 28) is GRANTED; and
IT IS FURTHER ORDERED, that this action is DISMISSED WITH
PREJUDICE.
s/ Linda V. Parker
LINDA V. PARKER
U.S. DISTRICT JUDGE
Dated: December 13, 2018
I hereby certify that a copy of the foregoing document was mailed to counsel of
record and/or pro se parties on this date, December 13, 2018, by electronic and/or
U.S. First Class mail.
s/ R. Loury
Case Manager

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