Aquino v. Fort Washington Auto Body Corp et al

Filing 32

OPINION AND ORDER re: 29 LETTER addressed to Magistrate Judge Henry B. Pitman from Kevin A. Guaranda dated 11/16/2016 re: Approval of agreements and 31 SUPPLEMENTAL LETTER addressed to Magistrate Judge Henry B. Pitman from Michael R. Minkoff, Esq . dated April 17, 2017 re: ECF # 30 - supplemental filing in support of settlement approval. Accordingly, for all the foregoing reasons, I approve the settlements in this matter. In light of the settlements, the action is dismissed with prejudice and without costs. The Clerk of the Court is respectfully requested to mark this matter closed. (Signed by Magistrate Judge Henry B. Pitman on 5/23/2017) Copies Transmitted By Chambers. (ras)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

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YUNIOR AQUINO, on behalf of
himself, individually, and
on behalf of all others
similarly situated, et al.,
16 Civ. 390

(HBP)

Plaintiffs,
OPINION
AND ORDER

-againstFORT WASHINGTON AUTO BODY
CORP. , et al. ,
Defendants.

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PITMAN, United States Magistrate Judge:

This matter is before me on a joint application to
approve a settlement between plaintiff Ismael Santana and defendants and a separate settlement between the remaining plaintiffs
and defendants

(Docket Item ( "D. I.")

2 9,

31) .

All parties have

consented to my exercising plenary jurisdiction pursuant to 28
U.S.C. § 636(c).
This is an action brought by seven individuals who were
or are employed by defendants.

Plaintiffs allege that they were

not paid for overtime work and did not receive proper wage
statements.
Standards Act

Plaintiffs assert their claims under the Fair Labor
(the "FLSA"), 29 U.S.C. §§ 201 et

.§§_g.,

provisions of the New York Labor Law (the "NYLL").

and various

The action

was commenced as a collective action with respect to the FLSA
claim, and the parties stipulated to the matter proceeding as a
collective action.
Defendants deny plaintiffs' allegations.

They contend

that plaintiffs' salaries covered all hours worked and included
an additional amount for their overtime hours.

Defendants also

dispute the number of hours that plaintiffs claim to have worked.
In addition, defendants assert that Santana was a manager and,
thus, was exempt from the federal and state overtime requirements.
I held a lengthy settlement conference on September 29,
2016 that was attended by Santana and his counsel.

At the

conference, Santana claimed he was owed either $58,133.86 or
$239,802.19 in unpaid wages, depending on whether the wages he
received were intended to compensate him for all hours worked or
only for the first forty hours.

After a protracted discussion of

the strengths and weaknesses of the parties' respective positions, Santana and defendants agreed to resolve his claim for a
total settlement of $38,500.00.

The parties have also agreed

that $230.21 of the settlement amount will be allocated to
reimburse Santana's counsel for their out-of-pocket costs,
$12,833.33 (or approximately one-third) of the remaining

2

$38,269.79 will be paid to Santana's counsel and the balance of
$25,436.46 will be paid to Santana.
The remaining plaintiffs and defendants have agreed to
a total settlement of $170,000.00, to be distributed among the
The parties have also agreed

plaintiffs on a .2.£.Q rata basis.

that, after deduction of out-of-pocket costs, plaintiffs' counsel
will receive one-third of the total settlement amount as attorneys' fees.
tiffs,

1

The amounts claimed by each of the remaining plain-

the gross amount of the settlement fund allocable to each

plaintiff and the net amount that will be received by each
plaintiff after deduction for legal fees and costs are as follows:

Plaintiff

Amount
Claimed

Gross
Allocable
Share

Allocable
Share of
Costs

Yunior Aquino

25,395.48

37,878.62

Ramon Sanchez

27,274.21

Dominguez Celso
Dony Almanzar

Allocable
Share of
~

Net
Allocable
Share

277.78

12, 626. 21

24,974.63

40,695.13

298.43

13,565.04

26,831.66

18,318.07

30,566.61

224.15

10,188.87

20,153.59

19,242.86

30,220.50

221.62

10,073.50

19,925.38

Jairo Pujols

955.56

6,602.18

48.41

2,200.73

4,353.04

Antonio Diaz

12,155.56

24,036.96

176.27

8,012.32

15,848.37

103,341.74

170,000.00

1,246.66

56,666.67

112,086.67

TOTAL

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The amount claimed by each of the plaintiffs includes the
allegedly unpaid overtime (assuming that the wages paid represented straight time pay for all hours actually worked) and
liquidated damages.
It does not include statutory damages for
alleged violations of New York's Wage Theft Prevention Act.
3

This settlement was reached prior to the settlement conference I
conducted between Santana and defendants.
I refused to approve an earlier draft of the settlement
agreement between Santana and defendants because it contained a
general release (D.I. 30).

Specifically, the provision not only

barred all claims against defendants themselves, but also against
unaffiliated persons or entities.

I ordered the parties to limit

the persons or entities covered by the general release.

I also

noted that Santana's counsel sought a 40% contingency fee and
that such a high fee required justification and documentation.
I also refused to approve an earlier draft of the
settlement agreement between the remaining plaintiffs and defendants

(D.I. 30).

While counsel had listed each plaintiff's

maximum potential recovery in their submission seeking settlement
approval, they provided a calculation of damages within the
FLSA's three-year statute of limitations only, not within the
NYLL's six-year statutory period.

I ordered the parties to re-

submit a damages calculation for the six-year period that preceded the filing of the complaint so that I could assess whether
the estimate of plaintiffs' maximum potential recoveries was
accurate.
The parties have addressed each of these issues; they
have limited the general release and reduced the contingency fee
4

sought in Santana's settlement agreement, and they have submitted
a damages calculation for the six-year period that preceded the
filing of the complaint for the remaining plaintiffs.
Court approval of an FLSA settlement is appropriate
"when [the settlement] [is] reached as a result of
contested litigation to resolve bona fide disputes."
Johnson v. Brennan, No. 10 Civ. 4712, 2011 WL 4357376,
at *12 (S.D.N.Y. Sept. 16, 2011).
"If the proposed
settlement reflects a reasonable compromise over contested issues, the court should approve the settlement." Id. (citing Lynn's Food Stores, Inc. v. United
States, 679 F.2d 1350, 1353 n.8 (11th Cir. 1982)).
Agudelo v. E & D LLC, 12 Civ. 960 (HB), 2013 WL 1401887 at *1
(S.D.N.Y. Apr. 4, 2013)

(Baer, D.J.)

(alterations in original)

"Generally, there is a strong presumption in favor of finding a
settlement fair,

[because] the Court is generally not in as good

a position as the parties to determine the reasonableness of an
FLSA settlement."

Lliguichuzhca v. Cinema 60, LLC,

2d 362, 365 (S.D.N.Y. 2013)
tion marks omitted).

(Gorenstein, M.J.)

948 F. Supp.

(internal quota-

"Typically, courts regard the adversarial

nature of a litigated FLSA case to be an adequate indicator of
the fairness of the settlement."
F.R.D. 467,

476 (S.D.N.Y. 2013)

Beckman v. KeyBank, N.A., 293
(Ellis, M.J.), citing Lynn's Food

Stores, Inc. v. United States, supra,

679 F.2d at 1353-54.

The

presumption of fairness in this case is bolstered by the caliber
of the parties' attorneys.

Based upon their performance at the

5

settlement conference that was held, it is clear to me that all
parties are represented by counsel who are extremely knowledgeable regarding all issues in the case and who are well suited to
assess the risks of litigation and the benefits of the proposed
settlements.
In Wolinsky v. Scholastic Inc.,

900 F. Supp. 2d 332,

335 (S.D.N.Y. 2012), the Honorable Jesse M. Furman, United States
District Judge, identified five factors that are relevant to an
assessment of the fairness of an FLSA settlement:
In determining whether [a] proposed [FLSA] settlement is fair and reasonable, a court should consider
the totality of circumstances, including but not limited to the following factors:
(1) the plaintiff's
range of possible recovery; (2) the extent to which the
settlement will enable the parties to avoid anticipated
burdens and expenses in establishing their respective
claims and defenses; (3) the seriousness of the litigation risks faced by the parties; (4) whether the settlement agreement is the product of arm's-length bargaining between experienced counsel; and (5) the possibility of fraud or collusion.
(Internal quotation marks omitted).

The settlement here satis-

fies these criteria.
First, Santana's net settlement represents approximately 44% of his claimed damages.

Defendants argue that Santana

was exempt from the overtime requirements and is, therefore,
entitled to no damages for overtime work.

As discussed in more

detail below, given the risks this issue presents, Santana's

6

Additionally, each of the

settlement amount is reasonable.

remaining plaintiffs will receive between 98% and 456% of their
claimed damages after deduction of costs and fees.

Thus, the net

settlement amount provides the remaining plaintiffs with a
substantial percentage of their claimed damages.
Second, the settlement will entirely avoid the burden,
expense and aggravation of litigation.

Defendants did not

maintain accurate time records; instead, the plaintiffs signed in
and out every day.

Defendants also claim that plaintiffs regu-

larly conducted personal matters while at work and took frequent
breaks.

Trial preparation would require several depositions to

explore these issues, and the settlement avoids the necessity of
conducting those depositions.
Third, the settlement will enable plaintiffs to avoid
the risk of litigation.

Plaintiffs here were paid partially in

cash, which defendants claim accounted for plaintiffs' overtime
wages.

In addition, defendants dispute the number of hours

plaintiffs worked.

Additionally, as noted above, defendants take

the position that Santana, as a manager, was an exempt employee
and, therefore, not entitled to overtime.

The Secretary of

Labor's regulations implementing the FLSA state that managers
generally qualify as exempt employees.

Callari v. Blackman

Plumbing Supply, Inc., 988 F. Supp. 2d 261, 275-77
7

(E.D.N.Y.

2013); Indergit v. Rite Aid Corp., 08 Civ. 9361 (PGG), 08 Civ.
11364 (PGG), 2010 WL 1327242 at *4-*5 (S.D.N.Y. Mar. 31, 2010)
(Gardephe,

D.J.).

However, the law is also clear that an em-

ployee's title, by itself, is not determinative of whether he or
she is exempt from the overtime requirements; instead, the court
must examine the nature of the employee's duties.
Universal Commc'ns of Miami,

Inc.,

591 F.3d 101, 105 (2d Cir.

2010); Moran v. GTL Constr., LLC, 06 Civ. 168
2142343 at *2

Reiseck v.

(S.D.N.Y. July 24, 2007)

(SCR), 2007 WL

(Robinson,

Litiga-

D.J.).

tion would, therefore, require testimony as to the nature of
Santana's duties, which would raise issues of credibility.

Thus,

whether Santana and the other plaintiffs would recover at trial
is far from certain.

See Bodon v. Domino's Pizza, LLC, No. 09-

CV-2941 (SLT), 2015 WL 588656 at *6 (E.D.N.Y. Jan. 16, 2015)
(Report

&

Recommendation)

(" [T) he question [in assessing the

fairness of a class action settlement] is not whether the settlement represents the highest recovery possible

but whether

it represents a reasonable one in light of the many uncertainties
the class faces

" (internal quotation marks omitted)),

adopted sub nom . .Qy, Bodon v. Domino's Pizza, Inc., 2015 WL
588680 (E.D.N.Y. Feb. 11, 2015); Massiah v. MetroPlus Health
Plan, Inc., No.

ll-cv-05669 (BMC),

Y. Nov. 20, 2012)

2012 WL 5874655 at *5

(E.D.N.-

(n[W]hen a settlement assures immediate payment
8

of substantial amounts to class members, even if it means sacrificing speculative payment of a hypothetically larger amount
years down the road, settlement is reasonable .

II

(internal

quotation marks omitted; assessing fairness of class action
settlement)).
Fourth, I am confident that the settlements are reasonable based on their being agreed to by plaintiffs' counsel.
Plaintiffs' counsel was exceptionally well prepared at the
settlement conference between Santana and defendants and was
fully familiar with the claims and the pertinent legal and
factual issues.

Given the exceptional diligence and zeal with

which plaintiffs' counsel represented Santana, I am confident
that the settlements are fair.
Fifth, there are no factors here that suggest the
existence of fraud or collusion.
Each settlement agreement also provides that, after
deduction of out-of-pocket costs, one-third of the total settlement amount will be paid to plaintiffs' counsel as a contingency
fee.

Contingency fees of one-third in FLSA cases are routinely

approved in this circuit.
Inc., 15 Civ. 814
2015)

Santos v. EL Tepeyac Butcher Shop

(RA), 2015 WL 9077172 at *3

(Abrams, D. J. )

(S.D.N.Y. Dec. 15,

( 11 [ C] our ts in this District have declined to

award more than one third of the net settlement amount as attor9

ney's fees except in extraordinary circumstances."), citing Zhang
v. Lin Kumo Japanese Rest. Inc., 13 Civ. 6667
5122530 at *4

(S.D.N.Y. Aug. 31, 2015)

(Engelmayer, D.J.) and

Thornhill v. CVS Pharm., Inc., 13 Civ. 507
at *3 (S.D.N.Y. Mar. 20, 2014)

(PAE), 2015 WL

(JMF), 2014 WL 1100135

(Furman, D.J.); Rangel v. 639

Grand St. Meat & Produce Corp., No.

13 CV 3234

5308277 at *l (E.D.N. Y. Sept. 19, 2013)

(LB), 2013 WL

(approving attorneys'

fees of one-third of FLSA settlement amount, plus costs, pursuant
to plaintiff's retainer agreement, and noting that such a fee
arrangement "is routinely approved by courts in this Circuit");
Febus v. Guardian First Funding Grp., LLC, 870 F. Supp. 2d 337,
340 (S.D.N.Y. 2012)

(Stein, D.J.)

("[A] fee that is one-third of

the fund is typical" in FLSA cases); accord Calle v. Elite
Specialty Coatings Plus, Inc., No. 13-CV-6126 (NGG) (VMS), 2014 WL
6621081 at *3 (E.D.N.Y. Nov. 21, 2014); Palacio v. E*TRADE Fin.
Corp., 10 Civ. 4030
Y. June 22, 2012)

(LAP) (DCF), 2012 WL 2384419 at *6-*7

(S.D.N.-

(Freeman, M.J.).

Accordingly, for all the foregoing reasons,
the settlements in this matter.

I approve

In light of the settlements, the

10

action is dismissed with prejudice and without costs.

The Clerk

of the Court is respectfully requested to mark this matter
closed.
Dated:

New York, New York
May 23, 2017
SO ORDERED

HENRYPiMAN
United States Magistrate Judge
Copies transmitted to:
All Counsel of Record

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