Harbin et al v. Emergency Coverage Corporation et al

Filing 55

ORDER adopting Report and Recommendations re 54 Report and Recommendations. Signed by District Judge Travis R McDonough on 5/17/2018. (BDG, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE
DUSTIN HARBIN and JIMMY PRUITT,
on behalf of themselves and the class
defined herein,
Plaintiffs,
v.
EMERGENCY COVERAGE
CORPORATION and ACCOUNT
RESOLUTION TEAM, INC.,
Defendants.

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Case No. 3:16-CV-125
Judge Travis R. McDonough
Magistrate Judge H. Bruce Guyton

ORDER

On April 16, 2018, United States Magistrate Judge H. Bruce Guyton filed his report and
recommendation pursuant to 28 U.S.C. § 636(b)(1). (Doc. 54.) Magistrate Judge Guyton
recommended that the parties’ settlement agreement (Doc. 43-1) be approved in its entirety.
(Doc. 54.) Neither party has filed any objections to Magistrate Judge Guyton’s report and
recommendation.1 Additionally, as noted by Magistrate Judge Guyton, no objections were filed
to the proposed settlement agreement or presented at the fairness hearing. (Id. at 1.)
Nevertheless, the Court has conducted a review of the report and recommendation, as well as the

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Magistrate Judge Guyton specifically advised the parties that they had fourteen days in which
to object to the report and recommendation and that failure to do so would waive their right to
appeal. (Doc. 54, at 7 n.2); see Fed. R. Civ. P. 72(b)(2); see also Thomas v. Arn, 474 U.S. 140,
148–51 (1985) (noting that “[i]t does not appear that Congress intended to require district court
review of a magistrate’s factual or legal conclusions, under a de novo or any other standard,
when neither party objects to those findings”). Even taking into account the three additional
days for service provided by Federal Rule of Civil Procedure 6(d), the period in which the parties
could timely file any objections has now expired.

record, and it agrees with Magistrate Judge Guyton’s well-reasoned conclusions. Accordingly,
the Court will ACCEPT and ADOPT Magistrate Judge Guyton’s report and recommendation
(Doc. 54).
Upon consideration of the Parties’ request for final approval of the Class Settlement
Agreement (“Agreement”) between Plaintiffs, Dustin Harbin and Jimmy Pruitt (“Plaintiffs”),
individually, and as representatives of the class of persons defined below (“Settlement Class”),
and Defendants, Account Resolution Team and Emergency Coverage Corporation, the Court
orders and finds as follows:
1.

This Court has jurisdiction over the subject matter of this lawsuit, Plaintiffs,

Settlement Class members, and Defendants.
2.

The following Settlement Class is certified pursuant to Fed. R. Civ. P. 23(b)(3):
(a) All persons sued by Defendants; (b) in the General Session Court of
Hamblen County, Tennessee; (c) that had garnishments issued against
their wages that included amounts of post-judgment interest or fees that
exceeded the amount allowed under Tennessee state law; (d) that made
payments to Defendants as a result of the wrongful garnishments issued to
their employers by garnishment of wages or direct payment to the clerk
between March 16, 2013 and ending on April 5, 2016.

3.

Based on the Parties’ stipulations: (A) the Settlement Class as defined is

sufficiently numerous such that joinder is impracticable; (B) common questions of law and fact
predominate over any questions affecting only individual Settlement Class members; (C) the
claim of Plaintiffs are typical of the Settlement Class members’ claims; (D) Plaintiffs are
appropriate and adequate representatives for the Class and their attorneys, Alan C. Lee, Peter A
Holland, and Scott C Borison, are hereby appointed as Class Counsel; and (E) a class action is
the superior method for the fair and efficient adjudication of the claims of the Settlement Class
members.

4.

The Court approved a form of notice for mailing to the Settlement Class. The

Court is informed that actual notice was sent by first class mail to approximately 119 Settlement
Class members by First Class, Inc., the third-party settlement administrator. A total of seventeen
envelopes were returned by the United States Postal Service, none of which were returned with
forwarding addresses and re-mailed. No Settlement Class members requested exclusion, and no
objections were filed or received. A total of 119 Settlement Class members are entitled to a
share of the monetary benefits of the settlement.
5.

On March 26, 2018, Magistrate Judge Guyton held a fairness hearing to which

Settlement Class members, including any with objections, were invited. Excluded from the
Settlement Class are those persons who timely and validly requested exclusion.
6.

The Court finds that provisions for notice to the class satisfy the requirements due

process pursuant to the Federal Rules of Civil Procedure, including Rule 23, the United States
Constitution and any other applicable law.
7.

The Court finds that the settlement is fair, reasonable, and adequate and hereby

finally approves the Agreement submitted by the Parties, including the Release and payments by
PRS. Upon the Effective Date, as that term is defined in the Agreement, Defendants shall make
the following payments:
(a)

Defendants shall create a class settlement fund of $1,360.00 (“Class
Recovery”), which the Class Administrator shall distribute among those
Settlement Class Members who did not exclude themselves (“Claimants”).
Claimants will receive a $10.00 payment from the Class Recovery by
check. The shares of any of the Settlement Class Members who could not
be located will be donated as a cy pres award to East Tennessee Children’s
Hospital, and the award will be expressly earmarked for the benefit of
infants afflicted with Neonatal Abstinence Syndrome (NAS). Checks
issued to Claimants will be void sixty days from the date of issuance. Any
checks that have not been cashed by the void date, along with any
unclaimed funds remaining in the Class Recovery, will also be donated as

a cy pres award to East Tennessee Children’s Hospital for the same
purposes.
(b)
(c)

8.

Defendants shall pay each Plaintiff $1,010.00.
Defendants shall pay into the registry of the Court the sum of $27,500 in
payment of Plaintiffs’ attorneys’ fees and costs incurred in the action and
due Class Counsel. Class Counsel shall not request additional fees or
costs from Defendants or the Settlement Class members.

The Parties grant the following releases:
(a)

(b)

Each member of the Settlement Class who did not exclude themselves
from the Agreement hereby releases and discharges the Released Parties
of all causes of action, suits, liability, and claims, including claims for the
payment of attorney’s fees and costs arising out of or related to
Defendants’ collection activity.

(c)

9.

Plaintiffs, Dustin Harbin and Jimmy Pruitt, including each and every one
of their respective agents, representatives, attorneys, heirs, assigns, or any
other person acting on their behalf or for their benefit, and any person
claiming through them (collectively “Releasors”), releases and discharges
Defendants, as well as their parent corporations, predecessors and
successors in interest and present and former affiliates, subsidiaries,
insurers, officers, directors, agents, employees, members, shareholders,
general partners, limited partners, beneficiaries, representatives,
attorneys, or assigns, (in their respective capacities as officers, directors,
agents, employees, members, shareholders, general partners, limited
partners, beneficiaries, representatives, attorneys, or assigns for
Defendants) (collectively, “Released Parties”), from all causes of action,
suits, claims, or demands, in law or in equity, known or unknown at this
time which Releasors now have or ever had against the Released Parties,
or any of them, under any legal theory, whether or not alleged, related to
or arising from matters that occurred from the beginning of time up
through the Effective Date. Without limiting the generality of the
foregoing, Releasors release Released Parties of all claims that were
made or that could have been made in this lawsuit including all claims
relating to Defendants’ collection activity.

Defendants does NOT release its claims, if any, against Plaintiffs or any
member of the Settlement Class for the payment of their debts. The
underlying debts Defendants sought to collect are not affected by the
Agreement. The Agreement does not prevent Defendants from
continuing to attempt to collect the debts allegedly owed by the
Settlement Class members.

The Court finds the Agreement is fair and made in good faith.

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10.

The terms of the Agreement are incorporated into this Order.

11.

Defendants, after all money has been distributed from the Class Recovery and no

later than thirty days after the payment void date, shall file a notice apprising the Court that the
terms of the Agreement have been complied with and providing the Court with an accounting of
how the money in the Class Recovery was distributed.
12.

Ten days after the filing of the notice contemplated in ¶ 11 above, the dismissal of

the claims of Plaintiffs and the Settlement Class shall be with prejudice and without costs.
13.

The Court finds, in accordance with Fed. R. Civ. P. 54(b), that there is no just

reason for delay of enforcement of, or appeal from, this Order.
14.

The Parties are hereby ordered to comply with the terms of the Agreement and

this Order.
SO ORDERED.
/s/ Travis R. McDonough
TRAVIS R. MCDONOUGH
UNITED STATES DISTRICT JUDGE

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