United States District Court, S.D. California
DEAN BEAVER AND LAURIE BEAVER, HUSBAND AND WIFE; et al., Plaintiffs,
TARSADIA HOTELS, A CALIFORNIA CORPORATION; et al., Defendants.
ORDER: (1) GRANTING PLAINTIFFS' UNOPPOSED MOTION
FOR PRELIMINARY APPROVALOF CLASS ACTION SETTLEMENT; (2)
DIRECTING ISSUEANCE OF NOTICE; AND (3) SETTING FINAL APPROVAL
HEARING [ECF NO. 273.]
GONZALO P. CURIEL, UNITED STATES DISTRICT JUDGE
Parties and Playground Destination Properties, Inc. have
entered into a Class Settlement Agreement and Release, dated
April 24, 2017 (“Settlement”) which, if
approved, would resolve this putative class action.
Plaintiffs have filed a Motion for Preliminary Approval of
the Settlement. Upon review and consideration of the motion
papers, including the Settlement, Notice Program, and
Distribution Plan, the Court finds that there is sufficient
basis for: (1) granting preliminary approval of the proposed
Settlement; (2) preliminarily certifying the proposed Class
for settlement purposes only; (3) preliminarily appointing
Plaintiffs as Class Representatives and their counsel as
Class Counsel; (4) approving the Parties' proposed Notice
Program and directing that Notice be disseminated to the
Class; (5) appointing the Garden City Group, LLC
(“GCG”) as the Settlement Administrator to
conduct the duties set forth for that position in the
Settlement; and (6) setting a hearing (the “Fairness
Hearing”), on September 15, 2017 at which the
Court will consider, among other things: (a) whether the
proposed Settlement, including the proposed Distribution
Plan, should be Finally Approved as fair, reasonable, and
adequate to the Class; (b) whether final judgment should be
entered dismissing with prejudice this Action; (c) Class
Counsel's application for attorneys' fees, costs, and
expenses; and (d) Class Representatives' application for
Court now GRANTS the Motion for Preliminary Approval and
makes the following findings and orders:
of Settlement Class
Ninth Circuit adheres to a “strong judicial policy that
favors settlements, particularly where complex class action
litigation is concerned.” Class Plaintiffs v. City
of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992).
“The initial decision to approve or reject the
settlement under Fed.R.Civ.P. 23(e) is committed to the sound
discretion of the trial judge.” Id. at 1291.
23(a) of the Federal Rules of Civil Procedure establishes
four prerequisites for class certification: (1) numerosity;
(2) commonality; (3) typicality; and (4) adequacy of
representation. Fed.R.Civ.P. 23(a). The Court finds that all
of these requirements of Rule 23(a) are met here for
settlement purposes only. Joinder of the more than 360
members of the Class in a single proceeding would be
impractical. Because all Class members' claims stem from
the same factual circumstances-the failure to provide
rescission rights when Class members purchased
condominium-hotel units-and raise the same legal claim,
common issues exist among Class members and predominate over
questions affecting only individual Class members.
Plaintiffs' claims are typical of those of the Class in
that they possess the same interest and suffered the same
injury as putative Class members. Plaintiffs and their
counsel will fairly and adequately protect the interests of
the Class; Plaintiffs have no interests antagonistic to those
of the Class, and have retained counsel experienced and
competent to prosecute this matter on behalf of the Class.
Finally, for settlement purposes only, a class settlement is
superior to other available methods for a fair resolution of
the controversy because the class mechanism will reduce
litigation costs and promote greater efficiency.
Because some of these factors-including the Class
Members' reactions and governmental participation-cannot
be fully assessed until the Court conducts a final fairness
hearing, “a full fairness analysis is unnecessary at
this stage.” Alberto v. GMRI, Inc., 252 F.R.D.
652, 665 (E.D. Cal. 2008) (internal citation and quotation
marks omitted). Rather, “[t]he Court's task at the
preliminary approval stage is to determine whether the
settlement falls ‘within the range of possible
approval.'” Hart v. Colvin, No.
15-CV-00623-JST, 2016 WL 6611002, at *4 (N.D. Cal. Nov. 9,
2016) (quoting In re Tableware Antitrust Litig., 484
F.Supp.2d 1078, 1080 (N.D. Cal. 2007)). In examining
“overall fairness, ” the Court must review the
proposed settlement “as a whole, rather than the
individual component parts.” Id. (quoting
Hanlon, 150 F.3d at 1026). A court lacks “the ability
to delete, modify or substitute certain provisions. The
settlement must stand or fall in its entirety.”
Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th
Cir. 1998) (internal citations and quotation marks omitted).
the foregoing reasons, the Court preliminarily certifies the
following settlement Class for purposes of the proposed
All individuals and businesses who agreed to purchase
condominium-hotel units at the Hard Rock Hotel &
Condominiums in San Diego, California at any time between May
2006 and December 2007 and ultimately closed escrow on units
in the project, with the exception of (a) the Tarsadia
Defendants and their officers, affiliates, directors,
employees and the immediate family members of its officers,
directors and employees (the Tarsadia Defendants have
determined this exception excludes only Units 602, 639 and
1150), (b) those named plaintiffs in the action entitled
Bell et al. v. Tarsadia Hotels et al. (San Diego
Superior Court Case No. 37-2010-00096618) who signed the
Settlement Agreement And Mutual Release in that case, (c) the
named plaintiffs in the action entitled Salameh et al. v.
Tarsadia Hotels et al. (Case No. 09-CV-2739), and (d)
Persons who file timely Opt-Outs. The Settlement Class shall
be construed to include purchasers “Subject to the 2008
Close Defense” and “Subject to the Assignment
Defense, ” as those phrases are used in Exhibit A to
the Class Member Stipulation (Dkt. No. 70), provided that
they otherwise fall within the definition of the Settlement
Class. Without in anyway limiting the foregoing, a list of
known Settlement Class members is attached hereto as Exhibit
A (the “Class Member List”).
Settlement provides for the creation of a common settlement
fund in the amount of $51, 150, 000 (“Settlement
Fund”). Settlement ¶ 8.1. Of the $51, 150, 000,
the Tarsadia Defendants will contribute $10, 000, 000, and GT
will contribute the remaining $41, 150, 000. Id.
There will be no reversion of any funds to the Tarsadia
Defendants, GT, GT's insurers, or any other contributing
party. Id. at ¶ 8.7.
Net Settlement Fund, which consists of the money remaining
after attorneys' fees and costs, Settlement
Administration Costs, and service awards are deducted, will
be distributed to Class members pursuant to the
“Distribution Plan.” See Schrag Decl.
Ex. 1 at Ex. E. The basic methodology is to first calculate
the pro rata share of the Net Settlement Fund for each unit
owned by one or more members of the Class, and then, if there
is more than one owner, determine how that amount should be
allocated among the owners. Generally, the pro rata shares
are determined based on the original purchase price and
either the current value of the unit if still owned, or what
the Class member(s) received when the unit was sold or lost
Court preliminarily appoints Plaintiffs Dean Beaver, Laurie
Beaver, Steven Adelman, Abraham Aghachi, Dinesh Gauba, Kevin
Kenna, and Veronica Kenna as Class Representatives.
Court preliminarily appoints the following five firms to
serve as Class Counsel: Reiser Law, P.C.; Gibbs Law Group
LLP; The Meade Firm p.c.; Talisman Law PC; and the Fostvedt
Legal Group LLC.
23(e) requires the Court to determine whether a proposed
settlement is “fundamentally fair, adequate, and
reasonable.” Staton v. Boeing Co., 327 F.3d
938, 959 (9th Cir. 2003) (internal quotations omitted). In
making this determination, a court may consider: (1) the
strength of the plaintiff's case; (2) “the risk,
expense, complexity, and likely duration of further
litigation;” (3) “the risk of maintaining class
action status throughout the trial;” (4) “the
amount offered in settlement;” (5) “the extent of
discovery completed and the stage of the proceedings;”
(6) “the experience and views of counsel;” (7)
“the presence of a governmental participant;” and
(8) “the reaction of the class members to the proposed
settlement.” Id. (internal quotations
omitted). Moreover, the settlement may not be the product of
collusion among the negotiating parties. In re Mego Fin.
Corp. Sec. Litig., 213 F.3d 454, 458 (9th Cir.2000);
see also Barani v. Wells Fargo Bank, N.A., 2014 WL
1389329, at *4 (S.D. Cal. Apr. 9, 2014).
considering whether to preliminarily approve a class
settlement, the Court should consider whether the deal is
both procedurally and substantively fair. In re Tableware
Antitrust Litig., 484 F.Supp.2d at 1080
(“preliminary approval of a settlement has both a
procedural and a substantive component”). Specifically,
the Court should confirm that “(1) the proposed
settlement appears to be the product of serious, informed,
non-collusive negotiations, (2) has no obvious deficiencies,
(3) does not improperly grant preferential treatment to class
representatives or segments of the class, and (4) falls
with[in] the range of possible approval.” Dilts v.
Penske Logistics, LLC, No. 08cv318-CAB(BLM), 2014 WL
12515159, *2 (S.D. Cal. July 11, 2014) (citations omitted).
Settlement Is the Product of Serious, Informed, Non-Collusive
settlement agreement is presumed to be fair if it is reached
in arm's length negotiations after relevant discovery has
taken place. Cohorst v. BRE Prop., Inc., 2011 WL
7061923, *12 (S.D. Cal. Nov. 14, 2011) (stating that
voluntary mediation before a retired judge in which the
parties reached an agreement-in-principle are factors
“highly indicative of fairness”) (citations
this case, the proposed Settlement is the product of over
five and one half years of litigation, two failed
court-assisted settlement conferences, a failed mediation in
2013, the recent second mediation and follow-up negotiations.
Both mediations were before Judge West, a highly respected
retired judge at JAMS who formerly presided in the complex
department in Los Angeles County Superior Court. See
Schrag Decl. at ¶ 26. The Parties reached a settlement
after completion of fact and expert discovery, the Ninth
Circuit's affirmance of this Court's granting partial
summary judgment in Plaintiffs' favor on their UCL claim,
full briefing and argument on the motion for class
certification, and when the only remaining major task in the
case was a remedies bench trial. Id. ¶¶
23-25. Thus, the posture of the litigation and the process of
negotiating the Settlement indicate that the deal is informed
and non-collusive. Further, the Settlement's terms
demonstrate procedural fairness and lack of collusion.
Aspects of a settlement that may potentially lend themselves
to self-interested action are attorneys' fees and
incentive awards for class representatives. Barani v.
Wells Fargo Bank, N.A., 2014 WL 1389329, *8 (S.D. Cal.
Apr. 9, 2014). Here, however, both of these terms are fair to
Settlement Treats All Class Members Fairly
Next, the Court should consider whether the proposed
Settlement improperly grants preferential treatment to the
Class Representatives or any segment of the Class. In re
Tableware Antitrust Litig., 484 F.Supp.2d at 1079. Here,
the proposed Settlement affords all Class members the same
relief: a pro rata share of the Settlement Fund,
based on the price they paid for their units and either the
current value if they still own, the sales price if they
sold, or the amount of their loan discharged in foreclosure.
See Schrag Decl. at ¶ 27. Class members will
receive different amounts under the Settlement, but those
differences are only to take into account the purchase price
of each ...