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Noroma v. Home Point Financial Corp.

United States District Court, N.D. California

November 6, 2019

BRANDON NOROMA, Plaintiff,
v.
HOME POINT FINANCIAL CORPORATION, Defendant.

          ORDER GRANTING MOTION FOR FINAL APPROVAL RE: DKT. NOS. 57, 59

          HAYWOOD S. GILLIAM, JR. UNITED STATES DISTRICT JUDGE.

         Pending before the Court are two unopposed motions filed by Plaintiffs Brandon Norona[1]and Linda Corbin: (1) the motion for final approval of the parties' proposed class action settlement, Dkt. No. 59; and (2) the motion for attorneys' fees, expenses, and incentive awards, Dkt. No. 57. The Court held a final fairness hearing on September 26, 2019. See Dkt. No. 61. For the reasons detailed below, the Court GRANTS final approval and GRANTS IN PART Plaintiffs' motion for attorneys' fees, expenses, and service awards.

         I. BACKGROUND

         A. Factual Background

         Although Plaintiff Norona initially filed this case as the single named Plaintiff, Plaintiff Corbin was added to the action on April 16, 2019, following the Court's order granting preliminary approval of the class action settlement. See SAC ¶¶ 14-15; see also Dkt. No. 52. Plaintiffs Norona and Corbin brought this putative labor and employment class action against Defendant Home Point Financial Corporation. See Dkt. No. 53 (“Second Amended Complaint” or “SAC”). Plaintiffs allege, on behalf of themselves and all others similarly situated, that Defendant had a uniform policy and practice of failing to (1) include commissions and bonuses as wages when calculating overtime pay; (2) pay premiums for meal and rest breaks; (3) provide complete wage statements; and (4) pay all wages owed at the time of termination of its employees, in violation of the Fair Labor Standard Act (“FLSA”) and California law. See SAC ¶¶ 28-86. Plaintiffs further sought civil penalties under California's Private Attorneys' General Act (“PAGA”). Id. ¶ 87-105.

         Plaintiffs brought claims on behalf of two groups of non-exempt Home Point employees, including “loan originators, mortgage professionals, loan officers, and loan processors” who were not compensated for all hours that they worked. Id. ¶ 7. First, Plaintiffs asserted a nationwide, opt-in collective action under FLSA, 29 U.S.C. § 216(b), on behalf of Home Point employees who worked from three years prior to the filing date up to the date of judgment (“FLSA Collective”). See Id. ¶¶ 8, 12. Second, Plaintiffs asserted claims under the California Labor Code, California Business and Professions Code, and PAGA as part of an opt-out class action composed of Home Point employees who worked from four years prior to the filing date up to the date of judgment (“California Class”). Id. ¶¶ 9-11, 13.

         B. Settlement Agreement

         On May 17, 2018, the parties held an all-day mediation before the Hon. William J. Cahill, during which they reached a settlement in principle. See Dkt. No. 32. The parties filed a motion for settlement, see Dkt. No. 50, and the Court granted preliminary approval of the settlement on April 12, 2019, see Dkt. No. 52. The key terms of the Settlement Agreement are as follows:

         i. Class Definitions

         The FLSA Collective is defined as:

[A]ll persons currently or previously employed by Defendant in the United States while residing outside California, including under Defendant's previous name, Maverick Funding Corp., as non-exempt loan originators, mortgage professionals, loan officers, loan processors and other non-exempt employees in positions that were eligible for commissions and/or non-discretionary bonuses, the amounts of which are measured by or dependent on hours worked, production, or efficiency, from December 19, 2014, through and including September 30, 2018, who have not previously released their claims. Individuals who resided in California for part of the relevant time period and outside of California for part of the relevant time period are included in the [California] Class for the workweeks employed by Defendant and residing in California, and included in the [FLSA] Collective for the workweeks employed by Defendant and residing in the United States but outside of California.

See Dkt. No. 50-4 (“Settlement Agreement” or “SA”) ¶ 2.41.

         The California Class is defined as:

[A]ll persons currently or previously employed by Defendant in California, including under its prior name, Maverick Funding Corp., as non-exempt loan originators, mortgage professionals, loan officers, loan processors and other non-exempt employees in positions that were eligible for commissions and/or non-discretionary bonuses, the amounts of which are measured by or dependent on hours worked, production, or efficiency, from December 19, 2013 through and including September 30, 2018, who have not previously released their claims. The [California] Class does not include any person who was employed solely by Stonegate Capital Corporation and/or Cross-Line Capital, Inc. in California. Individuals employed as a non-exempt inside loan agent, mortgage advisor, or mortgage loan officer at Stonegate Capital Corporation and/or Cross-Line Capital, Inc. and subsequently employed by Defendant while residing in California as non-exempt employee are included in the Settlement Class but only for the period of time employed by Defendant starting June 1, 2017. . . . Individuals who resided in California for part of the relevant time period and outside of California for part of the relevant time period are included in the [California] Class for the workweeks employed by Defendant and residing in California, and included in the [FLSA] Collective for the workweeks employed by Defendant and residing outside of California.

Id. ¶ 2.35.

         ii. Settlement Benefits

         FLSA Collective: Defendant has agreed to pay up to $500, 000 to the FLSA Collective, with the actual amount paid out based on the number of opt-ins. SA ¶¶ 2.15, 2.42, 4.1, 5.1, 5.6.2.B. Of the estimated 1, 382 FLSA Collective members who were sent notice, 461 have opted in.[2] See Dkt. No. 59-2, ¶¶ 8, 14; Dkt. No. 60 ¶ 3; see also Dkt. No. 62 at 2. FLSA Collective members will receive a pro-rata share of the available funds, based on the number of weeks the member worked during the covered period as reflected in the following formula: (FLSA Collective Member's Total Workweeks / Total Workweeks in the Settlement Collective combined) x FLSA Collective Fund. See SA ¶ 5.6.2.B. However, the “Total Workweeks in the Settlement Collective combined” will include all 1, 382 putative members of the collective, and not just the 461 who opted in. Id. After fees and costs, Plaintiffs estimate that $130, 681.75 will be paid out to FLSA Collective members. See Dkt. No. 60 ¶ 4. The average award is expected to be approximately $284.09. Id. For tax purposes, the awards will be allocated as 50% wages and 50% liquidated damages. See SA ¶ 5.9.1.

         California Class: Defendant has agreed to pay a total of $1.725 million, with no reversion, for the California Class fund. See SA ¶ 4.1. Of the estimated 255 California Class members, only two have opted out, for a total of 253 total participating members. See Dkt. No. 59-2 ¶ 14. California Class members will receive a pro-rata share of the available funds, based on the number of weeks the member worked during the covered period. See SA ¶ 5.6.2.A. After fees and costs, Plaintiff estimates that $1.1 million will be paid out to California Class members. See Dkt. No. 59-2 ¶ 15. The average award is expected to be over $4, 000. Id. For tax purposes, the awards will be allocated as one-third wages, one-third statutory and civil penalties, and one-third interest. See SA ¶ 5.9.1.

         PAGA Allocation: Defendant has agreed to pay $25, 000 to settle claims under PAGA. See SA ¶ 2.21. Of this, three-quarters ($18, 750) will be paid to the California Labor Workforce Development Agency, and one-quarter ($6, 250) will be paid to the California Class. Id. ¶¶ 2.21, 2.36. All California Class members (even those who opt out) will receive their pro-rata share of the PAGA payment. See Id. ¶¶ 3.10.5, 3.10.9, 5.3.

         iii. Release

         FLSA Collective members will release:

“[A]ny and all present and past claims, actions, demands, causes of action, suits, debts, obligations, rights or liabilities, arising out of their employment with Home Point based on the facts, conduct, claims, and/or allegations in the Complaint, First Amended Complaint and Second Amended Complaint pursuant to the Fair Labor Standards Act, 29 U.S.C. sections 201 et seq. regarding non-payment of wages, minimum wages, overtime wages, and any other compensation (including but not limited to regular rate calculations and overtime premium pay), failure to timely pay any compensation (including but not limited to wages, bonuses, or commissions), and includes all wages, overtime, overtime premium, liquidated damages, costs and expenses, attorneys' fees, declaratory relief, injunctive relief, equitable remedies, exemplary or punitive damages, and/or pre- or post-judgment interest, at any time during the [FLSA] Collective Period of December 19, 2014, through September 30, 2018. [FLSA] Collective Members' Released Claims also includes all claims that the [FLSA] Collective Members may have against the Released Parties relating to (i) the payment, taxation and allocation of attorneys' fees and costs to Class Counsel pursuant to this Settlement Agreement and (ii) the payment, taxation and allocation of Plaintiffs' Service Awards pursuant to this Settlement Agreement.

SA ¶ 2.44.

         California Class members will release:

[A]ny and all present and past claims, actions, demands, causes of action, suits, debts, obligations, damages, rights or liabilities, of any nature alleged in the Complaint, the First Amended Complaints, the proposed Second Amended Complaint (“the Complaints”) and/or in Plaintiff Norona's December 14, 2017 PAGA letter to the LWDA concerning Defendant (“the PAGA Letter”), or which could have been asserted based on the facts alleged in the Complaints and/or the PAGA letter, including without limitation all claims for unpaid wages, minimum wage, overtime, double-time, wages (including the calculation of the regular rate), failure to timely pay compensation (i.e., wages, bonuses, or commissions), failure to provide compliant meal periods and rest breaks, failure to reimburse business expenses incurred, wage statement violations, and untimely final pay, seeking wages, overtime, overtime premium pay, exemplary or punitive damages, waiting time penalties, civil penalties, statutory penalties, liquidated damages, restitution, declaratory relief, injunctive relief, equitable remedies, attorneys' fees, costs, disbursements, and/or pre-or post-judgment interest, at any time from December 19, 2013 through September 30, 2018. The [California] Class Members' Released Claims include all claims alleging violations of, or seeking relief under, California Labor Code sections 200, 201, 201.3, 202, 203, 204, 204b, 204.1, 204.2, 205, 205.5, 208, 218, 218.6, 226, 226.3, 226.7, 501, 502, 503, 504, 505, 506, 507, 508, 510, 512, 515, 558, 1182, 1182.12, 1194, 1194.2, 1197, 1197.1, 1197.5, 1198, 2802, 2810.5, 2698 et seq., the California Industrial Wage Commission Wage Orders, the California Business and Professions Code sections 17200 et seq.; and any other similar laws. [California] Class Members' Released Claims also include all claims that Plaintiffs and/or the [California] Class Members may have against the Released Parties relating to (i) the payment, taxation and allocation of attorneys' fees and costs to Class Counsel pursuant to this Settlement Agreement and (ii) the payment, taxation and allocation of Plaintiffs' Service Awards pursuant to this Settlement Agreement. [California] Class Members' Released Claims also include Plaintiffs' causes of action/claims for penalties under PAGA, which are fully released by [California] Class Members.

SA ¶ 2.38.

         iv. Class Notice & Procedure

         The parties agreed that third-party settlement administrator ILYM Group, Inc. would send notices to class members in accordance with the Settlement ...


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