Sanchez v. DPC N.Y. Inc.

381 F. Supp. 3d 245
CourtDistrict Court, S.D. Illinois
DecidedJune 3, 2019
Docket1:17-cv-00455 (AJN) (SDA)
StatusPublished
Cited by17 cases

This text of 381 F. Supp. 3d 245 (Sanchez v. DPC N.Y. Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sanchez v. DPC N.Y. Inc., 381 F. Supp. 3d 245 (S.D. Ill. 2019).

Opinion

STEWART D. AARON, United States Magistrate Judge

This case, which contains claims under the Fair Labor Standards Act ("FLSA"), is before me on the parties' joint application to approve the settlement. (5/28/19 Faillace Ltr., ECF No. 100.) All parties have consented to my exercising plenary jurisdiction pursuant to 28 U.S.C. § 636(c).

*248(Consent, ECF No. 91.) As set forth below, the settlement is approved and the Court awards to Plaintiffs' counsel $ 8,123.50 in attorneys' fees and costs.

BACKGROUND

Plaintiffs Wilson Rodrigo Villena Sanchez ("Sanchez"), Gustavo Galarza ("Galarza") and Andres Luna ("Luna") (collectively, "Plaintiffs") allege that they were employed at various times by a construction company doing business under the name DP Consulting that was owned and operated by Defendants DPC New York Inc., DP Consulting Corp., Thomas Pepe and Christopher Pepe (collectively, "Defendants"). (Compl., ECF No. 1, ¶¶ 1-4.) Plaintiffs, who assert both FLSA and New York Labor Law ("NYLL") claims, allege that Defendants failed to pay them minimum wage, overtime pay and spread-of-hours pay throughout their employment. (5/28/19 Faillace Ltr. at 1.) Defendants denied the material allegations of the Complaint (Answer, ECF No. 13, ¶¶ 108-25 ), and asserted as defenses that "[o]ne or more Plaintiffs was a manager and/or supervisor and not an employee and thus not eligible for overtime," and that "[o]ne or more of the Plaintiffs was not employed by any of the Defendants named herein." (Id. ¶¶ 126-27.)

Plaintiffs Sanchez and Galarza reached a settlement in principle with Defendants in mid-April 2017. (5/25/17 Santos Ltr., ECF No. 19.) At an initial pretrial conference in this case held before District Judge Alison J. Nathan on May 12, 2017, Marisol Santos ("Santos"), who was then an associate at Michael Faillace & Associates, P.C. ("Faillace Firm"),1 advised the Court that Plaintiffs Sanchez and Galarza no longer wished to continue the case and that Santos anticipated filing settlement papers over the coming week. (See id. ; 6/7/17 Order, ECF No. 20.) However, according to Santos, Sanchez and Galarza later changed their minds, and the case continued. (Id. )2

In October 2017, Defendants filed a Third Party Complaint against ANDR Services Group Inc. ("ANDR") and Marcelo Andrade ("Andrade") (collectively, "Third Party Defendants") alleging that "Plaintiffs or some of the Plaintiffs" were employees of the Third Party Defendants, and not employees of the Defendants. (Third Party Complaint, ECF No. 33, ¶ 9.) Although a signature on behalf of Third Party Defendant ANDR appears on one of the signature pages of the Settlement Agreement, the Third Party Defendants are not listed as parties to the Settlement Agreement. (See 5/28/19 Faillace Ltr., Ex. A, ECF No. 100-1, at 1 of 16 and 5 of 16.)3

A mediation was held in this case on May 2, 2018, which was unsuccessful. (5/4/18 Rabinowitz Ltr., ECF No. 55.) However, what occurred during that mediation is relevant to the Faillace Firm's application for attorneys' fees in this case. As explained below, Michael Faillace ("Faillace") refused to permit Sanchez and Galarza to settle, despite their desire to do so.

*249Prior to a settlement conference before me on January 24, 2019, affidavits were provided to me that were signed by Sanchez and Galarza in which they stated that they wanted to settle their claims, but that their attorney did not permit them to do so.4 (Sanchez Aff., ECF No. 82, ¶ 3 ("My attorney refuses to allow me to settle the claim and he keeps telling me that he will decide the amount of the settlement and that I have no say in settling this matter."); Galarza Aff., ECF No. 83, ¶ 3 (same).) At the January 24, 2019 conference,5 both Sanchez and Galarza advised me that they signed the affidavits and that they wished to settle for the amounts stated (i.e. , $ 24,000 for Sanchez and $ 25,000 for Galarza, both exclusive of attorneys' fees). (1/24/19 Tr. at 3-4.)

During the January 24, 2019 conference, I learned that the attorney to whom Sanchez and Galarza referred in their affidavits was Faillace and that, during the May 2, 2018 mediation, Andrade (who is a Spanish speaker) overheard Faillace stating in Spanish that Faillace would decide the amount of the settlement and that he would not allow his clients to settle.6 (See 1/24/19 Tr. at 7-10.)

At the January 24, 2019 conference, after accepting the settlements reached by Sanchez and Galarza on the terms reflected in their affidavits, I held a settlement conference regarding Luna's claims. That day, a settlement was reached of Luna's claims in the amount of $ 75,000, exclusive of attorneys' fees. (1/24/19 Tr. at 13-14.)

The Settlement Agreement submitted to me for approval was executed by Plaintiffs Sanchez, Galarza and Luna on May 29, 2019. (See Settlement Agmt., ECF No. 100-1 at 4 of 16.) The joint letter to the Court in support of the Settlement Agreement is dated May 28, 2019, but was filed on May 29, 2019. (5/28/19 Faillace Ltr. at 1.)

ANALYSIS

I. Approval of the Settlement Agreement

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-CV-04712, 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. (citation omitted). "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 , 948 F. Supp. 2d 362, 365 (S.D.N.Y. 2013) (internal quotation marks omitted).

Having reviewed the proposed settlement, the Court finds that it is fair and *250reasonable. Although the settlement represents a payment to Plaintiffs of only 19% of their maximum possible recovery, it avoids the serious risks of litigation that the three Plaintiffs faced, including as to whether the Defendants actually qualified as their employers under the FLSA. See Lopez v. Poko-St. Ann L.P. ,

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381 F. Supp. 3d 245, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sanchez-v-dpc-ny-inc-ilsd-2019.