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Abercrombie v. Pagano's Bros, Inc.

United States District Court, M.D. Florida, Orlando Division

June 28, 2018

JILL ABERCROMBIE, Plaintiff,
v.
PAGANO'S BROS, INC., Defendant.

          REPORT AND RECOMMENDATION

          KARLA R. SPAULDING, UNITED STATES MAGISTRATE JUDGE

         TO THE UNITED STATES DISTRICT COURT:

         This cause came on for consideration without oral argument on the following motion filed herein:

         MOTION: MOTION FOR SETTLEMENT APPROVAL (Doc. No. 11)[1]

         FILED:June 22, 2018

         I. BACKGROUND.

         Plaintiff, Jill Abercrombie, filed a complaint against Defendant, Pagano's Bros., Inc., alleging that Defendant failed to pay all of her overtime wages in violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq. Doc. No. 1. In this action, she seeks unpaid overtime wages and liquidated damages. Id. at 4.

         On June 14, 2018—before Defendant appeared in the action—Plaintiff filed a notice of voluntary dismissal with prejudice. Doc. No. 8. The Court then required Plaintiff to advise the Court whether there had been a settlement in this matter. Doc. No. 9. In response, Plaintiff filed a notice explaining that the parties had reached a settlement and that she had received all of the overtime and liquidated damages to which she had claimed she was entitled. Thus, she represented that there had been no compromise of her claims. Doc. No. 11. The notice was signed only by Plaintiff's attorney and does not appear to have been served on Defendant's attorney. She attached a copy of a document titled “Settlement and Release Agreement, ” which is signed only by Plaintiff. The document does not appear to have included an area for Defendant to sign. Doc. No. 11-1. Plaintiff also attached a letter from Defendant's attorney, Michael J. Politis, enclosing a check for the full settlement amount ($4, 000.00). The letter states, “Enclosed herein please find an original settlement draft made payable to your Trust Account in the amount of $4, 000.00, representing full and final satisfaction of any and all claims. I thank you for the general release signed by your client and I have provided a copy of same to my client as well. I thank you for working with me in resolving this matter in an amicable fashion.” Id.

         II. APPLICABLE LAW.

         In Lynn's Food, the United States Court of Appeals for the Eleventh Circuit explained that claims for compensation under the FLSA may only be settled or compromised when the Department of Labor supervises the payment of back wages or when the district court enters a stipulated judgment “after scrutinizing the settlement for fairness.” 679 F.2d at 1353. Under Lynn's Food, a court may only enter an order approving a settlement if it finds that the settlement is fair and reasonable, Dees v. Hydradry, Inc., 706 F.Supp.2d 1227, 1240 (M.D. Fla. 2010), and that the ensuing judgment is stipulated, Nall v. Mal Motels, Inc., 723 F.3d 1304, 1308 (11th Cir. 2013).

         When a settlement agreement includes an amount to be used to pay attorney's fees and costs, the “FLSA requires judicial review of the reasonableness of counsel's legal fees to assure both that counsel is compensated adequately and that no conflict of interest taints the amount the wronged employee recovers under a settlement agreement.” Silva v. Miller, 307 Fed.Appx. 349, 351 (11th Cir. 2009) (per curiam).[2] If the Court finds that the payment to the attorney is not reasonable, the Court must consider whether a plaintiff's recovery might have been greater if the parties had reduced the attorney's fees to a reasonable amount. See Id. at 351-52; see also Bonetti v. Embarq Mgmt. Co., 715 F.Supp.2d 1222, 1228 (M.D. Fla. 2009) (finding that the Court must consider the reasonableness of attorney's fees when a “settlement does not appear reasonable on its face or there is reason to believe that the plaintiff's recovery was adversely affected by the amount of fees paid to his attorney”).

         III. ANALYSIS.

         A. Whether the Settlement Agreement is a Compromise.

         Under the terms of the parties' settlement agreement, Defendant agreed to pay Plaintiff $4, 000.00 to settle this lawsuit. Doc. No. 11-1. Although the settlement agreement does not so state, Plaintiff's attorney represents that $925.00 of that amount represents payment for unpaid overtime, $925.00 represents payment for liquidated damages, and $2, 150.00 represents attorney's fees. Doc. No. 11, at 1. The parties settled Plaintiff's claims before she filed answers to the Court's FLSA Interrogatories and provided the Court with information about the value of her claim. However, Plaintiff's counsel represents that Plaintiff claimed $925.00 in unpaid overtime compensation and an equal amount in liquidated damages. Id. Thus, Plaintiff's counsel represents that ...


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