Mongue v. The Wheatleigh Corp.

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ARLETA MONGUE, Plaintiff, v. THE WHEATLEIGH CORPORATION, L. LINFIELD SIMON, SUSAN SIMON, and MARC WILHELM, Defendants.

CIVIL No. 3:18-cv-30095-KAR

United States District Court, D. Massachusetts

November 22, 2022

MEMORANDUM AND ORDER ON PLAINTIFF'S MOTION TO ENFORCE SETTLEMENT AGREEMENT (Dkt No. 138)

KATHERINE A. ROBERTSON, United States Magistrate Judge.

Plaintiff Arleta Mongue (“Plaintiff”) is a former wait staff employee of the defendant The Wheatleigh Corporation (“Wheatleigh”), which was owned and/or operated by the remaining defendants L. Linfield Simon, Susan Simon and Marc Wilhelm (collectively, “Defendants”). Plaintiff alleges in her amended complaint that Defendants violated the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., by failing to pay her an overtime premium, paying her less than the federal minimum wage, not providing proper notice before utilizing a tip credit, and operating an illegal tip pool. Plaintiff also asserts state law claims against these Defendants under Massachusetts wage laws. Specifically, Plaintiff claims that Defendants violated the Massachusetts Fair Minimum Wage Act, Mass. Gen. Laws ch. 151 §§ 1, 7, by paying Plaintiff the service rate when she should have received full minimum wage due to Defendants' unlawful distribution of its tip pools, the un-tipped tasks to which Plaintiff was assigned, and Defendants' failure to provide proper written notice before utilizing the service rate; the Massachusetts Tips Act, Mass. Gen. Laws ch. 149, § 152A, by unlawfully distributing wages from the tip pool to non-wait staff employees and supervisors; and the Massachusetts Wage Act, Mass. Gen. Laws ch. 149, §§ 148, 150, by failing to timely pay wages. The parties have consented to this court's jurisdiction (Dkt. No. 14). See 28 U.S.C. § 636(c); Fed.R.Civ.P. 73. Presently before the court is Plaintiff's Motion to Enforce Settlement Agreement (Dkt. No. 138). For the reasons stated herein, the court GRANTS Plaintiff's motion.

I. PERTINENT PROCEDURAL HISTORY AND BACKGROUND

Plaintiff, though counsel, filed this action on June 20, 2018 (Dkt. No. 1). This is one of four cases Plaintiff's counsel filed against Defendants. Plaintiff's counsel also filed a complaint on behalf of Mark Brown, a former guest services manager, on April 11, 2018 (Case No. 3:18-cv-30056-KAR); Christian Perreault Hamel, a former restaurant manager, on July 17, 2018 (Case No. 3:18-cv-30113-KAR); and Mary Harris, a former housekeeping manager, on July 17, 2018 (Case No. 3:18-cv-30114-KAR) (referred to collectively as the “Individual Cases”). Brown, Hamel, and Harris (referred to collectively as the “Individual Plaintiffs”) each alleged violations of the Fair Labor Standards Act and cognate Massachusetts wage laws based on their misclassification as managers who were exempt from overtime compensation.

On June 26, 2020, with leave of court, Plaintiff filed an amended complaint asserting class claims against Defendants (Dkt. No. 61). Plaintiff filed a motion for certification of a class pursuant to Fed.R.Civ.P. 23(b)(3) limited to her state law claims on December 2, 2020 (Dkt. No. 75), which the court granted on September 29, 2021 (Dkt. No. 113). The court ultimately certified a class consisting of “[a]ll individuals who worked as wait staff employees, service employees, or service bartenders for Defendants from May 7, 2017, to March 1, 2020, and were paid a Service Rate” (Dkt. Nos. 113, 117). The court appointed Plaintiff's counsel as class counsel (hereinafter “Class Counsel”) (Dkt. No. 113). While Defendants opposed class certification, they did not raise any conflict issues with respect to Class Counsel's appointment (Dkt. No. 86).

On December 22, 2021, Class Counsel sent an email to Defendants' then-counsel with a settlement demand for a “Gross Settlement Fund” or “GSF” of $580,000.00 to be allocated as follows: $8,103.00 to Brown (1.5 times single damages); $11,961.00 to Harris (1.5 times single damages); $8,124.00 to Hamel (single damages); $5,000.00 to Mongue (individually, as a service award for being the class representative); $27,102.00 to the Class for Class tip pool violations ($9,034.00 x 3); $234,884.80 to the Class for other violations; and $284,825.20 in attorneys' fees and costs (to be allocated between the four cases as Class Counsel chose) (Dkt. No. 133-1 at 3). The email addressed a number of other terms, including that “Class Counsel may apply to the Court for an award of attorneys' fees and costs and expenses incurred in connection with the prosecution of the Litigation,” and “Plaintiff may apply to the Court for an enhancement award in consideration for serving as Class Representative (i.e., the ''Incentive Award”) in an amount not to exceed $5,000.00, subject to approval by the Court to be paid out of the GSF” (Dkt. No. 133-1 at 3).

The following day, after further negotiations, then-counsel for Defendants responded “confirming that [the parties] have reached a global settlement on the terms stated” in Plaintiff's Counsel's email with two modifications, including that the total GSF would be $550K rather than $580K, with Class Counsel deciding how to adjust the allocation (Dkt. No. 133-1 at 2). Defense counsel further noted the following in connection with the agreement: (1) that the award of attorneys' fees and costs and expenses would be paid out of the GSF; (2) that Defendants would get general releases from Brown, Harris, Hamel, and Mongue and could include a release of wage claims on the checks to class members; and (3) that all four lawsuits would be dismissed with prejudice (Dkt. No. 133-1 at 2). Plaintiff's Counsel responded, “[c]onfirmed.”

Thereafter, on December 29, 2021, Defendants' then-counsel notified the court via emails to the Courtroom Clerk that the four cases against Defendants had been resolved, that the parties in the Individual Cases would be filing joint motions for 45-day nisi orders, and that Class Counsel would be following up with the court likely after the New Year in relation to the instant matter. On February 17, 2022, the parties filed a joint status report indicating that they intended to file a motion for preliminary approval of a class action settlement on or before March 4, 2022 (Dkt. No. 121). On March 4, 2022, the parties filed an updated joint status report indicating that they had made progress but needed additional time, until March 25, 2022, before Class Counsel could file the motion for preliminary approval of a class action settlement (Dkt. No. 123). On April 5, 2022, the parties jointly requested a status conference as they had “encountered obstacles to finalizing settlement” in the four matters (Dkt. No. 127).^[1]

After the status conference was held on April 20, 2022, the parties entered into settlement agreements to resolve the three Individual Cases, and the Individual Plaintiffs filed stipulations of dismissal on May 6, 2022. Pursuant to the settlement agreements, Defendants were to pay $8,103.00 to Brown, $11,961.00 to Harris, and $8,124.00 to Hamel (Dkt. No. 133-2 at 2, 6, 10); these figures represented the same amounts that were contemplated in Class Counsel's December 22, 2021, settlement demand (Dkt. No. 133-1 at 3). The payment provisions and release of claims contained in the settlement agreements state that they are contingent on this court issuing a “Final Approval Order” in this matter, defined as an order approving a class action settlement and dismissing the action with prejudice (Dkt. No. 133-2 at 1-2, 6-7, 10-11). In addition, Defendants agreed to pay a maximum of $60,000.00 in attorney's fees and costs with respect to each of the three cases, for a total of up to $180,000.00, or any lesser amount this court may direct at any time before entry of a Final Approval Order in this matter (Dkt. No. 133-2 at 2, 6, 10).

In the instant matter, Defendants' then-counsel filed a status report notifying the court that defendant L. Linfield Simon (hereinafter “Simon”) had instructed them “not to spend further time negotiating a settlement agreement ... relat[ing] solely to the claims in this case” (Dkt. No. 131). The status report was accompanied by a declaration of Simon, which Defendants' then-counsel represented he had prepared without their substantive assistance and had directed them to file, setting forth a number of arguments for why the settlement agreement could not be enforced, including the argument Defendants currently advance (Dkt. No. 133). Defendants' then-counsel noted that they had “differing views [from Simon] regarding the relevant legal issues” and sought “guidance” on how to proceed (Dkt. No. 133 1t 1). In response, the court issued an order directing Class Counsel to file a motion to enforce the parties' settlement agreement to the extent there existed a basis for doing so and indicating that it would entertain a request for attorneys' fees in connection with the motion to enforce (Dkt. No. 134). The court further admonished Simon that it would not review or rule on anything he filed while represented by counsel unless it was filed by said counsel on his behalf (Dkt. No. 134). See McCulloch v. Velez, 364 F.3d 1, 5 (1st Cir. 2004) (a party has a right to represent himself or to be represented by counsel but he cannot simultaneously have it both ways). Finally, the court directed Defendants' then-counsel to the local rule setting forth the appropriate procedures for an attorney to withdraw his or her appearance (Dkt. No. 134).

In compliance with the court's order, Class Counsel filed the instant motion to enforce the settlement agreement. Class Counsel also seeks its attorneys' fees and costs incurred in connection with the motion. Defendants, through new counsel, oppose enforcement of the settlement agreement object to the ...