SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA

LINDA LEE CARLSON, individually and on behalf of all others similarly situated,

Plaintiff,

vs.

GATESTONE & CO. INTERNATIONAL, INC., a Delaware corporation; and DOES 1 through 10, inclusive,

Defendants.
Case No. 2017-1-CV-306698

TENTATIVE RULING RE: MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT; MOTION FOR ATTORNEY FEES AND COSTS AND APPROVAL OF SERVICE AWARD

The above-entitled action comes on for hearing before the Honorable Thomas E. Kuhnle on March 29, 2019, at 9:00 a.m. in Department 5. The Court now issues its tentative ruling as follows:

I. INTRODUCTION

This is a putative class action brought pursuant to the California Rosenthal Fair Debt Collection Practices Act (“RFDCPA”). According to the Class Action Complaint for Statutory Damages (“Complaint”), filed on February 23, 2017, plaintiff Linda Lee Carlson (“Plaintiff”), on behalf of herself and all persons similarly situated, seeks statutory damages against defendants Gatestone & Co. International, Inc. (“Gatestone” or “Defendant”) and Nicholas C. Wilson arising from their routine practice of sending initial written communications that fail to provide the “Consumer Collection Notice” required by California Civil Code section 1812.700, subdivision (a), in a type-size that is at least the same type-size as that used to inform the debtor of his or her specific debt or in at least 12-point type, in violation of California Civil Code section 1812.701, subdivision (b). (Complaint, ¶ 3.) The Complaint sets forth a single cause of action titled “California Consumer Collection Notice.”

The parties have reached a settlement. On November 30, 2018, the Court granted preliminary approval of the settlement. The parties now move for final approval of the settlement. Plaintiff separately moves for attorneys’ fees, costs, and approval of a service award.

II. LEGAL STANDARD

Generally, “questions whether a settlement was fair and reasonable, whether notice to the class was adequate, whether certification of the class was proper, and whether the attorney fee award was proper are matters addressed to the trial court’s broad discretion.” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 234-235, citing Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794.)
In determining whether a class settlement is fair, adequate and reasonable, the trial court should consider relevant factors, such as “the strength of plaintiffs’ case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, the presence of a governmental participant, and the reaction of the class members to the proposed settlement.”

(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at pp. 244-245, citing Dunk, supra, 48 Cal.App.4th at p. 1801 and Officers for Justice v. Civil Service Com’n, etc. (9th Cir. 1982) 688 F.2d 615, 624.)

“The list of factors is not exclusive and the court is free to engage in a balancing and weighing of factors depending on the circumstances of each case.” (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245.) The court must examine the “proposed settlement agreement to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.” (Ibid., quoting Dunk, supra, 48 Cal.App.4th at p. 1801 and Officers for Justice v. Civil Service Com’n, etc., supra, 688 F.2d at p. 625, internal quotation marks omitted.)

The burden is on the proponent of the settlement to show that it is fair and reasonable. However “a presumption of fairness exists where: (1) the settlement is reached through arm’s-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small.”

(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245, citing Dunk, supra, 48 Cal.App.4th at p. 1802.)

III. DEFENDANT’S REQUEST FOR JUDICIAL NOTICE

Defendant requests judicial notice of the following documents:

(1) Declaration of Fred W. Schwinn dated 12/27/16, filed in United States District Court, Northern District of California, Case No. 14-cv-01806-BLF (Docket 113 1);

(2) California Secretary of State record for Defendant available online at https//businesssearch.sos.ca.gov/CBS/Detail ;

(3) Class Action Complaint for Statutory Damages dated 12/26/16, filed in Superior Court, County of Lake, Lakeport Division, in Timlick v. NCB Management, Case No. CV416919, by Fred W. Schwinn, Consumer Law Center;

(4) Notice of Removal by Defendant and related case initiating documents, filed in United States District Court, Northern District of California, Case No. 17-cv01818-BLF, Carlson v. Gatestone;

(5) Answer to Complaint by Defendant (Docket 8) filed in United States District Court, Northern District of California, Case No. 17-cv01818-BLF, Carlson v. Gatestone;

(6) Order Granting Motion to Remand (Docket 23) filed in United States District Court, Northern District of California, Case No. 17-cv01818-BLF, Carlson v. Gatestone.

The Court can take judicial notice of documents one and three through six as court records. (Evid. Code, § 452, subd. (d).) However, the website provided for item two provides no information regarding Defendant. Accordingly, the request for judicial notice is GRANTED as to items one and three through six and DENIED as to item two.

IV. PLAINTIFF’S REQUEST FOR JUDICIAL NOTICE

Plaintiff requests judicial notice of the Tentative Ruling Re: Motion for Summary Judgment issued in this case on June 28, 2018. The request for judicial notice is GRANTED. (Evid. Code, § 452, subd. (d).)

V. DISCUSSION

The case has been settled on behalf of the following class:

(i) all persons with addresses in California (ii) to whom Defendant sent, or caused to be sent, an initial written communication in the form of Exhibits “1” and “2” attached to Plaintiff’s Class Action Complaint filed herein (iii) in an attempt to collect a defaulted consumer debt originally owed to BANK OF AMERICA, N.A., (iv) which was not returned as undeliverable by the U.S. Post Office (v) during the period one year prior to the date of filing this action through the date of class certification.

Excluded from the Class would be any officers, directors or legal representatives of Defendant, and any judge, justice, or judicial officer presiding over this matter and the members of their immediate families and judicial staff person who is already subject to an existing release; and any Class Member who timely mails a request for exclusion.

As discussed in connection with the motion for preliminary approval, Defendant will pay $44,215 (no less than $5 to each class member). Defendant will also pay an incentive award of $2,000 to the class representative. Defendant will pay for settlement administration costs. Settlement checks remaining uncashed after 90 days from the mailing date will be paid to the Pro Bono Project Silicon Valley as a cy pres recipient.

On December 21, 2018, notices were mailed to 8,230 class members. (Declaration of Bailey Hughes in Support of Joint Motion for Final Approval of Class Action Settlement, ¶ 7.) As of March 5, 2019, 1,272 notices have been returned as undeliverable with no forwarding address or further information provided by the U.S. Postal Service. (Id at ¶ 9.) There have been no objections. (Id. at ¶ 11.) There have been two requests for exclusion. (Id. at ¶ 12.)

The Court previously found that the proposed settlement is fair and the Court continues to make that finding for purposes of final approval.
Plaintiff requests a service award of $2,000 for class representative Linda Lee Carlson.

The rationale for making enhancement or incentive awards to named plaintiffs is that they should be compensated for the expense or risk they have incurred in conferring a benefit on other members of the class. An incentive award is appropriate if it is necessary to induce an individual to participate in the suit. Criteria courts may consider in determining whether to make an incentive award include: 1) the risk to the class representative in commencing suit, both financial and otherwise; 2) the notoriety and personal difficulties encountered by the class representative; 3) the amount of time and effort spent by the class representative; 4) the duration of the litigation and; 5) the personal benefit (or lack thereof) enjoyed by the class representative as a result of the litigation. These “incentive awards” to class representatives must not be disproportionate to the amount of time and energy expended in pursuit of the lawsuit.

(Cellphone Termination Fee Cases (2010) 186 Cal.App.4th 1380, 1394-1395, quotation marks, brackets, ellipses, and citations omitted.)
The class representative has submitted a declaration in which she states she provided correspondence and other documents to class counsel, frequently discussed the case with class counsel, and participated in mediation. (Declaration of Class Representative Linda Lee Carlson in Support of Final Approval of Class Action Settlement and Service Award, ¶¶ 6, 9-11, and 13.) The Court finds the service award is warranted.

The Court also has an independent right and responsibility to review the requested attorneys’ fees and only award so much as it determines reasonable. (See Garabedian v. Los Angeles Cellular Telephone Co. (2004) 118 Cal.App.4th 123, 127-128.) Plaintiff’s counsel brings a motion for attorneys’ fees and costs in the amount of $72,327.34.

Defendant opposes the fee amount. In addition to substantive arguments regarding the reasonableness of the fees, Defendant argues Plaintiff failed to attempt to negotiate a resolution of the fee claim before filing a motion for fees. The settlement agreement states the fees and costs to be paid by Defendant will be “in an amount to be further negotiated by the parties or decided by the Court upon noticed motion, if the parties cannot agree.” (Settlement Agreement, ¶ 4.6, emphasis added.)

Defendant’s argument regarding Plaintiff’s failure to attempt to negotiate the fee amount before moving for an award of fees has merit. This appears to be a breach of the settlement agreement. The parties are ORDERED to meet and confer to negotiate the fees after reviewing this tentative ruling and/or at the courthouse before the hearing.

The motion for final approval of class action settlement is GRANTED. The parties are ordered to appear at the hearing to discuss the motion for attorneys’ fees.

The Court will set a compliance hearing for October 25, 2019 at 10:00 a.m. in Department 5. At least ten court days before the hearing, class counsel and the settlement administrator shall submit a summary accounting of the net settlement fund identifying distributions made as ordered herein, the number and value of any uncashed checks, amounts remitted to Defendant, the status of any unresolved issues, and any other matters appropriate to bring to the court’s attention. Counsel shall also submit an amended judgment as described in Code of Civil Procedure section 384, subdivision (b). Counsel may appear at the compliance hearing telephonically.