Labarca v. GRJH, Inc.
| Decision Date | 01 March 2018 |
| Docket Number | 6:16-cv-826 (MAD/TWD) |
| Parties | VINCENT J. LABARCA, on behalf of themselves and all others similarly situated, and TRISHA A. FLINT, on behalf of themselves and all others similarly situated, Plaintiffs, v. GRJH, INC., doing business as Cobble Pond Farms; JAMES METZ, individually; ALICIA H. METZ, individually; and LAUREN H. SIMONS, individually, Defendants. |
| Court | U.S. District Court — Northern District of New York |
APPEARANCES:
IANNIELLO ANDERSON, P.C.
SARAH J. BURGER, ESQ.
JEANNE GONSALVES LLOYD, ESQ.
MEMORANDUM-DECISION AND ORDER
Plaintiffs commenced this action on July 6, 2016, seeking declaratory and monetary relief to redress alleged deprivations of their rights under the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (the "FLSA"), and New York Labor Law § 190. See Dkt. No. 1. On June 8, 2017, Defendants made an Offer of Judgment pursuant to Rule 68 of the Federal Rules of Civil Procedure. On June 12, 2017, Plaintiffs filed a Notice of Acceptance of the Rule 68 Offer. See Dkt. No. 47. As such, the Court entered judgment on June 15, 2017 and closed this case. See Dkt. No. 53.
Currently before the Court is Defendants' motion seeking to revoke or rescind their Rule 68 Offer, or, in the alternative, to amend, alter, or revoke the judgment. See Dkt. No. 58.
This action was commenced by Plaintiffs Vincent J. LaBarca and Tricia A. Flint on behalf of themselves and all others similarly situated, on or about July 7, 2016, against their former employer, GRJH, Inc., d/b/a Cobble Pond Farms, and the purported officers of GRJH, Inc., James Metz, Alicia H. Metz, and Lauren H. Simons. See Dkt. No. 1. The Complaint contains three causes of action, alleging primarily the failure to pay Plaintiffs no less than one and one-half times their regular pay rate for hours worked in excess of forty hours in a workweek, in violation of the FLSA and New York Labor Law. See id. at ¶¶ 58-68. All three causes of action listed reasonable attorneys' fees and costs as part of the relief Plaintiffs were seeking.
After completion of mandatory disclosures, paper discovery, and the depositions of the representative Plaintiffs, the parties attended a mediation session with the Honorable Randolph Treece, on March 28, 2017, as part of the Northern District of New York's Mandatory Mediation Program. See Dkt. No. 58-1 at ¶ 8. While offers and counteroffers were exchanged during the mediation, the case did not settle at that time. See id. All of the offers and counteroffers extended at that time contemplated a global resolution to all claims asserted in the complaint, including all claims for wages, attorney's fees, costs and interest. See id.
Settlement negotiations continued with the assistance of the mediator until April 27, 2017. See id. at ¶ 9. In response to Plaintiffs $85,000 settlement demand, on April 14, 2017, Defendantsauthorized their attorney, Jeanne M. Gonsalves Lloyd, Esq., to extend a global settlement offer to Plaintiffs in the amount of $70,000, payable over a two-year period. See id. at ¶ 10; see also Dkt. No. 61-1 at ¶ 6. On April 26, Plaintiffs' counsel, Sarah Burger, Esq., responded to the April 14 offer as follows: Dkt. No. 58-1 at ¶ 11.
Upon receipt of this email from Ms. Burger, Ms. Lloyd responded as follows:
I am quite confident that my clients will not agree to the $77,500.00, however, I will pass this counteroffer on to them. If my clients will agree to a $70,000.00 up front payment, will that settle the case? I am not sure that this is even a possibility they will consider, but I will recommend it if you tell me that your clients will accept that.
Id. at ¶ 12. That same day, Ms. Burger responded Id. at ¶ 13. The next day, April 27, 2017, Ms. Burger sent another email stating as follows: Id. at ¶ 14.
Counsel for all parties appear to agree that each of the settlement offers and settlement demands extended at the mediation and continuing thereafter in April 2017 contemplated full resolution of all claims in the Complaint, including Plaintiffs' claims for attorney's fees. See id. at ¶ 15; see also Dkt. No. 61-1 at ¶¶ 5-8. After settlement discussions failed, the depositions of the individually named Defendants was scheduled for June 13, 29-30, 2017, and subpoenas for thedepositions of five non-party witnesses were served and their depositions scheduled for July 11-13, 2017. See Dkt. No. 61-1 at ¶ 8.
On June 8, 2017, Ms. Lloyd was directed by her clients to serve a Rule 68 Offer of Judgment in the sum of $70,000.00. See Dkt. No. 58-1 at ¶ 17. According to Ms. Lloyd, "[i]nstead of the $70,000.00 being made payable over a two year period as previously offered, however, in order to make the offer more palatable to plaintiffs and their counsel, the defendants instructed me to make the $70,000.00 payable over a period of 9 months as opposed to two years." Id. The Offer of Judgment served on Plaintiffs stated, in relevant part, as follows:
On June 9, 2017, Ms. Burger emailed Ms. Lloyd, indicating that she would discuss the Rule 68 Offer with her clients. See Dkt. No. 58-1 at ¶ 21. Later that day, Ms. Burger called Ms. Lloyd regarding the offer. See id. at ¶ 23. According to Ms. Lloyd, Ms. Burger asked whether, if accepted by her clients, GRJH, Inc. would be reporting the payments as 1099 or W-2 income to her clients. See id. Ms. Lloyd responded that she was unsure, as she is neither an accountant ortax attorney, but stated that she did not believe that all of the payments could be properly reported as W-2 income for two reasons: "1) plaintiffs are no longer employees of GRJH; and 2) the $70,000.00 included both wages and attorney's fees." Id. Ms. Lloyd claims that Ms. Burger's only response to this was to indicate that "'[y]our Offer of Judgment is very clear.'" Id.1
On June 12, 2017, Ms. Burger sent Ms. Lloyd an email informing her that her clients were accepting the Rule 68 Offer and that she would shortly file the Notice of Acceptance. See id. at ¶ 24. Later that day, Ms. Burger filed Plaintiffs' Notice of Acceptance with the Court, which included the following language: "Pursuant to Rule 68(a) of the Federal Rules of Civil Procedure, plaintiffs Vincent J. LaBarca and Tricia A. Flint, through their undersigned counsel, hereby accept and provide notice that they have accepted Defendants' Offer of Judgment to Plaintiffs dated June 8, 2017, attached hereto as Exhibit 'A.'" Id. at ¶ 26. In their motion, Defendants note that, while the Rule 68 Offer was made not only to LaBarca and Flint, but also "on behalf of themselves and all others similarly situated[.]" Id. at ¶ 27. The Rule 68 Offer was worded that way because, according to Defendants, LaBarca and Flint brought this action not just in their individual capacities, but "'on behalf of themselves and similarly situated persons who are current and former employees of defendants since the date three years prior to the filing of this action who elect to opt-in to this action (the "FLSA Collective").'" Id. at ¶ 28.
On the morning of June 13, 2017, Defendant Metz contacted Ms. Lloyd to request that she contact Ms. Burger and/or the Court to request that entry of Judgment on the Rule 68 Offer of Judgment be held in abeyance pending Defendants' final payment, at which time both the Judgment and Satisfaction piece could be filed. See Dkt. No. 58-1 at ¶ 32. When asked, Ms.Burger indicated that the proposed delayed filing of the Judgment was not possible under Rule 68. See Dkt. No. 61-1 at ¶ 16. Later that day, Ms. Lloyd filed a letter motion with the Court seeking the delayed entry of judgment, which Plaintiffs "vehemently object[ed]." Dkt. Nos. 49 & 50.
Although there was no mention of attorney's fees in Plaintiffs' letter in opposition to Defendants' motion, Ms. Lloyd claims that she first became suspicious of the possibility that Plaintiffs would be seeking such fees because of the authority cited in the June 13, 2017 letter. See Dkt. No. 58-1 at ¶ 34.2 On June 14, 2017, Ms. Lloyd attempted to call Ms. Burger to discuss her suspicion, but Ms. Burger was unavailable. See id. at ¶ 35. At this point, Ms. Lloyd sent Ms. Burger a lengthy email in which she indicates, among other things, that it was always the intent...
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