United States District Court, D. Maryland
EDWARD J. AND VICKI FANGMAN, et al., Plaintiffs,
GENUINE TITLE, LLC, et al. Defendants.
Richard D. Bennett United States District Judge
December 16, 2016, this Court conducted a Final Fairness
Hearing on the Proposed Class Action Settlement (ECF No.
277-2) (“Settlement Agreement”) of all claims
asserted in this action against Defendant JPMorgan Chase
Bank, N.A. (“Chase”). Via Order dated that same
day (ECF No. 421), this Court granted final approval of the
Settlement Agreement, dismissed all claims against Chase, and
approved the parties' requested service awards for Class
Representatives Carol Shaw and Patricia Marshall in the
amount of $3, 500 each, including their settlement
benefits. See Order, ¶¶ 8, 9,
13, ECF No. 421. Final Judgement has been entered in this
case against Chase in “an amount necessary to fund
Settlement Benefits payable to [Chase] Class Members, in
accordance with the Settlement Agreement, ” discussed
infra. Id. at ¶¶ 11, 15. Still
pending before this Court is Settlement Counsels'
Petition for Attorneys' Fees and Expenses (ECF No. 356).
The parties' submissions have been reviewed, and no
additional hearing on the issue of attorneys' fees and
expenses is necessary. See Local Rule 105.6 (D. Md.
2016). For the reasons stated herein, the pending Settlement
Counsels' Petition for Attorneys' Fees and Expenses
(ECF No. 356) is GRANTED in the requested amount of $82,
139.52, an award equal to 25% of the Chase Settlement
January of 2014, Plaintiffs Edward J. and Vicki Fangman
brought this class action against Defendant Genuine Title,
LLC alleging, inter alia, violations of the Real
Estate Settlement Procedures Act (“RESPA”), 12
U.S.C. §§ 2607(a), (b). See Compl., ECF
No. 2. JPMorgan Chase Bank, N.A. (“Chase”) was
named as a Defendant in the Second Amended Complaint (ECF No.
138). An additional thirteen home mortgage lenders have also
been named as Defendants (collectively “Lender
Defendants”) via the First and Second Amended
Complaints in this action. Attorneys Michael Paul Smith,
Sarah Zadrozny, Timothy J. Maloney, and Veronica Nannis of
the law firms of Smith, Gildea & Schmidt, LLC
(“SGS”) and Joseph, Greenwald & Laake, P.A.
(“JGL”) (hereinafter “Settlement
Counsel”) have represented all Plaintiffs, including
the Chase Plaintiffs, throughout this litigation.
prosecuting this case, Settlement Counsel have incurred
significant expense and have undergone significant
investigation. For example, in July of 2013, Plaintiffs filed
a Petition for Emergency Appointment of a Receiver for the
purpose of retrieving and preserving the documents, books,
and records of Genuine Title in the Circuit Court for
Baltimore County, Maryland. That court granted the petition
on July 30, 2014, and Settlement Counsel were able to
retrieve vast amounts of evidence from Genuine Title's
records, including the identities of potential Chase Class
Members. Additionally, Settlement Counsel have subpoenaed
records, documents, and testimony from a prior investigation
into Chase's home mortgage lending practices conducted by
the Consumer Financial Protection Bureau (“CFPB”)
and the State of Maryland. See Fangman, et al. v. Genuine
Title, LLC, et al., No. RDB-14-0081, 2016 WL 560483, at
*2 (D. Md. Feb. 12, 2016). That investigation involved
similar allegations to those raised by the Plaintiffs in this
action. In that case, Chase ultimately agreed to a Stipulated
Final Judgment and Order (the “Consent Decree”)
with the CFPB and the State, pursuant to which Chase agreed
to refund certain settlement charges to Chase borrowers.
Filed a Motion to Dismiss the Second Amended Complaint on
July 21, 2015 (ECF No. 170), to which Plaintiffs responded on
September 4, 2015 (ECF No. 182). However, the parties
subsequently requested that this Court suspend consideration
of Chase's Motion to Dismiss, pending settlement
discussions (ECF No. 206). The parties filed a Joint Motion
to Preliminarily Approve Settlement on May 16, 2016 (ECF No.
277), attaching the Settlement Agreement as Exhibit A (ECF
No. 277-2). This Court held a Preliminary Fairness Hearing on
June 1, 2016 and granted the parties' Joint Motion via
Order dated that same date (ECF No. 286). This Court's
Order designated Michael Paul Smith, Sarah Zadrozny, Timothy
J. Maloney, and Veronica Nannis of the law firms of Smith,
Gildea & Schmidt, LLC (“SGS”) and Joseph,
Greenwald & Laake, P.A. (“JGL”) as Settlement
Settlement Agreement provides for the payment of the
following benefits to the Chase Class Members: “an
amount equal to 120% the Section 1100 Charges that were paid
to [Genuine Title] (excluding Line 1108 title
underwriter's fees) as reflected on the member's
final HUD-1 Settlement Statement for the member's Chase
loan.” Settlement Agreement, ¶ 6.1, ECF No. 277-2.
The settlement benefits are to be deposited into a Common
Fund, which Settlement Counsel has subsequently indicated
will reach a total value of $328, 558.08.
See Correspondence, p. 1, ECF No. 422.
respect to attorneys' fees and expenses, the Settlement
Agreement provides that Chase will pay attorneys' fees
and expenses “in addition to, not out of the Common
Fund.” Settlement Agreement, ¶ 12, ECF No. 277-2.
The Settlement Agreement provides that Settlement Counsel
shall limit the amount of their requested attorneys' fees
and expenses to an amount equal to 25% of the Common Fund.
Id. The Agreement further provides that Chase
reserves the right to oppose any petition for attorneys'
fees and expenses that seeks more than an aggregate
award equal to 20% of the Common Fund. Id.
the terms of the Settlement Agreement, a notice plan was
completed pursuant to which all members of the Chase Class
were informed of the Settlement Agreement's terms,
including the provisions for payment of attorneys' fees
and expenses. See Id. at ¶ 10. No objections to
the terms of the Settlement Agreement or requests for
exclusion from the settlement have been filed. On November 4,
2016, this Court conducted a Final Fairness Hearing on the
proposed settlement and granted final approval of the
Settlement Agreement that same day.
Counsel have requested an award of attorneys' fees and
expenses in the amount of 25% of the Common Fund, or $82,
139.52. Mot. for Attorneys' Fees, p. 2, ECF No. 356;
Correspondence, p. 1, ECF No. 422. Pursuant to the terms of
the Settlement Agreement, $3, 892.43 of that award will be
paid to the Class Representatives-the difference between
their settlement benefits and $3, 500 service awards
previously awarded by this Court. See Settlement
Agreement, ¶ 11, ECF No. 277-2; Correspondence, p. 1,
ECF No. 422. An additional $1, 025.84 of that award will
cover Settlement Counsels' expenses. Correspondence, p.
1, ECF No. 422. Accordingly, Settlement Counsel request a
total of $77, 221.25 in attorneys' fees alone.
Id. Although Chase reserved the right to object to
any request for attorneys' fees and expenses in excess of
20% of the Common Fund, Chase has filed a Notice of
Non-Opposition to Settlement Counsels' pending motion
(ECF No. 366).
23(h) of the Federal Rules of Civil Procedure provides that
“[i]n a certified class action, the court may award
reasonable attorney's fees and nontaxable costs that are
authorized by law or by the parties' agreement.”
Fed.R.Civ.P. 23(h). Additionally, the Real Estate Settlement
Procedures Act (“RESPA”) provides that
“[i]n any private action brought pursuant to this
subsection, the court may award to the prevailing party the
court costs of the action together with reasonable attorneys
fees.” 12 U.S.C. § 2607(d)(5). As this Court has
previously noted, “[t]here are two primary methods of
calculating attorneys' fees: the lodestar method and the
‘percentage of recovery' method.”
Whitaker v. Navy Fed. Credit Union, No. RDB-09-2288,
2010 WL 3928616, at *4 (D. Md. Oct. 4, 2010). “The
lodestar method requires the multiplication of the number of
hours worked by a reasonable hourly rate, the product of
which this Court can then adjust by employing a
‘multiplier.' ” Id. “The
percentage of the recovery method involves an award based on
a percentage of the class recovery, set by the weighing of a
number of factors by the court.” Id.
reasons explained in this Court's prior Memorandum
Opinion of November 18, 2016 (ECF No. 411), the
“percentage of recovery” method shall be used to
calculate Settlement Counsels' attorneys' fees and
expenses in this case. However, this Court will cross-check
the “percentage of recovery” analysis with a
lodestar analysis. This Court has previously recognized that
“using the percentage of fund method and supplementing
it with the lodestar cross-check . . . take[s] advantage of
the benefits of both methods.” Singleton v.
Domino's Pizza, LLC, 976 F.Supp.2d 665, 681 (D. Md.
2013) (quoting In re The Mills Corp. Securities
Litig., 265 F.R.D. 246, 261 (E.D. Va. 2009)).
“Percentage of Recovery” Analysis
the United States Court of Appeals for the Fourth Circuit
“has not yet identified factors for district courts to
apply when using the ‘percentage of recovery'
method, . . . District courts in this circuit have analyzed
the following seven factors:”
(1) the results obtained for the class; (2) the quality,
skill, and efficiency of the attorneys involved; (3) the risk
of nonpayment; (4) objections by members of the class to the
settlement terms and/or fees requested by counsel; (5) awards
in similar cases; (6) the complexity and duration of the
case; and (7) public policy. [citing, e.g., The
Kay Company v. Equitable Production Co., 749 F.Supp.2d
455, 464 (S.D. W.Va. 2010)]. Importantly, “fee award
reasonableness factors ‘need not be applied in a
formulaic way' because each case is different, ‘and
in certain cases, one factor may outweigh the rest.'
” In re AT & T Corp., 455 F.3d 160, 166
(3d Cir. 2006) (quoting In re Rite Aid Corp. Sec.
Litig., 396 F.3d 294, 301 (3rd Cir. 2005)).
Singleton, 976 F.Supp.2d at 682.
Results Obtained for the Class
‘[T]he most critical factor in calculating a reasonable
fee award is the degree of success obtained.' ”
Id. (quoting McKnight v. Circuit City Stores,
Inc., 14 F.App'x. 147, 149 (4th Cir. 2001)). In this
case, Settlement Counsel have secured a significant financial
recovery for the members of the Chase Class. As outlined
supra, members of the Settlement Class will directly
receive more than 100% of the settlement charges paid to
Genuine Title on their loans, in addition to payments they
have already received from Chase pursuant to its prior
settlement with the Consumer Financial Protection Bureau
(“CFPB”). Settlement Counsel have indicated that
the Common Fund is valued at a total of $328, 558.08.
See Correspondence, p. 1, ECF No. 422. Additionally,
class members' settlement benefits will not be reduced by
court-awarded attorneys' fees and costs, Class
Representatives' service awards, or by the costs of
settlement administration or notice, which Chase has agreed
to pay separately. Furthermore, as this Court observed in
Singleton, “[t]he fact that no objections have
been filed further suggests that the result achieved is a
desirable one.” Singleton, 976 F.Supp.2d at
Quality, Skill, and Efficiency of the ...