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.
8, 2017, this Court conducted a Final Fairness Hearing on the
Proposed Class Action Settlement (ECF No. 412-2)
(“Settlement Agreement”) of all claims asserted
in this action against Defendant Net Equity Financial, Inc.
(“Net Equity”). Via Order dated that same day
(ECF No. 471), this Court granted final approval of the
Settlement Agreement, dismissed all claims against Net
Equity, and approved the requested service award for Class
Representative Helen L. Householder in the amount of $5, 000,
including her Settlement Benefit. See Order,
¶¶ 1, 9, 13, ECF No. 471. Final Judgement has been
entered in this case against Net Equity in an
“amount necessary to fund Settlement Benefits
payable to the Settlement Class Members, in accordance with
the Settlement Agreement, ” discussed infra.
Id. ¶¶ 11, 15. Still pending before this
Court is Settlement Counsels' Petition for Attorneys'
Fees and Expenses (ECF No. 459), in which Settlement Counsel
request an award of attorneys' fees and expenses in the
amount of “20% of the amount of the Settlement Benefit
to the Settlement Class, specifically, $607, 163.33.”
Net Equity has not opposed that request. 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. 459) is GRANTED
in the full requested, and unopposed, amount of $607,
163.33, an award equal to 20% of the Settlement
Benefit to the Settlement Class or, alternatively, 1/6
of the entire Common Fund.
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. Net Equity Financial, Inc. (“Net Equity”)
was named as a Defendant in the First Amended Complaint (ECF
No. 47). 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 Net Equity 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 Net Equity
Equity Filed a Motion to Dismiss the Second Amended Complaint
on July 21, 2015 (ECF No. 162), to which Plaintiffs responded
on September 4, 2015 (ECF No. 178). Following a hearing on
November 24, 2015, this Court denied Net Equity's Motion
to Dismiss with respect to Plaintiffs' claims under the
Real Estate Settlement Procedures Act in a Memorandum Opinion
and Order dated December 9, 2015 (ECF Nos. 211 & 212).
Following this Court's entry of a Scheduling Order on
December 15, 2015 (ECF No. 220), the parties engaged in a
period of contested discovery. Settlement Counsel have
indicated that several discovery disputes remained unresolved
at the time of settlement.
parties filed a Joint Motion to Preliminarily Approve
Settlement on November 22, 2016 (ECF No. 412), attaching the
Settlement Agreement (ECF No. 412-2). This Court held a
Preliminary Fairness Hearing on January 12, 2017 and granted
the parties' Joint Motion via Order dated that same date
(ECF No. 431). 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 Counsel.
7.2 of the Settlement Agreement provides for the payment of
the following benefits to the Net Equity Class Members:
Each of these class members shall receive a proportionate
share of the Common Fund remaining after deduction of any
awards of attorneys' costs, expenses, and fees and
service awards . . . . The formula for distribution shall be
the Common Fund less any awards of attorneys' costs,
expenses, and fees and service awards divided by the number
of members of the Settlement Class who did not file a
complete and valid Request for Exclusion by the Exclusion
Counsel have indicated that the Common Fund now totals
$3, 642, 980.
respect to attorneys' fees and expenses, the Settlement
Agreement provides that “[p]ayment of any award of
attorneys' costs, expenses and fees shall come from
the Common Fund.” Settlement Agreement, ¶ 13,
ECF No. 412-2 (emphasis added). The Settlement Agreement
provides that Settlement Counsel shall limit their requested
attorneys' fees and expenses to an amount equal to 25% of
the amount of the Settlement Benefit to the Settlement Class.
Id. The Agreement further provides that Net Equity
reserves the right to oppose any petition for attorneys'
fees and expenses that seeks more than an aggregate
award equal to 20% of the Settlement Benefit to the
Settlement Class. Id.
the terms of the Settlement Agreement, a notice plan was
completed pursuant to which all members of the Net Equity
Class were informed of the Settlement Agreement's terms,
including the provisions for payment of attorneys' fees
and expenses. See Id. ¶ 11. No objections to
the terms of the Settlement Agreement have been filed. One
request for exclusion was filed by Sonia Gilroy, personal
representative for the Estate of David K. Gilroy. 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, excluding Gilroy from the
Counsel have requested an award of attorneys' fees and
expenses of “20% of the amount of the Settlement
Benefit to the Settlement Class, specifically, $607,
163.33.” Mot. for Attorneys' Fees, p. 2, ECF
No. 459. After deducting Settlement Counsels' reported
costs and expenses of $34, 876.08, the attorneys' fees
sought are $572, 287.25. See Mem. Supp. Mot., p. 22,
ECF No. 459-1. Net Equity does not oppose this award.
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 ...