Lofton v. Wells Fargo Home Mortgage, No. A146282 (D1d3 Sept. 28, 2018)
Four years ago, the First District upheld a preliminary injunction against a Law Firm, preventing it from using a shady settlement tactic to obtain fees from a class action settlement outside the judicially supervised case by bringing, and allegedly settling a parallel individual case in a different jurisdiction. On remand, and after further development of the record on just how deceptive the Firm’s tactics were, the trial court found that the $6 million obtained from the individual settlement should have rightly been part of the common fund settlement to benefit the class. And on top of that, Law Firm wasn’t entitled to receive any fees and it had to pay the class back for incentive awards paid to three individual clients. The Court of Appeal affirms. And then it orders its opinion to be sent to the state bar.
Affirmed.
Showing posts with label lofton. Show all posts
Showing posts with label lofton. Show all posts
Friday, December 7, 2018
Thursday, November 13, 2014
Shady, Shady Stuff
Lofton v. Wells Fargo, No. A136626 (D1d3, as modified Nov. 20, 2014)
There are two wage-and-hour cases against Wells Fargo. One is a class action. The other is a 600 plaintiff mass joinder case with no certified class. One is in LA, the other in San Francisco. Although they are not coordinated, both cases allegedly resolve at the same mediation. The deal was that the class will settle for $19 million, the 600 plaintiffs will opt out, and then the 600 will settle for $6 million.
But when it comes time to get approval, the individuals don’t opt out. Instead, they file claims in the class settlement, apparently because that’s what their lawyers tell them to do. And nobody tells the court during the approval process that the individual case attorneys—the appropriately named “Initiative Legal Group”—now contend that the whole $6 million was to address their attorneys’ fees.
When one of the individual plaintiffs gets word of ILG’s initiative to steal the settlement fund from their clients, he sues ILG for breach of fiduciary duty. He also intervenes in the (already approved) class action case and gets a TRO from that court preventing ILG from dissipating the $6 million.
The court here affirms that injunction, finding: (1) that issuing the TRO was within the trial court’s ongoing jurisdiction over a class action settlement under Code of Civil Procedure § 664.6, which includes the authority to act in equity; (2) that the trial court did not abuse its discretion in issuing the TRO; (3) that ILG’s constitutional and privacy objections are bogus; and (4) that ILG’s Evidence Code § 1152 settlement privilege objections were harmless or unfounded.
Affirmed.
There are two wage-and-hour cases against Wells Fargo. One is a class action. The other is a 600 plaintiff mass joinder case with no certified class. One is in LA, the other in San Francisco. Although they are not coordinated, both cases allegedly resolve at the same mediation. The deal was that the class will settle for $19 million, the 600 plaintiffs will opt out, and then the 600 will settle for $6 million.
But when it comes time to get approval, the individuals don’t opt out. Instead, they file claims in the class settlement, apparently because that’s what their lawyers tell them to do. And nobody tells the court during the approval process that the individual case attorneys—the appropriately named “Initiative Legal Group”—now contend that the whole $6 million was to address their attorneys’ fees.
When one of the individual plaintiffs gets word of ILG’s initiative to steal the settlement fund from their clients, he sues ILG for breach of fiduciary duty. He also intervenes in the (already approved) class action case and gets a TRO from that court preventing ILG from dissipating the $6 million.
The court here affirms that injunction, finding: (1) that issuing the TRO was within the trial court’s ongoing jurisdiction over a class action settlement under Code of Civil Procedure § 664.6, which includes the authority to act in equity; (2) that the trial court did not abuse its discretion in issuing the TRO; (3) that ILG’s constitutional and privacy objections are bogus; and (4) that ILG’s Evidence Code § 1152 settlement privilege objections were harmless or unfounded.
Affirmed.
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