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Febus v. Guardian First Funding Group, LLC

United States District Court, S.D. New York

March 4, 2015

RAFAEL FEBUS, on behalf of himself and all others similarly situated, Plaintiff,
v.
GUARDIAN FIRST FUNDING GROUP, LLC, and RAFAEL JASON LEVY, MARK FIDEL and ROBERT STARK, individually, Defendants

Page 241

For Rafael Febus, on behalf of himself and all others similarly situated, Plaintiff, Counter Defendant: Michele Renee Fisher, LEAD ATTORNEY, Nichols Kaster, PLLP, Minneapolis, MN; Paul J. Lukas, Reena I. Desai, PRO HAC VICE, Nichols Kaster, PLLP, Minneapolis, MN.

For Guardian First Funding Group, LLC, Jason Levy, Individually, Defendants: Ari Karen, Seth Blonder, LEAD ATTORNEYS, PRO HAC VICE, Harold Mark Walter, OFFIT KURMAN, Maple Lane, MD.

For Mark Fidel, Individually, Robert Stark, Individually, Defendant: Harold Mark Walter, Offit Kurman P.A, Fulton, MD; Ari Karen, LEAD ATTORNEY, PRO HAC VICE, OFFIT KURMAN, MAPLE LAWN, MD.

For Jason Levy, Individually, Counter Claimant: Harold Mark Walter, Offit Kurman P.A, Fulton, MD.

Page 242

OPINION & ORDER

Sidney H. Stein, United States District Judge.

This is the story of a sophisticated businessman who contracted to make certain

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payments in settlement of this action. He has failed to honor his commitments and is now being called to account by plaintiffs for his contractual breaches. On May 14, 2012, this Court granted final approval to a settlement of this collective and class action that alleged that defendants violated the Fair Labor Standards Act (" FLSA" ), 29 U.S.C. § 201 et seq. and New York labor law (" NYLL" ) for a massive failure to pay overtime and minimum wages to its eligible employees. ( See Order for Final Approval of the Settlement (" Final Approval" ), Dkt. No. 136.) The Settlement Agreement, consisting of the Memorandum of Understanding dated January 6, 2012 and the Addendum to the Memorandum of Understanding dated February 16, 2012, provided that the three individual defendants pay a total of $850,000 over five installments, to be completed in May 2015. Defendant Robert Stark, alone among the individual defendants, has defaulted on his obligations and is now ordered to pay $239,285.67 plus prejudgment interest.

I. Factual Background

In March 2010, plaintiff Rafael Febus brought this FLSA and NYLL action on behalf of himself and other current and former loan officers of defendant Guardian First Funding Group, LLC, a large traditional and reverse mortgage lender, alleging overtime and minimum wage violations by defendants, officers of Guardian First. Stark was the President and owner of Guardian First ( see Defs.' Answer and Affirmative Defenses to Class Action Amended Compl. ¶ 13, Dkt. No. 107), which has ceased doing business since the Settlement Agreement was executed. ( See Memorandum in Support of Joint Motion for Final Approval of the Proposed Settlement (" Joint Mot. for Final Approval" ) at 13, Dkt. No. 131.) Seven months after the lawsuit began, the FLSA collective action was conditionally certified pursuant to 29 U.S.C. § 216(b) (Dkt. No. 77), and fifty-eight individuals opted into the collective. The Court later certified a Rule 23 class under the NYLL for loan officers who had worked in New York state. (Dkt. No. 101.)

A. The Settlement

After motion practice and mediation led by the Honorable Kathleen Roberts, a retired federal magistrate judge, and attended personally by Stark as well as his attorney, Ari Karen, Esq., all parties reached a resolution as to all claims and executed a Memorandum of Understanding. ( See Affidavit of Reena I. Desai in Support of Mot. to Enforce the Settlement Agreement (" Desai Aff." ) ¶ 3, dated October 29, 2014; Memorandum of Understanding Between Plaintiffs and Defendants Guardian First Funding Group, LLC, Rafael Jason Levy, Robert Stark, and Mark Fidel (the " MOU" ), Ex. 1 to Desai Aff.) The MOU provided for $850,000 to be paid to plaintiffs in four installments:

Installment 1
$450,000.00 to be paid by Defendants within 90 days of the date of [the MOU], with Defendants Stark and Levy paying a total of $435,000.00, and Defendant Fidel paying $15,000.00.
. . .
Installment 2
$133,333.33 to be paid by Defendants on May 1, 2013, with Defendants Stark and Levy paying $48,333.33 each, and Defendant Fidel paying $36,666.67.
Installment 3
$133,333.33 to be paid by Defendants on May 1, 2014, with Defendants Stark and Levy paying $48,333.33 each, and Defendant Fidel paying $36,666.67. Installment 4
$133,333.34 to be paid by Defendants on May 1, 2015, with Defendants Stark and

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Levy paying $48,333.34 each, and Defendant Fidel paying $36,666.66.

In the MOU, defendants also agreed to execute a confession of judgment whereby they would confess to a judgment in the amount of 30% more than their respective share of the settlement in the event of default. ( Id.) The MOU was executed by the attorney for plaintiffs and by ...


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