United States District Court, N.D. New York
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,
GRJH, INC., doing business as Cobble Pond Farms; JAMES METZ, individually; ALICIA H. METZ, individually; and LAUREN H. SIMONS, individually, Defendants.
IANNIELLO ANDERSON, P.C. Attorneys for Plaintiffs
FRIEDMAN, HIRSCHEN & MILLER, LLP Attorneys for Defendants
J. BURGER, ESQ., JEANNE GONSALVES LLOYD, ESQ.
MEMORANDUM-DECISION AND ORDER
D'Agostino, U.S. District Judge
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.
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.
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.
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.
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, Defendants authorized 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: "We are getting close. I just spoke to my
clients again. The two year payment plan for $70k seems
excessive, especially in light of the offer being $10k more
than the last lump sum offer of $60k. If your clients require
a two year payment plan then the total settlement would need
to be around $100, 000.00. At this time I am authorized to
make a counteroffer of $77, 500.00. We are open to
suggestions on how to structure the settlement. Hope we can
close the gap. Thanks." Dkt. No. 58-1 at ¶ 11.
receipt of this email from Ms. Burger, Ms. Lloyd responded as
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
Id. at ¶ 12. That same day, Ms. Burger
responded "I will speak to them again. I am fairly
certain they will accept $75, 000.00 based upon prior
discussions. At $75, 000.00 we are taking a 25% cut on
attorney fees. We cannot do much better than that."
Id. at ¶ 13. The next day, April 27, 2017, Ms.
Burger sent another email stating as follows: "$75,
000.00 is as low as we can go. That's our final. Thanks.
Otherwise, let's coordinate to get the 8 depositions
scheduled." Id. at ¶ 14.
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 the
depositions of five non-party witnesses were served and their
depositions scheduled for July 11-13, 2017. See Dkt.
No. 61-1 at ¶ 8.
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:
The defendants . . . hereby make an Offer of Judgment,
pursuant to Rule 68 of the Federal Rules of Civil Procedure,
to the Plaintiffs, Vincent J. LaBarca and Trisha A. Flint, on
behalf of themselves and all others similarly situated, in
the amount of $70, 000.00, with costs as set forth in 28
U.S.C. Section 1920, accrued to date, which Judgment shall be
payable as follows:
-$17, 500.00 with costs pursuant to 28 U.S.C. Section 1920,
accrued to date, within 30 days of service of written notice
accepting the offer;
- $17, 500.00 payable within three (3) months of the initial
- $17, 500.00 payable within six (6) months of the initial
- $17, 500.00 payable within nine (9) months of the initial
Dkt. No. 47 at 3.
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 or tax 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.'"
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.
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.
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. 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 of all parties to resolve all issues,
including attorney's fees in a global settlement and
asked for clarification on whether Ms. Burger was intended to
file a separate application for additional fees. See
Id. at 73-74. Shortly thereafter, Ms. Burger sent a
return email, which did not address her intent regarding the
issue of attorney's fees and simply reiterated that the
Rule 68 Offer had been accepted. See Id. at 72.
Since Ms. Burger did not address the concerns raised in her
response, Ms. Lloyd sent Ms. Burger the following email:
I do not wish to burden the Court unnecessarily. I am simply
seeking clarification from you concerning the basis of your
objection. If you[r] objection is simply based on the
question of the timing of when the Judgment is to be entered,
and we are in agreement that the $70, 000 plus Section 1920
costs accrued to date will resolve all claims and causes of
action in the case, inclusive of attorney's fees, there
is no need to further burden the Court. In the event,
however, that it is plaintiffs' intent to pursue
additional attorney's fees on top of those contemplated
as part of the $70, 000 set forth in the Offer of Judgment,
as well as Sec. 1920 costs, further communication with the
Court will be necessary. Kindly clarify your intentions in
this regard by stating whether or not you will be pursuing
attorney's fees in addition to the $70, 000. If not, we
will abide by whatever decision the Court renders concerning
our request that the entry of the Judgment be held in
abeyance. If you are pursuing additional attorney's fees,
we will make a further application to the Court.
Id. at 72. Ms. Burger never responded to this
follow-up email. See Dkt. No. 58-1 at ¶ 36.
15, 2017, the Court denied Defendants' letter requesting
asking the Court to delay filing the Judgment and entered
Judgment and closed the case. On June 16, 2017, Ms. Lloyd
filed a letter with the Court requesting a telephone
conference to discuss the issue of attorney's fees and
that the Court delay entering judgment until after the
conference. See Dkt. No. 54. Although Judgment had
already been entered on June 15, 2017, a telephone conference
was scheduled for June 29, 2017. On June 28, 2017, Plaintiffs
filed motions for attorney's fees and costs. See
Dkt. Nos. 55 & 56. During the telephone conference on
June 29, 2017, ...