Fladell v. Wells Fargo Bank, N.A.

Citations: 112 F. Supp. 3d 1323; 2014 U.S. Dist. LEXIS 184292; 2014 WL 10017434Docket: Case No. 0:13-CV-60721

Court: District Court, S.D. Florida; March 17, 2014; Federal District Court

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The court granted preliminary approval of a class action settlement in the Fladell Litigation, involving Plaintiffs and Defendants, including Wells Fargo entities and insurance companies. The settlement aims to resolve all claims arising from the action without the need for prolonged litigation. The court reviewed the Settlement Agreement and deemed its terms fair, reasonable, and adequate. 

The Settlement Class is defined to include U.S. borrowers charged by the Wells Fargo Defendants for specific types of insurance policies (hazard, flood, flood gap, or wind-only), during a defined Class Period. Members of the Settlement Class include those who either paid or still owe the Net Premium for these policies. The court also approved the proposed Settlement Relief for the Settlement Class Members on a preliminary basis. A final approval hearing is scheduled to further review the settlement's terms.

The "Class Period" for the settlement is defined based on property location, starting on specific dates for each state and continuing until the date of the Preliminary Approval Order. The states and their respective start dates are: California (October 7, 2007), Florida (September 2, 2006), Illinois (July 5, 2002), Indiana (June 15, 2002), Louisiana (February 19, 2003), New Jersey (April 2, 2007), New York (July 5, 2006), Ohio (August 8, 1998), Pennsylvania (April 7, 2005), Texas (October 7, 2007), and all other states (January 1, 2008).

Exclusions from the Class include: (i) current or former officers or directors of the Defendants; (ii) judges and their close relatives; (iii) borrowers whose LPI Policy was fully refunded; (iv) borrowers involved in specific prior litigation; and (v) borrowers who opt out of the Class.

The Court preliminarily certifies the Settlement Class for settlement purposes, confirming that the Class is numerous, has common legal and factual questions, and that the claims of the Plaintiffs are typical of the Class. The Plaintiffs are deemed capable of protecting the Class’s interests, and the Class is ascertainable. A nationwide settlement is considered the most efficient resolution for the claims.

Class representatives are named as Ira Marc Fladell, Sarah Crouch, Greg Olson, Margaret Zawistowski, Tilena Ali, Danny Lane, and Beverly Lane, while Class Counsel is designated as the firms Kozyak, Tropin, Throckmorton, P.A., Podhurst Orseck, P.A., and Harke Clasby, Bushman LLP.

A Final Approval Hearing is scheduled for September 18, 2014, to evaluate the fairness of the Settlement, the dismissal of the Fladell Litigation, binding of Class Members to the Release, enforcement of a permanent injunction against non-opted-out members, and approval of Class Counsel's fees and any awards to Plaintiffs.

The Court approves the Class Notice as outlined in the Settlement Agreement, including the Mail Notice (Exhibit A) and its delivery methods, deeming them the best practicable notice to inform Settlement Class Members about the Action's status, Settlement Agreement terms, and their rights to object or opt-out. The Mail Notice must be sent at least 90 days before the Final Approval Hearing and will include Claim Instructions (Exhibit B) and a Claim Form (Exhibit C). 

A Settlement Website, accessible at FladellSettlementInfo.com, will be created by the Settlement Administrator to host copies of the Settlement Agreement, Mail Notice, and related materials, enabling Class Members to submit claims online. A toll-free interactive voice response system will also be established to provide information about the Settlement and allow for inquiries, with provisions for Class Counsel to receive updates on inquiries.

Defendants are required to file proof of mailing and the website establishment with the Court at least 10 days before the Final Approval Hearing. They must comply with the Class Action Fairness Act (28 U.S.C. 1715) and file declarations regarding this compliance. The Court authorizes the retention of one or more Administrators to execute various tasks related to the Settlement Agreement, including mailing notices, setting up the phone system and website, processing claims, and fulfilling other responsibilities as agreed by the Parties.

Settlement Class Members wishing to opt out must submit a written Request for Exclusion to the Settlement Administrator via first-class mail, postmarked no later than 30 days before the Final Approval Hearing. The request must include the case name and number, the member's name and address, a personal signature, and a statement indicating the desire to be excluded. Mass or class opt-outs are prohibited. Members opting out must act in accordance with the Settlement Agreement, even if they have filed separate actions against the Released Persons or are involved in other class actions against them. Members who do not opt out will be bound by the settlement terms, including the releases specified in the Settlement Agreement, upon the Final Settlement Date. If more than 5% of Settlement Class Members properly opt out, the Defendants may terminate the Agreement without penalty. Additionally, members who do not request exclusion can object to the settlement in writing, which must be filed with the Clerk of Court and served on relevant parties at specified addresses, also 30 days before the Final Approval Hearing.

A valid written objection to the Settlement must comply with requirements detailed in the Class Notice and Settlement Website, including: the case name and number, the objector's contact information (and that of their counsel if applicable), the basis for the objection, and whether they plan to appear at the Final Approval Hearing. Failure to object as specified will result in a waiver of the right to object and preclude further review of the Settlement. Settlement Class Members who submit timely objections may attend the Final Approval Hearing to contest the Settlement's fairness, provided they file a Notice of Intention to Appear with the court, including relevant details and evidence by the Objection Deadline, and serve copies to designated counsel. Representation by counsel at the hearing will be at the objector's expense, and an appearance notice must be filed two weeks prior. Those who do not comply with these requirements will be barred from attending the hearing to raise objections.

If the Settlement is approved, non-excluding Settlement Class Members will release the Released Persons from all claims related to the conduct of Wells Fargo Defendants concerning hazard LPI Policies during the Class Period. Defendants will not oppose an application for Attorneys’ Fees and Expenses up to $19 million and a $5,000 Case Contribution Award for each Plaintiff or married Plaintiffs for their contributions to the case. Additionally, Settlement Class Members who do not exclude themselves are preliminarily enjoined from initiating any lawsuits related to the claims in this Action or attempting to organize separate class actions based on the same claims.

Defendants’ Counsel and Class Counsel are required to serve each other and all parties who have filed notices of appearance with any additional documents supporting the proposed Settlement before the Final Approval Hearing. They must also share any objections or requests for exclusion received and file these with the Court by the hearing date. The Order will be null and void if the proposed Settlement is not approved or finalized, or if the Settlement Agreement is terminated, reverting the Parties to their statuses prior to the Order. In such cases, the proposed Settlement and Agreement will have no effect, the preliminary certification of the Settlement Class will be vacated, and no part of the Agreement or Orders can be referenced for any purpose. Additionally, the Order will not imply any admission of fault or liability by any Defendant nor suggest that the claims of the Plaintiff or Settlement Class Members lack merit. The Court also permits the Parties to take necessary actions to implement the Settlement Agreement.