Donald M Lusnak v. Bank of America, N.A.
2:14-cv-01855
C.D. Cal.Aug 10, 2020Background:
- Plaintiff Donald M. Lusnak brought a class action against Bank of America alleging it failed to pay at least 2% simple interest on escrowed advance funds (taxes, insurance, assessments) for one- to four‑family California mortgage loans from July 1, 2008 to December 31, 2018.
- The parties negotiated a settlement (mediated by Eric Green) creating a $35 million common fund to be distributed directly to Settlement Class Members without a claims process; minimum payment $5 plus pro rata shares based on alleged unpaid escrow interest.
- The Court preliminarily approved the settlement, directed notice (including CAFA notice), and held a final fairness hearing on August 10, 2020.
- The Settlement Class was defined to include Bank of America Corp., Bank of America, N.A., and related predecessors/subsidiaries; 25 class members timely opted out and there were no objections.
- The Court found notice adequate under Rule 23 and CAFA, certified the class for settlement purposes under Rules 23(a) and 23(b)(3), and approved the settlement as fair, reasonable, and adequate.
- The action was dismissed with prejudice; releases and a permanent injunction as to Released Claims were entered. The Court approved attorneys’ fees and expenses of $8,750,000 and a $10,000 service award to Lusnak.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Class certification for settlement (Rule 23(a), 23(b)(3)) | Lusnak: numerosity, commonality, typicality, adequacy, predominance and superiority satisfied for settlement | BofA: supported settlement and class certification for settlement purposes to finalize global relief | Certified for settlement purposes under Rules 23(a) and 23(b)(3) |
| Fairness, adequacy, and reasonableness of settlement (Rule 23(e)(2)) | Settlement provides tangible, direct relief via immediate distribution; negotiated at arm’s length after extensive litigation | Settlement fairly accounts for litigation risks, delay, and distribution efficiency | Approved as fair, reasonable, and adequate; ordered implementation |
| Notice sufficiency (CAFA and Rule 23) | Notice program provided best practicable notice, direct notice to identifiable class members, and included fee/service award amounts | BofA concurred with notice program and its sufficiency | Notice deemed adequate under Rule 23, CAFA compliance satisfied, and no valid objections received |
| Attorneys’ fees, expenses, and service award | Class counsel sought $8,750,000 (fees + expenses) and $10,000 service award to representative as reasonable under percentage-of-fund and lodestar cross-check | BofA did not oppose fee amount being paid from common fund per settlement | Fee motion granted in full: $8,750,000 to counsel and $10,000 to plaintiff; costs reimbursed; Court found amounts reasonable |
Key Cases Cited
- Churchill Village LLC v. Gen. Elec. Co., 361 F.3d 566 (9th Cir. 2004) (factors to evaluate proposed class settlements)
- In re Wash. Pub. Power Supply Sys. Sec. Litig., 19 F.3d 1291 (9th Cir. 1994) (percentage-of-the-fund method for attorney fees)
- Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002) (lodestar cross-check and multiplier considerations for fee awards)
- Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003) (standards for awarding costs and service awards to class representatives)
- Rodriguez v. West Publ’g Corp., 563 F.3d 948 (9th Cir. 2009) (considerations for incentive awards and class notice)