IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF FLORIDA

Transcription

1 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 1 of 40 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF FLORIDA JOHN ROBERT BEGLEY and ) CARRIE BELL BEGLEY, on behalf ) of themselves and all others similarly ) situated, ) ) Plaintiffs, ) CASE NO. 3:16-cv MCR-CJK ) v. ) ) OCWEN LOAN SERVICING, LLC, ) ) Defendant. ) PLAINTIFFS UNOPPOSED MOTION AND MEMORANDUM IN SUPPORT OF ATTORNEYS FEES, COSTS AND SERVICE AWARD PLEASE TAKE NOTICE that on November 20, 2017, at 9:00 a.m., or on such date as may be specified by the Court, before the Honorable M. Casey Rogers, United States District Court for the Northern District of Florida, in Courtroom 2 of the Winston E. Arnow Federal Building, 100 North Palafox Street, Pensacola, Florida 32502, the Plaintiffs, John Robert Begley and Carrie Bell Begley, through Class Counsel, will request Court approval of this motion for an award of attorneys fees, costs and service awards.

2 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 2 of 40 This motion is made pursuant to Rules 23(h) and 54(d)(2) of the Federal Rules of Civil Procedure, the Parties Agreement 1 filed May 12, 2017 (Doc. 46-2), and paragraph 10 of the Court s Order of Preliminary Approval Order dated June 15, 2017 (Doc. 53). Plaintiffs, on behalf of themselves and the Class, will request the entry of an order, pursuant to Fed. R. Civ. P. 23(h) and 54(d)(2), granting the following relief: 1) Awarding Class Counsel $2,000,000 in attorneys fees, costs and litigation expenses (representing 8% of the total gross value of the settlement); 2) Awarding $5,000 to Plaintiffs jointly as the named class representatives, to be paid from the requested $2,000,000 in attorneys fees, costs and litigation expenses. Plaintiffs show that if their motion is approved, the Settlement will result in $24.7 million dollars in value for the class members that includes automatic payments of approximately $500,00 to eligible class members, as well as the reversal and corrected reapplication of mortgage payments. This motion will be heard concurrent with Plaintiffs Motion for Final Approval of Class Action Settlement, which shall be separately briefed and filed no later than November 10, 2017 (ten days before the Final Fairness Hearing). See Order, Doc. 53, 20. This motion is based on this notice; the incorporated Memorandum of Law; the Declaration of Class Counsel filed concurrently herewith; 1 The Begleys employ certain capitalized words and phrases in this memorandum that are defined in Section 2 of the Parties Settlement.

3 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 3 of 40 the Settlement Agreement (previously filed at Doc. 46-2); and on such further evidence as may be submitted or as the Court may receive. Pursuant to Rule 23(h), Class Counsel files this Motion 14 days in advance of the October 16, 2017 deadline for objecting to the Settlement. See Order, Doc. 53, 19. A copy of this Motion will be posted to the Settlement Website, where it can easily be accessed by class members. /s/ Bryan F. Aylstock Bryan F. Aylstock Aylstock, Witkin, Kreis & Overholtz, PLLC 17 E. Main Street, Suite 200 Pensacola, FL Phone: (850) Fax: (850) baylstock@awkolaw.com Richard M. Golomb Kenneth J. Grunfeld Golomb & Honik, P.C Market Street, Suite 1100 Philadelphia, PA Phone: (215) Fax: (215) rgolomb@golombhonik.com kgrunfeld@golombhonik.com Joseph Jay H. Aughtman, Esquire Aughtman Law Firm, LLC 1722 Platt Place Montgomery, AL 36117

4 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 4 of 40 Phone:(334) Fax: (334) jay@aughtmanlaw.com Aaron C. Hemmings, Esquire Hemmings & Stevens, P.L.L.C 5540 McNeely Drive, Suite 202 Raleigh, NC Phone:(919) Fax: (919) ahemmings@hemmingsandstevens.com Dated: October 2, 2017 Attorneys for Plaintiffs and the Class

5 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 5 of 40 TABLE OF CONTENTS I. II. III. IV. INTRODUCTION... 1 FACTUAL BACKGROUND AND PROCEDURAL HISTORY... 4 TERMS OF THE SETTLEMENT AND THE AGREEMENT... 6 CLASS COUNSEL S UNOPPOSED REQUEST FOR COSTS AND ATTORNEYS FEES IS REASONABLE... 7 A. The Actual Expenses Incurred were Reasonable and Necessary... 7 B. The Requested Fee Award is Appropriate Under 11th Circuit Precedent Legal Standard Eleventh Circuit Law Supports Class Counsel s Attorneys Fee Request Application of the Johnson/Camden I Factors a. First Factor: Time and Labor Required b. Second Factor: Novelty and Difficulty c. Third Factor: Requisite Skill d. Fourth Factor: Preclusion of Other Employment e. Fifth and Sixth Factors: Customary Fee and Whether the Fee is Fixed or Contingent f. Seventh Factor: Time Limitations g. Eighth Factor: Results h. Ninth Factor: Experience, Reputation and Skill of Counsel i. Tenth Factor: Undesirability of Taking the Case j. Eleventh Factor: Relationship with Client k. Twelfth Factor: Awards in Similar Cases i

6 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 6 of A Lodestar Cross-Check is Not Necessary Here C. THE REQUESTED SERVICE AWARD IS REASONABLE V. CONCLUSION ii

7 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 7 of 40 CASES TABLE OF AUTHORITIES Allapattah Servs., Inc. v. Exxon Corp., 454 F. Supp. 2d 1185, 1200 (S.D. Fla. 2006)... 8, 23 Behrens v. Wometco Enters., Inc., 118 F.R.D. 534, 548 (S.D. Fla. 1988), aff d, 899 F.2d 21 (11th Cir. 1990) Bennett v. Behring Corp., 737 F.2d 982, 986 (11th Cir. 1984)... 9 Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980)... 11, 18 Bradburn Parent Teacher Store, Inc. v. 3M, 513 F. Supp. 2d 322, (E.D.Pa 2007) Camden I Condo. Ass n v. Dunkle, 946 F.2d 768, 771 (11th Cir. 1991)... 8, 12, 13, 14, 15, 22, 26 City Pension Fund for Firefighters & Police Officers in the City of Miami Beach v. Aracruz Cellulose S.A., No CIV-LENARD/TUR, D.E. 201, at 8 (S.D. Fla. Jul. 7, 2013) Cohn v. Nelson, 375 F. Supp. 2d 844, 854 (E.D. Mo. 2005) Cotton v. Hinton, 559 F.2d 1326, 1331 (5th Cir. 1977)... 9 David v. American Suzuki Motor Corp., No , 2010 WL , 18, 26 Deposit Guar. Nat l Bank v. Rope, 445 U.S. 326, (1980) Fuller v. Imperial Holdings, Inc., No. 9:11-cv KAM, D.E. 95 at 15 (S.D. Fla. Sept. 16, 2013) Goldberger v. Integrated Resources, Inc., 209 F.3d 43, 50 (2d Cir. 2000) Gutter v. E.I. Dupont De Nemours & Co., No CIV-GOLD, 2003 U.S. Dist. LEXIS (S.D. Fla. May 30, 2003) iii

8 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 8 of 40 Hensley v. Eckerhart, 461 U.S. 424, 437 (1983)... 11, 13, 18, 23 In re Buspirone Antitrust Litig., 2003 U.S. Dist. LEXIS (S.D.N.Y.2003) In re Checking Account Overdraft Litig., 830 F. Supp. 2d 1330, 1364 (S.D. Fla. 2011)... 8, 12, 13, 21, 22, 25, 26, 27 In re Quantum Health Resources, Inc., 962 F. Supp. 1254, 1256 (C.D. Cal. 1997) In re Remeron Direct Purchaser Antitrust Litig., No. 03-cv-0085 (D.N.J 2005) In re Sunbeam, 176 F. Supp. 2d at In re U.S. Oil & Gas Litig., 967 F.2d 489, 493 (11th Cir. 1992)... 9 In re Vitamins Antitrust Litig., No , 2001 WL (D.D.C. July 16, 2001) Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974)... 14, 19, 25, 26 Lee v. Ocwen Loan Servicing, LLC, No. 0:14-cv JG, 2015 U.S. Dist. LEXIS , (S.D. Fla. Sept. 14, 2015)... 9, 24 Mashburn v. Nat l Healthcare, 684 F. Supp. 679, 687 (M.D. Ala. 1988) Mills v. Electric Auto-Lite Co., 396 U.S. 375, (1970)... 7 Montoya v. PNC Bank, N.A., No CIV-GOODMAN, 2016 U.S. Dist. LEXIS (S.D. Fla. Apr. 13, 2016) Norman v. Hous. Auth. of Montgomery, 836 F.2d 1292, 1299 (11th Cir. 1988) Oakes v. Blue Cross & Blue Shield of Fla., Inc., No CIV, 2016 U.S. Dist. LEXIS (S.D. Fla. Oct. 21, 2016) iv

9 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 9 of 40 Pinto v. Princess Cruise Lines, Ltd., 513 F. Supp. 2d at , 21 Ressler v. Jacobson, 149 F.R.D. at , 20 Saccoccio v. J.P. Morgan Chase Bank, N.A., 297 F.R.D. 683, 694 (S.D. Fla. 2014)... 11, 14, 27 Schlage Lock Co., 505 F. Supp. 2d 704, 708 (D. Colo. 2007) Tapken v. Brown, No CIV-MARCUS, 1992 U.S. Dist. LEXIS (S.D. Fla. Mar. 13, 1992) Walco Inv., Inc. v. Thenen, 975 F. Supp. 1468, 1472 (S.D. Fla. 1997) Yates v. Mobile Cnty Pers. Bd., 719 F.2d 1530, 1535 (11th Cir. 1983) RULES Fed. R. Civ. P , 10, 12 v

10 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 10 of 40 I. INTRODUCTION Class Counsel request $2 million dollars in attorneys fees, expenses and a Service Award in this matter, where the settlement brings a value of approximately $24.7 million dollars to class members. Ocwen has agreed to separately pay attorneys fees awarded by the Court up to that amount. This matter was filed on April 16, 2016 to recover damages and correct the misapplication of weekly and bi-weekly mortgage payments made by the class members to Ocwen pursuant to an accelerated mortgage payoff program, formerly serviced by GMAC Mortgage Company ( GMACM ) that was intended to save the class members interest and accelerate the payoff of their mortgages. When the class members mortgages were transferred from GMACM to Ocwen, their payments were misapplied by an Ocwen third-party vendor, ACI Worldwide, Inc. ( ACI ), in a manner that provided no interest savings, and no acceleration of the mortgage payoff. Four (4) months after the Complaint was filed, the parties began negotiating a settlement. (Class Counsel Decl. Doc at 13-18). After an intensive mediation process and extensive informal confirmatory discovery lasting over five months, the Parties arrived at a settlement that offers a 100% remediation of those mortgage payment misapplications to 52,502 primary joint and/or co-borrowers, 1

11 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 11 of 40 consisting of 34,736 mortgage loans nationwide. The settlement offers both monetary payments and correction of debt through payment reapplication valued at approximately $24.7 million dollars. See Joint Declaration in Support of Plaintiffs and Class Counsel s Unopposed Motion and Memorandum in Support of Attorneys Fees, Costs and Service Award ( Joint Fee Decl. ), filed contemporaneously herewith, at 13. The matter is unique in that Class Counsel were unable to identify any other prior reported class action involving a similar theory or similar facts anywhere in the country. At the outset, Class Counsel s participation in this matter was extremely risky and the outcome was uncertain. See Joint Fee Decl. at 16. Before this matter was filed, Class Counsel engaged in significant investigation and research of the facts, and engaged expert economists and forensic accountants in order to properly frame the theory of recovery. See Joint Fee Decl., at 6, 9. The matter required time-consuming, complex analysis that mixed legal theories with mathematical and financial analysis and involved confirmatory discovery from Ocwen that included several hundred megabytes of electronic information that totaled more than five million lines of digital data, as well as hundreds of pages of traditional hard copy documents. (Class Counsel Decl., Doc at 14-17). The fee sought is further supported by the fact that Class Counsel do not separately seek an order reimbursing them for their litigation costs and expenses. Class Counsel has included the costs 2

12 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 12 of 40 and expenses within their requested fee award, and Costs of Administration are being separately paid for by Ocwen. (Doc at 4.8). This case involved heavy interaction with several expert economists and forensic accountants, travel expenses, as well as the costs of three mediation conferences. See Joint Fee Decl., at 6, 10. Class Counsel overcame significant risks and reached a settlement that offers a 100% recovery for each class member. Under Rule 23 s attorney fee standards, awards in an amount equal to 30% to 33% of the value of the settlement have been made in numerous class actions. Here, Class Counsel s fees are being paid separately from the amounts being paid to class members. Further, Class Counsel s requested attorneys fees (which include their litigation expenses) represent only approximately 8% of the total gross value of the settlement, which includes a combination of automatic cash refunds and debt correction for members of the settlement class. Class Counsel also seek approval of a single Service Award in the amount of $5,000 for the named class representatives, Mr. and Mrs. Begley, who were active and spent significant time gathering information, and meeting and communicating with Class Counsel in the course of the litigation of this Action. In short, as Ocwen has agreed to separately pay Attorneys Fees and Expenses as well as the requested $5,000 Service Award for Mr. and Mrs. Begley within the $2,000,000 request, the award sought is reasonable, will not reduce the relief being 3

13 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 13 of 40 offered to the class members, and the class members will have the opportunity to obtain a 100% remediation. II. FACTUAL BACKGROUND AND PROCEDURAL HISTORY After a review of the Plaintiffs loan documents and records of applied payments from Ocwen, Class Counsel determined, with the help of experts, that under the accelerated payoff program offered by GMACM, Ocwen debited the Begley s bank account one-half of their total mortgage payment every two weeks. Therefore, based on the calendar, twice in a 12-month period of time, the withdrawal schedule debited the one-half payment 3 times in a given month, such that over that time period, the Begleys made a total of 26 half-payments, or the equivalent of 13 full mortgage payments. (Am. Compl. Doc ). According to the terms of a mortgage note, assuming a borrower was current on where he or she should have been with their payments, each of the extra withdrawals within a given calendar month, referred to in the settlement agreement (Doc. 46-2) as the ACI Extra Payments, should have been immediately applied to reduce unpaid principal. Instead, Ocwen applied these payments toward future monthly payments not yet due, which has the effect of delaying the borrower s next payment due date, but also requiring more payment of interest over the life of the loan than intended by the ACI weekly and bi-weekly plans, and failing to reduce the principal balance as quickly as those plans contemplated. 4

14 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 14 of 40 Plaintiffs filed this matter on April 16, 2016 on behalf of themselves and a putative class of borrowers to recover damages and correct a misapplication of weekly and bi-weekly mortgage payments. (Compl., Am. Compl. Docs. 1, 8). Ocwen filed motions to dismiss the Complaint and Amended Complaint. (Docs. 9, 23). Contemporaneously, the Parties engaged in early mediation discussions and on August 22, 2016, jointly requested a stay of the proceedings to permit mediation. (Doc. 29 at 1-2). The Court granted that request on August 26, (Doc. 30). Through an intensive, five-month mediation process which included three mediation conferences with retired United States District Court Judge Thomas Scott, and numerous rounds of confirmatory informal discovery, Class Counsel were able to assess the merits of Plaintiffs claims, Ocwen s defenses, and the material facts regarding the nature, cause and effect of the payment misapplication at issue in this case. (Class Counsel Decl., Doc at 14-17; see also Docs. 31-1; 34-1; 36-1; 38). Upon review of data provided by Ocwen, Class Counsel was also able to confirm that similarly, under a weekly payment plan, a borrower would pay one quarter of his total mortgage payment weekly, resulting in 52-quarter payments (and 13-full payments) being made over a 12-month period and that those payments from the class members were being misapplied in the same manner. (Class Counsel Decl., Doc at 10). On May 11, 2017, the Parties reached a settlement. (Doc. 46-2). 5

15 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 15 of 40 III. TERMS OF THE SETTLEMENT AND THE AGREEMENT Class Counsel s investigation confirmed that a total of 34,736 loans, involving 52,502 primary joint and/or co-borrowers, were enrolled in an ACI weekly or biweekly payment plan while those loans were serviced by Ocwen on its REALServicing platform, and therefore were potentially impacted by the Extra Payment Processing Issue. See Joint Fee Decl. at 13. Under the Agreement, class members with paid-off loans will automatically receive a check reflecting the economic impact of any misapplication of the ACI Extra Payments. (Class Counsel Decl., Doc at 19, 20, 41 see also, Agreement Doc at ). The total amount is approximately $500, Class Members with active or transferred loans are given the opportunity to file a claim to evaluate the economic impact of any misapplication of the ACI Extra Payments, and then can choose for themselves whether to accept, decline or challenge that relief determination. Id. This claim process is tailored for this very unique class action because, among other things, reversing and reapplying payments could potentially make a borrower s next contractual monthly payment due sooner than currently shown on his or her monthly statement; because some borrower s may have opted to skip payments based on the original payment applications; and because Ocwen needs the borrower s authorization to obtain necessary information from transferee servicers on transferred loans. 6

16 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 16 of 40 In addition to this relief as well as the $2 million dollars in fees and litigation costs, Ocwen has further agreed to separately pay, and has been advancing, the full Costs of Administration. (Agreement, Doc at 4.8). In exchange, the settlement proposes the Begleys and the class members will release Ocwen and certain of its related and affiliated entities from all potential claims related to Ocwen s application or misapplication of payments made by class members under the weekly or bi-weekly accelerated payoff programs while their loans were being serviced by Ocwen, and from any claims arising in whole or in part from the termination of the ACI programs. (Doc at 8.1). IV. CLASS COUNSEL S UNOPPOSED REQUEST FOR COSTS AND ATTORNEYS FEES IS REASONABLE A. The Actual Expenses Incurred were Reasonable and Necessary Class Counsel requests the Court approve $197, in litigation expenses that are being paid as part of the $2 million dollars that Ocwen has agreed to separately pay. See Mills v. Electric Auto-Lite Co., 396 U.S. 375, (1970). This sum corresponds to certain actual out-of-pocket costs and expenses that Class Counsel necessarily incurred and paid in connection with the prosecution of the Action and the Settlement. See Joint Fee Decl., at 31. The expenses incurred are kept in the usual course of business by Class Counsel and were all necessary in this matter. For example, among other costs, Class Counsel spent $136, on expert fees and $13, to pay for their share 7

17 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 17 of 40 of the mediation. See Joint Fee Decl., at 32. Even before this matter was filed, Class Counsel engaged expert economists and forensic accountants in order to properly frame the theory of recovery. (Class Counsel Decl., Doc at 8, 9, 23-25). Class Counsel and the experts eventually had to pore over confirmatory discovery from Ocwen, including several hundred megabytes of electronic information that totaled more than five million lines of digital data as well as hundreds of pages of traditional hard copy documents. (Class Counsel Decl., Doc at 14-17). Class Counsel further engaged in a five-month, intensive mediation process that included three mediation conferences in Atlanta and Miami with retired United States District Court Judge Thomas Scott. (Class Counsel Decl., Doc at 14-17; see also Docs. 31-1; 34-1; 36-1; 38). All of these out-ofpocket expenses were reasonably and necessarily incurred and paid in furtherance of the prosecution of this Action, and are paid separately from benefits that flow to the class members as a result of the settlement. B. The Requested Fee Award is Appropriate Under 11th Circuit Precedent Class Counsel s unopposed fee request is well within the guidelines set forth by the Eleventh Circuit. It is well-established that when a representative party has conferred a substantial benefit upon a class, counsel is entitled to an allowance of attorneys fees based upon the benefit obtained. Camden I Condo. Ass n v. Dunkle, 8

18 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 18 of F.2d 768, 771 (11th Cir. 1991). 2 Not only does the settlement provide for reasonable attorneys fees to be paid from separately by Ocwen, but Class Counsel s requested Attorneys Fees and Expenses fall well within the acceptable range in this Circuit. 1. Legal Standard There is a strong judicial policy favoring the pretrial settlement of class actions. See, e.g., In re U.S. Oil & Gas Litig., 967 F.2d 489, 493 (11th Cir. 1992) ( Public policy strongly favors the pretrial settlement of class action lawsuits. ); Cotton v. Hinton, 559 F.2d 1326, 1331 (5th Cir. 1977) ( Particularly in class action suits, there is an overriding public interest in favor of settlement. ); Lee v. Ocwen Loan Servicing, LLC, No. 0:14-cv JG, 2015 U.S. Dist. LEXIS , *14 (S.D. Fla. Sept. 14, 2015) (same). A class settlement should be approved as long as it is fair, reasonable, and adequate, Fed. R. Civ. P. 23(e)(2), and not the product of collusion. Bennett v. Behring Corp., 737 F.2d 982, 986 (11th Cir. 1984). 2 Eleventh Circuit attorneys fee law governs this request, not the law of Florida. In re Checking Account Overdraft Litig., 830 F. Supp. 2d 1330, 1362, n.3 (S.D. Fla. 2011) (district court presiding over diversity-based class action has equitable power to apply federal common law in deciding fees); see also Allapattah Servs., Inc. v. Exxon Corp., 454 F. Supp. 2d 1185, 1200 (S.D. Fla. 2006). 9

19 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 19 of 40 Pursuant to Fed. R. Civ. P. 23(h), in a certified class action, the court may award reasonable attorney's fees and costs as authorized by law or by the parties agreement: Attorney s Fees and Nontaxable Costs. In a certified class action, the court may award reasonable attorney s fees and nontaxable costs that are authorized by law or by the parties agreement. The following procedures apply: (1) A claim for an award must be made by motion under Rule 54(d)(2), subject to the provisions of this subdivision (h), at a time the court sets. Notice of the motion must be served on all parties and, for motions by class counsel, directed to class members in a reasonable manner. (2) A class member, or a party from whom payment is sought, may object to the motion. (3) The court may hold a hearing and must find the facts and state its legal conclusions under Rule 52(a). Fed. R. Civ. P. 23(h). (4) The court may refer issues related to the amount of the award to a special master or a magistrate judge, as provided in Rule 54(d)(2)(D). 2. Eleventh Circuit Law Supports Class Counsel s Attorneys Fee Request The unopposed requested amount of Attorneys Fees and Expenses of $2 million dollars comports with both the Agreement and Eleventh Circuit law. The requested award is inclusive of not only all Class Counsel s fees, but also 10

20 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 20 of 40 reimbursement of all litigation expenses (other than the Cost of Administration and notice, which Ocwen is paying directly), and this payment is separate from the relief due to the class members. (Agreement Doc at and 4.8). The Parties negotiated and reached this agreement regarding Attorneys Fees and Expenses only after reaching agreement on all other material terms of this settlement, and they did so at arm s length under the authority and supervision of Judge Scott. (Class Counsel Decl., Doc at 32 see also, Settlement Agreement Doc at 1.7). This was an appropriate way to resolve attorneys fees. See Hensley v. Eckerhart, 461 U.S. 424, 437 (1983) ( A request for attorneys fees should not result in a second major litigation. Ideally, of course, litigants will settle the amount of the fee ); see also Cohn v. Nelson, 375 F. Supp. 2d 844, 854 (E.D. Mo. 2005) (explaining that where parties have agreed on the amount of attorneys fees and expenses, courts give the parties agreement substantial deference ). [A] litigant or a lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to a reasonable attorney s fee from the fund as a whole. Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980). The common fund analysis is appropriate even where the fee award will be paid separately by Defendants. Saccoccio v. J.P. Morgan Chase Bank, N.A., 297 F.R.D. 11

21 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 21 of , 694 (S.D. Fla. 2014). 3 Accordingly, courts in the Eleventh Circuit apply a percentage-of-the-fund analysis in cases like this one where the requested fees do not come directly out of the common fund. It is well-established in the Eleventh Circuit that, when a representative party confers a benefit upon a class, counsel is entitled to an allowance of attorneys fees based upon the benefit obtained. Camden I, 946 F.2d at 771 ( Attorneys in a class action in which a common fund is created are entitled to compensation for their services from the common fund, but the amount is subject to court approval. ); In re Checking Account Overdraft Litig., 830 F. Supp. 2d at As the Eleventh Circuit further noted in Camden I, the percentage of the fund approach [as opposed to the lodestar approach] is the better reasoned in a common fund case. Henceforth in this circuit, attorneys fees awarded from a common fund shall be based upon a reasonable percentage of the fund established for the benefit of the class. Camden 3 See also David v. American Suzuki Motor Corp., No , 2010 WL , at *8, n.14: While I recognize that the fee award requested by Class Counsel will be paid separately by Defendants and is not drawn from a common fund in the traditional sense, there is authority directing district courts to exercise their equitable jurisdiction to review counsel-fee arrangements negotiated in connection with class-action settlements even where the counsel fees are not taken from a common fund but are instead paid separately by a class-action defendant. (citing Duhaime v. John Hancock Mut. Life Ins. Co., 183 F.3d 1, 4 (1st Cir. 1999) and Fed.R.Civ.P. 23(h)); Almanzar v. Select Portfolio Servicing, Inc., No. 1: , 2016 WL at * 4 (S.D. Fla. Mar. 25, 2016); Hamilton v. Suntrust Mort. Inc., No , 2014 WL , at * 7 (S.D. Fla. Oct. 24, 2014). 12

22 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 22 of 40 I, 946 F.2d at 774. Attorneys fees also encourage efforts to seek redress for wrongs caused to entire classes of persons, and deter future misconduct of a similar nature. See, e.g., In re Checking Account Overdraft Litig., 830 F. Supp. 2d at 1367; Mashburn v. Nat l Healthcare, 684 F. Supp. 679, 687 (M.D. Ala. 1988); see also Deposit Guar. Nat l Bank v. Rope, 445 U.S. 326, (1980). The Court has discretion to determine an appropriate fee percentage. See Hensley, 461 U.S. at 437. There is no hard and fast rule mandating a certain percentage of a common fund which may be awarded as a fee because the amount of any fee must be determined upon the facts of each case. In re Sunbeam, 176 F. Supp. 2d at 1333 (quoting Camden I, 946 F.2d at 774). To avoid depleting the funds available for distribution to the class, an upper limit of 50% may be stated as a general rule, although even larger percentages have been awarded. Camden I, 946 F.2d at Class Counsel s fee request here falls well within, and in fact below, this acceptable range. See In re Checking Account Overdraft Litig., 830 F. Supp. 2d at 1366, n.35 (awarding 35% noting that, in private marketplace, contingent fees of percent are common in mass action[s] and... higher fees often prevail ); In re Remeron Direct Purchaser Antitrust Litig., No. 03-cv-0085 (D.N.J 2005) (awarding fees of one-third of $75 million); In re Buspirone Antitrust Litig., 2003 U.S. Dist. LEXIS 26538, at *11 (S.D.N.Y.2003) (awarding fees of one-third of $220 13

23 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 23 of 40 million); Bradburn Parent Teacher Store, Inc. v. 3M, 513 F. Supp. 2d 322, (E.D.Pa 2007) (awarding fees in the amount of 35% of $35 million); In re Vitamins Antitrust Litig., No , 2001 WL , at *10 (D.D.C. July 16, 2001) (awarding fees of 34% of an approximately $360 million fund). Class Counsel requests an award of $2 million dollars, which amounts to only approximately 8% of the total value of the settlement. 4 See Saccoccio, 297 F.R.D Application of the Johnson/Camden I Factors In ruling on a fee request like this one, courts consider the Camden I factors (sometimes referred to as the Johnson Factors ). Camden I, 946 F.2d at 772 (citing factors originally set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974)); Saccoccio, 297 F.R.D. at These factors are: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney; (5) the customary fee; (6) whether the fee is contingent; (7) the time limitations imposed; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorney(s); (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases. Id. These twelve factors are merely guidelines, as 4 It bears noting that Class Counsel costs of $197, and the class representatives Service Award of $5, is also included in this amount. 14

24 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 24 of 40 the Eleventh Circuit has encouraged the lower courts to consider additional factors unique to the particular case. Walco Inv., Inc. v. Thenen, 975 F. Supp. 1468, 1472 (S.D. Fla. 1997) (citing Camden I, 946 F.2d at 775). Additional factors include time required to reach a settlement, whether there are any substantial objections by class members or other parties to the settlement, and the economics involved in prosecuting a class action. In re Sunbeam, 176 F. Supp. 2d at 1335 (quoting Camden I, 946 F.2d at 775). Application of the Camden I and other salient factors here supports Class Counsel s reasonable fee request. a. First Factor: Time and Labor Required Prosecuting and settling this action demanded considerable time and labor, which began with interviewing the Begleys, analyzing all of their mortgage materials, and investigating the complex claims presented by the novelty of the Extra Payment Processing Issue. By the time the mediations were being conducted and the settlement was reached, Class Counsel had: (i) investigated the facts and conducted exhaustive legal research on this very unique matter; (ii) filed the initial Complaint and Amended Complaint; (iii) developed confirmatory discovery requests and served on them on Ocwen; (iv) received and developed a review process for discovery that included several hundred megabytes of electronic information that totaled more than five million lines of digital data as well as hundreds of pages of traditional hard copy documents; (v) engaged and worked with two experts to 15

25 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 25 of 40 analyze the discovery data received; (vi) prepared a mediation statement and engaged in a complex, five month mediation process that included three mediation conferences with United States District Court Judge Thomas Scott; (vii) negotiated and revised a formal settlement agreement with opposing counsel; (viii) prepared and filed a motion for preliminary approval of the settlement; and (ix) worked with defense counsel to help implement the notice program and has fielded individual inquiries from more than a dozen putative class members. See Joint Fee Decl., at 7. Moreover, Class Counsel s work is not yet done. If this settlement is approved, Class Counsel will be required to, among other things: (1) continue to monitor the notice program, the manual, loan-by-loan reversal and reapplication of payments by Ocwen, and communicate with the Claims Administrator, Classsettlement.com, (2) respond to continuing class member inquiries now and throughout the remainder of the claims administration process; (3) respond to objections, if any; (4) prepare for and attend the final approval hearing; (5) continue to oversee the claims administration process, including addressing any payment reversal and reapplication issues; (6) monitor distribution of cash benefits to those members who had paid off or transferred their loans before approval of the settlement; and (7) potentially handle post-judgment appeals. See Agreement, Doc at 4.4, 4.5 and 4.5.8; Joint Fee Decl. at 19. Ultimately, Class Counsel will 16

26 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 26 of 40 expend thousands of man-hours on this case. Joint Fee Decl. at 18, 19. The fees and costs requested encompass all future work by Class Counsel. b. Second Factor: Novelty and Difficulty This case presents a unique set of facts and the recovery to the class members is not only novel, but extremely complex. Class Counsel is unable to identify any other prior reported class action involving a similar theory or similar facts anywhere in the country. See Joint Fee Decl., at 17. Indeed, as the Complaint sets forth and the lengthy Agreement illustrates, the dates of application of the extra payments and the effect on payment balance and interest charged to any given class member on an ongoing basis, coupled with the fact that Ocwen performed manual servicing adjustments in addition to the automatic applications of payments performed by ACI, renders measuring the impact on each class member a dense and complicated process at best. Accordingly, long before this matter was brought to the court for approval, in an effort to offer 100% remediation to the class members, Class Counsel had to work closely with Ocwen and experts to develop a protocol for manual, loanby-loan reversal of extra payments made, which Ocwen will be required to perform at no expense to the class. (Settlement Agreement, Doc at 1.8 a-l). These complex factors favor approval of the requested award. 17

27 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 27 of 40 c. Third Factor: Requisite Skill The quality of the representation by Class Counsel and the standing of class counsel are important factors that support the reasonableness of the requested fee. See Ressler v. Jacobson, 149 F.R.D. at 654; see also Am. Suzuki Motor Corp., 2010 U.S. Dist. LEXIS , at *26-29 n.15 (a court should consider the skill and acumen required to successfully investigate, file, litigate, and settle a complicated class action lawsuit such as this one ). Here, each of the four class counsel law firms have significant experience and a proven track record of successfully litigating and resolving complex national class action and mass tort actions. See Supp. Decl. Doc. 52; Joint Fee Decl., at Consistent with this background outlined above, Class Counsel prepared and prosecuted this complex case zealously, skillfully, and patiently, and achieved a 100% offer of remediation to each class member. [T]he results achieved should play a major part in the determination of the fee award. Hensley v. Eckerhart, 461 U.S. 424, 436 (1983). Accordingly, the skill in which Class Counsel brought a 100% remediation to the class members favors approval of the requested award. d. Fourth Factor: Preclusion of Other Employment If Class Counsel were precluded from taking on other cases, that fact can be a factor in supporting the fee application. Montoya v. PNC Bank, N.A., No CIV-GOODMAN, 2016 U.S. Dist. LEXIS 50315, at *53-54 (S.D. Fla. Apr. 18

28 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 28 of 40 13, 2016) (citing Boeing v. Van Gemert, 444 U.S. 472, 478 (1980) (finding as a factor in support of fee that the law firms prosecuting the case are of small size... and thus the time devoted to the class action precludes other employment. ). Here, each of the four class counsel law firms is small in size, with Aylstock, Witkin, Kreis & Overholtz (12 attorneys), Golomb & Honik (8 attorneys), Hemmings & Stevens (3 attorneys), and The Aughtman Law Firm (1 attorney). See Joint Fee Decl., at 23. Each of these firms are engaged in very busy practices prosecuting consumer claims and therefore, the time spent on this litigation over a nearly two-year period was time that could not be spent on litigating other matters. Id.; Supp. Decl. Doc. 52; see also Yates v. Mobile Cnty Pers. Bd., 719 F.2d 1530, 1535 (11th Cir. 1983) (recognizing that the expenditure of significant blocks of time, necessarily had some adverse impact upon the ability of counsel for plaintiff to accept other work ). The Yates court further acknowledged that such devotion of time and resources to complex matters like the instant action should raise the amount of the award. Id.; Schlage Lock Co., 505 F. Supp. 2d 704, 708 (D. Colo. 2007) ( [T]he Johnson court concluded that priority work that delays a lawyer s other work is entitled to a premium. ). Finally, a determination of a fair fee for Class Counsel must include consideration of the contingent nature of the fee, the wholly contingent outlay of out-of-pocket sums by Class Counsel, and the fact that the risks of failure and 19

29 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 29 of 40 nonpayment in a class action are extremely high. Pinto v. Princess Cruise Lines, Ltd., 513 F. Supp. 2d at Here, Class Counsel has worked on this case for nearly two years, from when they first communicated with the Begleys, investigated their claims and filed suit, to the present. See Joint Fee Decl., at 6. Their time and money spent was fully contingent, and there was a great risk of Class Counsel never receiving any compensation. Id. at 16. To date, Class Counsel has never been paid a dime. Id. In effect, Class Counsel have advanced their legal services to the class members since that time. Moreover, after investigating this matter, Class Counsel recognized that due to the complex and novel nature of the alleged claims for recovery, Ocwen could have, in fact did, raise factual and legal defenses in the Action that presented a risk that the Begleys might not have prevailed on class certification. See Agreement Doc at Nevertheless, Class Counsel zealously prosecuted this Action and spent $197, in out-of-pocket, unreimbursed expenses, despite the risk. See Joint Fee Decl., at 31. These factors strongly favor the requested fee. e. Fifth and Sixth Factors: Customary Fee and Whether the Fee is Fixed or Contingent The customary fee in a class action lawsuit of this nature is a contingency fee because no individual class member possesses a sufficiently large enough stake in the litigation to justify paying attorneys on an hourly basis. See Ressler,

30 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 30 of 40 F.R.D. at 654, see also Norman v. Hous. Auth. of Montgomery, 836 F.2d 1292, 1299 (11th Cir. 1988). The Court should therefore give substantial weight to the contingent nature of Class Counsels fees when assessing the fee request. See Behrens v. Wometco Enters., Inc., 118 F.R.D. 534, 548 (S.D. Fla. 1988), aff d, 899 F.2d 21 (11th Cir. 1990). Courts have consistently recognized that the risk of receiving little or no recovery is a major factor in determining the award of fees, and that skilled counsel should be encouraged to undertake this risk. See In re Checking Account Overdraft Litig., 830 F. Supp. 2d 1330, 1364 (S.D. Fla. 2011) ( Numerous cases recognize that the contingent fee risk is an important factor in determining the fee award and A contingency fee arrangement often justifies an increase in the award of attorney s fees ); Pinto, 513 F. Supp. 2d at 1339 ( attorneys risk is perhaps the foremost factor in determining an appropriate fee award ); Behrens, 118 F.R.D. at 548 ( A contingency fee arrangement often justifies an increase in the award of attorneys fees ). A determination of a fair fee for Class Counsel must include consideration of the contingent nature of the fee, the outlay of out-of-pocket expenses by Class Counsel, and the fact that the risks of failure and nonpayment in a class action are extremely high. See e.g., Pinto, 513 F. Supp. 2d at In making a determination of what constitutes a fair percentage fee, this Court should be guided by those market rates and this Circuit s benchmark standard. See, 21

31 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 31 of 40 e.g., Gutter v. E.I. Dupont De Nemours & Co., No CIV-GOLD, 2003 U.S. Dist. LEXIS (S.D. Fla. May 30, 2003) (33-1/3 %); Waters, 190 F.3d (affirming 33-1/3%); Tapken v. Brown, No CIV-MARCUS, 1992 U.S. Dist. LEXIS (S.D. Fla. Mar. 13, 1992) (33%). Here, the requested fee of 8% of the total gross value of the settlement, which includes Class Counsel s expenses and the Service Award, is far below the market rate for class actions when viewed in the context of the financial benefits achieved for this 52,502 member class. A fee award of 8% is consistent with and in fact much less than fee awards in similar cases. See In re Checking Account Overdraft Litig., 830 F. Supp. 2d at 1366, n.35 (awarding 35%, noting that, in private marketplace, contingent fees of percent are common in mass action[s] and... higher fees often prevail ). As such, application of this Camden I factor supports Class Counsel s fee request. f. Seventh Factor: Time Limitations Due to the fact that the extra payment misapplication by Ocwen presented ongoing damages to the class members that increased on a daily basis, Class Counsel worked diligently to research and precisely craft the Complaint and Amended Complaint. (Compl., Am. Compl. Docs. 1, 8). As a testament to the clarity in which Class Counsel presented the merits of the alleged claims, just four (4) months after the Complaint was filed, the Parties began negotiating a settlement. (Class Counsel 22

32 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 32 of 40 Decl. Doc at 13-18). Indeed, if the settlement is approved, Class Counsel will have secured a settlement that offers a 100% remediation of the mortgage payment misapplications to 52,502 primary joint and/or co-borrowers, consisting of 34,736 mortgage loans nationwide. This factor weighs heavily in favor of approval of the requested fees. g. Eighth Factor: Results The eighth factor looks to the amount involved in the litigation, with particular emphasis placed on the monetary results achieved in the case by Class Counsel. See Allapattah, 454 F. Supp. 2d 1185; Hensley, 461 U.S. at 436 (finding that the most critical factor is the degree of success obtained ). The settlement is tremendous in this regard. Instead of facing additional years of costly and uncertain litigation, class members with paid-off loans will automatically receive a check reflecting 100% of the economic impact of any misapplication of ACI Extra Payments, and class members with current or transferred loans have the opportunity to receive through the Claims Process a similar 100% recovery of any economic impact to their loans caused by of any misapplication of ACI Extra Payments, and then choose for themselves whether to accept, decline or challenge those relief determinations. (Class Counsel Decl., Doc at 19, 20, 41; Agreement Doc at ). As the Northern District of California recently noted, it is a rare class action settlement which provides complete relief for all alleged harms. 23

33 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 33 of 40 Messineo v. Ocwen Loan Serv., LLC, No. 15-cv BLF, 2017 WL , at *9 (N.D. Cal. Feb. 24, 2017). Further evidence of the excellent result class counsel achieved is the fact that the settlement has been met with near-universal approval at this stage. See Joint Fee Decl., at 14. The notice informed the class about the settlement terms, including that Plaintiffs would seek Attorneys Fees and Expenses and a Service Award of up to $2 million dollars total. Class Counsel Decl., Doc at 28; see also, Agreement Doc at ). As of the date of this filing, more than 5,000 claims have been submitted to date, no objections have been filed with the Court, and only 3 Class Members have opted out. See Joint Fee Decl., at 14; Lee v. Ocwen Loan Servicing, LLC, Case No. 14-CV GOODMAN, 2015 U.S. Dist. LEXIS , at *83 (S.D. Fla. Sept. 14, 2015) ( Obviously, a low number of objections suggests that the settlement is reasonable. ) (internal quotations omitted) (awarding $9.85 million in fees and expenses, and a $5,000 service award to each named plaintiff, in a claims-made settlement). The favorable reaction of the class members to the relief offered to them favors approval of the requested fees. h. Ninth Factor: Experience, Reputation and Skill of Counsel Here, each of the four class counsel law firms have a significant experience and a record of successfully litigating and resolving complex national class action and mass tort actions. (Supp. Decl. Doc. 52). Class Counsel are seasoned attorneys 24

34 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 34 of 40 with considerable experience litigating and settling class actions of similar size, scope and complexity. Id.; See Joint Fee Decl., at Class Counsel regularly engage in major complex litigation involving consumer fraud and antitrust claims, and have been appointed Class Counsel by courts throughout the country. Id. Consistent with this background outlined above, Class Counsel prepared and prosecuted this Action zealously and skillfully, and achieved a 100% offer of remediation to each class member. i. Tenth Factor: Undesirability of Taking the Case When Class Counsel filed this case, they understood the risks associated with filing a novel theory of recovery in the absence of a developed body of law. See Joint Fee Decl., at 17. Class Counsel is unable to identify any other prior reported class action involving a similar theory or similar facts anywhere in the country. Id. So while Class Counsel views this case as distinctly desirable, peer firms, even those specializing in complex consumer class actions, might have rejected this case on uncertainty grounds. This supports the approval of the fee application under the tenth Johnson factor. j. Eleventh Factor: Relationship with Client The class representatives have never retained any of the four class counsel firms prior to this case. See Joint Fee Decl., at 27. Therefore, this factor is not relevant here. 25

35 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 35 of 40 k. Twelfth Factor: Awards in Similar Cases The approximately 8% fee award requested here is consistent with and in fact much less than fee awards in similar cases. See In re Checking Account Overdraft Litig., 830 F. Supp. 2d at 1366, n.35 (awarding 35% noting that, in private marketplace, contingent fees of percent are common in mass action[s] and... higher fees often prevail ). The fee is also less than the $2.1 million fee award in the Florida Blue settlement, which involved a similarly large, aggregate benefit for the class. See Oakes v. Blue Cross & Blue Shield of Fla., Inc., No CIV, 2016 U.S. Dist. LEXIS (S.D. Fla. Oct. 21, 2016). Further, it is being paid separately by Ocwen. Accordingly, Class Counsel s fee application is reasonable under the twelfth Johnson factor. 4. A Lodestar Cross-Check is Not Necessary Here Courts of the Eleventh Circuit do not require that Class Counsel use the lodestar method to calculate attorney fees, even as a cross-check on the reasonableness of a percentage fee. See In re Checking Account Overdraft, 830 F. Supp. 2d at 1362 (the lodestar approach should not be imposed through the back door via a cross-check.); In re Quantum Health Resources, Inc., 962 F. Supp. 1254, 1256 (C.D. Cal. 1997); Goldberger v. Integrated Resources, Inc., 209 F.3d 43, 50 (2d Cir. 2000); David, 2010 WL ; see also Alba Conte, Attorney Fee Awards 2.7, at 91, n.41 ( The Eleventh... Circuit[ ] repudiated the use of the 26

36 Case 3:16-cv MCR-CJK Document 54 Filed 10/02/17 Page 36 of 40 lodestar method in common-fund cases ). Under Camden I, courts in this Circuit regularly award fees based on a percentage of the recovery, without discussing lodestar at all. In re Checking Account Overdraft, 830 F. Supp. 2d at 1363 (citation omitted). While use of the lodestar method is not necessary here, Class Counsel has indeed spent thousands of hours working on this case. 5 See Joint Fee Decl., at 19. C. THE REQUESTED SERVICE AWARD IS REASONABLE Incentive awards compensate named plaintiffs for the services they provided and the risks they incurred during the course of the class action litigation. In re Checking Account Overdraft, 830 F. Supp. 2d at 1357 (granting service awards of $5,000 per class representative); Saccoccio, 297 F.R.D. at 695 (granting $5,000 service award). Courts determine service awards by looking at (1) the actions the class representatives took to protect the interests of the class; (2) the degree to which the class benefited from those actions; and (3) the amount of time and effort the class representatives expended in pursuing the litigation. Id. Courts in this Circuit have routinely authorized substantial payments to lead plaintiffs whenever requested settlements were approved. See, e.g., City Pension Fund for Firefighters & Police Officers in the City of Miami Beach v. Aracruz Cellulose S.A., No CIV- LENARD/TUR, D.E. 201, at 8 (S.D. Fla. Jul. 7, 2013) ($40,000); Fuller v. Imperial 5 If the Court were to require class counsel to perform a lodestar cross-check, one can promptly be provided through a supplemental pleading. 27