SUPERIOR COURT OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES ARTHUR HATTENSTY, ET AL. V. BESSIRE AND CASENHISER, INC., ET AL. CASE NO. BC540657 A court authorized this notice. This is not a solicitation from a lawyer. NOTICE OF CLASS ACTION SETTLEMENT AND FINAL APPROVAL HEARING A proposed class action settlement (the Settlement ) has been reached between Plaintiffs Arthur Hattensty and Jerrilyn Hattensty (collectively, Plaintiffs ) and Defendants Bessire and Casenhiser, Inc. and B.C. Personnel, Inc. (collectively, Defendants ) on behalf of the following Settlement Class : All persons employed by Defendants as non-exempt on-site managers in the State of California during the period from March 26, 2010 to June 23, 2015, with the exception of on-site managers whose employment with Defendants commenced on November 6, 2014 following the acquisition of certain properties from Vedder Community Management, LLC ( Excluded Employees ). Defendants records indicate that you are a member of the Settlement Class (i.e., a Class Member ). The Settlement resolves a putative class action lawsuit entitled Arthur Hattensty, et al. v. Bessire and Casenhiser, Inc., et al., (the Action ) about claims that Defendants violated California s wage and hour laws, including recordkeeping requirements, and are liable for unpaid wages (regular time, overtime and/or double time) penalties. Defendants deny all of the allegations in the Action and deny that a class action is proper except solely for purposes of the Settlement. YOUR ESTIMATED PAYMENT INFORMATION The Settlement provides for monetary payments based on your Work Weeks for the period from March 26, 2010 through June 23, 2015 (the Class Period ) compared to the Work Weeks for all Class Members during this same Class Period. Based on information currently available, we estimate your share of the settlement will be approximately $<<Insert Est. Amount>> [This amount does not include the amount listed below that you previously received for signing a release agreement]. According to payroll records maintained by Defendants, the total number of weeks you were employed by Defendants as a class member between March 26, 2010 and June 23, 2015 ( Work Weeks ), is: <<Insert Weeks>>. According to records maintained by Defendants, you [signed/did not sign] a release agreement [and received payment of [INSERT AMOUNT] for signing a release agreement]. RECEIVE A SHARE OF THE SETTLEMENT OPT OUT OF THE CLASS OBJECT TO THE SETTLEMENT OVERVIEW OF YOUR RIGHTS AND OPTIONS UNDER THE SETTLEMENT If you want to receive a monetary payment from the Settlement, you do not need to take any further action. However, if you no longer live at the address listed on the envelope to this Notice, or if you move, you should promptly contact the Settlement Administrator, whose contact information is listed in response to Question 9 below. In addition, if you wish to dispute any of the information listed above, you must follow the procedures set forth in response to Question 10 below and your dispute must be postmarked on or before November 27, 2015. If you do not want to give up your right to pursue the Class Member Released Claims (defined in response to Question 6 below), you may opt out of the Settlement Class by submitting a timely and valid Request For Exclusion to the Settlement Administrator in accordance with the procedures set forth in response to Question 12 below. If you opt out of the Settlement Class, you will not receive any money from the Settlement. To be valid, any Request for Exclusion must contain all of the information described in response to Question 12 and be postmarked on or before November 27, 2015. If you do not opt out of the Class and if wish to object to the Settlement, you must submit a written objection in accordance with the procedures set forth in response to Question 15 below. To be valid, any objection must comply with all of the procedures described in response to Question 15 below and be postmarked and mailed to the Settlement Administrator before November 27, 2015. These rights and options, and how to exercise them, are explained in more detail in this Notice. The Court handling this case still has to decide whether to grant final approval to the Settlement. Cash payments will only be issued if the Court grants final approval to the Settlement. 1 ILYM ID: <<ID>>
Additional information regarding the Settlement is available through the Settlement Administrator or Class Counsel, whose contact information is provided in this Notice. FURTHER INFORMATION REGARDING THE ACTION AND THE SETTLEMENT 1. What is the Action about? On March 26, 2014, a complaint was filed by Arthur Hattensty and Jerrilyn Hattensty (collectively, Plaintiffs ) on behalf of themselves and all others similarly situated against Bessire and Casenhiser, Inc. and B.C. Personnel, Inc. (collectively, Defendants ), in the Superior Court of California for the County of Los Angeles (the Action ). On April 29, 2014, Plaintiffs amended the complaint to seek additional penalties under the Labor Code Private Attorneys General Act of 2004 ( PAGA ). The Action alleges, among other things, that the non-exempt on-site managers employed by Defendants in the State of California during the period from March 26, 2010 through June 23, 2015 (the Class Period ), with the exception of on-site managers whose employment with Defendants commenced on November 6, 2014 following the acquisition of certain properties from Vedder Community Management, LLC ( Excluded Employees ), are owed compensation for unpaid wages (regular time, overtime and/or double time) based on Defendants alleged failures to pay them for all hours worked (specifically, time they spent performing opening and closing duties at sites managed by Defendants) and/or penalties for Defendants alleged failures to timely pay them earned wages and/or provide them with accurate written wage statements. The Action seeks damages for unpaid wages, interest, penalties and attorneys fees and expenses. If you worked for Defendants as a non-exempt on-site manager in the State of California at any time during the Class Period you are a Class Member, unless you are an Excluded Employee as defined above. The Action also includes claims under the California Labor Code and California Business & Professions Code Section 17200 et seq. Defendants have denied and continue to deny each of the claims in the Action. Defendants contend that all of their employees have been compensated in compliance with the law, and that their conduct was not willful or intentional with respect to any alleged failure to pay any wages (including but not limited to overtime, wages upon termination or otherwise) or alleged recordkeeping violation. Defendants have repeatedly asserted and continue to assert defenses to the claims in the Action, and have expressly denied and continue to deny any wrongdoing or legal liability arising out of any of the facts or conduct alleged in the Action. Neither the proposed Settlement nor any action taken to carry out the proposed Settlement is, may be construed as, or may be used as an admission, concession or indication by or against Defendants of any fault, wrongdoing or liability whatsoever. Counsel for Plaintiffs ( Class Counsel ) have extensively investigated and researched the facts and circumstances underlying the issues raised in the Action. Class Counsel recognize the expense and length of continued proceedings necessary to continue the Action against Defendants through trial and through any possible appeals. Class Counsel have also taken into account the uncertainty and the risk of the outcome of further litigation, including the risk that the Class might not be certified in light of Defendants opposition to certification, as well as the difficulties and delays generally inherent in such litigation. Class Counsel are also aware of the burdens of proof necessary to establish liability for the claims, of Defendants defenses thereto, and of the difficulties in establishing damages for the Class Members. Class Counsel have also taken into account the extensive settlement negotiations conducted by the Parties, including the prior releases obtained by Defendants for the claims at issue. Based on the foregoing, Class Counsel believes the proposed Settlement is fair, adequate and reasonable and in the best interests of the Class Members. Defendants have also extensively investigated and researched the facts and circumstances underlying the issues raised in the Action, and the law applicable thereto. Although Defendants believe they have meritorious defenses to the Action, Defendants have concluded that the further defense of this Action would be lengthy and expensive for all Parties. Defendants have, therefore, agreed to settle this Action in the manner and upon the terms set forth in the Settlement to put to rest all claims that are or could have been asserted against them in the Action. The Court has made no ruling on the merits of the Class Members claims and has determined only that certification of the Class for settlement purposes is appropriate under California law. 2. Why is this lawsuit a class action? In a class action, one or more people called the class representatives (in this case, Arthur Hattensty and Jerrilyn Hattensty) sue on behalf of people who have similar claims. All of these people are a Class or Class Members. One court resolves the issues for all Class Members, except for those who opt themselves out of the Class. 3. Who is a Class Member? On September 2, 2015, the Honorable Elihu M. Berle of Department 323 of the Central Civil West Courthouse of the Los Angeles County Superior Court granted preliminary approval of the Settlement and certified the following Settlement Class solely for purposes of the Settlement: All persons employed by Defendants as non-exempt on-site managers in the State of California during the period from March 26, 2010 to June 23, 2015, with the exception of on-site managers whose employment with Defendants commenced on November 6, 2014 following the acquisition of certain properties from Vedder Community Management, LLC ( Excluded Employees ). 2
4. Why is there a Settlement? After investigating the claims at issue, and the possible defenses to those claims, both sides agreed to the Settlement to avoid the cost and risk of further litigation. The Settlement does not mean that any law was broken. Defendants deny all of the legal claims in the case, and also assert that a class action is improper for any purpose other than settlement. In view of the risks that continued litigation would entail, including the risk that the release agreements that Class Members signed could bar them from obtaining further relief for their claims, Plaintiffs and their lawyers think the Settlement is in the best interests of all Class Members. THE SETTLEMENT BENEFITS WHAT YOU GET 5. What does the Settlement provide? The Settlement Agreement provides that Defendants will pay up to $300,000.00 (the Settlement Fund ), which includes the $34,130.68 previously paid to some Class Members for release agreements, to fully resolve the claims in the Action. After the following Court-approved deductions, the amount remaining in the Settlement Fund will be distributed to Class Members who do not request exclusion from the Class pursuant to a Court-approved allocation plan based on the number of weeks worked during the Class Period by Class Members, as detailed below. The following deductions will be made from the Settlement Fund: Settlement Administration. The Court has tentatively approved a payment to the Settlement Administrator, ILYM Group, Inc., currently estimated not to exceed $5,000.00, as Administration Costs to notify the Class and process payments and disputes. Attorneys Fees and Expenses. The Court has appointed the Law Offices of Louis Benowitz, Asaf Law, and the Law Office of Joshua Cohen Slatkin as counsel for the Class. Class Counsel has been prosecuting the Action on behalf of the Class on a contingency fee basis (that is, without being paid to date) while advancing litigation costs and expenses. The Settlement provides that Class Counsel may request from the Court payment not to exceed 33.33% of the Settlement Fund (currently anticipated to be $100,000.00) for attorneys fees. Class Counsel may also seek reimbursement of the expenses they have advanced, not to exceed $10,000.00. Any attorneys fees awarded will be divided as follows: (1) Law Offices of Louis Benowitz 42%, (2) Asaf Law 35%, (3) Law Office of Joshua Cohen Slatkin 5%, and (4) Briles and Associates 18%. Payments will be subject to the Court s approval and will be deducted from the Settlement Fund. The amounts approved will constitute full compensation for all legal fees and expenses of Class Counsel in the Action, including any work they do in the future. These attorneys fees are within the range of fees awarded to class counsel under similar circumstances in litigation of this type. Class Members are not personally responsible for any fees or expenses. Incentive Awards to Plaintiffs. Class Counsel will also seek Incentive Awards for the Plaintiffs for acting as the representatives on behalf of the Class of up to $5,000.00 each, for a total of up to $10,000.00 in total Incentive Awards. If approved by the Court, this amount will be paid from the Settlement Fund to compensate Plaintiffs for services they provided on behalf of the Class, including initiating and prosecuting this Action on behalf of the Class, as well as reviewing documents, submitting declarations, and attending strategy sessions, the mediation, and other meetings with Class Counsel. This amount is also intended to compensate Plaintiffs for the risks they took on behalf of the Class, including the risk that they could have been ordered to pay substantial costs to Defendants if the Action were unsuccessful. PAGA Penalties: From the Settlement Fund, $5,000.00 will be paid to the California Labor and Workforce Development Agency in compromise of claims under PAGA. Payment to Class Members: Plan of Allocation. The balance of the Settlement Fund, after the deductions described above ( Net Settlement Sum ), will be available for distribution to Class Members who not request exclusion from the Class ( Authorized Claimants ). Authorized Claimants will receive a Settlement Award based on the number of weeks of employment as a Class Member during the Class Period as reflected by Defendants corporate records ( Work Weeks ). Your individual Work Weeks and estimated Settlement Award are printed on the first page of this Notice. Class Members Who Signed Release Agreements: If you previously received a payment from Defendants in exchange for a release agreement, you will be entitled to submit a Claim Form and receive an additional payment under the terms of the Settlement. However, your total Settlement Award shall be reduced so that it is the pro-rata amount as calculated based on the Total Work Weeks for all Class Members. For purposes of clarification, if you previously received payment from Defendants in exchange for a release agreement, you will not be entitled to receive a double recovery, but will be able to participate in the Settlement and receive a reduced Settlement Award that already accounts for the prior payment you received. Put differently, if you previously signed a release agreement, the combined amount of your previous payment and reduced Settlement Award will be exactly the same amount as another Class Member who did not sign a release agreement would receive for the exact same number of Work Weeks. If you previously signed a release agreement, the amount you previously received for signing a release 3
agreement is listed on the first page of this Notice. Unclaimed Funds: If Class Members account for less than 100% of the Net Settlement Fund, the entirety of the unclaimed portion of the Net Settlement Fund shall be used to increase the Settlement Awards for Authorized Claimants so that 100% of the Net Settlement Fund is paid to Authorized Claimants. In other words, you may receive a larger Settlement Award than the amount listed on the first page of this Notice if there are Class Members who request exclusion from the Class. Tax Matters. IRS Forms W-2 and 1099 (and the equivalent California forms) will be distributed to Authorized Claimants reflecting the payments they receive under the Settlement. For tax purposes, 50 percent (50%) of the amounts distributed to each Authorized Claimant shall be treated as damages for lost wages and reported as such (W-2 reporting), twenty-five percent (25%) shall be treated as interest, and twenty-five percent (25%) shall be treated as penalties under the California Labor Code (including $5,000 allocated to PAGA penalties). Penalties and interest shall be reported as such (Form 1099 reporting) to the taxing authorities. Authorized Claimants should consult with their tax advisors concerning the tax consequences of the payments they receive under the Settlement. The usual and customary deductions will be taken out of the amounts attributable to unpaid wages. Any corporate payroll tax obligations arising out of the Settlement Awards shall be paid by Defendants. 6. What am I giving up in exchange for the Settlement benefits? If approved by the Court, the Settlement will be binding on all members of the Class and will bar any Class Member who does not timely opt out of the Settlement from bringing certain claims against Defendants described below. After Court approval, the Settlement will fully release and discharge Defendants, their past or present parents, subsidiaries, officers, directors, shareholders, related companies, employees, individuals, members, agents, principals, heirs, representatives, accountants, auditors, consultants, insurers and reinsurers, and its and their respective successors and predecessors in interest, entities, divisions, subsidiaries, affiliates, parents and attorneys ( Released Parties ) from all known and unknown claims, demands, rights, liabilities, and causes of action that were or could have been asserted (whether in tort, contract, or otherwise) for violation of any state or federal wage and hour law, whether for economic damages, non-economic damages, restitution, penalties, or other monies arising out of, relating to, or in connection with: Causes of action asserted in the Complaint, or that could have been asserted based on other claims in the Complaint, including any claims that Defendants failed to pay all wages (including regular time, overtime time, and double time), failed to pay all wages when due or upon termination, failed to provide timely or accurate paychecks/wage statements, failed to keep accurate or complete records, violated the Private Attorney General Act ( PAGA ), or otherwise engaged in conduct that caused economic, compensatory, liquidated or punitive damages, restitution, attorneys fees, costs, penalties (including statutory, Wage Order and PAGA penalties) and interest at any time during the Class Period (whether such claims are based on California or federal wage and hour law, contract law, or other law). ( Released Claims ). The back of each check issued to all Class Members who do not request exclusion from the Class will state, My signature hereon constitutes my declaration, under penalty of perjury, that I am the individual to whom this check was made payable and serves as my full and complete release, remise and discharge of all claims alleged in or arising out of Hattensty v. Bessire and Casenhiser, Inc., et al., Los Angeles County Superior Court, Case No. BC540657, including but not limited to all Fair Labor Standards Acts claims, as reflected in the Released Claims as described more fully in response to Question 6 in the Notice of Class Action Settlement and Final Approval Hearing. You can talk to one of the lawyers appointed as Class Counsel (listed in response to Question 7 below) for free or you can talk to your own lawyer if you have questions about the Released Claims and what they mean. THE LAWYERS REPRESENTING YOU 7. Do I have a lawyer in this case? The Court has appointed the following lawyers to serve as Class Counsel for the Settlement Class: Louis Benowitz Law Offices of Louis Benowitz 9454 Wilshire Blvd. PH Beverly Hills, CA 90212 (310) 844-5141 / Telephone (310) 492-4056 / Facsimile louis@benowitzlaw.com Asaf Agazanof Asaf Law 8730 Wilshire Blvd., Suite 310 Beverly Hills, CA 90211 (424) 254-8870 / Telephone (888) 254-0651 / Facsimile asaf@lawasaf.com 4 Joshua Cohen Slatkin Law Office of Joshua Cohen Slatkin 11845 West Olympic Blvd., Ste. 820W Los Angeles, CA 90064 (310) 627-2699 / Telephone (800) 581-2077 / Facsimile jcohenslatkin@gmail.com
8. How will the costs of the lawsuit and the Settlement be paid? Subject to court approval, Defendants agree to pay up to 33.33% of the Settlement Fund (currently anticipated to be $100,000.00) as attorneys fees and up to $10,000 in actual litigation costs to Class Counsel. In addition, and subject to Court approval, Defendants also agree to pay Plaintiffs up to $5,000 each as Incentive Awards (i.e., up to $10,000 total) for their participation in this lawsuit and for taking on the risk of litigation. Defendants also agree to pay the Settlement Administrator s costs and fees associated with administering the Settlement, estimated not to exceed $5,000.00. The Court may award less than these amounts. If lesser amounts are awarded, the difference will be included in the Net Settlement Sum and will be distributed to Class Members on a proportionate basis relative to their Work Weeks. HOW TO GET A CASH PAYMENT 9. How do I get a cash payment? You will automatically receive a cash payment unless you opt out of the Settlement Class in accordance with the procedures set forth in response to Question 12 below. If you no longer live at the address listed on the envelope to this Notice, or if you move, please update your address with the Settlement Administrator, whose contact information is as follows: Hattensty v. Bessire & Casenhiser, Inc. c/o ILYM Group, Inc. P.O. Box 57086 Irvine, CA 92619 Telephone: (888) 250-6810 10. What if I disagree with the information regarding my claim listed on the first page of this Notice? If you (1) disagree with the Work Weeks listed on this Notice, (2) disagree that you signed a release agreement, or (3) disagree with the amount listed that you received in exchange for a release agreement, you must provide satisfactory proof to the Settlement Administrator at the address listed in response to Question 9 above, postmarked by no later than November 27, 2015, showing that the information listed on the first page of this Notice is incorrect. For all disputes, Class Counsel and Defendants will first make a good faith effort to resolve the dispute informally and come to an agreement. If Class Counsel and Defendants cannot reach an agreement, the Settlement Administrator will examine all written records in an attempt to resolve the dispute. In the event of a dispute, Defendants records shall be presumed correct unless you furnish satisfactory written proof that they are inaccurate. Class Counsel, Defendants and the Settlement Administrator will make every reasonable effort to resolve any such disputes before the final approval hearing (described in response to Question 16 below). 11. When will I get my check? Checks will be mailed to Settlement Class members eligible to receive benefits under the Settlement, after the Court grants final approval of the Settlement. If the Court approves the Settlement after a hearing on January 13, 2016 at 10:00 a.m. (see The Court s Fairness Hearing ) below, there may be appeals. If there are any appeals resolving them could take some time, so please be patient. Please also be advised that you will only have 180 days from the date that the check is issued to cash it. If you do not cash your check within 180 days the date of its issuance, the funds attributable to your Settlement Award will be paid to the California Bar Foundation, a non-profit organization that provides funding for legal services organizations, as a cy pres designee. REQUESTING EXCLUSION FROM THE SETTLEMENT CLASS 12. How do I ask the Court to exclude me from the Settlement Class? If you do not wish to participate in the Settlement, and do not wish to receive a cash payment from the Settlement, you may be excluded (i.e., opt out ) by sending a timely letter in writing that contains your name, address, telephone number and last four digits of your social security number, as well as your signature ( Request for Exclusion ). The Request for Exclusion must be signed, dated and mailed by First Class U.S. Mail, or the equivalent, postmarked no later than November 27, 2015 to: Hattensty v. Bessire & Casenhiser, Inc. c/o ILYM Group, Inc. P.O. Box 57086 Irvine, CA 92619 Telephone: (888) 250-6810 5
Requests for Exclusion that do not include all required information and/or that are not timely submitted will be deemed null, void, and ineffective. Class Members who fail to submit valid and timely Requests for Exclusion on or before the above-specified deadline shall be bound by all terms of the Settlement and any Settlement Approval Order and Judgment entered in the Action if the Court approves the Settlement. 13. If I exclude myself, can I get anything from the Settlement? No. If you exclude yourself now you will not get anything from the Settlement. If you ask to be excluded, you will not get a cash payment, and you cannot object to the settlement. But you may sue, continue to sue, or be part of a different lawsuit against Defendants in the future. You will not be bound by anything that happens in this lawsuit. 14. If I don t exclude myself, can I sue later? No. Unless you exclude yourself, you give up the right to sue Defendants for the claims in the Action. You must exclude yourself from the Settlement Class to start or continue your own lawsuit. OBJECTING TO THE SETTLEMENT 15. How do I comment on or object to the Settlement? Any Class Member who does not opt out of the Settlement Class may comment on, or object to, the Settlement, or any portion thereof, by submitting a written comment or objection, and supporting papers, to the Settlement Administrator, postmarked no later than November 27, 2015. The Settlement Administrator will then promptly file any objections received from Class Members with the Court and forward them to Class Counsel (identified in response to Question 7 above) and Defendants Counsel (Christine Baran and Colin P. Calvert of Fisher & Phillips LLP in Irvine, CA). The Settlement Administrator is located at the following address: Hattensty v. Bessire & Casenhiser, Inc. c/o ILYM Group, Inc. P.O. Box 57086 Irvine, CA 92619 A written objection must contain the objecting Class Member s full name, current address, and include all objections and the reasons therefore, and include any and all supporting papers (including, without limitation, all briefs, written evidence, and declarations). If a Class Member wishes to appear at the Court s Fairness Hearing (see response to Question 17 below) and orally present his or her objection to the Court, the objector s written statement must include the objector s statement of intent to appear at the Court s Fairness Hearing. Any Class Member who submits an objection remains eligible to receive monetary compensation from the Settlement. THE COURT S FAIRNESS HEARING The Court will hold a hearing to decide whether to approve the Settlement. If you have filed a timely and valid objection requesting to present oral argument, you may attend and you may ask to speak, but you don t have to. 16. When and where will the Court decide whether to approve the Settlement? The Court will hold a Final Approval Hearing on January 13, 2016 at 10:00 a.m. in Department 323 at the Central Civil West Courthouse of the Superior Court of California for the County of Los Angeles, located at 600 South Commonwealth Avenue, Los Angeles, CA 90005. The hearing may be moved to a different date and/or time without additional notice. At this hearing, the Court will consider whether the Settlement is fair, reasonable, and adequate and decide whether to grant final approval. If there are objections, the Court will consider them. The Court will only listen to people who have asked to speak at the hearing. The Court will also decide how much to award to Class Counsel in attorneys fees and costs, and how much to award Plaintiffs for Incentive Awards. We do not know how long these decisions will take. 17. Do I have to come to the hearing? No. Class Counsel will answer any questions the judge may have. But, you are welcome to come at your own expense. If you submit a valid objection, you don t have to come to Court to talk about it. As long as you mailed your written objection on time, the Court will consider it. You may also pay another lawyer to attend, but it is not required. 18. May I speak at the hearing? If a Class Member wishes to appear at the Final Approval Hearing and orally present his or her objection to the Court, the objecting Class Member s written statement must include a statement of intent to appear at the Final Approval Hearing. GETTING MORE INFORMATION 19. How do I get more information? This notice summarizes the Settlement. More details are in the Settlement. You may contact Class Counsel or the Settlement Administrator for more information. DO NOT TELEPHONE THE COURT OR DEFENDANTS COUNSEL. 6