United States District Court, S.D. Mississippi, Northern Division
BARBARA J. KEMP and TIJUANNA HALL PLAINTIFFS
TOWER LOAN OF MISSISSIPPI, LLC D/B/A TOWER LOAN OF BILOXI, and FIRST TOWER LOAN, LLC D/B/A TOWER LOAN OF EAST GULFPORT DEFENDANTS
ORDER OF FINAL APPROVAL OF SETTLEMENT, AUTHORIZING
SERVICE AWARDS, AND GRANTING APPLICATION FOR ATTORNEYS'
FEES AND EXPENSES
CARLTON W. REEVES UNITED STATES DISTRICT JUDGE.
November 27, 2017, Plaintiffs and Class Counsel filed their
Motion for Final Approval of Class Settlement (Dkt. No. 80;
the “Motion”), seeking Final Approval of the
Settlement Agreement and Release (“Settlement” or
“Agreement”; capitalized terms that are not
defined herein have the meanings given in the Agreement) with
Tower Loan of Mississippi, LLC (“TLM”) and First
Tower Loan, LLC (“FTL”; TLM and FTL are referred
to collectively herein as “Tower”). The
Settlement Agreement and Release contains provisions
authorizing service awards to the named plaintiffs. Class
counsel filed a separate petition for attorney's fees.
Dkt. No. 81. Counsel supported each motion with a separate
memorandum. See Dkt. Nos. 81, 83 and 85. On December
18, 2017, a Final Approval Hearing was held pursuant to the
Court's Preliminary Approval Order dated August 8, 2017.
See Dkt. No. 79. The Court reviewed all of the
filings related to the Settlement and heard from counsel for
Court confirms that it has jurisdiction over this matter and
the parties to it. After carefully considering the
parties' presentations, the Court concludes that the
Settlement constitutes a satisfactory result for the
Settlement Class under the circumstances and challenges
presented by the Action. The Court specifically finds that
the Settlement: (i) is fair, reasonable, and adequate; (ii)
is a satisfactory compromise of the Settlement Class
Members' claims; and (iii) fully complies with
Fed.R.Civ.P. 23(e). The Court therefore grants Final Approval
to the Settlement, certifies the Settlement Class, and awards
the fees and costs requested by Class Counsel, as well as the
requested Service Awards for the representative Plaintiffs.
present evidentiary record is more than adequate for the
Court to consider the fairness, reasonableness, and adequacy
of the Settlement. A fundamental question is whether the
district judge has sufficient facts before him to evaluate
and intelligently and knowledgeably approve or disapprove the
settlement. In re General Tire & Rubber Co. Sec.
Litig., 726 F.2d 1075, 1084 n.6 (6th Cir. 1984) (citing
Detroit v. Grinnell, 495 F.2d 448, 463-68 (2d Cir.
1974)). In this case, the Court clearly has such facts before
it in considering the Motion, including the evidence and
opinions of Class Counsel.
Factual and Procedural Background
July 8, 2015, Plaintiffs Barbara J. Kemp and Tijuanna Hall
filed a class action complaint in the United States District
Court for the Southern District of Mississippi against TLM in
which they asserted class and individual claims based on
alleged violations of the Truth in Lending Act, 15 U.S.C.
§1601 et seq., as amended, and implementing
Regulation Z, 12 C.F.R. Part 1026. Plaintiffs sought inter
alia, monetary damages, rescission, and attorney's fees
and costs. Plaintiffs also moved for class certification
September 30, 2015, TLM filed its answer to the Action,
denying any and all wrongdoing and liability whatsoever and
asserting various affirmative defenses.
Following a telephonic conference held on January 15, 2016,
this Court denied Plaintiffs' motion to certify class
without prejudice and granted Plaintiffs leave to amend their
complaint. Plaintiffs filed their first amended complaint
that same day.
answered the first amended Complaint, and the Parties
proceeded to conduct discovery.
June 24, 2016, the Parties participated in a court-ordered
settlement conference with United States Magistrate Judge
Linda R. Anderson. Although an agreement was not reached at
the conclusion of this conference, the Parties agreed to
continue settlement discussions with the assistance of
Magistrate Judge Anderson.
August 9, 2016, the Parties participated in a second
settlement conference with Magistrate Judge Anderson. An
agreement was not reached, but it was agreed that the
deadline for Plaintiffs to amend their complaint could be
Following the settlement conference, Magistrate Judge
Anderson entered an order that extended the deadline to amend
pleadings until August 26, 2016 and that stayed all remaining
deadlines until further order of the Court.
September 7, 2016, Plaintiffs filed a second amended
complaint that added FTL as a defendant. FTL and TLM each
answered the second amended complaint by denying all
wrongdoing and liability and by asserting various affirmative
Parties continued to pursue settlement of the Action and, at
the request of counsel, Magistrate Judge Anderson conducted a
third settlement conference on December 21, 2016. The case
did not settle, but counsel agreed to continue to confer.
the absence of a settlement, a telephonic scheduling
conference was held before Magistrate Judge Anderson on
January 12, 2017. Thereafter, on January 19, 2017, the Court
issued its scheduling order on class certification.
After further discussions, the Parties reached an agreement
in principal to settle the Action in its entirety without any
admission of liability, with respect to all claims of the
Settlement Class and all claims of the individual Plaintiffs,
subject to the drafting and execution of a mutually
acceptable final settlement agreement.
Following further negotiating at arms-length, the Parties
finalized the Agreement, which the Parties intend to bind
Plaintiffs, Tower, and all members of the Settlement Class
who do not request on a timely basis in accordance with the
terms of a Court-approved notice to be excluded from the
Settlement. In satisfaction of Fed.R.Civ.P. 23(e)(3), a copy
of the Agreement was provided to the Court with the motion
seeking the entry of the Preliminary Approval Order.
Court granted the motion seeking the entry of the Preliminary
Approval Order and entered the Preliminary Approval Order on
August 8, 2017. See Dkt. No. 79.
accordance with the Court's Preliminary Approval Order,
on September 20, 2017, actual notice was sent by first class
mail to all Settlement Class Members by Class-Settlement.com
(the “Class Administrator”). A total of 405
separate loans are part of the Settlement Class. The Class
Administrator mailed the notice separately to each
co-borrower for each loan, for a total of 576 notices mailed.
Of the notices initially mailed, 17 were returned by the post
office, 13 of the returned notices were successfully
redelivered to new addresses. One class member has been
reported as deceased.
accordance with the Court's Preliminary Approval Order,
the Class Administrator established a toll-free telephone
number to answer questions from Settlement Class Members.
satisfaction of Fed.R.Civ.P. 23(e)(2), counsel for the
Parties timely appeared before the Court on December 18, 2017
for the Final Approval Hearing to determine whether (i) the
Action satisfies the applicable prerequisites for class
action treatment; (ii) the proposed settlement is
fundamentally fair, reasonable, adequate; and (iii) the
proposed settlement is in the best interest of the Settlement
Class Members and should be approved by the Court.
Settlement Class Members were given an opportunity to object
to the settlement. No Settlement Class Members objected to
the Settlement. The Settlement Class Members who made valid
and timely requests for exclusion are excluded from the class
and settlement and are not bound by this Order. Only two (2)
Settlement Class Members validly and timely requested
Summary of the Settlement Terms
Settlement's terms are detailed in the Agreement (Dkt.
No. 78-1). The following is a summary of certain material
terms. This summary is merely an abbreviated synopsis and is
not a substitute for the actual terms of the Agreement.
The Settlement Class
Settlement Class is an opt-out class under Rule 23(b)(3) of
the Federal Rule of Civil Procedure. The Settlement Class is
All Borrowers of any Mortgage Loan with Tower that has a Date
of Loan from June 1, 2013 through and including November 3,
Agreement ¶ 54; also Preliminary Approval Order
(Dkt. No. 79).
Settlement Consideration for the Benefit of the
the Settlement, Tower timely made its initial deposit into an
Escrow Account following this Court's Preliminary
Approval. Agreement ¶ 73. That deposit created the
Settlement Fund, which will be used to pay: (i) checks to
certain Settlement Class Members in the specific cases
described in Paragraph 56 of the Agreement; (ii) the
Court-ordered award of Class Counsel's attorneys'
fees, costs, and expenses; (iii) the Court-ordered Service
Awards to the Class Representatives; (iv) any residual
distribution as set forth in Section XIII of the Agreement;
(v) any costs of settlement administration other than those
paid by Tower; and (vi) additional fees, costs and expenses
not specifically enumerated in the Agreement, subject to
approval of Class Counsel and Tower. Agreement ¶ 75.
Tower is responsible for paying all fees, costs, charges and
expenses incurred by the Settlement Administrator. Agreement
Class Members do not have to submit claim forms or take any
other affirmative steps to receive relief under the
Settlement. Tower will re-amortize each Settlement Class
Member's Mortgage Loan. Agreement ¶¶ 56, 76.
Within 157 days after the Effective Date, the Settlement
Administrator will distribute checks to all Settlement Class
Members entitled to a cash payment. Agreement ¶ 80.
uncashed or returned checks will remain in the Settlement
Fund for one year from the date the first distribution check
is mailed, during which time the Settlement Administrator
will make reasonable efforts to effectuate delivery of the
Settlement Fund payments. Agreement ¶ 81.
Agreement also provides a mechanism for distributing any
funds remaining in the Settlement Fund more than one year
plus 30 days after the date the Settlement Administrator
mails the first Settlement Fund Payments. Agreement ¶
82. The Parties will jointly file a proposed plan with the
Court for distributing the funds to a nonprofit organization
that promotes financial literacy in a way that is consistent
with well-regarded guidance on those types of supplemental
distributions. Id. The Court has the discretion to
approve the plan or disregard it as it deems fit.
will pay all fees, costs, charges, and expenses incurred by
the Settlement Administrator in connection with the Notice
Program. Agreement ¶ 59.
exchange for the benefits conferred by the Settlement, all
Settlement Class Members shall automatically be deemed to
have fully and irrevocably released and forever discharged
Tower from claims relating to the subject matter of the
Action as fully described and defined in Section XIV of the
federal courts have long recognized a strong policy and
presumption in favor of class settlements. The Rule 23(e)
analysis should be “informed by the strong judicial
policy favoring settlements as well as the realization that
compromise is the essence of settlement.” In re
Chicken Antitrust Litig. Am. Poultry, 669 F.2d 228, 238
(5th Cir. 1982); see also In re Nissan Motor Corp.
Antitrust Litig., 552 F.2d 1088, 1105 (5th Cir. 1977)
(“[s]ettlement agreements are highly favored in the law
and will be upheld whenever possible because they are a means
of amicably resolving doubts and uncertainties and preventing
lawsuits.”). “The recommendation by
Plaintiff's counsel and the good faith bargaining between
the parties . . . militates heavily in favor of approving the
settlement.” Murillo v. Texas A & M Univ.
Sys., 921 F.Supp. 443, 446 (S.D. Tex. 1996). The Court
does not “substitute its business judgment for that ...