United States District Court, D. Colorado
KATHY WORNICKI and EDWARD LAINE, on behalf of themselves and all others similarly situated, Plaintiffs,
BROKERPRICEOPINION.COM, INC., FIRST VALUATION, LLC, FIRST VALUATION SERVICES, LLC, FIRST VALUATION TECHNOLOGY, LLC, CARTEL ASSET MANAGEMENT, LLC, WALTER COATS, and VALUTECH, INC., Defendants.
A. BRIMMER United States District Judge.
matter is before the Court on Plaintiffs' Unopposed
Motion for Preliminary Approval of Class Action Settlement
[Docket No. 149]. The Court has jurisdiction over this matter
pursuant to 28 U.S.C. § 1332(d).
case arises from allegations that Brokerpriceopinion.com
(“Brokerprice”) failed to pay its brokers in a
timely fashion. Docket No. 149 at 8-9. Defendant Brokerprice
provides real estate valuation services to mortgage
companies, banks, securities dealers, investment firms, and
vendors for a variety of purposes. Docket No. 133 at 1.
Brokerprice operates online and its brokers sign up through
an online application process, submitting required
brokers' licenses and other information. Id. at
2. Brokers complete work orders for Brokerprice and
Brokerprice in turn promises payment to its brokers within
30-45 days of when Brokerprice shipped completed orders to
its clients. Id. Plaintiffs argue that Brokerprice
fell behind on its payments and owes its brokers millions of
dollars. Id. at 3.
filed a class action complaint on December 2, 2013. Docket
No. 1. Plaintiffs originally alleged claims for breach of
contract and unjust enrichment under Colorado
Id. On October 15, 2015, plaintiffs filed a motion
for class certification. Docket No. 79. Concurrently,
plaintiffs moved for leave to amend the second amended
complaint to add Walter Coats, the Brokerprice CEO, as a
defendant and add Colorado state law claims for negligent
misrepresentation and fraudulent inducement. Docket No. 81.
The Court granted plaintiffs' motion. Docket No. 97.
September 20, 2016, the Court granted plaintiffs' motion
for class certification in part, certifying a class comprised
of all persons and entities who provided broker price
opinions on behalf of Brokerpriceopinion.com, Inc., First
Valuation, LLC, First Valuation Services, LLC, First
Valuation Technology, LLC, Cartel Asset Management, LLC,
Walter Coats, or ValuTech, Inc. between December 2, 2007 and
the date of final disposition of this action and who have not
been paid for their services in accordance with
defendants' terms of payment. Docket No. 133 at 30. On
November 3, 2016, the Court approved the parties'
proposed notice plan and ordered the parties to disseminate
class notice within 14 days. Docket No. 138.
parties held a settlement conference before an arbitrator on
December 6, 2016. Docket No. 149-2 at 12-13, ¶ 20. At
the conference, defendants insisted that they would be
financially unable to pay a large settlement, while
plaintiffs insisted that defendants must provide complete
financial information to allow plaintiffs to assess
defendants' financial situation. Id. The parties
did not reach a settlement that day, but in the wake of the
conference defendants produced financial information that
convinced plaintiffs that settlement was in the best interest
of the class. Id. at 13, ¶ 20.
March 10, 2017, plaintiffs filed their unopposed motion for
preliminary approval of class action settlement. Docket No.
STANDARD FOR PRELIMINARY CERTIFICATION OF A SETTLEMENT
of a class action settlement takes place in two stages. In
the first stage, the court preliminarily certifies a
settlement class, preliminarily approves the settlement
agreement, and authorizes that notice be given to the class
so that interested class members may object to the fairness
of the settlement or opt out of the settlement. See In re
Motor Fuel Temperature Sales Practices Litig., 258
F.R.D. 671, 675 (D. Kan. 2009). In the second stage, after
notice is given to the putative class, the court holds a
fairness hearing at which it will address the fairness,
reasonableness, or adequacy of the settlement terms.
Fed.R.Civ.P. 23(e)(2); see Rutter & Wilbanks Corp. v.
Shell Oil Co., 314 F.3d 1180, 1188 (10th Cir. 2002).
approval of a class action settlement, in contrast to final
approval, is at most a determination that there is . . .
‘probable cause' to submit the proposal to class
members and hold a full-scale hearing as to its
fairness.” Davis v. J.P. Morgan Chase &
Co., 775 F.Supp.2d 601, 607 (W.D.N.Y. 2011). A proposed
settlement of a class action should therefore be
preliminarily approved where it “appears to be the
product of serious, informed, non-collusive negotiations, has
no obvious deficiencies, [and] does not improperly grant
preferential treatment to class representatives.”
See In re Motor Fuel, 286 F.R.D. at 492. “The
standards for preliminary approval of a settlement class are
not as stringent as those applied for final approval.”
ANALYSIS OF PROPOSED SETTLEMENT
Overview of the ...