Exhibit 10.1

LAW OFFICE OF DOMINIC J. MESSIHA, PC

DOMINIC J. MESSIHA, Bar No. 204544

11601 Wilshire Blvd, Suite 500

Los Angeles, CA 90025

310.575.1815 (phone)

310.650.8580 (direct)

310.575.1890 (fax)

Dominic@MessihaLegal.com 

 

JUSTIN R. MARINO (NYS Attorney ID: 4580262)

STEVENSON MARINO LLP

(admitted Pro Hac Vice)

75 Maiden Lane, Suite 402

New York, NY 10038

Telephone: (212) 939-7228

Facsimile: (212) 531-6129

Email: jmarino@stevensonmarino.com 

 

ATTORNEYS FOR PLAINTIFF

Robert J. Kramer, on behalf of himself
and all others similarly situated

 

 

KARIN M. COGBILL, Bar No. 244606

ANGELA MEAKIN, Bar No. 297169

Littler Mendelson, P.C.

50 W. San Fernando, 7th Floor
San Jose, CA  95113.2303

Telephone:408.998.4150

Fax No.:408.288.5686

Attorneys for Defendant

LUMBER LIQUIDATORS, INC.

 

SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA SACRAMENTO

 

 

 

 

 

 

 

 

 

ROBERT J. KRAMER, on behalf of himself and all others similarly situated,

Plaintiffs,

v.

LUMBER LIQUIDATORS, INC., a Delaware Corporation; and DOES 1 through 100,
inclusive,

Defendants.

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CLASS ACTION SETTLEMENT AGREEMENT

 

Complaint Filed:  November 17, 2017

 

 

 

 

 

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IT IS HEREBY STIPULATED, by Plaintiff ROBERT J. KRAMER (“Plaintiff”), on behalf
of himself, each of the Putative Class Members, and as a representative of the
LWDA, and Defendant LUMBER LIQUIDATORS, Inc., a Delaware Corporation
(“Defendant”) (collectively “the Parties”), that subject to the approval of the
Court, the above-captioned Action is hereby compromised and settled pursuant to
the terms and conditions set forth below:

I.

RECITALS

1.1. On November 17, 2017, Plaintiff filed a putative class action in the
Superior Court of California, County of Sacramento entitled, Robert J. Kramer,
behalf of himself, all others similarly situated v. Lumber Liquidators, Inc., a
Delaware corporation; and Does 1 through 100, inclusive, Case No.
34-2017-00222434.

1.2. On or about February 20, 2019, Plaintiff filed a First Amended Complaint
asserting the following causes of action: (1) Failure to Pay All Wages Earned
(Labor Code § 204); (2) Failure to Pay Overtime Wages (Labor Code §§ 510,
1194(a), and 1198); (3) Failure to Provide Accurate, Itemized Wage Statements
(Labor Code § 226(a)); (4) Failure to Provide Meal Periods (Labor Code §§ 226.7
and 512(a)); (5) Failure to Provide Rest Breaks (Labor Code § 226.7); (6)
Failure to Maintain Records (Labor Code § 1174(d)); (7) Failure to Reimburse
Business Expenses (Labor Code § 2802); (8) Failure to Pay All Wages Upon
Termination (Labor Code §§ 201-203); (9) Unfair Business Practice (Business &
Professions Code §§ 17200 et seq.); and (10) Private Attorneys General Act
(Labor Code §§ 2699 et seq.).

1.3. The First Amended Complaint seeks wages, general damages, special damages,
injunctive relief, statutory and civil penalties, premiums under Labor Code
section 226.7, reimbursement for business expenses, restitution, interest, and
attorneys’ fees and costs.    

1.4. Prior to mediation, the Parties engaged in both formal and informal
discovery. Defendant provided information and documentation about, inter alia:
the number of current and former putative class members who worked during the
relevant time period; the number of weeks worked by the putative class members;
the total earnings of each putative class member; termination dates (if
applicable).  Additionally, Defendant produced documentation related to the job
duties and

 

 

 

 

2.

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expectations of the putative class, Defendant’s operational structure, including
Defendant’s California operations; and other relevant information, including
Plaintiff’s personnel and payroll files.

1.5. On May 6, 2019, the Parties participated in an all-day mediation with
mediator Joel M. Grossman in Los Angeles, California. Following the mediation,
the Parties accepted a mediator’s proposal, and subsequently formalized the
terms in a Memorandum of Understanding (“MOU”). 

1.6. Defendant has represented that there are approximately 10,522 workweeks at
issue between November 17, 2013 and March 1, 2019 with regard to Store Managers
and another approximately 451 workweeks at issue between November 17, 2013 and
April 1, 2018 with respect to the Store Managers in Training. To the extent the
total number of workweeks at issue during the applicable time period for this
representation increases by more than 5% for any reason, the Total Settlement
Amount shall be increased on a pro rata basis to account for the additional
workweeks during the representative time period.

1.7. The Parties believe this Settlement is a fair, adequate and reasonable
settlement of this Action and have arrived at this Settlement after lengthy,
extensive arms-length negotiations, facilitated by an experienced wage and hour
class action mediator, considering all relevant factors related to liability and
damages.  Neither the MOU nor this Settlement Agreement shall be construed in
favor of or against any of the Parties by reason of their participation in the
drafting of the MOU or this Settlement Agreement.

1.8. Defendant denies that it has engaged in any unlawful activity, has failed
to comply with the law in any respect, has any liability to anyone under the
claims asserted in this matter, or that but for the Settlement a class should be
certified. This Settlement is entered into solely for the purpose of
compromising highly disputed claims. Nothing in this Agreement is intended or
will be construed as an admission of liability or wrongdoing by Defendant, or an
admission by Plaintiff that any of his claims were non-meritorious, or any
defense asserted by Defendant was meritorious. This Settlement and the fact that
Plaintiff and Defendant are willing to settle the Action will have no bearing
on, and will not be admissible in connection with, any litigation (other than
solely in connection with approval and enforcement of the Settlement).  

1.9. Plaintiff, on behalf of himself and the Putative Class, and as a
representative of the

 

 

 

 

3.

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LWDA, along with Defendant, and subject to the approval of the Court, stipulate
that the case will be compromised and settled pursuant to the terms and
conditions set forth in this Settlement Agreement and that after the date of the
Court’s final approval of this Settlement Agreement, judgment shall be entered,
subject to the continuing jurisdiction of the Court as set forth below, subject
to the recitals set forth above which by this reference become an integral part
of this Settlement Agreement, and subject to the following definitions, terms
and conditions:

II.

DEFINITIONS

Unless otherwise defined, capitalized terms used in this Settlement Agreement
shall have the meanings set forth below:

2.1 “Action” means the putative class action titled Robert J. Kramer, on behalf
of himself, and all others similarly situated v. Lumber Liquidators, Inc., a
Delaware corporation; and Does 1 through 100, inclusive, Case No.
34-2017-00222434 and all pleadings and amended Complaints filed therein.

2.2“Claims” means all claims which were plead in the operative First Amended
Complaint (titled Class Action and Private Attorneys’ General Act Complaint) or
which could have been pled based on the facts alleged in the operative First
Amended Complaint, including without limitations claims for unpaid wages and
overtime, itemized wage statements, meal and rest period wages and premiums,
record keeping violations, unpaid business expenses, untimely final paychecks,
and unfair competition.

2.3“Putative Class” or “Putative Class Members” means all current and/or former
Store Managers and Store Managers in Training employed in the state of
California by Defendant at any time between November 17, 2013 until the time of
preliminary approval of the Settlement by the court. 

2.4“Class Counsel” means the Law Office of Dominic J. Messiha, PC, 11601
Wilshire Boulevard, Suite 500, Los Angeles, California 90025 and Stevenson
Marino LLP, 75 Maiden Lane, Suite 402, New York, NY 10038. 

2.5“Class Counsel Costs Award” means the actual expenses and costs incurred by
Class Counsel for Class Counsel’s litigation and resolution of this Action, as
awarded by the Court, which may not exceed Thirty Thousand Dollars ($30,000.00).

 

 

 

 

4.

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2.6“Class Counsel Fees Award” means the attorneys’ fees for Class Counsel’s
litigation and resolution of this Action, as awarded by the Court. Defendant
agrees not to oppose a request for attorneys’ fees by Class Counsel in an amount
up to and including one-third of the Total Settlement Amount, which may not
exceed One Million, Five Hundred and Eighty-Three Thousand, Three Hundred and
Thirty-Three Dollars and Thirty-Three Cents ($1,583,333.33), which is one-third
of the Total Settlement Amount, or one third of the Total Settlement Amount if
the Settlement Amount is increased per the terms of this Agreement, whichever is
greater.

2.7“Putative Class Information” means information regarding Putative Class
Members that Defendant will compile in good faith from its records and provide
to the Settlement Administrator as a confidential document.  Putative Class
Information shall be provided in a confidential Microsoft Excel spreadsheet and
shall include, for each Putative Class Member: full name, last known
address, social security number, date of termination (if any), weeks worked
during the Putative Class Period as a Putative Class Member, and any other
information needed to calculate settlement payments. If Defendant has a readily
accessible last known personal phone number and last known personal email
address, Defendant will provide the same to the Settlement Administrator as part
of the Putative Class Information. Because Putative Class Members’ sensitive
personal information is included in the Putative Class Information, the
Settlement Administrator shall maintain the Putative Class Information securely
and in confidence. Access to such Putative Class Information shall be limited to
employees of the Settlement Administrator with a need to use the Putative Class
Information for administration of the Settlement. The Settlement Administrator
will take all necessary measures to adequately secure the information.  The
Settlement Administrator shall not disclose the Putative Class Information to
Class Counsel without the written consent of Defense Counsel.

2.8“Putative Class Period” means the period from November 17, 2013, through and
including the Preliminary Approval Date.

2.9“Complete and General Release” means in addition to the Claims as defined in
Paragraph 2.2, the unconditional general release given by the named Plaintiff
for himself only, releasing the Released Parties from any and all charges,
complaints, causes of action, damages and liabilities of any kind or nature
whatsoever, both at law and equity, known or unknown, suspected or

 

 

 

 

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unsuspected, arising from conduct occurring on or before the date Plaintiff
signs this Settlement Agreement.  This provision is intended by the Parties to
be all encompassing and to act as a full and total release of any individual
claim of Plaintiff for himself only, whether specifically enumerated herein or
not, that Plaintiff might have or have had individually, that exists or ever has
existed individually on or prior to the date this Settlement Agreement is
signed.  This release includes a waiver pursuant to California Civil Code 1542
for Plaintiff only.   

2.10“Court” means the Superior Court of California, County of Sacramento.

2.11“Defendant” means Lumber Liquidators, Inc., a Delaware Corporation. 

2.12“Defense Counsel” or “Counsel for Defendants” means Karin M. Cogbill and
Angela E. Meakin of Littler Mendelson, P.C.

2.13“Effective Date” means the date by which this Settlement is finally approved
as provided herein and the Court’s Final Approval Order becomes binding.  For
purposes of this Settlement Agreement, the Final Approval Order becomes binding
upon the later of: (1) the day after the last day by which a notice of appeal to
the California Court of Appeal of the Final Approval Order and/or of an order
rejecting any motion to intervene may be timely filed, and none is timely filed;
(2) if such an appeal is timely filed, and the final approval order is affirmed,
the day after the last date for timely filing a request for further review of
the California Court of Appeal’s decision passes and no further review is timely
requested; (3) if an appeal is filed and further review of the California Court
of Appeal’s decision is timely requested, the day after the request for review
is denied with prejudice and/or no further review of the decision can be timely
requested, or (4) if review is accepted, the day after the California Supreme
Court affirms the Settlement.  The Effective Date cannot occur, and Defendant
will not be obligated to fund this Settlement, until and unless there is no
possibility of a valid and timely appeal or further valid and timely appeal that
could potentially prevent this Settlement Agreement from becoming final and
binding.

2.14“Final Approval Hearing” means the hearing held to determine whether the
Court will enter a Final Approval Order finally approving this Settlement.

2.15“Final Approval Order” means the Court’s entry of an Order finally approving
and granting final judgment of this Settlement substantially in the form
attached hereto as Exhibit C.

 

 

 

 

6.

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2.16“Individual Settlement Payment” means the amount payable from the Net
Distribution Fund to each Putative Class Member, as calculated pursuant to
Paragraph 3.10.3 herein.  

2.17“Released Claims” means the Claims, as defined in Paragraph 2.2, that
Putative Class Members are fully releasing by this Settlement Agreement through
the date of Preliminary Approval. All Released Claims are released for all
Putative Class Members regardless of whether they receive any payment under the
Settlement unless they exclude themselves from the Settlement. 

2.18“Net Distribution Fund” means the Total Settlement Amount, less the amount
that the Court awards for (1) the LWDA’s portion of the PAGA award (i.e. 75% of
the total PAGA Award), not to exceed $60,000.00; (2) class counsels’ fees, which
shall not exceed One Million, Five Hundred and Eighty-Three Thousand, Three
Hundred and Thirty-Three Dollars and Thirty-Three Cents ($1,583,333.33); (3)
class counsels’ costs, which shall not exceed Thirty Thousand Dollars
($30,000.00); (4) settlement administration costs; (5) a service payment to the
named Plaintiff, which shall not exceed $10,000; and (6) the employer-share of
payroll taxes for any wage payment made to the Putative Class.  

2.19“Notice of Objection” means a written request by a Putative Class Member to
object to this Settlement.

2.20“Notice of Settlement” means the Notice of Class Action Settlement that will
be mailed to Putative Class Members to apprise them of this Settlement
substantially in the form attached hereto as Exhibit A. 

2.21 “Notice Period” is the time period of 45 days provided to Settlement Class
Members to opt out or object to the Settlement.

2.22“PAGA Award” means the portion of the Total Settlement Amount that is
allocated to PAGA penalties, pursuant to California Labor Code section 2698 et
seq., and as awarded by the Court.  The PAGA Award may not exceed Eighty
Thousand dollars ($80,000), of which seventy-five percent (75%) will be
distributed to the California Labor & Workforce Development Agency and
twenty-five percent (25%) will be distributed to Putative Class Members as part
of the Net Distribution Fund.

2.23“Parties” means Plaintiff and Defendant, and “Party” shall mean either
Plaintiff or Defendant.

 

 

 

 

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2.24“Plaintiff” means Robert J. Kramer.

2.25“Preliminary Approval” or “Preliminary Approval Date” means the date the
Court enters the Preliminary Approval Order.

2.26“Preliminary Approval Order” means the Court’s entry of an order
preliminarily approving this Settlement (substantially in the form attached
hereto as Exhibit B). 

2.27“Released Parties” means Defendant Lumber Liquidators, Inc., a Delaware
Corporation, their subsidiaries and affiliates, employee benefit plans sponsored
or maintained by any of the foregoing, their attorneys, and their respective
successors and predecessors in interest; all of their respective officers,
directors, employees, administrators, fiduciaries, trustees, beneficiaries and
agents; and each of their past, present and future officers, directors,
shareholders, members, employees, agents, principals, heirs, representatives,
accountants, auditors, consultants, insurers and reinsurers. 

2.28“Request for Exclusion” means a written request by a Putative Class Member
to exclude himself/herself from Settlement, which must be completed and mailed
in the manner set forth in this Settlement Agreement and the Notice of
Settlement. Putative Class Members who exclude themselves shall not have the
right to object to the Settlement. 

2.29“Response Deadline” means the date forty-five (45) calendar days after the
Settlement Administrator mails the Notice of Settlement to Putative Class
Members and the last date on which Putative Class Members may postmark and/or
file, as applicable, Requests for Exclusion, and/or Notices of Objection to the
Settlement.

2.30“Service Award” means the amount that the Court awards to Plaintiff for his
efforts in assisting with the prosecution of the Action and as consideration for
executing this Settlement Agreement and releasing his claims against
Defendant.  The Service Award will not exceed Ten Thousand Dollars ($10,000). 

2.31“Settlement Administration Costs” means the costs incurred by the Settlement
Administrator and awarded by the Court from the Total Settlement Amount, which
is expected to total ________________________________.

2.32“Settlement Administrator” means Angeion Group.

 

 

 

 

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2.33“Settlement Fund Account” means the bank account established pursuant to the
terms of this Settlement Agreement, from which all monies payable under the
terms of this Settlement shall be paid, as set forth herein.

2.34 “Total Settlement Amount” means the non-reversionary amount of Four Million
Seven Hundred and Fifty Thousand Dollars ($4,750,000.00), subject to the terms
and conditions herein.  The Total Settlement Amount includes (a) class counsels’
fees, which shall not exceed One Million, Five Hundred and Eighty-Three
Thousand, Three Hundred and Thirty-Three Dollars and Thirty-Three Cents
($1,583,333.33) or one third of the Total Settlement Amount, whichever is
greater; (b) class counsels’ costs, exceed Thirty Thousand Dollars ($30,000.00);
(c) settlement administration costs; (d) the PAGA Award, which shall not exceed
$80,000; (e) a service payment to the named Plaintiff, which shall not exceed
$10,000; (f) employee and employer payroll taxes for any wage payment made to
the Settlement Class; and (g) all individual payments made from the Net
Distribution Amount. Each Putative Class Member shall be responsible for paying
any additional taxes due on his or her Individual Settlement Payment.  The Total
Settlement Amount is the maximum amount that Defendant is obligated to pay under
this Settlement Agreement in order to settle this Action, subject to the Court’s
approval.

2.35“Void Date” means the date by which any checks issued to Putative Class
Members shall become void, i.e., on the one hundred and twenty-first (121st)
calendar day after mailing.

III.

TERMS OF SETTLEMENT AGREEMENT

The Parties agree as follows:

3.1Class Certification.  Solely for the purposes of this Settlement, the Parties
stipulate and agree that in order for this Settlement to occur, the Court must
certify a class consisting of Putative Class Members.

3.2Appointment of Class Representative.  Solely for the purposes of this
Settlement, the Parties stipulate and agree Plaintiff Robert J. Kramer shall be
appointed as a representative for the

 

 

 

 

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Putative Class.

3.3Appointment Of Class Counsel. Solely for the purposes of this Settlement, the
Parties stipulate and agree that Dominic J. Messiha and Justin Marino shall be
appointed as Class Counsel for the Putative Class.

3.4Appointment Of Settlement Administrator.  Solely for the purposes of this
Settlement, the Parties stipulate and agree Angeion Group shall be retained to
serve as Settlement Administrator.  The Settlement Administrator shall be
responsible for establishing a toll-free telephone number through which Class
Members may make inquiries about the Settlement and a website, which will have
links to the Notice of Settlement, the Settlement Agreement, motions for
approval and for attorneys’ fees, and a Post Office Box for receipt of Class
Member communications; preparing, printing and mailing the Notice of Settlement
to Class Members; receiving and reviewing Objections and Requests for Exclusion,
if any, submitted by Class Members; calculating Individual Settlement Payments;
calculating and paying any and all payroll tax or other required withholdings
from the wage portion of the Individual Settlement Payments as required under
this Settlement Agreement and applicable law; providing weekly status reports to
Defense and Class Counsel; providing a due diligence declaration for submission
to the Court prior to the Final Approval Hearing; mailing Individual Settlement
Payments to Class Members; paying the Service Award, Class Counsel Fees Award
and Class Counsel Costs Award; mailing the PAGA Award to the California Labor &
Workforce Development Agency; printing and providing Class Members, Plaintiff
and Class Counsel with IRS Forms W-2 and/or 1099 as required under this
Settlement Agreement and applicable law; providing a due diligence declaration
for submission to the Court upon the completion of the Settlement; providing
Defense Counsel with an accounting of all checks issued and cashed, and for such
other tasks as the Parties mutually agree.  The Settlement Administrator shall
keep the Parties timely apprised of the performance of all Settlement
Administrator responsibilities.  Any legally mandated tax reports, tax forms,
tax filings, or other tax documents required by administration of this
Settlement Agreement shall be prepared by the Settlement Administrator. Any
expenses incurred in connection with such preparation shall be a Settlement
Administration Cost.  The Parties agree to cooperate in the settlement
administration process and to make all reasonable efforts to control and

 

 

 

 

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minimize Settlement Administration Costs.  The Parties each represent they do
not have any financial interest in the Settlement Administrator or otherwise
have a relationship with the Settlement Administrator that could create a
conflict of interest.

3.5Conditional Nature Of Stipulation For Certification.  Solely for the purposes
of this Settlement, the Parties stipulate and agree to the certification of this
Action on behalf of Class Members.  Should for whatever reason the Settlement
not become effective, the fact that the Parties were willing to stipulate to
certification of the Action as part of the Settlement, or to resolve the PAGA
claim on a representative basis, shall have no bearing on, and shall not be
admissible in connection with, the issue of whether the Action, or any claim or
class, should be certified or proceed on a representative basis in in this
Action or in any other lawsuit.  Defendant expressly reserves their right to
oppose class certification and any representative claim in this or any other
action should this Settlement not become effective.

3.6Class Members’ Release.  As of the Effective Date, any Class Member who does
not submit a timely and valid Request for Exclusion will be deemed to have
released the Released Parties from the Released Claims.  Class Members may
discover facts in addition to or different from those they now know or believe
to be true with respect to the subject matter of the Released Claims, but upon
the Effective Date, shall be deemed to have, and by operation of the Final
Approval Order shall have, fully, finally, and forever settled and released any
and all of the Released Claims, whether known or unknown, suspected or
unsuspected, contingent or non-contingent, which now exist or have existed, upon
any theory of law or equity now existing, including but not limited to, conduct
that is negligent, intentional, with or without malice, or a breach of any duty,
law or rule, without regard to the subsequent discovery or existence of such
different or additional facts.  Class Members agree not to sue or otherwise make
a claim against any of the Released Parties for the Released Claims.  It is the
intent of the Parties that the Final Approval Order entered by the Court shall
have full res judicata effect and be final and binding upon Class Members as to
the Released Claims.

3.7Plaintiff’s Complete and General Release.  In consideration for the promises
and payments set forth in this Settlement Agreement, to which Plaintiff is
otherwise not entitled, Plaintiff agrees to provide a Complete and General
Release to the Released Parties for himself only, which

 

 

 

 

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releases all claims and damages of every kind and nature, actual or potential,
known and unknown, which exist or could arise out of Plaintiff’s employment,
through and including the date of his execution of this Settlement
Agreement.  Plaintiff may discover facts in addition to or different from those
he now knows or believes to be true with respect to the subject matter of the
Complete and General Release, but upon the Effective Date, shall be deemed to
have, and by operation of the Final Approval Order shall have, fully, finally,
and forever settled and released any and all of the claims covered by the
Complete and General Release, whether known or unknown, suspected or
unsuspected, contingent or non-contingent, which now exist, or have existed,
upon any theory of law or equity now existing, including, but not limited to,
conduct that is negligent, intentional, with or without malice, or a breach of
any duty, law or rule, without regard to the subsequent discovery or existence
of such different or additional facts.  This General Release applies to named
Plaintiff for himself only.  Plaintiff understands that he is releasing all
rights under section 1542 of the California Civil Code, which provides:

A general release does not extend to claims that the creditor or releasing party
does not know or suspect to exist in his or her favor at the time of executing
the release and that, if known by him or her, would have materially affected his
or her settlement with the debtor or released party.

3.7.1No Pending Or Future Lawsuits By Plaintiff.  Other than this Action,
Plaintiff represents that he does not have any pending lawsuits, administrative
complaints or charges against Defendant or the Released Parties in any local,
state or federal court or administrative agency.  Plaintiff further acknowledges
that all claims raised therein, if any, shall be fully and finally extinguished
by virtue of this Settlement Agreement and the Court’s Final Approval
Order.  Plaintiff further represents that he will not bring or join any action
in the future in which he seeks to recover any damages from Defendant or the
Released Parties relating to or arising from Plaintiff’s employment, other than
an action to enforce his rights under this Settlement Agreement.

3.8PAGA Release. Upon the approval by the Court of this Settlement, Plaintiff,
individually and as the representative acting as a proxy or agent of the LWDA, a
State of California Executive Branch Agency, in this Action, agrees to release
the Released Parties for penalties under the California Private Attorneys’
General Act predicated on, or contained within, Labor Code §§ 201-

 

 

 

 

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204, 210, 226, 226.3, 226.7, 510, 512, 558, 1174, 1194, 1198 and 2802 as alleged
in the First Amended Complaint during the Putative Class Period.

3.9Settlement Approval And Implementation Procedures.  As part of this
Settlement, the Parties agree to the following procedures for obtaining the
Court’s Preliminary Approval of the Settlement, notifying Class Members of the
Settlement, obtaining the Court’s Final Approval of the Settlement and
processing Individual Settlement Payments.

3.9.1Preliminary Approval and Certification.  As soon as practicable after
execution of this Settlement Agreement, Plaintiff will submit this Settlement
Agreement to the Court for Preliminary Approval.  Plaintiff’s submission will
include this Settlement Agreement, including Exhibits A-C, and any motions,
memoranda and evidence as may be necessary for the Court to determine that this
Settlement Agreement is fair, adequate and reasonable.  Defense Counsel shall be
provided with an opportunity of no less than seven (7) calendar days to review
Plaintiff’s motion for preliminary approval before submission to the Court. The
Parties shall work in good faith to resolve any disputes related to the content
of Plaintiff’s motion for preliminary approval.

3.9.2Class Information.  No more than fifteen (15) calendar days after entry of
the Preliminary Approval Order, Defendant shall provide the Settlement
Administrator with the Class Information for purposes of mailing the Notice of
Settlement to Class Members.

3.9.3Notice By First Class U.S. Mail.  Upon receipt of the Class Information,
the Settlement Administrator will conduct a national change of address search
and a skip trace for the most current address of all former employee Class
Members and will update such Class Members’ addresses as necessary.  Twenty-One
(21) calendar days after receipt of the Class Information, the Settlement
Administrator shall mail the Notice of Settlement to all Class Members by First
Class U.S. Mail, exercising its best judgment to determine the most current
mailing address for each Class Member including but not limited to the use of
skip tracing. The address identified by the Settlement Administrator as the
current mailing address shall be presumed to be the best mailing address for
each Class Member.

3.9.4Undeliverable Notices.  Any Notice of Settlement returned to the Settlement

 

 

 

 

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Administrator as non-deliverable on or before a date twenty-one (21) calendar
days before the Response Deadline shall be re-mailed to the forwarding address
affixed thereto.  If no forwarding address is provided, the Settlement
Administrator shall make reasonable efforts to obtain an updated mailing
address.  If an updated address is identified, the Settlement Administrator
shall resend the Notice of Settlement to the Class Member within five (5)
calendar days of the date of the return of the Notice of Settlement.  Class
Members to whom the Notice of Settlement is resent, after having been returned
as non-deliverable to the Settlement Administrator, shall have until the
Response Deadline to post-mark their Request for Exclusion or mail and/or file
any objections. If a Class Member’s Notice of Settlement is returned to the
Settlement Administrator more than once as non-deliverable, then an additional
Notice of Settlement shall not be re-mailed. 

3.9.5Notice Satisfies Due Process.  Compliance with the notice procedures
specified in this Settlement Agreement shall constitute due and sufficient
notice to Class Members of this Settlement and shall satisfy the requirements of
due process.  Nothing else shall be required of, or done by, the Parties, Class
Counsel or Defense Counsel to provide notice of the proposed Settlement.  In the
event the procedures in this Settlement Agreement are followed and the intended
recipient of a Notice of Settlement still does not receive the Notice, the
intended recipient shall remain a Class Member and will be bound by all terms of
the Settlement and any Final Approval Order entered by the Court if the
Settlement becomes effective.  Notice provided by a means in addition to that
specified in Sections 3.9.3 and 3.9.4 is done only as a courtesy to a Class
Member and does not negate the binding effect of this Settlement on a Class
Member where Sections 3.9.3 and 3.9.4 are satisfied. 

3.9.6Requests For Exclusion (Opt-Outs).  The Notice of Settlement shall state
that Class Members who wish to exclude themselves from the Settlement must
submit a written Request for Exclusion to the Settlement Administrator,
postmarked on or before the Response Deadline.  To be valid, the Request for
Exclusion:  (1) must contain the full name, address and last four digits of the
social security number of the person requesting exclusion; (2) must be signed by
the person requesting exclusion; and (3) must state in substance:  “I want to
exclude

 

 

 

 

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myself from the Settlement in Robert J. Kramer v. Lumber Liquidators, Inc.,
pending in the Superior Court of California, County of Sacramento, Case No.
34-2017-00222434.  I understand that by requesting to be excluded from the
Settlement, I will receive no money from the Settlement.” If the Request for
Exclusion does not contain the information listed in (1)-(3) or is not
postmarked by the Response Deadline and returned to the Settlement Administrator
at the specified address, it will not be deemed a timely and valid Request for
Exclusion from the Class.  In the event of a dispute regarding the validity of
an opt-out by a Class Member prior to the Court’s decision on Final Approval,
the parties will meet and confer in an effort to reach a resolution.  If the
parties fail to agree, the decision regarding validity of the opt-out will be
made by the Claims Administrator.  Any challenges regarding the validity of an
opt-out post Final Approval will be decided by the Court. Any Class Members who
submit a timely and valid Request for Exclusion from the Settlement will not be
entitled to any monetary recovery under the Settlement and will not be bound by
the terms of the Settlement.  Any Class Member who submits a timely and valid
Request for Exclusion will not have any right to object, appeal or comment on
the Settlement.  Class Members who fail to submit a timely and valid Request for
Exclusion, postmarked on or before the Response Deadline shall be members of the
Class and will be bound by all terms of the Settlement and the Final Approval
Order entered in this Action. No later than fourteen (14) calendar days after
the Response Deadline, the Settlement Administrator shall provide Defense
Counsel with a complete list of all Class Members who have submitted timely and
valid Requests for Exclusion.  The Settlement Administrator shall provide Class
Counsel with a summary report that includes only the number of Requests for
Exclusion received by the Settlement Administrator.  If more than ten (10) Class
Members submit a request for exclusion of the settlement, Defendant may at their
own election void this Agreement.

3.9.7Notices of Objections.  The Notice of Settlement shall state that Class
Members who wish to object to the Settlement must submit a written Notice of
Objection to the Court by the Response Deadline.  To be valid, the Notice of
Objection: (1) must contain the full name, address and last four digits of the
social security number of the Class Member; and (2)

 

 

 

 

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must be signed by the Class Member.  The Notice of Objection should also state
the case name and number, Robert J. Kramer v. Lumber Liquidators, Inc., a
Delaware Corporation, pending in the Superior Court of California, County of
Sacramento, Case No. 34-2017-00222434, the basis for the objection and if the
Class Member intends to appear at the Final Approval Hearing.  If the Notice of
Objection does not contain the information listed in (1)-(2) or is not filed or
postmarked by the Response Deadline and returned to the Court at the specified
address, it will not be deemed a timely and valid Notice of Objection to this
Settlement.  As applicable, the date of the filing or the date of the postmark
on the return mailing envelope shall be the exclusive means used to determine
whether a Notice of Objection has been timely submitted.  Unless otherwise
required by the Court, Class Members who fail to submit a timely and valid
Notice of Objection shall be deemed to have waived any objections and shall be
foreclosed from making any objections to the Settlement.  Class Members who
submit a timely and valid Notice of Objection will have a right to appear at the
Final Approval Hearing to have their objections heard by the Court.

3.9.8In the event that a Class Member submits a Notice of Objection and a
Request for Exclusion, the Notice of Objection shall control. 

3.9.9No Solicitation Of Exclusions Or Objections.  The Parties agree to use
their best efforts to carry out the terms of this Settlement.  At no time shall
any of the Parties or their counsel seek to solicit or otherwise encourage Class
Members to submit a Notice of Objection to or Request for Exclusion from the
Settlement or to appeal from the Court’s Final Approval Order.  Class Counsel
shall not represent Class Members with respect to any objections or appeals to
this Settlement.

3.9.10Settlement Administrator Declaration In Support Of Final Approval.  Within
twenty-one (21) days of the Response Deadline, the Settlement Administrator
shall provide the Parties with a statement detailing the actions taken by the
Settlement Administrator to administer the Settlement to date, along with all
incurred and anticipated Settlement Administration Costs.

3.9.11Final Approval Hearing.  No earlier than thirty (30) calendar days after
the

 

 

 

 

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Response Deadline, the Court shall hold the Final Approval Hearing, where
objections, if any, may be heard and the Court shall determine whether the
Settlement should be finally approved, and if so, the amounts payable for: (1)
Individual Settlement Payments; (2) the PAGA Award; (3) Plaintiff’s Service
Award; (4) the Class Counsel Fees Award; (5) the Class Counsel Costs Award; and
(6) Settlement Administration Costs.

3.9.12Entry Of Final Approval Order.  If the Court approves this Settlement at
the Final Approval Hearing, the Parties shall request that the Court enter a
Final Approval Order, substantially in the form of Exhibit C.  After thus
granting final approval of the Settlement and entering judgment, the Court shall
retain jurisdiction over the Parties to enforce and implement the terms of the
judgment.

3.10Funding And Allocation of Settlement.

3.10.1Settlement Accounting.  No more than five (5) calendar days after the
Effective Date, the Settlement Administrator will provide the Parties with an
accounting of all anticipated payments from the Settlement Fund Account,
including: (1) Individual Settlement Payments and employer-side taxes thereon;
(2) the PAGA Award; (3) Plaintiff’s Service Award; (4) the Class Counsel Fees
Award; (5) the Class Counsel Costs Award; and (6) Settlement Administration
Costs, all as specified in this Settlement Agreement and approved by the Court. 

3.10.2Funding the Settlement.  Within fourteen (14) calendar days after the
Effective Date, Defendant shall fund the Settlement by providing the Total
Settlement Amount to the Settlement Administrator. The Settlement Administrator
shall deposit the funds in the Settlement Fund Account and will disburse the
funds in the manner and at the times set forth in this Settlement Agreement.

3.10.3Individual Settlement Payments.  Individual Settlement Payments will be
paid from the Net Distribution Fund and mailed by First Class U.S. Mail to Class
Members’ last known mailing address within fourteen (14) calendar days following
the funding of the Settlement.  Any checks issued to Class Members shall remain
valid and negotiable for one hundred and twenty (120) calendar days from the
date of their issuance and then shall become

 

 

 

 

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void on the one hundred and twenty-first (121st) calendar day after mailing,
i.e., the Void Date.  The Parties agree that any funds that remain from uncashed
Settlement Payment checks after the expiration of one hundred and twenty (120)
calendar days from the date of issuance shall be distributed to the Cy Pres
beneficiary as specified below. 

3.10.4Calculation Of Individual Settlement Payments.  All Class Members who do
not submit a timely and valid Request for Exclusion will receive an Individual
Settlement Payment.  Each Class Member’s Individual Settlement Amount will be
calculated as follows:  

(i)Each Putative Class Member will receive 1 point for week worked in California
during the Putative Class Period.

(ii)Any Class Member who separated his or her employment with Defendant from
November 17, 2014, through and including the Preliminary Approval Date, will
receive 5 additional points to compensate the Class Member for his or her
waiting time penalty claim.  The Parties acknowledge that this additional amount
provides sufficient consideration for a complete release of claims under Labor
Code section 203, regardless of the underlying facts or basis for the alleged
untimely, non-payment of wages.

(iii)The value of a point shall be determined by dividing the Net Distribution
Fund by the total number of points available to each Class Member as set forth
in subsections (i) and (ii) above.  Each Class Member shall receive a gross
payment equal to his or her points multiplied by the value of a point.  To the
extent that any Putative Class Member excludes him or herself from the
Settlement and there are unclaimed funds remaining of the Net Distribution Fund,
each Class Member shall be entitled to receive a pro-rated increase based on
their total number of points as compared to the total number of points for all
Class Members. 

3.10.5 Tax Treatment Of Individual Settlement Payments.  Each Individual
Settlement Payment shall be allocated between taxable and non-taxable
consideration as follows: one half (1/2) will be allocated to wages for which an
IRS Form W-2 will issue, one quarter (1/4) will be allocated to interest for
which an IRS Form 1099 will issue, and one quarter (1/4) will be allocated to
penalties pursuant to the California Labor Code for which an IRS Form 1099 will
issue.  The Settlement Administrator will be responsible for calculating

 

 

 

 

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the employer- and employee-side taxes owed on the wage portion of each Class
Member’s Individual Settlement Payment and paying these amounts to the
appropriate state and federal agencies, within the timing required by applicable
state and/or federal law.  The Parties make no representations as to the tax
treatment or legal effect of the payments called for in this Settlement
Agreement and Class Members are not relying on any statement or representation
by the Parties in this regard.  Class Members will be solely responsible for the
payment of any taxes and penalties assessed on the payments described herein
except for the employer’s share of payroll taxes on the wage portion of the
Individual Settlement Payments.

3.10.6PAGA Award.  The PAGA Award shall be distributed within fourteen (14)
calendar days after the Settlement is funded.  Specifically, the Settlement
Administrator shall prepare and mail a check payable to the California Labor &
Workforce Development Agency for an amount not to exceed eighty percent (75%) of
the PAGA Award.  The remaining twenty-five percent (25%) of the PAGA Award shall
be included within the Net Distribution Fund for distribution to Class Members
as part of the 1/4 penalties component of the Individual Settlement Payment.  In
the event that the Court awards less than the full amount requested for the PAGA
Award, the un-awarded amount will be made available for distribution to Class
Members as part of the Net Distribution Fund.

3.10.7  Plaintiff’s Service Award.  Defendant agrees not to oppose any
application by Plaintiff for a Service Award not to exceed Ten Thousand Dollars
($10,000), as consideration for his Complete and General Release of Claims and
for his time and effort in prosecuting this matter.  The Service Award shall be
paid to Plaintiff within fourteen (14) calendar days following funding of the
Settlement.  Plaintiff agrees to provide the Settlement Administrator with an
executed IRS Form W-9 before the Service Award is issued.  The Settlement
Administrator shall issue an IRS Form 1099 to Plaintiff for his
payment.  Plaintiff shall be solely and legally responsible for paying any and
all applicable taxes on his Service Award and shall hold Defendant harmless from
any claim or liability for taxes, penalties, or interest arising as a result of
the Service Award.  The Service Award shall be in addition to Plaintiff’s
Individual Settlement Payment, which he shall receive as a Participating Class
Member.  In

 

 

 

 

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the event that the Court awards less than the full amount requested for the
Service Award, the un-awarded amount will be made available for distribution to
Class Members as part of the Net Distribution Fund. 

3.10.8Class Counsel Fees Award And Class Counsel Costs Award.  Defendant agrees
not to oppose a request for a Class Counsel Fees Award not to exceed One
Million, Five Hundred and Eighty-Three Thousand, Three Hundred and Thirty-Three
Dollars and Thirty-Three Cents ($1,583,333.33), or one third of the Total
Settlement Amount, whichever is greater.  Defendant further agrees not to oppose
any application by Class Counsel for a Class Counsel Costs Award not to exceed
Thirty Thousand Dollars ($30,000.00).  The Settlement Administrator shall pay
the Court-approved Class Counsel Fees Award and Class Counsel Costs Award within
fourteen (14) calendar days following the funding of the Settlement.  Class
Counsel agrees to provide the Settlement Administrator with an executed IRS Form
W-9 before the Class Counsel Fees Award and Class Counsel Costs Award are
issued.  The Settlement Administrator shall issue an IRS Form 1099 to Class
Counsel for the payments made pursuant to this Paragraph.  In the event that the
Court awards less than the full amount requested for the Class Counsel Fees
Award and Class Counsel Costs Award, the un-awarded amount will be made
available for distribution to Class Members as part of the Net Distribution
Fund.  This Settlement is not contingent upon the Court awarding Class Counsel
any particular amount in attorneys’ fees and costs.

3.10.9 Settlement Administration Costs.  The Settlement Administrator shall be
paid Settlement Administration Costs from the Total Settlement Amount, in an
amount expected to total $15,000.  The Settlement Administrator shall be paid
Settlement Administration Costs within forty-five (45) calendar days following
the funding of the Settlement.  In the event that the Court awards less than the
full amount set aside for Settlement Administration Costs, the un-awarded amount
will be made available for distribution to Monetary Payment Class Members as
part of the Net Distribution Fund.

3.11No Effect On Employee Benefits.  Amounts paid to Plaintiff or Class Members
pursuant to this Settlement Agreement do not count as earnings or compensation
for purposes of any

 

 

 

 

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benefits (e.g., 401(k) plans or retirement plans) sponsored by Defendant.

3.12Nullification Of Settlement Agreement.  In the event: (1) the Court does not
enter the Preliminary Approval Order as provided herein; (2) the Court does not
enter a Final Approval Order as provided herein; (3) the Settlement does not
become final for any other reason; or (4) Judgment is not entered by the Court
dismissing the lawsuit as to all Claims as to all Class Members with prejudice,
this Settlement Agreement shall be null and void and any order entered by the
Court in furtherance of this Settlement shall be treated as void from the
beginning.  In such case, the Parties shall be returned to their respective
statuses as of the date and time immediately prior to the execution of this
Settlement Agreement and the Parties shall proceed in all respects as if this
Settlement Agreement had not been executed.  In the event an appeal is filed
from the Court’s Final Approval Order or from an order rejecting any motion to
intervene, or any other appellate review is sought, Settlement administration
shall be stayed pending final resolution of the appeal and Defendant will not be
required to fund this Settlement until and unless the Effective Date is reached.
 In the event that this Settlement is not Finally Approved for any reason,
including if Defendant voids the Settlement per the terms of this agreement,
Defendant will be solely responsible for costs incurred by the Settlement
Administrator.

3.13Exhibits And Headings.  The terms of this Settlement Agreement include the
terms set forth in the Exhibits A-C attached, which are incorporated by this
reference as though fully set forth herein.  All Exhibits A-C to this Settlement
Agreement are an integral part of the Settlement.  The descriptive headings of
any paragraphs or sections of this Settlement Agreement are inserted for
convenience only and do not constitute a part of this Settlement Agreement.

3.14Interim Stay Of Proceedings.  The Parties agree to stay all proceedings in
the Action, except such proceedings necessary to implement and complete the
Settlement, pending the Final Approval Hearing to be conducted by the Court.

3.15Amendment Or Modification.  This Settlement Agreement may be amended or
modified only by a written instrument signed by Defense and Class Counsel or
their successors-in-interest.

3.16Entire Agreement.  This Settlement Agreement and the attached Exhibits A-C
constitute the entire agreement among the Parties, and no oral or written
representations, warranties

 

 

 

 

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or inducements have been made to any Party concerning this Settlement Agreement
or its Exhibits A-C other than the representations, warranties and covenants
contained and memorialized in the Settlement Agreement and its Exhibits A-C.

3.17Authorization To Enter Into Settlement Agreement.  The person signing this
Settlement Agreement on behalf of Defendant represents and warrants that he/she
is authorized to sign this Settlement Agreement on behalf of
Defendant.  Plaintiff represents and warrants that he is authorized to sign this
Settlement Agreement and that he has not assigned any claim covered by this
Settlement to a third-party.  Plaintiff, by signing this Settlement Agreement,
is bound by the terms herein and further agrees not to submit any Request for
Exclusion from or Notice of Objection to the Settlement.  Any such Request for
Exclusion or Notice of Objection shall therefore be void and of no force or
effect.

3.18Signature of all Class Members Unnecessary to be Binding.  The Parties agree
that because the Class Members are numerous, it is impossible or impractical to
have each Class Member execute this Agreement.  The Notice will advise all Class
Members of the binding nature of the release provided herein and shall have the
same force and effect as if the Agreement were executed by each Class
Member.  The only Class Members who will not be bound by the terms of this
Agreement are those who submit a timely and valid Request for Exclusion.

3.19Binding On Successors And Assigns.  This Settlement Agreement shall be
binding upon, and inure to the benefit of, the successors or assigns of the
Parties hereto, as previously defined.

3.20California Law Governs.  All terms of this Settlement Agreement shall be
governed by and interpreted according to the laws of the State of California.

3.21Mutual Cooperation. The Parties agree to fully cooperate with each other to
accomplish the terms of this Agreement, including but not limited to, execution
of such documents and to take such other action as may be necessary to implement
the terms of this Agreement. The Parties to this Agreement shall use their best
efforts, including all reasonable efforts contemplated by this Agreement and any
other reasonable efforts that may become necessary by order of the Court, or
otherwise, to effectuate this Agreement and the terms set forth herein. 

3.22Counterparts.  This Settlement Agreement shall become effective upon its
execution

 

 

 

 

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by all of the undersigned.  Plaintiff, Class Counsel, and Defendant may execute
this Settlement Agreement in counterparts, which shall have the same force and
effect as if each had signed the same instrument.  Copies of the executed
Settlement Agreement shall be effective for all purposes as though the
signatures contained therein were original signatures.

3.23Residue or Reversion.  This is a non-reversionary settlement and no amount
of the Gross Settlement Amount shall revert back to Defendant. Should there
remain any residual from the Net Settlement Amount after all payments are made
under this Agreement, such residual shall be handled in the following manner:
All amounts contained in settlement checks that were not cashed within 90
calendar days, and all interest that has accrued, shall be paid to a
Court-approved cy pres beneficiary.  Subject to Court approval, the Katherine
and George Alexander Community Law Center, is designated as the cy pres
beneficiary.  No later than ten (10) calendar days after the expiration of the
Void Date, the Settlement Administrator shall pay the amounts contained in
settlement checks that were not cashed, and all interest that has accrued, to
the cy pres beneficiary.  The Settlement Administrator shall provide a
declaration of payment to the cy pres beneficiary, which will be served on Class
Counsel and Defendant’s Counsel within ten (10) calendar days of payment of the
residual to such beneficiary.  Any costs associated with administering the
remaining funds under this section (e.g., bank stop-payment charges, settlement
administration costs associated with any reserve amount) or payments to the cy
pres beneficiary will be deducted before donation of any cy pres funds.

 

IT IS SO STIPULATED AND AGREED.

 

 

 

 

 

Dated:September 9, 2019_

 

 

/s/ Robert J. Kramer

 

ROBERT J. KRAMER

 

 

 

 

 

 

 

 

 

 

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Dated:September 5, 2019_

 

 

/s/ M. Lee Reeves

 

LUMBER LIQUIDATORS, INC.

 

 

 

 

 

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