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CAFFARELLI & ASSOCIATES LTD.

Lorrie T. Peeters (CA Bar No. 276367)

10265 Beardon Dr.

Cupertino, CA 95014

Phone: (408) 216-0599; Fax: (312) 577-0720

Email: lpeeters@caffarelli.com

Local Counsel for Plaintiff

KENNEDY HODGES, LLP

Galvin Kennedy (TX Bar No. 00796870) (Admitted pro hac vice)

Don Foty (TX Bar No. 24050022) (Admitted pro hac vice)

4409 Montrose Blvd, Suite 200

Houston, Texas 77006

Phone: (713) 523-0001; Fax: (713) 523-1116

Email: gkennedy@kennedyhodges.com

dfoty@kennedyhodges.com

Counsel for Plaintiff

MANNING & KASS, ELLROD, RAMIREZ, TRESTER, LLP

John M. Cowden (State Bar No. 224963) (jmc@manningllp.com)

Jordon R. Ferguson (State Bar No. 276578) (jrf@manningllp.com)

19800 MacArthur Blvd., Ste. 900

Irvine, California 92612

Phone: (949) 440-6690; Fax: (949) 440-6691

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

 CANDIDA PALEGA,

Plaintiff,

vs.

THE PROPERTY SCIENCES 

GROUP, INCORPORATED

Defendant.

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Case Number: 3:17-cv-00855-WHA

JOINT MOTION FOR PRELIMINARY 

APPROVAL OF INDIVIDUAL 

SETTLEMENT

[Filed and served concurrently with 

Administration Motion to File Under Seal; 

and (Proposed) Order]

Date: August 2, 2018

Time: 8:00 a.m. 

Place: Courtroom 12

Judge: Hon. William Alsup

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TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

PLEASE TAKE NOTICE that on Thursday, August 2, 2018, at 8:00 a.m. in 

Courtroom 12 in the United States Courthouse located at 450 Golden Gate Avenue, San 

Francisco, California 94102, the Honorable William H. Alsup presiding, Plaintiff Candida 

Palega and Defendant The Property Sciences Group, Inc. will, and hereby do, move the Court 

for an Order preliminarily approving a proposed settlement of this action (the “Settlement”) and 

staying all other activity in this action. The proposed settlement is an individualized settlement, 

as opposed to a settlement of any class or collective claims. 

The grounds for this Motion are that the proposed Settlement is fair, reasonable, and 

adequate in that the parties are resolving a bona fide dispute over both liability and the amount 

of alleged damages.

This motion is based on the Memorandum of Points and Authorities submitted below, 

the concurrently filed and served Administrative Motion to File Under Seal and its supporting 

materials, and all other pleadings and matters of record. A true and correct copy of the 

Confidential Settlement Agreement and Full Release of All Claims has been filed with the 

Court conditionally under seal.

A Proposed Order is submitted herewith. 

DATED: June 20, 2018 Respectfully submitted,

KENNEDY HODGES, L.L.P.

By: /s/ Galvin B. Kennedy

Galvin B. Kennedy (admitted pro hac vice)

gkennedy@kennedyhodges.com

Texas State Bar No. 00796870

4409 Montrose Blvd., Suite 200

Houston, TX 77006

Telephone: (713) 523-0001

Facsimile: (713) 523-1116

LEAD ATTORNEY FOR PLAINTIFF

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OF COUNSEL:

Don Foty (admitted pro hac vice)

dfoty@kennedyhodges.com

Texas State Bar No. 24050022

William M. Hogg (admitted pro hac vice)

whogg@kennedyhodges.com

Texas State Bar No. 24087733

KENNEDY HODGES, LLP

4409 Montrose Blvd. Ste. 200

Houston, Texas 77054

Telephone: (713) 523-0001

Facsimile: (713) 523-1116

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MEMORANDUM OF POINTS AND AUTHORITIES

I. INTRODUCTION

The parties jointly submit this motion for preliminary approval of the proposed 

individual settlement between Plaintiff Candida Palega and Defendant The Property Sciences 

Group, Inc. A copy of the Settlement Agreement is filed conditionally under seal pursuant to the 

concurrently filed and served Administrative Motion to File Under Seal. The parties seek: 

preliminary approval of the terms of the Settlement and a stay of all non-settlement related 

activity in the Action and entry of a Preliminary Approval Order setting a Final Approval 

Hearing.

On March 23, 2018, the Court granted Plaintiff’s request to amend her Complaint in 

order to voluntarily remove her class and collective claims and proceed in her individual 

capacity. See Doc. 63. After granting Plaintiff’s request, the parties mediated with an 

experienced mediator, Mr. Louis Marlin with JAMS, on May 16, 2018, and reached an 

agreeable settlement the same day. 

The Parties believe this is a fair and reasonable settlement because both Plaintiff and 

Defendant are receiving the substantial benefit of a mutual releases of claims. The Parties have 

differing views on the strength of Plaintiff’s claims and alleged damages she believes she is 

owed. A material term to the parties reaching a settlement was the inclusion of a confidentiality 

provision that prohibits the disclosure, dissemination, and/or publicizing or causing or 

permitting such action regarding any of the terms of the Agreement. Accordingly, an 

Administrative Motion to File Under Seal has been filed and served concurrently with this 

motion. The Parties jointly stipulate to that application. 

The Settlement is an individualized settlement only, meaning it is not intended to release 

any class or collective claims that were or could be asserted by individuals other than Plaintiff. 

The Settlement does not depend on any fees or costs awarded and the parties agree to a mutual 

waiver of fees and costs as a part of the settlement. Moreover, the parties expressly warrant and 

agree that this settlement is not intended to impact the valuation, nor the viability, of any claims 

by any other purported plaintiff against Defendant, whether on a class, collective, 

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representative, or individual basis. 

The Parties reached a settlement following arm’s-length negotiations with an 

experienced mediator, Louis Marlin, who facilitated a mutually agreeable resolution between 

Plaintiff and Defendant.

Therefore, the Parties believe that the Settlement is fair, reasonable, and adequate and 

therefore the Preliminary Approval Order should be entered.

II. BACKGROUND

On February 22, 2017, Plaintiff Candida Palega filed this action alleging that The 

Property Sciences Group, Inc. misclassified her as exempt from overtime, failed to reimburse 

her for all reasonable and necessary business expense, provided her improper wage statements, 

failed to provide meal and rest breaks pursuant to California law, failed to pay all wages upon 

separation of employment, and asserted a derivative violation of California Business & 

Professions Code §§ 17200, et seq. (through violation of California Labor Code § 2802 and/or 

California Labor Code § 226). See Doc. 1. Plaintiff originally sought to bring this lawsuit as a 

class and collective action under the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. and as a 

Rule 23 Class Action under the California Labor Code. Id. Plaintiff thereafter sought, and the 

Court granted, to dismiss her class and collective claims, and proceed in this action in her 

individual capacity only. See Doc. 63. Pursuant to Plaintiff’s First Amended Complaint, 

Plaintiff sought damages only in her individual capacity.

Since the inception of this case, the Parties have engaged in extensive merits-based 

discovery. Both parties served initial disclosures, documents requests and interrogatories. The 

Parties have conducted depositions including Plaintiff Palega and Defendant’s Rule 30(b)(6) 

corporate representatives. Defendant designated its founder and CEO, Paul Chandler, and its 

Vice President of Defendant’s Residential Division, David Kim, as its corporate representatives. 

Plaintiff has produced 107 pages of documents, and has propounded seventeen interrogatories

and eighteen requests for production on Defendant. Defendant has produced more than 4,500 

pages of documents, and propounded twenty-four interrogatories and twenty requests for 

production on Plaintiff. These discovery responses include both traditional and electronic 

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discovery. In advance of the mediation, Plaintiff analyzed the pay data and deposition testimony 

to estimate potential recoveries on Ms. Palega’s individual claims using Plaintiff’s proposed 

methodology. 

III. SETTLEMENT

On May 16, 2018, the Parties participated in an all-day mediation session with Louis 

Marlin, a mediator with extensive experience in wage and hour cases. Mr. Marlin played an 

active role in the settlement negotiations, including identifying each sides’ strengths, 

weaknesses, and potential risks. Mr. Marlin also had the benefit of detailed briefs and position 

statements, including relevant case law and Plaintiff’s damage model. This process culminated 

in an arm’s-length mediation agreement, guided by Mr. Marlin’s neutral oversight.

The Parties believe they reached a fair and reasonable settlement because both Plaintiff 

and Defendant are receiving the substantial benefit of a mutual releases of claims. The Parties 

have differing views on the strength of Plaintiff’s claims and alleged damages she believes she 

is owed. A material term to the parties reaching a settlement was the inclusion of a 

confidentiality provision that prohibits the disclosure, dissemination, and/or publicizing or 

causing or permitting such action regarding any of the terms of the Agreement. Accordingly, an 

Administrative Motion to File Under Seal has been filed and served concurrently with this 

motion. The Parties jointly stipulate to that application. 

IV. THE COURT SHOULD PRELIMINARILY APPROVE THE SETTLEMENT

Settlements of private FLSA claims generally require court approval. Till v. Saks 

Incorporated, No. C 11-00504 SBA, C 12-03903 SBA, 2014 WL 1230604, at *1 (N.D. Cal. 

Mar. 21, 2014) (citing Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir. 

1982)). In reviewing an FLSA settlement, the district court’s “[o]bligation is not to act as 

caretaker but as gatekeeper; [rather,] it must ensure that private FLSA settlements are 

appropriate given the FLSA’s purposes and that such settlements do not undermine the Act’s 

purposes.” Id. (quoting Goudie v. Cable Commc’ns, Inc., No. CV 08-507-AC, 2009 WL 88336, 

at *1 (D. Or. Jan. 12, 2009)). “The salient question for purposes of approving a FLSA 

settlement is whether is constitutes a ‘fair and reasonable resolution of a bona fide dispute.’” Id.

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(citing Lynn’s Food Stores, 679 F.2d at 1353). “If the settlement reflects a reasonable 

compromise over issues that are actually in dispute, the Court may approve the settlement ‘in 

order to promote the policy of encouraging settlement in litigation.’” McKeen-Chaplin v. 

Franklin American Mortg. Co., No. C 10-5243 SBA, 2012 WL 6629608, at *2 (N.D. Cal. Dec. 

19, 2012) (quoting in part Lynn’s Food Stores, 679 F.2d at 1354).

Under these criteria, Plaintiff respectfully submits that preliminary approval of the 

proposed Settlement should be granted.

A. The Settlement Agreement Resulted from Arm’s-Length Negotiation and Is Not the 

Produce of Collusion.

The Court should look to whether the proposed settlement appears to be the product of 

collusion among the negotiating parties. In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 458 

(9th Cir. 2000), as amended (June 19, 2000). In applying this factor, courts give substantial 

weight to the experience of the attorneys who prosecuted the case and negotiated the settlement. 

See In re Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 1080 (N.D. Cal. 2007); see also 

Hanlon, 150 F.3d at 1027 (courts are deferential “to the private consensual decisions of the 

parties.”) (citing Officers for Justice v. Civil Serv. Comm’n., 688 F.2d 615, 625 (9th Cir. 1982)). 

Indeed, when a settlement is negotiated at ’arm’s-length by experienced counsel, there is a

presumption that it is fair and reasonable. See Tableware, 484 F. Supp. 2d at 1080; City P’ship, 

100 F.3d at 1043 (“When sufficient discovery has been provided and the parties have bargained 

at arm’s-length, there is a presumption in favor of the settlement.”). 

To that end, the courts have recognized “[t]he assistance of an experienced mediator in 

the settlement process confirms that the settlement is non-collusive.” Satchell v. Fed. Express 

Corp., No. C03-cv-2659 SI, 2007 WL 1114010, at *4 (N.D. Cal. Apr. 13, 2007); In re Immune 

Response Sec. Litig., 497 F. Supp. 2d 1166, 1171 (S.D. Cal. 2007.

Here, both sides heeded the Court’s directive that “it is better to develop and to present a 

proposed compromise after class certification, after diligent discovery on the merits, and after

the damage study has been finalized.” (ECF No. 27 (“Notice Regarding Factors to Be Evaluated 

For Any Proposed Class Settlement”), § 10 (emphasis in original).) Specifically, the Parties did 

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not discuss settlement of any claims until after the Court granted Plaintiff’s Motion to Amend 

her Original Complaint to remove her class and collective claims. By that point in time, the 

Parties had already participated in written discovery and conducted substantive depositions. 

The proposed Settlement here is the produce of extensive, arm’s-length negotiations, 

which included an all-day mediation session with Louis Marlin -- a private mediator 

experienced in wage and hour litigation, which commenced only after the Parties had the benefit 

of the Court’s order granting Plaintiff’s Motion for Leave to Amend. Counsel were thus able to 

make informed assessments regarding the merits of their claims and defenses. See In re Charles 

Schwab Corp. Sec. Litig., No. C 08-01510 WHA, 2011 WL 1481424, at *5 (N.D. Cal. Apr. 19, 

2011) (“the class settlements were reached on the eve of trial when class counsel had completed 

discovery and had conducted extensive motion practice and where thus well aware of the issues 

and attendant risks involved in going to trial as well as the adequacy of the amount of the class 

settlement.”). The negotiations were informed by the knowledge Plaintiff’s counsel gained 

through discovery and motion practice, as well as the rulings in this litigation. Based on the 

familiarity with the factual and legal issues, and armed with a thorough understanding of the 

strengths and weaknesses of the claims at issue, the Parties were able to negotiate a fair 

settlement, taking into account the costs and risks of continued litigation. The negotiations were 

at all times hard-fought and, through the guidance and oversight of a neutral mediator, have 

produced a result that the Parties believe to be in their respective interests. See Zynga, Inc., 2015 

WL 6471171, at *9 (“The use of a mediator and the presence of discovery ‘support the 

conclusion that the Plaintiff was appropriately informed in negotiating a settlement.’”).

Plaintiff’s counsel has carefully evaluated the merits of Plaintiff’s case, concluding that 

Plaintiff has a strong case and that there is sufficient evidence to proceed to a jury. Plaintiff’s 

counsel does recognize, however, that there exists challenges in this litigation that could pose 

significant risks regarding Plaintiff’s ability to prevail and the scope of damages if the case were 

to proceed to trial. Even if Plaintiff emerged victorious, there can be no doubt that such a trial 

would be lengthy and costly for all sides. See In re Charles Schwab Corp. Sec. Litig., 2011 WL 

1481424, at *5 (N.D. Cal. Apr. 19, 2011) (approving settlement; “prosecuting these claims 

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through trial and subsequent appeals would have involved significant risk, expense, and delay to 

any potential recovery”). As such, Plaintiff’s counsel believes the Settlement is fair, reasonable 

and adequate, and in the best interest of Plaintiff. See, e.g., In re NVIDIA Corp. Derivative 

Litig., No. C-06-06110-SBA (JCS), 2008 WL 5382544, at *4 (N.D. Cal. Dec. 22, 2008) 

(“[S]ignificant weight should be attributed to counsel’s belief that settlement is in the best 

interest of those affected by the settlement.”); In re Omnivision Techs., Inc., 559 F. Supp. 2d 

1036, 1043 (N.D. Cal. 2008) (counsel’s recommendation weighed in favor of settlement, given 

counsel’s familiarity with the dispute and significant experience in securities litigation).

This proposed settlement constitutes a fair and reasonable resolution of a bona fide 

dispute. Taking into account the disputed number of hours worked by Plaintiff, the disputed 

amount of alleged business expenses Plaintiff claimed she was owed, the disputed meal and rest 

period claims, the disputed wage statement claims, the dispute over whether Defendant’s 

alleged violation of the FLSA was willful, the dispute as to whether Plaintiff was entitled to 

liquidated damages, as well as the potential viability of any breach of contract claims that 

Defendant might have against Plaintiff, it is clear there are numerous variables affecting the 

potential value of Plaintiff’s claims. Moreover, considering Defendant’s continued denial of 

liability and assertion that it would have vigorously defended the action if Plaintiff were to 

litigate further and potentially assert counterclaims for breach of contract and breach of duty 

against Plaintiff, there is a distinct possibility that Plaintiff would have recovered nothing has 

she pursued the action through trial. Accordingly, the parties believe the settlement reached 

constitutes fair value for the claims asserted by Plaintiff. 

B. The Settlement Has No Obvious Deficiencies and Falls Within the Range for 

Approval.

When evaluating the adequacy of a settlement, courts balance a plaintiff’s expected 

recovery against the value of the offer. Tableware, 484 F. Supp. 2d at 1080; Portal Software, 

2007 WL 1991529, at *6. This case involves a range of disputed issues including the merits of 

Plaintiff’s claims, including wage claims, expense reimbursement, and liquidated damages. 

While Plaintiff believes that she has meritorious claims, Defendant denies, and continues to 

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deny, each and all of the claims and contentions asserted by Plaintiff. Likewise, Defendant 

disputes Plaintiff’s damages calculation. Defendant also maintained potential counterclaims 

against Plaintiff, including potential breach of contract and breach of duty claims.

The Parties believe they reached a fair and reasonable settlement because both Plaintiff 

and Defendant are receiving the substantial benefit of a mutual releases of claims. The Parties 

have differing views on the strength of Plaintiff’s claims and alleged damages she believes she 

is owed. A material term to the parties reaching a settlement was the inclusion of a 

confidentiality provision that prohibits the disclosure, dissemination, and/or publicizing or 

causing or permitting such action regarding any of the terms of the Agreement. Accordingly, an 

Administrative Motion to File Under Seal has been filed and served concurrently with this 

motion. The Parties jointly stipulate to that application. 

C. Attorneys’ Fees and Expenses are Separate from Plaintiff’s Settlement Award.

Pursuant to the proposed Settlement, Plaintiff’s counsel’s attorney’s fees are separated 

from any other consideration between the Parties. Any such award constitutes a small fraction 

of Plaintiff’s counsel’s actual lodestar in attorney’s fees. This portion of attorneys’ fees will not 

in any way diminish the amount directed toward Plaintiff in the proposed Settlement. 

D. Schedule for Final Approval Proceedings.

Unless the Court sees fit to grant final approval of the proposed Settlement as described 

herein, the Parties propose the final approval hearing take place at least 45 days after 

preliminary approval. 

CONCLUSION

Accordingly, based on the Settlement Agreement, this memorandum of law and the prior 

proceedings in this matter, the Parties respectfully request the Court grant preliminary approval 

of the proposed Settlement, and enter the proposed Preliminary Approval Order submitted 

herewith.

Respectfully submitted,

DATED: June 20, 2018

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KENNEDY HODGES, L.L.P.

By: /s/ Galvin B. Kennedy

Galvin B. Kennedy

Attorneys for Plaintiff

MANNING & KASS, ELLROD, 

RAMIREZ, TRESTER, L.L.P.

By: /s/ Jordon R. Ferguson

Jordon R. Ferguson

Attorneys for Defendant

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