Lofton v. Wells Fargo Home Mortg.
Annotate this CaseIn 2005 class counsel initiated a class action against Wells Fargo on behalf of thousands of mortgage consultants who had allegedly been misclassified as exempt employees. In 2006 ILG filed a putative class action alleging similar claims on behalf of a similar class. An ILG class was initially certified, but was decertified in 2010. Eventually, ILG filed multiple lawsuits, each with 30 to 90 plaintiffs, on behalf of 600 clients, including Maxon. ILG, Wells Fargo and class counsel mediated all pending claims. In 2011, class counsel moved for preliminary approval of a proposed class and settlement; Wells Fargo agreed to pay $19 million, including attorney fees to class counsel, to settle all class claims and $6 million for the ILG claims. At the preliminary approval hearing, the court was told that ILG’s clients would opt out of the class action. Contrary to that explanation, ILG assisted its class member clients in securing the benefits of the class action settlement rather than in opting out to seek recompense from the $6 million fund. ILG claimed that that settlement was for its attorney fees, but was willing to pay $1,750 to each plaintiff for a claim arguably not resolved in the class action. Maxon objected. The trial court issued a temporary restraining order requiring ILG to deposit the funds into escrow. The appeals court affirmed. The court presiding over the class action had jurisdiction to consider the propriety of the settlement of class member claims, even for class members represented by ILG and had a duty to ensure that ILG’s fees were reasonable in light of the overall result.
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