Barbara Waldrup v. Countrywide Financial Corporation

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’

Case No. 2:13-CV-08833-CAS (AGRx) Date March 30, 2020

2:16-CV-04166-CAS (AGRx)

Title Waldrup, et al. v. Countrywide Financial Corp., et al.

Williams, et al. v. Countrywide Financial Corp., et all.

Present: The Honorable CHRISTINA A. SNYDER

Catherine Jeang Laura Elias N/A

Deputy Clerk Court Reporter / Recorder Tape No.

Attorneys Present for Plaintiffs: Attorneys Present for Defendants:

Daniel Alberstone Douglas Thompson

Mark Pifko Linda Hsu

Roland Tellis Craig Singer

Evan Zucker Brooks Brown

Christopher Pitoun Thomas Hefferon

Steve Berman

Elizabeth Williams, Pro Per

Proceedings: TELEPHONE HEARING:

PLAINTIFFS’ MOTION FOR REMOVAL OF ELIZABETH

WILLIAMS AS NAMED PLAINTIFF AND CLASS

REPRESENTATIVE (Docket No. 13-CV-08833, ECF No. 458)

(filed February 19, 2020)

PLAINTIFFS’ MOTION FOR REMOVAL OF ELIZABETH

WILLIAMS AS NAMED PLAINTIFF AND CLASS

REPRESENTATIVE (Docket No. 16-CV-04166, ECF No. 218)

(filed February 19, 2020)

I. INTRODUCTION & BACKGROUND

Plaintiff Elizabeth Williams, together with Barbara Waldrup, Beckie Reaster, and

Rebecca Murphy, are named plaintiffs and Court-appointed class representatives in this

class action against defendants Countrywide Financial Corp., Countrywide Home Loans,

Bank of America, N.A., Bank of America Corp., Landsafe, Inc., and Land Safe Appraisal

Services, Inc. Plaintiffs allege that defendants fraudulently solicited and performed real

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’

Case No. 2:13-CV-08833-CAS (AGRx) Date March 30, 2020

2:16-CV-04166-CAS (AGRx)

Title Waldrup, et al. v. Countrywide Financial Corp., et al.

Williams, et al. v. Countrywide Financial Corp., et all.

estate appraisals in violation of California’s Unfair Competition Law (Cal. Bus. & Prof.

Code § 17200), and the Racketeer Influenced and Corrupt Organizations Act (18 U.S.C.

§ 1962). Plaintiff Waldrup also asserts claims under Texas law for unjust enrichment.

Following multiple mediation sessions supervised by Court-appointed mediator Eric

D. Green and numerous conferences between counsel, the parties agreed upon and

executed a memorandum of understanding reflecting the terms of a proposed settlement on

November 4, 2019. See ECF No. 453.! Counsel for the parties subsequently prepared and

submitted a formal settlement agreement for preliminary approval with the Court on

February 19, 2020. See ECF No. 457 (the “Settlement Agreement’). Pursuant to the

agreement, defendants agreed to pay $250 million in cash (plus up to an additional $2.5

million for settlement administration costs) which will be disbursed to approximately 2.3

million members of the settlement class without requiring the submission of proofs of claim

by class members. Id. It is estimated that each class member will receive at least 22% of

the appraisal fee they paid to defendants. Id. In addition, each class representative 1s

proposed to receive an incentive compensation award of $15,000. Id. The parties further

agreed to cap an attorneys’ fee award to plaintiffs’ counsel at 25% of the common fund.

Id.

Three of the four class representatives—Waldrup, Reaster, and Murphy—signed the

Settlement Agreement. Williams—whose signature is not required for the settlement

agreement to become effective, see Settlement Agreement at § 6.19—did not. On February

19, 2020, class counsel filed the instant motion to (i) remove Williams as a class

representative and (11) withdraw from representing Williams in any capacity other than as

class counsel, if she chooses to remain in the class. See ECF No. 458 (“Mot.”). Defendants

filed a brief in support of the motion on March 9, 2020. See ECF No. 463 (“Defs.’ Resp.”).

Williams, appearing in propria persona, filed an opposition on March 16, 2020, that was

not received by the Court or the parties until March 29, 2020. See ECF No. 473 (“Opp.”).

On March 23, 2020, plaintiffs filed a reply, noting the absence (at that time) of any

opposition. See ECF Nos. 469 (“Reply”).

All docket citations are to the Waldrup matter, No. 13-CV-08833, unless otherwise

noted.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’

Case No. 2:13-CV-08833-CAS (AGRx) Date March 30, 2020

2:16-CV-04166-CAS (AGRx)

Title Waldrup, et al. v. Countrywide Financial Corp., et al.

Williams, et al. v. Countrywide Financial Corp., et all.

The Court held a telephonic hearing on March 30, 2020, and heard argument in

camera from Williams and class counsel. Having considered the parties’ arguments, the

Court finds and concludes as follows.

Il. DISCUSSION

The Court “in its discretion may remove a named plaintiff as a class representative,

should it be demonstrated that the named plaintiff does not meet the criteria of Rule 23(a),”

unless such removal “would unfairly prejudice the parties or the class.” Lancaster v. Tilton,

No. C79-01630 WHA, 2007 WL 1807953, at *2 (N.D. Cal. June 21, 2007) (citing In re

United States Fin. Sec. Litig., 69 F.R.D. 24, 38 (S.D. Cal. 1975)). Rule 23(a)(4) requires

a Class representative to “fairly and adequately protect the interests of the class.” See Fed.

R. Civ. Proc. 23(a)(4). Adequacy entails a two-prong inquiry: “(1) do the named plaintiffs

and their counsel have any conflicts of interest with other class members and (2) will the

named plaintiffs and their counsel prosecute the action vigorously on behalf of the class?”

Evon v. Law Offices of Sidney Mickell, 688 F.3d 1015, 1031 (9th Cir. 2012) (quoting

Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir. 1998)). “[E]vidence of a

fundamental conflict between [a class representative’s] position and that of many class

members” precludes a finding of adequacy. See Brown v. Am. Airlines, Inc., 285 F.R.D.

546, 559 (C.D. Cal. 2011).

Class counsel contends that the settlement represents the best possible settlement of

the class claims, and that Williams should be removed as class representative because the

nature of her opposition to the settlement places her in fundamental conflict with members

of the class. Williams denies the existence of any conflict, and contends that the settlement

fails to sufficiently compensate her, or the class, for their injuries. She also objects, in

general, on grounds that class representatives were not adequately involved in the

settlement negotiations.

Based on the presentations made by the parties in their papers and at the hearing held

in camera, the Court finds that the attorney-client relationship between class counsel and

Williams has broken down. Given that breakdown, and given class counsel’s reasoned

belief that the settlement is fair, adequate, and reasonable, if not the best settlement

available for the class, the Court concludes that there would be a conflict with the class if

Williams remained a class representative in this case. See, e.g., Nunez v. BAE Sys. San

Diego Ship Repair Inc., 292 F. Supp. 3d 1018, 1059-61 (S._D. Cal. 2017) (concluding that

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’

Case No. 2:13-CV-08833-CAS (AGRx) Date March 30, 2020

2:16-CV-04166-CAS (AGRx)

Title Waldrup, et al. v. Countrywide Financial Corp., et al.

Williams, et al. v. Countrywide Financial Corp., et all.

“because Nunez continues to object to the Settlement” that plaintiff's counsel found to be

in the class’s best interest “he stands in direct conflict with the Class and thus cannot

continue to serve as an adequate Class Representative”). The Court is also concerned that

Williams’ objections may be premised, at least in part, on the benefits she will receive

pursuant to the settlement if it is approved by the Court.

The Court further finds that no party will be prejudiced by removing Williams as

class representative. The Court appointed three other plaintiffs to serve as class

representatives—Waldrup, Reaster, and Murphy—to represent the class. See ECF No.

248. These individuals have signed the Settlement Agreement and are prepared to fulfill

their obligations to the class. See Pitoun Decl., § 7.

Accordingly, Williams shall be removed as a class representative, and class counsel

shall be permitted to withdraw from representing Williams in any capacity, other than as

class counsel if she chooses to remain in the class. See Nunez, 292 F. Supp. 3d at 1059-60

(citing Heit v. Van Ochten, 126 F. Supp. 2d 487, 494 (W_D. Mich. 2001), which held that

class counsel “cannot represent” a class representative “because he objects to the Proposed

Settlement, which Plaintiffs counsel argues is in the class’s interest’).

Il. CONCLUSION

In accordance with the foregoing, the Court GRANTS plaintiffs’ motion to remove

Williams as a class representative. Plaintiffs’ counsel shall be permitted to withdraw from

representing Williams in any capacity other than as class counsel, if she chooses to remain

in the class.

IT IS SO ORDERED.

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