"BofA Unit To Pay $36M To Settle Appraiser OT Row"
Law360, August 26, 2015 (link)
Bank of America Corp.'s appraisal subsidiary, Landsafe Appraisal Services Inc., will pay $36 million to settle a class action accusing it of misclassifying residential real estate appraisers as exempt from overtime, according to a Monday filing in California federal court.
Seeking preliminary approval of the settlement, plaintiffs' attorneys heralded the "enormous payday" that would come with the deal, under which 365 class members would receive approximately $100,000 each.
Bank of America had claimed the appraisers fell under a number of "white collar" exemptions for overtime under the Fair Labor Standards Act and California state labor laws. Plaintiffs claimed the appraisers didn't sell anything, but their work was essential to the production of residential loan sales.
The settlement announced Monday came after a judge in May granted plaintiffs' partial motion for summary judgment. While the matter was slated for trial on Aug. 31, the parties resolved the case in their third full day of mediation over three years, according to Monday's filing.
Bryan J. Schwartz of Bryan Schwartz Law, which is representing the plaintiffs, told Law360 on Tuesday that, "We are thrilled that we were able to obtain such substantial relief for the class after hard-fought litigation, and feel optimistic about the court approving the settlement, because it is such a monumental victory for the class."
Bank of America told Law360 on Tuesday that Landsafe is pleased to bring the matter to resolution.
"We continue to believe the past decision to classify staff appraisers, who are responsible for the analysis of each property, have assignments that clearly are professional in nature, and as such, the classification of these positions as exempt was appropriate," Bank of America said. "However, we agreed to settle to avoid further legal costs."
Landsafe provides market value appraisals for properties in connection with residential mortgage loan transaction to subsidiaries and divisions of Bank of America, court filings said. Appraisers are tasked with appraising and generating appraisal reports for properties on which Bank of America offers mortgages. They are paid on commission, according to court papers.
Plaintiffs, who filed the suit in April 2013, claimed Bank of America forced them to work nights, weekends and holidays without overtime pay, and didn't provide them with meal and rest periods. The suit further alleged that the appraisers didn't receive itemized wage statements and reimbursements.
Judge David O. Carter in December 2013 granted conditional class certification under the FLSA, according to court papers.
Schwartz also represented JPMorgan Chase & Co. employees in a similar suit that was resolved in October of last year. JPMorgan agreed to pay $2.4 million to resolve a putative class action alleging the company incorrectly classified commercial real estate appraisers as exempt from overtime.
Under the terms of that deal, which would provide approximately $9,500 each to 158 employees and $800,000 in attorneys' fees to the employees' counsel, JPMorgan also agreed to reclassify certain commercial real estate appraisers as non-exempt from overtime, according to court papers.
Plaintiffs are represented by Bryan J. Schwartz, Rachel M. Terp and Eduard R. Meleshinsky of Bryan Schwartz Law, and Wilmer J. Harris, Michael D. Seplow, Aidan C. McGlaze, and Isabel Daniels of Schonbrun DeSimone Seplow Harris & Hoffman LLP.
Bank of America and Landsafe are represented by Matthew C. Kane, Michael D. Mandel, John A. Van Hook and Christopher A. Killens of McGuireWoods LLP.
The case is Terry P. Boyd et al. v. Bank of America Corp. et al., case number 8:13-cv-00561, in the U.S. District Court for the Central District of California.
--Editing by Emily Kokoll.