Free Stipulation - District Court of Colorado - Colorado

Case 1:03-cv-02485-MSK-PAC

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Filed 02/17/2006

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UNITED STATES DISTRICT COURT DISTRICT OF COLORADO CASE NO. 03-cv-02485-MSK-PAC Camille Melonakis-Kurz, et al. Plaintiffs, v. Heartland Home Finance, Inc., Defendant. JOINT STIPULATION REGARDING EVIDENTIARY HEARING ON MOTION TO DECERTIFY THE CLASS ________________________________________________________________________ The parties, through their counsel, in response to the Court's Order of February 10, 2006, hereby present the following Stipulation setting forth what they believe the relevant factual issues to be relating to the decertification evidentiary hearing set for May 11 and 12, 2006. As this Court noted on February 10, 2006, the Court in ruling on Defendant's Motion for Decertification will use the second stage analysis, which takes into account the: (1) disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to defendant which appear available to be individual to each plaintiff; and (3) fairness and procedural considerations. Thiessen v. General Electric Capital Corp., 267 F.3d 1095, 1102-03 (10th Cir. 2001). (The fourth

factor: whether the plaintiffs made the filings required by the ADEA before instituting suit, does not appear applicable, and the parties stipulate that it does not apply.) The parties have set forth below what they believe the issues to be relating to this Court's ruling on decertification.

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DEFENDANT'S POSITION: All of the following items remain factually disputed, and will be subject to the evidentiary hearing involving the evidence, witnesses, and deposition testimony acquired during discovery:

1. Whether there is a nationwide policy to comply with, or violate, the FLSA. a. For example, whether Defendant's upper management told people not to work more than 40 hours, as opposed to not to record more than 40 hours. 2. Whether individual analysis of whether a particular plaintiff loan officer qualifies as administratively exempt under the FLSA precludes class treatment. a. Whether loan officers had control and discretion over the fees that they charged on loans (which meant that they had control to bind the company, and that they also had control over their own compensation). b. Whether the fees charged on a loan (whether as a total amount or a percentage of loan amount) varied a great deal even for a single loan officer ­ which meant that compensation for loan officers would vary a great deal. c. Whether a spectrum of independent judgment and discretion existed from self-described "waitresses" to other loan officers who described themselves as "experts" and having significant independent judgment and discretion. d. Whether, and to what extent, loan officers went to their managers for any guidance and/or worked independently of their managers. e. Whether, and to what extent, loan officers provided training to other loan officers, and bounced ideas off each other. f. Whether, and to what extent, loan officers said they did "cold calling", versus Defendant providing leads which meant that pre-screening already had taken place. g. Whether, and to what extent, loan officers did their own marketing. h. Whether, and to what extent, loan officers performed branch manager duties in the absence of branch managers. 3. Whether differences in location and individual employee circumstances preclude class treatment.

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a. Some plaintiffs employed prior to draw being initiated, some plaintiffs employed after draw was initiated, some plaintiffs employed both before and after. b. Some plaintiffs employed prior to timesheets being initiated, some plaintiffs employed after timesheets initiated, some plaintiffs employed both before and after c. Some plaintiffs employed prior to brokering policy change, some employed after, and some employed both before and after d. Some opt-ins closed mostly HHF loans e. Some opt-ins closed mostly brokered loans f. Some opt-ins closed a mix of HHF and brokered loans g. Some opt-ins closed mostly conventional loans h. Some opt-ins closed mostly non-conventional loans i. Some opt-ins closed a mix of conventional and non-conventional loans j. Whether the fees charged by one loan officer as compared to another varied, and what the significance of this might be. k. Whether each branch manager had his or her own method of handling timesheets. l. Whether each branch manager had a different approach to office hours and to loan officer hours (even within a single geographic location). m. Whether loan officer work ethics or work habits were different from those of other employees. In other words, they worked one set of hours or had one set of habits, but this could not be said of others. n. Whether some loan officers claim that they did not record all of their hours on timesheets, versus others who claimed they did. o. Whether, and to what extent, differences exist in how time was recorded on time sheets or reported to branch managers. p. Whether, and to what extent, loan officer overtime was the result of working from home. 4. Whether defenses individual to each loan officer preclude class treatment.

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a. Whether some loan officers may be subject to the "suffer or permit" defense in that they failed to notify management they were working overtime from home or otherwise. b. Whether some loan officers are barred by the statute of limitations. c. Whether different loan officers have different choice of forum clauses in the Defendant Employment Agreements. d. Whether some loan officers filed for bankruptcy ­ if they didn't identify claims on bankruptcy schedules, then those claims are gone. If they did, then property of the bankruptcy estate unless released by trustee. e. Whether a number of loan officers accepted DOL settlements and are precluded from participating in suit. f. Whether a number of loan officers had outside activities, second jobs, medical conditions, etc., that forced them to miss work on an ongoing basis or for certain period of time. g. Whether a number of loan officers have significant credibility issues: based on conflicts with particular managers; declarants who were deposed repeatedly were shown timesheets that contradicted their declaration testimony (each of these will be individualized); felony convictions; testimony of over-reporting of hours and/or that they were not actually working all of the time that they reported; and/or failure to appear for scheduled depositions.

Defendant maintains that the individualized nature of these factual issues mandates a series of mini-trials on liability alone, which could take six months or more to complete, apart from any determination of individual damages, and that this additional factor weighs against class treatment. PLAINTIFFS' POSITION: 1. NATIONWIDE POLICY: Defendant's nationwide policy of never paying any loan officer overtime ever is undisputed. Defendant admits that its loan officers were classified as non-exempt, overtime eligible employees, and regardless of whether overtime hours were recorded on their timesheets or not, Defendant admits that it never paid any of its loan officers overtime compensation.

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2. ADMINISTRATIVE EXEMPTION: After this Court's ruling on Plaintiffs' Motion for Summary Judgment, Plaintiffs believe liability will no longer be an issue. Even so, it is undisputed that Defendant does not meet the salary basis test prior to July 31, 2002 and after August 22, 2004 and therefore the administrative exemption does not apply and liability is certain as to those timeframes. 425 Plaintiffs have claims that fall either wholly or in part within those timeframes. Therefore, the only time frame Defendant asserts is at issue for purposes of liability is July 31, 2002 to August 22, 2004. It is Plaintiffs position, as set forth in detail in their Memorandum in Support of Their Motion for Summary Judgment, that Defendant does not meet the requisite "long test" administrative exemption standards during that timeframe either. Regardless, to the extent Defendant claims there are differences between Plaintiffs relating to the applicability of this exemption for that timeframe, Plaintiffs will present evidence and argument rebutting that there are any relevant differences. 3. EXECUTIVE EXEMPTION: Defendant asserts that fact disputes exist which relate solely to the executive exemption and not the administrative exemption. Because Defendant has not pled the executive exemption defense, these alleged factual issues are irrelevant. 4. LOCATION AND DIFFERENCES IN EMPLOYEE CIRCUMSTANCES: Defendant asserts that fact disputes exist relating to location and individual employee circumstances. The issues Defendant presents are irrelevant for decertification because no matter what happened at the individual branch level, Defendant maintained a national policy at the corporate level of never paying any loan officer any overtime compensation and the job duties and the manner in which they were performed remain the same nationwide. 5. DEFENSES AND DAMAGES: Defendant is asserting the same defense to all Plaintiffs, the administrative defense, which was discussed above. With respect to the other defenses asserted, those defenses go solely to damages. Differences in damages do not warrant decertification as this would defeat the collective action nature of the FLSA. See 29 U.S.C. § 216(b); Gold Strike Stamp Co. v. Christensen, 436 F2d 791, 796, 798 (10th Cir. 1970); see also Mendez v. Radec Corp., 232 F.R.D. 78, 92-93 (W.D. N.Y. 2005)(citing Blackie v. Barrack, 524 F.2d 891, 905 (9th Cir. 1975). Defendant also asserts that a choice of forum clause creates factual differences. However, Plaintiffs do not have a choice of forum clause in their employment agreement, only a statement of governing law for purposes of construing the contract. Since there is no contract dispute in this case, and therefore no interpretation of the contract is necessary, this defense is inapplicable.

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PRE-HEARING PREPARATION The evidentiary hearing has been set by the Court for May 11 and 12, 2006. Counsel for the parties have agreed to work together to identify specific witnesses and exhibits to be presented closer to the date of the hearing.

Dated: 02/17/06 NICHOLS KASTER & ANDERSON, PLLP

Dated: 02/17/06 ICE MILLER, LLP

/s Michele R. Fisher__________ Donald H. Nichols, MN Bar No. 78918 Paul J. Lukas, MN Bar No. 22084X Michele R. Fisher, MN Bar No. 303069 Jill M. Novak, MN Bar No. 343456 4600 IDS Center 80 South 8th Street Minneapolis, MN 55402 Telephone (612) 256-3200 ATTORNEYS FOR PLAINTIFFS

/s Steven F. Pockrass David J. Carr IN Bar No. 4241-49 Steven F. Pockrass IN No. 18836-49 One American Square, Suite 3100 Indianapolis, IN 46282 Telephone: (317) 236-2100

Sean R. Gallagher Hogan & Hartson LLP 1200 Seventeenth Street Suite 1500 Denver, CO 80202 (303) 454-2415 ATTORNEYS FOR DEFENDANT

INDY 1691564v1

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