Hotchkiss vs. Amarik Properties, Inc.

Plaintiff is ordered to give notice of this ruling to Defendant.

2 30-2023-01359910 The tentative ruling is to continue the Final Report Hearing to Hotchkiss vs. December 7, 2026 at 1:30 p.m. to clarify that the settlement has Amarik Properties, been administered in accordance with the court’s October 13, Inc. 2025 Order granting final approval and the settlement agreement that the court approved. All supporting papers must be filed at least 16 days before the Final Report Hearing date.

The escalator clause in the parties’ settlement agreement states: 3. Escalator Clause. The Parties have agreed to the terms set forth herein based on their estimate that the PAGA Members have worked 2,700 pay periods during the PAGA Period. However, should the Administrator determine that actual number of pay periods worked by the PAGA Members is more than 10% larger than this estimate (i.e. more than 2,970 pay periods), then Defendant shall have the option of either: (a) increasing the MSA pro rata for every additional pay period worked by the PAGA Members above that 10% threshold (i.e. if the actual number of pay periods worked by the PAGA Members is 11% larger than this estimate, the MSA shall be increased by 1%) or (b) ending the PAGA Period on the date that the number of pay periods worked by the PAGA Members equals 2,970, in which case no adjustment to the MSA shall be made. (Settlement § III(3).)

The settlement administrator states that the escalator clause was triggered because the total number of Pay Periods was four thousand and eighty-two (4,082), which was more than 10% over the estimated 2,970 pay periods. The administrator explained that the 41.19% excess results in a required increase to the Gross Settlement Amount of $20,592.59. However, the settlement administrator states that Defendant deposited only the original Gross Settlement Amount of $70,407.41, not the escalated amount totaling $90,000.00.

Further, the administrator states that “[t]he Court approved Plaintiff’s Counsel attorneys’ fees ($21,122.22 plus Escalator Clause Fee of $6,177.78),” but the court did no such thing. The court approved a fixed amount of attorney’s fees of $21,122.22 and never authorized any increase in attorney’s fees based on the escalator clause. (ROA 62, 75 [both stating that the court approved $21,122.22 in attorney’s fees].) There is also no language in the settlement agreement that provides for an increase in attorney’s fees if the escalator clause is triggered.

Further, the deposit amount of $70,407.41, and the distribution of attorneys’ fees ($21,122.22 plus Escalator Clause Fee of $6,177.78), attorney costs ($14,397.85), Enhancement Payment to Plaintiff ($1,000.00), and Administration Costs ($3,998.49), result in a Net Settlement Amount of $23,711.07. This amount should have been divided 75% to the LWDA ($17,783.30), and 25% to aggrieved employees ($5,927.77). However, the settlement administrator distributed $17,992.19 to the LWDA and $5,974.06 to the aggrieved employees. These numbers do not add up.

As a result of Defendant’s failure to deposit the increased amount based on the escalator clause and the administrator’s unauthorized distribution of additional attorney’s fees to Plaintiff’s counsel, as well as the math miscalculations above, the administrator’s calculation after the escalator clause somehow triggered a decreased amount distributed to aggrieved employees from the $7,472.21 approved by the court in its October 13, 2025 Order, to only $5,974.06.

The following should have been the settlement distribution amounts after the escalator clause was applied: · GSA: $90,000.00 · Attorney’s fees: $21,122.22 · Attorney costs: $14,397.85 · Enhancement award: $1,000.00 · Administrator costs: $3,998.49 · NSA/PAGA Penalties: $49,481.44 o 75% PAGA penalties to LWDA: $37,111.08 o 25% PAGA penalties to aggrieved employees: $12,370.36 The parties and the administrator must explain the discrepancies between the court’s final approval order and the actions taken by the settlement administrator. The parties must also provide a proposal as to how the parties plan to ensure that the correct amounts will be distributed to the LWDA ($37,111.08) and to the aggrieved employees ($12,370.36).

Plaintiff is ordered to give notice of this ruling to Defendant.

3 30-2024-01380407 The tentative ruling is to continue the hearing on Plaintiff Joseph Villanueva vs. Villanueva’s (“Plaintiff”) Motion for Approval of Settlement Newport Pacific Under Private Attorneys General Act (“PAGA”) to December 14, Capital Co., Inc. 2025 at 1:30 p.m.

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