United States District Court, D. Nevada
ALICE SINANYAN, an individual; JAMES KOURY, an individual and trustee of the Koury Family Trust; and SEHAK TUNA, an individual, on behalf of themselves and others similarly situated, Plaintiffs,
LUXURY SUITES INTERNATIONAL, LLC, a Nevada limited liability company; RE/MAX PROPERTIES, LLC, a Nevada limited liability company; JETLIVING HOTELS, LLC, a Nevada limited liability company; and DOES 1 through 100, inclusive, Defendants.
M Navarro, Chief-Judge United States District Judge
action involves claims brought by Alice Sinanyan
(“Sinayan”) and Jim Koury (“Koury”)
(collectively “Plaintiffs”), individually and on
behalf of a putative class of approximately 347 condominium
owners, against property rental manager Luxury Suites
International, LLC (“LSI”) and its predecessor
Re/Max Properties, LLC (“Re/Max”).Plaintiffs allege
that LSI violated its contractual, statutory, and common law
duties by failing to disclose its collection of a
“resort fee” from rental guests, and the parties
have now reached a settlement. Pending before the Court is
the Joint Motion for an Order, (ECF No. 114), filed by both
parties requesting that the Court grant provisional approval
of the proposed settlement agreement and preliminarily
certify Plaintiffs' proposed class action for purposes of
settlement. For the reasons stated herein, the Motion is
February 9, 2015, Plaintiffs filed the instant action
alleging various state law violations on behalf of a putative
class comprising all condominium owners at the Signature at
MGM Grand (“The Signature”) who contracted with
LSI to manage the rental of their condominium units from
January 5, 2009, to January 5, 2015 (“Putative
Class”). (First Am. Compl. ¶ 75, ECF No. 32).
Specifically, Plaintiffs alleges that pursuant to the LSI
Rental Agreement, members of the Putative Class were entitled
to 65% of a “resort fee” collected by LSI from
rental guests. (Id. ¶ 88). According to
Plaintiffs, not only did LSI retain all resort fees, LSI also
failed to disclose that it was collecting the fee.
(Id. ¶ 89). Based on these allegations, the
Complaint alleges the following causes of action against LSI:
(1) breach of contract; (2) breach of implied covenant of
good faith and fair dealing; (3) intentional
misrepresentation; (4) fraudulent concealment; (5) negligent
misrepresentation; (6) violation of Nevada Revised Statutes
§ 41.600; (7) breach of fiduciary duty; and (8) unjust
August 22, 2016, the parties reached a tentative settlement
through mediation and subsequently submitted a proposed
settlement (“Proposed Settlement”) now before the
Court. (See Joint Mot. for Order 4:15-18, ECF No.
114). The total settlement amount is $525, 000.00
(“Settlement Amount”), which the parties propose
allocating in the following manner: (1) “attorney's
fees in the amount of twenty five percent (25%) of the total
settlement amounts”; (2) “costs not to exceed
Eighty-Eight Thousand Dollars and Zero Cents ($88,
000.00)”; (3) “an incentive payment in the amount
of Twenty Thousand Dollars and Zero Cents ($20, 000.00) to be
paid to Individual Plaintiff Sinanyan and Ten Thousand
Dollars and Zero Cents ($10, 000.00) to be paid to Individual
Plaintiff Koury”; (4) “administrative expenses in
the amount of Twelve Thousand Dollars and No Cents ($12,
000.00), but not to exceed Fifteen Thousand Dollars and No
Cents ($15, 000.00)”; and (5) an allocation of the
remaining proceeds “on a pro rata basis based
on the Resort Fees Collected by LSI from the rental of the
individual Putative Class member's unit divided by the
total Resorts Fees Collected by LSI from the rental of all
non-opt out Putative Class members' units.”
(Id. 6:22-7:9). The Proposed Settlement provides for
notice by direct mail to all Putative Class members
identified through LSI's business records. (Id.
instant Motion requests that the Court adopt the parties'
proposed order by: (1) granting preliminary approval of the
proposed class action Proposed Settlement; (2) provisionally
certifying the Putative Class; (3) approving the proposed
method and form of notice; and (4) scheduling a final
approval hearing. (Id. 4:20-22).
Ninth Circuit has declared that a strong judicial policy
favors settlement of class actions. Class Plaintiffs v.
City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992).
However, a class action may not be settled without court
approval. Fed.R.Civ.P. 23(e). When the parties to a putative
class action reach a settlement agreement prior to class
certification, “courts must peruse the proposed
compromise to ratify both the propriety of the certification
and the fairness of the settlement.” Staton v.
Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003). At the
preliminary stage, the court must first assess whether a
class exists. Id. (citing Amchem Prods. Inc. v.
Windsor, 521 U.S. 591, 620 (1997)).
the court must determine whether the proposed settlement
“is fundamentally fair, adequate, and
reasonable.” Hanlon v. Chrysler Corp., 150
F.3d 1011, 1026 (9th Cir. 1998). Pre-class certification
settlements “must withstand an even higher level of
scrutiny for evidence of collusion or other conflicts of
interest than is ordinarily required under Rule 23(e) before
securing the court's approval as fair.” In re
Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 946
(9th Cir. 2011). This heightened scrutiny “ensure[s]
that class representatives and their counsel do not secure a
disproportionate benefit ‘at the expense of the unnamed
plaintiffs who class counsel had a duty to
represent.'” Lane v. Facebook, Inc., 696
F.3d 811, 819 (9th Cir. 2012) (quoting Hanlon, 150
F.3d at 1027). As such, courts must evaluate the settlement
for evidence of collusion. Id.
court preliminarily certifies the class and finds the
proposed settlement fair to its members, the court schedules
a fairness hearing where it will make a final determination
as to the fairness of the class settlement. Finally, the
court must “direct notice in a reasonable manner to all
class members who would be bound by the proposal.”
Motion contends, inter alia, that the Court should
(1) certify the proposed Putative Class and (2) grant
preliminary approval of the Proposed Settlement.
Conditional Class Certification
seeks conditional certification of a settlement class under
Rule 23(a) and (b)(3) and satisfies all of Rule 23's
certification requirements. (See Joint Mot. for
Order 6:3-20, ECF No. 69). To obtain class certification, a
plaintiff must satisfy the four prerequisites identified in
Rule 23(a) as well as one of the three subdivisions of Rule
23(b). Amchem Prods., 521 U.S. at 614. “The
four requirements of Rule 23(a) are commonly referred to as
‘numerosity, ' ‘commonality, '
‘typicality, ' and ‘adequacy of
representation' (or just ‘adequacy'),
respectively.” United Steel, Paper & Forestry,
Rubber, Mfg. Energy, Allied Indus. & Serv. Workers
Int'l Union, AFL-CIO v. ConocoPhillips Co., 593 F.3d
802, 806 (9th Cir. 2010). Certification under Rule 23(b)(3)
is appropriate where common questions of law or fact
predominate and class resolution is superior to other
available methods. Fed.R.Civ.P. 23(b)(3). The party seeking
class certification bears the burden of affirmatively
demonstrating that the class meets Rule 23's
requirements. Wal-Mart Stores, Inc. v. Dukes, 131
S.Ct. 2541, 2553 (2011).
general, “[b]efore certifying a class, the trial court
must conduct a ‘rigorous analysis' to determine
whether the party seeking certification has met the
prerequisites of Rule 23.” Mazza v. Am. Honda Motor
Co., Inc., 666 F.3d 581, 588 (9th Cir. 2012). However,
when evaluating class certification in the context of a
proposed settlement, courts “must pay undiluted, even
heightened, attention to class certification
requirements” because the court will lack the
opportunity, present when a case is litigated, to adjust the
class, informed by the proceedings. Hanlon, 150 F.3d
at 1019; see also Amchem Prods., 521 U.S. at 620.
The Court finds that Plaintiffs have has met the numerosity,
commonality, typicality, and adequacy requirements under Rule
23(a) as well as the certification requirements under Rule
23(a)(1) requires that a class be so numerous that joinder of
all members is impracticable. Generally, courts have held
that numerosity is satisfied when the class size exceeds
forty members. See, e.g., Slaven v. BP Am.,
Inc., 190 F.R.D. 649, 654-56 (C.D. Cal. 2000); In re
Cooper Cos. Inc. Secs. Litig., 254 F.R.D. 628, 634 (C.D.
case, the Putative Class consists of approximately 347 unit
owners who contracted with LSI for rental management of their
units during the relevant period. (Joint Mot. for Order
7:3-4). Therefore, the Court can safely conclude that the
Putative Class is sufficiently numerous such that the joinder
of each member would be impracticable.
demonstrate commonality, a plaintiff must show that there are
“questions of law or fact common to the class.”
Fed.R.Civ.P. 23(a)(2). “A class has sufficient
commonality ‘if there are questions of fact and law
which are common to the class.'” Hanlon,
150 F.3d at 1019. As clarified in Dukes, a plaintiff
must demonstrate that the class members “have suffered
the same injury” and that their claims “depend
upon a common contention . . . of such a nature that it is
capable of classwide resolution-which means that
determination of its truth or falsity will resolve an issue
that is central to the validity of each one of the claims in
one stroke.” Dukes, 131 S.Ct. at 2551.
the Amended Complaint raises several common questions of law
and fact, including (1) whether LSI failed to disclose the
resort fee to the Putative Class and (2) whether LSI failed
to treat the resort fee as gross rental revenue. (First Am.
Compl. ¶ 79, ECF No. 32). If Plaintiffs continued to
press this action, the answers to these questions would
result in classwide resolution of the claims asserted.
Therefore, the Court finds that Plaintiffs have satisfied the