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Jones v. Elite Emergency Services, LLC

United States District Court, M.D. Tennessee, Nashville Division

March 20, 2018

WANDA FAYE JONES, KELLY DORRIS PENDERGRASS, and TIFFANY SHEA JONES, Plaintiffs,
v.
ELITE EMERGENCY SERVICES, LLC, AND SAMUEL C. CLEMMONS, Defendants

          MEMORANDUM OPINION

          WAVERLY D. CRENSHAW, JR. CHIEF UNITED STATES DISTRICT JUDGE

         Pending before the Court are Plaintiffs' Motion for Pre-Judgment Interest (Doc. No. 315) and Plaintiffs' Motion for Attorneys' Fees, Expenses and Costs (Doc. No. 318). For the reasons stated herein, Plaintiffs' Motion for Pre-Judgment Interest will be denied, and Plaintiffs' Motion for Attorneys' Fees, Expenses and Costs will be granted in part, as explained in and subject to the reasons herein.

         BACKGROUND

         This action has a long and especially contentious history. The case was filed, pursuant to the Fair Labor Standards Act (“FLSA”), by former employees of Defendant Elite Emergency Services, LLC. On December 18, 2013, the Court approved the parties' proposed Settlement Agreement (Doc. No. 138). The Court held that the case would not be dismissed until the Court received notice from Plaintiffs that Defendants provided payment of all amounts due under the Settlement Agreement (Doc. No. 140). The Court expressly retained jurisdiction over the case, although the case was administratively closed. (Id.)

         On July 31, 2014, Plaintiffs filed a Motion for Entry of Final Judgment (Doc. No. 143), in which Plaintiffs alleged that Defendants had failed to make the payments required by the Settlement Agreement. Plaintiffs asked the Court to enter a final judgment against the Defendants for which execution could issue, if necessary. (Id.) The Motion for Entry of Final Judgment was referred to the Magistrate Judge for a Report and Recommendation (Doc. No. 156). After several supplemental filings, the Magistrate Judge recommended that Plaintiffs' Motion for Entry of Final Judgment be granted (Doc. No. 166). In their Objection to the recommendation of the Magistrate Judge, Defendants argued that the Settlement Agreement had been induced by Plaintiffs' fraud, and they sought relief from the Court's earlier Order approving the settlement. After numerous additional filings, the Court adopted and approved the Report and Recommendation and granted Plaintiffs' Motion for Entry of Final Judgment (Doc. No. 178). As part of that Order, the Court denied Defendants' request for relief from the earlier Order approving the settlement. (Id.)

         Nonetheless, Defendants filed a Rule 60(b) Motion for Relief and Motion to Set Aside Settlement (Doc. No. 179), accompanied by 819 pages of supporting documents (Doc. No. 182). Following a myriad of additional documents from both sides, the case was transferred to the undersigned (Doc. No. 207). The Court set an evidentiary hearing on Defendants' Motion, before which the parties filed an extraordinary number of motions, including an amended Motion for Relief from Order and to Set Aside Settlement (Doc. No. 264), asking the Court to set aside the settlement based upon “newly discovered evidence” of fraud. See generally Doc. Nos. 209-296. The hearing took place on March 16, 2017, and on March 21, 2017, this Court entered an Order referring the matter to the Magistrate Judge for alternative dispute resolution (Doc. No. 297). In that Order, the Court agreed to refrain from ruling on Defendants' Motion for Relief under Rule 60 for sixty days. (Id.) The alternative dispute resolution process was not successful (Doc. No. 302). Even though the Court had not yet ruled on Defendants' Motion, Plaintiffs filed yet another Motion for Entry and Enforcement of Final Judgment against Defendants (Doc. No. 303). By Order dated July 24, 2017, the Court denied Defendants' Amended Motion for Relief, finding that Defendants had not established fraud under Rule 60, and denied Plaintiffs' Motion to Enforce Judgment as moot (Doc. No. 311). Plaintiffs have now moved for pre-judgment interest, attorneys' fees, expenses and costs.

         THE SETTLEMENT AGREEMENT

         The parties' Settlement Agreement provides, among other things, that Defendants will pay to Plaintiffs $125, 000, $60, 000 of which would be for attorneys' fees. (Doc. No. 137 at ¶ 3). It further provides that, upon complete satisfaction of all obligations required in paragraph 3, Plaintiffs' attorneys' fees and costs will be completely satisfied and Plaintiffs will make no further claim of either attorneys' fees or expenses whatsoever with the exception of any fees and expenses contemplated and set forth in paragraph 11. (Id. at ¶ 7). Paragraph 11 states:

In the event any party breaches the terms of this Agreement, the non-breaching party shall be entitled to reasonable attorneys' fees, costs, and litigation expenses for any legal action resulting from said breach. These attorneys' fees, costs, and litigation expenses shall be in addition to any other legal or equitable remedy available. The proper venue for any legal action resulting from a breach of this Agreement shall be the Chancery Court of Davidson County, Tennessee.

(Doc. No. 137 at ¶ 11).

         PREJUDGMENT INTEREST

         Plaintiffs ask the Court for prejudgment interest, computed at 10% per annum, on the $125, 000.00 judgment awarded them on March 2, 2016 (Doc. No. 178). Plaintiffs seek prejudgment interest calculated from the Court's March 28, 2014 Order approving the Settlement Agreement (Doc. No. 140) until the Court's March 2, 2016 Order (Doc. No. 178) granting judgment against Defendants. The Settlement Agreement makes no mention of pre-judgment interest. Plaintiffs argue that interest should be awarded to them because of Defendants' breach of the Settlement Agreement. This Court has never held that Defendants breached the Settlement Agreement, however. Indeed, Plaintiffs did not allege a claim against Defendants for breach of the Settlement Agreement. When Defendants failed to pay as promised under the Settlement Agreement, Plaintiffs sought an award of Final Judgment to enforce the Settlement Agreement against the Defendants in this FLSA action, not an award for breach of contract.

         An award of pre-judgment interest is within the trial court's discretion. Bennett v. Highland Graphics, Inc., 2017 WL 4512470 at * 5 (M.D. Tenn. Oct. 10, 2017). Equity is the guiding principle for exercising that discretion: “Simply stated, the court must decide whether the award of prejudgment interest is fair, given the particular circumstances of the case.” Id. (quoting Myint v. Allstate Ins. Co., 970 S.W.2d 920, 927 (Tenn. 1998)). The purpose of awarding prejudgment interest is to fully compensate a plaintiff for the loss of the use of funds to which he or she was legally entitled, not to penalize a defendant for wrongdoing. Id.; Amsurg Glendale, Inc. v. Glendale Surgery Partners, 2017 WL 5749670 at * 5 (M.D. Tenn. March 22, 2017) (also citing Myint).

         In this case, Defendants challenged the Settlement Agreement, after it was approved, based upon allegedly new information concerning alleged fraud in the Settlement Agreement's inducement. This Court held that Defendants failed to establish fraud under Rule 60(b)(3) (Doc. No. 311 at 3).This Court did not hold, as argued by Plaintiffs, that ...


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