Tannlund’s motion to compel and for sanctions

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The parties agreed their settlement agreement required a second distribution in the event unclaimed funds exceeded $4 per recipient and that the unclaimed funds should be donated to a related charity if they fell below this threshold amount. However, the parties disagreed over whether Real Time was permitted to deduct its administrative costs from the unclaimed funds when calculating whether the threshold amount was met.

Real Time argued that the settlement agreement provided bc data america that a second distribution was only necessary if, after subtracting administrative costs, the pro rata distribution would exceed the threshold amount. Based on this provision, Real Time argued the agreement required donating the unclaimed funds to charity. When deducting its $251,000 in administrative costs from the unclaimed funds, only $10,274 remained, which was less than $1 per class member.

Tannlund argued in response that the agreement “couldn’t be clearer: ‘The postage and administrative costs for any such second distribution shall be paid by Real Time.’” Therefore, she argued that dividing the unclaimed funds by the total number of class members who cashed their original settlement check yielded a payment of roughly $24 per person, thus exceeding the $4 threshold and necessitating a second distribution. Tannlund also sought sanctions in the amount of $2,500 as partial payment for the fees and costs incurred as a result of litigating the need for a second distribution.

Following briefing and a hearing, the Court granted Tannlund’s motion but denied the requested sanctions as not warranted. The Court ordered a second distribution to class members who cashed their original settlement check, at Real Time’s expense. The parties’ dispute and the Court’s Order highlight the importance of drafting settlement agreements that clearly delineate the parties’ responsibilities and account for potential contingencies, if they are foreseeable.

A copy of the Minute Entry granting is available here, a copy of the motion itself is available here, and a copy of Real Time’s opposition brief is available here.