DLLR » Topics » California Legal Proceedings

This excerpt taken from the DLLR 8-K filed Nov 20, 2009.
California Legal Proceedings
 
On September 11, 2006, Caren Bufil commenced a lawsuit against OPCO; the claims in Bufil are substantially similar to the claims in a previously dismissed case. Bufil seeks class certification of the action alleging that OPCO failed to provide non-management employees with meal and rest breaks required under California law. The suit seeks an unspecified amount of damages and other relief. OPCO filed a motion for judgment on the pleadings, arguing that the Bufil case is duplicative of the previous case and should be dismissed. Plaintiff filed her motion for class certification. OPCO’s motion was granted and Bufil’s motion was denied. Bufil appealed both rulings. In April 2008, the Court of Appeal reversed the trial court’s ruling. OPCO filed a petition for review of that decision with the California Supreme Court, but in July 2008 the Court denied the petition. The case was then returned to the trial court level and was assigned to the complex division. The trial court ordered briefing and a hearing on the issue of what discretion the trial court had on plaintiff’s motion for class certification. After the hearing, the trial court ruled that it had to follow the Court of Appeal’s decision on class certification issues and ordered that the plaintiff’s proposed class and sub-classes be certified. At this time, it is too early to determine the likelihood of an unfavorable outcome or the ultimate liability, if any, resulting from the Bufil case.
 
On April 26, 2007, the San Francisco City Attorney (“City Attorney”) filed a complaint in the name of the People of the State of California alleging that OPCO’s subsidiaries engaged in unlawful and deceptive business practices in violation of California Business and Professions Code Section 17200 by either themselves making installment loans under the guise of marketing and servicing for co-defendant First Bank of Delaware (the “Bank”) or by brokering installment loans made by the Bank in California in violation of the prohibition on usury contained in the California Constitution and the California Finance Lenders Law and that they have otherwise violated the California Finance Lenders Law and the California Deferred Deposit Transaction Law. The complaint seeks broad injunctive relief as well as civil penalties. On January 5, 2009, the City Attorney filed a First Amended Complaint, restating the claims in the original complaint, adding OPCO as a defendant and adding a claim that short-term deferred deposit loans made by the Bank, which were marketed and serviced by OPCO and/or its subsidiaries violated the California Deferred Deposit Transaction law. OPCO and its subsidiaries have denied the allegations of the First Amended Complaint. Discovery is proceeding in state court and no trial date has been set. At this time, it is too early to determine the likelihood of an unfavorable outcome or the ultimate liability, if any, resulting from this case.
 
These excerpts taken from the DLLR 10-K filed Aug 29, 2008.
California Legal Proceedings
 
The Company was the defendant in four lawsuits commenced by the same law firm. Each lawsuit was pled as a class action, and each lawsuit alleged violations of California’s wage-and-hour laws. The named plaintiffs were the Company’s former employees Vernell Woods (commenced August 22, 2000), Juan Castillo (commenced May 1, 2003), Stanley Chin (commenced May 7, 2003) and Kenneth Williams (commenced June 3, 2003). Each of these suits sought an unspecified amount of damages and other relief in connection with allegations that the Company misclassified California store (Woods) and area (Castillo) managers as “exempt” from a state law requiring the payment of overtime compensation, that the Company failed to provide non-management employees with meal and rest breaks required under state law (Chin) and that the Company computed bonuses payable to its store managers using an impermissible profit-sharing formula (Williams). The trial court in Chin denied plaintiff’s motion for class certification and that decision was upheld on appeal. The Company reached a settlement with Chin, resolving all issues for a nominal amount.
 
In March 2006, the Company reached a settlement in the Woods, Castillo and Williams actions and the court granted approval of that settlement in October of 2006. On January 11, 2007, the Company made a $5.8 million settlement distribution, including payment to the attorneys for fees and costs. On October 2, 2007, the court held a final accounting hearing regarding the distribution of the settlement funds. At that hearing, the court dismissed the consolidated cases.
 
On September 11, 2006, plaintiff Caren Bufil commenced a lawsuit against the Company; the claims in Bufil are substantially similar to the claims in Chin. Bufil seeks class certification of the action against the Company for failure to provide meal and rest periods, failure to provide accurate wage statements and unlawful, unfair and fraudulent business practices under California law. The suit seeks an unspecified amount of damages and other relief. The Company filed a motion for judgment on the pleadings, arguing that the Bufil case is duplicative of the Chin case and should be dismissed. Plaintiff filed her motion for class certification. The Company’s motion was granted, and Bufil’s motion was denied. Bufil appealed both rulings. On April 17, 2008, the Court of Appeal issued its decision, and reversed the trial court’s ruling. The Company has filed a petition for review of that decision with the California Supreme Court, and the Company is awaiting a decision on that petition. At this time, it is too early to determine the likelihood of an unfavorable outcome or the ultimate liability, if any, resulting from the Bufil case.
 
On April 26, 2007, the San Francisco City Attorney (“City Attorney”) filed a complaint in the name of the People of the State of California in the Superior Court of the State of California, County of San Francisco, against Monetary Management of California, Inc. and Money Mart Express, Inc., both subsidiaries of OPCO. The complaint alleges that OPCO’s subsidiaries have engaged in unlawful and deceptive business practices in violation of California Business and Professions Code Section 17200 by either themselves making installment loans under the guise of marketing and servicing for co-defendant First Bank of Delaware or by brokering


89


 

 
DOLLAR FINANCIAL CORP.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
14.   Contingent Liabilities (continued)
 

California Legal Proceedings (continued)
 
installment loans made by co-defendant First Bank of Delaware in California in violation of the prohibition on usury contained in the California Constitution and the California Finance Lenders Law and that they have otherwise violated the California Finance Lenders Law and the California Deferred Deposit Transaction Law. The complaint seeks broad injunctive relief as well as civil penalties. The Company denies the allegations of the complaint. Discovery is proceeding in state court and no trial date has been set. On February 28, 2008, the City Attorney advised that he intends to amend the complaint to challenge the legality of short term deferred deposit loans made by First Bank of Delaware and marketed and serviced by OPCO and/or its subsidiaries but to date the City Attorney has taken no action to amend. At this time, it is too early to determine the likelihood of an unfavorable outcome or the ultimate liability, if any, resulting from this case.
 
California
Legal Proceedings



 



The Company was the defendant in four lawsuits commenced by the
same law firm. Each lawsuit was pled as a class action, and each
lawsuit alleged violations of California’s
wage-and-hour
laws. The named plaintiffs were the Company’s former
employees Vernell Woods (commenced August 22, 2000), Juan
Castillo (commenced May 1, 2003), Stanley Chin (commenced
May 7, 2003) and Kenneth Williams (commenced
June 3, 2003). Each of these suits sought an unspecified
amount of damages and other relief in connection with
allegations that the Company misclassified California store
(Woods) and area (Castillo) managers as
“exempt” from a state law requiring the payment of
overtime compensation, that the Company failed to provide
non-management employees with meal and rest breaks required
under state law (Chin) and that the Company computed
bonuses payable to its store managers using an impermissible
profit-sharing formula (Williams). The trial court in
Chin denied plaintiff’s motion for class
certification and that decision was upheld on appeal. The
Company reached a settlement with Chin, resolving all issues for
a nominal amount.


 



In March 2006, the Company reached a settlement in the Woods,
Castillo
and Williams actions and the court granted
approval of that settlement in October of 2006. On
January 11, 2007, the Company made a $5.8 million
settlement distribution, including payment to the attorneys for
fees and costs. On October 2, 2007, the court held a final
accounting hearing regarding the distribution of the settlement
funds. At that hearing, the court dismissed the consolidated
cases.


 



On September 11, 2006, plaintiff Caren Bufil commenced a
lawsuit against the Company; the claims in Bufil are
substantially similar to the claims in Chin. Bufil seeks
class certification of the action against the Company for
failure to provide meal and rest periods, failure to provide
accurate wage statements and unlawful, unfair and fraudulent
business practices under California law. The suit seeks an
unspecified amount of damages and other relief. The Company
filed a motion for judgment on the pleadings, arguing that the
Bufil case is duplicative of the Chin case and
should be dismissed. Plaintiff filed her motion for class
certification. The Company’s motion was granted, and
Bufil’s motion was denied. Bufil appealed both rulings. On
April 17, 2008, the Court of Appeal issued its decision,
and reversed the trial court’s ruling. The Company has
filed a petition for review of that decision with the California
Supreme Court, and the Company is awaiting a decision on that
petition. At this time, it is too early to determine the
likelihood of an unfavorable outcome or the ultimate liability,
if any, resulting from the Bufil case.


 



On April 26, 2007, the San Francisco City Attorney
(“City Attorney”) filed a complaint in the name of the
People of the State of California in the Superior Court of the
State of California, County of San Francisco, against
Monetary Management of California, Inc. and Money Mart Express,
Inc., both subsidiaries of OPCO. The complaint alleges that
OPCO’s subsidiaries have engaged in unlawful and deceptive
business practices in violation of California Business and
Professions Code Section 17200 by either themselves making
installment loans under the guise of marketing and servicing for
co-defendant First Bank of Delaware or by brokering





89





 





 




DOLLAR
FINANCIAL CORP.




 




NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)


 




















14.  

Contingent
Liabilities (continued)


 












California
Legal Proceedings (continued)


 



installment loans made by co-defendant First Bank of Delaware in
California in violation of the prohibition on usury contained in
the California Constitution and the California Finance Lenders
Law and that they have otherwise violated the California Finance
Lenders Law and the California Deferred Deposit Transaction Law.
The complaint seeks broad injunctive relief as well as civil
penalties. The Company denies the allegations of the complaint.
Discovery is proceeding in state court and no trial date has
been set. On February 28, 2008, the City Attorney advised
that he intends to amend the complaint to challenge the legality
of short term deferred deposit loans made by First Bank of
Delaware and marketed and serviced by OPCO
and/or its
subsidiaries but to date the City Attorney has taken no action
to amend. At this time, it is too early to determine the
likelihood of an unfavorable outcome or the ultimate liability,
if any, resulting from this case.






 




This excerpt taken from the DLLR 10-K filed Sep 18, 2007.
California Legal Proceedings
 
The Company was the defendant in four lawsuits commenced by the same law firm. Each lawsuit was pled as a class action, and each lawsuit alleged violations of California’s wage-and-hour laws. The named plaintiffs were the Company’s former employees, Vernell Woods (commenced August 22, 2000), Juan Castillo (commenced May 1, 2003), Stanley Chin (commenced May 7, 2003) and Kenneth Williams (commenced June 3, 2003). Each of these suits sought an unspecified amount of damages and other relief in connection with allegations that the Company misclassified California store (Woods) and area (Castillo) managers as “exempt” from a state law requiring the payment of overtime compensation, that the Company failed to


92


Table of Contents

 
DOLLAR FINANCIAL CORP.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
14.   Contingent Liabilities (continued)
 

California Legal Proceedings (continued)
 
provide non-management employees with meal and rest breaks required under state law (Chin) and that the Company computed bonuses payable to its store managers using an impermissible profit-sharing formula (Williams). The trial court in Chin denied plaintiff’s motion for class certification and that decision was upheld on appeal. The Company reached a settlement with Chin, resolving all issues for a nominal amount.
 
In March 2006, the Company reached a settlement in the Woods, Castillo and Williams actions, and the court granted approval of that settlement in October of 2006. The Company agreed to settle these cases for $5.8 million and a settlement distribution, including payment to the attorneys for fees and costs occurred on January 11, 2007. The court has scheduled a hearing regarding the final accounting of the settlement funds for October 2, 2007.
 
On September 11, 2006, plaintiff Caren Bufil commenced a lawsuit against the Company; the claims in Bufil are substantially similar to the claims in Chin. Bufil seeks class certification of the action against the Company for failure to provide meal and rest periods, failure to provide accurate wage statements and unlawful, unfair and fraudulent business practices under California law. The suit seeks an unspecified amount of damages and other relief. The Company filed a motion for judgment on the pleadings, arguing that the Bufil case is duplicative of the Chin case and should be dismissed. Plaintiff filed her motion for class certification. The Company’s motion was granted, and Bufil’s motion was denied. Bufil has appealed both rulings, and her appellate brief will be filed shortly. The Company expects briefing to be completed by the end of October 2007 with a decision on the issues in early 2008.
 
At this time, it is too early to determine the likelihood of an unfavorable outcome or the ultimate liability, if any, resulting from the Bufil case.
 
On April 26, 2007, San Francisco City Attorney filed a complaint in the name of the People of the State of California in the Superior Court of the State of California, County of San Francisco, against Monetary Management of California, Inc. and Money Mart Express, Inc. (collectively the “Money Mart Entities”). OPCO is the parent of the Money Mart Entities. The complaint alleges that the Money Mart Entities have engaged in unlawful and deceptive business practices in violation of California Business and Professions Code section 17200 by either making or brokering installment loans in California in violation of the prohibition on usury contained in the California Constitution and the California Finance Lenders Law and that they have otherwise violated the California Finance Lenders Law and the California Deferred Deposit Transaction Law. The complaint seeks broad injunctive relief as well as civil penalties. The Company denies the allegations of the complaint. The Money Mart Entities answered the complaint on May 25, 2007. On May 29, 2007, all defendants removed the case to the United States Court for the Northern District of California (No. C 07-02789 JSW). On August 20, 2007, the Court issued an order remanding the case to state court. The Company is unable to state whether an outcome unfavorable to the Company is either probable or remote, nor is the Company able to estimate the amount or range of loss in the event of an unfavorable outcome.
 
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