2 UNITED STATES DISTRICT COURT 3 SOUTHERN DISTRICT OF CALIFORNIA
4 E.C., a minor, by and through her mother, Case No.: 21-cv-2070-JES-BLM 5 Gretta Caraballo; V.B., a minor, by and through her father, Jeffrey Logan ORDER GRANTING UNOPPOSED 6 Bradley; Z.M., a minor, by and through EX PARTE MOTION TO CONFIRM 7 his mother, Abigail Merten; GRETTA PLAINTIFF E.C.’S MINOR’S CARABALLO; REBECCA COMPROMISE 8 PATTERSON; and JOHNATHON 9 MERTEN, Plaintiffs, 10 v. [DKT. NO. 74] 11 LINCOLN MILITARY PROPERTY 12 MANAGEMENT LP; et al., 13 Defendants. 14
15 Before the Court is Plaintiffs’ Unopposed Ex Parte Motion to Confirm Plaintiff 16 E.C.’s Minor’s Compromise. Dkt. No. 74.1 Defendants do not oppose the Motion. For 17 the reasons stated below, the Court GRANTS the Motion. 18 I. BACKGROUND AND NATURE OF THE CLAIM 19 Plaintiffs filed a complaint alleging claims for personal injury against Defendants 20 Lincoln Military Property Management, LP, LMH Holdings, LLC, Camp Pendleton & 21 Quantico Housing, LLC, and LPC Pendleton Quantico PM LP (collectively, 22 “Defendants”). Dkt. No. 8. The Complaint alleges that Plaintiff Gretta Caraballo 23 (“Caraballo”) turned on the faucet of the bathroom sink to give her 9-month-old daughter, 24 E.C., a bath. Dkt No. 8. Caraballo felt the water before putting E.C. into the sink; it was 25 26
27 1 This case was assigned to U.S. Magistrate Judge Daniel E. Butcher for review of the Minor’s Compromise, and the parties subsequently consented to the undersigned’s 28 jurisdiction for purposes of reviewing the Minor’s Compromise. Dkt. Nos. 76, 79. 1 lukewarm to the touch, not hot. Id. Caraballo placed E.C. into the sink and turned around 2 to grab the washcloth she used to wash E.C. Id. Within seconds, Caraballo heard E.C. 3 scream in pain and saw steam rising from the sink. Id. Caraballo immediately shut off the 4 water and pulled E.C. from the sink. Id. E.C. continued to scream; the scalding water had 5 severely burned her buttocks and genitals. Id. 6 Tricare covered Plaintiff E.C.’s medical care, and the medical lien is $688.26. Dkt. 7 No. 74-5 (Caraballo Decl. ¶ 5); Dkt. No. 74-1 (Ritterbeck Decl. ¶ 7). E.C.’s medical care 8 is not ongoing. Dkt. No. 74-5 (Caraballo Decl. ¶ 6). 9 After extensive litigation, Plaintiffs Gretta Caraballo and E.C. settled their claims 10 with Defendants for $400,000, apportioning $200,000 to E.C., and $200,000 to Caraballo. 11 Dkt No. 74 and 74-1 (Ritterbeck Decl. ¶ 4). Plaintiffs now move for approval of E.C.’s 12 settlement. Id. 13 II. LEGAL STANDARD 14 “District courts have a special duty, derived from Federal Rule of Civil Procedure 15 17(c), to safeguard the interests of litigants who are minors.” Robidoux v. Rosengren, 638 16 F.3d 1177, 1181 (9th Cir. 2011). Rule 17(c) provides that a district court “must appoint a 17 guardian ad litem—or issue another appropriate order—to protect a minor . . . who is 18 unrepresented in an action.” Fed. R. Civ. P. 17(c)(2). “In the context of proposed 19 settlements in suits involving minor plaintiffs, this special duty requires a district court to 20 ‘conduct its own inquiry to determine whether the settlement serves the best interests of 21 the minor.’” Robidoux, 638 F.2d at 1181 (quoting Dacanay v. Mendoza, 573 F.2d 1075, 22 1080 (9th Cir. 1978)); see also Salmeron v. United States, 724 F.2d 1357, 1363 (9th Cir. 23 1983) (“Thus, a court must independently investigate and evaluate any compromise or 24 settlement of a minor’s claims to assure itself that the minor’s interests are protected, even 25 if the settlement has been recommended or negotiated by the minor’s parent or guardian 26 ad litem.”). 27 This Court’s Civil Local Rule 17.1 states, “[no] action by or on behalf of a 28 minor . . . will be settled, compromised, voluntarily discontinued, dismissed or terminated 1 without court order or judgment. All settlements and compromises must be reviewed by 2 a magistrate judge before any order of approval will issue.” CivLR 17.1(a). In addition, 3 any “[m]oney or property recovered by a minor or incompetent California resident by 4 settlement or judgment must be paid and disbursed in accordance with California Probate 5 Code Section 3600, et seq.” CivLR 17.1(b)(1). 6 Under California law, the Court must “evaluate the reasonableness of the settlement 7 and determine whether the compromise is in the best interest of the minor.” A.M.L., et al. 8 v. Cernaianu, M.D., et al., LA CV12-06082 JAK (RZx), 2014 WL 12588992, at *3 (C.D. 9 Cal. Apr. 1, 2014). The court is afforded “broad power . . . to authorize payment from the 10 settlement—to say who and what will be paid from the minor's money—as well as direct 11 certain individuals to pay it.” Goldberg v. Super. Ct., 23 Cal. App. 4th 1378, 1382 (Cal. 12 Ct. App. 1994); see also Peason v. Super. Ct., 136 Cal. Rptr. 3d 455, 459 (Cal. Ct. App. 13 2012) (explaining that the purpose of requiring court approval of a minor’s settlement is 14 to “allow[ ] the guardians of a minor to effectively negotiate a settlement while at the 15 same time protect[ing] the minor’s interest by requiring court approval before the 16 settlement can have a binding effect on the minor”). 17 District courts “limit the scope of their review to the question whether the net 18 amount distributed to each minor plaintiff in the settlement is fair and reasonable, in light 19 of the facts of the case, the minor’s specific claim, and recovery in similar cases.” 20 Robidoux, 638 F.3d at 1181-82. “[T]he district court should evaluate the fairness of each 21 minor plaintiff’s net recovery without regard to the proportion of the total settlement value 22 designated for the adult co-plaintiffs or plaintiffs’ counsel—whose interests the district 23 court has no special duty to safeguard.” Id. at 1182. “So long as the net recovery to each 24 minor plaintiff is fair and reasonable in light of their claims and average recovery in 25 similar cases, the district court should approve the settlement as proposed by the parties.” 26 Id. 27 III. DISCUSSION 28 Plaintiffs and Defendants settled their claims for $400,000, apportioned as follows: 1 $200,000 to Caraballo; and $200,000 to E.C. Dkt. No. 74-1 (Ritterbeck Decl. ¶ 4); Dkt. 2 No. 74-5 (Caraballo Decl. ¶ 4). Regarding the $200,000 allocated to E.C., the Court finds 3 the amount fair, reasonable, and in the minor’s best interests considering the facts and 4 circumstances of this action. The Court also finds the net disbursement to E.C. after 5 deductions for a medical lien, litigation costs, and attorney’s fees is reasonable. 6 A. Proposed Settlement Amount 7 The Court has reviewed the confidential Settlement Agreement. Under the 8 Settlement Agreement, E.C. will net $93,969.27 ($200,000 less $688.26 for the medical 9 lien, $35,342.47 in litigation costs, and $70,000 in legal fees). The $93,969.27 net 10 proceeds will fund an annuity providing payments to E.C. as follows: 11 $20,000 payable at Age 18 on 02/24/2038 12 $30,000 payable at Age 21 on 02/24/2041 13 $40,000 payable at Age 24 on 02/24/2044 14 $50,000 payable at Age 27 on 02/24/2047 15 $128,512.46 payable at Age 30 on 02/24/2050 16 Dkt. No. 74-2. The total payout from annuities to E.C. is $268,512.46. Dkt. No. 74-1 17 (Ritterbeck Decl. ¶ 7); Dkt. No. 74-5 (Caraballo Decl. ¶ 5).
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2 UNITED STATES DISTRICT COURT 3 SOUTHERN DISTRICT OF CALIFORNIA
4 E.C., a minor, by and through her mother, Case No.: 21-cv-2070-JES-BLM 5 Gretta Caraballo; V.B., a minor, by and through her father, Jeffrey Logan ORDER GRANTING UNOPPOSED 6 Bradley; Z.M., a minor, by and through EX PARTE MOTION TO CONFIRM 7 his mother, Abigail Merten; GRETTA PLAINTIFF E.C.’S MINOR’S CARABALLO; REBECCA COMPROMISE 8 PATTERSON; and JOHNATHON 9 MERTEN, Plaintiffs, 10 v. [DKT. NO. 74] 11 LINCOLN MILITARY PROPERTY 12 MANAGEMENT LP; et al., 13 Defendants. 14
15 Before the Court is Plaintiffs’ Unopposed Ex Parte Motion to Confirm Plaintiff 16 E.C.’s Minor’s Compromise. Dkt. No. 74.1 Defendants do not oppose the Motion. For 17 the reasons stated below, the Court GRANTS the Motion. 18 I. BACKGROUND AND NATURE OF THE CLAIM 19 Plaintiffs filed a complaint alleging claims for personal injury against Defendants 20 Lincoln Military Property Management, LP, LMH Holdings, LLC, Camp Pendleton & 21 Quantico Housing, LLC, and LPC Pendleton Quantico PM LP (collectively, 22 “Defendants”). Dkt. No. 8. The Complaint alleges that Plaintiff Gretta Caraballo 23 (“Caraballo”) turned on the faucet of the bathroom sink to give her 9-month-old daughter, 24 E.C., a bath. Dkt No. 8. Caraballo felt the water before putting E.C. into the sink; it was 25 26
27 1 This case was assigned to U.S. Magistrate Judge Daniel E. Butcher for review of the Minor’s Compromise, and the parties subsequently consented to the undersigned’s 28 jurisdiction for purposes of reviewing the Minor’s Compromise. Dkt. Nos. 76, 79. 1 lukewarm to the touch, not hot. Id. Caraballo placed E.C. into the sink and turned around 2 to grab the washcloth she used to wash E.C. Id. Within seconds, Caraballo heard E.C. 3 scream in pain and saw steam rising from the sink. Id. Caraballo immediately shut off the 4 water and pulled E.C. from the sink. Id. E.C. continued to scream; the scalding water had 5 severely burned her buttocks and genitals. Id. 6 Tricare covered Plaintiff E.C.’s medical care, and the medical lien is $688.26. Dkt. 7 No. 74-5 (Caraballo Decl. ¶ 5); Dkt. No. 74-1 (Ritterbeck Decl. ¶ 7). E.C.’s medical care 8 is not ongoing. Dkt. No. 74-5 (Caraballo Decl. ¶ 6). 9 After extensive litigation, Plaintiffs Gretta Caraballo and E.C. settled their claims 10 with Defendants for $400,000, apportioning $200,000 to E.C., and $200,000 to Caraballo. 11 Dkt No. 74 and 74-1 (Ritterbeck Decl. ¶ 4). Plaintiffs now move for approval of E.C.’s 12 settlement. Id. 13 II. LEGAL STANDARD 14 “District courts have a special duty, derived from Federal Rule of Civil Procedure 15 17(c), to safeguard the interests of litigants who are minors.” Robidoux v. Rosengren, 638 16 F.3d 1177, 1181 (9th Cir. 2011). Rule 17(c) provides that a district court “must appoint a 17 guardian ad litem—or issue another appropriate order—to protect a minor . . . who is 18 unrepresented in an action.” Fed. R. Civ. P. 17(c)(2). “In the context of proposed 19 settlements in suits involving minor plaintiffs, this special duty requires a district court to 20 ‘conduct its own inquiry to determine whether the settlement serves the best interests of 21 the minor.’” Robidoux, 638 F.2d at 1181 (quoting Dacanay v. Mendoza, 573 F.2d 1075, 22 1080 (9th Cir. 1978)); see also Salmeron v. United States, 724 F.2d 1357, 1363 (9th Cir. 23 1983) (“Thus, a court must independently investigate and evaluate any compromise or 24 settlement of a minor’s claims to assure itself that the minor’s interests are protected, even 25 if the settlement has been recommended or negotiated by the minor’s parent or guardian 26 ad litem.”). 27 This Court’s Civil Local Rule 17.1 states, “[no] action by or on behalf of a 28 minor . . . will be settled, compromised, voluntarily discontinued, dismissed or terminated 1 without court order or judgment. All settlements and compromises must be reviewed by 2 a magistrate judge before any order of approval will issue.” CivLR 17.1(a). In addition, 3 any “[m]oney or property recovered by a minor or incompetent California resident by 4 settlement or judgment must be paid and disbursed in accordance with California Probate 5 Code Section 3600, et seq.” CivLR 17.1(b)(1). 6 Under California law, the Court must “evaluate the reasonableness of the settlement 7 and determine whether the compromise is in the best interest of the minor.” A.M.L., et al. 8 v. Cernaianu, M.D., et al., LA CV12-06082 JAK (RZx), 2014 WL 12588992, at *3 (C.D. 9 Cal. Apr. 1, 2014). The court is afforded “broad power . . . to authorize payment from the 10 settlement—to say who and what will be paid from the minor's money—as well as direct 11 certain individuals to pay it.” Goldberg v. Super. Ct., 23 Cal. App. 4th 1378, 1382 (Cal. 12 Ct. App. 1994); see also Peason v. Super. Ct., 136 Cal. Rptr. 3d 455, 459 (Cal. Ct. App. 13 2012) (explaining that the purpose of requiring court approval of a minor’s settlement is 14 to “allow[ ] the guardians of a minor to effectively negotiate a settlement while at the 15 same time protect[ing] the minor’s interest by requiring court approval before the 16 settlement can have a binding effect on the minor”). 17 District courts “limit the scope of their review to the question whether the net 18 amount distributed to each minor plaintiff in the settlement is fair and reasonable, in light 19 of the facts of the case, the minor’s specific claim, and recovery in similar cases.” 20 Robidoux, 638 F.3d at 1181-82. “[T]he district court should evaluate the fairness of each 21 minor plaintiff’s net recovery without regard to the proportion of the total settlement value 22 designated for the adult co-plaintiffs or plaintiffs’ counsel—whose interests the district 23 court has no special duty to safeguard.” Id. at 1182. “So long as the net recovery to each 24 minor plaintiff is fair and reasonable in light of their claims and average recovery in 25 similar cases, the district court should approve the settlement as proposed by the parties.” 26 Id. 27 III. DISCUSSION 28 Plaintiffs and Defendants settled their claims for $400,000, apportioned as follows: 1 $200,000 to Caraballo; and $200,000 to E.C. Dkt. No. 74-1 (Ritterbeck Decl. ¶ 4); Dkt. 2 No. 74-5 (Caraballo Decl. ¶ 4). Regarding the $200,000 allocated to E.C., the Court finds 3 the amount fair, reasonable, and in the minor’s best interests considering the facts and 4 circumstances of this action. The Court also finds the net disbursement to E.C. after 5 deductions for a medical lien, litigation costs, and attorney’s fees is reasonable. 6 A. Proposed Settlement Amount 7 The Court has reviewed the confidential Settlement Agreement. Under the 8 Settlement Agreement, E.C. will net $93,969.27 ($200,000 less $688.26 for the medical 9 lien, $35,342.47 in litigation costs, and $70,000 in legal fees). The $93,969.27 net 10 proceeds will fund an annuity providing payments to E.C. as follows: 11 $20,000 payable at Age 18 on 02/24/2038 12 $30,000 payable at Age 21 on 02/24/2041 13 $40,000 payable at Age 24 on 02/24/2044 14 $50,000 payable at Age 27 on 02/24/2047 15 $128,512.46 payable at Age 30 on 02/24/2050 16 Dkt. No. 74-2. The total payout from annuities to E.C. is $268,512.46. Dkt. No. 74-1 17 (Ritterbeck Decl. ¶ 7); Dkt. No. 74-5 (Caraballo Decl. ¶ 5). 18 Costs deducted from the settlement proceeds consist of filing fees, expert costs, 19 including four liability experts and three damages experts, seventeen depositions, 20 investigator costs, service costs, medical records, postage, and mediation. Shared costs 21 were split evenly between the three families involved in this lawsuit (Patterson/Bradley, 22 Merten, and Caraballo). The total costs for the Caraballos’ claims, including the 23 individual costs and the portion of the shared costs attributed to the Caraballo Plaintiffs 24 are $67,277.48. Dkt. No. 74-1 (Ritterbeck Decl. ¶ 6); Dkt. No. 74-5 (Caraballo Decl. ¶ 6). 25 This amount is apportioned between E.C. ($35,342.47) and Caraballo ($31,935.01). Id. 26 The Court finds this is a fair and reasonable apportionment. 27 The parties submitted an itemized breakdown of the Caraballos’ costs, which the 28 Court has reviewed. Dkt. No. 74-4. Although the costs are high in relation to the overall 1 settlement amount, the Court finds these costs are reasonable viewed in the context of the 2 difficulty, complexity, and length of the litigation. 3 In sum, the Court finds the total amount of the settlement and the costs apportioned 4 to E.C. are fair and equitable under the circumstances. 5 B. Attorney’s Fees 6 The Court next evaluates the reasonableness of the $70,000 attorney’s fees 7 deducted from the proceeds to E.C. In California, courts must approve attorney fees for 8 representing a minor. See CAL. PROB. CODE § 2601; Cal. Rule of Ct. 7.955; see also 9 A.G.A. v. Cty. of Riverside, No. EDCV 19-00077-VAP (SPx), 2019 WL 2871160, at *1 10 (C.D. Cal. Apr. 26, 2019) (the district court must “consider whether the net amount 11 distributed to each minor plaintiff in the settlement is fair and reasonable”) (internal 12 quotations omitted). 13 “When approving the amount of attorney’s fees paid as part of a minor’s 14 compromise, California Rule of Court 7.955 is instructive on factors that may be 15 considered ‘in determining whether an attorney’s proposed fee is reasonable.’” L.C.C. by 16 & through Calihan v. United States, No. 20-cv-1489-KSC, 2022 WL 16579320, at *4 17 (S.D. Cal. Nov. 1, 2022). Courts consider, for example, the time and labor required, 18 whether the minor’s representative consented to the fee, the amount of money involved, 19 the result obtained, and whether the fee is fixed, hourly, or contingent. California Rule of 20 Court 7.955(b); V.C. by & through Anaya v. Hunterwood Techs. USA, Ltd., No. 21-cv- 21 888-AJB-LR, 2023 WL 2914284, at *5 (S.D. Cal. Apr. 11, 2023), report and 22 recommendation adopted, No. 21-cv-0888-AJB-LR, 2023 WL 4047589 (S.D. Cal. Apr. 23 17, 2023) (consulting Rule 7.955(b) and approving 33.33% contingency fee where 24 attorneys spent hundreds of hours collaborating with experts, conducting investigations, 25 and working with structured settlement professionals to determine the best approach to 26 disburse the settlement proceeds). 27 “[F]ees in minors’ cases have historically been limited to twenty-five percent 28 (25%) of the gross recovery.” See, e.g., DeRuyver v. Omni La Costa Resort & Spa, LLC, 1 17-cv-0516-H-AGS, 2020 WL 563551, at *2 (S.D. Cal. Feb. 4, 2020); Napier v. San 2 Diego City, No. 15-cv-581-CAB-KSC, 2017 WL 5759803, at *9 (S.D. Cal. Nov. 28, 3 2017); Mitchell v. Riverstone Residential Grp., No. Civ. S-11-2202 LKK/CKD, 2013 WL 4 1680641, at *2 (E.D. Cal. Apr. 17, 2013). “[M]ost courts require a showing of good cause 5 to award more than 25% of any recovery” and such an award is “rare and justified only 6 when counsel proves that he or she provided extraordinary services.” Schwall v. Meadow 7 Wood Apts., CIV. S-07-0014 LKK, 2008 WL 552432, at *1-*2 (E.D. Cal. Feb. 27, 2008) 8 (internal quotations omitted). 9 Plaintiff E.C.’s fee agreement provides for a 35% contingency fee. The Court finds 10 good cause supports this contingency fee. Dkt. No. 74-1 (Ritterbeck Decl. ¶ 5); Dkt. No. 11 74-5 (Caraballo Decl. ¶ 6). 12 Plaintiff’s counsel submitted a declaration explaining the case involved extensive 13 written discovery, and three attorneys completed seventeen depositions. Dkt. No. 74-1 ¶ 14 5. Counsel successfully opposed several motions to dismiss and a motion to sever. Id. 15 Counsel attended two settlement conferences and two mediations. Id. Counsel also 16 engaged four liability experts and three damages experts, attended inspections with some 17 of those experts, and obtained expert reports before finally reaching a settlement one 18 month before the final Pretrial Conference. Dkt. No. 74-5 ¶ 7. 19 The Court finds counsel expended significant time and resources to obtain a 20 favorable result for Plaintiff E.C. The Court also notes that E.C.’s guardian, Gretta 21 Caraballo, consents to the fee. Dkt. No. 74-5. The Court, therefore, finds good cause for 22 a 35% contingency fee here. See Alter by & through Alter v. Cnty. of San Diego, No. 21- 23 cv-1709-BLM, 2023 WL 4166096, at *5 (S.D. Cal. June 22, 2023) (relying on Robidoux 24 to find attorney’s fees for 33.33% of settlement to incompetent adult reasonable given 25 attorney’s experience, the length of the litigation, the difficult and complex legal and 26 factual issues raised, and counsel’s significant success); Garcia v. Cnty. of San Diego, 27 No. 15-cv-189-JLS-NLS, 2022 WL 2973429, at *3 (S.D. Cal. July 27, 2022) (approving 28 minor’s compromise with attorney’s fees of 50% of settlement pursuant to fee agreement 1 finding that counsel were experienced attorneys and excessive litigation was involved). 2 IV. CONCLUSION 3 For the reasons discussed above, the Court APPROVES the settlement agreement 4 and GRANTS Plaintiffs’ Motion to confirm Plaintiff E.C.’s minor’s compromise. Dkt. 5 No. 74. 6 Under the Settlement Agreement, Plaintiff E.C. will receive $200,000 as the total 7 settlement amount, minus $688.26 in medical fees to Tricare and $35,342.47 in legal 8 costs. The Court also approves attorney’s fees at 35% of Plaintiff E.C.’s recovery 9 ($70,000). The settlement proceeds will be distributed as follows: 10 Gross amount of settlement $200,000 11 Medical Lien to be paid from settlement ($688.26) 12 Attorney’s Fees to be paid from settlement ($70,000) 13 Legal expenses to be paid from settlement ($35,342.47) 14 Net Balance of Proceeds for annuity $93,969.27 15 The $93,969.27 net proceeds to E.C. is to be used to purchase an annuity from New 16 York Life Insurance and Annuity Corporation, which will provide for the following 17 periodic payments to be made by New York Life Insurance Company, rated A++ XV by 18 A.M. Best: 19 TO PAYEE: E.C. 20 $20,000 payable at Age 18 on 02/24/2038 21 $30,000 payable at Age 21 on 02/24/2041 22 $40,000 payable at Age 24 on 02/24/2044 23 $50,000 payable at Age 27 on 02/24/2047 24 $128,512.46 payable at Age 30 on 02/24/2050 25 See Dkt. No. 74-2. These annuity payments to E.C. will total $268,512.46. 26 // 27 // 28 // 1 The parties shall implement the settlement in accordance with the terms of the 2 | Settlement Agreement. In addition, the parties shall file a Joint Motion to Dismiss this 3 | action within 30 days after the date of this Order. 4 IT IS SO ORDERED. 5 Dated: August 8, 2023 ~ ats aul PTIo Daniel E. Butcher 7 United States Magistrate Judge 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28