E.C. et al v. Lincoln Military Property Management LP et al, No. 3:2021cv02070 - Document 80 (S.D. Cal. 2023)
Court Description: ORDER Granting 73 Unopposed Ex Parte Motion to Confirm Plaintiff Z.M.'s Minor's Compromise. The parties shall implement the settlement in accordance with the terms of the Settlement Agreement. In addition, the parties shall file a Joint Motion to Dismiss this action within 30 days after the date of this Order. Signed by Magistrate Judge Daniel E. Butcher on 7/21/2023. (rmc)
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E.C. et al v. Lincoln Military Property Management LP et al Doc. 80 1 2 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA 3 4 5 6 7 8 9 10 11 E.C., a minor, by and through her mother, Gretta Caraballo; V.B., a minor, by and through her father, Jeffrey Logan Bradley; Z.M., a minor, by and through his mother, Abigail Merten; GRETTA CARABALLO; REBECCA PATTERSON; and JOHNATHON MERTEN, Plaintiffs, v. Case No.: 21-cv-2070-JES-BLM ORDER GRANTING UNOPPOSED EX PARTE MOTION TO CONFIRM PLAINTIFF Z.M.’S MINOR’S COMPROMISE [DKT. NO. 73] LINCOLN MILITARY PROPERTY 12 MANAGEMENT LP; et al., 13 Defendants. 14 15 16 17 18 Before the Court is Plaintiffs’ Unopposed Ex Parte Motion to Confirm Plaintiff Z.M.’s Minor’s Compromise. Dkt. No. 73. 1 Defendants do not oppose the Motion. For the reasons stated below, the Court GRANTS the Motion. I. 19 20 21 22 23 24 25 26 BACKGROUND AND NATURE OF THE CLAIM Plaintiffs filed a complaint alleging claims for personal injury against Defendants Lincoln Military Property Management, LP, LMH Holdings, LLC, Camp Pendleton & Quantico Housing, LLC, and LPC Pendleton Quantico PM LP (collectively, “Defendants”). Dkt. No. 8. The Complaint alleges that Plaintiff Johnathon Merten (“Merten”) turned on the faucet of the bathroom sink to give his 21-month-old son, Z.M., a bath. Merten felt the water before putting Z.M. into the sink; it was lukewarm to the 1 This case was assigned to U.S. Magistrate Judge Daniel E. Butcher for review of the 27 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 21-cv-2070-JES-BLM Dockets.Justia.com 1 touch, not hot. Id. at 8. Merten placed Z.M. into the sink. Id. Z.M. was enjoying the bath 2 and playing with the water when he turned the hot water handle. Id. Within seconds, the 3 water became scalding hot. Z.M. screamed in pain. Id. Merten immediately pulled Z.M. 4 from the scalding water. Id. Z.M. continued to scream and cry in pain; the scalding water 5 had burned his right leg, knee, thigh, and genitals. Id. 6 Tricare covered Z.M.’s medical care, and the medical lien is $856.53. Dkt. No. 7 73-1 (Ritterbeck Decl. ¶ 7); Dkt. No. 73-5 (A. Merten Decl. ¶ 6). Z.M.’s medical care is 8 not ongoing. Dkt. No. 73-5 (A. Merten Decl ¶ 6). 9 The Amended Complaint asserts the property at issue is owned by Defendants 10 Camp Pendleton & Quantico Housing, LLC and LMH Holdings, LLC and managed by 11 LPC Pendleton Quantico PM, LP and Lincoln Military Property Management LP. Dkt. 12 No. 8. 13 After extensive litigation, Plaintiffs Johnathon Merten and Z.M. settled their claims 14 with Defendants for $150,000.00, apportioning $83,000 to Z.M. and the balance to 15 Merten. Dkt No. 73 and 73-1 (Ritterbeck Decl. ¶ 4). Plaintiffs now move for approval of 16 Z.M.’s settlement. Dkt. No. 73. 17 18 II. LEGAL STANDARD “District courts have a special duty, derived from Federal Rule of Civil Procedure 19 17(c), to safeguard the interests of litigants who are minors.” Robidoux v. Rosengren, 638 20 F.3d 1177, 1181 (9th Cir. 2011). Rule 17(c) provides that a district court “must appoint a 21 guardian ad litem—or issue another appropriate order—to protect a minor . . . who is 22 unrepresented in an action.” Fed. R. Civ. P. 17(c)(2). “In the context of proposed 23 settlements in suits involving minor plaintiffs, this special duty requires a district court to 24 ‘conduct its own inquiry to determine whether the settlement serves the best interests of 25 the minor.’” Robidoux, 638 F.2d at 1181 (quoting Dacanay v. Mendoza, 573 F.2d 1075, 26 1080 (9th Cir. 1978)); see also Salmeron v. United States, 724 F.2d 1357, 1363 (9th Cir. 27 1983) (“Thus, a court must independently investigate and evaluate any compromise or 28 settlement of a minor’s claims to assure itself that the minor’s interests are protected, even 2 21-cv-2070-JES-BLM 1 if the settlement has been recommended or negotiated by the minor’s parent or guardian 2 ad litem.”). 3 This Court’s Civil Local Rule 17.1 states, “[no] action by or on behalf of a minor 4 . . . will be settled, compromised, voluntarily discontinued, dismissed or terminated 5 without court order or judgment. All settlements and compromises must be reviewed by 6 a magistrate judge before any order of approval will issue.” CivLR 17.1(a). In addition, 7 any “[m]oney or property recovered by a minor or incompetent California resident by 8 settlement or judgment must be paid and disbursed in accordance with California Probate 9 Code Section 3600, et seq.” CivLR 17.1(b)(1). 10 Under California law, the Court must “evaluate the reasonableness of the settlement 11 and determine whether the compromise is in the best interests of the minor.” A.M.L., et 12 al. v. Cernaianu, M.D., et al., LA CV12-06082 JAK (RZx), 2014 WL 12588992, at *3 13 (C.D. Cal. Apr. 1, 2014). The court is afforded “broad power . . . to authorize payment 14 from the settlement—to say who and what will be paid from the minor's money—as well 15 as direct certain individuals to pay it.” Goldberg v. Super. Ct., 23 Cal. App. 4th 1378, 16 1382 (Cal. Ct. App. 1994); see also Peason v. Super. Ct., 136 Cal. Rptr. 3d 455, 459 (Cal. 17 Ct. App. 2012) (explaining that the purpose of requiring court approval of a minor’s 18 settlement is to “allow[ ] the guardians of a minor to effectively negotiate a settlement 19 while at the same time protect[ing] the minor’s interest by requiring court approval before 20 the settlement can have a binding effect on the minor”). 21 District courts “limit the scope of their review to the question whether the net 22 amount distributed to each minor plaintiff in the settlement is fair and reasonable, in light 23 of the facts of the case, the minor’s specific claim, and recovery in similar cases.” 24 Robidoux, 638 F.3d at 1181-82. “[T]he district court should evaluate the fairness of each 25 minor plaintiff’s net recovery without regard to the proportion of the total settlement value 26 designated for the adult co-plaintiffs or plaintiffs’ counsel—whose interests the district 27 court has no special duty to safeguard.” Id. at 1182. “So long as the net recovery to each 28 minor plaintiff is fair and reasonable in light of their claims and average recovery in 3 21-cv-2070-JES-BLM 1 similar cases, the district court should approve the settlement as proposed by the parties.” 2 Id. 3 4 III. DISCUSSION Plaintiffs and Defendants settled their claims for $150,000.00, apportioned as 5 follows: $67,000 to Merten and $83,000 to Z.M. Dkt. No. 73-1 (Ritterbeck Decl. ¶ 4); 6 Dkt. No. 73-5 (A. Merten Decl. ¶ 4). Regarding the $83,000 to Z.M., the Court finds the 7 amount fair, reasonable, and in the minor’s best interests considering the facts and 8 circumstances of this action. The Court also finds the net disbursement to Z.M. after 9 deductions for a medical lien, litigation costs, and attorney’s fees is reasonable. 10 A. 11 Proposed Settlement Amount The Court has reviewed the confidential Settlement Agreement. Under the 12 Settlement Agreement, Z.M. will net $20,770.30 ($83,000.00 less $856.53 for the medical 13 lien, $36,473.17 in litigation costs, and $24,900 in legal fees). The $20,770.30 net 14 proceeds will fund an annuity providing payments to Z.M. as follows: 15 $5,000.00 guaranteed lump sum at Age 18 on 08/01/2037. 16 $10,000.00 guaranteed lump sum at Age 21 on 08/01/2040. 17 $30,742.18 guaranteed lump sum at Age 24 on 08/01/2043. 18 Dkt. No. 73-2. The total payout from the annuity Z.M. is $45,742.18. Dkt. No. 73-1 19 (Ritterbeck Decl. ¶ 7); Dkt. No. 73-5 (A. Merten Decl. ¶ 6). 20 Costs deducted from the settlement proceeds consist of filing fees, expert costs 21 (including four liability experts and three damages experts), seventeen depositions, 22 investigator costs, service costs, medical records, postage, and mediation. Shared costs 23 are split evenly between the three families involved in this lawsuit (Bradley, Merten, and 24 Caraballo). The total costs for the Mertens’ claims, including the individual costs and the 25 portion of the shared costs attributed to them are $64,427.19. Dkt. No. 73-1 (Ritterbeck 26 Decl. ¶ 6); Dkt. No. 73-5 (A. Merten Decl. ¶ 7). This amount is apportioned between Z.M. 27 ($36,473.17) and Merten ($27,954.02) proportionate to their recovery. Id. The Court finds 28 this is a fair and reasonable apportionment. 4 21-cv-2070-JES-BLM 1 The parties submitted an itemized breakdown of the Mertens’ costs, which the 2 Court has reviewed. Dkt. No. 73-4. Although the costs are high in relation to the overall 3 settlement amount, the Court finds these costs are reasonable given the difficulty, 4 complexity, and length of the litigation. 5 In sum, the Court finds the total amount of the settlement and the costs apportioned 6 to Z.M. are fair and equitable under the circumstances. 7 B. Attorney’s Fees 8 The Court next evaluates the reasonableness of the $24,900 in attorney’s fees 9 deducted from the proceeds to Z.M. In California, courts must approve attorney fees for 10 representing a minor. See CAL. PROB. CODE § 2601; Cal. Rule of Ct. 7.955; see also 11 A.G.A. v. Cty. of Riverside, No. EDCV 19-00077-VAP (SPx), 2019 WL 2871160, at *1 12 (C.D. Cal. Apr. 26, 2019) (the district court must “consider whether the net amount 13 distributed to each minor plaintiff in the settlement is fair and reasonable”) (internal 14 quotations omitted). 15 “When approving the amount of attorney’s fees paid as part of a minor’s 16 compromise, California Rule of Court 7.955 is instructive on factors that may be 17 considered ‘in determining whether an attorney’s proposed fee is reasonable.’” L.C.C. by 18 & through Calihan v. United States, No. 20-cv-1489-KSC, 2022 WL 16579320, at *4 19 (S.D. Cal. Nov. 1, 2022). The Court considers, for example, the time and labor required, 20 whether the minor’s representative consented to the fee, the amount of money involved, 21 the result obtained, and whether the fee is fixed, hourly, or contingent. California Rule of 22 Court 7.955(b); see V.C. by & through Anaya v. Hunterwood Techs. USA, Ltd., No. 2123 cv-888-AJB-LR, 2023 WL 2914284, at *5 (S.D. Cal. Apr. 11, 2023), report and 24 recommendation adopted, No. 21-cv-0888-AJB-LR, 2023 WL 4047589 (S.D. Cal. Apr. 25 17, 2023) (consulting Rule 7.955(b) and approving 33.33% contingency fee where 26 attorneys spent hundreds of hours collaborating with experts, conducting investigations, 27 and working with structured settlement professionals to determine the best approach to 28 disburse the settlement proceeds). 5 21-cv-2070-JES-BLM 1 “[F]ees in minors’ cases have historically been limited to twenty-five percent 2 (25%) of the gross recovery.” See, e.g., DeRuyver v. Omni La Costa Resort & Spa, LLC, 3 No. 17-cv-0516-H-AGS, 2020 WL 563551, at *2 (S.D. Cal. Feb. 4, 2020); Napier v. San 4 Diego City, No. 15-cv-581-CAB-KSC, 2017 WL 5759803, at *9 (S.D. Cal. Nov. 28, 5 2017); Mitchell v. Riverstone Residential Grp., No. Civ. S-11-2202 LKK/CKD, 2013 WL 6 1680641, at *2 (E.D. Cal. Apr. 17, 2013). “[M]ost courts require a showing of good cause 7 to award more than 25% of any recovery” and such an award is “rare and justified only 8 when counsel proves that he or she provided extraordinary services.” Schwall v. Meadow 9 Wood Apts., CIV. S-07-0014 LKK, 2008 WL 552432, at *1-*2 (E.D. Cal. Feb. 27, 2008) 10 (internal quotations omitted). 11 Z.M.’s fee agreement provides for a 35% contingency fee. Dkt. No. 73-1 12 (Ritterbeck Decl. ¶ 5); Dkt. No. 73-5 (A. Merten Decl. ¶ 7).As part of the Settlement 13 Agreement, however, counsel agreed to reduce the fee to 30% of the gross recovery. Id. 14 The Court finds a 30% contingency fee is appropriate under the circumstances. 15 Plaintiff’s counsel submitted a declaration explaining the case involved extensive 16 written discovery and three attorneys completed seventeen depositions. Dkt. No. 73-1 17 ¶ 5. Counsel successfully opposed several motions to dismiss and a motion to sever. Id. 18 Counsel attended two settlement conferences and two mediations. Id. Counsel also 19 engaged four liability experts and three damages experts, attended inspections with some 20 of those experts, and obtained expert reports before finally reaching a settlement one 21 month before the final Pretrial Conference. Dkt. No. 73-5 ¶ 7. 22 The Court agrees that counsel expended significant time and resources to obtain a 23 favorable result for Plaintiff Z.M. The Court also notes that Z.M.’s guardian, Abigail 24 Merten, consents to the fee. Dkt. No. 73-5 (A. Merten Decl. ¶ 8-9). The Court, therefore, 25 finds a 30% contingency fee is appropriate here. See Alter by & through Alter v. Cnty. of 26 San Diego, No. 21-cv-1709-BLM, 2023 WL 4166096, at *5 (S.D. Cal. June 22, 2023) 27 (relying on Robidoux to find attorney’s fees for 33.33% of settlement to incompetent adult 28 reasonable given attorney’s experience, the length of the litigation, the difficult and 6 21-cv-2070-JES-BLM 1 complex legal and factual issues raised, and counsel’s significant success); Garcia v. 2 Cnty. of San Diego, No. 15-cv-189-JLS-NLS, 2022 WL 2973429, at *3 (S.D. Cal. July 3 27, 2022) (approving minor’s compromise with attorney’s fees of 50% of settlement 4 pursuant to fee agreement finding that counsel were experienced attorneys and excessive 5 litigation was involved). IV. 6 7 CONCLUSION For the reasons discussed above, the Court APPROVES the settlement agreement 8 and GRANTS Plaintiffs’ Motion to confirm Plaintiff Z.M.’s minor’s compromise. Dkt. 9 No. 73. 10 Under the Settlement Agreement, Plaintiff Z.M. will receive $83,000.00 as the total 11 settlement amount, minus $856.53 in medical fees to Tricare and $36,473.17 in legal 12 costs. The Court also approves attorney’s fees at 30% of Plaintiff Z.M.’s recovery 13 ($24,900.00). The settlement proceeds will be distributed as follows: 14 Gross amount of settlement $83,000.00 15 Medical Lien to be paid from settlement ($856.53) 16 Attorney’s Fees to be paid from settlement ($24,900.00) 17 Legal expenses to be paid from settlement ($36,473.17) 18 Net Balance of Proceeds for annuity $20,770.30. 19 The $20,770.30 net proceeds to Z.M. are to be used to purchase an annuity from 20 MetLife Assignment Company, Inc., which will provide for the following periodic 21 payments to be made by Metropolitan Tower Life Insurance Company, rated A+ XV by 22 A.M. Best: 23 TO PAYEE: Z.M. 24 $5,000.00 payable guaranteed lump sum at Age 18 on 08/01/2037. 25 $10,000.00 payable guaranteed lump sum at Age 21 on 08/01/2040. 26 $30,742.18 payable guaranteed lump sum at Age 24 on 08/01/2043. 27 See Dkt. No. 73-2. These annuity payments to Z.M. total $45,742.18. 28 The parties shall implement the settlement in accordance with the terms of the 7 21-cv-2070-JES-BLM 1 Settlement Agreement. In addition, the parties shall file a Joint Motion to Dismiss this 2 action within 30 days after the date of this Order. 3 IT IS SO ORDERED. 4 5 Dated: July 21, 2023 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 21-cv-2070-JES-BLM
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