A.B. v. San Diego Family Housing, LLC

[7] 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA [10] 11 A.B., a minor, by and through her Case No.: 24-cv-01391-JLS-DEB guardian ad litem, Nia Baxter, [12] REPORT AND Plaintiff, 13 RECOMMENDATION RE: v. PETITION FOR APPROVAL OF [14] MINOR’S COMPROMISE OF SAN DIEGO FAMILY HOUSING, LLC, 15 PLAINTIFF A.B. et al., [16] Defendants. [ECF No. 12] [18] 19 This Report and Recommendation is submitted to the Honorable Judge Janis L. 20 Sammartino, United States District Judge, pursuant to 28 U.S.C. § 636 (b)(1) and Local 21 Civil Rule 17.1 of the United States District Court for the Southern District of California. 22 Before the Court is Plaintiff’s Petition for Approval of Minor’s Compromise of 23 Plaintiff A.B. (ECF No. 12.) Defendants San Diego Family Housing and LMH Military 24 Property Management LP (collectively, “Defendants”) did not file a response to the 25 Petition for Approval. After reviewing the Petition for Approval and all supporting 26 documents, and for the reasons discussed below, the Court RECOMMENDS that 27 Judge Sammartino GRANT the Petition for Approval. 28 /// 1 I. BACKGROUND 2 Plaintiff A.B. (“Plaintiff”) is a minor, appearing by and through her guardian ad 3 litem, Nia Baxter. (ECF No. 1-3 (“Compl.”).) According to the allegations in the 4 Complaint, Defendants owned, operated, and managed the Lofgren Terrace Apartments, 5 located at 1698 Miracosta Circle, Chula Vista, CA. (Id. ¶¶ 11, 15.) On February 20, 2021, 6 as a direct and proximate result of the allegedly dangerous conditions caused by 7 Defendants, Plaintiff, a two-year old child, fell from a second story window at 970 8 Grossmont Court, Apartment 6, located within the Lofgren Terrace Apartments. (Id. ¶ 18; 9 see also ECF No. 12-1 at 8.) Plaintiff sustained serious personal injuries. (Id. ¶¶ 18–19.) 10 As discussed in the Petition for Approval, after the incident, Plaintiff was transported 11 via ambulance to Rady Children’s Hospital and diagnosed with a retrobulbar hemorrhage, 12 a sphenoid sinus fracture, a subdural hematoma, a closed fracture of frontal bone, a thoracic 13 compression fracture, and a subarachnoid hemorrhage. (ECF No. 12 at 2–3.) Plaintiff 14 spent six days in the hospital and underwent further post-charge care, including primary 15 care visits, neurology visits, and speech therapy. (Id. at 3.) At present, Plaintiff is not 16 currently being treated for any injuries related to the incident. (Id.) 17 On May 9, 2024, Plaintiff filed a complaint for negligence against Defendants in 18 California Superior Court. (ECF No. 1.) On August 5, 2024, Defendants removed this 19 action to federal court on the basis of federal enclave jurisdiction and federal agency 20 jurisdiction. (Id.) After Defendants filed an Answer, the U.S. Magistrate Judge assigned 21 to the case, Daniel E. Butcher, held an Early Neutral Evaluation Conference on 22 October 2, 2024. (ECF No. 7.) The case settled. (Id.) Review of the petition for approval 23 of the minor’s compromise was thereafter referred to the undersigned judge for a report 24 and recommendation. (ECF No. 8.) On November 6, 2024, as modified on 25 November 7, 2024, Plaintiff filed the instant Petition for Approval of the Minor’s 26 Compromise. (ECF Nos. 10–12.) Defendants have not filed a response. (See ECF No. 7.) 27 /// 28 /// 1 II. LEGAL STANDARD 2 “District courts have a special duty, derived from Federal Rule of Civil Procedure 3 17(c), to safeguard the interests of litigants who are minors.” Robidoux v. Rosengren, 638 4 F.3d 1177, 1181 (9th Cir. 2011) (citing Fed. R. Civ. P. 17(c)(2) (“The court must appoint 5 a guardian ad litem—or issue another appropriate order—to protect a minor or incompetent 6 person who is unrepresented in an action.”)). “In the context of proposed settlements in 7 suits involving minor plaintiffs, this special duty requires a district court to ‘conduct its 8 own inquiry to determine whether the settlement serves the best interests of the minor.’” [9] Id. (quoting Dacanay v. Mendoza, 573 F.2d 1075, 1080 (9th Cir. 1978)); see also Salmeron 10 v. United States, 724 F.2d 1357, 1363 (9th Cir. 1983) (“[A] court must independently 11 investigate and evaluate any compromise or settlement of a minor’s claims to assure itself 12 that the minor’s interests are protected, even if the settlement has been recommended or 13 negotiated by the minor’s parent or guardian ad litem.”) (citation omitted). 14 Local Civil Rule 17.1 mandates that “[n]o action by or on behalf of a minor or 15 incompetent, or in which a minor or incompetent has an interest, will be settled, 16 compromised, voluntarily discontinued, dismissed or terminated without court order or 17 judgment.” CivLR 17.1.a. The court is required to determine whether the settlement is in 18 the best interests of the minor, considering not only the fairness of the settlement, but also 19 the structure and manner of the plan for the payment and distribution of the assets for the 20 benefit of the minor. See CivLR 17.1.b. 21 In the Ninth Circuit, courts reviewing the settlement of a minor’s federal claims 22 should “limit the scope of their review to the question whether the net amount distributed 23 to each minor plaintiff in the settlement is fair and reasonable, in light of the facts of the 24 case, the minor’s specific claim, and recovery in similar cases.” Robidoux, 638 F.3d at 25 1181–82. Courts should “evaluate the fairness of each minor plaintiff’s net recovery 26 without regard to the proportion of the total settlement value designated for . . . plaintiffs’ 27 counsel—whose interests the district court has no special duty to safeguard.” Id. at 1182 28 (citing Dacanay, 573 F.2d at 1078 ). “So long as the net recovery to each minor plaintiff is 1 fair and reasonable in light of their claims and average recovery in similar cases, the district 2 court should approve the settlement as proposed by the parties.” Id. 3 The Ninth Circuit limited its decision in Robidoux to “cases involving the settlement 4 of a minor’s federal claims.” Id. at 1179 n.2. Where a settlement involves state law claims, 5 federal courts are generally guided by state law rather than Robidoux. See Clines v. Cnty. 6 of San Diego, No. 20CV2504-W(BLM), 2022 WL 16851818 , at *2 (S.D. Cal. Nov. 10, 7 2022), report and recommendation adopted sub nom. K.C.A. by & through Purvis v. Cnty. 8 of San Diego, No. 20-CV-02504-W-BLM, 2022 WL 17097422 (S.D. Cal. Nov. 21, 2022); 9 Lobaton v. City of San Diego, No. 3:15-CV-1416-GPC-DHB, 2017 WL 2610038 , at *2 10 (S.D. Cal. June 16, 2017). 11 The California Probate Code provides the applicable statutory scheme for approval 12 of a minor’s compromise under state law. See Cal. Prob. Code §§ 3601 , et seq. Under 13 California law, the court is tasked with evaluating the reasonableness of the settlement and 14 determining whether the compromise is in the best interest of the minor. See Espericueta 15 v. Shewry, 164 Cal. App. 4th 615 , 625–26 (2008). The Court is afforded “broad power . . . 16 to authorize payment from the settlement—to say who and what will be paid from the 17 minor’s money—as well as direct certain individuals to pay it.” Goldberg v. Superior Ct., [18] 23 Cal. App. 4th 1378, 1382 (1994); see also Pearson v. Superior Ct., 202 Cal. App. 4th 19 1333, 1340 (2012) (explaining that the purpose of requiring court approval of a minor’s 20 settlement is to “allow[ ] the guardians of a minor to effectively negotiate a settlement 21 while at the same time protect[ing] the minor’s interest by requiring court approval before 22 the settlement can have a binding effect on the minor”). 23 Here, the initial complaint was filed in San Diego County Superior Court alleging a 24 state law claim. (ECF No. 1.) The Court, therefore, will apply California law and focus 25 on whether “the compromise is sufficient to provide for the minor’s injuries, care and 26 treatment.” Goldberg, 23 Cal. App. 4th at 1382 . Additionally, the Court will consider the 27 Robidoux “framework for evaluating the reasonableness and fairness of Plaintiff’s 28 settlement.” Lobaton, 2017 WL 2610038 , at *2. 1 III. DISCUSSION 2 To fulfill the special duty of the court to safeguard the interests of minors in the 3 context of settlements proposed in a civil suit, the Court will analyze the proposed 4 settlement, the method of disbursing Plaintiff’s net recovery, and the amount of attorney’s 5 fees and costs. 6 A. Proposed Net Settlement Amount for Plaintiff 7 As set forth in the Petition for Approval, the total settlement amount is $85,000. 8 (ECF No. 12 at 3.) The proceeds are to be divided as follows: $10,000 to the Department 9 of the Navy for reimbursement of its medical lien;1 $5,418.98 to American Medical 10 Response for a related unpaid medical expense;2 $21,250 in attorney’s fees; $2,093 in 11 attorney’s costs; and the remainder to Plaintiff. (Id. at 3–4.) Therefore, the net recovery 12 to Plaintiff is $46,237.42. (Id. at 4.) Plaintiff requests that her net recovery be invested in 13 a single-premium deferred annuity with New York Life Insurance Company. (Id.) 14 Plaintiff’s net recovery reflects fair compensation for her alleged damages. Cf. 15 Tipton v. Camp Pendleton & Quantico Hous., LLC, No. 3:22-CV-00167-W-AHG, 2022 16 WL 5133481 , at *3–4 (S.D. Cal. Oct. 4, 2022) (granting petition for minor’s compromise 17 and approving proposed settlement of $3,750 to each minor for premises liability, 18 negligence, and related claims where minors’ symptoms fully resolved); Sykes v. Shea, No. 19 CV 2:16-2851 WBS GGH, 2018 WL 2335774 , at *2 (E.D. Cal. May 23, 2018) (approving 20 net recovery of $38,993.02 for the minor plaintiff alleging negligence-based personal 21 injury claims related to a motor vehicle collision). Plaintiff endured great physical and 22 mental pain, but she is not undergoing ongoing treatment. (Compl. ¶ 18; ECF No. 12 at 2– 23 3.) The proposed settlement allows for the certainty of recovery for Plaintiff, as opposed [25] 1 Plaintiff’s medical expenses were paid, in large part, by the Department of the Navy. [26] (ECF No. 12 at 3.) The Department of the Navy paid medical expenses totaling $30,153.89 27 but agreed to accept $10,000 in full satisfaction of its lien. (Id.; see also ECF No. 12-1 at 55.) [28] 1 to the uncertainty associated with a trial. Plaintiff contends that the facts and circumstances 2 of the case presented considerable liability challenges in light of relevant case law. (ECF 3 Nos. 12-1 at 2; 14 at 2.) Defendants in this case argued that this case was nearly 4 indistinguishable from Pineda v. Ennabe, 61 Cal. App. 4th 1403, 1408 (1998), which holds 5 that a landlord has no duty of care to ensure that a child tenant does not fall out of an 6 ordinary second story window. (ECF No. 14 at 2.) Despite this, Plaintiff proceeded with 7 the case to try “to obtain some measure of recovery.” (ECF No. 12-1 at 2.) Accordingly, 8 based upon a consideration of the facts, Plaintiff’s claim, and the risks associated with trial, 9 the Court concludes the proposed settlement is fair and reasonable under California and 10 federal law standards. 11 B. Method of Disbursement 12 “Money or property recovered by a minor or incompetent California resident by 13 settlement or judgment must be paid and disbursed in accordance with California Probate 14 Code Section 3600, et seq.” CivLR 17.1.b.1. California law provides for a wide variety 15 of methods for the disbursement of settlement funds to a minor. See Cal. Prob. Code §§ 16 3610 (“When money or other property is to be paid or delivered for the benefit of a minor 17 or person with a disability under a compromise, covenant, order or judgment, and there is 18 no guardianship of the estate of the minor or conservatorship of the estate of the person 19 with a disability, the remaining balance of the money and other property (after payment of 20 all expenses, costs, and fees as approved and allowed by the court under Section 3601) 21 shall be paid, delivered, deposited, or invested as provided in this article.”); 3611 (listing 22 disbursement methods). 23 Here, the parties propose the $46,237.42 be invested in a single-premium deferred 24 annuity with New York Life Insurance Company. (ECF No. 12 at 4.) The Court finds the 25 proposed procedure for disposition of the funds consistent with the California Probate 26 Code, because Plaintiff’s $46,237.42 will be deposited in “a single-premium deferred 27 annuity” until Plaintiff turns 18 years old. See Cal. Prob. Code § 3611 (b). This would 28 provide Plaintiff guaranteed monthly payments of $1,087.09 for seven years starting at age 1 18. (ECF No. 12-1 at 66.) The total guaranteed benefits would be $91,315.56. (Id.) The 2 annuity has fixed benefits and is income tax-free. (Id.) The Court finds the method of 3 disbursement reasonable and within the bounds of applicable law. See Cal. Prob. Code § 4 3602(c)(1) (providing an option that funds be deposited into a single-premium deferred 5 annuity); Shen by & through Brewster v. Club Med SAS, No. 3:19-cv-00349-BEN-BGS, [6] 2019 WL 6907803 , at *3 (S.D. Cal. Dec. 19, 2019), report and recommendation adopted, [7] 2019 WL 7343479 , at *2 (S.D. Cal. Dec. 31, 2019) (approving disbursement of minor’s 8 settlement in structured annuities). 9 C. Attorney’s Fees and Costs 10 For district courts applying California law, “[i]n contingency fee cases, attorneys’ 11 fees for representing a minor historically have been limited to 25% of the gross recovery.” 12 Clines, 2022 WL 16851818 , at *3 (collecting cases); E.C. by and through Caraballo v. 13 Lincoln Mil. Prop. Mgt. LP, No. 21-CV-2070-JES-BLM, 2023 WL 5055474 , at *3 (S.D. 14 Cal. Aug. 8, 2023) (collecting cases); S.G.P. v. Tehachapi Unified Sch. Dist., No. 1:22-cv15 01066-ADA-BAK, 2022 WL 4450750 , at *9 (E.D. Cal. Sept. 23, 2022), report and 16 recommendation adopted sub nom. S.G.P. v. Turlock Unified Sch. Dist., No. 11:22-cv17 01066-ADA-CDB, 2022 WL 17406537 (E.D. Cal. Dec. 2, 2022) (“Attorneys’ fees in the 18 amount of twenty-five percent (25%) are the typical benchmark in contingency cases for 19 minors.”). “‘[M]ost courts require[] a showing of good cause to award more than 25% of 20 any recovery’ and such an award is ‘rare and justified only when counsel proves that he or 21 she provided extraordinary services.’” Clines, 2022 WL 16851818 , at *3 (quoting Schwall 22 v. Meadow Wood Apartments, No. CIV. S-07-0014 LKK, 2008 WL 552432 , at *1 (E.D. 23 Cal. Feb. 27, 2008)). To determine whether a request for attorney’s fee is reasonable, the 24 court may consider factors such as the time and labor required, whether the minor’s 25 representative consented to the fee, the amount of money involved, the result obtained, and 26 whether the fee is fixed, hourly, or contingent. Clines, 2022 WL 16851818 , at *3 (citing 27 Cal. R. Ct. 7.955(b)). 28 /// 1 Here, Plaintiff’s counsel is only seeking 25% of the gross recovery, which amounts 2 to $21,250.3 That is consistent with the contingency fee agreement Plaintiff signed with 3 counsel at the outset of litigation. (ECF No. 12-1 at 69.) Plaintiff’s counsel represents that 4 the attorneys who worked on the case have extensive experience representing clients in 5 personal injury cases and exercised substantial skill and expertise in resolving this case. 6 (Id. at 3.) Counsel spent substantial amounts of time both before and during litigation. 7 (Id.) The pre-litigation expenditure of time proved fruitful as counsel resolved this matter 8 at an early stage in the proceedings and avoided extensive and costly litigation. (Id.) Upon 9 consideration of the foregoing, the Court finds the attorney’s fees requested to be fair and 10 reasonable. The Court further finds Plaintiff’s counsel’s costs, which cover, inter alia, 11 process services and stenographers, in the amount of $2,093.60, to be reasonable. (See id. 12 at 74.) 13 IV. CONCLUSION 14 For the reasons discussed above, IT IS HEREBY RECOMMENDED that 15 Judge Sammartino issue an Order: (1) adopting this Report and Recommendation; (2) 16 GRANTING Plaintiff’s unopposed Petition for Approval (ECF No. 12); and (3) approving 17 the proposed settlement as fair and reasonable. 18 IT IS ORDERED that, pursuant to 28 U.S.C. § 636 (b)(1)(C), any party to this action 19 may file written objections with the Court and serve a copy on all parties no later than 20 /// 21 /// 22 /// 23 /// [25] 3 Counsel has provided no documentation in support of this attorney’s fees request. [26] Nonetheless, the Court finds that in consideration of the duration of this case, the amount 27 of work performed by Plaintiff’s counsel, and the fee request’s adherence to an amount which does not exceed the 25% limit historically applied, the amount of attorney’s fees [28] 1 || January 20, 2025. The document should be captioned “Objections to Report and 2 || Recommendation.” If objections are filed, any reply is due by February 3, 2025. 3 IT IS SO ORDERED. 4 ||Dated: January 6, 2025 - n. Jill L. Burkhardt 6 ited States Magistrate Judge