Judge Daniel M. Crowley, Case Number: 19STCV41281, Date: 2023-05-25 Tentative Ruling

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Petitioner April Melissa Perez’s petition to approve minor’s compromise for Ismirah Bella Chavarria Perez is granted. The Court orders the funds invested in the selected single-premium deferred annuity.

Petitioner April Melissa Perez’s petition to approve minor’s compromise for Jacob Rick Perez is granted. The Court orders the funds invested in the selected single-premium deferred annuity.

Petitioner April Melissa Perez’s petition to approve minor’s compromise for Layla Marie Chavarria Perez is granted. The Court orders the funds invested in the selected single-premium deferred annuity.

The Court requires attendance at the hearing by the Petitioners to grant the petition. (CRC Rule 7.952.)

Petitioner April Lee Mijares (“A. Mijares”), on behalf of Claimant Ebony Hazel Mijares (“Ebony”) petitions the Court to approve the minor’s compromise in the settlement of the instant action.

Petitioner April Melissa Perez (“A. Perez”), on behalf of Claimants Ismirah Bella Chavarria Perez (“Ismirah”), Jacob Rick Perez (“Jacob”), and Layla Marie Chavarria Perez (“Layla”) petitions the Court to approve minors’ compromises in the settlement of the instant action.

A. Mijares, individually and as guardian ad litem for Ebony (collectively, “Mijares Claimants”); and A. Perez, individually and as guardian ad litem for Ismirah, Jacob, and Layla (collectively, “Perez Claimants) together with other named Plaintiffs (collectively, “Plaintiffs”) filed an initial complaint against Defendants ERG Capital, LLC (“ERG”), Gregory T. Royston (“Royston”), American State Properties Inc. (“ASP”), Forbix Ventures LLC (“Forbix”), U.S. Bank Trust, N.A. as Trustee for LSF9 Master Participation Trust (“USBT”), WRI Property Management CA (“WRI”), and Central Point LLC (“Central Point”) (collectively, “Defendants”) on November 15, 2019. Plaintiffs filed the operative first amended complaint (“FAC”) against Defendants on April 28, 2021, for (1) violation of Civil Code §1942.4, (2) tortious breach of the warranty of habitability, (3) private nuisance, (4) Business & Professions Code §§17200 et seq., and (5) negligence for issues at an apartment building located 5712 S. Figueroa St. Los Angeles, CA 90037 (“Subject Property”), owned, managed and/or controlled by Defendants, where Plaintiffs were tenants. (See FAC.) Pursuant to the instant petitions, Defendants ERG, Royston, Ron Rozillio (“Rozillio”), Forbix, USBT, WRI, and Central Point have agreed to pay Plaintiffs to settle the claims. (See Petitions ¶¶10b, 11, Attachments 10b, 11b(5).)

A settlement was reached pursuant to which Defendants ERG, Royston, Ron Rozillio (“Rozillio”), Forbix, USBT, WRI, and Central Point agreed to pay a total of $1,837,500.00. (Petitions ¶10a, Attach. 10b.) The four settling minor claimants (Ebony, Ismirah, Jacob, and Layla) will receive a gross sum of $40,000.00 each, and the four adult Plaintiffs will receive $215,791.25 each. (Petitions ¶16(a); Decl. of Castelblanco ¶¶9-10.) The total amount of attorney’s fees for which court approval is requested is $40,000 (or $10,000 per minor), calculated as twenty-five percent of the minor claimants’ settlement total and is based on a contingency basis; expenses incurred over the course of litigation will be borne by the adult Plaintiffs alone. (See Petitions ¶¶13a, 16(c)-(d); Decl. of Castelblanco ¶¶10, 12(c).) The net balance of proceeds for each minor claimant is $30,000. (Petitions ¶¶15, 16(f).) All procedural requirements have been met, as Petitioners have completed a Judicial Council form MC-350 on behalf of each minor claimant, signed by their respective Petitioner, as well as Form MC-351 on the minor claimants’ behalf.

Compromises of disputed claims brought by minors are governed in part by C.C.P. §372. The statute allows a guardian ad litem to appear in court on behalf of a minor claimant and gives the guardian ad litem the power to compromise the minor’s claim “with the approval of the court in which the action or proceeding is pending.” A petition for court approval of a compromise must be verified by the petitioner and must contain a full disclosure of all information that has any bearing upon the reasonableness of the compromise or covenant. (CRC Rule 7.950.) CRC Rule 7.952(a) requires the attendance of the petitioner and claimant at the hearing on the compromise of the claim unless the court for good causes dispenses with their personal appearance.

“Neither section 372 nor the California Rules of Court (rules 7.950 & 7.952) contemplates a noticed motion and adversary hearing when court approval of a minor’s compromise is sought. Although we need not decide the question, it would appear that a petition to approve or disapprove a minor’s compromise may be decided by the superior court, ex parte, in chambers.” (Pearson v. Superior Court (2012) 202 Cal.App.4th 1333, 1337.)

CRC Rule 7.955(a) requires the Court to use “a reasonable fee standard” when approving and allowing the amount of attorneys’ fees payable from money to be paid for the benefit of a person with a disability and requires that the Court “give consideration to the terms of any representation agreement made between the attorney and the representative of the minor . . . and evaluate the agreement based on the facts and circumstances existing at the time the agreement was made, except where the attorney and the representative of the minor . . . contemplated that the attorney’s fee would be affected by later events.”

CRC Rule 7.955(b) sets forth fourteen nonexclusive factors the Court may consider in determining a reasonable attorney’s fee. CRC Rule 7.955(c) requires that a petition requesting Court approval and allowance of an attorney’s fee under 7.955(a) must include a declaration from the attorney that addresses the factors listed in 7.955(b) that are applicable to the matter before the Court.

Petitioners A. Mijares and A. Perez seek court approval for a settlement under which minor claimants would each receive $30,000.00. The amounts reflect payment amounts to each minor claimant after deduction of attorneys’ fees representing 25% of each minor claimant’s settlement. (See Petitions ¶16(f).)

This is a habitability suit, in which minor claimants lived in uninhabitable conditions, including but not limited to living with faulty plumbing, deteriorated walls and floors, poor maintenance, and infestations of cockroaches, rats, and bed bugs, which caused injuries including insect bites, loss of appetite, lack of sleep, and emotional distress. (Petitions ¶¶5-6.) The minor claimants have recovered completely from these injuries with no permanent injuries. (Petitions ¶8.)

Petitioners’ counsel, Eric E. Castelblanco, declares that the attorney fees requested are based on a contingency basis if there was no recovery, there would have been no attorney fee charge. (Decl. of Castelblanco ¶12(b).) Chapman declares all costs are being borne by the adult Plaintiffs. (Decl. of Castelblanco ¶12(c).) Castelblanco declares he represented this Plaintiffs’ group since on or about April 24, 2019, and throughout this case, the parties engaged in extensive litigation, including inspections by government agencies; subpoenas to government agencies and Defendants’ agents, including maintenance and pest control persons; written discovery to all Plaintiffs and Defendants, including form and special interrogatories, requests for admission and requests for production of documents, depositions, including of Plaintiffs and Defendants and their agents, hundreds of photographs and videos taken, and investigation into Defendants’ business practices, as well as several motions for summary judgment and adjudication. (Decl. of Castelblanco ¶12(d).)

Petitions include copies of agreements between Petitioners and their counsel. (Attachments 17(a)(2).) Each agreement identifies the names of the individuals who signed the submitted fee agreements on behalf of the minor clients. As such, the submitted copies of the written attorney fee arrangement agreements with minor claimants are sufficient and support the attorneys’ fees request.

Petitioners request this Court order the disposition of the minor claimants’ balance of the settlements, in the amount of $30,000.00 per minor claimant, be invested in a single-premium deferred annuity, subject to withdrawal only on authorization of the Court. (Petitions ¶18(b)(3), Attachments 18(b)(3).) Petitioners select the following structured settlement annuity for the disposition of the minor claimants’ balances: Metropolitan Tower Life Insurance Company. (Petitions at Attachs. 18(b)(3).)

Based on the foregoing, the petitions to approve the minors’ compromise are granted. The Court orders the funds invested in the selected single-premium deferred annuities.

Hon. Daniel M. Crowley

Judge of the Superior Court