Judge: Daniel M. Crowley, Case: BC691744, Date: 2022-08-12 Tentative Ruling
Case Number: BC691744 Hearing Date: August 12, 2022 Dept: 28
Defendant West Hills Hospital and
Medical Center’s Motion to Enforce Settlement
Having considered the moving, opposing and reply papers, the
Court rules as follows.
BACKGROUND
On January 25, 2018, Plaintiff Joshua Saeta (“Plaintiff”)
filed this action against Defendant West Hills Hospital and Medical Center
(“Defendant”) for medical negligence.
On April 27, 2018, Defendant filed an answer.
On June 10, 2022, Defendant filed a Motion to Enforce
Settlement to be heard on June 30, 2022. On June 20, 2022, Plaintiff filed an
opposition. On June 23, 2022, Defendant filed a reply.
At the June 30, 2022, hearing on the motion, the Court heard
argument and continued the hearing on the motion to August 12, 2022. The Court
also scheduled a OSC Re: Whether the Settlement is Arbitrary and Capricious to
be heard on August 12, 2022, so that the Court could evaluate the merits of the
settlement.
Defendant filed the opening brief on July 15, 2022.
Plaintiff filed an opposition on July 29, 2022. On August 5, 2022, Defendant
filed a reply.
Trial is currently scheduled for March
1, 2023.
PARTY’S REQUESTS
Defendant requests that the Court enforce settlement.
Plaintiff requests the Court deny the motion.
LEGAL
STANDARD
Code of Civil Procedure section 664.6 states:
“(a) If parties to pending litigation
stipulate, in a writing signed by the parties outside of the presence of the
court or orally before the court, for settlement of the case, or part thereof,
the court, upon motion, may enter judgment pursuant to the terms of the
settlement. If requested by the parties, the court may retain jurisdiction over
the parties to enforce the settlement until performance in full of the terms of
the settlement.”
Code
of Civil Procedure section 372(a)(1) states:
“When a minor, a person who
lacks legal capacity to make decisions, or a person for whom a conservator has
been appointed is a party, that person shall appear either by a guardian or
conservator of the estate or by guardian ad litem appointed by the court in
which the action or proceeding is pending, or by a judge thereof, in each case.
A guardian ad litem may be appointed in any case when it is deemed by the court
in which the action or proceeding is prosecuted, or by a judge thereof,
expedient to appoint a guardian ad litem to represent the minor, person lacking
legal capacity to make decisions, or person for whom a conservator has been
appointed, notwithstanding that the person may have a guardian or conservator
of the estate and may have appeared by the guardian or conservator of the
estate. The guardian or conservator of the estate or guardian ad litem so
appearing for any minor, person who lacks legal capacity to make decisions, or
person for whom a conservator has been appointed shall have power, with the
approval of the court in which the action or proceeding is pending, to
compromise the same, to agree to the order or judgment to be entered therein
for or against the ward or conservatee, and to satisfy any judgment or order in
favor of the ward or conservatee or release or discharge any claim of the ward
or conservatee pursuant to that compromise.”
DISCUSSION
Defendant claims that the case was settled in its entirety
following a mediation on July 26, 2021. (Ex. A.) The stipulation was signed by
all relevant parties to the litigation.
Plaintiff’s counsel subsequently submitted a Notice of Settlement of the
Entire Case. Defendant prepared and sent Plaintiff a “General Release of All
Claims,” as a settlement agreement, per the terms agreed to at mediation;
Plaintiff and Plaintiff’s counsel have yet to sign or return the release.
Plaintiff argues that Plaintiff repudiated the settlement
before any approval by the Court. The filed notice of settlement made the
settlement conditional, with a request for dismissal to be filed by February
10, 2022. According to Plaintiff, the conditions required for settlement were
not met before this deadline, resulting in the settlement not being
enforceable. (Declaration of Jennifer Saeta ¶ 8.; Declaration of Steven Saeta ¶
7) Additionally, parties at the mediation state they rescinded any intent to
enter into a settlement agreement. (J. Saeta Decl. ¶ 9; S. Saeta Decl. ¶ 9.)
Additionally, it appears that the conservators who signed the agreement did not
have prior court approval to facilitate such a claim.
Essentially, Plaintiff argues that because his guardians
repudiated the settlement reached at the July 26, 2022, mediation before the Court
approved it, the settlement cannot be enforced.
It is true that the Court must defer to the guardians’ decision to
repudiate the settlement, but that deference is not unlimited. The Court may still enforce the settlement if
the Court finds that the repudiation is averse to the interests of the
Plaintiff. (Scruton v. Korean Air
Lines Co. (1995) 39 Cal.App.4th 1596, 1608.)
In Scruton, the Court found that under California
Civil Code section 372, a guardian had no power, without authorization of the
trial court, to bind a minor to a compromise of their claims, and that any
purported settlement entered into by the guardian was neither final nor binding
until trial court approval. Hence, a settlement could be repudiated by the
guardian at any time until such court approval was obtained. The Court held
that the trial court considering the defendant’s motion to enforce the
settlement, when faced with a rejected compromise, was required to grant the
guardian some deference, and could only unilaterally enforce the settlement upon
a finding that the guardian’s repudiation was averse to the best interests of
the minor. Because the trial court failed to make such a finding, the trial
court’s enforcement of the settlement was reversed. (Scruton v. Korean Air
Lines Co. (1995) 39 Cal.App.4th 1596, 1608.)
The Scruton Court found support in the Ninth Circuit Court
of Appeals' decision in Dacanay v. Mendoza (9th Cir. 1978) 573
F.2d 1075:
“Research
has revealed no California cases which deal specifically with the power of a
guardian ad litem to repudiate a settlement before trial court approval, or the
power of the trial court to enforce a compromise of a minor's claim despite a
guardian's repudiation. However, the Ninth Circuit Court of Appeals' decision
in Dacanay v. Mendoza (9th Cir. 1978) 573 F.2d 1075 is squarely
on point. While Dacanay involved application of Guam law, the Guam Code
of Civil Procedure section 372 is patterned after and closely follows the
language of California's section 372 (573 F.2d at p. 10787), and so it is persuasive authority.”
(Scruton
v. Korean Air Lines Co. (1995) 39 Cal.App.4th 1596, 1604.)
In, Dacanay, the Court noted that the power of a guardian
to repudiate a settlement was limited, however.
“Our
holding does not imply that guardian ad litem may capriciously frustrate the
efforts of the adversary of a minor litigant to negotiate a fair settlement. As
emphasized above, the binding characteristic of the settlement derives from the
approval of the court and not from the consent of the guardian ad litem, who is
but an officer of the court. Therefore, an obdurate guardian ad litem cannot
with impunity foreclose the court from directing a proposed settlement;
otherwise, the court's jurisdiction over the minor as a ward of the court would
be surrendered to one of the court's own officers.
(Dacanay
v. Mendoza (9th Cir. 1978) 573 F.2d 1075, 1080.)
Therefore, under Scruton and Dacanay, a finding
that a guardian effectively repudiated a settlement does not end the court's
inquiry. Rather, even though a guardian may make a timely repudiation, the
trial court may unilaterally enforce the compromise if the court finds the
guardian acted arbitrarily, capriciously, and inimical to the plaintiff’s best
interest. Scruton, supra, 39 Cal. App.
4th at 1607, 1608; Dacanay, supra, 573 F.2d at 1080.
At the June 30, 2022, hearing,
the Court requested briefing on the issue of whether in repudiating the subject
settlement, Plaintiff’s guardians acted arbitrarily, capriciously, or inimical
to the Plaintiff’s interests. Defendant
filed a brief explaining that the Plaintiff’s guardians had agreed to a
settlement of $4,250,000, from which $709,166.67 in attorney’s fees would be paid,
as well as a MediCal lien of approximately $623,761 and a MediCare lien of approximately
$41,715, each of which would be subject to negotiation between Plaintiff and MediCal
or MediCare. The net settlement to Plaintiff, therefore, would be+/- $3,00’0,000.
Defendant explained that the value of Plaintiffs settlement is impacted by
Plaintiff’s life expectancy. Plaintiff argued that Plaintiff would live until
2036. The Defendant's expert projects his life expectancy at an additional 7-8
years, i.e., to about 2029. Defendant
argued that most of Plaintiff’s ongoing medical needs be covered by medical
insurance, apart from home nursing care if he continues to reside at the family
home. Prior to Covid, he had been residing at Healthy Life Congregate Care in
Simi Valley, which was paid for through his Social Security payments, at a
total cost of about $2,000/month. Defendant argued that the cost of Plaintiffs
true medical and care needs is best reflected by the MediCare and MediCal liens
in the case, which are $623,761 (MediCal) and $41,715 (MediCare) during the 4 ½
11 years from Feb. 2017 - July 2021, averaging about $147,000/year. Defendant
argues that the pending settlement more than covers those care needs,
especially with a guaranteed annuity, with significant money left over.
Plaintiff’s brief did not address the merits or lack thereof
of the settlement sought to be repudiated, and, instead, focuses simply on the
point that a settlement cannot be enforced absent the Court’s approval of
it. The parties were ordered to show
cause on August 11, 2022, why the settlement was arbitrary or capricious. The order should have been to show cause as
to whether the guardians’ repudiation of the settlement was arbitrary or
capricious, but the outcome is the same – in essence, the Court requested briefing
on the issues presented in Scruton, supra, 39 Cal. App. 4th at
1607, 1608; Dacanay, supra, 573 F.2d at 1080. Plaintiff’s brief failed to present any fact
or argument on the merits of the issues as to why the settlement should not be
enforced or why the guardians’ repudiation of the settlement was not arbitrary, capricious, or inimical to the Plaintiff’s best
interest. Accordingly, the Court is
left with Defendant’s presentation, and the Court can only find that the
guardians’ repudiation of the settlement was arbitrary, capricious, and inimical
to the Plaintiff’s best interests.
CONCLUSION
Defendant’s
Motion to Enforce Settlement is GRANTED.
Plaintiff is ordered to file an MC-350 petition seeking approval of the
settlement and an MC-351 order. The hearing
on the motion to approve the settlement shall be on September 16, 2022, at 1:30
p.m. in Dept. 28.
All
other future dates are advanced and vacated.
Discovery is cut-off.
Moving party is ordered to give
notice of this ruling.
Moving Party is ordered to file the proof of service of this
ruling with the Court within five days.
The parties are directed to the header of this
tentative ruling for further instructions.