Judge Kerry Bensinger, Case 21STCV00771 2023-04-12 Tentative Ruling

Claimant Dominic Lee Marinov Seco (“Claimant”), a minor, by and through his parent and guardian ad litem, Jordan Leigh Marinov (“Petitioner”), has agreed to settle his claims against Defendants Providence Little Company of Mary Medical Center of Torrance, Anila Management LLC dba Lead Healthstaff and Anita Ross, R.N., and Mia Je Naee Sanders, M.D. in exchange for $5,000,000. If approved, $813,980.52 will be used for attorney’s fees and $51,240.99 for nonmedical expenses, leaving a balance of $4,134,778.49 for Claimant.

Court approval is required for all settlements of a minor’s claim. (Probate Code §§ 3500, 3600, et seq.; Code Civ. Proc. § 372.)

Claimant requests $2,000,000 of the settlement balance to be invested in a single-premium deferred annuity, subject to withdrawal only on authorization of the Court. The terms and conditions of the annuity are specified in Attachment 18b(3). Claimant requests the remaining settlement balance of $2,134,778.49 to be paid or transferred to the trustee of a special needs trust—which is entitled, “Dominic Lee Marinov Seco Special needs Trust”, and is attached to the present Petition as Attachment 18b(4).

The Court has reviewed the proposed settlement and concludes the proposed settlement is fair and reasonable. Further, the Court concludes the requested attorney’s fees, which amounts to approximately 16% of the total settlement, is also fair and reasonable.

As to the balance of the settlement proceeds to be transferred into a proposed Special Needs Trust (“SNT”), the Court’s Probate Department reviewed the SNT. After review, the Court rules as follows:

A cornerstone requirement of an SNT instrument is that it have a “payback provision” whereby any trust assets remaining upon termination of the SNT by death of the beneficiary (or any other reason), the remaining trust assets shall be “paid back” to the state to the extent of benefits received by the beneficiary. The idea is that the assets in a SNT are deemed to be exempt from counting toward the $2,000 asset limit for purposes of calculating benefits eligibility, but that ends upon beneficiary’s death and the state recovers those funds before they are distributed to beneficiary’s heirs. The existence of this payback provision is the most basic requirement of a SNT instrument. Without that provision, the SNT beneficiary would almost immediately lose benefits eligibility. Put another way, the SNT assets would not qualify as exempt and instead would be counted toward beneficiary’s $2,000 asset limit. The SNT instrument here contains an adequate payback provision in Article III, Section 3 of the proposed SNT instrument. (Petition, Attachment 18b(4), Dominic Lee Marinov Seco Special Needs Trust, at p. 6.)

The main requirements for court created or funded trusts are set forth at California Rules of Court (“CRC”), Rule 7.903, subd. (c) and LASC Rule 4.116, subd. (b). The proposed trust instrument meets those requirements.

Petitioner includes the following additional requests for relief that are beyond those fundamental to the creation and funding of a SNT:

1. Petitioner requests authority for trustee, Wells Fargo Bank, N.A., to receive periodic trustee fees that would be evaluated and approved by the probate court during the accountings in the trust supervision case over time. (Petition, Attachment 18b(4), at p. 4.)

2. Petitioner requests authority to pay $4,500 to attorney Randolph Sharon, SNT specialty counsel, for drafting of the trust instrument and related portions of the petition. (Petition, Attachment 18b(4), at p. 5.)

When ultimately approving the establishment or funding of a SNT from settlement proceeds, the Court must make the following findings pursuant to Probate Code section 3604, subdivision (b):

1. The SNT beneficiary has a disability which substantially impairs the individual’s ability to provide for her own care or custody and constitutes a substantial handicap;

2. The SNT beneficiary is likely to have special needs that will not be met without the trust;

3. The money to be paid to the trust does not exceed the amount that appears reasonably necessary to meet the SNT beneficiary’s special needs.

Upon review of the factual allegations set forth in the Petition and the attachments supporting settlement, the Court finds that Claimant has a disability which substantially impairs his ability to provide for his own care and custody and constitutes a substantial handicap. (See Petition, Item 8c; Attachment 8c, Report of Luis Montes, M.D.; Attachment 13a, ¶ 2.) The Court further finds Claimant’s needs cannot be met without the trust, and the money to be paid to the trust is reasonably necessary to meet Claimant’s special needs.

The SNT instrument indicates that Wells Fargo Bank, N.A., will be the SNT trustee. Normally, bond must be required of a trustee unless the trustee is a corporate fiduciary. (California Rules of Court, Rule 7.903, subd. (c)(5), Prob. Code, § 2320.) The bank is a corporate fiduciary. Accordingly, a bond is not required.

When seeking approval of a SNT, notice of the hearing and service of the petition must be made upon three state agencies including the Dept. of Mental Health, Dept. of Developmental Services, and Dept. of Health Care Services. (Prob. Code, §§ 3602, subd. (f), 3611, subd. (c).). A separately-filed proof of service indicates such service. Notice is complete.

An order establishing an SNT should include language requiring the submission of a Notice of Commencement of Proceedings for a Court Supervised Trust on LASC Form PRO 044 within 60 days. Filing of LASC Form PRO 044 will begin the trust administration for the SNT that will host the future SNT accountings and any bond issues or other trust issues. A 60 day date needs to be added to Attachment 13, page 18, paragraph 8.

When the funding of a SNT is allowed, the court order should include language requiring petitioner to file an accounting within a year, with a specific date specified to allow time for drafting and filing. A 14 month date needs to be added to Attachment 13, page 18, paragraph 12.

As discussed below, a 60 day OSC needs to be added to Attachment 13, page 18, paragraph 10.

The Court sets an OSC re: Status of Probate Case on June 12, 2023 at 8:30 a.m. in Department 27 of Spring Street Courthouse to determine if the petitioner has filed proof in the civil case that the trust file has been opened in the Probate Department of the Los Angeles Superior Court.

Parties who intend to submit on this tentative must send an email to the Court at SSCDEPT27@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.

Hon. Kerry Bensinger

Judge of the Superior Court