Judge: Lisa R. Jaskol, Case: 22STCV30010, Date: 2025-03-04 Tentative Ruling
Case Number: 22STCV30010 Hearing Date: March 4, 2025 Dept: 28
Having considered the petitioning papers, the Court rules as follows.
BACKGROUND
On September 14, 2022, Plaintiff Jayme Mae LaPlante (“Plaintiff”), a minor, by and through her guardian ad litem Jenelle Arnold (“Arnold”), filed this action against Defendants Parkia, Inc. (“Parkia”), City of Los Angeles (“City”), County of Los Angeles (“County”), Anthony Michael Hernandez (“Hernandez”), and Does 1-30 for motor vehicle tort, general negligence, negligence per se, wrongful death, and survival action.
On November 28, 2022, Plaintiff amended the complaint to include Defendant Catalina Partida (“Partida”) as Doe 1. On January 23, 2023, Plaintiff amended the complaint to include Defendants City of Los Angeles Department of Public Works as Doe 2, Los Angeles Department of Water and Power (“LADWP”) as Doe 3, Julio Cesar Regalado (“Regalado”) as Doe 4, and Ismael ‘S’ Zapata (“Zapata”) as Doe 5. On November 20, 2023, Plaintiff amended the complaint to include Defendant David Claudio (“Claudio”) as Doe 6.
On November 7, 2022, Parkia filed an answer and a cross-complaint against Cross-Defendants Hernandez and Roes 1-50 for implied indemnity, contribution, and declaratory relief.
On November 16, 2022, Hernandez filed an answer to Plaintiff’s complaint. On March 7, 2023, Regalado and Zapata filed an answer to Plaintiff’s complaint. On December 6, 2023, Claudio filed an answer to Plaintiff’s complaint.
On December 27, 2022, the Court dismissed the County without prejudice at Plaintiff’s request.
On April 24, 2023, LADWP filed an answer and a cross-complaint against Cross-Defendant Parkia and Roes 1-15 for express indemnity, comparative indemnity, contribution, and declaratory relief. On June 30, 2023, Parkia filed an answer to LADWP’s cross-complaint. On August 15, 2024, the Court dismissed LADWP’s cross-complaint with prejudice at LADWP’s request.
On June 2, 2023, the City filed an answer to Plaintiff’s complaint. On June 5, 2023, the City filed a cross-complaint against Cross-Defendants Parkia and Roes 1-10 for indemnification, apportionment of fault, declaratory relief, and express indemnity. On June 30, 2023, Parkia filed an answer to the City’s cross-complaint. On August 15, 2024, the Court dismissed the City’s cross-complaint without prejudice at the City’s request.
On February 1, 2024, the Court granted the City’s motion for judgment on the pleadings with leave to amend.
On February 29, 2024, Plaintiff filed a first amended complaint.
On May 1, 2024, Hernandez and Partida filed an answer. On May 3, 2024, Parkia, Regalado, Zapata, and Claudio filed an answer.
On May 20, 2024, the Court sustained LADWP’s demurrer to Plaintiff’s first amended complaint with 30 days leave to amend.
On June 20, 2024, Plaintiff filed a second amended complaint.
On August 14, 2024, the Court dismissed LADWP, the City, and Partida with prejudice at Plaintiff’s request.
On August 27, 2024, Plaintiff filed a notice of settlement.
On November 19, 2024, Petitioner Jenelle Arnold (“Petitioner”) filed a petition to approve the settlement of Plaintiff’s claims. The petition was set for hearing on January 13, 2025. The Court continued the hearing to March 4, 2025.
PETITIONER’S REQUEST
Petitioner Jenelle Arnold asks the Court to approve the compromise of the pending action of Plaintiff Jayme Mae LaPlante, including placement of a portion of the net settlement proceeds in a trust.
DISCUSSION
A. The petition to approve minor’s compromise
On November 19, 2024, Petitioner filed a petition to approve the compromise of Plaintiff’s case. The petition lists the following information:
Gross
settlement amount: $9,500,000.00
Medical
expenses to be paid from settlement proceeds: $0
Attorney’s
fees: $3,800,000.00
Expenses: $135,712.82
Net
balance: $5,291,118.00
The Court has considered the factors listed in rule 7.955, including counsel’s declaration and the retainer agreement, and concludes that an attorney’s fee award of 30 percent is reasonable in this case. (See Schultz, supra, 27 Cal.App.5th at p. 1175 [“Even if there is no benchmark starting point for attorney fees in cases under California Rules of Court, rule 7.955, a court may of course reasonably determine that 25 percent is an appropriate percentage in a given case”].) Therefore, the Court awards attorney’s fees of $2,850,000.00. As a result, the net settlement amount will be $6,241,118.00.
B. Trust
Petitioner proposes to fund $330,540.00 into a minor’s settlement trust for the benefit of Plaintiff and to use the remaining $4,960,578.00 to purchase annuities that would pay into the minor’s trust. Because the Court has ordered that the net settlement amount be increased by $950,000.00 (using funds taken from the proposed attorney’s fee award), the amounts used to purchase annuities and to fund a minor’s settlement trust may need to be recalculated.
Petitioner proposes using settlement funds to purchase the following annuities:
1. Metropolitan Tower Life Insurance Company, which will produce $6,500.00 payable monthly, guaranteed for 15 year(s) and 6 month(s), beginning on March 1, 2025, increasing at a rate of 3.00% compounded annually, with the last guaranteed payment on August 1, 2040.
2. Metropolitan Tower Life Insurance Company, which will produce $75,000.00 payable annually, guaranteed for 4 year(s), beginning on August 24, 2040 at age 18, with the last guaranteed payment on August 24, 2043 at age 21 (for college education funds).
3. Metropolitan Tower Life Insurance Company, which will produce $150,000.00 payable annually, guaranteed for 2 year(s), beginning on August 24, 2044 at age 22, with the last guaranteed payment on August 24, 2045 at age 23 (for Graduate School education funds).
4. Metropolitan Tower Life Insurance Company, which will produce $500,000.00 paid as a lump sum on August 24, 2050, guaranteed, at age 28, and $1,000,000.00 paid as a lump sum on August 24, 2054, guaranteed, at age 32.
Other annuities would pay directly to Plaintiff (after age 18) as follows:
5. Prudential Insurance Company of America, which will produce $3,500.00 payable monthly, guaranteed for 6 year(s), beginning on August 24, 2040 at age 18, with the last guaranteed payment on July 24, 2046.
6. Prudential Insurance Company of America, which will produce $5,000.00 payable monthly, guaranteed for 11 year(s), beginning on August 24, 2046 at age 24, with the last guaranteed payment on July 24, 2057.
7. Prudential Insurance Company of America, which will produce $12,000.00 for life, payable monthly, guaranteed for 20 year(s), beginning on August 24, 2057 at age 35, increasing at a rate of 3.00% compounded annually, with the last guaranteed payment on July 24, 2077.
8. Prudential Insurance Company of America, which will produce $2,000,000.00 paid as a lump sum on August 24, 2058, guaranteed, at age 36, and $4,822,104.69 paid as a lump sum on August 24, 2062, guaranteed, at age 40.
Petitioner proposes to fund the proceeds into a minor’s trust (not a special needs trust) that would become revocable at Plaintiff’s election when Plaintiff/beneficiary reaches 18 years old. Minor’s trusts must become revocable at the 18th birthday, and the settlement funds should not be encumbered past Plaintiff’s 18th birthday. Here, the trust instrument specifies that the trust becomes revocable at age 18. (Section 5.5 of the trust, court’s pdf at p. 99.)
The main requirements for court created or funded trusts are set forth at California Rules of Court, rule 7.903(c), and LASC rule 4.116(b). The proposed trust instrument meets those requirements and is ready for approval for creation and/or funding.
The proposed initial trustees are Lee Ann Hitchman and Annelise Hitchman. Normally, bond is required of a trustee unless the trustee is a corporate fiduciary. (Cal. Rules of Court, rule 7.903(c)(5); Prob. Code, § 2320.) The proposed trustees do not meet the definition of a corporate fiduciary and bond is required.
Petitioner calculates bond at $438,301.82 (rounded up to $439,000.00 in the proposed order) based on the assets to be funded into the trust, plus anticipated annual income from investments and any annuity, plus an additional amount required for the costs of any recovery on the bond. The calculation appears to be sufficient. If the Court approves the petition, the Court will require trustee to submit a $439,000.00 bond to this Department. (The bond will later be resubmitted to the Probate court in any trust supervision action.)
When the Court approves the petition, the Court will require the filing of a Notice of Commencement of Proceedings for a Court Supervised Trust on LASC Form PRO 044 in the Court’s Probate division within 60 days. This can consist of a general statement in the order on the compromise petition that the PRO 044 must be filed in 60 days or an actual stated calendar date in 60 days. This filing will pass jurisdiction over the trust to the Court’s Probate department to provide for court supervision of the trust over the years. The trustee will file accountings (and any other petitions involving the trust) in that Probate case. The proposed order includes the filing requirement at page 9, paragraph 4.
When the Court approves the petition, the Court will also make an order that the trustee’s first accounting must be filed in the Probate case within a year and will provide an actual 14-month calendar due date. This is included in the order at page 9, paragraph 5. The Court will provide the 14-month calendar due date in the blank space on the order.
When the Court approves the petition, the Court will also set an OSC in its own department in approximately 60 days to ensure the funding of the settlement, submission of a bond, and the filing of LASC Form PRO 044 to open a trust supervision action in Probate. The Court will provide the OSC date/time/Department in the blank spaces in the order at page 9, paragraph 4.
CONCLUSION
The Court CONTINUES the hearing on Petitioner Jenelle Arnold’s petition to approve the compromise of minor Plaintiff Jayme Mae LaPlante’s action filed on November 19, 2024. The Court will provide a continued hearing date at the March 4, 2025 hearing.
At least 10 days before the continued hearing, Petitioner may submit a revised petition, trust instrument, and proposed order addressing the issues raised in the Court’s ruling.
Petitioner is ordered to give notice of this ruling.
Petitioner is ordered to file proof of service of this ruling within five days.