Judge: Mark A. Young, Case: 25SMCV01645, Date: 2025-05-09 Tentative Ruling
Case Number: 25SMCV01645 Hearing Date: May 9, 2025 Dept: M
CASE NAME: Fridjonsdottir,
et al., v. Lynch Plumbing, Inc., et al.
CASE NO.: 25SMCV01645
MOTION: Approval
of Minors Compromise
HEARING DATE: 5/9/2025
Claimant Alba Royal, a minor, by and through their parents
and Guardian Ad Litem, Agla Fridjonsdottir and Cameron Royal (“Petitioners”),
have agreed to settle her claim for $500,000.00.
As an initial matter, paragraphs 10-11 and Attachment 10c of
the Petition do not name which defendants are settling. Petitioners must submit
a corrected petition with this information.
Furthermore, when seeking approval of a special needs trust (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.
(Probate Code section 3611(c).) Here,
petitioner seeks to fund a settlement trust that involves a potential sub-strut
as SNT, and SNT language is included in the proposed trust instrument, arguably
invoking these notice requirements to the three state agencies. There is no proof of service on these
agencies and the hearing must be continued for proof of this required notice of
hearing and proof of service.
Alternatively, this notice would not be required if petitioner submits
an amended petition with a revised trust instrument that omits the SNT language.
A request involving a trust to receive settlement proceeds on
behalf of a minor invariably involves either a minor’s settlement trust or a
SNT, but not both. Here, Section 4.0.2
of the trust instrument provides that trustee or the trust protector may
petition the court to distribute some of all of the trust assets to a SNT as
provided in Article Five of this trust instrument. Article Five purports to create a SNT
instrument within the minor settlement trust instrument. This approach is unworkable because this
language can be read as an operative SNT while a later court order would be
required. Moreover, a SNT that is not
currently in effect should not be stated in the present trust instrument. Also, when approving the establishment or
funding of a SNT from settlement proceeds, the court must make the following
findings pursuant to Probate Code section 3604(b):
Here, there is no request to make those findings because there is
no current request to create or fund a SNT, yet SNT language is present in the
trust instrument. The Court suggests a
new proposed trust instrument without inclusion of the SNT components. The Trustee could always petition the Probate
division of the court separately to fund the settlement trust assets into a new
SNT at some later date.
The trust instrument is also improper because it contains
limitations of liability and indemnification clauses that are inappropriate for
these kinds of trust instruments (the terms improperly limit the liability of
trustee and trust protector and allow for indemnification of trust protector,
see, e.g., Sections 3.06 and 3.07). The
trust instrument is also insufficient because it allows the trustee to retain
assets on trust for any trust beneficiary distributes who are underage or
incapacitated. (Section 7.02.) There is also a basis for a trustee to retain
distributions to third party beneficiaries as part of this trust and this term
should be removed in any revised trust instrument. The trust instrument limits an interested
party’s right to object to an account to 60 days after the trustee provides an
accounting. (Section 8.08, courts pdf at
p. 44.) There is no basis in law for
such limitation in a court supervised trust and this term should be removed in
any revised trust instrument.
In addition, 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 Probate division of this court within 60 days of approval
With respect to the monetary settlement amounts, the Court would
find those amounts to be reasonable.