Judge Salvatore Sirna, Case Number: 21STCV00259, Date: 2024-03-28 Tentative Ruling

Judge: Salvatore Sirna, Case: 21STCV00259, Date: 2024-03-28 Tentative Ruling

The Court may change tentative rulings at any time. Therefore, counsel are advised to check this website periodically to determine whether any changes or updates have been made to the tentative ruling. Counsel may submit on a tentative ruling by calling the clerk in Department G at (909) 802-1104 prior to 8:30 a.m. the morning of the hearing.

Case Number: 21STCV00259 Hearing Date: March 28, 2024 Dept: G

Petitioner B.M.’s Petition for Approval of Compromise of Claim or Action or Disposition of Proceeds of Judgment for Minor or a Person with a Disability

Respondent: Taylor & Ring, Plaintiff L.C.’s Prior Counsel

TENTATIVE RULING

Petitioner B.M.’s Petition for Approval of Compromise of Claim or Action or Disposition of Proceeds of Judgment for Minor or a Person with a Disability is CONTINUED to a date to be determined at the hearing set in Department G (Pomona).

B.M.’s present counsel is ordered to submit a supplemental declaration supporting counsel’s request for attorney fees by describing the hours worked by counsel or providing an estimation if counsel failed to document the hours worked.

Furthermore, to the extent B.M. requests reimbursement for non-litigation costs as outlined in Exhibit G to the declaration of B.M., B.M. is ordered to submit a supplemental declaration that addresses each request and provides proper evidence and legal authority for the award of each request.

BACKGROUND

This action arises from the sexual abuse of an elementary school student by fellow students. During the 2016-2017 school year, Plaintiff L.C. was a minor student attending C.J. Morris Elementary School in the Walnut Valley Unified School District (WVUSD). During this time, L.C. alleges another classmate sexually abused L.C. on the school bus and in the classroom. During the 2017-2018 school year, L.C. alleges other classmates also began to participate in the sexual abuse. When school administration discovered what was occurring, L.C. alleges they failed to discipline the abusers which resulted in L.C. leaving the school.

On January 5, 2021, L.C., by and through guardian ad litem B.M., filed a complaint against WVUSD and Does 1-60, alleging (1) negligent supervision of minors, (2) breach of mandatory duty, (3) racial discrimination, (4) violation of Civil Code sections 51.9 and 52, and (5) negligence. On December 1, the court sustained a demurrer to the Complaint by WVUSD in part with leave to amend.

On December 21, 2021, L.C. filed a First Amended Complaint (FAC) against the same defendants alleging (1) negligent supervision of minors, (2) breach of mandatory duty, (3) violation of Civil Code sections 51.9 and 52, and (4) negligence.

On November 3, 2023, L.C.’s counsel submitted a petition to confirm minor’s compromise. Subsequently, L.C.’s counsel was replaced by new counsel and the petition was withdrawn on November 29.

On March 11, 2024, B.M. submitted the present petition on L.C.’s behalf. A hearing on the petition is set for March 28.

ANALYSIS

B.M. petitions for the court’s approval of a $6,800,000 settlement reached between L.C. and WVUSD.

Legal Standard

An enforceable settlement of a minor’s or incompetent’s claim can only be consummated with court approval. (Prob. Code, §§ 2504, 3500, 3600 et seq.; Code Civ. Proc., § 372.) For this purpose, a petition for approval must be presented to the court and until it is granted, there is no final settlement. (Scruton v. Korean Air Lines Co. (1995) 39 Cal.App.4th 1596, 1603-1606.) Any settlement agreement therefore is voidable by the minor’s guardian ad litem. (Id., at p. 1606.)

Probate Code section 3600, et seq., governs how the settlement proceeds are to be paid. Pursuant to Probate Code section 3601, the order shall approve payment of reasonable expenses from the settlement as follows:

The court making the order or giving the judgment referred to in Section 3600, as a part thereof, shall make a further order authorizing and directing that such reasonable expenses (medical or otherwise and including reimbursement to a parent, guardian, or conservator), costs, and attorney’s fees, as the court shall approve and allow therein, shall be paid from the money or other property to be paid or delivered for the benefit of the minor or incompetent person. (Prob. Code, § 3601, subd. (a).)

In cases pursuant to Probate Code section 3601, “unless the court has approved the fee agreement in advance, the court must use a reasonable fee standard when approving and allowing the amount of attorney’s fees payable from money or property paid or to be paid for the benefit of a minor or a person with a disability.” (Cal. Rules of Court 7.955, subd. (a)(1).) In doing so, “[t]he court must give consideration to the terms of any representation agreement made between the attorney and the representative of the minor or person with a disability and must 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 or person with a disability contemplated that the attorney's fee would be affected by later events.” (Cal. Rules of Court 7.955, subd. (a)(2).)

Discussion

The current matter involves the alleged sexual assault of minor plaintiff L.C. which occurred while L.C. was attending C.J. Morris Elementary School.

Pursuant to the settlement agreement reached between the parties, WVUSD will pay a total of $6,800,000 to L.C.

With regards to attorney fees and costs, B.M. requests $2,040,000 in attorney fees, which constitutes 30% of the gross recovery, and $23,968.73 in costs for L.C.’s previous counsel. In Attachment 13(a), L.C.’s counsel proposes dividing the $2,040,000 in requested attorney fees to $1,700,000 (25% of gross recovery) for L.C.’s former counsel and $340,000 in attorney fees (5% of gross recovery) for L.C.’s current counsel. (Attach. 13(a), Boyce Decl., Ex. K.) L.C.’s former counsel oppose B.M.’s request, arguing they are entitled to $2,720,000 or 40% of the gross recovery as stated in their retainer agreement minus any reasonable fees awarded to L.C.’s current counsel.

In ruling on a petition to confirm minor’s compromise, the court has the power to calculate the reasonable fee awards when there are competing claims for attorney fees. (See Padilla v. McClellan (2001) 93 Cal.App.4th 1100, 1105-1106.) L.C.’s former counsel provided a copy of their contingency fee agreement as Exhibit B to the declaration of Neil K. Gehlawat, Esq. In it, attorney fees for L.C. will be 40% of the total gross recovery if recovery is obtained. (Gehlawat Decl., Ex. B, ¶ 4.) In requesting a reduction of 15% to the former counsel’s requested fees, L.C.’s current counsel argues case law supports the reduction. (Attach. 13(a), Boyce Decl., ¶ 31.) The court notes, however, that counsel fails to include any citations to such case law. Counsel also claims the facts of the abuse rather than prior counsel’s legal prowess were responsible for the settlement. (Attach. 13(a), Boyce Decl., ¶ 31.)

While the court is certain the facts of this case played a significant role in motivating WVUSD to settle, L.C’s current counsel does not provide a reasonable basis upon which the court may properly discount the work and skill of prior counsel. In a declaration submitted with the original petition to confirm minor’s compromise, L.C.’s former counsel provided an overview of their work which included drafting complaints, reviewing documents, identifying witnesses, participating in multiple depositions, conducting written discovery, and participating in two mediation sessions. (Attach. 13(a), Gehlawat Decl., p. 3:1-18.) Furthermore, unlike present counsel, L.C.’s prior counsel brought the present action with the risk that they could recover nothing if they failed to succeed. In fact, our supreme court has explicitly recognized that a contingent fee “may properly provide for a larger compensation than would otherwise be reasonable” due to the risk imposed on counsel. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132, quoting Rader v. Thrasher (1962) 57 Cal.2d 244, 253.)

Accordingly, the court finds L.C.’s prior counsel are entitled to the full 40% outlined in their fee agreement with B.M. and finds such an amount is reasonable and appropriate in light of the work they accomplished, the outcome they obtained, and the risk they faced by taking this case on a contingent basis.

While L.C.’s current counsel requests $340,000 (5% of gross recovery) in attorney fees for counsel’s work in the present action, the court finds this amount disproportionate and unreasonable. According to counsel’s declaration, counsel was retained by B.M. on L.C.’s behalf on November 22, 2023. (Attach. 13(a), Boyce Decl., ¶ 7.) After withdrawing the original petition that had been filed, L.C.’s counsel then worked with B.M. and L.C. to craft a new petition that would better address their concerns. (Attach. 13(a), Boyce Decl., ¶ 10-14.) L.C.’s counsel also describes counsel’s experience and states counsel’s hourly rate is $550 which the court finds is reasonable in light of the court’s experience with cases of this nature. (Attach. 13(a), Boyce Decl., ¶ 29-30.)

Accepting counsel’s hourly rate of $550, a fee of $340,000 would only be reasonable if counsel had worked in excess of 618 hours. Further, counsel did not provide support which would justify that award of feeds. The court finds L.C.’s current counsel is not entitled to a multiplier of counsel’s fees since there was little contingent risk in assuming the handling of a case where a settlement had already been reached and a petition to approve minor’s compromise filed.

Accordingly, the court finds L.C.’s counsel is only entitled to reasonable attorney fees for the actual hours spent on the present case. The court orders present counsel to provide an itemization or estimation of the actual hours spent on the case since taking over on or about November 22, 2023.

The court CONTINUES the hearing on B.M.’s petition in order for counsel to submit an updated declaration supporting the request for attorney fees.

CONCLUSION

Based on the foregoing, the court CONTINUES the hearing on B.M.’s petition to a date to be determined at the hearing set in Department G (Pomona). B.M.’s present counsel is ordered to submit a supplemental declaration supporting counsel’s request for attorney fees by describing the hours worked by counsel or providing an estimation if counsel failed to document the hours worked.