Judge: Stephen Morgan, Case: 19AVCV00569, Date: 2023-05-02 Tentative Ruling

                                                                           Department A14 Tentative Rulings 

If parties are satisfied with the tentative ruling, parties may submit by emailing the courtroom at ATPDeptA14@LACOURT.ORG. 

If a matter is also scheduled for a CMC, TSC, OSC, etc., an appearance is still required even if the parties are willing to submit on the tentative ruling.

Case Number: 19AVCV00569    Hearing Date: May 2, 2023    Dept: A14

Background

This action arises from a motor vehicle accident that occurred on or about May 24, 2019 where Plaintiffs John Rafael Paclib Reyes; Jocelyn Reyes; Aravhela Rabut, a minor by and through her guardian ad litem, Jocelyn Reyes; and Kayleen Reyes, a minor by and through her guardian ad litem, John Rafael Paclib Reyes (collectively “Plaintiffs”) were allegedly struck by a vehicle driven by Defendants Julia Ann Wallace (Julia[1]) and owned by Julia and Raymond Joseph Wallace (“Raymond” and collectively “Defendants”).

On March 23, 2021, Plaintiffs filed a complaint against Defendants alleging two causes of action for Motor Vehicle and Negligence, and seeking exemplary damages against Julia.

On May 4, 2021, Petitioner John Paclib Reyes (“Petitioner”) filed a petition to approve the compromise of pending action on behalf of minor claimant Kayleen Reyes (“Minor Claimant”).

Analysis

Standard for Approving Minor’s Compromises – Court approval is required for all settlements of a minor’s claim or that of a person lacking the capacity to make decisions.  (Prob. Code, §§ 2504, 3500, 3600 et seq.; Code Civ. Proc., § 372; see Pearson v. Superior Court (2012) 202 Cal.App.4th 1333, 1337.)

“[T]he protective role the court generally assumes in cases involving minors, [is] a role to assure that whatever is done is in the minor’s best interests . . . .  [I]ts primary concern is whether the compromise is sufficient to provide for the minor’s injuries, care and treatment.”  (Goldberg v. Superior Court (1994) 23 Cal.App.4th 1378, 1382.) 

A petition for court approval of a compromise or covenant not to sue under Code of Civil Procedure section 372 must comply with California Rules of Court Rules 7.950, 7.951, and 7.952.  The petition must be verified by the petitioner and contain a full disclosure of all information that has “any bearing upon the reasonableness” of the compromise or the covenant.  (Cal. Rules of Court, rule 7.950.)  The person compromising the claim on behalf of the minor or person who lacks capacity, and the represented person, must attend the hearing on compromise of the claim unless the court for good cause dispenses with their personal appearance.  (Cal. Rules of Court, rule 7.952(a).)

An order for deposit of funds of a minor or person lacking decision-making capacity and a petition for the withdrawal of such funds must comply with California Rules of Court Rules 7.953 and 7.954.  (Cal. Rules of Court, rule 3.1384; see also Super. Ct. L.A. County, Local Rules, rules 4.115-4.118.)

-----

It appears that there are errors in the petition. The petition shows that Minor Claimant settled with Defendants for a total amount of $325,000.00. (Petition at 10(a)-(b).) However, the petition then states in the summary that Minor Claimant is receiving $62,500.00. (Id. at 16.) Attachment 11b(3) supports the amount stated in the summary:

This matter involved a family of four, Parents John Rafael Paclib Reyes and Jocelyn Reyes are permanently injured and their apportionment is based on the severity of their injuries and constrained to the maximum per person insurance policy limits had by the defendants in the amount $100,000 per person. $100,000 to Plaintiff John Rafael Paclib Reyes $100,000 to Plaintiff Jocelyn Reyes The children, Kayleen Reyes and Aravhela Rabut will split the remaining $100,000 available afforded in Defendants' insurance policy limits $300,000 per incident (the other $200,000 apportioned to parents above). In addition, Defendants themselves are personally contributing $25,000.00 in addition to all the insurance money. this additional 25,000.00 contribution will be apportioned evenly between Kayleen Reyes and Aravhela Rabut as follows: $62,500 to Plaintiff Kayleen Reyes $62,500 to Plaintiff Aravhela Rabut.

(Id. at Attachment 11b(3).)

Next, the total amount of medical expenses to be paid or reimbursed from the proceeds is not filled in. (Id. at 12(a)(4).)

Finally, Petitioner did not fill out 13(b), instead directing the Court to the attachment. The attachment simply states “Attorney Costs” and includes an excel sheet for a summary of expenses that appears to include expenses that are unrelated to non-medical expenses such as money spent on LAFD and costs that appear to be related to medical expenses such as LAC + USC and Optum. Some other charges that Petitioner seeks to recover do not indicate clearly what these charges are for, including but not limited to, ML Research’s invoice is simply a check, there is an invoice for the shipment of an unidentified item to Defendant via FedEx, a payment to an independent contractor by the name of Angela Vanesian, a check to Robert A. Kilroy DC, an invoice to an unknown entity for $1,218.04. It also appears that Petitioner has included unrecoverable costs such as costs for an investigation. (See Cal. Code Civ. Proc. § 1033.5(16)(b)(2) [“The following items are not allowable as costs, except when expressly authorized by law: . . . Investigation expenses in preparing the case for trial.”].) It also appears that Petitioner seeks to recover costs related to obtaining medical records. Recovery of costs for medical records are not explicitly allowed or disallowed by Cal. Code Civ. Proc. § 1033.5 and are subject to the Court’s discretion; however, Petitioner has not indicated a total for these costs. The Court is unwilling to do the calculations by going through each and every invoice, finding ones that seem to be related to medical records, and then adding them together.

Accordingly, the Petition to Approve the Compromise of Pending Action on Behalf of Minor Claimants Kayleen Reyes is DENIED without prejudice.

Should Petitioner seek to file a new petition, he must correct the errors in the petition as well as provide the Court with a clear breakdown of non-medical expenses. The Court also requests Petitioner include a calculation for expenses related to medical records should Petitioner seek to recover those fees as reasonable expenses.

The Court also notes that the Petition requests $25,000.00 in attorney’s fees. If the amount is $62,500 as indicated by the summary and attachment, $25,000.00 is 40% of the gross settlement. Counsel for Petitioner and Minor Claimant, Harry Nalbandy (“Nalbandy”) informs the Court that a retainer was signed by Petitioner for  a fee in the amount of 45% and that, as a courtesy, he has reduced the fee for Minor Claimant to 40%.

Attorney’s fees on a minor’s compromise are generally 25%. This stems from a previous a previous local rule which stated: “Except where good cause is shown, the attorney's fees shall not exceed an amount equal to twenty-five percent (25%) of the gross proceeds of settlement, or, if applicable, the amount determined under Business and Professions Code section 6146[, part of MICRA], whichever is less.” (Super. Ct. L.A. County, Local Rules, former rule 10.79(c)(3), italics added.) The Court notes that other superior courts in California had similar local rules. Currently, Cal. Rules of Court, Rule 7.955(d) contains a preemption clause which states:

The Judicial Council has preempted all local rules relating to the determination of reasonable attorney's fees to be awarded from the proceeds of a compromise, settlement, or judgment under Probate Code sections 3600-3601. No trial court, or any division or branch of a trial court, may enact or enforce any local rule concerning this field, except a rule pertaining to the assignment or scheduling of a hearing on a petition or application for court approval or allowance of attorney's fees under sections 3600-3601. All local rules concerning this field are null and void unless otherwise permitted by a statute or a rule in the California Rules of Court.

Cal. Prob. Code § 360(a) gives discretion to the Court for an order authorizing and directing “reasonable expenses,” including attorney’s fees. The factors that a court may consider in determining a reasonable attorney’s fee is laid out in Cal. Rules of Court, Rule 7.955(b).

Though counsel for Petitioner and Minor Claimant presents a retainer was signed by Petitioner for Minor Claimant, Cal. Fam. Code § 6602 provides:

A contract for attorney’s fees for services in litigation, made by or on behalf of a minor, is void unless the contract is approved, on petition by an interested person, by the court in which the litigation is pending or by the court having jurisdiction of the guardianship estate of the minor. If the contract is not approved and a judgment is recovered by or on behalf of the minor, the attorney’s fees chargeable against the minor shall be fixed by the court rendering the judgment.

A 40% fee on a minor’s compromise, under the factors laid out by Cal. Rules of Court, Rule 7.955(b) is not reasonable. However, because the Court is intimately familiar with this case and has reviewed the case in light of Cal. Rules of Court, Rule 7.955(b) factors, it will find an attorney’s fee constituting 30% reasonable.

The Court informs Nalbandy that further petitions for Minor Claimant will not be considered “reasonable.” While a Petition for Approval of Compromise of Claim or Action or Disposition of Proceeds for Judgement for Minor or Person with a Disability is reasonable, there is a level of as competence and diligence required of attorneys. (See Rules of Professional Conduct, Rules 1.1-1.8 [Lawyer-Client Relationship].) Nalbandy prepared the current petition which had errors and it would not be just to allow Minor Claimant to bear the expenses for rectifying the errors caused by Nalbandy’s preparation.

Conclusion

The Petition to Approve the Compromise of Pending Action on Behalf of Minor Claimants Kayleen Reyes is DENIED without prejudice.