Judge: Stephen Morgan, Case: MC027974, Date: 2022-08-23 Tentative Ruling

Case Number: MC027974    Hearing Date: August 23, 2022    Dept: A14

Background

 

This action arises from a motor vehicle incident that involved a train that occurred on June 27, 2017. Plaintiffs Byron Ramos (“Ramos”) and Anthony Juarez (“Juarez” and collectively “Minor Claimants”) were passengers in a vehicle driven by their father, X, that was struck by the vehicle allegedly driven by their Guardian ad Litem Ana Ruth Abarca.

 

On March 07, 2018, Minor Claimants, minors by and through their guardian ad litem, Ana Ruth Abarca, filed a complaint against Defendants Nicolas Omar Patino, Union Pacific Railroad Company, Granite Construction Company, City of Lancaster, and County of Los Angeles. The operative pleading is the First Amended Complaint (“FAC”) alleging three causes of action for: (1) Motor Vehicle, (2) Premises Liability, and (3) General Negligence.

 

On April 25, 2022 and April 28, 2022, Petitioner Ana Ruth Abarca (“Petitioner”) filed petitions to approve the compromise of pending action on behalf of Minor Claimants.

 

On July 27, 2022, the Petition to Approve Compromise of Pending Action on behalf of Anthony Juarez was granted, subject to filing of a Notice of Substitution by Dordick Law Corporation.

 

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.)

 

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The petition shows that Minor Claimant Ramos settled with Defendants Union Pacific Railroad Company; Granite Construction Company; and Statewide Traffic Safety and Signs, Inc. for a total amount of $8,500,000.00. The Court notes that the terms of the settlement list that Granite Construction Company will be paying $7,500,000.00 and Statewide Traffic and Safety will be paying $1,000,000.00. $181,473.81 will be used to pay medical expenses, $2,833,050.00 will be used to pay attorney’s fees, and $58,872.06 will be used to reimburse costs advanced by Dordick Law Corp. and Koshkaryan Law Group, leaving a balance of $5,426.640.13 for Ramos. Petitioner proposes the net proceeds be distributed as follows:

 

 

Regarding attorney’s fees, the attorney’s fees requested constitute 33.33%. Courts typically limit attorney’s fees to 25% in minor’s compromises. The Court must apply a reasonable fee standard in approving attorney’s fees in a minor’s compromise petition. (Cal. Rules of Court, Rule 7.955(a).) Attorney’s fees must be analyzed in accordance with the 14 factors set forth in Cal. Rules of Court, Rule 7.955(b). (See Gonzales v. Chen (2011) 197 Cal.App.4th 881, 885.) In addition to analyzing the settlement in light of these factors, the Court must find that the amount of the proposed settlement and the payment terms and attorney’s fees appear reasonable in light of the potential liability nd the nature and extent of the injuries. The court must also take care to confirm that the settlement will be sufficient to address any otherwise unmet future medical needs of the child, and also that the guardian ad litem understands the terms and finality of the settlement; understands that the settlement proceeds belong to the minor and generally may not be invaded by the guardian or parent; and believes the settlement is in the minor's best interests. Finally, in a case involving an annuity or other structured settlement, the court must consider the financial rating of the company that is ultimately responsible and take pains to ensure that the funds will be appropriately husbanded during the remaining period of the child's minority. (See generally Cal. Probate Code §§ 3601, 3602, 3611.) 

 

Here, Petitioner entered into a contingency fee agreement with Koshkaryan Law Group with fees listed as follows: 331/3% of the gross recovery before a lawsuit is filed or a demand for arbitration is submitted, 45% of the gross recovery after a lawsuit is filed or a demand for arbitration is submitted, and 50% of the gross recovery if the case proceeds to trial or arbitration. (See Attachment 17a.) It is unclear from Plaintiffs’ counsel, Gary A. Dordick (“Dordick”)’s declaration as to whether he was retained by Petitioner or solely in association with Koshkaryan Law Group. (See Attachment 13a, Decl. Dordrick ¶¶ 1-3.) What is clear is that Dordick states that his firm “took over the handling of the matter” (Id., Decl. Dordrick ¶ 3) and that his firm is seeking a different amount of attorney’s fees than Koshkaryan Law Group (Id., Decl. Dordrick ¶ 5.) A substitution of attorney is needed as the association can be either a joint venture between the attorneys sharing the fees or an employment relationship, but not both. (Bunn v. Lucas, Pino & Lucas (1959) 172 Cal.App.2d 450, 465. See also Ford v. Freeman (1919) 40 Cal.App, 221, 227.) No fee-splitting arrangement or evidence that Koshkaryan is receiving a contingency fee is evidenced. The Court believes a Substitution of Attorney form needs to be filed. 

 

That aside, this has been an extensive action, spanning from June 07, 2018 to the present with multiple defendants. The Court notes that Dordick states that Koshkaryan had been handling the case since June 28, 2017; however, the Complaint was not filed until June 07, 2018. (See Attachment 13a, Decl. Dordrick ¶ 3; see also Complaint.) The Court uses its date of record as the date of commencement for this action. The injuries sustained by the parties were serious and a large amount of time and labor was needed to reach this settlement. The Court finds the attorney’s fees reasonable due to the circumstances surrounding this action.  

 

The Court GRANTS the Petition for Ramos.

 

Issues with the Petition

 

There appears to be some errors within the petition itself.

 

First, with regards to the request to spend up to $550,000.00 of SNT assets to purchase a residence for Plaintiffs’ benefits, the civil action is not the correct forum for such a request. Subsequent to the granting of this instant petition, a probate case will be initiated and the Probate Department will supervise the SNT administration. This Court believes the most appropriate way to request authority to spend up to $550,000.00 of SNT assets to purchase a residence for Plaintiffs’ benefits is to make a request by noticed petition in the probate case that will supervise the SNT administration. The probate court can then make detailed requirements regarding approval of the home to be purchased, follow-up over time regarding titling, and address other longer-term issues.

 

Next, Attachment 13 states that Dordick Law Corporation is required to pay Susan A. Katzen $20,290.00 for her services provided for the establishment of Ramos’ irrevocable SNT. The amount of the request is significantly larger than the typical $3,500-$6,500 range, though this may be due to complexity of the requests in this petition. The Court requests a declaration from Susan A. Katzen regarding the $20,290.00.

 

Finally, an order funding a SNT “shall include a provision that all statutory liens in favor of the State Department of Health Care Services, the State Department of State Hospitals, the State Department of Developmental Services, and any county or city and county in this state shall first be satisfied.” (Cal. Probate Code § 3604(d).) Normally, that requirement is met my checking the box at Section 8b(3) of the Judicial Council form order approving this kind of petition (form MC-351), which contains language that mirrors this requirement. Though the petition indicates that a Medi-Cal lien will be paid, this portion of the order is not completed and the lien payment is not addressed elsewhere in the proposed order. The Court requests a new proposed order with this section filled out.

 

As a new petition will be filed, the Court addresses one other section. Petitioner has calculated the bond as $1,704,871.42, including the initial funding amount, anticipated annual income (annuities and investment returns), plus the statutory additional amounts required for costs of recovery. That calculation appears to be correct. The Court requires the $1,704,871.42 bond. The Court requires section 11 of the new proposed order to be filled in with this amount.

 

Conclusion

 

The Petition to Approve the Compromise of Pending Action on Behalf of Minor Claimant Byron Ramos is GRANTED, subject to:

 

  1. The filing of a Notice of Substitution by Dordick Law Corporation; and

  2. The filing of a declaration from Susan A. Katzen regarding the $20,290.00; and

     3. The filing of a new proposed order in which (1) Section 8b(3) is filled out, and (2) section 11 is filled out.