Judge Thomas D. Long, Case Number: 21STCV29317, Date: 2024-08-22 Tentative Ruling

Claimant Isaias Cervantes, a person with disabilities, by and through his parent, guardian ad litem, and conservator Rosa Padilla, has agreed to settle his claims against Defendant County of Los Angeles in exchange for $25 million. Of this amount, $105,573.75 is allocated for a Medi-Cal lien, $10 million is allocated for attorney fees, and $307,433.70 is allocated for costs and expenses, leaving a balance of $14,586,992.55 for Claimant. If approved, a portion of the funds will be paid to the guardian or conservator of the estate, a portion of the funds will be invested in a single-premium deferred annuity, and a portion of the funds will be transferred to the trustee of a special needs trust.

Court approval is required for all settlements of the claims of people with disabilities. (Probate Code §§ 3500, 3600, et seq.; Code Civ. Proc., § 372.) The Court has reviewed the proposed settlement and cannot approve it at this time.

Items 14 and 15 do not correctly state the balance of proceeds for the Claimant.

Item 11(b)(5) states that Plaintiff Rosa Padilla will receive $1.5 million and Plaintiff Yajaira Cervantes will receive $60,000. Item 11(b)(1) states that the total amount offered by all defendants to others is “$0.” The settlement agreement states that Defendant will pay $25 million “in full and final settlement of any and all claims by the Plaintiffs against the Defendants.” It therefore appears that Plaintiff Rosa Padilla and Plaintiff Yajaira Cervantes will receive a portion of the $25 million settlement, and $25 million is not the amount of Claimant’s own settlement for approval. Counsel’s declaration clarifies that $25 million is the gross settlement amount, to be divided as $13,049,538.80 to Isaias Cervantes; $1,477,453.84 to Rosa Padilla; and $60,000.00 to Yajaira Cervantes. (Dove Decl. ¶ 52.) After deducting attorney fees and costs from the $25 million, the remaining amount of $14,692,566.30 will be divided as $13,049,538.80 to Isaias Cervantes, $1,477,538.84 to Rosa Padilla, and $60,000,00 to Yajaira Cervantes. (Dove Decl. ¶ 52.) This is not what the Petition states in Items 10, 11, 15, and 16. Additionally, the settlement agreement is not signed by a representative of Defendant.

In Item 20, Plaintiff Yajaira Cervantes “asks this Court for a distribution from the settlement proceeds in the amount of $60,000.” The Court will not approve this distribution from Claimant’s portion of the settlement funds. If this is the agreed-to division of the overall settlement, the Court does not need to approve Yajaira Cervantes’s settlement with Defendant. However, any division of the $25 million must be properly set forth in the Petition as explained above.

Counsel’s declaration in support of the reasonableness of attorney fees does not adequately support the request for $10 million in attorney fees. Although Claimant’s parent, guardian ad litem, and conservator contracted with counsel for attorney fees of 40-percent of settlement recovery, $10 million is excessive in this case. Counsel declares that he has spent over 300 hours on this case. (Dove Decl. ¶ 43.) The requested fees are approximately $33,333/hour based on that time estimate. Even if counsel spent 1,000 hours on this case, the requested fees would be $10,000/hour. The Court will not approve attorney fees greater than twenty-five percent.

Among the claimed costs and expenses is $47,475.00 in “Client Advances” to Tomas Cervantes and Rosa Padilla. That is not an amount appropriately deducted from Claimant’s settlement. The settlement amount is for Claimant and his future special needs, not for unspecified advances to a different plaintiff and a non-party. Accordingly, the $$47,475.00 expense is not approved.

A portion of Claimant’s funds will be transferred to a special needs trust. When a settlement proposes the establishment of a special needs or other trust as provided in Probate Code sections 3600 to 3612, the terms of the proposed trust must be reviewed by the Probate Department. (L.A. County Sup. Ct. Rule 4.115(c).) A party seeking to establish and fund a trust as part of a Petition must, within two court days of the filing of the Petition, lodge with the filing window of the Probate Division at Stanley Mosk Courthouse a physical copy of the face page of the Petition with a copy of the proposed trust instrument and the proposed order approving the compromise and trust. (L.A. County Sup. Ct. Rule 4.115(c).) This procedure was not followed.

The Petition to Approve Compromise of Disputed Claim is DENIED without prejudice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. If all parties in the case submit on the tentative ruling, no appearances before the Court are required unless a companion hearing (for example, a Case Management Conference) is also on calendar.

Hon. Thomas D. Long

Judge of the Superior Court