The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court
Order Granting in Part and Denying in Part Plaintiff's Motion to Strike; Granting Motion to Approve Compromise of Claim; Granting Motion to Establish Special Needs Trust [Doc. Nos. 135, 136, 137]
Plaintiff Jessica Schroeder, by and through her Guardian ad Litem Marina Schroeder, moves the Court for an order (1) striking the attorneys' fees lien of former counsel Amy and Tom Vandeveld, (2) approving the settlement of her claims against Defendants, and (3) establishing a special needs trust for distribution of the settlement funds. The Vandevelds have filed an opposition to the motion to strike the attorneys fees lien, and Plaintiff has filed a reply as to that motion. The Court found the motions appropriate for submission on the papers and without oral argument, and vacated the hearing date.
For the reasons set forth herein, the Court GRANTS IN PART AND DENIES IN PART Plaintiff's motion to strike the Vandevelds' lien for attorneys fees and costs, and GRANTS Plaintiff's motion for approval of the settlement and motion to establish a Special Needs Trust.
Plaintiff initially filed her complaint on July12, 2007, alleging causes of action against the San Diego Unified School District and teacher Kimberly Chambers under 42 U.S.C. § 1983, Title II of the Americans with Disabilities Act, the California Unruh Civil Rights Act, and California Civil Code § 51.9, as well as negligence. Plaintiff's mother, Marina Laneri Schroeder, asserted a claim for intentional infliction of emotional distress against the District and Ms. Chambers. Plaintiff also alleged a claim for battery against Fernando Ortiz, the student who sexually abused her, and alleged Fernando's parents, Henry and Sylvia Ortiz, were vicariously liable for their son's actions.
Defendants Fernando, Henry, and Sylvia Ortiz filed answers to the complaint on September 14, 2007. Defendants, the District and Ms. Chambers, moved to dismiss the complaint for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6). By order filed November 26, 2007, the Court denied Defendants' motion.
Plaintiff's original counsel, Amy and Thomas Vandeveld, withdrew from representation on June 27, 2008, and new counsel substituted into the case on August 13, 2008. On November 11, 2008, Plaintiff moved the Court for leave to file an amended complaint. The Court granted that motion and on February 5, 2009, Plaintiff filed her amended complaint. Plaintiff's amended complaint deleted all claims against Fernando, Henry, and Sylvia Ortiz, and also deleted Marina Laneri Schroeder's individual claim. Plaintiff added two new Defendants, Michael Jimenez and Sue Skinner. Plaintiff deleted all of her claims under the ADA and California Civil Code, and alleged only claims under § 1983 as well as negligence.
The Court denied Defendants' motion for summary adjudication of Plaintiff's claims under § 1983. Prior to the Pretrial Conference, the parties reached a settlement of all Plaintiff's claims.
The parties have agreed to settle the entire case for the sum of $400,000. Plaintiff's current counsel were retained based on a contingency fee agreement, under which they are entitled to one-third of the gross recovery plus litigation costs. Thus, current counsel is entitled to $133,333.33 in fees and $74,619.33 in litigation expenses. However, current counsel have agreed to accept a total of $175,000 for all their fees and costs. With the payment of certain other expenses, Plaintiff will receive slightly less than $220,000 in settlement of her claims.
At the time of the incident which is the subject of this lawsuit, the Spring of 2006, Jessica was an 18-year old severely mentally retarded young woman with the functional ability of a young child. [Amended Complaint, ¶ 3.] Jessica was a student in Kimberly Chambers' Integrated Life Skills ("ILS") class at Serra High School within the District. The purpose of this class is to teach students with a low level of mental functioning certain basic skills, such as buying groceries and riding the bus, so that they can function in society.
Fernando Ortiz was also a student at Serra High School, and was assigned to be a "peer tutor" in Ms. Chambers' classroom in the spring semester of 2006. Ortiz was in Ms. Chambers' room acting as a peer tutor on the afternoon of April 17, 2006 when he sexually assaulted Jessica. The abuse occurred while others, including Ms. Chambers, were in the room engaging in a bowling activity, and occurred off and on over a period of about 30 minutes. Information in Ortiz's background likely should have led school officials to recognize he could be a danger to those, like Jessica, who are particularly vulnerable to sexual abuse. Ortiz pled guilty to sexual assault as a result of the incident.
Facts Underlying Counsel's Withdrawal from the Action
Plaintiff's mother and guardian ad litem, Marina Schroeder, originally retained Amy Vandeveld on May 18, 2006, to represent their interests. The parties executed a written retainer agreement, providing that Ms. Vandeveld would receive a contingency fee in the amount of 40% of any recovery achieved after the "first Court Conference or hearing in this Action." [Plaintiff's Motion to Strike, Exhibit A.] This action was filed in federal court on July 13, 2007. The parties entered into a revised fee agreement on December 17, 2007, explicitly providing that Thomas Vandeveld could be associated as counsel to work on the case and share in any fees. [Vandevelds' Opposition to Motion to Strike, Exhibit 15.]
In June of 2008, a conflict developed between Marina Schroeder and the Vandevelds. The Vandevelds questioned Marina's honesty based upon several discrepancies between what Marina told them about Jessica's behavior and information reflected in the medical records. In particular, the Vandevelds began to question Marina closely about her claims that Jessica's behavior changed dramatically after the sexual assault. Marina told the Vandevelds that before the assault Jessica was "loving and affectionate" and not aggressive. However, a review of Jessica's medical records revealed numerous references to Jessica's aggression toward her sister and mother before the incident. In addition, although Marina told the Vandevelds that Jessica was unable to sleep and began wandering around the house after the assault, the medical records made several references to Jessica wandering the house during the night, commenting that chimes had been put on Jessica's door because of this problem as many as two years before the assault. The Vandevelds also believed Marina had been dishonest about whether there was a man living in the home, about whether Jessica's treating neurologist, Dr. Grossman, would support Plaintiff's claim regarding changes in behavior, and about the legal status of workers who helped Marina with Jessica's in-home care.
To address all of these issues, the Vandevelds met with Marina on June 9, 2008. Following that meeting, Marina sent Amy Vandeveld an email addressing the alleged discrepancy as to whether or not there was a man living in her house. In that email, Marina noted The meeting today has left me very unsettled. Instead of finding solutions to the problems that are arising all you have done is to doubt my credibility by assuming I am lying to you in regards to a stepfather in the house.... I have left the meeting today with an overwhelming feeling of doom, which I ...