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Katherine Gonzalez, A Minor, Etc v. Edward Chen

July 21, 2011

KATHERINE GONZALEZ, A MINOR, ETC., PLAINTIFF AND RESPONDENT,
v.
EDWARD CHEN, DEFENDANT; NATHANIEL J. FRIEDMAN, OBJECTOR AND APPELLANT.



(Los Angeles County Super. Ct. No. BC416539) APPEAL from an order of the Los Angeles County Superior Court, C. Edward Simpson, Judge.

The opinion of the court was delivered by: Mallano, P. J.

CERTIFIED FOR PUBLICATION

Reversed with directions.

A minor's attorney filed this appeal on his own behalf, dissatisfied with the attorney fees he was awarded in an order approving a compromise in a medical malpractice case. We reverse and remand so the trial court may award fees pursuant to the applicable California Rule of Court, not the local court rule that was preempted at the time of the award. In addition, the trial court was not required to award the maximum contingency fees allowed under the Medical Injury Compensation Reform Act of 1975 (MICRA) (Bus. & Prof. Code, § 6146, subd. (a)).

I

BACKGROUND

The allegations and facts in this appeal are taken from the complaint, the petition to approve a minor's compromise, and the resulting order.

A. Complaint

The operative complaint alleged as follows. In June 2009, Katherine Gonzalez, a minor, filed this action against Edward Chen, M.D., for injuries arising out of the way in which she was delivered at birth. In particular, based on Katherine's size, Dr. Chen should have performed a cesarean section instead of a vaginal delivery. His failure in that regard caused Katherine to suffer shoulder dystocia at birth which later developed into Erb's palsy, or paralysis, of the right arm. Katherine's mother also alleged her own claim for medical malpractice.

B. Petition to Approve Minor's Compromise

Through mediation, the parties reached a settlement of $200,000. On July 7, 2010, Katherine's attorney, Nathaniel J. Friedman, filed the standard petition to approve a minor's compromise. (See Judicial Council Forms, form MC-350.) He sought (1) $1,975 to cover medical liens, (2) $31,000 in costs, (3) $10,000 in damages for Katherine's mother, and (4) $61,666 in attorney fees based on the maximum contingency limitations set forth under MICRA (Bus. & Prof. Code, § 6146, subd. (a)). That would have left $95,359 for Katherine. Friedman indicated on the petition that he and his client had the "[c]ustomary medical malpractice contingency fee agreement."

At the July 15, 2010 hearing on the petition, the trial court remarked: "The bottom line is I think the amount of the settlement is low. Here we have a child, two years old that will have a permanent lifetime injury as a result of . . . dystocia that [she'll have] for the rest of her life. . . . The settlement is some $200,000 of which, after fees have been paid, the costs have been paid, money to the mother, the child is going to net about $95,000 for a lifetime injury." Friedman pointed out that Katherine was scheduled for surgery at Children's Hospital in early September. Opposing counsel stated that "shoulder dystocia, Erb's palsy" cases generally settle for $125,000 to $175,000. He continued: "This is the most I have ever paid on [such a] case, and I think that the odds favor the defense winning this case at trial." Katherine's father, her guardian ad litem, said that the settlement was acceptable to him and his wife. The court took the matter under submission.

By order dated July 23, 2010, the trial court approved the compromise, awarded costs in the amount of $29,000, medical expenses of $1,975, damages of $10,000 to Katherine's mother, and $50,000 in attorney fees. The fee award was calculated pursuant to a local court rule that typically required fees to be fixed at 25 percent of the total recovery. (See Super. Ct. L.A. County, Local Rules, former rule 10.79(c)(3).)*fn1

The trial court initially ordered that the funds for Katherine, $109,025, be placed in Friedman's trust account at Union Bank in the form of a special needs trust. In a subsequent order dated August 19, 2010, the trial court directed Friedman to transfer the $109,025 to City National Bank and set up a blocked interest-bearing account with Katherine's father as the trustee. The order recited that "[t]he blocked account belongs to the minor." Any withdrawals before Katherine reached age 18 required a further written ...


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