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Spencer Pearson, As Guardian Ad Litem, Etc v. the Superior Court of San Luis Obispo County

January 25, 2012

SPENCER PEARSON, AS GUARDIAN AD LITEM, ETC., PETITIONER,
v.
THE SUPERIOR COURT OF SAN LUIS OBISPO COUNTY, RESPONDENT; GARY NICHOLSON ET AL., REAL PARTIES IN INTEREST.



Dodie A. Harmon, Judge Superior Court County of San Luis Obispo (Super. Ct. No. 070861)

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

CERTIFIED FOR PUBLICATION

(San Luis Obispo County)

OPINION AND ORDER GRANTING

PEREMPTORY WRIT OF MANDATE

Bryce Pearson, a minor, was injured while riding on an all terrain vehicle operated by a friend. Through his father and guardian ad litem Spencer Pearson, minor sued the friend's family to recover damages for personal injuries. On June 9, 2010, the parties and the defendants' insurance carrier entered a settlement of minor's claims on the record at a settlement conference. Because Bryce was a minor, the settlement required court approval pursuant to Code of Civil Procedure section 372.*fn1 A petition for approval of the minor's claim was filed. Tragically, Bryce died about three weeks before the superior court ruled on the petition.

Defendants filed opposition to the petition on the ground that the settlement agreement was not enforceable because it had not been approved by the court before minor's death, which extinguished damages attributable to pain and suffering. Guardian ad litem moved to enforce the settlement agreement, contending that section 372 allows only the minor to repudiate a settlement agreement before it is approved by the court. In its statement of decision, the superior court denied the petition and the motion to enforce the settlement agreement. It reasoned that the settlement agreement never became final because it had not been approved by the court prior to minor's death. Because certain claims were extinguished by that event, the trial court concluded approval of the settlement agreement would result in a "windfall" for plaintiffs.

Guardian ad litem filed this petition for writ of mandate to compel the superior court to grant the motion for approval of the minor's compromise and enforcement of the settlement agreement. We issued an order to show cause and have considered the parties' arguments. We conclude that while the motion for approval of the minor's compromise is pending, the settlement agreement is voidable only at the election of the minor or his guardian. Neither the letter nor the spirit of section 372 confer any right on the defendant and/or its carrier to object when the court approves or disapproves of a settlement agreement. Accordingly, we direct the respondent superior court to vacate its order denying approval of the settlement agreement and to enter a new order granting petitioner's motion.

When no minors are involved, the parties to pending litigation may enter into a final and binding settlement agreement by reciting the terms of their agreement on the record, in the court in which the action is pending. After they have stipulated "orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement." (§ 664.6.)

When one of the parties to litigation is a minor, however, an additional step is required to protect the minor. It has long been the rule in California that a minor has limited capacity to enter into contracts (Fam. Code, §§ 6700, 6701), and that, "a contract of a minor may be disaffirmed by the minor before majority . . . ." (Fam. Code, § 6710, emphasis added.) One corollary of this general rule is that a minor must appear as a party in litigation through a guardian ad litem or some other adult representative. The guardian ad litem "shall have power, with the approval of the court in which the action or proceeding is pending, to compromise the same, to agree to the order or judgment to be entered therein for or against [the minor], and to satisfy any judgment or order in favor of the [minor] or release or discharge any claim of the [minor] pursuant to that compromise." (§ 372, emphasis added.) An agreement to settle or compromise a claim made by a minor "is valid only after it has been approved, upon the filing of a petition, by the superior court . . . ." in the county where the minor resides or the action could have been brought. (Prob. Code, § 3500, subd. (b).)*fn2

The requirements that a guardian ad litem be appointed and that the proposed compromise of a minor's claim be approved by the trial court exist to protect the best interests of the minor. (See e.g., Williams v. Superior Court (2007) 147 Cal.App.4th 36, 46-47.) As the court observed in Scruton v. Korean Air Lines Co. Ltd. (1995) 39 Cal.App.4th 1596, (Scruton) "just as a minor lacks capacity to enter into a contract, the guardian ad litem lacks contractual capacity to settle litigation without endorsement of the court. As with any other contract where one party lacks capacity, or a necessary contractual formality has been ignored, the contract is voidable until the defect is remedied." (Id. at p. 1605.)

Relying heavily on Dacany v. Mendoza (9th Cir. 1978) 573 F.2d 1075, the court in Scruton held that the guardian ad litem for two minors whose mother was killed in an airplane accident could withdraw consent to the settlement of their wrongful death action against the airline at any time before the trial court approved the settlement agreement. (Scruton, supra, 39 Cal.App.4th at pp. 1605-1606.) "[W]ithout trial court approval of the proposed compromise of the ward's claim, the settlement cannot be valid. (Andersen v. Latimer (1985) 166 Cal.App.3d 667, 676.) [¶] Nor is the settlement binding [on the minor] until it is endorsed by the trial court. Subject to exceptions not applicable here, contracts are voidable by minors in California. (Fam. Code, §§ 6710, 6701; 1 Witkin, Summary of Cal. Law (9th ed., 1994 pocket supp.) Contracts, § 356C, pp. 71-72.) Therefore, a proposed compromise is always voidable at the election of the minor through his guardian ad litem unless and until 'the court's imprimatur has been placed on it.' " (Id. at p. 1606, quoting Dacany v. Mendoza, supra, 573 F.2d at p. 1080.)

The court in Scruton, supra, 39 Cal.App.4th at page 1608, further held that the trial court "could not unilaterally and summarily enforce the repudiated compromise without first determining whether, in rejecting the agreement, [the guardian ad litem] had acted contrary to the best interests of the minors." It also concluded, there was no statutory authorization for the defendant to move to enforce the compromise over the guardian ad litem's objections. (Id.)

Scruton and Dacany answered the question of whether a settlement agreement may be repudiated by a minor before the agreement is approved by the trial court. It may, and neither the defendant nor the trial court may enforce the agreement over the minor's objections. Here, by contrast, the guardian ad litem seeks court approval of the settlement agreement, not its repudiation. Thus, we are confronted with the question of whether a defendant and/or its carrier can object to court approval of the settlement. We hold that: 1. while the petition for approval of the compromise is pending the ...


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