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Paregien v. Wilshire Insurance Co., Inc.

United States District Court, E.D. California

April 4, 2017

SHAWN J. PAREGIEN, et al., Plaintiffs,



         S.J.P. and P.S.P appeared in this proceeding by and through their guardians ad litem who seek approval of the minor's compromise in this action. (Doc. 62). Notably, however, during the pendency of this action, S.J.P. achieved the age or majority and at the time of the filing of this petition, had and has the capacity to compromise his own claim.[2] (Doc. 62-3 at 2) For this reason and those set forth below, the Court recommends the motion as to S.J.P. be GRANTED but the petition of S.J.P. be found to be MOOT.

         I. Factual History

         This action involves a car collision in which the children's mother and grandmother were killed. They initiated this action against the company that insured the driver--who caused the collision-and his employer, to recover the damages awarded in the underlying lawsuit. (Doc. 1) At the time the action was initiated, the Kern County Superior Court had appointed S.J.P. and P.S.P. guardians ad litem and the underlying lawsuit in that court had be completed. (Docs. 53, 54) Because the guardians ad litem sought appointment in this Court and did not report that they had already been appointed in State court, the Court here appointed the guardians also. (Doc. 7)

         On February 26, 2017, S.J.P. turned 18. (Doc. 62-3 at 2) Thus, he is no longer a minor under California law (Cal. Fam. Code § 6502(a)(2)) and has the capacity to compromise his own claim. Thus, the Court RECOMMENDS the petition as to S.J.P. to be found to be MOOT.

         II. Settlement Approval Standards

         No settlement or compromise of “a claim by or against a minor or incompetent person” is effective unless it is approved by the Court. Local Rule 202(b). The purpose of requiring the Court's approval is to provide an additional level of oversight to ensure that the child's interests are protected. Toward this end, a party seeking approval of the settlement must disclose:

the age and sex of the minor, the nature of the causes of action to be settled or compromised, the facts and circumstances out of which the causes of action arose, including the time, place and persons involved, the manner in which the compromise amount . . . was determined, including such additional information as may be required to enable the Court to determine the fairness of the settlement or compromise, and, if a personal injury claim, the nature and extent of the injury with sufficient particularity to inform the Court whether the injury is temporary or permanent.

Local Rule 202(b)(2).

         Federal Rule of Civil Procedure 17(c), imposes on the Court the responsibility to safeguard the interests of child-litigants. Robidoux v. Rosengren, 638 F.3d 1177, 1181 (9th Cir. 2011); See Friends for All Children, Inc. v. Lockheed Aircraft Corp., 567 F.Supp. 790, 812-813 (D.D.C.1983. Thus, the Court is obligated to independently investigate the fairness of the settlement even where the parent has recommended it. Robidoux, at 1181. Moreover, rather than focusing on the amount of fees to be awarded, the Court is to evaluate whether the net amount to the child is fair and reasonable “without regard to the proportion of the total settlement value designated for adult co-plaintiffs or plaintiffs' counsel” and “in light of the facts of the case, the minor's specific claim, and recovery in similar cases.” Id. at 1181-1182. The Court is obligated to consider the child's specific claim and other awards in similar cases to determine whether the settlement amount is reasonable. Id.

         III. Discussion and Analysis

         The petition in this case sets forth the information that is required. P.S.P. is six years old (Doc. 62-5 at 2) Through her guardian ad litem, she was awarded half of the judgment issued in the state court which equals $8, 119, 971.65. (Doc. 62-5) In this action, she sought to recover this damage award from the company that insured the tortfeasors. (Doc. 1)

         In settlement of this action, the defendant, Wilshire Insurance Company agreed to pay $7, 075, 000 in addition to the payment of $953, 559.21[3] previously paid. (Doc. 62-5 at 4) Out of the child's funds, her attorney will be reimbursed $12, 913.22 in costs and $2, 358, 333.33[4] in fees. (Doc. 62-5 at 7) In addition, the child's adoptive parents seek “child support” in the amount of $1, 000 per month until the child reaches 18 years old, which equates to $139, 000. Id.

         The petition was first presented to the Kern County Superior Court (Doc. 62), as required by Local Rule 202(b)(1). That court approved the petition (Doc. 62-6) and established the Paregien Qualified Settlement Fund and appointed an administrator of the Fund. (Doc. 62-1 at 2-3) The Kern County Superior Court ordered the bulk of the remaining settlement amount, $4.5 million, to be deposited in the Fund and the remaining $64, ...

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