Fitzgerald v. Papa Murphy's International, LLC

          Craig M. Murphy, Esq. MURPHY & MURPHY LAW OFFICES Attorneys for Plaintiff

          ORDER GRANTING EX-PARTE PETITION FOR COMPROMISE OF MINOR'S CLAIM

         This matter comes before the Court on Plaintiffs Ex-Parte Petition for Compromise of Minor's Claim. [Doc. No. 4');">41] Based upon the Court's review of the papers, __ and for the reasons set forth below, the Court GRANTS the petition.

         I.

         BACKGROUND

         Petitioner is the natural parent and guardian of R.B., a minor. R.B. is 8 years old, having been born on June 26, 2011. As of May 8, 2018, federal, state and local health officials attributed a multi-state outbreak of Escherichia coli O157;H7 to romaine lettuce from Yuma, Arizona. [Doc. No. 4');">4, p. 11]. On or about April 10, 2018, R.B. consumed romaine lettuce from the Yuma, Arizona growing region in a salad at the Papa Murphy's restaurant located at 4');">4819 Granite Drive, Rocklin, California 95677. The romaine lettuce was contaminated by E. coli O157;H7 bacteria, leading to R.B.'s E. coli O157;H7 infection and related injuries. [Doc. No. 4');">4, p. 13]. R.B. began feeling ill around April 12, 2018. He experienced fevers, agonizing abdominal cramps, and bloody diarrhea, culminating in his admittance to Sutter General Sacramento on March 14');">4, 2018. [Doc. No. 4');">4, p. 13]. R.B. tested positive for E. coli O157;H7. [Doc. No. 4');">4, p. 13]. R.B. remained hospitalized until April 30, 2018. During his hospitalization, he developed HUS, and required four blood transfusions. Id. Defendants produced, distributed, and sold the contaminated food product that injured R.B., and caused his E. coli O157;H7 infection. The Defendants are, therefore, manufacturers, distributors, and sellers of an adulterated food product, and the adulterated food product reached R.B. without substantial change from the condition in which it was sold by the Defendants. [Doc. No. 4');">4, p. 13].

         Prior to the filing of Plaintiffs' Complaint and First Amended Complaint in this matter, the parties had engaged in extensive settlement negotiations and attempts to settle the Plaintiffs' claims. The Complaint and First Amended Complaint were filed when the settlement negotiations were at an impasse. After the filing of the First Amended Complaint, the parties resumed settlement negotiations. In an attempt to foster settlement negotiations and to avoid litigation costs and expenses, the parties agreed to dismiss the case without prejudice. [Doc. No. 37]. On September 12, 2018, the Court entered an Order dismissing the case per the parties' Stipulation. [Doc. No. 38].

         The parties thereafter continued pursuing this case and eventually agreed to settle Plaintiffs' claims as a result of a private mediation. On November 14');">4, 2019 Plaintiffs filed an Ex-Parte Petition to re-open this case to allow them to file an Ex-Parte Petition to Compromise Minor's Claim. [Doc. No. 39]. On November 15, 2019, this Court entered an Order re-opening this case [Doc. No. 4');">40] to allow Plaintiffs to file their Ex-Parte Petition for Compromise of Minor's Claim. [Doc. No. 4');">41]. The parties agreed to settle Plaintiffs' claims for $525, 000.00. Plaintiffs requested that a Structured Settlement be established for the deposit and safe-keeping of settlement funds. The Structured Settlement will allow for the best compounding of the settlement funds until R.B. reaches the age of 18, and further provides for the periodic payment of the funds after R.B. reaches 18 to further ensure he maximizes the benefits of this settlement once he reaches the age of majority. Plaintiffs therefore sought the Court's approval of the settlement and the establishment of the Structured Settlement annuity payable to R.B. the minor herein.

         II.

         DISCUSSION

         It is well-settled that district courts have a special duty to safeguard the interests of minor children in the context of settlements proposed in civil lawsuits or claims for damages. Robidoux v. Rosengren, 8 F.3d 1177');">638 F.3d 1177, 1181 (9th Cir. 2011); see also Fed.R.Civ.P. 17(c)(2) (district courts "must appoint a guardian ad litem-or issue another appropriate order-to protect a minor or incompetent person who is unrepresented in an action.") "This special duty requires a district court to 'conduct its own inquiry to determine whether the settlement serves the best interest of the minor.'" Robidoux, 638 F.3d at 1181 (quoting Dacanay v. Mendoza, 573 F.2d 1075, 1080 (9th Cir. 1978)). See also Salmeron v. United States, 4');">4 F.2d 1357');">724');">4 F.2d 1357, 1363 (9th Cir. 1983) (holding that "a court must independently investigate and evaluate any compromise or settlement of a minor's claims to assure itself that the minor's interests are protected, even if the settlement has been recommended or negotiated by the minor's parent or guardian ad litem").

         In evaluating the propriety of a proposed settlement of a minor's claim and "in considering the fairness of a minor's state law settlement, federal courts generally require that claims by minors . . . be settled in accordance with the applicable state law." Lobaton v. City of San Diego, No. 3:15-cv-14');">416-GPC-DHB, 2017 WL 2610038, at *2 (June 16, 2017) (internal quotation marks and citation omitted). California law requires court approval of a settlement for a minor and attorney's fees to represent a minor. CAL. PROB. CODE § 3601; CAL FAM. CODE § 6602. The court is tasked with evaluating the reasonableness of the settlement and determining whether the compromise is in the best interest of the minor before approving a settlement. Espericueta v. Shewry, 164');">4 Cal.App.4');">4th 615, 617 (2008). Furthermore, California Probate Code Section 3601 authorizes the court approving a compromise of a minor's disputed claim to "make a further order authorizing and directing that reasonable expenses, medical or otherwise[, ] . . . costs, and attorney's fees, as the court shall approve and allow therein, shall be paid from the money or other property to be paid or delivered for the benefit of the minor. CAL. PROB. CODE§ 3601(a). The statute "bestows broad power on the court to authorize payment from the settlement - to say who and what will be paid from the minor's money - as well as direct certain individuals to pay it." Goldberg v. Superior Court, 4');">4th 1378');">23 Cal.App.4');">4th 1378, 1382 (1994');">4).

         However, following the Ninth Circuit's decision in Robidoux, district courts have been split on whether or not to apply Robidoux when evaluating the propriety of a settlement of a minor's state law claims. See Lobaton, 2017 WL 2610038, at *2; see also Id. at n. 1 (collecting district court cases). The Robdioux court provided that in cases involving the settlement of a minor's federal claims, district courts should "limit the scope of their review to the question of whether the net amount distributed to each minor plaintiff is fair, in light of the facts of the case, the minor's specific claim, and recovery in similar cases." Robdioux, 638 F.3d at 1181. Here, the instant case was filed in this Court on the basis of diversity of citizenship. Thus, the court should apply California law and focus on whether "the compromise is sufficient to provide for the minor's injuries, care and treatment." Goldberg, 23 Cal.App.4');">4th at 1382. As a guide, the court may consider the guidelines set forth in Robidoux because they provide a "framework for evaluating the reasonableness and fairness of Plaintiff s settlement." Lobaton, 2017 WL 2610038, at *2.

         The court finds that the proposed settlement of R.B.'s claims is fair, reasonable and in the best interest of R.B. The proposed settlement would result in a total payment of $525, 000.00 to R.B. The proposed settlement provides that $131, 250.00.00 of the proceeds would be paid to R.B.'s counsel and that $8, 567.4');">45 would be reimbursed to counsel as and for costs incurred in this matter. The proposed settlement further provides that Plaintiff, Taylor Fitzgerald, R.B.'s mother, be reimbursed $8, 558.53 in lost wages due to missed work while caring for R.B. and seeing to his medical care and treatment, and repaid $895.00 in out-of-pocket expenses incurred for the care and treatment of R.B. The proposed settlement further provides that R.B.'s healthcare insurance provider's lien of $21, 4');">493.86 be repaid. Thus, R.B., the minor, would receive a net payment of $354');">4, 235.16, which shall be deposited into a structured settlement annuity with Pacific Life & Annuity Services, Inc. [Doc. No. 4');">41-6, pp. 1-7; and Doc. No. 4');">41-8, p. 2].

         The claims in this matter have been ongoing since May 2018. Plaintiffs' counsel pursued claims against the named Defendants in this matter. Prior to the filing of the Complaint in this matter, the parties had engaged in extensive settlement negotiations and attempts to settle the Plaintiffs' claims. [Doc. No. 4');">41, p. 3]. The Complaint was filed when the settlement negotiations were at an impasse. The parties continued to engage in settlement discussions and the case was voluntarily dismissed by the parties without prejudice. [Doc. No. 37]. Since the ...