United States District Court, S.D. California
MILA SHEN, by and through her guardian ad litem Peggy Shen Brewster; EDWIN SHEN, an individual; JOYCE SHEN, an individual; ZOE SHEN and VESPER SHEN, by and through their guardian ad litem Peggy Shen Brewster, Plaintiffs,
CLUB MED SAS, a corporation; CLUB MED SALES, INC.; CLUB MED MANAGEMENT SERVICES, INC.; and DOES 1 to 50, Defendants.
REPORT AND RECOMMENDATION FOR ORDER GRANTING MINORS
COMPROMISE PETITIONS (ECF No. 40)
BERNARD G. SKOMAL UNITED STATES MAGISTRATE JUDGE
the Court are the petitions of guardian ad litem Erik
Brewster to approve the compromise of the pending action on
behalf of minor Plaintiffs Mila Shen, Zoe Shen, and Vesper
Shen (“minor Plaintiffs”). (ECF No. 40.) This
Report and Recommendation is submitted to United States
District Judge Roget T. Benitez pursuant to 28 U.S.C. §
636(b)(1) and Local Civil Rule 17.1 of the United States
District Court for the Southern District of California. After
reviewing the Petitions and all supporting documents, and for
the reasons discussed below, the Court
RECOMMENDS that the Petitions (ECF No. 40)
Mila Shen, Zoe Shen, and Vesper Shen are minors appearing by
and through their court appointed guardian ad litem, Erik
Brewster. (ECF No. 21.) On August 8, 2018, Plaintiffs Mila,
Zoe, Vesper and their parents, Plaintiffs Edwin and Joyce
Shen, attended a performance at Club Med hotel in Tomamu
Hokkaido, Japan. (ECF No. 1-2 at 4.) General manager Merlin
Chelliah gathered the children to the front of the stage to
have them partake in a sake barrel breaking ceremony. During
the ceremony, Ms. Chelliah's wooden mallet slipped out of
her hand and hit Mila in the center of her forehead.
(Id. at 5.) She suffered a nondisplaced frontal
skull fracture and today has a prominent scar across her
forehead. (ECF No. 40-1 at 3.) She received emergency
treatment, imaging, neurological examination, plastic
surgery, and therapy for emotional trauma. (Id.)
Mila was seven years old at the time of the injury. (ECF No.
1-2 at 5.) Her parents and sisters Zoe and Vesper witnessed
Mila's injury causing them emotional distress.
(Id.; ECF No. 40-2 at 3; ECF No. 40-3 at 3.)
action was initially filed in California Superior Court and
was removed to this Court on February 20, 2019. (ECF No. 1.)
Plaintiffs alleged claims of negligence, negligent infliction
of emotional distress, and negligent misrepresentation. (ECF
No. 1-2.) Defendants filed motions to dismiss for lack of
personal jurisdiction. (ECF Nos. 21-22.) The undersigned
judge held an Early Neutral Evaluation and Case Management
Conference on September 4, 2019. (ECF No. 29.) The case did
not settle, and a scheduling order was issued. (Id.;
ECF No. 30.) On September 30, 2019, Plaintiffs filed their
opposition to Defendants' Motion to Dismiss. (ECF Nos.
32-33.) On October 18, 2019, the parties filed a joint notice
of settlement informing the Court they reached a settlement.
(ECF No. 37.) On November 1, 2019, guardian ad litem Erik
Brewster filed petitions for approval of the minor's
compromise of claims. (ECF No. 40.) Exhibits were attached
containing petitions for Mila (ECF No. 40-1), Zoe (ECF No.
40-2), and Vesper (ECF No. 40-3).
well settled that courts have a special duty to safeguard the
interests of litigants who are minors in the context of
settlements proposed in civil suits. Robidoux v.
Rosengren, 638 F.3d 1177, 1181 (9th Cir. 2011); see
also Fed. R. Civ. P. 17(c) (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 duty
“requires a district court to ‘conduct its own
inquiry to determine whether the settlement serves the best
interests 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, 724 F.2d 1357, 1363 (9th Cir. 1983) (“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.”).
Accordingly, Local Rule 17.1(a) provides that “[n]o
action by or on behalf of a minor or incompetent will be
settled, compromised, voluntarily discontinued, dismissed or
terminated without court order or judgment.” CivLR.
17.1(a). This requires the Court to question if the
settlement is in the best interests of the minor and consider
not only the fairness of the settlement, but the structure
and manner of the plan for the payment and distribution of
the assets for the benefit of the minor.
“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-1416-GPC-DHB, 2017 WL 2610038, at *2 (S.D. Cal. 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. Under
California state law, the Court is tasked with evaluating the
reasonableness of the settlement and determining whether the
compromise is in the best interest of the minor.
Espericueta v. Shewry, 164 Cal.App.4th 615, 619-20
(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). This
“bestows broad power on the court to authorize payment
form 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, 23
Cal.App.4th 1378, 1382 (1994).
cases involving the settlement of a minor's claims, the
Ninth Circuit has stated that 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.”
Robidoux, 638 F.3d at 1181-82. This inquiry should
be made “without regard to the proportion of the total
settlement value designated for adult co-plaintiffs or
plaintiffs' counsel - whose interests the district court
has no special duty to safeguard.” Id. at
1182. “So long as the net recovery to each minor
plaintiff is fair and reasonable in light of their claims and
average recovery in similar cases, the district court should
approve the settlement as proposed by the parties.”
the instant complaint was filed in San Diego County Superior
Court and alleges state law claims for negligence, negligent
infliction of emotional distress, and negligent
misrepresentation. (ECF No. 1-2.) The Court, therefore, will
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.4th at 1382. Additionally, the Court will 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.
on a review of the petitions and applicable law, the Court
finds that the terms of the settlement are fair and
reasonable as to the minor Plaintiffs. Under the terms of the
settlement, Plaintiffs agree to accept $500, 000 in exchange
for dismissing their claims against Defendants. (ECF No. 40
at 2.) The settlement is apportioned according to the
following percentages: Mila is to receive 76.94%; Zoe is to
receive 11.53%; and Vesper is to receive 11.53%. (ECF No.
40-1 at 13.) The gross proceeds are to be apportioned
accordingly, with Mila receiving $384, 700 and each of her
sisters receiving $57, 650. (ECF Nos. 40-1 at 7, 40-2 at 7,
40-3 at 7.) After attorney's fees and costs, Mila will
receive $299, 707.18, Zoe will receive $45, 091, and Vesper
will receive $45, 091 to be paid into structured annuities.
(Id.) The minors' parents are not taking any
settlement funds and Plaintiffs' counsel reduced their
fee from 33 1/3% to 20% to ensure adequate compensation for
Mila. (Id.; 40-1 at 19.)
action was initiated in state court December 6, 2018 (ECF No.
1-2 at 2) and removed to federal court on February 20, 2019
(ECF No. 1.) Over the course of the litigation,
Plaintiffs' counsel conducted an extensive investigation
into the events surrounding Mila's injury, and the facts
of the case were thoroughly investigated in response to
Defendants' Motions to Dismiss on basis of lack of
personal jurisdiction and via participation in an Early
Neutral Evaluation with the undersigned judge. Based upon
consideration of the facts, the minor Plaintiffs' ...