V.G.M. v. City of Salinas
- Beth Freeman
- 5:19-cv-08007
- U.S. District Court · Northern District of California
- 4
In V.G.M. v. City of Salinas, Judge Freeman approved a $2 million settlement resolving a minor plaintiff’s claims and ordered how the minor’s share would be paid.
The minor plaintiff, the minor’s guardian ad litem Ernesto Daniel Rodriguez, the plaintiffs’ counsel, and the defendants were affected by the approved settlement and payment requirements.
What happened
In V.G.M. v. City of Salinas, the plaintiffs asked the court to approve a settlement involving a minor plaintiff. The defendants did not oppose the request.
The total settlement was $2 million, with $1.3 million allocated to the minor. After fees and costs, the minor’s net recovery was $973,900.52, to be paid through a blocked account and a structured settlement annuity.
Judge Freeman found the proposed distribution fair and reasonable and granted the motion. The court approved the settlement, the payment arrangements, and the attorneys’ fees and costs, and required documentation of the account deposit and annuity purchase.
The detailed version
- V.G.M. v. City of Salinas · No. 5:19-cv-08007
- Beth Freeman
- Mar. 30, 2021
Background
The plaintiffs moved for approval of a minor’s compromise, meaning a proposed settlement resolving a minor’s claims. The defendants stated that they did not oppose the motion.
Under Federal Rule of Civil Procedure 17(c), the court has a special duty to protect minors’ interests. The court explained that, under Ninth Circuit law, it must independently determine whether the settlement is in the minor’s best interests. Its review focuses on whether each minor’s net recovery is fair and reasonable, without considering the amount adult co-plaintiffs receive or what they agreed to pay their lawyers.
Settlement Terms
The defendants agreed to pay a total settlement of $2,000,000. The minor’s share was 65 percent, or $1,300,000. After fees and costs, the minor’s net settlement was $973,900.52.
Of that net amount, $98,900.52 was to be placed in an interest-bearing blocked account at a Federal Deposit Insurance Corporation-insured financial institution. After the account was funded, the institution was to immediately issue a $7,500 cashier’s check to the minor’s guardian ad litem, Ernesto Daniel Rodriguez, for the minor’s benefit. The remaining balance in the blocked account was to be paid to the minor on February 8, 2037, her eighteenth birthday.
The remaining $875,000 of the minor’s net settlement was to be used to purchase a structured settlement annuity from United Omaha Life Insurance Company. The listed payments included monthly payments to Ernesto Daniel Rodriguez for the minor’s benefit, monthly and annual payments directly to the minor beginning at specified ages, and guaranteed lump-sum payments at ages 22, 25, 30, and 32. The excerpt does not show the dollar amount for item (c) of the annuity schedule.
Ruling
The court found that the proposed distribution was fair and reasonable to the minor and granted the motion. The order approved the minor’s claims settlement under the parties’ agreement, required plaintiffs’ counsel to deposit $98,900.52 into the blocked account, and required the defendants to pay the remaining $875,000 toward the annuity. The receipt for the annuity purchase had to be filed within 60 days, and plaintiffs’ counsel had to notify the court when the blocked-account deposit was completed. The court also approved the attorneys’ fees and costs described in the motion.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.