Keathley v. Annor

Background

The motion sought court approval of a settlement on behalf of MK, an infant plaintiff. The proposed settlement agreement stated that the defendants would pay MK $41,000: $15,000 from Surinder Gera and Kennedy Annor, $25,000 from Samuel H. Kim, and $1,000 from Mark P. Ringo. The agreement said the payment would resolve the parties’ disputed claims but did not mention releases or attorney’s fees.

On September 4, 2020, the court denied the settlement-approval motion without prejudice because the submissions did not comply with New York Civil Practice Law and Rules §§ 1208(a)(8) and 1208(b)(2). The court directed the petitioner to file the retainer agreement and proposed settlement agreement. On September 28, the court ordered a revised petition correcting the deficiencies and including the requested documents. The petitioner filed a proposed infant compromise settlement order and a one-page retainer, and later filed an attorney’s affidavit and proposed settlement agreement.

Legal Standard

Local Civil Rule 83.2(a) requires court approval before an action on behalf of an infant may be settled or terminated. The court must determine a reasonable attorney’s fee and proper expenses and distribute the remaining settlement proceeds in a way that protects the infant’s interests. New York Civil Practice Law and Rules § 1208 requires information from the infant’s representative and the attorney, including details about related claims and potential conflicts of interest.

The court also treated the settlement agreement as a contract. Under the principles it cited, consideration means something of legally recognized value exchanged between the parties. The court stated that courts generally do not examine whether the exchange was adequate unless there is fraud or unconscionability.

Reasons for Denial

The court found that the petitioner failed to file the revised petition by the deadline and did not request an extension. The court further found that the procedural deficiency identified in its earlier order had not been cured. The attorney’s affidavit described MK’s physical condition, but § 1208(a)(8) required an affidavit from MK’s representative addressing whether the representative or a family member had made a claim arising from the same event and, if so, the amount paid or to be paid in settlement. No such representative’s affidavit was filed.

The attorney’s affidavit stated that the attorney represented Craig Keathley and Molly Keathley in claims arising from the same event and that their claims had been settled. But the court found that the affidavit did not include the required statement that the attorney had not become involved in the settlement at the request of an opposing party or a person with interests adverse to MK, or received or expected compensation from such a party. The affidavit also did not provide the date, amounts, terms, or legal authorization for the parents’ settlements. The court noted that settlements involving an infant require court approval under Local Rule 83.2 and New York Civil Practice Law and Rules § 1207.

The court also identified problems in the proposed settlement documents. The proposed settlement agreement did not state what the defendants received in exchange for their payments, did not mention releases, and did not mention attorney’s fees. A separate proposed infant compromise settlement order proposed unidentified attorney’s fees and costs for the Katsorhis Law Firm, creating a discrepancy with the proposed settlement agreement. The proposed agreement also did not state whether Gera and Annor were jointly and separately responsible for the $15,000 payment. The court described these omissions and discrepancies as serious concerns weighing against approval.

Disposition

Judge Kevin Nathaniel Fox denied, with prejudice, the petitioner’s motion for settlement of the action on behalf of MK. The court also directed the parties to complete the questionnaire at Docket Entry No. 26 and file it before the November 10, 2020, 2:00 p.m. telephone conference. The opinion does not decide the underlying claims against the defendants.