Opinion
CIV. NO. 2:14-2053 WBS CKD
03-07-2017
E.R., a minor, by and through his Guardian ad Litem, CAROLYN YOUNG, Plaintiff, v. SUTTER DAVIS HOSPITAL; SUTTER WEST WOMEN'S HEALTH; SUSAN MAAYAH, M.D.; Defendants. AND RELATED THIRD-PARTY CLAIMS.
MEMORANDUM AND ORDER RE: MOTION FOR DETERMINATION OF GOOD FAITH SETTLEMENT AND PETITION TO APPROVE MINOR'S COMPROMISE
Plaintiff E.R., by and through his guardian ad litem, Carolyn Young, brought this action, alleging defendants Sutter Davis Hospital ("Sutter Davis"), Sutter Medical Group, and Dr. Susan Maayah were negligent during E.R.'s birth. (Docket No. 1-1.) Plaintiff and Sutter Davis reached a settlement in the amount of $875,000 and now separately move for a determination that 1) the settlement was made in good faith pursuant to California Code of Civil Procedure § 877.6 (Docket No. 78); and 2) the proposed compromise of a disputed claim of a minor was proper under applicable law (Docket No. 89). No opposition has been filed in response to Sutter Davis's motion for determination of good faith settlement. No opposition has been filed in response to guardian ad litem Carolyn Young's petition for approval of minor's compromise with the exception of defendants Sutter Medical Group's and Dr. Maayah's objection to the payment of $79,500 in connection with nine retained experts. The court held a hearing on the motion and petition on March 6, 2017.
Sutter Medical Group is the proper name for the defendant listed as "Sutter West Women's Health" in the complaint. (See Docket No. 75 at 2.) --------
I. Good Faith Settlement
The court finds that the settlement was made in good faith based on the factors announced in Tech-Bilt, Inc. v. Woodward-Clyde & Associates, 38 Cal. 3d 488, 500-01 (1985) (holding that a court should consider, inter alia, the rough approximation of plaintiff's total recovery and the settling party's proportionate liability, the amount of the settlement, and the existence of collusion, fraud or tortious conduct aimed to injure the nonsettling party's interests). See Fed. Sav. & Loan Ins. Corp. v. Butler, 904 F.2d 505, 511 (9th Cir. 1990) (settling party may seek a determination that a settlement was made in good faith under Cal. Code of Civ. Proc. § 877.6 in federal court).
Considering the evidence supporting an approximately $2.3 million total damages calculation, the evidence supporting Sutter Davis's contention that its nurses were not negligent, and the possibility that even assuming Sutter Davis was found liable, the non-settling defendants could be held liable for a substantial portion of any recovery at trial, the $875,000 settlement is "within the reasonable range of the settling tortfeasor's proportional share of comparative liability for plaintiff's injuries." See Tech-Bilt, 38 Cal. 3d at 499.
Moreover, there is no suggestion of collusion or fraud. The fact that plaintiff is willing to accept a settlement amount less than what Sutter Davis might ultimately have been required to pay suggests that it is in the range of appropriate settlement amounts. Additionally, under California Code of Civil Procedure § 877, any party challenging a settlement bears the burden of establishing that the proposed settlement amount is "so far 'out of the ballpark' that the equitable objectives of § 877 are not satisfied." Tyco Thermal Controls LLC v. Redwood Indus., No. C 06-07164, 2010 WL 3211926, at *13 (N.D. Cal. Aug. 12, 2010) (citing Tech-Bilt, 38 Cal. 3d at 499-500). No party here has even attempted to make such a showing.
Finally, the court considers whether any party properly objected to a motion for determination of good faith settlement. Under section 877.6(a)(2), "[i]f none of the nonsettling parties files a motion within 25 days of mailing of the notice, application, and proposed order, or within 20 days of personal service, the court may approve the settlement." Non-settling defendants Sutter Medical Group and Dr. Maayah received notice of the settlement, did not file any response to Sutter Davis's motion, and do not contend that the settlement was not made in good faith.
In light of the above factors, the settlement between plaintiff and Sutter Davis Hospital was made in good faith pursuant to section 877.6, and the court will grant Sutter Davis's motion for determination of good faith settlement.
II. Minor's Compromise
The court is familiar with the allegations in this case, including the undisputed severe and permanent neurological injury suffered by plaintiff, as well as Sutter Davis's continued claim that its nurses complied with the applicable standard of care and that nothing the nurses did contributed to plaintiff's injury, and the parties' damages estimates. The settlement is for a substantial sum of $875,000, and the court is not certain that plaintiff would recover that amount against Sutter Davis if the case proceeded to trial, in light of the evidence supporting a finding of no liability, though plaintiff has produced contrary evidence supporting his position. Moreover, proper notice of the settlement has been given to all parties.
While the settlement will result in the payment of $175,198 in attorney's fees to plaintiff's counsel, it "has been the practice in the Eastern District of California to consider 25% of the recovery as the benchmark for attorney's fees in contingency cases involving minors." See Chance v. Prudential Ins. Co. of Am., No. 1:15-cv-1889-DAD-JLT, 2016 WL 3538345, at *3 (E.D. Cal. June 29, 2016) (compiling cases). Thus, the portion of the total settlement allocated to attorney's fees, which is below the 25% benchmark, is reasonable under the circumstances.
Based on all of these considerations, the court finds that the settlement is fair and reasonable and in the best interests of the minor child. See E.D. Cal. L.R. 202(b); see also Robidoux v. Rosengren, 638 F.3d 1177, 1179 (9th Cir. 2011) Accordingly, the court will approve the settlement of plaintiff's claims against defendant Sutter Davis and will grant Carolyn Young's petition for approval of minor's compromise.
IT IS THEREFORE ORDERED that Sutter Davis Hospital's motion for determination of good faith settlement (Docket No. 78) be, and the same hereby is, GRANTED.
IT IS FURTHER ORDERED that the settlement bars any claims for contribution or indemnity by co-defendants Sutter Medical Group or Dr. Susan Maayah or any other joint tortfeasor or co-obligor against Sutter Davis Hospital.
IT IS FURTHER ORDERED that Carolyn Young's petition for approval of minor's compromise (Docket No. 89) be, and the same hereby is, GRANTED.
IT IS FURTHER ORDERED that:
1. The gross amount or value of the settlement or judgment in favor of plaintiff E.R. is $875,000.
2. Fees and expenses shall be paid by one or more checks or drafts, drawn payable to the order of plaintiff's guardian ad litem Carolyn Young and plaintiff's attorney, if any, or directly to third parties entitled to receive payment identified in this order for the following items of expenses or damages, which are hereby authorized to be paid out of the proceeds of the settlement or judgment:
(a) Attorney's fees in the total amount of $175,198 payable to Rice & Bloomfield, LLP.
(b) Reimbursement for medical and all other expenses paid by the guardian ad litem and plaintiff's attorney in the total amount of $220,871.
(c) Medical, hospital, ambulance, nursing, and other like expenses payable in the total amount of $56,580 directly to the Department of Health Care Services/Recovery Section, MS 4720, P.O. Box 997425, Sacramento, California 95899-7425.
(d) A check in the amount of $60,000 will be deposited into the Special Needs Trust for plaintiff's immediate, short-term needs, as detailed in Attachment 19b(4).
(e) A check in the amount of $62,000 shall be made payable to Rice & Bloomfield, LLP, which is ordered to maintain that amount of the settlement funds in their Client Trust Account for the purpose of purchasing a handicapped-equipped van to allow plaintiff to be transported more comfortably and more conveniently by his caregivers. Upon selection of that vehicle, Rice & Bloomfield, LLP, is directed to make a check payable to the dealer or vendor from whom that equipment is purchased. Should the cost of the vehicle be less than $62,000, Rice & Bloomfield, LLP, are directed to deposit the unused funds into plaintiff's trust account within 15 days of the purchase of the vehicle.
(f) The balance of the settlement funds, $300,351, will be used to purchase an annuity (structured settlement), as detailed in Attachment 19b(3).
3. The petitioner is authorized and directed to execute any and all documents reasonably necessary to carry out the terms of the settlement.
4. Until further order of the court, jurisdiction is reserved to determine a claim for a reduction of a Medi-Cal lien under California Welfare and Institutions Code § 14124.76 in the amount of $300,000. Dated: March 7, 2017
/s/_________
WILLIAM B. SHUBB
UNITED STATES DISTRICT JUDGE
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