LAWRENCE O. ANDERSON, Magistrate Judge.
This case arises on the parties' request for settlement approval of this consolidated interpleader action. J.R. Thompson, conservator and father of K.T., a minor; Marivel Ramos, putative conservator and guardian
This interpleader action arises from a tragic familial triple homicide and suicide. On or about September 21, 2010, Gilbert Ramos shot and killed Sandra Ramos and their two minor children and then killed himself. At the time of the shootings, Gilbert was married to Sandra with whom he had two young children and was employed by AMF Bowling Worldwide, Inc. ("AMF Bowling"). The children died at the scene and Sandra survived for a few days before she passed away from her injuries. Sandra's biological daughter, K.T.
At the time of the shootings, Gilbert and his sister, Marivel Ramos, were reportedly the subjects of an insurance fraud investigation as a result of Gilbert's intentional damage to Marivel's automobile and a subsequent claim for payment by Marivel's auto insurance benefits. In his suicide note, Gilbert absolved Marivel of criminal complicity, admitted he intentionally damaged his sister's vehicle, confessed he told her someone had stolen it, and opined he "ruined [his] family financially[]" and was "sorry for what [he's] done and am about to do." (Supplement to Police Report, by Homicide Detective, T. Nelson, December 3, 2010.)
Gilbert's employer, AMF Bowling, maintained a 401(k) retirement plan for the benefit of its eligible employees, including Gilbert, whose account balance on December 30, 2010 was $77,158.84. (Doc. 1, ¶ 14 at 3) According to AMF Bowling, before his marriage to Sandra, Gilbert designated his plan's beneficiaries as Maria Gonzalez, his mother; Devon Ramos, his adult son; Sandra Thompson, his then fiancee; and Christopher Dunagan, another adult son, as either primary and/or secondary beneficiaries with certain percentages designated for each that totaled 100 percent of the plan's benefits. (Id., ¶ 17 at 4
At the time of his death, Gilbert Ramos was insured by Liberty Life Assurance Company of Boston ("Liberty Life") under a renewable and convertible term life insurance policy in the amount of $100,000.00, Policy No. NF3-39621478. (Doc. 1, ¶ 17 in CV-11-554-PHX-LOA) Before his marriage to Sandra, Gilbert designated Marivel Ramos, his sister, as the primary beneficiary, and Maria Gonzalez, his mother, as the contingent beneficiary. (Id., ¶¶ 4-5, 18) After disputes arose over the entitlement of Gilbert Ramos' life insurance proceeds, Liberty Life filed an interpleader action on March 24, 2011, pursuant to Rule 22, Fed.R.Civ.P., and 28 U.S.C. § 2201.
On January 3, 2012, the Court granted Liberty Life's Revised Motion for Dismissal and Discharge and dismissed Liberty Life from this action with prejudice. (Doc. 53) Liberty Life was discharged from any further obligation and liability to any person, whether a party herein or not, with respect to Gilbert Ramos' life insurance policy with Liberty Life, Policy No. NF3-39621478. (Id. at 9-10) After Liberty Life discounted its attorneys' and paralegals' fees and, pursuant to Ninth Circuit precedent, the Court awarded Liberty Life its fees and costs in the sum of $13,955.80. (Id.)
With the skilled and gentle assistance of Magistrate Judge Michelle H. Burns at an emotionally-charged settlement conference in late November, 2011, the parties reached an amicable settlement, apportioning the residual interpled funds and accruing interest amongst the claimants. (Docs. 48, 60) As of February 7, 2012, the combined res amounted to $151,105.52. (Doc. 66) The claimants agreed to a distribution of the following gross amounts before payment of their attorneys' fees and costs: 1) $43,000.00 allocated between Maria Gonzalez ($16,500) and Marivel Ramos ($26,500); 2) $50,000 to Devon Ramos, Gilbert's adult son; and 3) $58,105.52
At the final settlement approval hearing, evidence was presented that, on December 13, 2010, J.R. Thompson filed a Petition for Permanent Appointment of Conservatorship of a Minor in the Maricopa County Superior Court, Case No. PB2010-91268, requesting he be appointed K.T.'s conservator because she "owns money or property that requires management or protection[.]" (hearing Exh. 1) The petition was granted on January 6, 2011 by Superior Court Commissioner Kirby Kongable, appointing J.R. Thompson as K.T.'s conservator to serve without a bond. (Id.) The appointment order requires K.T.'s funds "be deposited in [Maricopa County], in a federally insured, interest bearing account titled `The Estate of [K.T.], a Minor, by [J.R. Thompson], Conservator.'" (Id.)
Similarly, evidence was presented at the February 2, 2012 hearing that Marivel Ramos petitioned the Maricopa County Superior Court, Case No. PB2012-90038, on January 17, 2012, requesting she be appointed Maria I. Gonzalez' guardian and conservator because her mother, Maria, is an incapacitated and protected person, as defined by Arizona law, and is "receiving funds from a settlement of a case in the U.S. District Court [in] Phx. Az[.]" (hearing Exh. A) Evidence was introduced that the required notices have been provided and an appointment hearing is scheduled for March 27, 2012 to consider Marivel Ramos' Petition. (Id.)
The minor, K.T., and her father, as her conservator, are represented by counsel employed by The Never Again Foundation, a § 501(c)(3) non-profit legal charity, located in Phoenix. (Doc. 57-2, ¶ 4 at 1-2) The Never Again Foundation provides free legal representation to surviving families in civil domestic violence death cases filed directly against the offenders or killers.
Marivel Ramos, Maria Gonzalez, and Christopher Dunagan are represented by Harry P. Friedlander, an attorney licensed to practice in the State of Arizona. (Doc. 65) Significantly, his affidavit fails to provide any information about his experience, expertise, accomplishments, and background as an attorney for the Court to evaluate the reasonableness of his requested fees and costs. Because Mr. Friedlander did not file a narrative application or motion, including a "memorandum of points and authorities in support of a motion for award of attorneys' fees's . . . .", LRCiv 54.2(c), and his sealed affidavit does not supply sufficient information needed to determine the reasonableness of his requested fees and costs, consistent with LRCiv 54.2(c)(3), (d)(2) and (4), and how those fees and costs are apportioned between his clients, the Court will not award any attorney's fees and costs to Mr. Friedlander until after he submits of an application and supplemental affidavit of attorney's fees in compliance with these specific Local Rules.
Once a federal action is commenced, it must be prosecuted in the name of the real party in interest. Gonzalez v. Ariz. Dep't of Health Servs., 2009 WL 383535, * 1 (D.Ariz. Feb.13 2009) (quoting Rule 17(a)(1) (providing an exception for legal guardians, inter alia)); see also 6A also Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1548, at 373-74 (2d ed. 1990) ("A guardian ad litem . . . is a nominal party only; the ward is the real party in interest. . . ."). Rule 17(c)(2) provides that
Rule 17(c)(2). A minor's or incapacitated person's representation by an attorney only is insufficient to satisfy the requirements of Rule 17(c). U.S. v. 30.64 Acres of Land, More or Less, Situated in Klickitat County, State of Wash., 795 F.2d 796, 805 (9th Cir. 1986) (noting, in part, that the absence of guardian ad litem effectively precludes the possibility of a binding contract of settlement because of the incompetency of one of the parties); Watson v. County of Santa Clara, 468 F.Supp.2d 1150, 1155 (N.D.Cal. 2007) (dismissing without prejudice actions brought by plaintiff minors because no guardian ad litem was formally appointed by the court).
"As a general rule, a federal court cannot appoint a guardian ad litem in an action in which the infant or incompetent already is represented by someone who is considered appropriate under the law of the forum state." Hogan v. Fresno County Sheriff's Deputy Robinson, 2005 WL 2064113 (E.D.Cal. Aug 24, 2005) (quoting T.W. by Enk v. Brophy, 124 F.3d 893, 896 (7th Cir. 1997); Developmental Disabilities Advocacy Center, Inc. v. Melton, 689 F.2d 281, 286 (1st Cir. 1982)); see also 6A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1570, p. 497 (2d ed. 1990)). A district court is "obligated to abide by the State's determination of who shall represent the incompetent . . . [and the court's] power to appoint under Rule 17(c) should not be used to circumvent the mandate in Rule 17(b) to observe state law." Id. (quoting Wolfe v. Bias, 601 F.Supp. 426, 427-28 (S.D.W.Va. 1984) and citing Brophy, 124 F.3d at 895).
In a federal action, a district court has the discretion and authority to remove a guardian ad litem or state-appointed conservator
A person may gain standing to sue as a guardian ad litem on behalf of a minor or incompetent person if he or she can both "(1) provide an adequate explanation, such as inaccessibility, mental incompetence, or other disability, why the real party in interest cannot appear on his own behalf to prosecute the action; and (2) be truly dedicated to the best interests of the person on whose behalf he or she seeks to litigate and have some significant relationship with the real party in interest." Gonzalez, 2009 WL 383535 at * 1 (quoting Miller ex rel. Jones v. Stewart, 231 F.3d 1248, 1251 (9th Cir. 2000)); see also Matter of Guardianship of Kelly, 184 Ariz. 514, 910 P.2d 665 (Az.Ct.App. 1996) (appointing an independent third party as guardian rather than one of the ward's adult children because clear and convincing evidence supported the court's determination that the ward was incapacitated and in need of a guardian.). The ultimate decision whether to appoint a guardian ad litem or retain a state-appointed conservator rests with the sound discretion of the district court and will not be disturbed unless there has been an abuse of its authority. Sam M. ex rel. Elliott v. Carcieri, 608 F.3d 77, 85 (1st Cir. 2010) (quoting Melton, 689 F.2d at 285); Hoffert v. General Motors Corp., 656 F.2d 161, 164 (5th Cir. 1981); see also In re Guardianship of Kelly, 184 Ariz. 514, 518, 910 P.2d 665, 669 (Az.Ct.App. 1996) (The trial court "has wide latitude to perform its statutory duty to safeguard the well-being of the ward.").
In 1973, Arizona adopted the Uniform Probate Code ("UPC"), A.R.S. §§ 14-1101 to 14-7308. Matter of Estate of Mason, 190 Ariz. 312, 313, 947 P.2d 886, 887 (Az.Ct.App. 1997). Over the years, there have been numerous statutory changes.
Arizona's probate laws are designed, in part, to protect and preserve the assets and finances of a minor
Among the many powers conferred upon a conservator by Arizona law is the authority "with court approval to compromise a personal injury or wrongful death claim for a protected person[.]" A.R.S. § 14-5424(D
Arizona law provides that "a court may appoint a guardian when it is satisfied by clear and convincing evidence that the proposed ward is incapacitated, the appointment is necessary to provide for the ward's demonstrated needs and that such needs cannot be met by less restrictive means." In re Guardianship and Conservatorship of Rango, 2009 WL 325330, * 3 (Az.Ct.App. February 10, 2009) (citing A.R.S. § 14-5304)). A guardian of an incapacitated person
Arizona's statutory scheme governing guardians and conservators authorizes an award of reasonable attorney's fees. Sleeth, 244 P.3d at 1172 (citing A.R.S. §§ 14-5314(A) and 14-5414(A)). However, Arizona courts "[e]ndorse [attorney fee-reducing] suggestions and encourage fiduciaries and attorneys to diligently search for ways to increase efficiency and to employ cost-reducing measures that will preserve as much as possible the protected person's estate. Obviously, fiduciaries and their attorneys must avoid the pursuit of pyrrhic victories that accomplish little but to bankrupt the protected person." Id. at 1174.
"It has long been established that the court in which a minor's claims are being litigated has a duty to protect the minor's interests." Salmeron v. United States, 724 F.2d 1357, 1363 (9th Cir. 1983). "In the context of proposed settlements in suits involving minor plaintiffs, this special duty requires a district court to `conduct its own inquiry to determine whether the settlement serves the best interests of the minor.'" Robidoux v. Rosengren, 638 F.3d 1177, 1181 (9th Cir. 2011) (quoting Dacanay v. Mendoza, 573 F.2d 1075, 1080 (9th Cir. 1978)). A district court should also be "mindful of the need to protect the rights of the mentally incompetent[,]" Ferrelli v. River Manor Health Care Ctr., 323 F.3d 196, 201 (2d Cir. 2003), and is "under a legal obligation to consider whether [an incompetent] person is adequately protected." 30.64 Acres of Land, 795 F.2d at 805 (citing Roberts v. Ohio Casualty Insurance Co., 256 F.2d 35, 39 (5th Cir. 1958)). Whether federal or state, "[j]udges play a vital role in fulfilling the [Arizona] legislature's intent to safeguard those in need of the protection of conservators and guardians." Sleeth, 244 P.3d at 1175.
In reviewing a proposed settlement, a district court should consider "whether the net amount distributed to [a] minor plaintiff [or incompetent person] in the settlement is fair and reasonable, in light of the facts of the case, the minor's [or incompetent person's] specific claim, and recovery in similar cases." Robidoux at 1182. "It is the court's order approving the settlement that vests the guardian ad litem [or state-appointed conservator] with the legal power to enforce the agreement." Id. at 1079.
To properly assess whether the parties' settlement agreement is fair and just for K.T. and Maria Gonzalez, the Court will discuss the various claims or theories of liability if this action or a separate action went to trial.
As previously mentioned, two different funds were separately interpled — Gilbert Ramos' AMF 401(k) retirement plan and Liberty Life's $100,000.00 life insurance policy. Both interpleader actions were consolidated into this single case because of the similarities between the incident, the decedent, and the potential claimants to the funds, totaling $151,105.52 on February 7, 2012.
The distribution of the AMF 401(k) proceeds is governed by the specific terms of the AMF 401(k) plan, which were quoted in AMF Bowling's interpleader complaint: "Paragraph 7.3 of the Plan provides that if the employee is married at this death, the spouse is automatically the beneficiary." (Doc. 1, ¶ 18 at 4) It is undisputed that at the time of Gilbert Ramos' death, he was married to Sandra Ramos. Thus, according to the plan itself, Sandra automatically became the beneficiary upon their marriage. Because K.T. is the sole rightful heir to all of Sandra Ramos' estate and the parties agree that Marivel Ramos and Maria Gonzales have no claim to these funds, K.T. is entitled to 100 percent of the residual of Gilbert's 401(k) plan or $48,159.32 as of February 7, 2012.
The entitlement to the proceeds from Gilbert's life insurance policy is more complicated. Prior to his marriage to Sandra, on March 18, 1997, Gilbert Ramos took out a $100,000.00 "Five Year Renewable and Convertible Term Life Insurance Policy" with Liberty Life on his life and named his sister, Marivel Ramos, as the policy's beneficiary. On March 18, 2002, Gilbert renewed the policy for an additional five years, and, on May 29, 2004, Gilbert married Sandra. After their marriage, Gilbert again renewed his life insurance policy on March 18, 2007. After Gilbert's marriage to Sandra in 2004, the policy premium was paid by community property funds. The parties agree that, at least, some of the policy premiums were paid by community funds of the marriage of Gilbert and Sandra Ramos for the last five year term of the Liberty Life policy. There is no evidence that Sandra signed any written documents waiving her community property right to receive the life insurance proceeds.
K.T. asserts three separate legal theories in support of her entitlment to all of Gilbert's life insurance proceeds. First, assuming Arizona law applied, under Arizona's community property laws and case authorities, A.R.S. § 25-211
Second, if K.T. filed a wrongful death action
Finally, K.T. contends, upon information and belief, that Gilbert called Liberty Life just prior to committing the murders/suicide to verify that his sister Marivel was the beneficiary on his life insurance policy. Pursuant to A.R.S. § 13-2314.04 (RICO), K.T. argues that the combined acts of verifying a financial payout to his sister, and his suicide note regarding ruining his family financially, support an argument that Gilbert's actions were, at least in part, calculated to produce a financial gain for Marivel, resulting in a constructive trust of his life insurance benefits for the estate of the homicide victim, Sandra. Thus, as the sole beneficiary of the estate of Sandra Ramos, K.T. would receive all of Gilbert's life insurance proceeds.
Conversely, Marivel Ramos and Maria Gonzales contend that the distribution of Gilbert's life insurance benefits is simply a matter of contract law and they would prevail as either the primary beneficiary (Marivel Ramos) and/or the second beneficiary (Maria Gonzalez) if K.T.'s claims to Gilbert's life insurance proceeds were litigated to a conclusion. Additionally, Marivel argues that she would prevail on any claim in this action or a separate lawsuit against her under Arizona's "slayer statute,"
In his individual capacity, Devon Ramos claims he was entitled to the majority of Gilbert's 401(k) retirement plan but concedes, as the personal representative of Gilbert's estate, the estate makes no claim to the Liberty Life insurance proceeds. Moreover, Devon disputes the application of Arizona's slayer statute to Gilbert's 401(k) retirement plan. It is undisputed that AMF Bowling's Complaint alleged that paragraph 15.3 of its retirement plan provides that Gilbert's "plan shall be construed, enforced and administered in accordance with the laws of the Commonwealth of Virginia[,]" not Arizona law. (Doc. 1, ¶ 20 at 5)
The Court concludes that the parties' voluntary resolution of this case is fair and reasonable. Each of the parties will receive a modest but reasonably proportionate share of the limited funds available. All agree that continued litigation to a final conclusion would be expensive with estimates that the combined attorneys' fees and costs would exceed the amount of the interpled funds. The wisdom of an early settlement guarantees the parties, not the lawyers, will financially benefit from a resolution, provides an emotional ending of immeasurable worth to this horrific tragedy and a beginning of the healing process to all the Ramos family members, and "avoid[s] the pursuit of pyrrhic victories that accomplish little but to bankrupt the protected person." Sleeth, 244 P.3d at 1174. A settlement now may assist K.T. in obtaining a higher education and provide a modest degree of assistance to Maria in her declining health and years whereas pursuing further litigation would be risky, lengthy, and replete with challenging legal issues, such as, choice-of-law and causation questions, and the unlikelihood that K.T. could collect a favorable judgment beyond the interpled funds.
After considering the terms of the proposed settlement, the arguments of counsel at the February 2, 2012 hearing, the totality of the facts of these consolidated cases, and the claims and defenses that were alleged or could have been alleged, the Court finds that the parties' settlement is fair, reasonable, and in K.T.'s and Maria Gonzalez' best interests.
Based on the foregoing,
According to the Clerk's Financial Administrator, a request for funds deposited in the District Court of Arizona's registry can only be made on a Wednesday. Under the federal Court Registry Investment System ("CRIS"), money deposited in every district court case is pooled with the money on deposit with the Treasury, with a credit back to all district courts with funds in CRIS, which is used to purchase Government Account Series securities through the Bureau of Public Debt. See 28 U.S.C. §§ 2041, 2045; Six Mexican Workers v. Arizona Citrus Growers, 904 F.2d 1301, 1308 n. 5 (9th Cir. 1990). CRIS operates on a weekly cycle tied to a Thursday maturity date of these securities.
A.R.S. § 14-5424(D) (1998); see also UPC § 5-423.
A.R.S. § 25-211(A).
