ORDER APPROVING SETTLEMENT OF MINOR'S CLAIMS
Re: Dkt. No. 32
EDWARD J. DAVILA, District Judge.
Plaintiffs Joe Ramos, Ana Garcia, and O.R., a minor by and through his guardians ad litem Jose Ramos and Ana Garcia (hereinafter "Plaintiff O.R.") initiated this action against San Jose Unified School District and named individuals ("Defendants") for violating the Americans with Disabilities Act, Section 504 of the Rehabilitation Act of 1973, as well as state laws. Complaint, Dkt. No. 1. This Court has subject matter jurisdiction under 28 U.S.C. § 1331 (federal question). After formal mediation with Magistrate Judge Nathanael Cousins, the parties agreed to settle the lawsuit. Presently before the Court is Plaintiff's Motion to Approve Settlement of Minor's Claims. Dkt. No. 32. Plaintiff's compromise is GRANTED for the reasons set forth below.
I. BACKGROUND
Plaintiff O.R. is a minor who was a special education student within the San Jose Unified School District. Compl. ¶¶ 6-7. Plaintiff O.R. received physically abusive treatment while in class by an instructional aide employed by the school. The instructional aide "dragged [Plaintiff] O.R. by his ankles approximately five to six feet across the ground scraping his bare body across the rough carpet. After the dragging, [Plaintiff] O.R. was left face down with his shirt pulled and his bare belly red and torn with rug rash." Id. ¶ 29. Because Plaintiff O.R. is non-verbal, this abuse went unnoticed until another child in the classroom reported the incident to his parents who then reported the incident to Plaintiffs Jose Ramos and Ana Garcia. Compl. ¶ 31. The facts of the abuse were corroborated by another adult in the classroom at the time of the incident. Id. ¶ 38.
After the incident, Plaintiff O.R. suffered exacerbation of his disability and behavioral regression because of trauma and fear. Id. ¶ 34. Plaintiffs allege they have suffered emotional distress, loss of sleep, shame, humiliation, worry, anxiety, stress, loss of work, and continual medical expenses for treatment of Post-Traumatic Stress Disorder. Id. ¶¶ 60, 61.
The parties engaged in mediation and subsequently settled all claims. The parties agree that Plaintiff O.R.'s best interest is served with the settlement of this matter. The parties agree on a monetary amount of $135,000 to be dispersed among Plaintiff O.R., his parents, and counsel.
II. LEGAL STANDARD
"District courts have a special duty, derived from Federal Rules of Civil Procedure 17(c) to safeguard the interests of litigants who are minors." Robidoux v. Rosengren, 638 F.3d 1177, 1181 (9th Cir. 2011). "Rule 17(c) provides, in relevant part, that a district court `must appoint guardian ad litem—or issue another appropriate order—to protect a minor or incompetent person who is unrepresented in an action.'" Fed. R. Civ. P. 17(c). "Federal courts generally require that claims by minors . . . be settled in accordance with applicable state law." The Wagstaffe Group Practice Guide: Federal Civil Procedure Before Trial, § 46-V[B][2], 46.49 (2017).
In California, a settlement or compromise of a claim of a minor is not enforceable without court approval. Cal. Civ. Proc. § 372(a)(1). California law requires a court to "assure that whatever is done is in the minor's best interest" and that "the compromise is sufficient to provide for the minor's injuries, care and treatment." Goldberg v. Superior Court, 23 Cal.App.4th 1378, 1382 (Cal. Ct. App. 1994). In the context of a proposed settlement, the Ninth Circuit looks at each minor's net recovery in isolation in determining whether the amount is fair and reasonable, regardless of any amount apportioned for attorney's fees. Robidoux, 638 F.3d at 1182.
III. DISCUSSION
The Court finds the parties' compromise to be fair and reasonable. In exchange for a general release of all past claims, Defendants have agreed to pay $135,000 to settle the dispute. Plaintiffs' settlement is to be distributed as follows: (a) $5,000 to be paid to Plaintiff O.R.'s parents, Plaintiffs Ana Garcia and Jose Ramos; (b) $15,000 to be deposited into a California ABLE ("CalABLE") account for the benefit of Plaintiff O.R.; (c) $70,450.00 to be used to purchase a structured settlement annuity paid in increments annually over five years for the benefit of Plaintiff O.R.; and (d) $44,550 to be paid for attorney's fees.
At the hearing Plaintiffs' counsel stated that the CalABLE account sequesters monies for future life improvements for Plaintiff O.R. such as therapy sessions. Counsel represented that Plaintiff O.R. suffers from "profound challenges" and the annuity will ensure that Plaintiff O.R. receives necessary medical treatment in the future, including speech therapy and other services to help Plaintiff O.R. gain some independence.
The compromise is consistent with other cases in California. See C.F. v. San Lorenzo Unified Sch. Dist, 2016 U.S. Dist. LEXIS 115870, at *3-4 (N.D. Cal. Aug. 29, 2016) (approving a $65,000 compromise for loss of special education services to minor plaintiff with Attention Deficit Hyperactivity Disorder, Dyslexia, and learning disabilities); MAP v. City of Bakersfield, 2009 U.S. Dist. LEXIS 7519, at *2 (E.D. Cal. Jan. 23, 2019) (approving a $95,000 compromise when a police dog attacked minor plaintiff in his bed and bit him in his head); M.D. v. Rosedale Union Sch. Dist., 2009 U.S. Dist. LEXIS 4118, at *2-4 (E.D. Cal. May 13, 2009) (approving a $9,999.00 compromise when minor was verbally and physically beaten at school by other students).
The Court also finds the request for attorney's fees totaling approximately 33% of the recovery is reasonable. The parties engaged in extensive negotiations with a mediator to reach settlement. Dkt. No. 32-1 at 2. Plaintiffs' counsel reviewed records, researched, and engaged in extensive document discovery as well as settlement negotiations. Id.
For the reasons stated above, the court finds that the minor's compromise is fair, reasonable, and in the best interest of the minor. Therefore, the petition to approve a compromise of the minor's claims is GRANTED.
IV. CONCLUSION & ORDER
The Court orders as follows:
1. The petition to approve compromise of the minor's claim is GRANTED;
2. A portion of the settlement proceeds for the minor in the amount of $15,000, shall be in the form of a check for deposit into the minor's CalABLE account for the benefit of O.R. (the check will be in the full name of the minor Plaintiff O.R.);
3. A portion of the settlement proceeds for the minor, in the amount of $70,450.00 shall be used to purchase a settlement annuity in accordance with Exhibit 1;
4. $5,000 in settlement proceeds for the adult plaintiffs in the form of a check made out to Jose Ramos is GRANTED;
5. Attorney's fees and costs in the amount of $44,550 in the form of a check made out to Tollner Law Offices is GRANTED.
IT IS SO ORDERED.
EXHIBIT 1
PROPOSED SETTLEMENT AGREEMENT WITH AMENDED ADDENDUM
SETTLEMENT AGREEMENT AND GENERAL RELEASE
This Settlement Agreement and General Release (the "Agreement") is made and entered into by and between Plaintiffs JOSE RAMOS AND ANA GARCIA, O.R. a minor, by and through his Parents and Guardian ad Litem, JOSE RAMOS AND ANA GARCIA ("Plaintiffs") and SAN JOSE UNIFIED SCHOOL DISTRICT ("SJUSD"), DEBRA FIELD, NEIL ARATIN, KATY BAILEY, JENNIFER WILLIS, MARY ANNE PEREIRA, SHARON SPIVACK, MAE LIN BISHOP, J. DOMINIC BEJARANO, NANCY ALBARRAN, AND JACKIE ZELLER ("Individual Defendants").
RECITALS
This Agreement is entered into with reference to the following facts:
A. A dispute has arisen between Plaintiffs and Defendants.
B. Plaintiffs allege that O.R. was physically abused and discriminated against by SJUSD teacher, Debra Field, at Carson Elementary School during the 2016-2017 school year, as more specifically alleged in United States District Court Case No. 17-07202 EJD.
C. In order to avoid the substantial expense and inconvenience of litigation in both matters, the parties now desire to finally settle all claims asserted on the terms set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the covenants and promises hereinafter set forth, the Parties hereto agree as follows:
1. Consideration. Subject to the terms and conditions of this Agreement, the Parties agree to settle this matter on the following terms:
a. Monetary Payment. In consideration for Plaintiffs' release of claims against the SJUSD as described herein, payment of:
i. $135,000. (One Hundred Thirty-Five Thousand Dollars) will be paid on behalf of the SJUSD to Plaintiffs pursuant to terms which will be set forth in an order issued by the Court after a minor's compromise hearing to be set and complete by Plaintiffs' counsel.
b. Waiver of Costs. Plaintiffs will release and all claims against the Individual Defendants in return for a waiver of costs.
c. Release of Claims. Plaintiffs fully and forever release and discharge the Individual Defendants, SJUSD, the SJUSD's past and present representatives, employees, agents, independent contractors and attorneys (collectively, the "SJUSD Releasees") from any and all claims (with the exception of any claims relating to enforcement of this agreement as specified herein), demands, actions, causes of action (for legal, statutory, administrative or equitable relief), contracts, obligations, services, suits, debts, costs or liabilities, whether known or unknown, which Plaintiffs ever had, now have, or may hereafter claim to have against any of the SJUSD Releasees relating to and arising out of the alleged abuse allegations and claims asserted, and further release all Federal and State claims related to the following listed causes of action through the date of signatures on this agreement only:
i. Violation of § 504 Rehabilitation Act of 1973
ii. Violation of Title II of the Americans with Disabilities Act
iii. Negligence
iv. Negligent Supervision
v. Intentional Infliction of Emotional Distress
vi. Negligent Infliction of Emotional Distress
vii. Violation of UNRUH Civil Rights Act
viii. Violation of California Ed. Code. §49001
ix. Battery
x. Assault
Nothing in this agreement limits or restricts Plaintiffs rights in regard to claims which may arise in the future associated with Student's continued enrollment in SJUSD, except claims arising out of the alleged abuse and discrimination as more specifically alleged in United States District Court Case No. 17-07202 EJD.
d. An Addendum to General Release related to Structured Settlement is Attached hereto.
2. Unknown Facts or Claims. It is the Parties' intent that this Agreement shall apply to all claims of Plaintiffs against the SJUSD Releasees, whether known, unknown or unanticipated through the date of signatures on this agreement. Furthermore, the general release of the SJUSD Releasees provided above shall remain in effect as a full and complete release, notwithstanding the existence or subsequent discovery of any presently-unknown, different or additional facts or claims as to the SJUSD, the Individual Defendants or Plaintiffs regarding U.S. District Court Case No. 17-07202. The Parties expressly waive any rights and benefits they may have related to special education through the date of signatures on this agreement under California Civil Code section 1542 (or any other statute or legal doctrine or precedent similar to California Civil Code section 1542), which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
3. Compromise/No Admissions. This Agreement is a compromise and settlement of disputed and contested claims and is intended of avoid litigation and expense. By entering into this Agreement, the SJUSD Releasees do not admit that they have engaged in, or are now engaging in, any unlawful conduct, nor are they in violation of any statute, as it relates to Plaintiffs. It is understood and agreed that this Agreement is not an admission of liability, and that the SJUSD Releasees specifically deny any and all liability or fault with respect to the Action and he factual allegations contained therein, and intend merely to avoid further litigation and expense by this settlement.
4. Minor's Compromise. Plaintiffs understand and agree that is will be their responsibility to obtain court approval of this settlement (e.g., Order Approving Minor's Compromise), after proper notice to any and all lienholders if any (including, but not limited to, Medi-Cal or Medicare if applicable) all of which Plaintiffs shall bear the total and sole responsibility and that securing court approval is a condition of this entire settlement with Plaintiffs, including but not limited to any obligation of SJUSD to make any payments to them. Plaintiffs understand and agree that the settlement proceeds payable to Plaintiffs are to be maintained and disbursed as provided in the Court's Order Approving the Minor's Compromise. Claimants further understand and agree that the SJUSD Releasees shall bear no responsibility, legal, financial or otherwise, for any failure by Claimants to comply with the Court's Order Approving the Minor's Compromise. It is agreed by and between the parties that any payments shall be made by SJUSD to Claimants consistent with a final Order Approving Minor's Compromise approved by the court.
5. Dismissal of the Action. Plaintiffs agree to ke all actions necessary to dismiss the Action, with prejudice, as alleged against the SJUSD and Individual Defendants, as soon as possible after this Agreement and Minor's Compromise becomes effective, including, but not limited to, executing and filing a Stipulation for Dismissal of the Action with Prejudice, each party to bear their own costs and attorney fees (except as described in the Minor's Compromise) with the United States District Court.
6. Independent Advice of Counsel. The Parties respectively represent and certify that they have had the opportunity to secure independent legal advice and consultation in connection with this Agreement and any rights they may be relinquishing hereby and that they have not relied upon any representations or statements made by any other party or by any other party's counsel or representatives in executing this Agreement other than as stated herein expressly. Plaintiff's acknowledge that none of the SJUSD Releasees has made representations regarding the tax treatment of the payment described in paragraph 1 above and that Plaintiffs are solely responsible for the tax consequences of such payment.
7. Voluntary Agreement. The Parties respectively represent and certify that they have carefully read this Agreement and know the contents thereof and that they sign the same freely and voluntarily.
8. Benefit and Burden. This Agreement shall be binding upon, and inure to the benefit of, the Parties and their respective heirs, executors, administrator, representatives, successors, and assigns.
9. Non-Assignment. The Parties represent, warrant, and certify that there has been no transfer or assignment, or attempted transfer or assignment, of any right, title, or interest in or to any claim, action, or cause of ction that is being released and discharged pursuant to the general release provided above.
10. Attorneys' Fees and Costs. The parties hereby agree that each party is to bear their own costs and attorneys' fees, except as described in the Minor's Compromise.
11. Confidentiality: The Parties and their counsel agree that the terms of this settlement are confidential and that they shall cause no publicity or press release of same, which terms shall not to be disclosed to anyone other than mmediate family members, law firm members, or others with a legal need to know a required by California law, or pursuant to a court order, or as necessary to enforce the Agreement or process the Minor's Compromise. If the Parties are asked about the resolution of this matter, the only allowable response is, in substance, "the matter was resolved without any admission of liability by a payment from SJUSD and by mutual dismissals of all individual parties."
12. Entire Agreement. All agreements, covenants, representations and warranties, expressed and implied, oral and written, of the Parties concerning the subject matter hereof are contained herein. No other agreements, covenants, representations or warranties, express or implied, oral or written, have been made by any party thereto to any other party concerning the subject matter hereof. All prior and contemporaneous conversations, negotiations, possible and alleged agreements, representations, covenants and warranties concerning the subject matter hereof are merged herein. This is an integrated Agreement. The terms of this Agreement may not be modified except by written instrument duly signed by all Parties.
13. Waiver and Amendment. No breach of any provision hereof can be waived unless in writing. Waiver of any one breach shall not be deemed to be a waiver of any other breach of the same or any other provision herelf.
14. Construction. Each party hereto and his, her, or its respective counsel or representatives have had an opportunity to review and revise this Agreement and agree that the normal rules of construction to the effect that any ambiguities in this Agreement are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.
15. Captions. Paragraphs, titles, or captions contained in this Agreement are used for convenience or reference only and are not intended to and shall not in any way enlarge, define, limit, extend or describe the rights or obligations of the parties or affect the meaning or construction of this Agreement or any provision hereof.
16. Provisions Severable. This Agreement is intended to be performed in accordance with, and only to the extent permitted by, all applicable laws, ordinances, rules and regulations. If any provisions of this Agreement, or the application thereof to any person or circumstances, shall for any reason and to any extent be invalid or unenforceable, the remainder of this Agreement, or the application of such provision to the unaffected persons or circumstances, shall not be affected thereby and shall be enforced to the greatest extent permitted by law.
17. Counterparts. This Agreement shall be executed in counterparts, each of which shall be deemed on original. Such counterparts, when taken together, shall constitute but one Agreement. Facsimile and PDF signatures shall be binding and effective and shall have the same force and effect as original signatures.
18. Warranty of Authority. Each signatory to this Agreement expressly warrants to the other parties that he, she or it has the authority to compromise and settle the claims at issue in the action and to execute this Agreement on behalf of the party or parties to be bound by his, her, or its signature, and on behalf of each and every principal or other owner of a legal, equitable, or beneficial interest in such party or parties. Each signatory agrees that he, she, to it will indemnify the other parties to this Agreement from any loss or damage resulting from a breach of this warranty of authority.
19. Governing Law. This Agreement shall be governed by the laws of the State of California applicabel to agreements made, and to be performed, therein and without resort that State's conflict of law provisions or rules. The Parties agree that the forum for any action arising out of or relating to this Agreement shall be United States District Court, Northern District, and hereby consent to the jurisdiction of the court.
PLEASE READ CAREFULLY. THIS SETTLEMENT AGREEMENT AND GENERAL RELEASE INCLUDES A MUTUAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
DATED:
___________________________________
O.R., a minor, by and through his Guardians
ad Litem, JOSE RAMOS and ANA
GARCIA, Plaintiff
DATED:
___________________________________
JOSE RAMOS, individually, Plaintiff
DATED:
____________________________________
ANA GARCIA, individually, Plaintiff
DATED:
__________________________________
J. DOMINIC BEJARANO, Assistant
Superintendent, Administrative Services for
SAN JOSE UNIFIED SCHOOL
DISTRICT, NEIL ARATIN, KATY
BAILEY, JENNIFER WILLIS, MARY
ANNE PEREIRA, SHARON SPIVACK,
MAE LIN BISHOP, J. DOMINIC
BEJARANO, NANCY ALBARRAN, AND
JACKIE ZELLER, Defendants
DATED:
_______________________________
DEBRA FIELD, individually, Defendant
APPROVED AS TO FORM AND SUBSTANCE:
DATED; TOLLNER LAW OFFICES
___________________________
DAVID TOLLNER
Attorneys for Plaintiffs
DATED: SAMUELSON, WILSON & ROE
_____________________________
JACQUELYN WILSON
Attorneys for Defendants SAN JOSE
UNIFIED SCHOOL DISTRICT, NEIL
ARATIN, KATY BAILEY, JENNIFER
WILLIS, MARY ANNE PEREIRA,
SHARON SPIVACK, MAE LIN BISHOP,
J. DOMINIC BEJARANO, NANCY
ALBARRAN, AND JACKIE ZELLER
DATED: DAVIS & YOUNG, APLC
___________________________________
MARK E. DAVIS
Attorneys for Defendant DEBRA FIELD
Structured Settlement Addendum to Settlement Agreement and General Release
1.0 Payment
It is further agreed, that for consideration set forth, SJUSD hereby agrees to pay the sums outlined below and in accordance with a court endorsed Order Approving Minor's Compromise:
1.1 $70,450.00 payable to Pacific Life & Annuity Services, Inc. to fund the obligation for the Periodic Payments illustrated in Section 1.2
1.2 Periodic payments to be made to CalABLE fbo O[REDACTED/] Y. P[REDACTED/] G[REDACTED/] (the "Payee") according to the schedule, as follows (the "Periodic Payments"):
$14,468.26 payable annually, guaranteed for 5 years, which is 5 payments, beginning on 1/15/2020, with the last guaranteed payment on 1/15/2024
All sums set forth herein constitute damages on account of personal physical injuries or physical sickness, within the meaning of Section 104(a)(2) of the Internal Revenue Code of 1986, as amended.
2.0 Payee's Rights to Payments
Plaintiffs and any Payee acknowledge that the Periodic Payments cannot be accelerated, deferred, increased or decreased by any Payee; nor shall any Payee have the power to sell, mortgage, encumber, or anticipate the Periodic Payments, or any part thereof, by assignment or otherwise.
3.0 Beneficiary
Any payments to be made after the death of the O[REDACTED/] Y[REDACTED/] R[REDACTED/] G[REDACTED/] pursuant to the terms of this Addendum, shall be made to such person or entity as shall be designated in writing by O[REDACTED/] Y[REDACTED/] R[REDACTED/] G[REDACTED/] upon reaching the age of majority, to the Assignee. If no person or entity is so designated, or if the person designated is not living at the time of the Payee's death, such payments shall be made to the estate of O[REDACTED/] Y[REDACTED/] P[REDACTED/] G[REDACTED/] No such designation, or any revocation thereof, shall be effective unless it is in writing and delivered to the Assignee. The designation must be in a form acceptable to the Assignee before such payments are made.
4.0 Consent to Qualified Assignment
4.1 Plaintiffs and any Payee acknowledge and agree that SJUSD may make a "qualified assignment" within the meaning of Section 130 (c), of the Internal Revenue Code of 1986, as amended, of the Insurer's liability to make the Periodic Payments set forth in Section 1.2 to Pacific Life & Annuity Services, Inc. (the "Assignee"). Assignee's obligation for payment of the Periodic Payments shall be no greater than that of SJUSD, whether by judgment or agreement, immediately preceding the assignment of the Periodic Payments obligation.
4.2 Any such assignment, if made, shall be accepted by Plaintiffs and any Payee without right of rejection and shall completely release and discharge SJUSD from the Periodic Payments obligation assigned to the Assignee. The Plaintiffs and any Payee recognize that, in the event of such an assignment, the Assignee shall be the sole obligor with respect to the Periodic Payments obligation, and that all other releases with respect to the Periodic Payments obligation that partain to the liability of SJUSD shall thereupon become final, irrevocable and absolute. Pacific LifeCorp will issue a Statement of Irrevocable Guarantee as evidence of its financial guarantee over the periodic payment obligation of Pacific Life & Annuity Services, Inc.
5.0 Right to Purchase an Annuity
SJUSD, itself or through the Assignee, reserves the right to fund the liability to make the Periodic Payments in Section 1.2 through the purchase of an annuity policy from Pacific Life Insurance Company (the "Annuity Issuer"). Assignee shall be the sole owner of the annuity policy and shall have all rights of ownership. Assignee may have the Annuity Issuer mail payments directly to the Payee. The Plaintiff or Payee, upon reaching the age of majority, shall be responsible for maintaining the accuracy of the current mailing address and mortality information for the Payee with the Assignee.
6.0 Discharge of Obligation
The obligation assumed by Assignee to make each Periodic Payment shall be fully discharged upon the mailing of a valid check or electronic funds transfer in the amount of such payment on or before the due date to the last address on record for the Payee or Beneficiary with the Annuity Issuer. If the Payee or Beneficiary notifies the Assignee that any check or electronic funds transfer was not received, the Assignee shall direct the Annuity Issuer to initiate a stop payment action and, upon confirmation that such check was not previously negotiated or electronic funds transfer deposited, shall have the Annuity Issuer process a replacement payment.
7.0 Effectiveness
This Addendum to Settlement Agreement and General Release shall become effective immediately following execution by each of the parties and entry of the Order Approving Minor's Compromise by the Superior Court.
Date: ___________ ___________________________________
JOSE RAMOS, Individually and as Parent
and Guardian ad Litem for O[REDACTED/] Y[REDACTED/]
R[REDACTED/] G[REDACTED/] a minor
Date: ___________ ___________________________________
ANA GARCIA, Individually and as Parent
and Guardian ad Litem for O[REDACTED/] Y[REDACTED/].
R[REDACTED/], G[REDACTED/] a minor
APPROVED AS TO FORM AND CONTENT:
Date: ___________ TOLLNER LAW OFFICES
By: _______________________________
DAVID H. TOLLNER, Esquire
