Title: Haley v. Nev. Dist. Court

State: nevada

Issuer: Nevada Supreme Court

Document:

00

 

428 Nev., Advance Opinion | 7
IN THE SUPREME COURT OF THE STATE OF NEVADA

DALE E. HALEY, ESQ; | No. 57437
CHRISTOPHER G. GELLNER,P.C; |
AND CHRISTOPHER G. GELLNER,

Pottonrs, FILED

vs.
‘THE EIGHTH JUDICIAL DISTRICT 052012
COURT OF THE STATE OF NEVADA,
IN AND FOR THE COUNTY OF
CLARK; AND THE HONORABLE
MICHAEL VILLANI, DISTRICT
JUDGE,
Respondents,

and
JOEL D. OREVILLO, M.D.; AND
STEWART PULMONARY
ASSOCIATES, LTD., D/B/A
PULMONARY ASSOCIATES,
Real Parties in Interest.

 

 

  

Original petition for a writ of mandamus or prohibition
challenging a district court order approving the compromise of a minor's
claim in a medical malpractice action but directing a different distribution
of the settlement proceeds than that agreed to by the parties.

Christopher G. Gellner, P.C., and Christopher G. Gellner, Las Vegas;

Dale E. Haley, Las Vegas,
for Petitioners.

Catherine Cortez Masto, Attorney General, and Robert J. Simon, Deputy
Attorney General, Carson City,
for Respondents.

12-1008

 
——

 

Mandelbaum, Ellerton & McBride and Kim I. Mandelbaum, Las Vegas,
for Real Parties in Interest.

BEFORE DOUGLAS, HARDESTY and PARRAGUIRRE, JJ.

OPINION

By the Court, PARRAGUIRRE, J.:

In this opinion, we address the scope of a district court’s
authority to unilaterally modify a settlement agreement under NRS
41.200, Nevada's statute governing the compromise of a minor's claim.

Because NRS 41.200 leaves the allocation of fees and costs to
the district court's discretion, we conclude that the district court may
adjust the terms of the settlement in accordance with the minor's best
interest. As such, we deny in part this writ petition. However, because
the district court in this case provided no explanation for the allocation of
fees between the attorney and the guardian ad litem, we grant in part this
writ petition.

FACTS AND PROCEDURAL HISTORY

In June 2005, Warren West’s pregnant wife underwent an
emergency delivery procedure at the University Medical Center of
Southern Nevada (UMC). West's wife died during the procedure, and
their baby girl was born with severe brain damage due to oxygen
deprivation,

Unable to care for the baby’s medical needs, West relinquished
her for adoption and she became a ward of the state. Nonetheless, West

retained petitioner attorney Christopher Gellner to bring a wrongful death

 
and personal injury claim on the baby’s behalf against real parties in
interest Dr. Joel Orevillo and Stewart Pulmonary Associates, Ltd. (SPA).
While litigation was ongoing, the baby was adopted and named Ashley,
and petitioner Dale Haley was appointed as her guardian ad litem.

In July 2010, the parties reached a $238,000 settlement before
going to trial. Of this amount, Gellner sought to allocate $109,187.26 to
himself ($61,000 in feos and $48,187.26 in costs), $20,100 to Haley as
guardian ad litem, $79,333.33 to Medicaid, and the remaining $29,379.41
for Ashley. Pursuant to statute, Gellner submitted the proposed
‘compromise to the district court for approval.

‘The d

 

court refused to approve the compromise because
the attorney fees and costs exceeded the amount payable to the minor, and
further directed a reduction in either the attorney fees or the Medicaid
lien before resubmission, Instead of reworking the numbers, Gellner filed
another motion to approve the compromise, arguing that the
circumstances of this case justified the original disposition of proceeds. At
the district court's request, Haley submitted a statement of his hours as
guardian ad litem

‘Upon receipt of this information, the district court approved
the overall settlement of $238,000 and ordered payment of $79,338.33 to
Medicaid. The district court refused, however, to approve the remaining
disbursement and ordered Gellner to submit a copy of his retainer

'Gellner also filed wrongful death suits on behalf of West and his
three other children against multiple UMC-affiliated defendants, but the
parties reached a settlement. Subsequently, the claims of West and his
other children against Dr. Orevillo and SPA (who are unaffiliated with
UMC) were dismissed as time-barred. The baby's claims for wrongful
death and personal injury against Dr. Orevillo and SPA were preserved
under NRS 41A.097(4)(a)'s exception for minors with brain damage.

 

 
agreement. After review of Gellner's contingency fee, which provided for a
40% recovery after out-of-pocket expenses, the district court issued a final
otting $95,200 to be placed in a
blocked financial investment for Ashley's benefit and $63,466.67 as fees

order for the remaining distribution,

 

and costs to Gellner and Haley, combined in the distribution as attorneys.

Petitioners Gellner and Haley now assert that the district
court lacked the statutory authority to unilaterally alter the distribution,
and even if it had such authority, they argue that the district court abused
its discretion in making the alteration it did. Petitioners seek this court's
intervention by way of extraordinary writ.

DISCUSSION

Writ relief is an extraordinary remedy, and therefore, the
decision to entertain a writ petition lies within our discretion. Cheung v.
Dist._Ct., 121 Nev. 867, 869, 124 P.3d 650, 552 (2005), “A writ of
prohibition ‘serves to stop a district court from carrying on its judicial
functions when it is acting outside its jurisdiction.” Stephens Media v.
Dist. Ct,, 125 Nev. 849, 857, 221 P.3d 1240, 1246 (2009) (quoting Sonia F.
v.Dist. Ct., 125 Nev. 495, 498, 215 P.3d 705, 707 (2009)); NRS 34.320. “A
writ of mandamus is available to compel the performance of an act that
the law requires as a duty resulting from an office, trust, or station or to
control an arbitrary or capricious exercise of discretion.” Williams v. Dist.
Ct, 127 Nev. __, __, 262 P.3d 360, 364 (2011) (quoting International
Game Tech. v, Dist. Ct., 124 Nev. 193, 197, 179 P.3d 556, 558 (2008); NRS
34,160. “Mandamus will not lie to control discretionary action, unless

 

discretion is manifestly abused or is exercised arbitrarily or capriciously.”
Round Hill Gen. Imp. Dist. v. Newman, 97 Nev. 601, 603-04, 637 P.2d 534,
536 (1981) (internal citation omitted). A writ will not issue if the
“petitioner has a plain, speedy, and adequate remedy in the ordinary

 

 
4

course of law.” Williams, 127 Nev. at __, 262 P.8d at 364 (quoting
Mineral County v. State, Dep't of Conserv., 117 Nev. 235, 248, 20 P.3d
800, 805 (2001)); NRS 34.170; NRS 34.330.

As is relevant here, we have consistently held that the right to
appeal is generally an adequate legal remedy precluding writ relief, Pan
v. Dist. Ct,, 120 Nev. 222, 224, 88 P.3d 840, 841 (2004). No right of appeal
lies from the underlying order because neither Gellner nor Haley is an
aggrieved party. NRAP 3A(a) (providing that only an aggrieved party may
appeal from an adverse decision); Albert D, Masi, Ltd, v. Bellmyre, 111
Nev. 1520, 1621, 908 P.2d 705, 706 (1995) (stating that “an attorney
representing a client in a case is not a party to the action and does not
; Inxe Christina B., 23 Cal, Rptr. 2d 918, 926
(Ct. App. 1993) (noting that by definition, “[a] guardian ad litem is not a

have standing to appeal”

 

party to the action, but merely a party's representative”), Further, we
have stated that our consideration of a petition for extraordinary relief
may be justified to clarify an important issue of law and when public
policy is served by the invocation of our original jurisdiction. Stephens
Media, 125 Nev. at 857, 221 P.3d at 1246.

Because petitioners have no adequate remedy at law, and
because this petition presents an issue of first impression, we exercise our
discretion to consider the merits of this writ petition. We conclude that
mandamus relief is appropriate, in part, and deny the petition to the
extent it requests a writ of prohibition.

‘To begin, we address whether a district court has authority
under NRS 41.200 to unilaterally alter the distribution of settlement

proceeds in approving the compromise of a minor's claim. After concluding

 

 
   
 
 
 
    
  
 
 
 
 
 
 
 
 
 
 
 
 
   

that such authority exists, we then discuss the redistribution of Ashley's
compromise,

I. _ NRS 41.200 authorizes the district court to redistribute proceeds of
settlement agreement in the minor's best interest

NRS 41,200 sets out the procedure for compromising the
claims of a minor. Subsection 1 of the statute provides that when a minor
has a claim for money against a third person, either of the minor's parents
or a guardian ad litem has the right to compromise the claim. NRS
41.200(1). A compromise is not effective until approved by the district
court upon a verified petition in writing. Id, At issue here is whether the
district court had authority to approve the compromise of a minor's claim
by directing a distribution of the settlement proceeds different from that
provided for in the petition for approval.

Petitioners contend that resolution of this matter necessitates
our interpretation of NRS 41.200(4), suggesting that this provision merely
affords the district court narrow authority to approve a compromise in its
entirety and to then determine where the money will be paid on behalf of
the minor, as opposed to determining the amount the minor will receive.

We disagree with petitioners’ position, as such an
interpretation directly contradicts the broad authority granted to the
district court under NRS 41.200(1) to approve the proposed compromise of
a minor's claim. ‘This approval process expressly encompasses a review of
the proposed apportionment of proceeds, including the amount to be used
for attorney fees and other expenses, See NRS 41.200(2)() (providing that
the petition must include the proposed allocation of attorney fees and
other expenses). This conclusion is also consistent with the general

 

 
ane a

authority set forth in NRCP 17(¢), which allows the district court to issue
any “order as it deems proper for the protection” of a minor.*

We note that NRCP 17(c) is nearly identical to its federal
counterpart, FRCP 17(¢), which has been interpreted as charging the court,
with a “special duty... to safeguard the interests of litigants who are
minors.” See Robidoux v. Rosengren, 638 F.3d 1177, 1181-82 (9th Cir,
2011) (instructing the district court to evaluate whether the net recovery
of the minor is fair and reasonable in terms of the minor's claims and
recovery in similar cases); Salmeron v, United States, 724 F.2d 1957, 1863,
(9th Cir. 1983) (holding that “a court must independently investigate and

evaluate any compromise or settlement of a minor's claims to assure itself

 

that the minor's interests are protected, even if the settlement has been
recommended or negotiated by the minor's parent or guardian ad litem"
(citations omitted)), “Integral to this protective judicial role is
ascertaining whether attorney fee agreements involving minors... are
reasonable.” In re Abrams & Abrams, P.A., 605 F.3d 238, 243 (4th Cir.

4In other contexts involving minors, we have established as a matter
of public policy that the “best interests of the child” are of primary weight
and concern. For instance, in Fernandez v, Fernandez, 126 Nev. __.
222 P.3d 1031, 1035-36 (2010), we affirmed the district court's decision to
‘modify a child support order, taking into account the best interests of the
child, notwithstanding the parties’ settlement agreement to the contrary.
Also, we have previously incorporated the best interests of the child as a
factor in the child's placement outside the home, even though the statute
did not speak to the issue. Clark County Dist. Att'y v. Dist. Ct., 123 Nev.
337, 346, 167 P.3d 922, 928 (2007) (directing that a child's bost interests
should be the central focus in determining placement with someone other
than a parent, despite the fact that the relevant statute does not expressly
provide for such),

 

 
oe

2010). In Abrams, the Fourth Cireuit reviewed a district court's decision
to reduce attorney fees in approving the compromise of an incompetent
party. Id. at 240. The court concluded that, regardless of the local rules, a
district court has discretion to review attorney fees for reasonableness, s0
long as it adequately considers the requisite factors. Id. at 244 (setting
forth 12 factors as guidance for the district court).

‘Taking into account Nevad:

 

preference to consider a minor's
best interest, an approach that is also supported by federal law, we

conclude that NRS 41,200 allows the district court to the

 

 

 

onableness of a petition to approve the compromise of a minor's claim

and to ensure that approval of the proposed compromise is in the minor's

 

best interest. This review necessarily entails the authority to review each
portion of the proposed compromise for reasonableness and to adjust the
terms of the settlement accordingly, including the fees and costs to be
taken from the minor's recovery.? Abrams, 605 F.3d at 244. With this in
mind, we address the district cow

 

's review of Ashley's proposed
compromise and reallocation of attorney fees.
TI. Modification of the proposed compromise of Ashley’s claim

To recall, the proposed compromise of Ashley's claim allocated
$109,187.26 to petitioner Gellner and $20,100 to petitioner Haley. In
approving the compromise, the district court reallocated $63,466.77 as fees
and costs to “attorneys” without further explanation. Petitioners now
assert that the modified distribution was unfair, arguing that it

8We note that the modification here had no impact on the overall
settlement amount of $238,000. Instead, the district court merely
modified the distribution of requested attorney fees and costs to be taken
from the minor's recovery after the Medicaid lien was satisfied.

 

 
os

unreasonably reduced Gollner’s recovery and failed to provide
compensation for Haley as guardian ad litem.‘

Although NRS 41.200 is silent as to the standard for a distriet
court to apply when reviewing a petition to approve the compromise of a

 

minor's claim, we have otherwise applied a “fair and reasonable” approach
for reviewing a lower court’s decision to approve a settlement in which
incompetent parties are involved. Mainor v. Nault, 120 Nev. 750, 758-59,
101 P.3d 908, 314 (2004). Similarly, district courts have great discretion
to award attorney fees, and this discretion is tempered only by reason and
fairness. Shuette v. Beazer Homes Holdings Corp., 121 Nev. 837, 864, 124
P.3d 680, 648-49 (2005). “{lJn determining the amount of fees to award,
the court is not limited to one specific approach; its analysis may begin
with any method rationally designed to calculate a reasonable amount,” ¢0
long as the requested amount is reviewed in light of the factors set forth in
Brunzell v, Golden Gate National Bank, 85 Nev. 345, 349, 455 P.2d 31, 33
(1969), Shuette, 121 Nev. at 864-65, 125 P.3d at 549.

Here, the record demonstrates the district court's requisite
consideration of the Brunzell factors in reaching its decision. See
Brunzell, 85 Nev. at 349, 455 P.2d at 83 (directing the district court to
consider four factors in calculating the reasonableness of attorney fees: (1)
the qualities of the attorney, (2) the character of the work to be done, (3)
the actual work performed by the attorney, and (4) the case's result). To

‘Gellner also argues that the district court was required to first
conduct an evidentiary hearing as to the reasonableness of fees and costs
before making its ruling. We disagree, as NRS 41.200(1) provides that
approval by the district court is based upon the filing of “a verified petition
in writing.” Here, the district court met and exceeded this requirement by
reviewing the petition and also requesting supplemental information
before ruling on the petition.

 

 
begin, the district court reviewed Gellner’s contingency fee agreement and
the extensive briefing by the parties before reaching its decision. The
Jdistrict court then referenced Gellner’s limited experience as a medical
malpractice attorney. In considering the complex nature of Ashley's
claims, the district court also highlighted Gellner’s role in complicating the

jmatter by noting the many amended motions, dismissals, and time-barred

 

lcomplaints resulting from attorney oversight. Finally, the district court
balanced Ashley's lifelong special needs and potential for a multimillion
[dollar judgment against the proposed payment.

Thus, in light of this case's surrounding circumstances, the
ldistrict court acted within its broad discretion by concluding that the
yroposed allocation to petitioner Gellner was unreasonable. Accordingly,
jve deny writ relief in this regard,

‘The problem with the district court’s reallocation, however,

 

that it

 

not allocate the attorney fees and costs awarded to petitioner
jellner separately from any guardian ad litem fees awarded to petitioner
jaley. See NRS 159.0455(1) (The guardian ad litem is entitled to
-asonable compensation from the estate of the ward or proposed ward.”).
instead, the district court's order simply combined Gellner and Haley's
covery, treating them both as “attorneys.” Thus, based upon the distriet,
wurt’s order, it is unclear whether Haley's guardian ad litem fees are
included within the allocation of attorney fees, and if so, in what amount.
cause the guardian ad litem is statutorily entitled to a reasonable

mount in compensation, we grant petitioners’ request for mandamus

lief in this respect.
Accordingly, the clerk of this court shall issue a writ of
.andamus instructing the district court to provide a distribution of the

 

 
$63,466.67 that fairly and reasonably accounts for duties performed by
Gellner and Haley in their roles as attorney and guardian ad litem,
respectively. See NRS 159.0455(3).
CONCLUSION

Because NRS 41.200 authorized the district court to modify
the proposed compromise in the minor's best interest, the redistribution of
settlement proceeds was proper, and we deny in part this writ petition,
However, wo grant in part this writ petition because the district court,
should have provided explanation as to the allocation of fees between the

attorney and the guardian ad litem.

 

au ZT.
Parraguirre

We concur:

vy )as. 4

Douglas