Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_19-cv-00349/USCOURTS-casd-3_19-cv-00349-0/pdf.json

Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 28:1441pi Removal- Personal Injury

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MILA SHEN, by and through her 

guardian ad litem Peggy Shen Brewster; 

EDWIN SHEN, an individual; JOYCE 

SHEN, an individual; ZOE SHEN and 

VESPER SHEN, by and through their 

guardian ad litem Peggy Shen Brewster,

Plaintiffs,

v.

CLUB MED SAS, a corporation; CLUB 

MED SALES, INC.; CLUB MED 

MANAGEMENT SERVICES, INC.; and 

DOES 1 to 50,

Defendants.

Case No.: 3:19-cv-00349-BEN-BGS

REPORT AND 

RECOMMENDATION FOR ORDER 

GRANTING MINORS 

COMPROMISE PETITIONS

(ECF No. 40)

Before the Court are the petitions of guardian ad litem Erik Brewster to approve the 

compromise of the pending action on behalf of minor Plaintiffs Mila Shen, Zoe Shen, and 

Vesper Shen (“minor Plaintiffs”). (ECF No. 40.) This Report and Recommendation is 

submitted to United States District Judge Roget T. Benitez pursuant to 28 U.S.C. 

§ 636(b)(1) and Local Civil Rule 17.1 of the United States District Court for the Southern 

District of California. After reviewing the Petitions and all supporting documents, and for 

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the reasons discussed below, the Court RECOMMENDS that the Petitions (ECF No. 40) 

be GRANTED. 

I. BACKGROUND

Plaintiffs Mila Shen, Zoe Shen, and Vesper Shen are minors appearing by and 

through their court appointed guardian ad litem, Erik Brewster. (ECF No. 21.) On August 

8, 2018, Plaintiffs Mila, Zoe, Vesper and their parents, Plaintiffs Edwin and Joyce Shen, 

attended a performance at Club Med hotel in Tomamu Hokkaido, Japan. (ECF No. 1-2 at 

4.) General manager Merlin Chelliah gathered the children to the front of the stage to have 

them partake in a sake barrel breaking ceremony. During the ceremony, Ms. Chelliah’s 

wooden mallet slipped out of her hand and hit Mila in the center of her forehead. (Id. at 

5.) She suffered a nondisplaced frontal skull fracture and today has a prominent scar across 

her forehead. (ECF No. 40-1 at 3.) She received emergency treatment, imaging, 

neurological examination, plastic surgery, and therapy for emotional trauma. (Id.) Mila 

was seven years old at the time of the injury. (ECF No. 1-2 at 5.) Her parents and sisters 

Zoe and Vesper witnessed Mila’s injury causing them emotional distress. (Id.; ECF No. 

40-2 at 3; ECF No. 40-3 at 3.) 

This action was initially filed in California Superior Court and was removed to this 

Court on February 20, 2019. (ECF No. 1.) Plaintiffs alleged claims of negligence, 

negligent infliction of emotional distress, and negligent misrepresentation. (ECF No. 1-2.) 

Defendants filed motions to dismiss for lack of personal jurisdiction. (ECF Nos. 21–22.) 

The undersigned judge held an Early Neutral Evaluation and Case Management 

Conference on September 4, 2019. (ECF No. 29.) The case did not settle, and a scheduling 

order was issued. (Id.; ECF No. 30.) On September 30, 2019, Plaintiffs filed their 

opposition to Defendants’ Motion to Dismiss. (ECF Nos. 32–33.) On October 18, 2019, 

the parties filed a joint notice of settlement informing the Court they reached a settlement. 

(ECF No. 37.) On November 1, 2019, guardian ad litem Erik Brewster filed petitions for 

approval of the minor’s compromise of claims. (ECF No. 40.) Exhibits were attached 

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containing petitions for Mila (ECF No. 40-1), Zoe (ECF No. 40-2), and Vesper (ECF No. 

40-3). 

II. LEGAL STANDARD

It is well settled that courts have a special duty to safeguard the interests of litigants 

who are minors in the context of settlements proposed in civil suits. Robidoux v. 

Rosengren, 638 F.3d 1177, 1181 (9th Cir. 2011); see also Fed. R. Civ. P. 17(c) (district 

courts “must appoint a guardian ad litem—or issue another appropriate order—to protect 

a minor or incompetent person who is unrepresented in an action.”). This duty “requires a 

district court to ‘conduct its own inquiry to determine whether the settlement serves the 

best interests of the minor.’” Robidoux, 638 F.3d at 1181 (quoting Dacanay v. Mendoza, 

573 F.2d 1075, 1080 (9th Cir. 1978)); see also Salmeron v. United States, 724 F.2d 1357, 

1363 (9th Cir. 1983) (“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.”). Accordingly, Local Rule 17.1(a) provides that “[n]o action by or 

on behalf of a minor or incompetent will be settled, compromised, voluntarily discontinued, 

dismissed or terminated without court order or judgment.” CivLR. 17.1(a). This requires 

the Court to question if the settlement is in the best interests of the minor and consider not 

only the fairness of the settlement, but the structure and manner of the plan for the payment 

and distribution of the assets for the benefit of the minor.

Ordinarily, “in considering the fairness of a minor’s state law settlement, federal 

courts generally require that claims by minors . . . be settled in accordance with the 

applicable state law.” Lobaton v. City of San Diego, No. 3:15-cv-1416-GPC-DHB, 2017 

WL 2610038, at *2 (S.D. Cal. June 16, 2017) (internal quotation marks and citation 

omitted). California law requires court approval of a settlement for a minor and attorney’s 

fees to represent a minor. Cal. Prob. Code § 3601; Cal. Fam. Code § 6602. Under 

California state law, the Court is tasked with evaluating the reasonableness of the 

settlement and determining whether the compromise is in the best interest of the minor. 

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Espericueta v. Shewry, 164 Cal. App. 4th 615, 619–20 (2008). Furthermore, California 

Probate Code Section 3601 authorizes the court approving a compromise of a minor’s 

disputed claim to “make a further order authorizing and directing that reasonable expenses, 

medical or otherwise[,] ... costs, and attorney’s fees, as the court shall approve and allow 

therein, shall be paid from the money or other property to be paid or delivered for the 

benefit of the minor.” Cal. Prob. Code § 3601(a). This “bestows broad power on the court 

to authorize payment form the settlement—to say who and what will be paid from the 

minor’s money—as well as direct certain individuals to pay it.” Goldberg v. Superior 

Court, 23 Cal. App. 4th 1378, 1382 (1994).

In cases involving the settlement of a minor’s claims, the Ninth Circuit has stated 

that district courts should “limit the scope of their review to the question of whether the net 

amount distributed to each minor plaintiff is fair, in light of the facts of the case, the minor’s 

specific claim, and recovery in similar cases.” Robidoux, 638 F.3d at 1181–82. This 

inquiry should be made “without regard to the proportion of the total settlement value 

designated for adult co-plaintiffs or plaintiffs’ counsel – whose interests the district court 

has no special duty to safeguard.” Id. at 1182. “So long as the net recovery to each minor 

plaintiff is fair and reasonable in light of their claims and average recovery in similar cases, 

the district court should approve the settlement as proposed by the parties.” Id.

Here, the instant complaint was filed in San Diego County Superior Court and 

alleges state law claims for negligence, negligent infliction of emotional distress, and 

negligent misrepresentation. (ECF No. 1-2.) The Court, therefore, will apply California 

law and focus on whether “the compromise is sufficient to provide for the minor’s injuries, 

care and treatment.” Goldberg, 23 Cal. App. 4th at 1382. Additionally, the Court will 

consider the guidelines set forth in Robidoux because they provide a “framework for 

evaluating the reasonableness and fairness of Plaintiff’s settlement.” Lobaton, 2017 WL 

2610038, at *2.

III. DISCUSSION

A. Proposed Settlement

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Based on a review of the petitions and applicable law, the Court finds that the terms 

of the settlement are fair and reasonable as to the minor Plaintiffs. Under the terms of the 

settlement, Plaintiffs agree to accept $500,000 in exchange for dismissing their claims 

against Defendants. (ECF No. 40 at 2.) The settlement is apportioned according to the 

following percentages: Mila is to receive 76.94%; Zoe is to receive 11.53%; and Vesper is 

to receive 11.53%. (ECF No. 40-1 at 13.) The gross proceeds are to be apportioned 

accordingly, with Mila receiving $384,700 and each of her sisters receiving $57,650. (ECF 

Nos. 40-1 at 7, 40-2 at 7, 40-3 at 7.) After attorney’s fees and costs, Mila will receive 

$299,707.18, Zoe will receive $45,091, and Vesper will receive $45,091 to be paid into 

structured annuities. (Id.) The minors’ parents are not taking any settlement funds and 

Plaintiffs’ counsel reduced their fee from 33 1/3% to 20% to ensure adequate compensation 

for Mila. (Id.; 40-1 at 19.) 

This action was initiated in state court December 6, 2018 (ECF No. 1-2 at 2) and 

removed to federal court on February 20, 2019 (ECF No. 1.) Over the course of the 

litigation, Plaintiffs’ counsel conducted an extensive investigation into the events 

surrounding Mila’s injury, and the facts of the case were thoroughly investigated in 

response to Defendants’ Motions to Dismiss on basis of lack of personal jurisdiction and 

via participation in an Early Neutral Evaluation with the undersigned judge. Based upon 

consideration of the facts, the minor Plaintiffs’ claims, and the risks associated with trial, 

the Court concludes the proposed settlement is fair and reasonable under both California 

and federal law standards. 

B. Method of Disbursement 

Courts can use a variety of methods for the disbursement of settlement funds to a 

minor. See Cal. Prob. Code § 3600 et seq. Here, the Petitions request that the minor 

Plaintiffs’ net settlement be used to purchase three structured settlement annuities through 

Sage Settlement Consulting using rates from Pacific Life Insurance Company. (ECF Nos. 

40-1 at 25, 40-2 at 25, 40-3 at 25.) 

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The Court has considered the structured annuity quotes provided by Sage Settlement 

Consulting and the methods of disbursement chosen by the minor Plaintiffs’ guardian ad 

litem. These methods provide that the balance of the settlement be placed in an account 

for each of the minor Plaintiffs with disbursements to be made over a period of years. 

Specifically, Defendants or their insurers are to pay $ 299,707.18 for Mila and $45,091 

each for Zoe and Vesper to fund three single-premium deferred annuities subject to 

withdrawal only upon authorization of the Court as set forth in the Petitions. (ECF Nos. 

40-1 at 10, 40-2 at 10, 40-3 at 10.) This would provide Mila with guaranteed lump sum 

payments of approximately $92,050.73, $95,992.78, $98,999.17, and $101,834.82 at ages 

18 through 21. (ECF No. 40-1 at 25.) It would also provide Zoe and Vesper each with 

guaranteed lump sum payments of approximately $12,963.06, $13,387.28, $13,904.99, and 

$14,690.18 at ages 18 through 21. (ECF No 40-1 at 25; ECF No. 40-2 at 25.) The terms 

of the annuities protect the minor Plaintiffs as they provide that the bulk of the settlement 

be released after they have reached the age of majority. The Court finds the methods of 

disbursements to be fair, reasonable, and within the bounds of applicable law. See Cal. 

Prob. Code § 3602(c)(1) (providing as option that funds be deposited into a single-premium 

deferred annuity).

C. Attorney’s Fees, Costs, and Medical Liens

Attorney’s fees to be paid for representing the minor Plaintiffs must also be approved 

by the Court. Cal. Fam. Code § 6602. Attorney’s fees and costs are typically controlled 

by statute, local rule, or local custom. Generally, fees in minors’ cases have historically 

been limited to twenty-five percent (25%) of the gross recovery. Napier by & through 

Quiroz v. San Diego Cty., No. 315CV00581CABKSC, 2017 WL 5759803, at *3 (S.D. Cal. 

Nov. 28, 2017.) In California, courts are required to approve the attorney’s fees to be paid 

for representation of a minor. See Cal. Prob. Code § 2601; Cal. Rule of Ct. 7.955. To 

determine whether the fee is reasonable courts consider a myriad of factors including: the 

amount of the fee in proportion to the value of the services performed; the novelty and 

difficulty of the questions involved and skills required; the amount involved and the results 

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obtained; and the experience and ability of the attorney. Cal. Rule of Ct. 7.955(b). When

a contingency fee has been proposed, “most courts require a showing of good cause to 

award more than 25% of any recovery” whereas a greater reward is “rare and justified only 

when counsel proves that he or she provided extraordinary services.” Schwall v. Meadow 

Wood Apts., No. CIV. S-07-0014 LKK, 2008 WL 552432, at *1–*2 (E.D. Cal. Feb. 27, 

2008) (internal quotation marks omitted).

Here, minor Plaintiffs’ counsel seeks $76,940 based on Mila’s portion of the 

settlement (ECF No. 40-1 at 7) and $11, 530 each from Zoe and Vesper’s portions of the 

settlement. (ECF Nos. 40-2 at 7, 40-3 at 7.) This represents 20% of the $500,000 gross 

settlement. (ECF Nos. 40-1 at 19, 40-2 at 19, 40-3 at 19.) Counsel has provided no 

documentation in support of their request. Nonetheless, the Court finds that in 

consideration of the duration of this case, the amount of work performed by Plaintiff’s 

counsel, the fee request’s adherence to the historically applied limit in cases involving 

minors, and the fact that counsel reduced their fees in order to facilitate settlement and 

ensure adequate compensation for Mila, the amount of attorney’s fees is reasonable and 

does not suggest that the settlement was unfair.

Additionally, in the instant petitions, minor Plaintiffs’ counsel set forth costs accrued 

over the course of the litigation totaling $8,928.38, with $6,869 to come from Mila’s 

settlement proceeds and $1,029 to come from both Zoe and Vesper’s settlement proceeds. 

(ECF Nos. 40-1. 40-2, and 40-3 at 7.) Counsel attaches an advanced detail of all costs 

which, amongst other costs, represent $2,500 in expert fees, $3,019.45 in translation costs, 

$1,443 in focus group costs. (ECF Nos. 40-1 at 21, 40-2 at 21, and 40-3 at 21.) This 

litigation, which was initiated December 2018 in state court, settled after minor Plaintiffs’ 

counsel conducted an extensive investigation into the events surrounding Mila’s injury and

the facts of the case were thoroughly investigated in response to Defendants’ Motions to 

Dismiss on basis of lack of personal jurisdiction. (ECF Nos. 40-1, 40-2, 40-3 at 16–17.) 

The Court finds that the costs incurred are fair and reasonable under the circumstances. 

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Finally, the petition on behalf of Mila sets forth $1,183.82 in medical expenses that 

are to be paid from the proceeds of the settlement. (ECF No. 40-1 at 6–7.) Payment of 

such medical expenses from settlement proceeds is permissible. See Cal. Prob. Code 

§ 3601(a) (“authorizing and directing that reasonable expenses, medical or 

otherwise . . . shall be paid from the money or other property to be paid or delivered for the 

benefit of the minor . . . .”). 

IV. CONCLUSION 

After reviewing the Petitions for Approval of Minor’s Compromise of Claims, the 

Court finds that the proposed settlement of minor Plaintiffs’ claims in the amount of 

$500,000 fair and reasonable. For the reasons discussed above, IT IS HEREBY 

RECOMMENDED that the District Court issue an Order: (1) adopting this Report and 

Recommendation; (2) GRANTING the Petitions (ECF No. 40); and (3) requiring the 

following:

(1) Defendants should prepare and deliver the settlement fund proceeds. The 

settlement funds should be disbursed as follows: (i) attorney’s fees in the 

amounts of $76,940, $11,530, and $11,530 (or collectively $100,000) shall be 

paid to Plaintiffs’ counsel, The McClellan Law Firm; (ii) costs in the amount of 

$8,928.38 shall be paid to Plaintiffs’ counsel, The McClellan Law Firm; and 

(iii) medical expenses in the amount of $1,183.82 shall be paid directly to 

provider Conduent (Cigna Medical Lien) via P.O. Box 30114, Salt Lake City, 

Utah 84130. The balance of the settlement will be distributed to each of the 

minor Plaintiffs as set forth in the Petitions. 

(2) The remaining amounts designated for each of the minor Plaintiffs ($299,707.18 

for Mila, $45,091 each for Zoe and Vesper) shall be invested into three structured 

settlement annuities comporting with the options selected by the minor Plaintiffs’

guardian ad litem for the benefit of minor Plaintiffs. The funds will be held in the 

structured annuities until the minor Plaintiffs reach the age of eighteen (18) and 

then be disbursed based on the proposals selected by the guardian ad litem. (See

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ECF Nos. 40-1 at 25, 40-2 at 25, 40-3 at 25.) Until that time, no withdrawals 

may be made from the structured annuity without a written order from this Court.

(3) All proceeds are to be paid within thirty (30) days after approval of the minors 

compromise. Interest shall accrue at 7% per annum on any amounts not paid 

within 30 days of this Order.

(4) Any annuity payments remaining to be paid after the death of Mila Shen will be 

made payable in equal shares to her primary beneficiaries: Zoe Shen, Vesper 

Shen, and Axel Shen. If one of Mila’s primary beneficiaries is no longer living, 

then that person’s payments will be distributed in equal shares to the remaining 

beneficiaries listed here. 

(5) Any annuity payments remaining to be paid after the death of Vesper Shen will 

be made payable in equal shares to her primary beneficiaries: Zoe Shen, Mila

Shen, and Axel Shen. If one of Vesper’s primary beneficiaries is no longer 

living, then that person’s payments will be distributed in equal shares to the 

remaining beneficiaries listed here. 

(6) Any annuity payments remaining to be paid after the death of Zoe Shen will be 

made payable in equal shares to her primary beneficiaries: Vesper Shen, Mila 

Shen, and Axel Shen. If one of Zoe’s primary beneficiaries is no longer living, 

then that person’s payments will be distributed in equal shares to the remaining 

beneficiaries listed here. 

IT IS ORDERED that no later than January 2, 2020, any party to this action may 

file written objections with the Court and serve a copy on all parties. The document should 

be captioned “Objections to Report and Recommendation.” The parties are advised a 

failure to file objections within the specified time may waive the right to raise those 

objections on appeal of the Court’s Order. See Martinez v. Ylst, 951 F.2d 1153, 1156 (9th 

Cir. 1991). 

IT IS FURTHER ORDERED that any reply to the objections shall be filed with 

the Court and served on all parties no later than January 9, 2020. 

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IT IS SO ORDERED. 

Dated: December 19, 2019

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