Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_06-cv-01165/USCOURTS-caed-1_06-cv-01165-6/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1132 E.R.I.S.A.

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

ANTHEM LIFE INSURANCE CASE NO. 1:06-cv-1165 GSA

COMPANY,

ORDER REGARDING PETITION

Plaintiff, FOR MINOR’S COMPROMISE

vs.

HILDA OLQUIN, et al.,

Defendants.

 /

Defendant Vincent James Musso Borgemeyer is a minor in this action (“minor”). On January

24, 2008, a settlement conference was held and the case settled. On January 25, 2008, a preliminary

hearing was held regarding the minor’s compromise. At that time, the court ordered that Mr.

Murillo, the minor’s attorney, file a declaration outlining his attorney fees. The declaration was filed

with the Court on January 28, 2008. In the declaration, Mr. Murillo asserts that “the contract

between Phillip Borgemeyer, guardian ad litem for the minor, provides that the minor shall receive a

net amount of fifteen thousand dollars ($15,000), the attorney shall receive about five thousand nine

hundred and twenty five dollars ($5,925.00), from which the attorney shall reimburse Mrs. Naida 

Mc Kinney two thousand five hundred dollars ($2,500.00) for a retainer on this action.” 

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 As the judge conducting the settlement conference, the Court is aware of these factors as these were outlined in 1

the confidential settlement statements and on the record at the settlement hearing . However, the factors need to be outlined

in the petition for the Court’s final approval. 

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This Court’s Local Rule 17-202 addresses settlements for minors and provides in pertinent

part:

(b) Settlement. No claim by . . . a minor . . . may be settled or compromised

absent court order by the assigned Judge or Magistrate Judge approving the settlement

or compromise.

. . .

(2) The approval of a proposed settlement shall be filed and calendared

pursuant to L.R. 78-230. Such application shall disclose, among other

things, the age and sex of the minor . . . , the nature of the causes of

action to be settled or compromised, the facts and circumstances out of

which the causes of action arose, including the time, place and persons

involved, the manner in which the compromise amount or other

consideration was determined, including such additional information

as may be required to enable the Court to determine the fairness of the

settlement or compromise ...1

(c) Disclosure of Attorney’s Interest. When the minor . . . is represented by an

attorney, it shall be disclosed to the Court by whom and the terms under which the

attorney was employed, whether the attorney became involved in the application at

the instance of the party against whom the causes of action are asserted directly or

indirectly, whether the attorney stands in any relationship to said party, and whether

the attorney has received or expects to receive any compensation, from whom, and the

amount.

. . .

(e) Payment of Judgment. Whenever money . . . is recovered on behalf of a

minor . . . the money . . . will be (1) disbursed to the representative pursuant to state

law upon a showing that he is the duly qualified representative under state law, (2)

disbursed otherwise pursuant to state law, or (3) disbursed pursuant to such other

order as the Court deems proper for the protection of the minor . . .

In this case, there has not been a petition for minor’s compromise filed. A petition must be

filed in accordance with the local rules outlined above before this Court can approve the settlement. 

In addition, this case involves the unique circumstance of the assignment of Nadia R. 

Mc Kinney’s interests as the beneficiary of the Group Life Insurance Plan through Anthem Life

Insurance to the minor. Therefore, the Court will also be requiring that the petition include an

explanation of the history of the assignment and a properly executed declaration from Ms. Nadia Mc

Kinney clearly outlining her knowing and voluntary intent to assign those rights to the minor. Any

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 The Court is aware that Ms. Mc Kinney has filed a notice of assignments of rights in this litigation. (Doc. 26). 2

However, the Court finds that this document is not sufficient to execute the assignment. Upon close examination of the

document it appears have been properly signed nor are there any other documents supporting the assignment. See, Local Rule

7-131(b).

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other documents executed in connection with the assignment should also be attached to the

declaration. Further, the petition should outline the gross and net amounts of the settlement, as well 2

as a description of the manner in which the settlement proceeds will be distributed to the minor. If

the settlement money is to be deposited in an account or accounts subject to withdrawal only upon

order of the Court, the name and address of the proposed depository should also be provided. 

Finally, based on the current declaration, the Court is unable to clearly ascertain the net

amount of attorney fees requested. Specifically, the Court cannot determine if the net amount the

attorney is seeking is $5,925 or $3,425 ($5925-2,500). It appears that the attorney is seeking a total

of $5,925 in attorney fees that will be subtracted from the $15,000 of the minor’s settlement. 

Although the attorney states that he is reimbursing Naida Mc Kinney $2,500 out of that amount, it

appears that $2,5000 was already paid to him as part of the retainer. If this is the case, the net

attorney’s fees would be $5,925, almost forty-percent (40%) of the net amount of the minor’s

settlement. As such, the attorney needs to provide the exact amount of attorney’s fees, the basis of

the fees, with an itemization of the costs sought to be allowed and charged against the minor’s

settlement amount. The attorney is advised that the Court will not order that the minor’s funds be

used to reimburse an existing retainer/contract agreement between Ms. Mc Kinney and the attorney.

The attorney has already attempted to obtain a court order allowing that the minor assume the

benefits of Ms. Mc Kinney and an obligation of the contract between Ms. Mc Kinney and Mr.

Murillo. (Doc. 18). That request was denied. (Doc. 27).

F.R.Civ.P. 17(c) empowers a district court to make such “order as it deems proper for the

protection” of a minor. “Federal courts generally require that claims by minors . . . be settled in

accordance with applicable state law. California law requires court approval of the fairness and

terms of the settlement.” 2 Schwarzer, Tashima & Wagstaffe, California Practice Guide, Federal

Procedure Before Trial (2002) Pretrial Conference and Settlement Procedures, para. 15:138, p. 15-

42 (emphasis in original). A settlement for a minor and attorney fees to represent a minor must be

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approved by the court. Cal. Prob. Code, § 3601; Cal. Fam. Code, § 6602. Reasonable expenses and

court costs to be paid out of the settlement also must be approved by the court. Cal. Prob. Code, §

3601. A leading California practice guide observes:

Courts vary in their fee approval policies. All will consider the time expended

and the complexity of the case. But, in contingency fee cases, most courts require a

showing of “good cause” to award more than 25% of any recovery. [Citations

omitted.]

Attorneys who believe their work deserves a fee higher than that usually

approved must be prepared to demonstrate this to the judge.

2 Weil & Brown, Cal. Practice Guide, Civil Procedure Before Trial (2002) Settlement Procedures,

paras. 12:576 and 12:577, p. 12(II)-14. If the attorney is seeking more than 25% of the recovery, he

needs to demonstrate why this fee is warranted.

In this instance, because no petition was filed, the Court does need to have the settlement

terms reduced to writing and supplied to the court as well as a complete statement regarding the 

attorney fees the minor is expected to pay. As such, the Court is ordering that the minor’s attorney

file a petition for minor’s compromise which includes the information outlined in Local Rule 17-

202(b)(2) and (c), as well as the other information listed above. The Court is aware that the minor’s

date of birth is February 20, 1990. As such, the Court will determine whether further hearing on the

petition is needed once the petition is received.

Accordingly, IT IS HEREBY ORDERED that :

1. The minor’s attorney submit an application for minor’s compromise in accordance with

Local Rule 17-202(b)(2) and (c) outlined above. In addition to the requirements of the Local Rule,

the petition should include the following :

a) A thorough explanation of the history of the assignment and a properly executed

declaration from Ms. Nadia Mc Kinney clearly outlining her knowing and voluntary assignment of

those rights to the minor. Any other documents executed in connection with the assignment should

also be attached to the declaration. 

b) An explanation of the gross and net amounts of the settlement, as well as a

description of the manner in which the settlement proceeds will be distributed. If the settlement

money is to be deposited in an account or accounts subject to withdrawal only upon order of the

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court, the name and address of the proposed depository shall be provided; and

c) The exact amount of attorney’s fees, the basis of the fees, with an itemization of the

costs sought to be allowed and charged against the minor’s settlement amount. 

.

IT IS SO ORDERED. 

Dated: February 8, 2008 /s/ Gary S. Austin 

60kij8 UNITED STATES MAGISTRATE JUDGE

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