Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_13-cv-00820/USCOURTS-caed-2_13-cv-00820-8/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1331 Fed. Question: Insurance Contract

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[PROPOSED] ORDER RE: MOTION FOR APPROVAL OF PROPOSED SETTLEMENT, 

DISBURSEMENT OF FUNDS, AND DISMISSAL OF ACTION

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CANDICE L. FIELDS, SBN 172174 

CANDICE FIELDS LAW 

455 Capitol Mall, Suite 802 

Sacramento, California 95814 

Telephone: (916) 414-8050 

Facsimile: (916) 790-9450 

cfields@candicefieldslaw.com 

Attorneys for Defendant A.M., A Minor 

Appearing Through Guardian Ad Litem 

INGERLISHA MARTINEZ 

UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF CALIFORNIA 

THE PRUDENTIAL INSURANCE 

COMPANY OF AMERICA, 

Plaintiff, 

v. 

A.M, a minor; D.P., a minor; ANDREA 

MORGAN in her personal capacity; 

INGERLISHA MARTINEZ, as mother and 

next friend of the minor child A.M.; and 

ANDREA MORGAN, in her capacity as 

mother and next friend of the minor child 

D.P.; 

Defendants. 

No. 2:13-cv-00820-MCE-AC 

ORDER RE: MOTION FOR APPROVAL 

OF PROPOSED SETTLEMENT, 

DISBURSEMENT OF FUNDS, AND 

DISMISSAL OF ACTION 

 

 

An Interpleader Complaint was filed by The Prudential Insurance Company of 

America (“Prudential”) to resolve a dispute regarding life insurance proceeds governed by 

federal law. Through the Office of Servicemembers’ Group Life Insurance, Prudential 

provides group life insurance benefits to the Department of Veterans Affairs of the United 

States, pursuant to Servicemembers’ Group Life Insurance, under group policy number G32000 (“SGLI Policy”). Xantavia was covered under the SGLI Policy in the amount of 

Case 2:13-cv-00820-MCE-AC Document 63 Filed 12/23/14 Page 1 of 7
[PROPOSED] ORDER RE: MOTION FOR APPROVAL OF PROPOSED SETTLEMENT, 

DISBURSEMENT OF FUNDS, AND DISMISSAL OF ACTION

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$400,000 (the “Death Benefit”). See Complaint, ECF No. 1, at Exhibit B. Pursuant to 38 

U.S.C section 1965 et seq., federal law governs the policy at issue. 

Xantavia never executed an SGLI form designating his beneficiaries, although his file 

did contain an unsigned SGLI form that listed his (former) wife, Andrea Morgan (“Andrea”) 

and their son D.P. as co-equal beneficiaries of the Death Benefit. See id., at Exhibit D. At 

the time of his death, Xantavia was divorced from Andrea and unmarried. See id.; see

Waiver And Withdrawal Of Claim To Death Benefit (“Waiver”), ECF No. 41, at Exhibit A. 

Pursuant to 38 U.S.C. section 1970, if no qualifying beneficiary designation exists at 

the time of an insured’s death, the death benefit under the SGLI policy is payable to the 

insured’s surviving spouse and, if none, to the insured’s surviving children, in equal shares. 

 For purposes of a SGLI Policy determination, a child of an insured is defined as 

either (1) a legitimate child or (2) an illegitimate child of the alleged father only if (a) he 

acknowledged the illegitimate child in a writing signed by him; or (b) he had been judicially 

ordered to contribute to the illegitimate child’s support; or (c) he had been, before his death, 

judicially decreed to be the father of such child; or (d) proof of paternity has been 

established by a certified copy of the public record of birth or church record of baptism 

showing that the insured was the informant and was named as the father of the illegitimate 

child; or (e) proof of paternity was established from service department records, such as 

school or welfare agencies, which show that with his knowledge the insured was named as 

the father of the child. See 38 U.S.C. § 1970(8). 

Ingerlisha Martinez (“Ingerlisha”), who had a relationship with Xantavia prior to his 

marriage to Andrea, submitted a claim to the Death Benefit on behalf of her child A.M.. See

Complaint, ECF No. 1, at Exhibit F. Andrea, both individually and on behalf of her child 

D.P., also submitted claims to the Death Benefit. See id., at Exhibits G and L. Thus, initially, 

there were three claimants: (a) Andrea individually, (b) D.P., and (c) A.M. Due to the 

dispute over entitlement to the Remaining Death Benefit, Prudential named all three 

claimants as defendants in this action. See Complaint, ECF No. 1. 

/// 

Case 2:13-cv-00820-MCE-AC Document 63 Filed 12/23/14 Page 2 of 7
[PROPOSED] ORDER RE: MOTION FOR APPROVAL OF PROPOSED SETTLEMENT, 

DISBURSEMENT OF FUNDS, AND DISMISSAL OF ACTION

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Proof of paternity between D.P. and Xantavia was un-contested. See Complaint, 

ECF No. 1, at Exhibit L. D.P., as Xantavia’s issue, therefore was entitled to one-half of the 

Death Benefit under either the unsigned beneficiary form or pursuant to 38 U.S.C. section 

1970. Because there was no guardian of D.P.’s property or estate, Prudential caused 

D.P.’s undisputed 50% share of the Death Benefit, or $200,000, to be paid into a Letter of 

Indebtedness to be held by Prudential and which may be surrendered when D.P. reaches 

the age of 18 or when a guardian of D.P.’s property or estate is appointed. See id. 

Pursuant to this Court’s Order, Prudential deposited the other one-half of the Death 

Benefit, plus accrued interest, or $206,957.47, with the Court on or about May 7, 2014 

(“Remaining Death Benefit”). See Order, ECF No. 44, and Receipt. 

The parties have settled. Pursuant to their settlement agreement, A.M. is entitled to 

one-half of the insurance proceeds. Her guardian ad litem seeks the Court’s approval of the 

proposed settlement and disbursement plan, including an award of attorneys’ fees. 

“District courts have a special duty, derived from Federal Rule of Civil Procedure 

(“FRCP”) 17(c), to safeguard the interests of litigants who are minors. [. . .] 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 interest 

of the minor.’ Dacanay v. Mendoza, 573 F.2d 1357, 1080 (9th Cir. 1978); see also 

Salmeron v. United States, 724 F.2d 1357, 1363 (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’).” Robidoux v. 

Rosengren, 638 F.3d 1177, 1181 (9th Cir. 2011). Referencing FRCP 17(c), Local Rule 

202(b) provides that no claim by or against a minor may be settled absent an order by the 

Court approving the settlement. In actions in which the United States courts have exclusive 

jurisdiction, a motion for approval of a proposed settlement must be filed and shall disclose 

such information as may be required by the Court to determine the fairness of the 

settlement. See id., at 202(b)(2). 

Case 2:13-cv-00820-MCE-AC Document 63 Filed 12/23/14 Page 3 of 7
[PROPOSED] ORDER RE: MOTION FOR APPROVAL OF PROPOSED SETTLEMENT, 

DISBURSEMENT OF FUNDS, AND DISMISSAL OF ACTION

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In Robidoux v. Rosengren, 638 F.3d 1177 (9th Cir. 2011), the Ninth Circuit provided 

guidance for a district court considering whether to approve a proposed settlement involving 

minors. In cases involving the settlement of a minor’s federal claim, a court should 

determine “whether the net amount distributed to each minor plaintiff in the proposed 

settlement is fair and reasonable, in light of the facts of the case, the minor’s specific claim, 

and recovery in similar cases. Most importantly, the district court should evaluate the 

fairness of each minor plaintiff’s net recovery without regard to the proportion of the total 

settlement value designated for . . . Plaintiffs’ counsel . . . .” Id., at 1179. If the net recovery 

of each minor plaintiff under the proposed settlement is fair and reasonable, the district 

court should approve the settlement as proposed.” Id., at 1179. The Court has original 

jurisdiction over this Interpleader action under the provisions of 28 U.S.C. section 1331. 

Therefore, the court will be guided by Robidoux’s holding. 

Each of the minors filed claims to the Death Benefit. See Complaint, ECF No. 1. If 

the unsigned beneficiary form is operative, D.P. would be entitled to all of the Death Benefit 

as a designated beneficiary (since Andrea waived her claim) and A.M.’s claim would have 

no value. If it is not operative, then Xantavia’s children should divide the Death Benefit 

equally. See 38 U.S.C. § 1970(a) (if the insured did not designate a beneficiary in a writing 

received prior to death, and no widow, proceeds to the child or children). 

The parties entered into a Settlement Agreement wherein, subject to court approval, 

A.M. is entitled to the Remaining Death Benefit (or $200,000 plus interest). Thus, the net 

amount distributed to each minor in the proposed settlement is as follows: $200,000 plus 

interest to D.P.; $200,000 plus interest to A.M. (less attorneys’ fees). 

Petitioner has provided the Court with similar cases wherein the order of 

beneficiaries, as set forth in 38 U.S.C section 1970, has been utilized when a 

servicemember fails to execute an SGLI beneficiary designation form. See Prudential Ins. 

Co. of America v. West, 324 F. Supp. 1049 (W.D. Ark. 1971). In another case cited by 

Petitioner, the court determined that evidence of the decedent’s intent should not be used to 

determine the beneficiary of SGLI proceeds, as that practice would be inconsistent with 

Case 2:13-cv-00820-MCE-AC Document 63 Filed 12/23/14 Page 4 of 7
[PROPOSED] ORDER RE: MOTION FOR APPROVAL OF PROPOSED SETTLEMENT, 

DISBURSEMENT OF FUNDS, AND DISMISSAL OF ACTION

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federal law. See Mixsooke v. Prudential Life Ins. Co., 2013 WL 600237 (D. Alaska 2013). 

In each of those cases cited by Petitioner, only the claimant whose name appeared on a 

fully executed SGLI form, or who was the designated beneficiary based upon the order of 

beneficiaries set forth in 18 U.S.C. section 1970, recovered any portion of the SGLI life 

insurance proceeds. 

Considering the facts of the case, the minors’ claims and recoveries in similar cases, 

the court finds the net recovery to each minor is fair and reasonable 

Since this matter arises under federal law, the court will use the lodestar method to 

evaluate the fairness of the requested award of attorneys’ fees. Counsel has provided 

billing entries evidencing that the amount of time worked on this case, exclusive of the time 

incurred by A.M.’s other counsel, attorneys Mack and Paxton, totals 150.2 hours. Based 

on the legal services provided and the legal issues addressed, the court finds the hours 

billed in this case are reasonable. 

Counsel has charged $350 per hour in this case and has provided the court with a 

declaration regarding the prevailing market rate in the Eastern District of California for work 

done by experienced attorneys in similar civil cases. The court finds $350 per hour a 

reasonable rate for attorney Fields in this case. 

By multiplying a total of 150.2 hours reasonably incurred by attorney Fields times a 

reasonable rate of $350 per hour, reasonable attorneys’ fees in this case total $52,570. 

While fees incurred are slightly greater than the $50,000 Contingency Fee called for in the 

Contingency Fee Contract (25% of the remaining gross amount, after deduction for cost 

advanced, of any recovery obtained by the way of settlement or compromise), counsel for 

A.M. (Attorney Fields and Mack) waives fees that exceed the contracted amount. Further, 

counsel waives any claim for recovery of costs and waives any claim to accrued interest on 

A.M.’s net recovery. The court finds that reasonable attorneys’ fees in this case total 

$52,570. In light of attorney Fields and Mack waive fees in any amount greater than 25%, 

the court awards attorney Fields the reduced sum of $50,000 (from which 10%, or $5,000, 

shall be paid to attorney Mack). 

Case 2:13-cv-00820-MCE-AC Document 63 Filed 12/23/14 Page 5 of 7
[PROPOSED] ORDER RE: MOTION FOR APPROVAL OF PROPOSED SETTLEMENT, 

DISBURSEMENT OF FUNDS, AND DISMISSAL OF ACTION

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The Louisiana state court is best suited to determine, under that state’s laws, the 

reasonableness of attorney Paxton’s requested award in the amount of $5,000. Therefore, 

this Court will issue a ruling concerning the reasonableness of attorney Paxton’s award 

upon review of the state court order in this regard. 

The court notes that Prudential has been dismissed and waived any claim for an 

award of fees or costs. See Memorandum and Order ECF No. 53. The court further notes 

that D.P. is not represented by counsel and his guardian has waived any claim for fees or 

costs. See Settlement Agreement, Exhibit A to Fields Dec., at ¶ 2. 

Pursuant to Local Rule 202(e), money that is recovered on behalf of a minor must be 

(1) disbursed to the representative pursuant to state law upon a showing that the 

representative is duly qualified 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. A.M. and her mother reside in Richland Parish, Louisiana. 

The court finds that it would be in A.M.’s best interest, and make the most sense, to 

obtain state court approval of a plan for the distribution of A.M.’s net recovery in this action. 

The court acknowledges the draft Petition to Withdraw the Minor’s Funds and to Set Court 

Approval of Payments on Behalf of the Minor (“state court Petition”) drafted by Louisiana 

attorney James E. Paxton, who has been retained by A.M.’s mother. See Petition, Exhibit 

F to Fields Dec. The court directs attorney Fields to ensure that the Petition is filed in the 

Fifth Judicial District Court In And For The Parish Of Richland - State Of Louisiana. 

Attorney Paxton asks this Court to waive Local Rule 202(f), which requires state 

court orders authorizing interim disbursements to be reviewed by an assigned Magistrate 

Judge in the Eastern District of California, based upon the procedural safeguards that 

Louisiana has in place sufficiently protect the property of a minor. See Declaration of 

James E. Paxton at ¶¶ 3 - 5. The court finds that it is appropriate to waive future 

compliance with Local Rule 202(f). 

/// 

/// 

Case 2:13-cv-00820-MCE-AC Document 63 Filed 12/23/14 Page 6 of 7
[PROPOSED] ORDER RE: MOTION FOR APPROVAL OF PROPOSED SETTLEMENT, 

DISBURSEMENT OF FUNDS, AND DISMISSAL OF ACTION

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Based upon the courts findings herein, the motion is GRANTED. The court approves 

the settlement of the minors’ claims. Further, the court approves a fee award to attorney 

Fields in the amount of $50,000. 

The Court hereby waives future compliance with Local Rule 202(f). 

Upon receipt and approval of a properly fashioned state court order, the Court shall 

direct the Clerk to disburse funds deposited into the Court’s Registry (Order, ECF 44), as 

follows: the Remaining Death Benefit plus accrued interest, less $50,000, to the registry of 

the Fifth Judicial District Court In And For The Parish Of Richland – State Of Louisiana. 

Attorney Fields shall provide this court with proof that the that the minor’s money has 

been deposited in a blocked interest-bearing account held with a banking institution that is 

insured with the Federal Deposit Insurance Corporation until the minor reaches the age of 

18, within 20 days of deposit. 

Upon the Court’s confirmation that the state court distribution plan has been 

completed, the Court shall direct the Clerk to disburse the remaining balance, in the amount 

of $50,000, to attorney Fields. 

If what is ordered occurs, this action shall be dismissed with prejudice with each side 

to bear its own cost. 

Dated: December 22, 2014 

 

Case 2:13-cv-00820-MCE-AC Document 63 Filed 12/23/14 Page 7 of 7