Opinion ID: 767140
Heading Depth: 2
Heading Rank: 4

Heading: The Refusal to Delay Approval of the Settlement

Text: 61 Neilson's final argument is that the district court erroneously refused to delay its consideration of the settlement pending a ruling in state court on the application by Neilson's son for appointment of a general guardian. 62 Neilson's argument involves the interaction between Federal Rule of Civil Procedure 17(b) and 1207 of the New York Civil Practice Law and Rules. The federal rule requires that a court determine capacity to sue by reference to the law of an individual's domicile. See Fed. R. Civ. P. 17(b). The state rule provides that approval of a settlement must be sought by a general guardian rather than by a guardian ad litem. See N.Y. C.P.L.R. 1207 (McKinney 1997); see also Tudorov v. Collazo, 215 A.D.2d 750, 627 N.Y.S.2d 419, 419-20 (2d Dep't 1995) (reversing Supreme Court's grant of guardian ad litem's motion to settle on ground that a guardian ad litem is not authorized to apply to the court for approval of a proposed settlement of a party's claim). Neilson argues that the district court was required under Rule 17(b) to adhere to the state rule and await appointment of the general guardian. 63 It is not clear that the limitation embodied in 1207 relates to capacity. See Bryant v. Riddle, 259 A.D.2d 399, 687 N.Y.S.2d 108, 109 (1st Dep't 1999) (Mem.) (stating that under New York law, a person of unsound mind but not judicially declared incompetent may sue or be sued in the same manner as any other person (citing Sengstack v. Sengstack, 4 N.Y.2d 502, 176 N.Y.S.2d 337, 341-42, 151 N.E.2d 887 (1958))). But assuming that it does, we conclude that the district court was not obligated to apply it, because insofar as state law might be read to preclude the federal court from exercising its appointive power under Rule 17(c), it must give way, Rule 17(b) notwithstanding. 6A Charles Alan Wright et al., Federal Practice and Procedure 1571, at 511 (2d ed. 1990). 64 Neilson argues in the alternative that the district court should have delayed settlement approval because, even if the court was not required to await the appointment of the general guardian, it should have respected the strong preference for representation by a general guardian expressed in both federal and state law. Neilson points to Federal Rule of Civil Procedure 17(c), which provides for representation of an incompetent by a guardian ad litem only in the absence of a general guardian. See Fed. R. Civ. P. 17(c) (Whenever an . . . incompetent person has a representative, such as a general guardian, committee, conservator, or other like fiduciary, the representative may sue or defend on behalf of the . . . incompetent person. An . . . incompetent person who does not have a duly appointed representative may sue by a next friend or by a guardian ad litem.). For a similar preference in state law, Neilson relies on In re Legget's Trust, 25 A.D.2d 727, 268 N.Y.S.2d 911 (1st Dep't 1966), in which the Appellate Division reversed the trial court's appointment of a guardian ad litem in part because, at the time of the appointment, the court was aware that the appellant had a general guardian. 268 N.Y.S.2d at 913. Neilson also cites the limitation, embodied in 1207, on a guardian ad litem's ability to apply to a court for approval of a settlement. 65 Federal and state law defer to a general guardian where such guardian has already been appointed. At the same time, where a general guardian has not been appointed, such a preference would be inconsistent with Rule 17(c), which is structured as it is in order to allow a district court to ensure through the appointment of a guardian ad litem that a lawsuit by or against an incompetent can proceed notwithstanding the state court's failure to appoint a general guardian. 7 Cf. 6A Wright et al., supra, 1571, at 511. 66 Once a district court that has already appointed a guardian ad litem for a litigant is informed of the impending appointment of a general guardian, the prudential question of whether to delay the course of the lawsuit pending arrival of the general guardian is addressed to the court's sound discretion. Cf. County of Suffolk v. Long Island Lighting Co., 907 F.2d 1295, 1322-23 (2d Cir. 1990) (reviewing for abuse of discretion district court's refusal to allow party to participate in settlement of class action where participation would cause delay in course of lawsuit). We see no abuse of discretion here. 67 Neilson suggests that delay was needed because the general guardian who has responsibility for all of [her] affairs would have had the ability to determine whether the settlement best served her particular needs. No doubt, a district court would do well to ascertain the views of a general guardian if possible, but the district court was free to weigh that advantage against circumstances that militated against delay. 68 The awaiting of the general guardian entailed a potentially long delay. Torres represented to the district court that, although the state court had decided to appoint a general guardian, it had yet to select someone to serve in that position, and that after selection, the general guardian would have to be qualified and bonded. Torres further conceded that the new general guardian could not be expected to weigh in on the proposed settlement without first reviewing what has transpired in federal court, reviewing the settlement, and also analyzing [Neilson's] financial situation. The adjournment sought by Neilson's son was therefore open-ended. Although we know now that the general guardian was appointed less than two weeks after the settlement was approved, that fact is available to us only through hindsight. When Judge Rakoff approved the settlement it was reasonable to anticipate a significant delay before a general guardian would be in position to advocate Neilson's interests. In the meantime, as the district court appreciated, see Neilson, 993 F. Supp. at 227-28, there was an offer on the table, and Nielson who was evidently unable to work as an accountant was, according to Dr. Pulver, apparently living on financial handouts from friends and relatives and not eating regularly. Judge Rakoff's decision to proceed was an entirely reasonable assessment of the circumstances and of Neilson's needs. 69 Other than to suggest that her values and wishes would have been better served by a different result, Neilson has pointed to no particular interest that would have been better served had Niss (or a general guardian) taken a different course. Instead, acting through the Vladeck firm, she challenges Niss's view of the merits of Neilson's remaining claims. But the district court, which was presented with both views, concurred with Niss's evaluation of those claims, and rejected as conclusory, self-serving, and unreliable the claims by the Vladeck firm that the plaintiff they successfully sought leave to abandon actually has a good case (good enough, that is, to warrant their asserting a lien for attorneys' fees). Neilson, 993 F. Supp. at 228 n.4. On this record, we see no reason to second guess that determination.