Zarate et al v. Farmers New World Life Insurance Company
Filing
22
ORDER GRANTING 21 Amended Joint Motion to Approve Minor's Settlement signed by District Judge Dale A. Drozd on 6/5/2018. CASE CLOSED. (Sant Agata, S)
1
2
3
4
5
6
7
8
UNITED STATES DISTRICT COURT
9
FOR THE EASTERN DISTRICT OF CALIFORNIA
10
11
12
ALONDRA ZARATE, and minors N.Z.
and A.Z., by and through their legal
guardian JOSE G. FIGUEROA,
13
14
15
16
17
Plaintiffs,
v.
FARMERS NEW WORLD LIFE
INSURANCE COMPANY and DOES 1–
10,
No. 1:17-cv-00954-DAD-JLT
ORDER GRANTING AMENDED JOINT
MOTION TO APPROVE MINOR’S
SETTLEMENT
(Doc. No. 21)
Defendants.
18
19
Before the court is the parties’ joint motion to approve a compromise of the minors’
20
claims in this action. (Doc. No. 17.) A hearing on the motion was held on May 30, 2018.
21
Attorney Craig A. Edmonston appeared telephonically on behalf of plaintiffs, and attorney
22
Michael Newman appeared telephonically on behalf of defendant. Following the hearing, the
23
parties filed an amended motion as discussed at the hearing. (Doc. No. 21.) Having considered
24
the parties’ amended request and heard oral argument, and for the reasons set forth below, the
25
court grants the amended motion to approve the minors’ compromise.
26
27
28
FACTUAL AND PROCEDURAL BACKGROUND
Defendant Farmers New World Life Insurance Company (“Farmers”) issued a term life
insurance policy, Policy No. 007874584-OR, to Jose Zarate (the “insured”). (See Doc. No. 21-2
1
1
at Ex. A.) The insured was covered under the term life policy in the amount of $250,000.00.
2
(Doc. No. 21 at ¶ 3.)
3
The insured died on or about April 11, 2008, and as a result the death benefit became
4
payable. (Id. at ¶ 4.) Maricela Zarate, the wife of the insured, was designated as the beneficiary.
5
(Id. at ¶ 5.) On October 4, 2010, Maricela Zarate was convicted of the homicide of the insured.
6
(Id. at ¶ 6.) Pursuant to California law:
7
A named beneficiary of a bond, life insurance policy, or other
contractual arrangement who feloniously and intentionally kills the
principal obligee or the person upon whose life the policy is issued
is not entitled to any benefit under the bond, policy, or other
contractual arrangement, and it becomes payable as though the
killer had predeceased the decedent.
8
9
10
11
Cal. Prob. Code § 252. Accordingly, Maricela Zarate was disqualified from the $250,000 life
12
benefit. (Id. at ¶ 6.)
13
Plaintiff Alondra Zarate, born January 13, 1997; plaintiff N.Z., born December 20, 2005;
14
and plaintiff A.Z., born February 13, 2002, are the natural daughters of Jose Zarate and Maricela
15
Zarate. (Id. at ¶ 5.) N.Z. will reach the age of majority on December 20, 2023, and A.Z. will
16
reach the age of majority on February 13, 2020. (Id. at ¶ 23.) Pursuant to the subject policy,
17
plaintiffs are entitled to the $250,000 life benefit as the surviving issue and contingent
18
beneficiaries of the insured. (Id. at ¶ 6.)
19
On April 21, 2017, plaintiffs commenced this action for breach of contract and declaratory
20
relief in Kern County Superior Court. (Doc. No. 3-1 at Ex. A.) On or about April 26, 2017, Jose
21
G. Figueroa was appointed as guardian ad litem for N.Z. and A.Z. (Doc. No. 21 at ¶ 8.) On July
22
18, 2017, defendant removed this action from state court. (Doc. No. 1.) On August 22, 2017,
23
defendant filed an answer. (Doc. No. 10.) On February 16, 2018, the plaintiffs filed a notice of
24
settlement. (Doc. No. 13.) On April 25, 2018, the parties filed a joint motion to approve a
25
compromise of the minors’ claims in this action. (Doc. No. 17.) Following a hearing on the
26
motion, the parties filed the instant amended motion to approve a compromise of the minors’
27
claims in this action on May 30, 2018. (Doc. No. 21.)
28
/////
2
1
The terms of the settlement agreement are outlined in the amended joint motion. (Id. at ¶¶
2
9–24.) Pursuant to the settlement agreement, the parties agree that no benefit other than the death
3
benefit described herein is payable under the policy as a consequence of the death of the insured.
4
(Id. at ¶ 10.) The parties agree that the death benefit (plus any applicable interest) shall be
5
payable in equal one-third shares to each of the decedent’s surviving children, Alondra Zarate,
6
N.Z., and A.Z. (Id. at ¶ 11.) Upon defendant Farmers mailing the checks to each of the parties
7
and their counsel, Jose G. Figueroa, Alondra Zarate, and N.Z. and A.Z., through their guardian
8
Jose G. Figueroa, release any and all claims each asserted or could have asserted against Farmers
9
arising out of the term life insurance policy and are further barred from bringing further actions or
10
proceedings against Farmers with respect to those claims. (Id. at ¶ 21.)
APPROVAL OF MINORS’ COMPROMISE
11
12
This court has a duty to protect the interests of minors participating in litigation before it.
13
Salmeron v. United States, 724 F.2d 1357, 1363 (9th Cir. 1983). To carry out this duty, the court
14
must “conduct its own inquiry to determine whether the settlement serves the best interests of the
15
minor.” Robidoux v. Rosengren, 638 F.3d 1177, 1181 (9th Cir. 2011) (quoting Dacanay v.
16
Mendoza, 573 F.2d 1075, 1080 (9th Cir. 1978)); see also Salmeron, 724 F.2d at 1363 (“[A] court
17
must independently investigate and evaluate any compromise or settlement of a minor’s claims to
18
assure itself that the minor’s interests are protected, even if the settlement has been recommended
19
or negotiated by the minor’s parent or guardian ad litem.”) (citation omitted). In considering the
20
fairness of a settlement of a minor’s claim, federal courts sitting in diversity generally are guided
21
by state law.1 See Tashima & Wagstaffe, California Practice Guide: Federal Civil Procedure
22
Before Trial ¶ 15:138 (Cal. & 9th Cir. Eds. 2015) (“Federal courts generally require that claims
23
24
25
26
27
28
1
In Robidoux, the Ninth Circuit held that a district court’s inquiry into a proposed settlement
should focus solely on “whether the net amount distributed to each minor plaintiff in the
settlement is fair and reasonable, in light of the facts of the case, the minor’s specific claim, and
recovery in similar cases.” 638 F.3d at 1182. In Robidoux, however, the court expressly limited
its holding to cases involving settlement of a minor’s federal claims and declined to “express a
view on the proper approach for a federal court to use when sitting in diversity and approving the
settlement of a minor’s state law claims,” as is the case here. Id. at 1179 n.2. Accordingly, while
mindful of the decision in Robidoux, this court will place more weight on state law considerations
in evaluating the proposed settlement here.
3
1
by minors . . . be settled in accordance with applicable state law. California law requires court
2
approval of the fairness and terms of the settlement.”). A settlement for a minor and attorney’s
3
fees to represent a minor must be approved by the court. Cal. Prob. Code § 3601; Cal. Fam. Code
4
§ 6602. Reasonable expenses and court costs to be paid out of the settlement also must be
5
approved by the court. Cal. Prob. Code § 3601. In addition, the Local Rules of this court require
6
disclosures regarding the minors involved, the nature of the controversy, the manner in which the
7
compromise was determined, and whether a conflict of interest may exist between the minor and
8
her attorney. See Local Rules 202(b)–(c).
9
Here, the proposed settlement agreement provides that defendant Farmers will pay each of
10
Jose Zarate’s surviving children a one-third share of the death benefits under the life insurance
11
policy at issue. Thus, each minor will receive an amount similar to that which she could likely be
12
entitled as a beneficiary under the plan, in the absence of a qualified surviving spouse or
13
registered domestic partner. Having carefully reviewed the parties’ submissions, the court finds
14
that the proposed settlement is fair and reasonable.
In addition, the instant petition seeks an order awarding attorneys’ fees amounting to 25%
15
16
of the total recovery for each minor. It has been the practice in the Eastern District of California
17
to consider 25% of the recovery as the benchmark for attorneys’ fees in contingency cases
18
involving minors. See, e.g., Mitchell v. Riverstone Residential Grp., No. 2:11-cv-02202-LKK-
19
CKD, 2013 WL 1680641, at *2 (E.D. Cal. Apr. 17, 2013); McCue v. South Fork Union Sch. Dist.,
20
No. 1:10-cv-00233-LJO-MJS, 2012 WL 2995666, at *2 (E.D. Cal. Jul. 23, 2012); Welch v.
21
County of Sacramento, No. 2:07-cv-00794-GEB-EFB, 2008 WL 3285412, at *1 (E.D. Cal. Aug.
22
5, 2008); Red v. Merced County, No. 1:06-cv-01003-GSA, 2008 WL 1849796, at *2 (E.D. Cal.
23
Apr. 23, 2008); Schwall v. Meadow Wood Apartments, No. 2:07-cv-00014-LKK, 2008 WL
24
552432, at *1 (E.D. Cal. Feb. 27, 2008); Walden v. Moffett, No. 1:04-cv-06680-LJO-DLB, 2007
25
WL 2859790, at *3 (E.D. Cal. Sept. 20, 2007). The court finds the award of attorney’s fees
26
sought to be reasonable under the circumstances.
27
/////
28
/////
4
1
2
3
4
ORDER
Accordingly, for the reasons stated above, the court grants the amended joint motion for
minors’ compromise (Doc. No. 21), and further orders the following:
1.
Defendant Farmers shall pay each of Jose Zarate’s surviving children a one-third
5
share of the death benefit (an amount totaling $351,375.38, inclusive of interest)
6
under the life insurance policy at issue, in the manner described herein;
7
2.
8
9
Within twenty-one (21) days of the date of this order, Farmers shall issue payment
of $117,125.13 to Alondra Zarate and her attorney Craig A. Edmonston;
3.
Within twenty-one (21) days of the date of this order, Jose G. Figueroa shall
10
establish a blocked account at Chase Bank, Delano Branch located at 917 Main
11
Street, Delano, CA 93215, for the benefit of N.Z. (the “N.Z. Restricted Account”).
12
Funds deposited into the N.Z. Restricted Account shall not be withdrawn without
13
further order of this court until N.Z. reaches the age of majority;
14
4.
Within ten (10) days of establishing the N.Z. Restricted Account, Jose G. Figueroa
15
shall provide Farmers, Craig A. Edmonston, Esq., and the court with the exact
16
name of the account holder for the N.Z. Restricted Account;
17
5.
Within twenty-one (21) days of receipt by Farmers of the exact name of the
18
account holder for the N.Z. Restricted Account, Farmers shall mail a check in the
19
amount of $87,523.85, which includes 1/3 of the applicable interest accrued on the
20
total Death Benefit, payable to “[N.Z.], a minor” to Craig A. Edmonston, Esq.
21
(The referenced $87,523.85 figure represents N.Z.’s 1/3 share of the Death
22
Benefit, plus interest ($117,125.13) less her attorney’s 25% contingency fee and
23
$320.00 in costs. These attorneys’ fees and costs are separately payable to Craig
24
A. Edmonston, Esq. pursuant to a certain Contingency Agreement by and between
25
Craig A. Edmonston, Esq. and Jose G. Figueroa, and payment of same is
26
addressed below.). Within ten (10) days of receiving Farmers’ check, Craig A.
27
Edmonston, Esq. shall deposit the amount payable to N.Z. into the N.Z. Restricted
28
Account, and provide confirmation of the deposit to the court and Farmers.
5
1
6.
Within twenty-one (21) days of the date of this order, Jose G. Figueroa shall
2
establish a blocked account at Chase Bank, for the benefit of A.Z. (the “A.Z.
3
Restricted Account”). Funds deposited into the A.Z. Restricted Account shall not
4
be withdrawn without further order of this court until A.Z. reaches the age of
5
majority.
6
7.
Within ten (10) days of establishing the A.Z. Restricted Account, Jose G. Figueroa
7
shall provide Farmers, Craig A. Edmonston, Esq., and the court with the exact
8
name of the account holder for the A.Z. Restricted Account;
9
8.
Within twenty-one (21) days of receipt by Farmers of the exact name of the
10
account holder for the A.Z. Restricted Account, Farmers shall mail a check in the
11
amount of $87,523.85, which includes 1/3 of the applicable interest accrued on the
12
total Death Benefit, payable to “[A.Z.], a minor” to Craig A. Edmonston, Esq.
13
(The referenced $87,523.85 figure represents A.Z.’s 1/3 share of the Death
14
Benefit, plus interest ($117,125.13) less her attorney’s 25% contingency fee and
15
$320.00 in costs. These attorneys’ fees and costs are separately payable to Craig
16
A. Edmonston, Esq. pursuant to a certain Contingency Agreement by and between
17
Craig A. Edmonston, Esq. and Jose G. Figueroa, and payment of same is
18
addressed below.). Within ten (10) days of receiving Farmers’ check, Craig A.
19
Edmonston, Esq. shall deposit the amount payable to A.Z. into the A.Z. Restricted
20
Account, and provide confirmation of the deposit to the court and Farmers;
21
9.
Within twenty-one (21) days of (a) the date of this order, (b) receipt of a W-9 form
22
properly executed by Craig A. Edmonston; and (c) Jose G. Figueroa providing the
23
names of the account holders for the N.Z. Restricted Account and the A.Z.
24
Restricted Account, Farmers shall mail to Craig A. Edmonston, Esq., 2204
25
Truxtun Avenue, Bakersfield, CA 93301 a check payable to “Craig A. Edmonston,
26
Esq.” in the amount of $59,202.56. (The referenced $59,202.56 figure represents
27
Craig A. Edmonston, Esq.’s 25% contingency fee on the portions of the Death
28
Benefit being paid to N.Z. and A.Z., plus an aggregate of $640.00 in court costs
6
1
allocated to the minors, pursuant to certain Contingency Agreements by and
2
between Craig A. Edmonston, Esq. and Jose G. Figueroa;
3
10.
Upon Farmers mailing the checks as set forth above, Jose G. Figueroa, Alondra
4
Zarate, N.Z., a minor, and A.Z., a minor, through their guardian Jose G. Figueroa,
5
release any and all claims each asserted or could have asserted against Farmers
6
arising out of the term life insurance policy, and are forever barred and restrained
7
from bringing further actions or proceedings against Farmers as to any and all acts,
8
omissions, or occurrences transpiring prior to the date of this motion;
9
11.
Via this settlement, N.Z. and A.Z. will each receive one-third of the term life
10
insurance policy Death Benefit plus accrued interest. Minors N.Z. and A.Z.
11
through their legal guardian Jose G. Figueroa hereby release Farmers from any
12
further liability for known or unknown claims arising from the Farmers subject
13
policy. Farmers hereby in turn waives any claims for attorneys’ fees and costs;
14
12.
This case is dismissed with prejudice; and
15
13.
The Clerk of the Court is directed to close this case.
16
17
IT IS SO ORDERED.
Dated:
June 5, 2018
UNITED STATES DISTRICT JUDGE
18
19
20
21
22
23
24
25
26
27
28
7
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?