Westfall v. County of Stanislaus et al

Filing 79

ORDER signed by Chief District Judge Kimberly J. Mueller on 6/3/2024 GRANTING 73 Motion to Approve Settlement and Compromise of Minor Plaintiffs Claims. The settlement amount of $20,800.00 shall be made payable to Structured Assignments, SCC, to fund the future periodic payments to B.W. $7,206.24 guaranteed lump sum, payable on B.W.'s 18th birthday. $31,046.22 guaranteed lump sum, payable on B.W.'s 25th birthday. (Clemente Licea, O)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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Jeremy Westfall, et al.,

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Plaintiffs,

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No. 1:21-cv-00283-KJM-CSK
ORDER

v.
County of Stanislaus, et al.,

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Defendants.

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Plaintiff Jeremy Westfall, individually and as Guardian ad Litem for his son, minor

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plaintiff B.W., requests this court approve the settlement and compromise of B.W.’s claims. The

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court submitted the motion without oral argument as provided under Local Rule 230(g). For the

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reasons set forth below, the court grants the petition and approves the minor’s compromise.

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I.

BACKGROUND

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Plaintiff Jeremy Westfall alleges Stanislaus County social workers violated his

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constitutional rights and the rights of his child by unlawfully removing B.W. from his care and

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custody in February 2019 following the death of his other child. Second Am. Compl. (SAC)

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¶¶ 155–59, ECF No. 19; Mot. at 6, ECF No. 73. B.W., aged five years old at the time, was

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initially placed with a foster family, SAC ¶¶ 187, 193; Mot. at 6, before going to live with his

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grandfather, id. ¶ 274; Robert A. Powell Decl. ¶ 15, ECF No. 73-1, where Westfall was able to
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visit him, SAC ¶ 277. B.W. was kept from living with plaintiff for seventeen months. Id ¶¶ 189,

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209.

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In October 2023, Westfall agreed to settle the instant case. Mot. at 6. Under the

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settlement agreement, Stanislaus County agreed to pay a total of $600,000.00, inclusive of

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attorneys’ fees and costs. Id. In return, Westfall agreed to dismiss all claims against each

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defendant. Id. Westfall, in his capacity as B.W.’s Guardian ad Litem, now applies for

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compromise of the minor plaintiff’s settlement proceeds. See generally id.

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II.

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LEGAL STANDARD
District courts have a duty to protect the interests of minor litigants. See Fed. R. Civ. P.

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17(c)(2) (requiring court “appoint a guardian ad litem—or issue another appropriate order—to

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

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requires a district court to “conduct its own inquiry to determine whether the settlement serves the

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best interests of the minor.” Robidoux v. Rosengren, 638 F.3d 1177, 1181 (9th Cir. 2011)

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(quoting Dacanay v. Mendoza, 573 F.2d 1075, 1080 (9th Cir. 1978)); see also E.D. Cal. L. R.

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202(b) (“No claim by or against a minor or incompetent person may be settled or compromised

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absent an order by the Court approving the settlement or compromise.”).

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The Ninth Circuit instructs district courts to “limit the scope of their review to the

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question of whether the net amount distributed to each minor plaintiff in the settlement is fair and

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reasonable, in light of the facts of the case, the minor’s specific claim, and recovery in similar

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cases.” Robidoux, 638 F.3d at 1181–82. This requires the court to “evaluate the fairness of each

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minor plaintiff’s net recovery without regard to the proportion of the total settlement value

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designated for adult co-plaintiffs or plaintiffs’ counsel—whose interests the district court has no

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special duty to safeguard.” Id. at 1182.

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III.

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ANALYSIS
Under the settlement agreement, Stanislaus County will issue a check for $579,200.00 to

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Powell & Associates Client Trust Account. Mot. at 7. This accounts for the entire settlement

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amount minus $20,800.00, which Stanislaus County will make payable to Structure Assignments

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SCC to fund future periodic payments to B.W. on his 18th and 25th birthdays. Id. Specifically,
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B.W. will receive a guaranteed lump sum of $7,206.24 in 2031 and $31,046.22 in 2038. Id. The

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payment to Structure Assignments SCC will be made through a qualified assignment under

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Section 130 of the Internal Revenue Code. Id. The Structure Assignments SCC will make

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payments through the purchase of an annuity from Independent Life Insurance Company, which

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will make the future periodic payments. Id.

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B.W.’s father, plaintiff Jeremy Westfall, will receive $239,200.00, which is the total

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amount after applying a 50 percent contingency fee to $600,000.00 and subtracting $40,000.00

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for costs. Powell Decl. ¶ 6. Plaintiffs’ counsel declares the contingency fee request and the

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ultimate distribution of the gross settlement award are fair and reasonable. Id. ¶ 4. Specifically,

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counsel asserts the uneven distribution between B.W. and Westfall is warranted because B.W. is

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still in Westfall’s care and will benefit from his father’s net settlement proceeds. Id. ¶¶ 7, 15.

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For example, plaintiffs’ counsel states if B.W. should require therapy or treatment, B.W.’s father

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would be financially responsible. Id. ¶ 35. Counsel appears to discount B.W.’s experience and

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argue the award is reasonable because B.W. was placed in the care of his grandfather and was

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allowed regular visitation with his father. Id. ¶ 15.

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To show the requested recovery amount for B.W. is reasonable, plaintiffs’ counsel

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provides a series of case citations involving unlawful removal, as well as cases involving

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wrongful death and sex abuse. See Mot. at 8–12. As noted in Minors P.H. v. County of

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Riverside, removal cases appear less frequently. No. 15-00890, 2020 WL 10893001, at *3 (C.D.

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Cal. Mar. 30, 2020). Based on the court’s independent review of these cases, as well as others,

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the court approves the $20,800.00 award for B.W. See, e.g., Carefoot v. County of Kern, No. 17-

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00456, 2019 WL 3026989, at *3 (E.D. Cal. July 11, 2019), report and recommendation adopted,

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No. 17-00456, 2019 WL 3943970 (E.D. Cal. Aug. 21, 2019) (approving $11,500 award for a

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minor who was removed for nearly two months at three months old); McNelis v. County of El

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Dorado, No. 22-00369, 2023 WL 5758540, at *5 (E.D. Cal. Sept. 6, 2023) (collecting cases and

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noting in unlawful removal cases, recovery ranges “from $7,000 to $28,000 with an outlier of

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$130,000”). Here, while the court notes the complaint alleges B.W. was first placed into foster

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care before living with his grandfather and separated from his father for seventeen months, given
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the award falls toward the higher end of normal recovery for unlawful removal cases and there

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are no allegations B.W. was subjected to medical examinations or other invasive investigative

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procedures, the court finds the award fair and reasonable. See Robidoux, 638 F.3d at 1182.

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Despite plaintiffs’ counsel’s justifications, the court is concerned by counsel’s request for

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a 50 percent contingency fee. Mot. at 13–14; McNelis v. County of El Dorado, No. 22-00369,

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2023 WL 5758540, at *4 (E.D. Cal. Sept. 6, 2023) (articulating similar concern with a request for

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a 40 percent contingency fee by the same attorney). Absent a showing of good cause, courts in

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the Eastern District of California generally consider 25 percent of the recovery as the benchmark

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for attorney’s fees in contingency cases involving minors. See L.T. v. United States, No. 22-

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00142, 2023 WL 5434423, at *3 (E.D. Cal. Aug. 23, 2023); Mitchell v. Riverstone Residential

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Grp., No. 11-2202, 2013 WL 1680641, at *2 (E.D. Cal. Apr. 17, 2013) (collecting cases).

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Plaintiffs’ counsel states he typically applies a fee of 35 percent and contingency fees of 50

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percent are not uncommon. Powell Decl. ¶ 14. However, plaintiffs’ counsel does not explain

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why he applied 50 percent in this case instead of his normal 35 percent fee. Further, while the

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court acknowledges counsel’s experience, id. ¶ 16, and the hundreds of hours counsel and his

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staff spent litigating this matter, given the overlap between this case and Webb, counsel’s

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collective fee award of $600,000 between the two cases could be considered excessive. Compare

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Mot. (seeking 50 percent contingency fee totaling $300,000.00) with Mot., Webb v. County of

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Stanislaus, No. 19-1716 (E.D. Cal. Dec. 18, 2023), ECF No. 144 (seeking 50 percent contingency

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fee totaling $300,000.00).

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Yet, in cases involving the settlement of a minor’s federal claims, such as the instant

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action, the Ninth Circuit directs courts to focus their inquiry on “whether the net recovery of each

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minor plaintiff is fair and reasonable, without regard to the amount received by adult co-plaintiffs

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and what they have agreed to pay plaintiffs’ counsel.” Robidoux, 638 F.3d at 1179 n.2, 1182

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(finding an abuse of discretion where the district court rejected a minor’s settlement because it

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found a 56% contingency fee was excessive and unreasonable). Therefore, because the court

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finds B.W.’s award is fair and reasonable, the court grants the motion for approval of minor’s

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compromise for B.W.
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IV.

CONCLUSION

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For the reasons set forth above:

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1) The settlement of the minor plaintiff’s claims, as compromised according to the terms

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of the settlement reached among the parties, and as further described in the Ex-Parte

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Petition for Approval of Minor’s Compromise filed December 7, 2023, is approved;

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2) The settlement amount of $20,800.00 shall be made payable to Structured

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Assignments, SCC, to fund the future periodic payments to B.W. on the dates and in

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the amounts indicated below:

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a. $7,206.24 guaranteed lump sum, payable on B.W.’s 18th birthday.

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b. $31,046.22 guaranteed lump sum, payable on B.W.’s 25th birthday.

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3) The projected purchase date of the annuity policy was January 10, 2024. The delay

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in funding the annuity may result in a delay of the payment dates by an equal number

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of days, or a change in the payment amounts that shall be accurately recorded in the

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qualified assignment and release document and annuity contract without the need of

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obtaining an amended Petition or Court Order. A comparably rated life insurance

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company may be substituted to obtain the best interest rates available at the time of

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funding;

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4) Defendant Stanislaus County and/or Insurer shall make a qualified assignment under

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Section 130 of the Internal Revenue Code to Structured Assignments SCC, to fund

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the obligation to make payments through the purchase of an Annuity from

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Independent Life Insurance Company, who shall make the future periodic payments;

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5) The court approves the distribution of attorneys’ fees to plaintiffs’ counsel as set
forth in the Ex-Parte Petition for Approval of Minor’s Compromise;

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This order resolves ECF No. 73.

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IT IS SO ORDERED.

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DATED: June 3, 2024.

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