Life Insurance Company of the Southwest v. Mua et al

Filing 30

Order requiring supplement to Application for Approval of Minors' Settlement, signed by District Judge Ana de Alba on 1/17/2023. (Rosales, O.)

Case 1:22-cv-00075-ADA-EPG Document 30 Filed 01/17/23 Page 1 of 5
1
2
3
4
5
6
7

UNITED STATES DISTRICT COURT

8

EASTERN DISTRICT OF CALIFORNIA

9
10
11

LIFE INSURANCE COMPANY OF THE
SOUTHWEST,
Plaintiff in Interpleader,

12
13
14

Case No. 1:22-cv-00075-ADA-EPG

ORDER REQUIRING SUPPLEMENT TO
APPLICATION FOR APPROVAL OF
MINORS’ SETTLEMENT

v.
JOEY MUA, et al.,

(ECF No. 28)
Defendants in
Interpleader

15
16
17
I.
18
19
20
21

BACKGROUND

Plaintiff Life Insurance Company of the Southwest initiated this action on January 19,
2022, by filing a complaint in interpleader regarding the disbursement of funds from a life
insurance policy among individuals with conflicting claims to those benefits, Defendants Joey
Mua, Lillian Mua, Mainhia Vue, and Youa Lee, individually, and as the guardian ad litem for

22

Minors C.A.M. and E.K.M. (ECF No. 1). The Court’s jurisdiction over this matter is based on the

23

parties’ diversity of citizenship. (Id. at 2); see 28 U.S.C. § 1332. Among other documents

24

attached to the complaint, is a copy of an order, dated October 16, 2021, from the Merced

25

Superior Court, appointing Youa Lee as the guardian for C.A.M. and E.K.M. (ECF No. 1-8).

26

After obtaining the Court’s approval (ECF No. 18), Plaintiff deposited $266,865.05 in the

27

Court’s Registry. (ECF No. 19). With the deposit of the funds, Plaintiff was terminated as a party

28

to this action. (ECF No. 18).
1

Case 1:22-cv-00075-ADA-EPG Document 30 Filed 01/17/23 Page 2 of 5
1

On December 9, 2022, the remaining parties notified the Court that they had reached a

2

settlement following a private mediation on December 1, 2022. (ECF No. 25). On December 14,

3

2022, the parties filed a stipulation regarding their settlement, accompanied by a proposed order

4

for the distribution of the funds in the Court’s Registry. (ECF No. 27). The same day, Lee1 filed

5

an application for approval of the settlement as to the Minors. (ECF No. 28). Of the roughly

6
7
8
9

$266,865.052 in funds to be disbursed, the settlement calls for $115,000 to be disbursed to Vue,
with the remainder of the amount to be disbursed in 25% shares to Joey Mua, Lillian Mua,
C.A.M. and E.K.M. (Id. at 4). For the Minors, after the deduction of attorney fees and costs, the
remaining amounts will be placed in a blocked account for each, with no withdrawals being
permitted until they turn eighteen. (Id. at 4, 8).

10
No opposition to the application has been filed and the time to oppose the application has
11
12
13

expired. See Local Rule 230(c). On January 12, 2023, the presiding District Judge referred the
application to the undersigned for findings and recommendations or other appropriate action.
(ECF No. 29). Upon review of the application, the Court will require a supplement filing.

14

II.

LOCAL RULE 202

15

Under Local Rule 202(a), there must be (1) evidence presented regarding the appointment

16

of a representative for a minor under state law, (2) a motion to appoint a guardian ad litem, or (3)

17

a showing that no such appointment is needed to ensure adequate representation for the minor.

18

The Court concludes that this requirement has been satisfied by a copy of the order being filed in

19

the record showing that Lee has been appointed as the guardian of Minors C.A.M. and E.K.M.

20

under California law. (ECF No. 1-8).
Under Local Rule 202(b), no minor’s claim may be settled absent a court order approving

21
22

the settlement. There are two methods to obtain court approval. The first applies in cases where

23

the minor “is represented by an appointed representative pursuant to appropriate state

24

law, excepting only those actions in which the United States courts have exclusive

25
26

jurisdiction.” Local Rule 202(b)(1). In such cases, “the settlement or compromise shall first be
approved by the state court having jurisdiction over the personal representative,” and following

27
1

28

2

The application states that Lee is the Minors’ mother.
An exact amount is not available because of interest accruing on the funds.

2

Case 1:22-cv-00075-ADA-EPG Document 30 Filed 01/17/23 Page 3 of 5
1

such approval, “a copy of the order and all supporting and opposing documents . . . shall be filed

2

in the District Court with a copy to all parties and to the Judge or Magistrate Judge who may

3

either approve the settlement or compromise without hearing or calendar the matter for hearing.”

4

Id.
The second method applies in all other cases and requires a party to file a motion for

5
6
7

approval of the minor’s settlement. Local Rule 202(b)(2). The following information must be
disclosed:
the age and sex of the minor or incompetent, 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, and, if a personal injury claim, the nature
and extent of the injury with sufficient particularity to inform the Court whether
the injury is temporary or permanent.

8
9
10
11
12
Id.
13
14
15

The requirements of Local Rule 202(b) have not been met here. Because Lee has been
appointed the Minors’ guardian under California Law, and this is not an action over which the
Court has exclusive jurisdiction, see, e.g., 28 U.S.C. § 1333, Lee would be expected to first seek

16

state court approval of the Minors’ settlement under Local Rule 202(b)(1). However, Lee has not

17

submitted any state court order for the Court’s review but has instead pursued the second method

18

of court approval under Local Rule 202(b)(2) by filing an application for approval of the Minors’

19

settlement. Given these circumstances, the Court will order Lee to first provide proof of the state

20

court’s approval of the Minors’ settlement or explain why such approval is not necessary. See

21

Duwayne C. v. Merced City Sch. Dist., No. 1:19-CV-01188-BAM, 2021 WL 411110, at *2 (E.D.

22

Cal. Feb. 5, 2021) (requiring Plaintiff to address whether state court had approved a minor’s

23

settlement under Local Rule 202(b)(1) or explain why such approval was not required).

24

Next, the Court notes the following requirements of Local Rule 202(c):

25

When the minor or incompetent 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 that party; and whether the attorney has
received or expects to receive any compensation, from whom, and the amount.

26
27
28

3

Case 1:22-cv-00075-ADA-EPG Document 30 Filed 01/17/23 Page 4 of 5
1
2

Local Rule 202(c).
While the application here addresses some of these questions, such as noting that counsel

3

expects to receive compensation, it does not answer all the questions, such as the amount of

4

compensation that counsel expects to receive. (ECF No. 28, p. 7). Accordingly, the Court will

5

order Lee to specifically address all the information required by Local Rule 202(c).

6
7
8
9

III.

MISCELLANEOUS CONCERNS

Before concluding, the Court notes other concerns with Lee’s application. First, the
declaration of Attorney Joseph Fogel states that C.A.M. was born in 2008 and E.K.M. was born
in 2004. However, a state court filing attached to the complaint identifies the Minors’ birth years
as 2008 and 2006. (ECF 1-8, p. 7). Moreover, if E.K.M. was born in 2004, that would mean that

10
E.K.M. is now at least eighteen years old and thus would not be a minor under California law. See
11
12
13
14

Student A v. Berkeley Unified Sch. Dist., No. 17-CV-02510-MEJ, 2017 WL 2171254, at *2 (N.D.
Cal. May 17, 2017) (noting that, under Fed. R. Civ. P. 17(b), California law applied to
determining capacity to be sued of Plaintiffs domiciled in California and that California law
defines a minor as a person under eighteen years of age); see Cal. Fam. Code § 6500 (defining

15

minor as person under eighteen years of age). Based on these circumstances, the Court will direct

16

Lee to address E.K.M.’s age and whether E.K.M.’s settlement requires this Court’s approval.

17

Second, the Court notes that Lee has attached a state court form to the application

18

regarding the approval of the Minors’ settlement. Among other things, the form asks whether the

19

attorney for the Minors is representing any other party. (ECF No. 28-1, p. 7). The form states the

20

attorney for the Minors is not representing any other party, but that is incorrect. In addition to

21

representing the Minors, Attorney Joseph Fogel represents Youa Lee, Joey Mua, and Lillian Mua.

22

According to the complaint, all of these individuals claimed an interest in the life insurance

23

benefits at issue. (ECF No. 1, p. 1). Lee is advised that, in pursuing approval of the Minors’

24

settlement through this Court or any other court, she must ensure that she provides accurate

25
26
27

information.
IV.

ORDER

For the reasons given above, IT IS ORDERED as follows:
1. By no later than January 27, 2023, Defendant Youa Lee, shall file a supplement

28
4

Case 1:22-cv-00075-ADA-EPG Document 30 Filed 01/17/23 Page 5 of 5
1

addressing the following:

2

a. In compliance with Local Rule 202(b), she shall provide proof of the state court’s

3

approval of the Minors’ settlement or explain why such approval is not needed.

4

And if Lee intends to pursue state court approval in the future, she shall provide an

5

estimated date for when she will file a copy of the state court order for this Court’s
review under Local Rule 202(b)(1).

6

b. In compliance with Local Rule 202(c), she shall address all the requirements

7

regarding the attorney’s interests in representing the Minors.

8

c. She shall confirm E.K.M.’s date of birth. And if E.K.M. is not a minor, Lee shall

9

explain why approval of E.K.M.’s share of the settlement is required.

10
d. She shall provide corrections to any incorrect information, including the disclosure
11
12
13

of whether counsel for the Minors is representing any other party in this action.
2. Within fourteen days of the filing of Lee’s supplement, any other party may file an
opposition to the granting of the application. See Local Rule 230(c).

14
15
16
17

IT IS SO ORDERED.
Dated:

January 17, 2023

/s/
UNITED STATES MAGISTRATE JUDGE

18
19
20
21
22
23
24
25
26
27
28
5