E.R. v. Sutter Davis Hospital et al

Filing 116

MEMORANDUM and ORDER signed by Senior Judge William B. Shubb on 3/7/2017 GRANTING 78 Sutter Davis Hospital's motion for determination of good faith settlement and GRANTING 89 Carolyn Young's petition for approval of minor's compromise. (Kirksey Smith, K) (Attachment Modified on 3/7/2017) (Kirksey Smith, K).

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 13 14 15 16 17 E.R., a minor, by and through his Guardian ad Litem, CAROLYN YOUNG, Plaintiff, v. CIV. NO. 2:14-2053 WBS CKD MEMORANDUM AND ORDER RE: MOTION FOR DETERMINATION OF GOOD FAITH SETTLEMENT AND PETITION TO APPROVE MINOR’S COMPROMISE SUTTER DAVIS HOSPITAL; SUTTER WEST WOMEN’S HEALTH; SUSAN MAAYAH, M.D.; 18 Defendants. 19 20 21 AND RELATED THIRD-PARTY CLAIMS. ----oo0oo---- 22 Plaintiff E.R., by and through his guardian ad litem, 23 24 Carolyn Young, brought this action, alleging defendants Sutter 25 Davis Hospital (“Sutter Davis”), Sutter Medical Group,1 and Dr. 26 27 28 1 Sutter Medical Group is the proper name for the defendant listed as “Sutter West Women’s Health” in the complaint. (See Docket No. 75 at 2.) 1 1 Susan Maayah were negligent during E.R.’s birth. 2 1.) 3 amount of $875,000 and now separately move for a determination 4 that 1) the settlement was made in good faith pursuant to 5 California Code of Civil Procedure § 877.6 (Docket No. 78); and 6 2) the proposed compromise of a disputed claim of a minor was 7 proper under applicable law (Docket No. 89). 8 been filed in response to Sutter Davis’s motion for determination 9 of good faith settlement. (Docket No. 1- Plaintiff and Sutter Davis reached a settlement in the No opposition has No opposition has been filed in 10 response to guardian ad litem Carolyn Young’s petition for 11 approval of minor’s compromise with the exception of defendants 12 Sutter Medical Group’s and Dr. Maayah’s objection to the payment 13 of $79,500 in connection with nine retained experts. 14 held a hearing on the motion and petition on March 6, 2017. 15 I. 16 The court Good Faith Settlement The court finds that the settlement was made in good 17 faith based on the factors announced in Tech-Bilt, Inc. v. 18 Woodward-Clyde & Associates, 38 Cal. 3d 488, 500-01 (1985) 19 (holding that a court should consider, inter alia, the rough 20 approximation of plaintiff’s total recovery and the settling 21 party’s proportionate liability, the amount of the settlement, 22 and the existence of collusion, fraud or tortious conduct aimed 23 to injure the nonsettling party’s interests). 24 Loan Ins. Corp. v. Butler, 904 F.2d 505, 511 (9th Cir. 1990) 25 (settling party may seek a determination that a settlement was 26 made in good faith under Cal. Code of Civ. Proc. § 877.6 in 27 federal court). 28 See Fed. Sav. & Considering the evidence supporting an approximately 2 1 $2.3 million total damages calculation, the evidence supporting 2 Sutter Davis’s contention that its nurses were not negligent, and 3 the possibility that even assuming Sutter Davis was found liable, 4 the non-settling defendants could be held liable for a 5 substantial portion of any recovery at trial, the $875,000 6 settlement is “within the reasonable range of the settling 7 tortfeasor’s proportional share of comparative liability for 8 plaintiff’s injuries.” 9 See Tech-Bilt, 38 Cal. 3d at 499. Moreover, there is no suggestion of collusion or fraud. 10 The fact that plaintiff is willing to accept a settlement amount 11 less than what Sutter Davis might ultimately have been required 12 to pay suggests that it is in the range of appropriate settlement 13 amounts. 14 § 877, any party challenging a settlement bears the burden of 15 establishing that the proposed settlement amount is “so far ‘out 16 of the ballpark’ that the equitable objectives of § 877 are not 17 satisfied.” 18 06-07164, 2010 WL 3211926, at *13 (N.D. Cal. Aug. 12, 2010) 19 (citing Tech-Bilt, 38 Cal. 3d at 499-500). 20 even attempted to make such a showing. 21 Additionally, under California Code of Civil Procedure Tyco Thermal Controls LLC v. Redwood Indus., No. C No party here has Finally, the court considers whether any party properly 22 objected to a motion for determination of good faith settlement. 23 Under section 877.6(a)(2), “[i]f none of the nonsettling parties 24 files a motion within 25 days of mailing of the notice, 25 application, and proposed order, or within 20 days of personal 26 service, the court may approve the settlement.” 27 defendants Sutter Medical Group and Dr. Maayah received notice of 28 the settlement, did not file any response to Sutter Davis’s 3 Non-settling 1 motion, and do not contend that the settlement was not made in 2 good faith. 3 In light of the above factors, the settlement between 4 plaintiff and Sutter Davis Hospital was made in good faith 5 pursuant to section 877.6, and the court will grant Sutter 6 Davis’s motion for determination of good faith settlement. 7 II. 8 9 Minor’s Compromise The court is familiar with the allegations in this case, including the undisputed severe and permanent neurological 10 injury suffered by plaintiff, as well as Sutter Davis’s continued 11 claim that its nurses complied with the applicable standard of 12 care and that nothing the nurses did contributed to plaintiff’s 13 injury, and the parties’ damages estimates. 14 for a substantial sum of $875,000, and the court is not certain 15 that plaintiff would recover that amount against Sutter Davis if 16 the case proceeded to trial, in light of the evidence supporting 17 a finding of no liability, though plaintiff has produced contrary 18 evidence supporting his position. 19 settlement has been given to all parties. 20 The settlement is Moreover, proper notice of the While the settlement will result in the payment of 21 $175,198 in attorney’s fees to plaintiff’s counsel, it “has been 22 the practice in the Eastern District of California to consider 23 25% of the recovery as the benchmark for attorney’s fees in 24 contingency cases involving minors.” 25 Ins. Co. of Am., No. 1:15-cv-1889-DAD-JLT, 2016 WL 3538345, at *3 26 (E.D. Cal. June 29, 2016) (compiling cases). 27 of the total settlement allocated to attorney’s fees, which is 28 below the 25% benchmark, is reasonable under the circumstances. 4 See Chance v. Prudential Thus, the portion 1 Based on all of these considerations, the court finds 2 that the settlement is fair and reasonable and in the best 3 interests of the minor child. 4 also Robidoux v. Rosengren, 638 F.3d 1177, 1179 (9th Cir. 2011) 5 Accordingly, the court will approve the settlement of plaintiff’s 6 claims against defendant Sutter Davis and will grant Carolyn 7 Young’s petition for approval of minor’s compromise. 8 9 10 See E.D. Cal. L.R. 202(b); see IT IS THEREFORE ORDERED that Sutter Davis Hospital’s motion for determination of good faith settlement (Docket No. 78) be, and the same hereby is, GRANTED. 11 IT IS FURTHER ORDERED that the settlement bars any 12 claims for contribution or indemnity by co-defendants Sutter 13 Medical Group or Dr. Susan Maayah or any other joint tortfeasor 14 or co-obligor against Sutter Davis Hospital. 15 IT IS FURTHER ORDERED that Carolyn Young’s petition for 16 approval of minor’s compromise (Docket No. 89) be, and the same 17 hereby is, GRANTED. 18 IT IS FURTHER ORDERED that: 19 1. 20 21 The gross amount or value of the settlement or judgment in favor of plaintiff E.R. is $875,000. 2. Fees and expenses shall be paid by one or more 22 checks or drafts, drawn payable to the order of plaintiff’s 23 guardian ad litem Carolyn Young and plaintiff’s attorney, if any, 24 or directly to third parties entitled to receive payment 25 identified in this order for the following items of expenses or 26 damages, which are hereby authorized to be paid out of the 27 proceeds of the settlement or judgment: 28 (a) Attorney’s fees in the total amount of 5 1 $175,198 payable to Rice & Bloomfield, LLP. 2 (b) Reimbursement for medical and all other 3 expenses paid by the guardian ad litem and plaintiff’s attorney 4 in the total amount of $220,871. 5 (c) Medical, hospital, ambulance, nursing, and 6 other like expenses payable in the total amount of $56,580 7 directly to the Department of Health Care Services/Recovery 8 Section, MS 4720, P.O. Box 997425, Sacramento, California 95899- 9 7425. 10 (d) A check in the amount of $60,000 will be 11 deposited into the Special Needs Trust for plaintiff’s immediate, 12 short-term needs, as detailed in Attachment 19b(4). 13 (e) A check in the amount of $62,000 shall be 14 made payable to Rice & Bloomfield, LLP, which is ordered to 15 maintain that amount of the settlement funds in their Client 16 Trust Account for the purpose of purchasing a handicapped- 17 equipped van to allow plaintiff to be transported more 18 comfortably and more conveniently by his caregivers. 19 selection of that vehicle, Rice & Bloomfield, LLP, is directed to 20 make a check payable to the dealer or vendor from whom that 21 equipment is purchased. 22 than $62,000, Rice & Bloomfield, LLP, are directed to deposit the 23 unused funds into plaintiff’s trust account within 15 days of the 24 purchase of the vehicle. 25 (f) Upon Should the cost of the vehicle be less The balance of the settlement funds, 26 $300,351, will be used to purchase an annuity (structured 27 settlement), as detailed in Attachment 19b(3). 28 3. The petitioner is authorized and directed to 6 1 execute any and all documents reasonably necessary to carry out 2 the terms of the settlement. 3 4. Until further order of the court, jurisdiction is 4 reserved to determine a claim for a reduction of a Medi-Cal lien 5 under California Welfare and Institutions Code § 14124.76 in the 6 amount of $300,000. 7 Dated: March 7, 2017 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7

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