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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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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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.;

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Defendants.

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AND RELATED THIRD-PARTY
CLAIMS.
----oo0oo----

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Plaintiff E.R., by and through his guardian ad litem,

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Carolyn Young, brought this action, alleging defendants Sutter

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Davis Hospital (“Sutter Davis”), Sutter Medical Group,1 and Dr.

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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.)
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Susan Maayah were negligent during E.R.’s birth.

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1.)

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amount of $875,000 and now separately move for a determination

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that 1) the settlement was made in good faith pursuant to

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California Code of Civil Procedure § 877.6 (Docket No. 78); and

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2) the proposed compromise of a disputed claim of a minor was

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proper under applicable law (Docket No. 89).

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been filed in response to Sutter Davis’s motion for determination

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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

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response to guardian ad litem Carolyn Young’s petition for

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approval of minor’s compromise with the exception of defendants

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Sutter Medical Group’s and Dr. Maayah’s objection to the payment

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of $79,500 in connection with nine retained experts.

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held a hearing on the motion and petition on March 6, 2017.

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I.

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The court

Good Faith Settlement
The court finds that the settlement was made in good

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faith based on the factors announced in Tech-Bilt, Inc. v.

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Woodward-Clyde & Associates, 38 Cal. 3d 488, 500-01 (1985)

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(holding that a court should consider, inter alia, the rough

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approximation of plaintiff’s total recovery and the settling

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party’s proportionate liability, the amount of the settlement,

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and the existence of collusion, fraud or tortious conduct aimed

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to injure the nonsettling party’s interests).

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Loan Ins. Corp. v. Butler, 904 F.2d 505, 511 (9th Cir. 1990)

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(settling party may seek a determination that a settlement was

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made in good faith under Cal. Code of Civ. Proc. § 877.6 in

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federal court).

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See Fed. Sav. &

Considering the evidence supporting an approximately
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$2.3 million total damages calculation, the evidence supporting

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Sutter Davis’s contention that its nurses were not negligent, and

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the possibility that even assuming Sutter Davis was found liable,

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the non-settling defendants could be held liable for a

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substantial portion of any recovery at trial, the $875,000

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settlement is “within the reasonable range of the settling

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tortfeasor’s proportional share of comparative liability for

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plaintiff’s injuries.”

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See Tech-Bilt, 38 Cal. 3d at 499.

Moreover, there is no suggestion of collusion or fraud.

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The fact that plaintiff is willing to accept a settlement amount

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less than what Sutter Davis might ultimately have been required

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to pay suggests that it is in the range of appropriate settlement

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amounts.

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§ 877, any party challenging a settlement bears the burden of

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establishing that the proposed settlement amount is “so far ‘out

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of the ballpark’ that the equitable objectives of § 877 are not

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satisfied.”

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06-07164, 2010 WL 3211926, at *13 (N.D. Cal. Aug. 12, 2010)

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(citing Tech-Bilt, 38 Cal. 3d at 499-500).

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even attempted to make such a showing.

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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

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objected to a motion for determination of good faith settlement.

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Under section 877.6(a)(2), “[i]f none of the nonsettling parties

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files a motion within 25 days of mailing of the notice,

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application, and proposed order, or within 20 days of personal

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service, the court may approve the settlement.”

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defendants Sutter Medical Group and Dr. Maayah received notice of

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the settlement, did not file any response to Sutter Davis’s
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Non-settling

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motion, and do not contend that the settlement was not made in

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good faith.

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In light of the above factors, the settlement between

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plaintiff and Sutter Davis Hospital was made in good faith

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pursuant to section 877.6, and the court will grant Sutter

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Davis’s motion for determination of good faith settlement.

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II.

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Minor’s Compromise
The court is familiar with the allegations in this

case, including the undisputed severe and permanent neurological

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injury suffered by plaintiff, as well as Sutter Davis’s continued

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claim that its nurses complied with the applicable standard of

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care and that nothing the nurses did contributed to plaintiff’s

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injury, and the parties’ damages estimates.

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for a substantial sum of $875,000, and the court is not certain

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that plaintiff would recover that amount against Sutter Davis if

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the case proceeded to trial, in light of the evidence supporting

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a finding of no liability, though plaintiff has produced contrary

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evidence supporting his position.

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settlement has been given to all parties.

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The settlement is

Moreover, proper notice of the

While the settlement will result in the payment of

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$175,198 in attorney’s fees to plaintiff’s counsel, it “has been

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the practice in the Eastern District of California to consider

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25% of the recovery as the benchmark for attorney’s fees in

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contingency cases involving minors.”

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Ins. Co. of Am., No. 1:15-cv-1889-DAD-JLT, 2016 WL 3538345, at *3

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(E.D. Cal. June 29, 2016) (compiling cases).

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of the total settlement allocated to attorney’s fees, which is

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below the 25% benchmark, is reasonable under the circumstances.
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See Chance v. Prudential

Thus, the portion

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Based on all of these considerations, the court finds

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that the settlement is fair and reasonable and in the best

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interests of the minor child.

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also Robidoux v. Rosengren, 638 F.3d 1177, 1179 (9th Cir. 2011)

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Accordingly, the court will approve the settlement of plaintiff’s

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claims against defendant Sutter Davis and will grant Carolyn

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Young’s petition for approval of minor’s compromise.

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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.

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IT IS FURTHER ORDERED that the settlement bars any

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claims for contribution or indemnity by co-defendants Sutter

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Medical Group or Dr. Susan Maayah or any other joint tortfeasor

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or co-obligor against Sutter Davis Hospital.

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IT IS FURTHER ORDERED that Carolyn Young’s petition for

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approval of minor’s compromise (Docket No. 89) be, and the same

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hereby is, GRANTED.

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IT IS FURTHER ORDERED that:

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1.

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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

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checks or drafts, drawn payable to the order of plaintiff’s

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guardian ad litem Carolyn Young and plaintiff’s attorney, if any,

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or directly to third parties entitled to receive payment

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identified in this order for the following items of expenses or

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damages, which are hereby authorized to be paid out of the

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proceeds of the settlement or judgment:

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(a)

Attorney’s fees in the total amount of
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$175,198 payable to Rice & Bloomfield, LLP.

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(b)

Reimbursement for medical and all other

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expenses paid by the guardian ad litem and plaintiff’s attorney

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in the total amount of $220,871.

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(c)

Medical, hospital, ambulance, nursing, and

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other like expenses payable in the total amount of $56,580

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directly to the Department of Health Care Services/Recovery

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Section, MS 4720, P.O. Box 997425, Sacramento, California 95899-

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7425.

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(d)

A check in the amount of $60,000 will be

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deposited into the Special Needs Trust for plaintiff’s immediate,

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short-term needs, as detailed in Attachment 19b(4).

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(e)

A check in the amount of $62,000 shall be

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made payable to Rice & Bloomfield, LLP, which is ordered to

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maintain that amount of the settlement funds in their Client

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Trust Account for the purpose of purchasing a handicapped-

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equipped van to allow plaintiff to be transported more

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comfortably and more conveniently by his caregivers.

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selection of that vehicle, Rice & Bloomfield, LLP, is directed to

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make a check payable to the dealer or vendor from whom that

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equipment is purchased.

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than $62,000, Rice & Bloomfield, LLP, are directed to deposit the

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unused funds into plaintiff’s trust account within 15 days of the

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purchase of the vehicle.

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(f)

Upon

Should the cost of the vehicle be less

The balance of the settlement funds,

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$300,351, will be used to purchase an annuity (structured

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settlement), as detailed in Attachment 19b(3).

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3.

The petitioner is authorized and directed to
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execute any and all documents reasonably necessary to carry out

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the terms of the settlement.

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4.

Until further order of the court, jurisdiction is

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reserved to determine a claim for a reduction of a Medi-Cal lien

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under California Welfare and Institutions Code § 14124.76 in the

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amount of $300,000.

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Dated:

March 7, 2017

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