Ocampo v. United States of America et al

Filing 271

ORDER granting #260 Joint Motion. Signed by Magistrate Judge William V. Gallo on 8/06/2020. (djk)

Case 3:15-cv-00180-JAH-WVG Document 271 Filed 08/06/20 PageID.4057 Page 1 of 6

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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KAREN OCAMPO, as the personal
representative of SALOMON
RODRIGUEZ,

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Case No.: 15-CV-180-JAH-WVG

ORDER ON JOINT MOTION FOR
APPROVAL OF SETTLEMENT AND
DISTRIBUTION OF FUNDS

Plaintiff,

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v.

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UNITED STATES OF AMERICA; and
NATIONAL STEEL AND
SHIPBUILDING COMPANY,

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Defendants.

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Pending before the Court is the Parties’ July 9, 2020 Joint Motion for Approval of

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Settlement and Distribution of Funds (“Joint Motion”) (Doc. No. 260) and the Parties’

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responsive briefing concerning the Guardian Ad Litem’s Objection to the Parties’ Joint

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Motion (Doc. No. 265). (Doc. Nos. 269, 270.) Having reviewed and considered the Parties’

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Joint Motion and supplemental briefing on the Guardian Ad Litem’s Objection, the Court

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GRANTS the Joint Motion and ORDERS as follows.

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I.

BACKGROUND

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On June 23, 2020, Plaintiff filed a Notice of State Probate Court’s Ruling on

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Plaintiff’s Motion to Approve Settlement and Distribution of Minor’s Funds. (Doc. No.
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258.) On June 24, 2020, the Parties jointly contacted this Court’s Chambers regarding

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further case coordination, pursuant to the Court’s June 5, 2020 Order Denying Plaintiff’s

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Ex Parte Motion. (Doc. No. 257.) On June 25, 2020, the Court issued an Order Setting

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Briefing Schedule, which directed the Parties to timely file a joint motion for settlement

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approval and briefing from the Parties and the guardian ad litem in this matter, Gary D.

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Jander (“Jander”). (Doc. No. 259.) Accordingly, on July 9, 2020, the Parties filed a Joint

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Motion for Approval of Settlement and Distribution of Funds. (Doc. No. 260.)

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On July 17, 2020, Jander filed his Response to the Parties’ Joint Motion. (Doc. No.

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265.) In large part, Jander responded favorably towards the Parties’ proposed settlement

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agreement as referenced in the Joint Motion. At the same time, however, Jander objected

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to the term providing for an annuity for the minor as part of the settlement agreement. (Id.)

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In light of Jander’s objection, on July 20, 2020, the Court ordered the Parties to submit

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briefing responding to and fully addressing Jander’s objection. (Doc. No. 267.) On July

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30, 2020, Plaintiff filed his reply to Jander’s Response. (Doc. No. 269.) On August 3, 2020,

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NASSCO filed its reply to Jander’s Response. (Doc. No. 270.) In light of these procedural

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circumstances, the matter has been fully briefed and is ripe for the Court’s adjudication.

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II.

DISCUSSION

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The Court’s consideration as to the fairness of the proposed settlement agreement is

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informed by Rule 17(c) of the Federal Rules of Civil Procedure. Rule 17(c) “provides, in

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relevant part, that a district court ‘must appoint a guardian ad litem—or issue another

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appropriate order—to protect a minor or incompetent person who is unrepresented in an

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action.’” Robidoux v. Rosengren, 638 F.3d 1177, 1181 (9th Cir. 2011) (citing Fed.R.Civ.P.

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17(c)). “In the context of proposed settlements in suits involving minor plaintiffs, this

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special duty requires a district court to ‘conduct its own inquiry to determine whether the

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settlement serves the best interests of the minor.’” Id. (citing Dacanay v. Mendoza, 573

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F.2d 1075, 1080 (9th Cir.1978)); see also Salmeron v. United States, 724 F.2d 1357, 1363

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(9th Cir. 1983) (“… a court must independently investigate and evaluate any compromise

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or settlement of a minor’s claims to assure itself that the minor’s interests are protected ...
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even if the settlement has been recommended or negotiated by the minor’s parent or

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guardian ad litem”). Further, Civil Local Rule 17.1 provides “[no] action by or on behalf

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of a minor ... will be settled, compromised, voluntarily discontinued, dismissed or

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terminated without court order or judgment.” Civ. L. R. 17.1.

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The Court has reviewed the terms of the Parties’ proposed settlement agreement and

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finds it fair and reasonable under the circumstances. The incremental payments and total

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payout to the minor over the course of his life up to and including the year when he turns

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30 appear to reasonably cover present and future living costs as well as the expense of

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college tuition and related expenses. The Court agrees with Plaintiff’s assessment that “the

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minor will thus be assured a steady stream of income plus sizable lump sum payments at

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key moments during adulthood, ensuring that he has sufficient funds to cover his support,

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maintenance, and education.” (Doc. No. 269.) To that end, the Court takes the view that

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Jander’s objection to the purchase of the annuity is not well founded.

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In his Response to the Parties’ Joint Motion, Jander submits he does not believe the

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minor’s best interests are served through the annuity because it “does not take into

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consideration any potential changes in [the minor’s] life or circumstances” and, relatedly,

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“it also provides a rate of return that is potentially significantly less than the rate of return

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that could be realized from an unrestricted long-term investment.” (Doc. No. 265, ¶ 7.) In

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the same breath, Jander poses that “a more flexible investment plan would allow for any

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unforeseen circumstances, such as an illness or injury and allow some of the funds to be

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used for these purposes.” (Id., ¶ 13.) Jander fails to follow up on his propositions for

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alternative means of financing the minor’s existing and future living expenses until he

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reaches 30 years of age with any dose of clarity and, in doing so, leaves nothing more than

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speculation for the Court’s consideration. The Court cannot and will not unravel a

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settlement agreement the Parties reached following protracted litigation and through arms-

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length negotiation based on Jander’s conjecture and nothing more.

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Unlike Jander’s vague reference to “a more flexible investment plan,” the annuity

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reflected in the Parties’ proposed settlement agreement is certain and guaranteed by USAA,
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a long-established and reputed company that will act in managing the settlement funds.

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This particular term of the settlement agreement stands in stark contrast to the highly

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speculative nature of Jander’s Response to the Parties’ Joint Motion. As noted, the Court’s

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fundamental consideration here is whether the Parties’ proposed settlement agreement is

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fair and reasonable to the minor. The Joint Motion and supporting papers make this clear.

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Relatedly, the Court looks to Karen Ocampo’s (“Ocampo”) appointment as the

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minor’s representative, involvement in ongoing settlement negotiations and proceedings,

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and approval of the Parties’ proposed settlement as further reason to find the settlement

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agreement fair and reasonable. In so finding, the Court notes that the California Probate

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Code section 10552(b) expressly provides: “The personal representative has the power to

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do all of the following: …(b) Compromise or settle a claim, action, or proceeding by or for

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the benefit of, or against, the decedent, the personal representative, or the estate…” (Cal.

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Prob. Code § 10552(b).) For purposes of this litigation, the California Probate Court

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appointed Ocampo as the minor’s personal representative. Section 10552(b) proscribes

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Ocampo with full authority to approve the settlement of this litigation. Ocampo has entered

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into the settlement agreement with Defendant National Steel and Shipbuilding Company

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(“NASSCO”) on the minor’s behalf and raises no objection to any of the terms of the

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agreement after having entered into the agreement. Dumas v. Sunview Properties, 2015

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WL 1006370, at *4 (S.D. Cal., Mar. 5, 2015) (approving Parties’ proposed settlement

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agreement and “not[ing] that this settlement was negotiated during a voluntary private

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mediation session” and “the amount of money Minor T.S. will receive [is] reasonable and

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fair”). For this reason, on its face, the settlement agreement appears to have been reached

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in the best interest of the minor, given Ocampo’s representation of the minor’s interests

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throughout the course of this Action. In light of this circumstance and the others

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aforementioned, the Court GRANTS the Parties’ Joint Motion for Approval of Settlement

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Distribution and Funds in finding the settlement amount and structure to be fair, reasonable,

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and certain.

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In this vein, the only unknown here is the true value of Jander’s attorneys’ fees. At
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present, the Court is in no position to accurately ascertain the value of Jander’s attorneys’

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fees as the bulk of Jander’s involvement in this matter arose in the related state court action

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and Jander’s appearance in the federal action was for limited reasons, namely

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telephonically appearing for a roughly 30-minute conference with this Court’s Chambers

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on June 24, 2020 and preparing and filing his five (5) page July 17, 2020 Response to the

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Parties’ Joint Motion). In so observing, the Court notes Jander’s representations to

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Plaintiff’s counsel that, by the end of trial in the state-court action, Jander incurred

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$22,000.00 in attorneys’ fees yet he presently seeks to recover $36,000.00 for his work in

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this case. (Doc. No. 269, 5: 3-5.) Plaintiff now “urges the Court to cap Mr. Jander’s

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attorney fees at $25,000.00…” (Id., 5:15-17.)

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Given Plaintiff’s stipulation to a fee award of $25,000.00 to Jander, the Court is

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prepared to approve such fee award up to and including the full $25,000.00. However, to

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the extent Jander seeks to pursue any amount beyond $25,000.00, the Court ORDERS

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Jander to file all time records and accounting statements that reflect the full value of the

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fee award Jander seeks as well as a declaration attesting to the veracity of those records

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and all work Jander performed in service of this litigation. Jander shall file all documents

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as aforementioned no later than 5:00 P.M. on Friday, August 14, 2020. Should Jander

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make such filing, the Court underscores it shall not be bound to award Jander the

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$25,000.00 fee award to which Plaintiff agreed and may adjust the fee award downward as

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necessary, consistent with any and all records Jander submits to the Court.

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III.

CONCLUSION

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The Court GRANTS the Parties’ Joint Motion for Approval of Settlement and

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Distribution of Funds (Doc. No. 260) and ORDERS Jander to file, if at all, no later than

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5:00 p.m. on Friday, August 14, 2020, a declaration and accompanying supporting

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documents, including but not limited to time records and accounting statements, verifying

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the full value of all attorneys’ fees incurred in the course and scope of this litigation, in the

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event Jander seeks to recover any amount exceeding the $25,000 fee award to which

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Plaintiff has stipulated.

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IT IS SO ORDERED.
Dated: August 7, 2020

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