Sweet v. E-Z Distribution, LLC

Filing 80

ORDERED: 1.Plaintiff's Amended Petition to Approve Minors' Settlement and Distribution 77 is GRANTED. 2.The Settlement Agreement and Releases [71-1], [71-2], 77 and the proposed Distribution Grid [77-2] are APPROVED. 3.The pr oposed settlement and distribution is in the best interest of Plaintiff's minor children, O.B. and A.B. Plaintiff is authorized to receive and accept the settlement funds on behalf of the minor children, O.B. and A.B. Plaintiff shall place the portion of the settlement funds granted to the minor children into two separate Crummey trusts, one for each child. 4.The Clerk is DIRECTED to seal the Contingent Fee Contract (Doc. 78, Exhibit B) and the proposed Distribution Grid (Doc. 7 7-2) as they contain confidential information that should not be made public. 5.The Clerk is further DIRECTED to terminate all deadlines and motions, and to CLOSE this case. Signed by Senior Judge Charlene Edwards Honeywell on 8/28/2024. (AB)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
STEPHANIE SWEET,
Plaintiff,
v.

Case No: 8:23-cv-631-CEH-SPF

E-Z DISTRIBUTION, LLC,
NATORGANICS DISTRIBUTION &
MFG, LLC, ZACKORI R. SCALF,
FREEDOM VAPOR, LLC, and
ZACKORI R. SCALF AS TRUSTEE
FOR ECOM MANAGEMENT
TRUST,
Defendants.
ORDER
This wrongful death action is before the Court on Plaintiff's Amended Petition
to Approve Minors’ Settlement and Distribution (Doc. 77). After a hearing, the Court
denied the prior petition (Doc. 71) without prejudice and directed Plaintiff to file an
amended petition responding to concerns identified at the hearing. Doc. 75. Upon
review, for the reasons stated herein, the Court will grant the Amended Petition and
approve the proposed settlement and distribution.
BACKGROUND
This action arose out of the death of Plaintiff Stephanie Sweet’s husband Joel
Bowlsby. Doc. 77 at 2. He died on September 15, 2021, allegedly from mitragynine
toxicity caused by Defendants’ kratom products. Id. Subsequently, Plaintiff,

individually and as trustee for the heirs and next of kin of Joel Bowlsby, brought claims
for failure to warn, strict liability design and manufacturing defect, breach of warranty,
fraudulent misrepresentation, negligence, and wrongful death against Defendants.
Doc. 1. The lawsuit also asserted claims on behalf the couple’s two minor children as
beneficiaries. See Docs. 1, 77.
The parties have reached an agreement to settle all claims for $650,000. See Doc.
77-2. After accounting for a 40% contingent attorney’s fee and reimbursement of
expenses (Doc. 77 at 3), Plaintiff requests that the remaining settlement proceeds be
distributed as follows: 50% to Stephanie Sweet, Plaintiff, and 25% to each of her minor
children, O.B. and A.B. Id. at 3–4.
As part of her amended petition, Plaintiff requests that she be allowed to place
the portion of the settlement allocated to the minors into two separate “Crummey”
trusts. Id. at 4. She states that under such a trust, she would not have access to the
funds except for items for the exclusive benefit of the minors, such as education,
healthcare, maintenance, or support. Id. She states that the minors will not have access
to the funds until their respective 18th birthdays, at the earliest, and that she will
establish the trusts with the assistance of an attorney in Minnesota. Id. She indicates
that a Crummey trust is one of the few options that could be utilized for the benefit of
the minors because settlement payments will be made in installments. Id. The assets in
the trust can be invested and grow over time, and the trustee shall invest the money in
assets that are reasonable and prudent considering the minors’ current ages, ages upon
vesting, and likely future needs. Id. Plaintiff also presents an alternative option—a
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Minnesota 529 College Savings Plan, under which Plaintiff would not have access to
the funds except for educational expenses of the minors. Id. Finally, Plaintiff states she
is not aware of any conflicts of interest she may have with her minor children. Id.
DISCUSSION
Under Florida law,
Court approval of any settlement after an action involving a child is
commenced is required [under Florida law]. The settlement must be for
the best interest of the ward. When determining if a settlement agreement
should be approved, [t]he cardinal rule is that the District Court must find
that the settlement is fair, adequate, and reasonable and is not the product
of collusion of the parties. The purpose of court approval is to protect the
interests of the minor and the guardian and to ensure that any release
given on behalf of the minor is legally effective.
L.P. v. School Bd. of Brevard Cty., No. 6:19-cv-2308-RBD-GJK, 2020 WL
7079143, at *2–3 (M.D. Fla. Nov. 18, 2020) (internal citations and quotation marks
omitted), report and recommendation adopted, 2020 WL 7074537 (M.D. Fla. Dec. 3,
2020). 1 “Put another way, [t]he cardinal rule is that the District Court must find that
the settlement is fair, adequate, and reasonable and is not the product of collusion of
the parties.” Barrett v. FECNA Am., Inc., No. 6:18-cv-2200-WWB-GJK, 2020 WL
3841295, at *1 (M.D. Fla. May 20, 2020) (quoting In re Smith, 926 F.2d 1027, 1029
(11th Cir. 1991)).

See also Dortch v. Castiel Shipping Inc., No. 3:21-CV-613-BJD-JBT, 2022 WL 21737662, at *2
(M.D. Fla. Mar. 2, 2022), report and recommendation adopted, No. 3:21-CV-613-BJD-JBT,
2022 WL 21737670 (M.D. Fla. Mar. 25, 2022).
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As described below, the Court will approve the proposed settlement and
distribution as being in the best interest of minor children O.B. and A.B., as it is
“fair, adequate, and reasonable and is not the product of collusion of the parties.” See
L.P., 2020 WL 7079143, at *3.
The total settlement is for $650,000. Doc. 77-2. That amount is fair, adequate,
and reasonable given its significant size and there being no indication that it was the
product of collusion of the parties. Moreover, Plaintiff is the mother of the minor
children and shares their interest in maximizing the amount of the settlement for all of
the beneficiaries.
Plaintiff desires that the settlement (after attorney’s fees) be allocated as follows:
50% to her, and 25% to each of the minor children. Doc. 77-2. This distribution is fair
and acceptable, and in the best interest of the minor children.
Next, as was discussed at the hearing, Plaintiff has provided additional detail
on protection of the funds set aside for her minor children. Doolin v. Pneumo Abex LLC,
No. 3:16-CV-778-MMH-PDB, 2019 WL 665748, at *1 (M.D. Fla. Feb. 5, 2019).
The Court finds acceptable Plaintiff’s proposal that the settlement funds be placed in
two irrevocable Crummey Trusts, established for the sole benefit of her minor children.
Plaintiff indicates that she would not have access to the funds except for items for the
exclusive benefit of the minors, and that the funds shall be invested for the benefit of
the minors by the trustee. Doc. 77 at 4 ¶ 13. Accordingly,
IT IS ORDERED:

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1. Plaintiff’s Amended Petition to Approve Minors’ Settlement and
Distribution (Doc. 77) is GRANTED.
2. The Settlement Agreement and Releases (Docs. 71-1, 71-2, 77) and the
proposed Distribution Grid (Doc. 77-2) are APPROVED.
3. The proposed settlement and distribution is in the best interest of Plaintiff’s
minor children, O.B. and A.B. Plaintiff is authorized to receive and accept
the settlement funds on behalf of the minor children, O.B. and A.B. Plaintiff
shall place the portion of the settlement funds granted to the minor children
into two separate Crummey trusts, one for each child.
4. The Clerk is DIRECTED to seal the Contingent Fee Contract (Doc. 78,
Exhibit B) and the proposed Distribution Grid (Doc. 77-2) as they contain
confidential information that should not be made public.
5. The Clerk is further DIRECTED to terminate all deadlines and motions,
and to CLOSE this case.
DONE and ORDERED in Tampa, Florida on August 28, 2024.

Copies furnished to:
Counsel of Record

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