Chambers v. Mega Manufacturing, Inc., et al

Filing 51

ORDER granting #33 Plaintiff's Motion for Approval of a Minor's Settlement and the #44 sealed settlement and release agreement filed in this matter is hereby APPROVED. See order for further details. Signed by District Judge Martin Reidinger on 8/5/2015. (khm)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
ASHEVILLE DIVISION
CIVIL NO. 1:13-CV-232-MR-DLH

ANGELA FAYE CHAMBERS, as
Personal Representative of
Christopher Ryan Reese, deceased,

)
)
)
)
Plaintiff,
)
)
vs.
)
)
)
MEGA MANUFACTURING, INC.,
)
a Corporation, and ALLSTEEL, a
)
Corporation,
)
)
Defendants.
)
________________________________ )

ORDER APPROVING
SETTLEMENT FOR THE
BENEFIT OF MINOR

THIS MATTER is before the Court on the Plaintiff’s Motion for Approval
of a Minor’s Settlement [Doc. 33].
BACKGROUND
Plaintiff is the duly appointed Personal Representative of the Estate of
her deceased son, Christopher Ryan Reese. [Doc. 1-2]. Mr. Reese died at
his place of employment after becoming entrapped in a shear press Plaintiff
alleges was defectively designed, manufactured, and distributed by the
Defendants. [Id. at 2]. Mr. Reese died intestate and left as his sole heir his

minor child A.R.1 [Doc. 33-5 at 4 (sealed)]. Subsequent to Mr. Reese’s death,
the minor child A.R. was lawfully adopted by D.W.R. and D.L.R. [Doc. 33-3
(sealed)].
Plaintiff brought this action in the Henderson County, North Carolina,
Superior Court, on July 15, 2013, alleging the wrongful death of her son.
Defendant Mega Manufacturing, Inc. (MMI), removed Plaintiff’s action to this
Court [Doc. 1], and filed an Answer to Plaintiff’s Complaint denying any
liability for Mr. Reese’s death. [Doc. 1-3]. Defendant Allsteel failed to plead
or otherwise appear in this matter and the Clerk entered Defendant Allsteel’s
default on February 4, 2014. [Doc. 20].
On August 25, 2014, Defendant MMI notified the Court that it and
Plaintiff had reached a settlement in this matter. [Docket Sheet]. The Court
thereafter entered an Order directing the parties to file such documentation
as would be necessary to bring this matter to a close. [Doc. 30].
On November 7, 2014, Plaintiff filed a Motion for the Approval of a
Minor’s Settlement seeking a final order of approval from the Court. [Doc.
33]. Plaintiff is asking the Court to approve the confidential settlement and

1

Due to the nature of this proceeding, and because it involves a minor beneficiary, three
of the persons involved in this matter are identified through the use of pseudonyms. Filed
under seal in this matter, and incorporated herein by reference, is a “Sealed Addendum”
specifically identifying the minor child and the minor’s adoptive parents by their true
names.
2

release agreement reached between her and MMI.

The terms of the

settlement and release agreement are set forth in documents filed under seal
with the Court. [Doc. 44 (sealed)]. In short, Defendant MMI and Plaintiff
agree, by way of such settlement and release agreement, to the dismissal of
this matter with prejudice and the full release of the Defendants upon
Plaintiff’s receipt of the confidential settlement amount to be paid by
Defendant MMI to Plaintiff for the benefit of the minor child A.R.
FINDINGS OF FACT
On July 8, 2015, this matter came on for final hearing before the Court.
Present at the proceeding were counsel for the Plaintiff;2 Mr. Eric A.
Richardson, Esq., the proposed guardian ad litem of minor child A.R.; and
the adoptive parents of A.R. Prior to the hearing, the Court reviewed the
settlement and release documents and filings pertinent to this matter. During
the hearing, the Court reviewed the report of the proposed guardian ad litem,
which it directed to be filed under seal [Doc. 48 (sealed)], and addressed the
persons who were present. Based on such document review and based on
the statements of said persons, the Court makes the following FINDINGS
OF FACT:

2

Defense counsel for MMI was excused from participating in this hearing by consent of
Plaintiff’s counsel.
3

1.

At the hearing held July 8, 2015, the Court determined that Mr.

Richardson was a responsible and accountable person and fit to act as the
guardian ad litem for A.R. and that Mr. Richardson has acted in the best
interests of A.R. with respect to this litigation. Accordingly, at that time, the
Court granted Plaintiff’s Motion to Appoint Guardian Ad Litem. [Doc. 42] and
appointed Mr. Richardson as guardian ad litem for A.R. nunc pro tunc to
June 17, 2015.
2.

Mr. Richardson is an attorney, duly licensed to practice law in the

State of North Carolina. Further, he stated to this Court at the hearing held
July 8, 2015, and acknowledged that he:
(a)

has read the pleadings and settlement and release

documents filed in this matter and understands the terms thereof and that
his minor ward is the beneficiary of a settlement reached between MMI and
Plaintiff, subject to the approval by the Court.
(b)

has met with counsel for the Plaintiff with regard to the

Plaintiff’s decision to settle this matter.
(c)

has met with D.W.R. and D.L.R., the parents of minor child

A.R., regarding how A.R. may be a potential beneficiary of the settlement of
this matter.

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(d)

understands the settlement and release agreement

proposes that his minor ward receive a monetary settlement in an amount of
which he is aware.
(e)

has compiled and filed a document under seal with the

Court entitled, “Guardian Ad Litem Report.” [Doc. 48 (sealed)].
(f)

understands the settlement and release agreement

proposes that the total settlement sum for his minor ward would be disbursed
as more fully set forth in the settlement and release agreement under seal in
this matter and understands also that a portion of the total settlement sum
will go toward paying the expenses of this litigation and attorneys fees. [Id.].
(g)

has

reviewed

the

claims,

evidence,

strengths,

weaknesses, defenses, insurance coverages and coverage questions, and
that his understandings are consistent with the proffer made by the Plaintiff’s
attorneys at the hearing held in this matter, and that he understands these
issues sufficiently to make an informed determination as to the
reasonableness and fairness of the settlement for his minor ward.
(h)

believes that the proposed settlement for his minor ward is

fair and reasonable under the circumstances of this case both as to the
amount of the settlement and as to the proposed disbursement.

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(i)

understands that, if the Court approves the settlement

agreement, the monies due his minor ward will be disbursed as described in
the sealed settlement and release agreement. [Doc. 44 (sealed)].
(j)

understands that, in the event his minor ward requires

access to the funds disbursed pursuant to the settlement and release
agreement before attaining the triggering age, a general guardian (whether
the guardian ad litem, the adoptive parents or some other qualified person)
will be required to appear before the Henderson County, North Carolina,
Clerk of Court and qualify as a “General Guardian,” as that term is defined
by N.C. Gen. Stat. § 35A-1202(7). Following such qualification, Chapter 35A
of the North Carolina General Statutes will control whether, and to what
extent, such general guardian will be permitted to withdraw any funds held
pursuant to the settlement and release agreement for the well-being of his
minor ward.
(k)

understands that the monies paid pursuant to the

settlement and release agreement for the benefit of his minor ward belong
to said ward and not to him nor to the minor’s parents, and that such monies
may not be used for the typical parental expenditures such as for food,
clothing, shelter, healthcare, or other maintenance costs associated with
raising children.
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(l)

understands that, if the Court approves the settlement and

release agreement, the monies due his ward and paid pursuant to the
settlement and release agreement will terminate the claims of his minor ward
against Defendants. He understands, too, that his decision to accept the
settlement and release agreement proposed by Defendant MMI (if approved
by the Court) will bind his minor ward and said ward will be enjoined from
seeking any future redress against Defendants, pursuant to the settlement
and release agreement, based upon the acts and omissions alleged in the
Complaint against the Defendants.
3.

D.W.R. and D.L.R. are the parents of minor child A.R. Further,

they have been duly appointed by the Ninth Judicial Circuit Court, in and for
Osceola County, Florida, where they reside, as Guardians of the Property of
their child, A.R. [Doc. 38-2 (sealed)]. They stated to this Court at the hearing
held July 8, 2015, and acknowledged that they:
(a)

have read the settlement and release agreement filed in

this matter and understand the terms thereof and that their minor child is a
potential beneficiary of a settlement reached between the Plaintiff and
Defendant MMI, subject to the approval by the Court.
(b)

have met with counsel of their choice in this matter.

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(c)

understand the settlement and release

agreement

proposes that their minor child receive a monetary settlement in an amount
of which they are aware.
(d)

understand the settlement and release

agreement

proposes that the total settlement sum due their minor child would be placed
in a protected account and disbursed as more fully set forth in the settlement
and release agreement and other documents filed under seal in this matter,
and understand also that a portion of the total settlement sum will go toward
paying the expenses of this litigation and attorneys’ fees.
(e)

believe that the proposed settlement for their minor child is

fair and reasonable under the circumstances of this case both as to the
amount of the settlement and as to the proposed disbursement of the
settlement.
(f)

understand that, if the Court approves the settlement and

release agreement, the monies due their minor child will be disbursed as
described in the sealed settlement and release agreement and other sealed
documents filed herein.
(g)

understand that the monies paid pursuant to the settlement

and release agreement for the benefit of their minor child belong to said child
and not to them, and that no such monies shall be used for the typical
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parental expenditures such as for food, clothing, shelter, healthcare, or other
maintenance costs generally associated with raising children.
(h)

understand that, if the Court approves the settlement and

release agreement, the monies due their child will terminate the claims of
their minor child against Defendants.

They understand, too, that the

guardian ad litem’s decision to accept the settlement and release agreement
on behalf of their minor child proposed by Plaintiff and Defendant MMI (if
approved by the Court) will bind their minor child and said child will be
enjoined from seeking any future redress against Defendants, pursuant to
the settlement and release agreement, based upon the acts and omissions
alleged in the Complaint against the Defendants.
4.

To make a determination about the reasonableness of the

settlement and release agreement, the Court requested that the Plaintiff give
a forecast of trial evidence and provide a candid evaluation of the strengths
and weaknesses of her claims and any defenses thereto. The Plaintiff
complied with the Court’s request and proffered details surrounding the
factual and legal circumstances of this matter at the hearing held July 8,
2015, which the Court will summarize in very general terms below.
On or about October 4, 2011, Christopher Ryan Reese was an
employee of Kiln Drying Systems & Components, Inc. located in Etowah,
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North Carolina. Mr. Reese was a machinist for Kiln Drying Systems and
worked on a shear press that Plaintiff alleges was defectively designed,
engineered, manufactured, and marketed by Defendants MMI and Allsteel.
Kiln Drying Systems had purchased and installed the shear press at its
Etowah facility prior to or by June, 1999. While operating the subject shear
press, Mr. Reese became entrapped within moving parts of the shear press.
As a result, Mr. Reese sustained multi-focal traumatic brain injury with
fractures of his skull and skull base along with hemorrhaging of the mid-brain
and brain stem. Mr. Reese was immediately hospitalized following his
injuries and placed on life-support systems. On October 13, 2011, Mr. Reese
was taken off life support and passed away from his injuries.
In evaluating the provisions of the settlement and release agreement,
the Court assessed the following factors:
(a)

Claims and Defenses. Plaintiff has brought claims for relief

alleging the wrongful death of Christopher Ryan Reese.

Defendant MMI

has asserted various defenses, of particular import, the defense of the North
Carolina statute of repose. While a strong factual basis has been forecast
by Plaintiff which could support a jury verdict finding Defendant MMI liable,
an equally strong argument, as conceded by Plaintiff, has been made by

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Defendant MMI that all of Plaintiff’s claims are foreclosed by the North
Carolina statute of repose.
(b)

Insurance. Defendant MMI is covered by liability insurance

by Admiral Insurance Company and MMI’s liability insurance carrier is
amenable to settlement on the terms set forth in the settlement and release
agreement. Bridgefield Casualty Insurance Company, the carrier on the risk
for worker’s compensation injuries for Defendant MMI, has specifically
released all subrogation claims for any Worker’s Compensation lien arising
from medical expenses and benefit payments it has made or will make to the
Estate of Christopher Ryan Reese as ordered by the North Carolina
Industrial Commission [Docs. 33-5; 44 (sealed)].
5.

The minor child’s guardian ad litem has reviewed the terms of

the settlement and release agreement that must executed to bring about the
disbursement of the settlement proceeds as ordered herein and is in
agreement with the terms thereof.
6.

The minor child’s guardian ad litem agrees that the disbursement

of the settlement proceeds as ordered herein is fair and reasonable to his
minor ward both as to the amount to be paid and as to the distribution of the
proceeds thereof when considering the powers and duties imposed generally
upon guardians as set forth in N.C. Gen. Stat. § 35A-1252.
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7.

Based upon all of the foregoing, the Court finds that the

settlement and release agreement for the benefit of the minor child is fair and
reasonable under all of the circumstances of this case; that the amount to be
paid for the benefit of said minor is fair and reasonable; and that the
proposed disbursement of said proceeds is fair and reasonable.
CONCLUSIONS OF LAW
WHEREFORE, based upon the forgoing finds of fact, the Court
concludes as a matter of law that:
1.

Minors, because they are legally incompetent to transact

business or give consent for most purposes, need responsible, accountable
adults to handle property or benefits to which they are or become entitled.
N.C. Gen. Stat. § 35A-1201(a)(6). The guardian ad litem, in all respects, is
competent and able to understand the ramifications of the settlement and
release agreement, as well as the effect it would have upon his minor ward,
and is competent and able to execute his duties accordingly.
2.

The extent and amount of recovery for the minor child is fair and

reasonable and the disbursement of such as ordered herein is in the best
interests of the minor child.
3.

The disbursement of the settlement proceeds, as set forth in the

sealed settlement and release agreement, benefits the minor child by the
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way in which the funds are to be preserved. The guardian ad litem and
counsel for the Plaintiff have specifically informed the Court that all are in
agreement as to the manner of distribution set forth therein and are capable
of carrying into effect the same.
4.

The guardian ad litem has bound his minor ward herein in the

same manner as if such minor had consented to the settlement as an adult.
5.

The settlement and release agreement should be approved.
ORDER

IT IS, THEREFORE, ORDERED that:
1.

The Plaintiff’s Motion for Approval of a Minor’s Settlement [Doc.

33] is GRANTED, and the sealed settlement and release agreement [Doc.
44 (sealed)] filed in this matter is hereby APPROVED.
2.

The total settlement sum for the benefit of minor child A.R.3 shall

be paid and disbursed as set forth in Sealed Documents 44, 47 and 48 of
the Court’s Docket, all of which, if not already executed, shall be duly signed
and transmitted by Plaintiff to Defendant MMI.
3.

Within twenty-one (21) days of Defendant MMI’s receipt of this

Order and an IRS W-9 form executed on behalf of the minor child, Defendant

3

As that person is identified in the Sealed Addendum to this Order filed
contemporaneously herewith
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MMI shall effect the disbursement more fully set forth in paragraph 2
immediately above.
4.

Within seven (7) days of the disbursement of the settlement

proceeds by the Defendant MMI in accordance with this Order, counsel for
the Defendant MMI shall file with the Court a notice stating that such has
been completed. Upon the filing of such notice, the balance of this matter
shall be dismissed with prejudice as to both Defendants.
IT IS SO ORDERED.
Signed: August 5, 2015

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