Caballero v. San Diego Family Housing, LLC

Opinion

1 UNITED STATES DISTRICT COURT 2 SOUTHERN DISTRICT OF CALIFORNIA 3 Victoria CABALLERO, et al., Case No.: 3:22-cv-0337-JM-AGS Plaintiffs, 4 REPORT AND RECOMMENDATION v. TO APPROVE MINORS’ 5 COMPROMISE (ECF 16) SAN DIEGO FAMILY HOUSING, LLC, 6 et al., 7 Defendants. 8 9 10 Plaintiffs, a group of families including 14 minors, seek an order approving a 11 proposed settlement of the minors’ claims. Because the settlement serves the minors’ best 12 interests, the Court recommends approving the minors’ settlement. 13 BACKGROUND 14 Plaintiffs allege that the defendant landlords failed to adequately address mold build- 15 up in plaintiffs’ military housing. (See ECF 1, at 3–4.) Plaintiffs sued for various types of 16 negligence, breach of warranty, fraud, constructive eviction, and premises liability, all 17 arising under California law. (See generally ECF 1, at 19-45.) As a result of the failure to 18 adequately clean the mold, plaintiffs claim they underwent “allergy-like symptoms,” with 19 the families variously suffering from “shortness of breath,” “constant nasal congestion,” 20 “rashes,” “migraines,” “respiratory illness,” “nausea,” “dizziness,” “body swelling,” “sore 21 throat,” and the “distress” and “worry” that come with those symptoms. (See id. at 11, 13– 22 14, 16–17, 19.) 23 The parties agreed to settle the suit for , of which the minors will each 24 receive between roughly $8,000 to $21,000. (See ECF 16, at 2–3.) From each recovery, 25 counsel will deduct 25% as fees and deduct the full amount of any costs. (Id. at 3.) And all 26 lien costs associated with the minors’ medical care will come from the settlement. (Id.) The 27 parties propose to deposit the minors’ recovery into an “interest-bearing, federally insured 28 block account” “until the minor reaches 18 years of age.” (Id. at 3–4.) 1 To fairly apportion the recovery, plaintiffs’ counsel hired a mediator, retired Judge 2 Victor Bianchini, to divvy up the proceeds to each plaintiff. Judge Bianchini apportioned 3 the total award, before attorney’s fees were reduced, with each minor receiving the 4 following: 5 Family Minor Proceeds 6 Caballero R.C. 7 Caballero Ry.C. 8 Camarlinghi G.C. 9 Camarlinghi I.C. 10 Camarlinghi H.C. 11 Camarlinghi S.C. 12 Guzman Jn.G. 13 Guzman Jv.G. 14 Guzman S.G. 15 Johnson A.J 16 Johnson L.J. 17 Kelly J.K. 18 Kelly C.K. 19 Losoya J.L. 20 21 To arrive at those apportionments, the mediator identified 22 28 1 2 Overall, the report is very detailed, 3 thorough, and thoughtful. 4 DISCUSSION 5 District courts have “a special duty” to “safeguard the interests of litigants who are 6 minors.” Robidoux v. Rosengren, 638 F.3d 1177, 1181 (9th Cir. 2011). In the settlement 7 context, that duty requires the court to “conduct its own inquiry to determine whether the 8 settlement serves the best interests of the minor.” Id. (citations omitted). The Court must 9 limit the scope of its review to “whether the net amount distributed to each minor plaintiff 10 in the settlement is fair and reasonable, in light of the facts of the case, the minors’ specific 11 claim, and recovery in similar cases.” Id. at 1182. “Most importantly, the district court 12 should evaluate the fairness of each minor plaintiff’s net recovery without regard to the 13 proportion of the total settlement value designated for adult co-plaintiffs or plaintiffs’ 14 counsel—whose interests the district court has no special duty to safeguard.” Id. 15 This Court’s Local Rules also contemplate the use of the California procedures to 16 approve minors’ compromises. See CivLR 17.1(b)(1) (“Money or property recovered by a 17 minor or incompetent California resident by settlement or judgment must be paid and 18 disbursed in accordance with California Probate Code Section 3600, et seq.”). Relevant to 19 this settlement, those sections authorize the court, if it is in the best interests of the child, 20 to order the settlement funds to be deposited “in an insured account in a financial institution 21 in this state . . . subject to withdrawal only upon the authorization of the court.” Cal. Prob. 22 Code § 3611(b) & (e). 23 The undersigned is very familiar with this case’s facts: this Court presided over this 24 case’s Early Neutral Evaluation hearing1 as well as a global settlement conference and 25 26 27 1 After the parties requested that this Court handle the minors’ compromise and waived any potential conflict arising from this Court’s participation in the Early Neutral 28 1 motion practice in a group of related cases. (See ECF 14 (ENE); see also ECF 62 in 20-cv- 2 1915-JM-AGS (global settlement conference).) At first blush, plaintiffs appear to have a 3 good case, although litigation is always uncertain. Plaintiffs also faced several costly 4 medical battles to prove causation and damages, not to mention the potential delay caused 5 by additional years of litigation. Finally, plaintiffs hired a mediator to carefully parse out 6 the award for each plaintiff, including each of the minors, which resulted in individualized 7 amounts based on each minors’ comparative injury. These facts each weigh in favor of the 8 settlement being fair and in the minors’ best interests. 9 Similarly, the proposed attorney’s fees distribution—that is, plaintiffs’ attorneys 10 taking 25% of the gross proceeds from each family—is appropriate under California law. 11 See Napier v. San Diego Cnty., No. 315CV00581CABKSC, 2017 WL 5759803, at *3 (S.D. 12 Cal. Nov. 28, 2017) (“Generally, fees in minors cases have historically been limited to 25% 13 of the gross recovery. In California, courts are required to approve the attorneys’ fees to be 14 paid for representation of a minor.”). Finally, the procedure for disposition of the funds— 15 placing them in a blocked account until the minors reach the age of majority—is consistent 16 with the California Probate Code. See Cal. Prob. Code 3611(b); (ECF 16, at 3–4). 17 The Court’s fairness determination is supported by other approved settlements in 18 similar cases. In another case settled against most of the same defendants arising out of 19 very similar mold allegations, the Court approved a net recovery of “$1,277.04” for a 20 minor. Doe v. Lincoln Mil. Prop. Mgmt. LP, No. 320CV00224GPCAHG, 2020 WL 21 5587488, at *10 (S.D. Cal. Sept. 18, 2020), adopted, No. 3:20-cv-00224-GPC-AHG, 2020 22 WL 5810168 (S.D. Cal. Sept. 30, 2020). That recovery was for a minor who, like the 23 minors here, suffered “wet coughs, eye infections, sinus infections, lethargy, and shortness 24 of breath.” See id. at *1. And in another mold-intrusion case, the Court approved the net 25 settlement of a minor’s claim for “$2,206.72.” Smith v. AMETEK, Inc., No. 320-CV-2359- 26 TWR-BLM, 2021 WL 4077580, at *1 (S.D. Cal. Sept. 8, 2021), adopted, No. 20-CV-2359 27 TWR (AGS), 2021 WL 4805532 (S.D. Cal. Oct. 14, 2021). That minor also suffered from 28 “wheezing, coughing, and allergic reactions.” Id. In this case, the minors who were | || afflicted with similar symptoms are recovering substantially more than the minors in those 2 || cases. 3 CONCLUSION 4 The settlement here is in the best interests of the children and is in line with 5 || settlements in similar cases. The distribution method is also appropriate. Accordingly, the 6 || Court recommends that: 7 1. The motion to approve the settlement (ECF 16) bb GRANTED. 8 2. The Court find that the compromise and settlement of the claims of the minors 9 be APPROVED as fair and reasonable and in the best interests of the minor plaintiffs. 10 3. The minors’ net recovery be placed in a blocked account until further Court 11 order or the minors reach the age of 18. (See ECF 16, at 3-4.) 12 4. The parties be given 30 days to file the joint motion to dismiss this action. 13 By September 23, 2022, the parties must file any objections to this report and 14 |}recommendation. See 28 U.S.C. § 636(b)(1). A party may respond to any such objection 15 || within 14 days of being served with it. See Fed. R. Civ. P. 72(b)(2). 16 Dated: September 9, 2022 17 A-—_ Hon. Andrew G. Schopler 18 United States Magistrate Judge 19 20 21 22 23 24 25 26 27 28