Case Number: EC064312 Hearing Date: August 31, 2018 Dept: NCD

tentative ruling

Calendar: 5

Date: 8/31/18

Case No: EC 064312

Case Name: Aramian v. Walters Residence Homes Inc., et al.

COMPROMISE OF PENDING ACTION

[CCP §372 CRC 3.1384]

Moving Party: Petitioner Merooj Aramian, as GAL for plaintiff Serj Aramian

SUMMARY OF FACTS:

Plaintiff Serj Aramian, through his GAL, alleges that he is a 34-year-old dependent adult suffering from multiple physical and mental disorders. In March of 2015, Merooj Aramian enlisted the assistance of defendant Los Angeles County Developmental Services Foundation dba Frank D. Lanternman Regional Center (“Regional Center”) to find a suitable home for plaintiff to help provide him care and assistance and treat his disorders. Regional Center promised to place plaintiff in a stable and healthy living environment, and had a duty to assess plaintiff’s needs and create and implement an individual program plan. Plaintiff alleges that Regional Center placed plaintiff in defendant Alicia Care Center, where he was physically attacked by another resident, Miguel, who had a history of physically attacking other residents, and that Alicia Care Center and its principal, defendant Peggy Walters, refused to provide plaintiff with immediate medical attention in an attempt to cover up the attack. It is also alleged that defendants informed Merooj Aramian that his brother had injured himself in a further attempt to cover up what had happened.

The incident was investigated by the Department of Social Services, which concluded that Alicia Care Center knew of Miguel’s history of aggressive behavior but had failed to take appropriate action, and issued several citations. Plaintiff also alleges that Alicia Care Center recklessly hired caregivers without regard to qualifications, and that the Regional Center breached its duty to properly investigate Alicia Care Center.

ANALYSIS:

Under CCP section 372, an action of a person with a disability may be compromised by a guardian ad litem “only with court approval.”

The settlement is for $175,000.00 to be paid by Peggy Walters and Walters Residence Homes.

The following issues are noted with the petition:

The attorneys’ fees and expenses sought from the settlement total $93,056.21. The fees alone of $70,000 are 40% of the settlement.

Under previous LASC Local Rule, fees could not exceed 25% without a showing of good cause. .

The California Rules of Court and Judicial Council have since expressly preempted local rules concerning this field, and the new local rules (Rule 4.115) does not address it. See CRC Rule 7.955(d).

Under CRC Rule 7.955, the court must now determine the “reasonable fees,” based on factors which must be addressed by the declaration of the attorney. CRC Rule 7.955(a)(c).

CRC Rule 7.955 provides:

“(a) Reasonable attorney’s fees

(1) In all cases under Code of Civil Procedure section 372 or Probate Code sections 3600-3601, unless the court has approved the fee agreement in advance, the court must use a reasonable fee standard when approving and allowing the amount of attorney’s fees payable from money or property paid or to be paid for the benefit of a minor or a person with a disability.

(2) The court must give consideration to the terms of any representation agreement made between the attorney and the representative of the minor or person with a disability and must evaluate the agreement based on the facts and circumstances existing at the time the agreement was made, except where the attorney and the representative of the minor or person with a disability contemplated that the attorney’s fee would be affected by later events.

(b) Factors the court may consider in determining a reasonable attorney’s fee In determining a reasonable attorney’s fee, the court may consider the following nonexclusive factors:

(1) The fact that a minor or person with a disability is involved and the circumstances of that minor or person with a disability.

(2) The amount of the fee in proportion to the value of the services performed.

(3) The novelty and difficulty of the questions involved and the skill required to perform the legal services properly.

(4) The amount involved and the results obtained.

(5) The time limitations or constraints imposed by the representative of the minor or person with a disability or by the circumstances.

(6) The nature and length of the professional relationship between the attorney and the representative of the minor or person with a disability.

(7) The experience, reputation, and ability of the attorney or attorneys performing the legal services.
(8) The time and labor required.

(9) The informed consent of the representative of the minor or person with a disability to the fee.

(10) The relative sophistication of the attorney and the representative of the minor or person with a disability.

(11) The likelihood, if apparent to the representative of the minor or person with a disability when the representation agreement was made, that the attorney’s acceptance of the particular employment would preclude other employment.

(12) Whether the fee is fixed, hourly, or contingent.

(13) If the fee is contingent:

(A) The risk of loss borne by the attorney;

(B) The amount of costs advanced by the attorney; and

(C) The delay in payment of fees and reimbursement of costs paid by the attorney.

(14) Statutory requirements for representation agreements applicable to particular cases or claims.

(c) Attorney’s declaration A petition requesting court approval and allowance of an attorney’s fee under (a) must include a declaration from the attorney that addresses the factors listed in (b) that are applicable to the matter before the court.

Here, the attorneys’ declaration explains that the legal services agreement called for payment of that percentage, and that counsel engaged in law and motion such as demurrer and motion to strike, conducted eight depositions, and reviewed voluminous materials. Counsel indicates that plaintiff was not able to retain the services of counsel on an hourly basis, and did not have the ability to advance costs, and that the case was taken over from previous counsel which found it too complex to handle, and that the element of recklessness in the dependent adult abuse claim was challenging, so that counsel undertook great risk in taking on this matter. [Berberian Decl.].

The court finds these fees justified and approves the compromise. The court finds the fees reasonable given the complexity of the issues, the amount of work put into the case and the higher risk of loss due to proof of recklessness not just negligence. The court also notes that the fee agreement called out the 40% fee.

In addition, the remaining funds, 481,943.79, are to are to be placed in a Special Needs Trust, attached as Exhibit 19(b)(4). First, it is confusing whether the petition seeks additional attorneys’ fees for the preparation of the Special Needs Trust itself, or whether these are included in the fees already sought.

In determining whether a special needs trust is appropriate, the court must find all three prongs of the test under Probate Code section 3604(b) are satisfied. The court must find:

(1) That the minor or incompetent has a disability that substantially impairs that individual’s ability to provide for the individual’s own care or custody and constitutes a substantial handicap. Section 3604(b)(1).

(2) That the minor or incompetent person is likely to have special needs that will not be met without the trust. Section 3604(b)(2).

(3) That money to be paid to the trust does not exceed the amount that appears reasonably necessary to meet the special needs of the minor or incompetent person. Section 3604(b)(3).

The petition here does not provide the court with sufficient information or evidence to make these findings at this time.

Notice of the establishment of the Trust must be given to certain state agencies, including the Department of Health Services, the Department of Mental Health and the Department of Developmental Services. Probate Code Section 3602(f). The proof of service does not show service on those entities. In establishing the trust, this court has the authority to determine the extent of court supervision, such as periodic accounts that must be filed with the court. Probate Code section 3604(a).

The terms of the proposed trust “must be reviewed by the Probate Department.” LASC Rule 4.115(c).

The Probate Department reviews the terms of the trust for compliance with LASC Local Rules 4.116, including that the trust identify the person responsible for disbursement, requires reports and accounts, and requires that the compensation of the trustee and attorney be in reasonable amounts as fixed by court order. The Probate review also confirms that the trust complies with CRC Rule 7.903.

Once this review is conducted, the court may approve or disapprove the trust. The trust is then subject to continuing jurisdiction of the court, and is subject to court supervision to the extent determined by the court. Probate Code section 3604(a).

The procedure followed here is that once the trust is established, it is subject to the jurisdiction of the Probate Court. The petitioner is accordingly ordered to take a certified copy of the order establishing the trust and open a probate case file.

The last time we did this, the Probate Department requested three weeks to review the papers, and the papers were forwarded by the clerk to the then Assistant Supervising Probate Attorney, for assignment to a Probate Attorney.

RULING:

Petition to Compromise an incompetent adult’s claim:

The court approves the attorneys’ fees and costs claims as reasonable. The court orders a total payment of $93,056.21.

In addition, the petitioner desires to place funds into a special needs trust.

The petition does not clearly seek authority to create such a Special Needs Trust, there has been no service on the Department of Health Services, the Department of Mental Health and the Department of Developmental Services, as required under Probate Code Section 3602(f). Petitioner has also failed to demonstrate that such a trust is necessary and appropriate according to the requirements of Probate Code section 3604(b). The court notes that if, after reviewing a duly noticed petition for the establishment of the special needs trust, the court finds that the incompetent adult has a disability that substantially impairs his ability to provide for his own care and is a substantial handicap (section 3604(b)(1)), that he is likely to have special needs that will not be met without the trust (section 3504(b)(2)), and that the money paid to the trust does not exceed the amount that appears reasonably necessary to meet the special needs of the incompetent person (section 3604(b)(3)), the court will approve its creation. While the petition submitted attaches a proposed trust document, the court cannot find on the current record that the incompetent adult has needs that will not be met without the trust, what those needs are and how much is necessary to meet those needs. Plaintiff must file a petition including all information required before the court can approve a compromise that places funds in a special needs trust.

Moreover, if a successful petition for the establishment of a special needs trust is filed and approved by the court, the trust instrument then “must be reviewed by the Probate Department” for compliance with LASC Rules 4.116 and 7.903. (LASC Rule 4.115(c).) This review takes approximately 4 to 6 weeks.