Case Number: BC446933    Hearing Date: September 04, 2014    Dept: 1

#1 – Gonzalez, et al. v. Kler, et al. (BC 446 933)

This apartment inhabitability case was filed on October 5, 2010 against the owners (Baldev Kler and Daljit Kler) and management company (PAMA Management) of the subject buildings. The original 47 named plaintiffs (28 adults and 19 minor children), all residents of the apartment projects located at 624, 632, 674, and 686 Abbey Lane in Pomona, alleged that the projects were infested with cockroaches and mold and were otherwise defective (e.g., had inoperable heaters, inadequate hot water, inoperable or missing smoke detectors). On March 24, 2011, Department 1 transferred the case from Department 33 of the Central Judicial District to the East Judicial District, the Pomona courthouse, under the then-effective mandatory filing requirement of LASC Local Rule 2.0(b)(1), which obligated the Plaintiffs to litigate the case in that district. On September 22, 2011 Plaintiffs filed a First Amended Complaint that added 208 additional plaintiffs (adults and minor children), all tenants of apartment projects located at 6617-6623 Fulton Avenue in Van Nuys and 12836-12912 Dalewood Street in Baldwin Park. On December 12, 2011, Judge Peter J. Meeka of Department O consolidated this case with four unlawful detainer cases filed on August 23, 2011 by this case’s defendant PAMA Management. against certain plaintiffs in this case (case numbers 11U01122, 11U01123, 11U01124, and 11U01129), with this case named the lead case. Various settlement efforts ensued, and in April 2012 defendants’ insurers settled with a majority of the 256 plaintiffs, leaving 121 plaintiffs in the case (70 adults and 51 minor children). On December 12, 2012, Judge Thomas C. Falls of Department O issued an order at the direction of Department 1 reassigning the case for trial to long-cause Department 89 in the Central Judicial District. Trial in that department was initially scheduled for September 4, 2013, continued to January 21, 2014, and ultimately taken off calendar pursuant to the Notice of Settlement of Entire Case filed on July 31, 2013.

On August 1, 2014 Judge William A. MacLaughlin of Department 89 ordered the case transferred to Department 1 for hearings on the petitions for minor’s compromise of claims. Plaintiffs now seek court approval of the $150.00 settlement negotiated on behalf of each of the case’s remaining 51 minors, as follows:

Petitions of Janette Esquivel to approve compromise of claims of minors Brian Esquivel and Alessandra Esquivel; Petition of Jazmin Castillo to approve compromise of claims of minor Adrian Vega; Petitions of Maria Betancourt to approve compromise of claims of minors Yuritzi Betancourt and Cesar Betancourt; Petitions of Araceli Beltran to approve compromise of claims of minors Nicole Aguero and Karen Aguero; Petitions of Erika Banuelos to approve compromise of claims of minors Melissa Lopez, Emily Lopez, and Edgar Mendez; Petitions of Rufina Aviles to approve compromise of claims of minors Ulisa Marcelino and Omar Marcelino; Petitions of Lizbeth Alvarez to approve compromise of claims of minors Zeus Garcia and Nahomi Alvarez; Petition of Vilmarie Montalvo to approve compromise of claims of minor Madison Martinez; Petitions of Marisol Martinez to approve compromise of claims of minors Valeria Villalobos and Ernesto Villalobos; Petition of Lizbeth Alvarez to approve compromise of claims of minor David Rodriguez; Petition of Geraldine Acosta to approve compromise of claims of minor Desiree Gutierrez; Petitions of Maria Villamil to approve compromise of claims of minors Raul Paredes and Daniela Paredes; Petitions of Rocio Vargas to approve compromise of claims of minors Brenda Hernandez and Carlos Hernandez Jr.; Petition of Krystel Spann to approve compromise of claims of minor Leilani Sanchez; Petitions of Amalia Renteria to approve compromise of claims of minors Perla Milagros, Marlon Ruiz, and Marcos Ruiz; Petitions of Graciela Palafox to approve compromise of claims of minors America Castillo and Alexia Castillo; Petitions of Dina Nolasco to approve compromise of claims of minors Gabriela Nolasco, Daniella Nolasco, and Benito Nolasco; Petition of Marisol Martinez to approve compromise of claims of minor Alberto Villalobos Jr.; Petitions of Ismene Islas to approve compromise of claims of minors Sheila Beltran, Jonathan Islas, and Sahara Beltran; Petitions of Maria Huerta to approve compromise of claims of minors Ruby Garcia and Jesus Garcia; Petitions of Brenda Gutierrez to approve compromise of claims of minors Brandon Gutierrez and Angel Gutierrez; Petition of Ana Gutierrez to approve compromise of claims of minor Jocelyne Galvan; Petitions of Marlina Flores to approve compromise of claims of minors Rihanna Flores, Nina Flores, Marlina Flores, and Katherine Hernandez; Petitions of Janette Esquivel to approve compromise of claims of minors Jayleen Esquivel and Destiny Esquivel; and Petitions of Erica Rodriguez to approve compromise of claims of minors Isaac Mazapila, Nayeli Mazapila, Israel Mazapila, and Noemi Mazapila.

Department 1 may properly consider this matter, as the case has been transferred to Department 1 for the purposes of approving these petitions and therefore the action is pending in this department. LASC Local Rule 4.115(a)(2).

Each of the above-noted petitions has been submitted with the required forms, has been verified by the petitioner, and contains a full disclosure of all information bearing upon the reasonableness of the settlement. See CRC 7.950 and LASC Local Rule 4.115(d). No medical treatment was required or sought, and no medical bills were incurred, by the minors. See Grant Riley Declaration, ¶ 3 and individual petitions, ¶¶ 8 and 13. Each petition requests that the minor’s $150.00 settlement sum be distributed to the parent, to be held in trust until the minor reaches the age of majority. See LASC Local Rule 4.115(b)(1).

The attorney’s information and interest has been properly disclosed as required by CRC 7.951 and the attorney has submitted the requisite CRC 7.955(c) declaration addressing the CRC 7.955(b) factors for determination of a “reasonable” attorney fee. Grant Riley Declaration, ¶ 35. However, Plaintiffs’ attorney has in fact allocated his fees to the representation of the adults and not the minors. See individual petitions, ¶ 14.b. As such, the reasonableness of the attorney fees indicated is only relevant to the overall determination of the reasonableness of the settlement sums to the minors as part of the settlement funds offered by the defendants.

The case has been settled for $300,000.00; after deducting discounted costs of $212,199.00 as negotiated by Plaintiffs’ attorney, the proposed settlement is that the 121 remaining plaintiffs will split $42,650.00 ($500.00 per adult, $150.00 per minor child) and Plaintiffs’ attorney will receive $45,151.00 (a discounted rate). See Grant Riley Declaration, ¶ 4-5 and Exhibit C. The declaration acknowledges disappointment in the low settlement amount achieved by Plaintiffs’ attorney, but also expresses belief that the settlement is still in the best interest of these minors because of the defendants’ vigorous defense of the action, which resulted in the defendants soliciting inconsistent statements from the plaintiffs which would have led to, at best, problems at trial for Plaintiffs (and potentially resulting in no recovery for Plaintiffs), and which zealousness also created increasing difficulty and expense in Plaintiffs’ continuing litigation of the case. See Grant Riley Declaration, ¶ 14-19. The declaration also indicates the case was, in fact, successful in forcing the defendants to repair the subject deficiencies in the properties. Id. In light of the duration and circumstances of the case, including the facts that counsel took the case on contingency and personally advanced sizeable costs, and negotiated discounts in the costs in order to create a surplus allowing the award, to the extent the attorney’s fees sought are considered for purposes of determining the funds available to the minors, those sums appear reasonable. No objection has been received as to their sum.

The petitions establish that each of the minor children sustained only minimal physical injury (allergic reactions, skin rashes, and insect bites), did not seek or receive medical treatment as a result, and recovered completely without permanent injury. In light of this, and the apparent lack of availability of a better result for these plaintiffs, along with the fact that the subject habitability issues have apparently already been repaired, the Court is satisfied that the settlement for each minor is reasonable under the circumstances. No objection has been received as to their sum.

Accordingly, the submitted petitions are all APPROVED.

Plaintiffs additionally sought an order reducing the fee that third-party litigation lender EDS Financial, Inc. may recover on the $83,918.00 in principal advanced to plaintiffs for the litigation. According to Plaintiffs, EDS normally charges a fee equal to 100% of its advances and Plaintiffs ask the Court instead to limit that fee to $20,000.00, equaling a 10% interest rate from the date that the funds were advanced. See Grant Riley Declaration, ¶ 22-24 and Exhibit C-D. Reducing this fee from $83,918.00 to $20,000.00 – along with the other cost discounts negotiated by counsel – makes possible the requested settlement, as otherwise the costs would exceed the settlement offered. See Grant Riley Declaration, ¶ 25 and Exhibit C. Plaintiffs’ attorney declares that EDS has been served with this declaration and given notice of the hearing, and no objection has been received. See Grant Riley Declaration, ¶ 24. No objection has been received by the Court; however, Plaintiffs provide no authority for the issuance of such an order. Regardless, Plaintiffs also indicate that EDS has already agreed to this reduction. Grant Riley Declaration, ¶ 27. Accordingly, this final request is MOOT.