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Everett v. Bazilme

June 26, 2007


The opinion of the court was delivered by: James Orenstein, Magistrate Judge


Plaintiff Cynthia Everett ("Everett"), acting both as the legal guardian of her infant son and as a plaintiff seeking damages for herself, filed the instant personal injury suit against defendants Faveur Bazilme and Murko Bazilme, alleging that she and her son had both been harmed as the result of an automobile accident that occurred on August 24, 2004, in Queens County, New York.*fn1 After completing discovery, the parties agreed in principle to settle the case, primarily by means of a payment by the defendants of the sum of $125,000, inclusive of attorney's fees and costs. DE 27 (Affidavit of Thomas D. Wilson) ("Wilson Aff.") ¶ 10. Pursuant to the terms of the proposed settlement, one third of the total payment would go to the plaintiff's counsel as his fee, the remainder would be deposited into a bank account for the benefit of the infant, and Everett would receive nothing for herself. Having reviewed the papers submitted in support of the proposed settlement and conducted an infant compromise hearing, I now approve the proposed settlement, including its provision for counsel's fee, as fair, reasonable, and in the best interests of the infant. See Loc. Civ. R. 83.2(a); N.Y. C.P.L.R. § 1205-08; N.Y. Jud. Law § 474.

A. Background

In her complaint, Everett alleged that her son was injured on August 24, 2005, when defendant Myrko Bazilme, driving a car jointly owned by both defendants, struck the child while the latter was riding his bicycle. Everett's son sustained a variety of injuries including a fracture of his temporal bone and a severe knee injury that required extensive surgery. See DE 27 (Hospital Reports). Further proceedings revealed that Everett's son will require further knee surgery in the future, and that there is no guarantee that he will regain the full use of the knee. Everett's claims on her own behalf arose entirely from her son's injuries, and was predicated on the loss of her son's services and her payment of his medical bills. See DE 1 (Complaint) at 2.

Discovery of the claims revealed, among other things, that the defendants were covered by an insurance policy for a total of $100,000, and that they had largely dissipated their remaining assets -- meaning that even if she secured a large judgment on her son's behalf, Everett would face significant challenges in collecting much more than the amount of the policy. Taking the latter consideration into account, as well as the substantive strengths and weaknesses of the case, the parties negotiated a proposed settlement, pursuant to which the defendants would pay a total of $125,000 in settlement of all claims in this case, representing the full amount of the insurance policy plus an additional $25,000 to be paid directly by the defendants, with all payments to be made within 21 days.*fn2 The proposed settlement also explicitly provides for the distribution of the $125,000 total as follows: Everett's attorney will receive $40,780.92 in attorney's fees and $2,657.23 in costs, leaving a balance of $81,561.85 to be paid into a bank account held by Everett for the exclusive benefit of her son until the latter achieves his eighteenth birthday. None of the settlement would go to Everett in her own right.

Pursuant to Local Civil Rule 83.2(a), and in conformity with Section 1208 of the New York Civil Practice Law and Rules, I held a hearing on June 20, 2007, to determine the reasonableness and propriety of the proposed settlement of the infant's cause of action and to determine a reasonable attorney's fee and proper expenses incurred by the plaintiff's attorney in prosecuting this action on behalf of the plaintiff. Attorney Wilson appeared before me in person, and Everett and her son appeared by telephone. In support of the proposed settlement, Wilson submitted affidavits signed by himself and Everett, respectively, along with a copy of the relevant hospital records regarding the child's treatment. Wilson explained the terms of the settlement on the record, as well as his view as to why the proposed result is a fair one. Everett indicated that she understood and agreed to the terms of the proposed settlement. I also spoke at length with Everett's son -- a process that proved challenging not only because of his age (he is ten years old) but also because of an occasionally poor connection to the mobile telephone that he and his mother were using. Although the child initially objected to the extent of Wilson's proposed fee (without providing a reason as to why he held that view), by the close of the hearing he had changed his mind and indicated that he understood and agreed to the terms of the settlement, including Wilson's request for his fee and costs.

For the reasons set out below, I find that the proposed settlement is fair and reasonable; that the provisions made for securing the funds are appropriate and will adequately protect the infant plaintiff's interests; and that the attorney's fees are also reasonable. Accordingly, I approve the proposed settlement.

B. Fairness Of The Total Settlement Amount

There is no bright-line test for concluding that a particular settlement is fair. See, e.g., Newman v. Stein, 464 F.2d 689, 692-93 (2d Cir. 1972). Rather, the court must determine whether the proposed settlement is "'fair, reasonable, and adequate' by comparing 'the terms of the compromise with the likely rewards of litigation.'" Neilson v. Colgate-Palmolive Co., 199 F.3d 642, 654 (2d Cir. 1999) (quoting Maywalt v. Parker & Parsley Petroleum Co., 67 F.3d 1072, 1078 (2d Cir. 1995)). A strong presumption exists that a settlement is fair and reasonable where "(i) the settlement is not collusive but was reached after arm's length negotiation; (ii) the proponents have counsel experienced in similar cases; [and] (iii) there has been sufficient discovery to enable counsel to act intelligently ...." Ross v. A.H. Robins Co., Inc., 700 F. Supp. 682, 683 (S.D.N.Y. 1988) (internal citations and quotation marks omitted). There is no indication of collusion in this case.*fn3 To the contrary, having overseen discovery in this case, I am confident that the infant and his counsel agreed to this settlement only after arm's-length bargaining with the defendants. I find that sufficient discovery was conducted to enable an intelligent analysis of the issues and the proposed settlement.

In considering a proposed settlement, the following factors may also be relevant:

(1) the complexity, expense and likely duration of the litigation ... ; (2) the reaction of the class to the settlement ... ; (3) the stage of the proceedings and the amount of discovery completed ... ; (4) the risks of establishing liability ... ; (5) the risks of establishing damages, ... ; (6) the risks of maintaining the class action through the trial ... ; (7) the ability of the defendants to withstand a greater judgment ... ; (8) the range of reasonableness of the settlement fund in light of the best possible recovery ... ; (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation ....

City of Detroit v. Grinnell Corp., 495 F.2d 448, 463 (2d Cir. 1974) (internal citations omitted).

In applying these factors, I am mindful that I need "'not decide the merits of the case or resolve unsettled legal questions.'" In re McDonnell Douglas Equip. Leasing Sec. Litig., 838 F. Supp. 729, 739 (S.D.N.Y. 1993) (citing Carson v. American Brands, Inc., 450 U.S. 79, 88 n.14 (1981)). Moreover, as courts have held that under New York law it should be presumed that the guardian or parent of the infant is acting in the best interests of the child and accordingly, I give deference to Everett's views regarding the fairness of the settlement. See, e.g., Sabater v. Lead Indus. Ass'n, Inc., 2001 WL 1111505, at *3-*4 (S.D.N.Y. Sept. 21, 2001); Stahl v. Rhee, 643 N.Y.S.2d 148, 153 (N.Y. App. Div. 1996) (noting that "[i]n a case where reasonable minds may legitimately differ, the judgment of the infant's natural guardian should prevail.").

Although the litigation in this case is not overly complex, it has caused, and is likely to continue to cause if not settled, a significant expense to all the parties involved. Apart from the cost of a trial, the potential cost of retaining experts on the infant plaintiff's damages and the nature of his injuries might well significantly ...

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