The opinion of the court was delivered by: Kevin Nathaniel Fox United States Magistrate Judge
REPORT and RECOMMENDATION
TO THE HONORABLE DEBORAH A. BATTS, UNITED STATES DISTRICT JUDGE
On January 17, 2008, J.A., an infant, and his mother, Tammy Atkins ("Atkins"), commenced the instant action in the New York State Supreme Court, Orange County, for damages arising from an explosion of toy gun caps, which burned J.A.'s left hand. On April 16, 2008, one of the defendants, Ja-Ru, Inc., removed the action to this court.
The parties have negotiated a settlement, in which all J.A.'s claims against the defendants would be compromised. Before the Court is Atkins' motion for leave to settle this action.
On or about July 1, 2006, Atkins purchased the wrong sized caps for J.A.'s toy cap gun from The Dollar Store in Marlboro, New York. Atkins purchased the caps in rings of eight, but J.A.'s gun held only single caps. Atkins instructed J.A. to cut the caps apart so they could be loaded into his gun. J.A., who was nine years old at the time, cut the caps apart and put them into a plastic container, where they "suddenly exploded" and burned J.A.'s left hand.
Medical records, submitted in support of the proposed settlement, show that, on July 1, 2006, J.A. was admitted to St. Luke's Cornwall Hospital ("St. Luke's"), where he received morphine intravenously for pain and soaked his left hand in sterile water. A physician, Dr. Thomas, attended to J.A. at St. Luke's and transferred him to Westchester Medical Center ("WMC") that day. Dr. Paul Kotzampaltiris examined J.A. upon his arrival at WMC and admitted him for further evaluation and treatment. On July 5, 2006, Dr. Charles A. Salzberg ("Dr. Salzberg") performed debridement surgery on J.A. to remove damaged tissue from his burnt hand. During the surgery, Dr. Salzberg decided not to pursue skin grafting. J.A. tolerated the surgery well and was discharged that day to home care.
In her supplemental affidavit, submitted in support of the proposed settlement, Atkins advises that J.A.'s left hand has healed well. J.A. does not have scarring or suffer any functional restrictions; however, his left hand causes him "some pain" in the winter and "'prunes'" more quickly than his right hand when he swims. J.A.'s left hand is slightly discolored. The discoloration is noticeable during the summer, because the injured part of his left hand does not tan like the rest of his body. Atkins reports that J.A. feels shy about the difference in appearance between his two hands, becomes upset when he sees cap guns and "occasionally dreams about the day of his injury."
The parties have negotiated a settlement after what the plaintiffs' counsel, James Alexander Burke ("Burke"), describes, in his affidavit, as "[e]xtensive" negotiations. The key terms of the proposed settlement are as follows: (1) J.A.'s claims against the defendants are compromised for the sum of $5,000*fn2 ; (2) from the $5,000, the plaintiffs' counsel, the law firm of Larkin, Axelrod, Ingrassia & Tetenbaum, LLP ("LAIT") will receive $1,097.47 for disbursements only; (3) the equitable subrogation claim asserted by Empire Blue Cross/Blue Shield/Child Health Plus ("Empire") is extinguished*fn3 ; and (4) the balance of the settlement funds -- $3,902.53 -- is to be paid directly to Atkins "jointly with an officer of the Wachovia Bank, 43 North Plank Road, Newburgh, New York" to be deposited in one or more high interest-bearing time savings certificate accounts until J.A. attains eighteen years of age.
In her affidavit, submitted in support of the proposed settlement, Atkins states that she believes the proposed settlement is fair, reasonable and in J.A.'s best interest to accept. This is so because Atkins believes: (1) the liability of the defendants in this action is "questionable"; and (2) J.A. has made "a reasonably good recovery from his injury[.]" In his affidavit, Burke states that he also believes the proposed settlement is fair and reasonable for the same reasons cited by Atkins.
On February 23, 2011, the Court held a hearing to determine the reasonableness and propriety of the proposed settlement. The Court permitted Atkins and J.A. to appear at the hearing telephonically, owing to the financial burden they faced to attend in-person. At the hearing, Atkins informed the Court that she did not have the names of all physicians who treated J.A. at St. Luke's and WMC. Atkins stated that J.A. did not have full use of his left hand for "a few months" after his burn, but was not employed at the time he sustained his injury. Additionally, Atkins explained that she did not consider any vehicles for investing J.A.'s settlement monies other than the time savings certificate accounts in the proposed settlement. During the hearing, the Court asked J.A. how the burn had affected him. J.A. replied that the burn "hurt a lot" and that "it makes [him] ...