Honorio Sanchez, et al. vs. Granite Construction Company, et al
Honorio Sanchez, et al. vs. Granite Construction Company, et al
Case Number
22CV04676
Case Type
Hearing Date / Time
Wed, 10/30/2024 - 10:00
Nature of Proceedings
Amended Petition For Approval Of Compromise Of Claim Or Action Or Disposition Of Proceeds Of Judgment For Minor Or Person With A Disability
Tentative Ruling
For Plaintiffs Teresa Sanchez and Honorio Sanchez: Paul R. Kiesel, Steven D. Archer, D. Bryan Garcia, Melanie Meneses Palmer, Kiesel Law LLP
For Plaintiff Jonathan Jair Montoya by his guardian ad litem Aida Araceli Fierros Villareal: Matthew A. Zavala, Zavala Law, PC, Ruben M. Ruiz
For Defendant and Cross-Defendant Jonathan Jair Montoya and Cross-Defendant Aida Araceli Fierros Villareal: Robert L. Reisinger, Theresa T. Nguyen, Ford, Walker, Haggerty & Behar,
For Defendants, Cross-Complainants, and Cross-Defendants Granite Construction Company and the State of California acting by and through the Department of Transportation: Thomas P. Gmelich, Patrick J. Glinka, Bradley, Gmelich & Wellerstein LLP
For Defendant, Cross-Complainant, and Cross-Defendant Alberto Santiago Sigala: Matthew P. Stone, Chris Allison, Esteban Sanchez, Stone Kalfus LLP
For Defendant, Cross-Defendant, and Cross-Complainant Commodity Trucking Acquisition, LLC: David J. Byassee, Shannon C. Lamb, Plain Legal PC
For Defendant and Cross-Defendant Banner Auto Sales: No appearance
RULING
Both matters will be called at the 10 am Calendar. No appearances at 8:30am required.
Law & Motion Matter. For all reasons discussed herein, the Court will continue the hearing on the amended petition of Aida Araceli Fierros Villareal, as guardian ad litem for Jonathan Jair Montoya, for approval of compromise of claim or action or disposition of proceeds of judgment for person with a disability to December 11, 2024. On or before November 26, 2024, petitioner shall file and serve the supplemental declaration or declarations and any necessary further documentation as required under and in accordance with this ruling.
Case Management Conference Matter. The Court intended to dismiss the action based upon the previous report by Mr. Ruiz. But on 10/23/24, Mr. Byassee informed the Court that Defendant’s Commodity Trucking Acquisition cross-complaint should not be dismissed. There are still some issues that have not been resolved. The Court set an OSC re Dismissal on the issue of the Commodity Trucking cross-complaint. At 8:30 a.m.
On 12/15/24 at the CMC the trial dates were confirmed. 8/7/24 through 9/13/24. On 4/3/24 a Notice of Settlement of the Entire Case [conditional] was filed with the dismissal promised for July 15, 2024.
On 4/9/24 the Court set 10/16/24 for dismissal. The Court noted at the CMC that Filed by counsel for Defendant Sigala reported that the parties reached a conditional global settlement. Defendant/Cross-Complainant Alberto Santiago Sigala requests that the April 12, 2024 Case Management Conference be taken off calendar. [Mr. Byassee was at the CMC.]
On 10/23/24 Mr. Byassee filed a declaration [148 pages] and now reports for the first time since 4/9/24 that Commodity is forced to maintain its Cross-Complaint against Sigala for contractual defense in relation to these consolidated civil actions. In an effort to enable the pending Sanchez and Montoya civil actions to proceed to a resolution, Commodity proposed a narrow reservation of only Commodity’s insurance carrier’s right to seek reimbursement for Commodity’s defense costs against Sigala’s insurer’s carrier, but Sigala has not agreed to this proposal. As a result, the global settlement with the Sanchez and Montoya Plaintiffs is at a standstill, because Sigala and his insurance carrier have refused to satisfy the admitted obligation of Sigala and Sigala’s insurance carrier to defend Commodity in these consolidated civil actions.
There is no Response to the new report by Commodity.
The Court will set trial dates for the issues left in the case at this CMC. Be prepared.
Background
This wrongful death action was originally filed by Plaintiffs Teresa Sanchez and Honorio Sanchez (collectively, Sanchez) on November 28, 2022. The litigation has been designated complex and consolidated with Santa Barbara Superior Court case no. 23CV02792 entitled Jonathan Montoya v. Granite Construction Company, et al. (the Montoya action), with this action designated as the lead case. (See Aug. 11 & Oct. 13, 2023, Minute Orders.)
On January 5, 2024, Sanchez filed in this action, with leave of Court, a second amended complaint (the Sanchez SAC) against Defendants Granite Construction Company (Granite), Alberto Santiago Sigala (Sigala), the State of California by and through the Department of Transportation (Caltrans), the State of California by and through the Highway Patrol (CHP), Jonathan Jair Montoya (Montoya), and Commodity Trucking Acquisition, LLC (Commodity Trucking), alleging five causes of action: (1) negligence (against Granite, Sigala, Commodity Trucking, and Montoya); (2) negligence (violation of Vehicle Code sections 21804 and 21367 (against Sigala only); (3) negligent hiring, retention, training, and supervision (against Granite and Commodity Trucking); (4) negligence/statutory liability (against Caltrans and CHP); and (5) violation of Vehicle Code section 22350 (against Montoya only). As alleged in the operative Sanchez SAC:
On March 18, 2022, at approximately 2:16 a.m., Montoya was operating a Nissan vehicle traveling southbound on U.S. Highway 101 (the roadway or subject roadway) at an excessive speed while approaching a construction site, when a vehicle operated by Sigala made an illegal U-turn from a closed center median in the construction zone where Granite was performing work, directly into the path of Montoya’s vehicle, causing Montoya’s vehicle to strike Sigala’s vehicle. (Sanchez SAC, ¶¶ 1-2, 30-32.) Montoya’s vehicle ran off the roadway, traveled down an embankment, crashed into a tree, and came to rest. (Sanchez SAC, ¶¶ 2 & 32.) Sanchez’s son, decedent Sergio Honorio Sanchez (Sergio), was a front seat passenger in Montoya’s vehicle. (Id. at ¶ 1.) (Note: Due to common familial surnames, the Court will refer to decedent by his first name to avoid confusion. No disrespect is intended.) The impact of Montoya’s vehicle with Sigala’s vehicle and the tree caused blunt force traumatic and fatal injuries to Sergio who was 21 years old at the time. (Id. at ¶¶ 3 & 33.)
The roadway, its traffic controls, and the construction zone where Granite was performing work are owned, operated, controlled, supervised, designed, and managed by Caltrans and CHP. (Sanchez SAC, ¶ 5-6, 13-14, 35.) At the time of the incident, Sigala was operating his vehicle in the course and scope of his employment with Granite and Commodity Trucking. (Id. at ¶ 30.) Sigala failed to follow requirements of the Vehicle Code, received citations for moving violations, and had caused accidents and injuries prior to the time of the incident. (Id. at ¶¶ 36-38 & 41.)
The operative first amended complaint of Montoya, by and through his guardian ad litem Aida Fierros Villareal (Villareal) (the Montoya FAC) was filed in the Montoya action on December 22, 2023, against Granite, Commodity Trucking, Sigala, Caltrans, CHP, Banner Auto Sales, and BA Auto Sales Corp. The Montoya FAC includes effectively identical or similar allegations as those described above and appearing in the Sanchez SAC, adding allegations and claims against Banner Auto Sales and BA Auto Sales Corp. with respect to the inspection, maintenance, distribution, repair, sale, or transfer of the vehicle driven by Montoya, and further alleging that as a result of the collision of Montoya’s vehicle with Sigala’s vehicle, Montoya sustained traumatic injuries and remains in a coma. (Montoya FAC, ¶ 31.)
Granite, Caltrans, and Commodity Trucking have each answered the Sanchez SAC and Montoya FAC. Sigala has answered the Sanchez SAC.
Caltrans and Granite have separately filed in the action cross-complaints against Sigala, Commodity Trucking, Montoya, Villareal, Banner Auto Sales, and BA Auto Sales Corp. Sigala has also filed a cross-complaint against Montoya, Granite, Caltrans, Villareal, Banner Auto Sales, and BA Auto Sales Corp. Commodity Trucking has filed cross-complaints against Sigala, Montoya, and Villareal.
The cross-complaint of Sigala has been dismissed without prejudice as to BA Auto Sales Corp. The default of Banner Auto Sales has been entered in the action. CHP has been dismissed from the action without prejudice.
Court records reflect that two notices of a conditional settlement of the entire action were filed by Sanchez and Montoya on, respectively, April 3 and 8, 2024.
On October 15, 2024, Villareal filed an original petition for approval of a compromise of Montoya’s claims in this action. An amended petition (the petition) for approval of a compromise of Montoya’s claims was filed by Villareal on October 22, 2024. The Court has no record of the filing of opposition to the petition by any party to this action.
Analysis
Under Code of Civil Procedure section 372, a guardian ad litem who appears for a party lacking legal capacity to make decisions is permitted to settle that party’s claim. (Code Civ. Proc., § 372, subd. (a)(3).) “[H]owever, the settlement is not final or binding until the agreement is approved by the trial Court in which the claim was brought.” (Ibid.; Carachure v. Scott (2021) 70 Cal.App.5th 16, 31.)
A petition for Court approval of a settlement brought under Code of Civil Procedure section 372, or Probate Code sections 3600 through 3613, must comply with California Rules of Court, rules 7.950 or 7.950.5, 7.951, and 7.952. (Cal Rules of Court, rule 3.1384(a).) (Note: Undesignated rule references shall be to the California Rules of Court unless otherwise indicated.) The petition must be submitted on a completed “Petition for Approval of Compromise of Claim or Action or Disposition of Proceeds of Judgment for Minor or Person With a Disability (form MC-350)”, be verified by the petitioner, and “. . . must contain a full disclosure of all information that has any bearing on the reasonableness of the compromise, covenant, settlement, or disposition.” (Cal. Rules of Court, rule 7.950.) In addition, if the petitioner has been represented by an attorney in preparing the petition, the petition must disclose the matters identified in California Rules of Court, rule 7.951(1) through (6). (Cal. Rules of Court, rule 7.951.) The petitioner and the person with a disability “must attend the hearing on the petition unless the Court for good cause dispenses with their appearance.” (Cal. Rules of Court, rule 7.952(a).)
The petition is submitted on a completed and approved form MC-350 as required under rule 7.950, and is verified by Villareal, who is the guardian ad litem and mother of Montoya. (Pet., ¶ 1.) Montoya is described as a person with a disability who is presently age 24. (Id. at ¶ 2(c) & (d).)
The petition describes the events that occurred on the roadway at 2:18 a.m. on March 18, 2022. As described in the petition, Montoya “was driving at high speed with more than double the limit of alcohol in his system” when Sigala, who was operating a dump truck on the roadway, made a U-turn in front of Montoya resulting in Montoya “clipping the back of the dump truck and losing control, eventually being shot-off into a tree.” (Pet., ¶ 5.) Montoya lost consciousness at the scene of the collision, and was transported by ambulance to Cottage Hospital where he remained for one month. (Id. at ¶ 7.) Montoya was then transported to St. Johns Pleasant Valley Hospital Subacute Unit (St. Johns) in Camarillo for long term care. (Ibid.) Montoya has not regained conscious since the accident and remains in long term care at St. Johns. (Id. at ¶¶ 7 & 8(b) & (c).) Montoya has not recovered from the effects of the injuries described in the petition, and his prognosis remains uncertain. (Id. at ¶ 7.)
Villareal submits as attachment 8 to the petition, a life care plan dated March 12, 2024, and prepared by Neil Ghodadra, M.D. (Dr. Ghodadra), who is a board certified orthopedic surgeon and certified life care planner. The life care plan describes Montoya’s injuries, current condition, and prognosis and includes a chronological synopsis of Montoya’s medical records obtained from AMR Santa Barbara County, Dignity Health St. John’s Hospital, and Cottage Health, as well as from treating physicians and other relevant medical personnel at these facilities, and which have been reviewed and considered by Dr. Ghodadra. (Pet., Attachment 8 at pp. 8-61.)
In addition, Dr. Ghodadra examined Montoya on January 29, 2024. (Pet., Attachment 8 at p. 61.) Dr. Ghodadra notes that the extrication of Montoya from his vehicle following the incident was prolonged, and that Montoya suffered significant facial trauma and was unresponsive. (Ibid.) At the subacute facility, which the Court understands to refer to St. Johns, Montoya received treatment for his injuries which also included respiratory failure, kidney failure, pneumothorax, and traumatic brain injury or TBI. (Id. at pp. 61-62.) Dr. Ghodadra notes that, during the examination, Montoya had a trach tube with secretions, a PEG tube, and flexed elbows with wrist flexion and pronation. (Id. at p. 62.) Montoya was immobile, hyper reflexic and hyper tonic with spasticity, had limited brain function with no eye tracking, was not alert or oriented, and was unable to communicate or respond to commands. (Id. at p. 62 & 64.) It is Dr. Ghodadra’s medical opinion that Montoya’s disabilities include a decreased ability to communicate and a lack of tracking with no voluntary movements, and that Montoya’s diagnostic conditions include acute respiratory failure and TBI with loss of consciousness. (Id. at p. 64.)
Dr. Ghodadra formulated a probable duration of care for Montoya which includes Dr. Ghodadra’s calculations with respect to Montoya’s average residual years of life and life expectancy. (Pet., Attachment 8 at pp. 64-67.) To formulate the duration of care and life expectancy of Montoya, Dr. Ghodadra applied his best professional efforts, considered published literature, and relied upon his education, training, skill and professional experience as a practicing medical doctor, Board Certified Orthopedic Surgeon, and Certified Life Care Planner, as well as a reasonable degree of medical probability. (Id. at p. 62.) Employing the methodology advocated by the American Academy of Physician Life Care Planners, Dr. Ghodadra states that Montoya has 20 years of life remaining, with a projected life expectancy of 43 years. (Id. at pp. 64-66.) Dr. Ghodadra included adjustments to Montoya’s life expectancy based on the impact of Montoya’s diagnostic conditions and disability, pre-existing and other comorbidities and conditions, lifestyle behaviors and mental health conditions, family health history, and any unique risk factors caused or adversely affected by Montoya’s injuries. (Id. at p. 66-67.)
Dr. Ghodadra further states that Montoya will have progressive symptoms, physical impairments, and disabilities from TBI which will require lifelong medical care. (Pet., Attachment 8 at p. 67.) Dr. Ghodadra also determined that the relevant disabilities affecting the necessity of Montoya’s future care include a decreased ability to perform or maintain traditional roles within family and other relationships and social units, a decreased ability to interact or socialize with family or friends, decreased physical function affecting a loss of vocational capacities/opportunities, a decreased ability to participate in social and personal avocational activities, decreased external mobility, and a decreased ability to perform household services and management. (Pet., Attachment 8 at pp. 91-92.) Dr. Ghodadra calculates Montoya’s probable duration of care to be 20 years. (Id. at p. 92.)
Dr. Ghodadra also performed a cost analysis to quantify the monetary value of providing Montoya with future medical goods and services to address the diagnostic conditions and consequent circumstances specified in the life care plan and further described above. (Pet., Attachment 8 at pp. 67-74.) The cost data provided in the life care plan was sourced by Dr. Ghodadra from Context4HealthCare, which Dr. Ghodadra describes as an independent third party provider of medical cost data endorsed and recommended by the Texas Medical Association and is based on the probable location of the care. (Id. at p. 71-73.) Based on Dr. Ghodadra’s analysis, it is Dr. Ghodadra’s opinion that the cost projection for Montoya’s future medical care requirements totals $14,382,470.60. (Id. at pp. 67-74 & Appendix A.) This total includes costs for routine medical and therapeutic evaluations, therapeutic modalities, diagnostic testing, equipment, aids, pharmacology, future aggressive care or surgical intervention, home care and services, labs, and for a nurse care manager. (Id. at Appendix A & Tables 1-10.)
The recommendations of Dr. Ghodadra stated in the life care plan are made with the intent of diminishing or eliminating Montoya’s physical and psychological pain and suffering, of reaching and maintaining the highest level of function given Montoya’s unique circumstances, of preventing complications to which Montoya is predisposed based on his physical and mental condition, and to afford Montoya the best possible quality of life in light of his condition. (Pet., Attachment 8 at p. 68.)
Villareal states that she has made a careful and diligent inquiry and investigation into the facts and circumstances of the accident in which Montoya was injured, the responsibility for the accident, and the nature, extent, and seriousness of Montoya’s injuries. (Pet., ¶ 9.) Villareal understands that if the compromise proposed in the petition is approved by the Court and consummated, Montoya will never be able to recover any more compensation from the settling Defendant, even if his injuries turn out to be more serious than they now appear. (Ibid.)
The amount offered in by Sigala to settle Montoya’s claim is $500,000. (Pet., ¶ 10(b).) Commodity Trucking has offered to pay the amount of $3 million and Granite has offered to pay the amount of $1.5 million to settle Montoya’s claim. (Ibid.) The net settlement proceeds will be used to purchase a structured settlement annuity and to fund a special needs trust for Montoya. (Id. at ¶ 10(c).) To settle claims arising out of the same incident that resulted in Montoya’s injuries, one or more Defendants named above have also offered to pay money to a person or persons other than Montoya, in the total amount of $8 million. (Id. at ¶ 11(b).) Villareal is not a Plaintiff in the action and does not have a claim against the recovery of Montoya other than for reimbursement of fees and expenses paid by Villareal and identified in the petition. (Id. at ¶ 11(b)(2) & (3).)
As stated in paragraph 12(a) of the petition, the medical expenses of Montoya, before any reductions total $4,957,950. These medical expenses include payments made by Medi-Cal which total $1,590,985.25. (See also Pet., ¶ 12(b)(4)(a).) Notice of the claim or action has been given to the Director of Health Care Services. (Ibid.) In full satisfaction of its lien rights, Medi-Cal has agreed to accept reimbursement in the amount of $1,166,966.86. (Id. at ¶ 12(b)(4)(c) & Attachment 12(b)4(c).)
Villareal further states that the amount claimed under statutory or contractual liens of medical service providers for payment of Montoya’s medical expenses totals $3,966.56, and these lienholders have agreed to accept the sum of $3,173.25 in full satisfaction of their lien claims. (Pet., ¶ 12(b)(5)(a)(iii).) Based on information appearing in the petition with respect to these liens, AMR is a medical service provider who furnished care and treatment to Montoya and who (1) has a lien for all or any part of the charges or (2) was paid (or will be paid from the proceeds) by Villareal, for which Villareal requests reimbursement. (Id. at ¶ 12(b)(5)(b)(i)(A).) The amount charged by AMR totals $3,966.56, and there exists a negotiated reduction of this charge in the amount of $793.31. (Id. at ¶ 12(b)(5)(b)(i)(C) & (E).) The amount to be paid to AMR from the settlement proceeds is $3,173.25. (Id. at ¶ 12(b)(5)(b)(i)(F).)
It appears to the Court that there exists either discrepancies in the amounts stated, or additional missing information with respect to the matters included, in paragraph 12. For example, the total of the lien rights with respect to amounts paid or charged by AMR is $1,170,140.11 ($1,166,966.86 + $3,173.25). This amount is identified in paragraph 12(a)(5) of the petition and which, according to Villareal, will be reimbursed from the proceeds of the settlement described in the petition. According to information appearing in the petition and further discussed above, the total amount of these liens also reflects negotiated reductions in the amount of $793.31 with respect to amounts charged by AMR and the amount of $424,018.39 with respect to medical expenses paid by Medi-Cal ($1,590,985.25 – $1,166,966.86). The total of the reductions negotiated with AMR and Medi-Cal is $424,811.70. However, Villareal states that the total of the negotiated reductions is $3,787,609.89. Villareal offers no information to explain this discrepancy.
The total amount of attorney’s fees, for which Court approval is requested, is $2 million. The declarations of Ruben M. Ruiz (Ruiz) and Matthew A. Zavala (Zavala) of Zavala Law, PC, who are co-counsel for Montoya and Villareal in this matter, are submitted as attachment 13(a) to the petition. As the information provided in each declaration is identical or nearly identical, the Court will cite primarily to the Ruiz declaration for efficiency purposes and ease of reference.
Ruiz and Zavala declare that they were retained by Montoya and Villareal on March 15, 2023, and started working on this matter the same day. (Pet. Attachment 13(a) [Ruiz & Zavala Decls.], ¶ 2.) Villareal signed a retainer agreement on March 15, 2023, which provides for contingency fees of thirty three and one-third percent if the case resolved prior to litigation, and forty percent if the case proceeded to litigation. (Id. [Ruiz Decl.] at ¶¶ 5 & 26.) Ruiz and Zavala agreed to advance all litigation costs, bearing the risk of loss of approximately $40,000 in costs. (Id. at ¶ 40.)
Ruiz states that he has represented individuals in catastrophic injury and wrongful death cases throughout California for over 25 years. (Pet., Attachment 13(a), ¶¶ 36 & 42.) Due to Ruiz’s fluency in Spanish, he was able to effectively communicate with Villareal’s spoken language and possessed knowledge and expertise in translating litigation matters notwithstanding cultural barriers or differences. (Id. at ¶ 42.)
Zavala states that he has been handling personal injury cases since 2010. (Pet., Attachment 3(a) [Zavala Decl.], ¶¶ 37 & 44.) Prior to opening his law firm in 2018, Zavala worked as an insurance defense attorney. (Id. at ¶ 44.) Zavala has tried personal injury cases to verdict and obtained large settlements on behalf of his clients. (Id. at ¶ 44.) Zavala is also a member of the Consumer Attorneys of California and Consumer Attorneys Association of Los Angeles, which are both Plaintiff-side organizations, and was named a Southern California Super Lawyer Rising Star from 2021-2023, and a Super Lawyer in 2024. (Id. at ¶ 44.)
Counsel assert that this matter was complex and that at the time of the incident at issue, Montoya was under the influence of alcohol with a blood alcohol level almost twice the legal limit for operating a vehicle and was driving a rate of approximately 75 to 90 miles per hour in a 55 mile per hour zone. (Pet., Attachment 13(a) [Ruiz Decl.], ¶ 4.) Counsel knew this case would be extremely difficult, expensive, and complicated to prosecute with a high chance of being defensed and risking losing all costs advanced on behalf of Montoya, and counsel were initially given very limited information regarding the accident that is the subject of this litigation. (Id. at ¶¶ 6-7.)
Counsel further assert that this case was highly disputed and heavily litigated with Sanchez having filed their wrongful death action over 8 months prior to counsel’s retention, in which Sanchez also named Villareal as the registered owner of the vehicle driven by Montoya. (Pet., Attachment 13(a) [Ruiz Decl.], ¶ 7(b).) Because counsel was retained 3 days prior to the expiration of the 1 year limitations period to present a government tort claim, counsel also had to act quickly to research a basis for government liability in this action, prepare the government tort claim and the application to submit a late claim, and to submit the claim on March 16, 2023. (Id. at ¶ 9.)
In addition, after obtaining a copy of the traffic collision report for the incident, counsel discovered that Montoya had been charged with manslaughter, and that the charges were ultimately dismissed without prejudice due to Montoya’s poor prognosis. (Pet., Attachment 13(a) [Ruiz Decl.], ¶ 8.) Counsel subsequently submitted public records act requests for the subject roadway which yielded hundreds of pages of documents. (Ibid.)
Counsel further state that Sigala involved his fifth amendment privilege at his deposition necessitating law and motion to discover additional details surrounding the accident. (Pet., Attachment 13(a) [Ruiz Decl.], ¶ 7(b).) Counsel’s declarations describe substantial discovery relating to numerous written requests and responses, review of a voluminous number of documents, preparation and issuance of subpoenas, organizing a medical examination of Montoya, and weekly depositions in addition to efforts to locate appropriate experts given the number of parties in this action who had previously retained experts. (Id. at ¶ 14-16 & 20.) Counsel note that upon consolidation of this action with the Montoya action, they had one year to prepare Montoya’s case for trial which necessitated that counsel decline other cases. (Id. at ¶ 13.)
Counsel also learned during their investigation of this matter that Montoya’s driver-side airbag did not deploy during the accident, necessitating extensive additional discovery to learn the identity of the seller of the vehicle because Villareal had no recollection of who sold her the vehicle on the street during Covid shutdown. (Pet., Attachment 13(a) [Ruiz Decl.], ¶ 7(b). Upon determining the identity of the seller of the vehicle driven by Montoya, counsel undertook efforts to obtain leave of Court to file a first amended complaint. (Ibid.) Counsel’s efforts also resulted in the discovery of evidence suggesting negligence on the part of Sigala, showing that Commodity Trucking was responsible for hiring Sigala, and showing a purported failure by Granite to instruct Sigala with respect to safely exiting the construction site. (Id. at ¶ 7(c).)
Counsel further note that they encountered difficulties with respect to their inability to discuss the incident with Montoya who has been in a coma since the accident. (Pet., Attachment 13(a) [Ruiz Decl.], ¶ 18.) As a result, counsel had to conduct significant social media and background investigations regarding Montoya’s activities prior to the incident. (Id. at ¶¶ 18-19.)
Counsel prepared for and attended a mediation in this matter on March 12, 2024. (Pet., Attachment 13(a) [Ruiz Decl.], ¶ 22.) According to counsel, one obstacle presented during the mediation was Sanchez’s refusal to dismiss their claims against Montoya until Sanchez received a settlement from available insurance proceeds, which would reduce the amount Montoya negotiated for and obtained at the mediation. (Id. at ¶ 23.) Notwithstanding this obstacle, counsel secured a settlement in Montoya’s favor. (Ibid.) Ruiz and Zavala also explained to Villareal that their investigation indicated liability to be adverse to Montoya resulting from Montoya’s speeding and DUI, such that proceeding forward could result in no recovery for Montoya with any jury award going to Sanchez to satisfy their claims. (Id. at ¶ 30.)
Ruiz and Zavala spent over 2000 hours researching, investigating, litigating, and negotiating the settlement, which includes time to negotiate liens and prepare the petition. (Pet., Attachment 13(a) [Ruiz Decl.], ¶ 26; [Zavala Decl.], ¶ 25.) In addition, Ruiz and Zavala consulted with Traci Kaas and Magaly Herrera from Kaas Consulting, and discussed with Villareal the options in terms of how to handle the settlement funds for Montoya. (Id. [Ruiz Decl.] at ¶ 26.) Ruiz and Zavala also advanced money for a consultation with a Benefits Specialists, after which Villareal elected to pursue a method that would allow Montoya to maintain his Medi-Cal benefits. (Id. at ¶ 26.) Accordingly, counsel retained an estate planning lawyer to prepare a special needs trust for Montoya, which Ruiz and Zavala assert will allow Montoya to continue receiving medical care through Medi-Cal. (Id. at ¶ 26.)
To date, the costs advanced by Zavala total $35,601.94, inclusive of expert costs, and costs advanced by Ruiz total $46,312.19 and include costs incurred in connection with the ordering of records from Caltrans and CHP, obtaining the traffic collision report for the subject incident, sending correspondence, Court fees including jury fees, hiring experts, and attending a mediation, among other things. (Pet., Attachment 3(a) [Ruiz Decl.], ¶ 27; [Zavala Decl.], ¶ 20 & Exh. 1.) The costs advanced by counsel total $81,914.13, as reflected in paragraph 13(b) of the petition.
Also attached to the petition is an agreement signed by Zavala, Ruiz, and Villareal on March 15, 2023 (the fee division agreement), which provides for an equal fifty percent division of fees between Zavala and Ruiz, and that the agreement will not increase attorney’s fees charged to Montoya or Villareal. (Pet., Attachment 17(a).) The fee division agreement also provides that costs advanced by counsel shall be paid entirely by either Zavala or Ruiz. (Ibid.)
A written retainer agreement between Ruiz and Montoya for legal services furnished in connection with this action is also attached to the petition. (Pet., Attachment 17(a).) Villareal signed the retainer agreement, on behalf of and as guardian ad litem for Montoya, on March 15, 2023. The retainer agreement signed by Villareal provides for the receipt by counsel of thirty-three and one-third percent of amounts paid to Montoya prior to the filing of a lawsuit, and of forty percent after the filing of a lawsuit. The retainer agreement further provides for the advancement of costs by Ruiz, and that Ruiz will be reimbursed for advanced costs against any recovery obtained in this case.
Ruiz represented Villareal in preparing the petition. (Pet., ¶ 17(a)(2).) Ruiz has not received attorney’s fees or other compensation in addition to the compensation requested in the petition, did not become concerned with this matter, directly or indirectly, at the insistence of a party against whom the claim is asserted or that party’s insurance carrier, is not representing or employed by any other party or insurance carrier involved in the matter, and does not expect to receive attorney’s fees or other compensation in addition to that requested in the petition, for services provided in connection with the claim giving rise to the petition. (Id. at ¶ 12(c)-(f).)
Upon consideration of the information offered in the Ruiz and Zavala declarations submitted in support of the petition and summarized above, as well as the terms of the retainer and fee division agreement together with the factors set forth in rule 7.955(b), the Court finds that the attorney’s fees claimed in connection with investigating and settling Montoya’s claims and the litigation costs advanced by Ruiz and Zavala are reasonable and appropriate.
Villareal also seeks the Court’s approval of a disposition of the amount of $14,879.90, to be made to Susan Katzen (Katzen) in connection with an “OBRA Special Needs Trust” (the trust). (Pet., ¶ 13(a).) Though it appears from the attachments to the petition that Katzen did or may have prepared the trust, Villareal offers no information to explain any fees owed to Katzen and does not attach a copy of any retainer agreement or invoice from Katzen. The Court will require Villareal to clarify the request for a disbursement to Katzen.
None of the medical expenses, attorney’s fees, or costs identified in petition paragraphs 12 and 13, for which reimbursement is requested, have been paid by Villareal.
In the Summary paragraph of the petition, Villareal lists gross settlement proceeds of $5 million, from which expenses totaling $3,266,934.14 will be deducted (consisting of medical expenses of $ 1,170,140.11, attorney’s fees of $2 million, and costs of $ 96,794.03), leaving a net balance of $1,733,065.86, in settlement proceeds available for Montoya. (Pet., ¶ 15).
It is the Court’s understanding based on information appearing in the petition that there is no conservatorship of Montoya’s estate. (See Pet., ¶ 18(a) & (b)), Of the net proceeds of the settlement ($1,733,065.86), Villareal requests an order directing that the amount of $1.4 million be invested in a single-premium deferred annuity subject to withdrawal only on authorization of the Court. (Id. at ¶ 18(b)(3).) The terms and conditions of the annuity are specified in attachment 18(b)(3) to the petition. Villareal further requests an order directing that the remaining balance of $333,065.86 be paid or transferred to the trustee of the trust which Villareal contends was established under to Probate Code section 3604, for the benefit of Montoya. The terms of the trust are specified in attachment 18(b)(4) to the petition. Villareal also requests that the Court order that the Medi-Cal lien be paid upon the Court’s approval of the petition.
Information appearing in attachment 18(b)(3) to the petition indicates that a monthly payment to the trust in the amount of $9,012.12 per month for 20 years will be split between Pacific Life Insurance Company (Pacific Life) and Metropolitan Tower Life Insurance Company (MetLife). Future period payments of $4,484.34 per month, commencing on February 1, 2025, will be funded by the purchase of an annuity from Pacific Life. Future period payments of $4,527.78 per month, also commencing on February 1, 2025, will be funded by the purchase of an annuity from MetLife. The total cost to purchase these annuities is $1.4 million ($700,000 to Pacific Life and $700,000 to MetLife).
Information appearing in attachment 18(b)(4) of the petition indicates that a copy of the petition has been or will be mailed to the State Director of Health Care Services, the Director of State Hospitals, and the Director of Developmental Services in Sacramento. Though Court records indicate that a copy of the petition was served on all parties to this action, and that an amended notice of the hearing on the petition was served on the State Director of Health Care Services, the Director of State Hospitals, and the Director of Developmental Services, the Court has no record showing that a copy of the petition itself was served on these entities at least 15 days before the hearing, as required under Probate Code section 3611, subdivision (c). The Court will require Villareal to submit proof that the petition itself was served in compliance with the provisions of Probate Code section 3611.
The Court has reviewed the trust which appears in attachment 18(b)(4) of the petition and finds that it satisfies the requirements of Probate Code section 3604. The Court further finds that Montoya has a disability that substantially impairs his ability to provide for his own care or custody and which constitutes a handicap, that Montoya is likely to have special needs that will not be met without the trust, and that the amount of $333,065.86 to be paid or transferred to the trust does not exceed the amount that appears reasonably necessary to meet the special needs of Montoya.
The Court further notes that Villareal requests additional orders apart from an order granting the petition, including orders transferring supervision and jurisdiction of the trust to Los Angeles County, approving the payment of interim fees to the trustee of the trust, authorizing the trustee to establish a conservatorship for the benefit of Montoya and to purchase mutual funds and bonds, requiring the trustee to provide accounts and reports, and others. To the extent Villareal requests that the Court enter orders apart from or in addition to an order granting (or, if appropriate, denying) the petition, Villareal will need to file and serve procedurally appropriate motions or other requests including, if necessary, any appropriate petitions that may be filed in probate proceedings initiated by Villareal.
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