Opinion
Case No. CV-00-735-S-BLW.
June 30, 2003
MEMORANDUM DECISION AND FINAL ORDER
MEMORANDUM DECISION
At this time, Two Hundred Thousand Dollars ($200,000.00) is on deposit with the Court pursuant to the above-referenced interpleader action (the "Proceeds"). These are the interpleaded Proceeds of a settlement last summer between the original parties to this case, United Heritage Mutual Life Insurance Company and the Veenstra Family Trust. United Heritage knew that a number of the Veenstra's creditors had made claims to the proceeds of the life insurance policy, and facing the risk of multiple claims to a single fund, interplead the funds into the Court, requesting that all claimants to the funds come forward and set forth their claims. A detailed factual history of the background of this matter is set forth in the Verified Petition to Compromise Minor's Claim (Docket No. 153), which was filed by Kirtlan G. Naylor, the court-appointed Guardian Ad Litem for A.P.V. and A.P.V., IV, the minor beneficiaries of the above-named Plaintiff Veenstra Family Trust (hereinafter the "Guardian Ad Litem").
On June 20, 2003, the Court held a hearing upon the Guardian Ad Litem's Petition. Present at the hearing were the following: Kirtlan G. Naylor, Guardian Ad Litem for A.P.V. and A.P.V., IV; Timothy J. McDermott, who participated by telephone, and Larry M. Dunn, Attorneys for the Veenstra Family Trust and Maria Veenstra; Thomas E. Dvorak, Attorney for Wells Fargo Bank; Jeffrey E. Rolig, Attorney for Georgia Allen and Robert Mader; Craig D. Hobdey, Attorney for Lavern and Opal Carpenter; and Luverne F. Shull, Attorney for Richard and Marsha Wells.
The Guardian Ad Litem's Petition sets forth a proposed and tentative settlement that was reached among all parties who have competing claims to the Proceeds; that such settlement is in the best interests of the minor children; and, that as part of this settlement, the Court should establish an education trust for the children. The parties who have asserted claims to the Proceeds are (1) the minor children beneficiaries of the Veenstra Family Trust, as represented by the Guardian Ad Litem (the "Veenstra Children"); and (2) four separate creditors who have claims against the life insurance proceeds at issue, namely Wells Fargo Bank ("Wells Fargo"); Georgia Allen, in her capacity as executor of the Dingman Estate, and Roberta Mader (hereinafter the "Dingman Estate"); Lavern Carpenter and Opal Carpenter, husband and wife (hereinafter "Carpenter"); and Richard L. Wells and Marsha E. Wells, husband and wife (hereinafter "Wells") (hereinafter sometimes collectively referred to as the "Creditor Claimants"). The attorneys who have represented the Veenstra Family Trust, Terry K. Martin and Timothy McDermott ("Martin and McDermott"), in the lawsuit have also filed a request for attorney's fees. In a contemporaneous order, the Court has denied that request as moot. No other parties have asserted a claim to the Proceeds.
At least one or more of the Creditor Claimants has objected that this does not constitute a proper "claim" to the interpleaded funds.
This Court has the authority and must exercise that authority to independently approve any settlement of a proceeding before the Court involving minors. Salmeron v. United States, 724 F.2d 1357, 1363 (9th Cir. 1983). It was for this reason that the Court appointed the Guardian Ad Litem, rather than approving the petition of the children's mother for her to be appointed their conservator.
The Court finds that the Guardian Ad Litem has adequately investigated the claims that have been made to the Proceeds in this case. The Petitioner has spoken with both Pete and Maria Veenstra, counsel for each of the other Creditor Claimants, and counsel for the Veenstra Family Trust and Maria Veenstra. According to the proposed settlement, the creditors asserting an interest in the life insurance proceeds will receive $115,000.00 of the $200,000.00 that is currently deposited with the Court, and the beneficiaries of the Veenstra Family Trust will receive the remaining $85,000.00. The Guardian Ad Litem has analyzed the legal claims asserted by the other creditors and the potential legal problems presented in litigating this interpleader action, and has concluded that the settlement and compromise set forth herein is a fair and adequate settlement solution to the competing claims made by the creditors and attorneys in this action. This Court has no reason to believe this is not the case, nor has it been presented with any reason to believe the contrary.
Interest on the proceeds is divided pro rata between the Creditor Claimants and the Veenstra Children.
The compromise proposed by the Guardian Ad Litem requires that the Veenstra Children will resolve and pay from the $85,000.00 share, $15,000.00 to attorneys Terry K. Martin and Timothy McDermott in full settlement of their claims for attorney's fees against the Trust for legal services provided in connection with this matter. Likewise, the Court has no reason to believe that this distribution is anything but what the Guardian Ad Litem represents it to be, a reasonable settlement of a disputed claim and an expense of the minor children in accordance with Idaho Code § 68-1402.
The Guardian Ad Litem asks that the remainder of the $85,000.00 in proceeds, pursuant to Idaho Code § 68-1402, be placed in one trust, providing for two educational sub-trusts to be created by the Court and administered by a trustee recommended by the Guardian Ad Litem. Again, the Court has no reason to doubt the legal authority or factual investigation of the Guardian Ad Litem.
Based on the foregoing, the Court approves the Guardian Ad Litem's Petition for the proposed resolution (1) of Creditor Claimants' Claims against the same proceeds claimed by the minor children, and (2) of Martin and McDermott's claims for attorneys fees against those same proceeds as reasonable and in the best interests of the minor children. The Court also approves the Substituted Stipulation Regarding Distribution to Beneficiaries (Docket No. 160), the Stipulation Regarding Distribution to Creditors (Docket No. 151), and that certain Letter of Agreement attached as Exhibit "A" to the Petition of the Guardian Ad Litem as reasonable and in the best interests of the Children.
ORDER
Having heard the comments of the parties, and reviewed the pleadings and documents filed and lodged in this matter, including the Guardian Ad Litem's Petition to Compromise Minor's Claims (Docket No. 153) and the attachments thereto, the Substituted Stipulation Regarding Distribution to Beneficiaries (Docket No. 160), the Stipulation Regarding Distribution to Creditors (Docket No. 151), and good cause appearing,
IT IS HEREBY ORDERED, ADJUDGED AND DECREED:
a. That the Petition to Compromise Minors' Claim (Docket No. 153) is GRANTED and APPROVED;
b. That the Substituted Stipulation Regarding Distribution to Beneficiaries (Docket No. 160), the Stipulation Regarding Distribution to Creditors (Docket No. 151), and that certain Letter of Agreement attached as Exhibit "A" to the Petition to Compromise Minor's Claims (Docket No. 153) are hereby APPROVED;
c. That the Clerk of the Court shall distribute $115,000.00, plus 57.5% of any interest earned on the Proceeds as of the date of distribution, in the form of a check payable to "Givens Pursley LLP Client Trust Account" and deliver said check to attorney Thomas E. Dvorak. Mr. Dvorak shall then distribute the amounts from his trust account to the other creditors in accordance with the Stipulation Regarding Distribution to Creditors (Docket No. 151);
d. That the Clerk of the Court shall distribute $15,000.00 in the form of a check payable to: "The Trust Account for Timothy J. McDermott," and deliver said check to Boise attorney Larry M. Dunn;
e. That the Clerk of the Court shall distribute $70,000.00, plus the remaining interest accrued on the Proceeds as of the date of said distribution (the "Trust Distribution"), in the following manner. The Guardian Ad Litem shall submit appropriate forms for the Court to establish the proposed trust with two educational sub-trusts, under seal (to protect the minor's identity), which contain the signature and address of the trustee recommended by the Guardian Ad Litem in his petition. Once the Court has signed those documents creating the trust, a copy of the trust documents shall be retained under seal in the Court records and the original executed trust documents, as well as the Trust Distribution, shall be delivered in accordance with the written instructions of the trustee, countersigned with a notarized signature of the Guardian Ad Litem;
f. That any interest earned on the Proceeds while they remain in the control of the Court will be allocated pro rata, 57.5% to the Settling Creditors' Share and 42.5% to the Beneficiaries' share;
g. That this Memorandum Decision and Final Order constitutes the findings of fact and conclusions of law of this Court in this interpleader action and is expressly deemed a final order of this Court for purposes of Federal Rule of Civil Procedure 54(a), as it resolves and adjudicates all claims to the $200,000.00 in interpleader; a separate Judgment is entered contemporaneously herewith to ensure there is no uncertainty in this regard, and which will fully adjudicate all claims as to the interpleader action; and
h. That this Court expressly retains jurisdiction to implement or adjudicate any controversy regarding this interpleader action, the resolution thereof, and the management of the trust and the terms and agreements embodied in and memorialized by this Memorandum Decision and Final Order and the associated Judgment.