Opinion
Case No. 17-cv-05144-BLF
07-10-2020
ACCORDIA LIFE AND ANNUITY COMPANY, Plaintiffs, v. BE THI NGUYEN, et al., Defendants.
ORDER APPROVING APPOINTMENT OF GUARDIAN AD LITEM AND MINORS' COMPROMISE
[Re: ECF 117]
Before the Court is the stipulation between Defendant, Cross-Claimant, and Cross-Defendant Vo Thi Be Nam ("Nam"), Cross-Claimants V.M.T., a minor, and V.T.A.T., a minor, (together, the "Nam Parties") and Defendants, Cross-Claimants, and Cross-Defendants Be Thi Nguyen, H.P., a minor, and J.P., a minor, (the "Nguyen Parties" and collectively with the Nam Parties, the "Parties") requesting an order (1) appointing Ms. Nam as the guardian ad litem of her two minor children V.M.T. and V.T.A.T, (2) approving the minors' compromise as to all four minor children, (3) distributing the interpleaded funds, and (4) and dismissing the Parties' respective Crossclaims with prejudice. Stipulation Requesting Appointment of Guardian Ad Litem, Court Approval of Minors' Compromise, Distribution of Interpleaded Funds, and Dismissal of Claim ("Request"), ECF 117. For the reasons stated below, the Court GRANTS the Request.
This section is based on allegations made in the Complaint at ECF 1. The Court accepts these allegations as true for the purposes of ruling on this motion. --------
Plaintiff Accordia Life and Annuity Company ("Accordia") is the successor in interest to Aviva Financial Life and Annuity Company, which issued a life insurance policy with a face value of $200,000 to Thanh Van Pham ("Pham") in 2010. Compl. ¶ 1. At the time of application for the insurance policy, Pham designated his domestic partner, Be Thi Nguyen, as the beneficiary of the policy. Id. ¶ 11. On November 17, 2015, Pham executed a change of beneficiary form. Id. ¶ 13. The adjusted beneficiaries were Be Thi Nguyen for 60% of the policy benefit, J.P., their first child, for 20% of the policy benefit, and H.P., their second child, for 20% of the policy benefits. Id. ¶¶ 12, 13. On December 21, 2008, Pham married Ve Thi Be Nam in Vietnam, and two children have been born to the marriage: V.M.T. and V.T.A.T. Id. ¶ 14. Pham fell ill and died on February 27, 2017 on a trip to Vietnam. Id. ¶ 15. Pham's unmentioned wife and children in Vietnam were discovered during routine investigation as to the death of the policyholder. Id. ¶ 16.
On September 6, 2017, Accordia brought this interpleader action pursuant to 28 U.S.C.A. § 1335 against Be Thi Nguyen, H.P., J.P., and Vi Thi Be Nam to resolve a dispute over the $200,000 in life insurance proceeds following the death of Pham. See generally Compl. The Court approved Accordia's deposit and discharged its liability. ECF 60. Accordia deposited $207,712.80 of the insurance proceeds plus interest to the Court registry. ECF 63.
The Nguyen Parties brought crossclaims against Nam contending that the Nguyen Parties are entitled to the entire amount of funds that have been deposited in the Court registry because Ms. Nguyen paid the insurance policy premiums out of her personal funds, and that those insurance proceeds should be allocated 60% to Nguyen, 20% to J.P., and 20% to H.P., as reflected in the insurance policy's beneficiary designation at the time of Pham's death. ECF 86. Nam, on behalf of herself and her minor children V.M.T. and V.T.A.T., brought crossclaims against the Nguyen Parties alleging that Nam is entitled to at least half of the funds that have been deposited in the Court registry because Ms. Nam was the spouse or putative spouse of Mr. Pham and the insurance policy was purchased with community property or quasi-community property. See ECF 104. Further, the Nam Parties claim that they are entitled to recover assets that they contend they would have received following Pham's death through California's rules of intestate succession, and which they contend Ms. Nguyen wrongfully retained following Mr. Pham's death. See id.
The Parties filed answers denying various allegations contained in the operative Crossclaims and exchanged discovery. ECF 104; ECF 108; ECF 109. The Parties then participated in a Settlement Conference with Magistrate Judge Susan van Keulen during the week of March 23, 2020 and executed the Settlement Agreement and General Release of Claims ("Settlement Agreement"). Request at 2; Request, Ex. A.
II. LEGAL STANDARD
A. Appointment of Guardian Ad Litem
Federal Rule of Civil Procedure 17(c)(2) permits federal courts to appoint a guardian ad litem "to protect a minor or incompetent person who is unrepresented in an action." "It appears to be the common practice to appoint a parent to act as next friend for a child." J. M. v. Liberty Union High Sch. Dist., 2016 WL 4942999, at *1 n.9 (N.D. Cal. Sept. 16, 2016) (internal quotation marks omitted). If "a parent brings an action on behalf of a child, and it is evident that the interests of each are the same, no need exists for someone other than the parent to represent the child's interests under Rule 17(c)." Id. at *1 (internal quotation marks omitted) (collecting cases). "Generally, when a minor is represented by a parent who is a party to the lawsuit and who has the same interests as the child there is no inherent conflict of interest." Id. at *2.
B. Minors' Compromise
"District courts have a special duty, derived from Federal Rule of Civil Procedure 17(c), to safeguard the interests of litigants who are minors." Robidoux v. Rosengren, 638 F.3d 1177, 1181 (9th Cir. 2011). "In the context of proposed settlements in suits involving minor plaintiffs, this special duty requires a district court to 'conduct its own inquiry to determine whether the settlement serves the best interests of the minor.'" Id. (quoting Dacanay v. Mendoza, 573 F.2d 1075, 1080 (9th Cir. 1978)).
In cases involving the settlement of a minor's federal claims, a district court must consider whether the proposed settlement is fair and reasonable as to each minor plaintiff. Robidoux, 638 F.3d at 1182. "[T]he district court should evaluate the fairness of each minor plaintiff's net recovery without regard to the proportion of the total settlement value designated for adult co-plaintiffs or plaintiffs' counsel—whose interests the district court has no special duty to safeguard." Id.
While the Robidoux court expressly limited its holding to settlement of a minor's federal claims, "district courts have found the Robidoux rule reasonable in the context of state law claims and have applied the rule to evaluate the propriety of a settlement of a minor's state law claims as well." Frary v. Cnty. of Marin, Case No. 12-cv-03928, 2015 WL 3776402, at *1 (N.D. Cal. June 16, 2015); see also Mitchell v. Riverstone Residential Grp., No. S-11-2202, 2013 WL 1680641, at *1 (E.D. Cal. Apr. 17, 2013) (collecting cases). California law, which governs the state law causes of action, also requires that a settlement for a minor be approved by the court. See Cal. Prob. Code § 3601; Cal. Fam. Code § 6602.
III. DISCUSSION
A. Appointment of Guardian Ad Litem
Nam submits that she is a proper representative of her children V.M.T. and V.T.A.T. in this case because she and her children collectively have an interest in achieving the maximum possible recovery for their family as promptly as possible. Request at 3. Nam will use the money and assets she receives to support her family and benefit her children. Decl. of Vo Thi Be Nam ("Nam Decl."), ECF 120-2. The Nguyen Parties do not oppose Nam's request for purposes of completing this settlement. Request at 3.
As stated above, there is no inherent conflict of interest because Nam is involved in the same litigation and has the same interest as her children. Therefore, the Court appoints Nam as guardian ad litem of her children V.M.T. and V.T.A.T.
B. Minors' Compromise
Under the proposed settlement, Ms. Nam will receive $11,250.00 of the funds that have been deposited with the Court in this Action. Request, Ex. A. ¶ 1. J.P. will receive $40,000.00 of the funds. Id. H.P. will receive $40,000.00, and Ms. Nguyen will receive the balance. Id. The Nguyen Parties will assign to Nam all right, title, and interest they may have to any financial accounts or assets situated in the United States owned by Pham at the time of his death other than the life insurance proceeds at issue, although Ms. Nguyen represents that she is unaware of any financial assets owned by Pham at the time of his death in the United States. Id. ¶¶ 6, 7. The Nguyen Parties will also assign to Ms. Nam all right, title, and interest they may have to any assets and property situated in Vietnam owned by Pham at the time of his death. Id. The Parties will dismiss with prejudice all claims against each other. Id. ¶ 2. Each party will bear their own costs, expenses, and attorneys' fees incurred in this Action. Id. ¶ 10. The Parties are represented by pro bono counsel who are not seeking to recover any fees or costs out of the funds that were deposited with the Clerk of the Court. ECF 117-1.
The Court finds the compromise of V.M.T. and V.T.A.T. fair and reasonable. Nam and her children, V.M.T. and V.T.A.T., live in Vietnam and subsist on $200 per month that Nam earns by cleaning house. Nam Decl. ¶ 3. Their lives are very hard, and their purpose in seeking to be involved in this case is to receive distributions soon to cover their cost of living. Id. This settlement achieves their goal because they can receive the distributions sooner than they would have had this case proceeded and with certainty. Id. ¶ 4; Decl. of Alexander J. Holtzman ("Holtzman Decl."), ECF 120. The amount Nam and her children will receive will make a very large difference in their lives. Nam Decl. ¶ 4. Even though Ms. Nguyen declares that Pham had no assets in the United States at the time of his death, Nam and her children will be entitled to any such assets if they exist because the Nguyen Parties will assign any rights to those assets to Nam. Id. ¶ 5. It is also a concrete benefit to Nam and her children to receive all assets owned by Pham in Vietnam at the time of his death. Holtzman Decl. ¶ 12.
Furthermore, it would be difficult to establish custodial bank accounts for minors into which separate settlement amounts for V.M.T. and V.T.A.T. could be deposited in Vietnam, so the entire amount of $11,250.00 will be sent to Nam directly by bank transfer. Holtzman Decl. ¶ 8. Nam is committed to use the money she receives for the benefit of her children. Nam Decl. ¶ 2. The Court finds Nam's interest to be consistent with that of her children. In consideration of the procedural uncertainty involved in establishing custodial bank accounts in Vietnam, direct bank transfer is an appropriate way to make distributions under the special circumstance.
In addition, the Court finds the compromise of J.P. and H.P. fair and reasonable. Each of them will get $40,000.00, which is 20% of the face value of the insurance proceeds, as reflected in the insurance policy's beneficiary designation at the time of Pham's death. Request, Ex. A. ¶ 1; ECF 86.
In light of the facts of the case, the minors' claims, and the settlement of disputes regarding distribution of the insurance proceeds and Pham's assets at the time of his death, the Court finds that the net amount to be distributed to each minor is fair and reasonable. The terms achieve the goal that the minors and their parents had for bringing the lawsuit. Accordingly, the Court APPROVES the proposed settlement.
IV. ORDER
Based on the foregoing, it is hereby ORDERED that:
1. The Court APPOINTS Nam as the guardian ad litem for V.M.T. and V.T.A.T.
2. The Court APPROVES the settlement on behalf of the minors as set forth herein.
3. The Court DISMISSES the Parties' respective Crossclaims at ECF 86 and ECF 104 with prejudice.
4. Nam may submit a Form W8-BEN in lieu of a Form W9.
5. The Clerk of the Court is hereby directed to distribute the funds that were deposited in the Court registry in connection with this action as follows:
a. $11,250 to Vo Thi Be Nam via direct bank transfer;
b. $40,000 to J.P., payable to Be Thi Nguyen, as custodian for J.P. under the California Uniform Transfer to Minors Act;
c. $40,000 to H.P., payable to Be Thi Nguyen, as custodian for H.P. under the California Uniform Transfer to Minors Act; and
d. the remaining balance to Be Thi Nguyen.
IT IS SO ORDERED. Dated: July 10, 2020
/s/_________
BETH LABSON FREEMAN
United States District Judge