Opinion
3819/00.
Decided November 14, 2006.
Plaintiffs appeared by Paul S. Vesnaver, Esq. Defendants did not appear on the application.
This application for an infant compromise order seeks approval for a proposed settlement of Mylic Olivier's claim for damages in a lead-paint poisoning case, instituted by his mother, Nadese Joseph, on his and her own behalf. For reasons that will appear, the application is denied, with leave to renew with new papers that address the concerns expressed.
The papers initially filed on this application consisted of a proposed Infant Compromise Order, an Attorneys' (sic) Affirmation of Paul Vesnaver; a Parent Affidavit of Nadese Joseph, the infant's mother; a letter dated August 23, 2005 from Structured Financial Associates to Plaintiffs' counsel, describing a structured settlement; a Physician's Affirmation of Leon Charash, M.D. dated September 14, 2005, accompanied by various medical records and reports; and a letter dated September 19, 2005 from Defendants' counsel to Plaintiffs' counsel, confirming a settlement at $200,000.00, "represent[ing] the balance of the insurance coverage limits available to the defendants for this matter."
Plaintiff Mylic Olivier was born on September 9, 1996, and was nine years old when the application was filed in October 2005. According to the Physician's Affirmation, Mylic "sustained the following injuries as a result of reported exposure to lead poisoning" at his residence at 38 St. Pauls Place, Apt. No. 3I, Brooklyn:
"organic brain damage; severe developmentally impaired with respect to social, behavioral, cognitive, motor and adaptive development; quantitatively and qualitatively limited interaction and play skills with his peers; does not demonstrate the understanding of complex directive; poor ability to process information, requiring continuous cues to engage in specified tasks and/or task completion; severe impairment in attention span and concentration."
Based upon his review and a most recent examination of Mylic on September 14, 2005, Dr. Charash "found that [he] ha[d] received maximum benefit from treatment and his condition has been stabilized with medication."
Of the total $200,000.00 proposed settlement, $30,000.00 has apparently already been paid to Mylic's mother on her claim for loss of services. Of the remaining $170,000.00, Plaintiffs' counsel is requesting a fee of $56,666.66, waiving disbursements, leaving $113,333.34 for Mylic. It was proposed that an annuity be purchased, providing for the following periodic payments:
$13,075.00 Semi-annually for eight (8) guaranteed payments (4 years) beginning September 9, 2014 (age 18), with the last payment on March 9, 2018 $20,000.00 September 9, 2021 (age 25) $30,000.00 September 9, 2026 (age 30) $40,000.00 September 9, 2031 (age 35) $60,000.00 September 9, 2036 (age 40) $113,000.00 September 9, 2061 (age 65)
In his affirmation, Mr. Vesnaver recommended the settlement as "a fair and appropriate settlement given the recovery made by the Infant Plaintiff." Mylic's mother, Nadese Joseph, agreed to the settlement in her Affidavit. Neither document provided any elaboration for the conclusion that settlement for the sum of $170,000.00 is a fair and reasonable settlement, nor did either provide any reason for structuring the settlement generally or with the periodic payments proposed, nor did either explain any basis for the $30,000.00 paid to Mylic's mother.
In telephone conversation with Plaintiffs' counsel and at a June 6, 2006 interview, the Court expressed several serious concerns raised by the application. They were, generally and in no particular order: the Court was given no medical opinion as to whether and to what extent Mylic is likely to be capable of handling his own affairs when he reaches majority; the Court was given no opinion by any qualified expert as to whether and to what extent some portion of the settlement funds might be effectively used before Mylic reaches majority to ameliorate any of the learning, behavioral, or other developmental effects that he has suffered from lead poisoning; the Court questioned both the authority and justification for a structure that deprives the infant of the opportunity to make his own allocation of substantial funds for use and investment, with the final, and largest, payment deferred until age 65; and the Court could see no justification for deflecting more than 20% of available insurance proceeds (after deduction of a one-third attorney fee) to the mother for "loss of services." Only some of these concerns have been adequately addressed in the many months the application has been pending.
In an Amended Physician's Affirmation, after a further examination of Mylic on March 27, 2006, Dr. Charash offered his opinion that Mylic "will be able to graduate from high school, and may within reasonable certainty have the capacity to go on to some additional training and education." He opined further "within a reasonable degree of medical certainty", that Mylic will "be competent to handle his own affairs upon reaching the age of majority."
A revised proposed compromise order has been submitted that includes a different schedule of payments, namely:
$13,075.00 Semi-annually for eight (8) guaranteed payments (4 years) beginning September 9, 2004 (age 18), with the last payment on March 9, 2018 $25,000.00 September 9, 2021 (age 25) $40,000.00 September 9, 2026 (age 30) $84,056.62 September 9, 2031 (age 35)
The revised proposed compromise order was not accompanied by an additional attorney's affirmation or an additional guardian's affidavit, explaining how the new schedule of payments will serve Mylic's interests. Although the revised proposed order was accompanied by eight pages of school records, they are not explained by any teacher or other professional, and do not provide any assessment of Mylic's current developmental status or any information on whether and how he might benefit from assistance that will not be provided by the public school system.
As to the $30,000.00 payment to Ms. Joseph, a March 9, 2006 letter from counsel advises that, "due to the additional needs of Mylic which resulted from the lead poisoning, such as the special diet required by Dr. Charash as noted in his affirmation as well as specialized aftercare once the school day is done, Ms. Joseph required a fund from which she could help defer these costs given the limited nature of her income." The "special diet required by Dr. Charash" is a reference to the following statements in his Amended Physician's Affirmation: "I have advised the infant-plaintiff's mother to provide the infant with vitamins and iron supplements. She was also given a dietary instruction, with advice to eat a lot of green leafy vegetables." The Court has been given no description of the "specialized aftercare" counsel mentions, or any professional justification.
In considering an application for approval of an infant compromise, the court must "scrutiniz[e] it to assure that it [is] fair and reasonable and in the infant's best interests." ( See Edionwe v. Hussain, 7 AD3d 751, 753 [2nd Dept 2004]; see also Barretta v. NBKL Corp., 298 AD2d 539, 539-40 [2nd Dept 2002].) The facts and circumstances to be considered are those required to be included in the affidavit of the infant's representative, the affidavit of the infant's attorney, and in the medical or hospital reports, that must be submitted with the application. ( See CPLR 1208[a], [b], [c]; see also Uniform Rules for the New York State Trial Courts, 22 NYCRR §§ 202.67, 208.36.) The considerations are similar to those that determine the fairness and reasonableness of settlements generally ( see Allstate Insurance Co. v. Williams, 2006 U.S. Dist. LEXIS 67849, *5-*7, 2006 WL 2711538 [EDNY]), but require special focus on whether the infant's representative or counsel may have an interest adverse to or conflicting with that of the infant ( see CPLR 1208[a][8], [b][2], [e].)
"[T]he power of the court to approve a settlement does not confer a concomitant power to dictate the terms of the settlement." ( Stahl v. Rhee, 220 AD2d 39, 44-45 [2nd Dept 1996].) "In a case where reasonable minds may legitimately differ, the judgment of the infant's natural guardian should prevail." ( Id. at 46; see also Matter of Palmiere, 284 AD2d 965, 966 [4th Cir 2001].) But the court need not defer to a guardian's judgment that is "unreasonable, arbitrary, or capricious" ( see Stahl v. Rhee, 220 AD2d at 46; Matter of Palmiere, 284 AD2d at 966), and the court may withhold its approval if all relevant information is not discernible from the record and "it does not appear that the infant plaintiff's best interests are being protected." ( See Edionwe v. Hussain, 7 AD3d at 753-54.)
The deference given to the guardian's judgment covers the guardian's choice of a structured settlement. ( See Barretta v. NBLK Corp, 298 AD2d at 539-40.) But the papers submitted on this application contain no explanation for that choice. ( Compare Glenn v. Jones, 8 Misc 3d 799, 801 [Sup Ct, Nassau County 2005].) Nor is there any evidence that the guardian has investigated and considered whether any of the settlement funds would better be directed to the infant's immediate developmental needs ( see Edionwe v. Hussain, 9 AD3d at 753-54), as requested by the Court more than once during the pendency of the application.
Equally troubling, if not more so, is Ms. Joseph's settlement of her claim for loss of services out of the available insurance proceeds. Except for a statement in a doctor's 2002 report that Mylic's father was living in Boston, the application contains no information on the father's relationship to the infant. The Court will assume, nonetheless, that Ms. Joseph would be able to establish facts that would entitle her to a claim for loss of services. ( See Winnick v. Kupperman Construction Co., Inc., 29 AD2d 261, 266-67 [2nd Dept 1968]; In re LaPonzina, 116 NYS2d 750, 751 [Sur Ct 1952].)
The right to recovery for loss of a child's services during the child's minority when caused by tortious injury has long been established at common law. ( See Cuming v. Brooklyn City Railroad Co., 109 NY 95.) The parent is entitled to recover damages "measured by the pecuniary loss . . . sustained . . . including the value of [the child's] services, if any, of which [the parent] was deprived and reasonable expenses necessarily incurred by the [parent] in an effort to restore the infant to health." ( Gilbert v. Stanton Brewery, Inc., 295 NY 270, 273.) There is no recovery for loss of society or companionship. ( See id.; Devito v. Opatich, 215 AD2d 714, 715 [2nd Dept 1995].)
There is no evidence on this application that Ms. Joseph has sustained or will sustain pecuniary loss by reason of deprivation or diminution of Mylic's services. ( See Devito v. Opatich, 215 AD2d at 715; Foti v. Quittel, 19 AD2d 635, 635 [2nd Dept 1963].) Although with respect to certain physical injuries, the absence of proof of loss of services might be cured by "ordinary human experience" ( see Zimmerman v. New York City Health and Hospitals Corp., 91 AD2d 290, 295 [1st Dept 1983]), that is not apparent here, and would not in any event justify an award of $30,000.00 to the mother when the child is receiving $170,000.00 ( see id.)
As for expenses for vitamins and green leafy vegetables, assuming that such expenses could be recovered by Ms. Joseph if she actually incurred them ( see Martell v. Boardwalk Enterprises, Inc., 748 F2d 740, 754-55 [2d Cir 1984] [educational expenses]), there is no evidence that she has. Any expenses of that type that might be incurred in the future must be reflected in Mylic's recovery, and not his mother's. ( See Clarke v. Eighth Avenue Railroad Co., 238 NY 246, 249-50; Stiles v. Caddick, 11 AD2d 889, 889-90 [3rd Dept 1960].) Such an allocation "insures that whatever sum will be recovered will be more likely used for the infant's benefit than if a recovery be permitted by the parent." ( See Clarke v. Eighth Avenue Railroad Co., 238 NY at 250.) The recovery will then be subject to the "usual protection of judicial supervision over the proceeds." ( See Stiles v. Caddick, 11 AD2d at 890.)
Indeed, if such expenses are likely, and are the only basis for any recovery by the mother, it appears that the court would have the power to direct transfer of the mother's recovery to the benefit of the child. ( See id.; see also Shields v. City of Watervliet, 41 AD2d 170, 172 [3rd Dept 1973].) That is not a question that need be resolved now.
To the extent that the amount proposed to settle Mylic's claim, $170,000.00, does not include expenses that would necessarily be incurred for his care, and particularly since funds to cover those expenses were available through insurance, it is difficult to see how the amount proposed is a fair and reasonable settlement. Counsel's affirmation states conclusorily that the amount proposed is "a fair and appropriate settlement given the recovery made by the Infant Plaintiff", but "counsel . . . [does] not explain his reasons for recommending the settlement." ( See Edionwe v. Hussain, 7 AD3d at 753-54.) The Court has already noted the absence of investigation into whether Mylic would benefit from immediate assistance and its likely cost. "In addition, there is no evidence of any diligent inquiry into the availability of additional insurance or assets against which the infant plaintiff might collect or concerns about liability if the case is tried." ( Id., at 754.)
The Court must also note that, having reviewed hundreds of applications for approval of infant compromises, this is the first that does not contain a waiver of the parent's claim for loss of services. An informal survey confirms that this experience is shared throughout the courthouse. Every case, of course, is different, and one parent's decision to forgo a claim cannot bind another parent. But the experience suggests societal mores that encourage the parent to maximize the monetary recovery of the child, particularly when, as appears the case here, presented with a zero-sum field.
In preparing for renewal of this application, counsel should consider whether Ms. Joseph and Mylic have adverse interests, and whether his continued representation of both would create a conflict.