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Some Major Points about Minor's Claims

Monday, July, 2, 2012


Some Major Points about Minor’s Claims

 

By Jon Starr

 

In this not so perfect world, minors (persons who are under the age of eighteen and who have not been emancipated) sustain injuries and become beneficiaries of wrongful death claims. As a result, parents or guardians of minors will seek out legal representation. Although the personal injury claims are generally viewed by practitioners as good claims to have due to sympathy toward children and due to the lack of pre-existing conditions that diminish damage values, the law applicable to minors’ claims can be a virtual minefield for the practitioner not well-educated in some of the unique aspects of the law applicable to minors’ claims.

 

This article is not meant to be a comprehensive look at the law affecting minors’ personal injury claims and wrongful death beneficiary claims. It is meant to provide some foundational understanding of the legal framework applicable to minors’ claims, and to highlight some of the areas that tend to be more prevalent in this particular area of the law so one is able to successfully navigate this minefield. As with many areas of the law, there are gray areas which have not been clearly addressed by the Oklahoma courts. The practitioner can only use his or her best judgment in ascertaining how the courts would view these particular issues. When faced with one of these gray areas in the law, the practitioner should always remember the overriding theme is the best interest of the child, which must be balanced against the legal rights of others involved.

 

Separate Causes of Action for Parents and Minors Arising Out of a Minor’s Injury

 

Probably, the first and most important thing to understand when dealing with a claim of an injured minor is that typically, there are two separate and distinct causes of action to be brought.1 Although the practitioner may be dealing with the same decision makers for the two separate causes of action, the decision makers actually have two hats they must wear. The Oklahoma Supreme Court has clearly recognized that when a minor is injured, there are two separate and distinct causes of action, which although commonly may be brought as one suit, can in fact be brought as two separate lawsuits.2

 

The two separate and distinct causes of actions are (1) the personal injuries sustained by the child, and (2) the medical expenses incurred by the parent.3 This law was clearly spelled out in a Governmental Tort Claims Act case.4 The Legislature subsequently amended the statute preventing some claims from being brought separately in the Governmental Tort Claims area5, but leaving the law applicable in the most other settings.

 

Absent statutory limitation, the parents’ right of action for consequential damages based upon loss of service and on expenses incurred as a result of the child’s injury is distinct from the child’s right of action for his or her own injuries.6 The Oklahoma Supreme Court has made it clear that there neither is a general statutory requirement that the child’s claim for damages for the personal injury and the parents’ claim for medical expenses be joined nor is the doctrine of res judicata applicable to the parents when bringing a suit for medical expenses after an action brought on behalf of a child for personal injuries.7 Again, by statutory amendment this case law was modified to require aggregation in some Governmental Tort Claim cases8, but absent of statutory limitation in a particular area of the law, the separate claim rule is still applicable.9

 

Since there are two separate causes of action, it is important to remember they are subject to two separate and distinct statutes of limitations.10 In personal injury cases, other than medical malpractice, the minor has until one year after obtaining the age of majority or being legally emancipated, to bring the cause of action.11 In medical malpractice cases, by statute, if the minor is under the age of twelve when the cause of action arises, the minor’s parent or guardian must bring the action within seven years after the infliction of the injury, and if the minor is twelve years of age or older, the action must be brought within one year after the minor obtains majority, but in no event less than two years from the date of the infliction of the injury.12 The parents’ claim for loss of service and expenses incurred as a result of the child’s injury brought by the parents, individually, must be asserted within the statute of limitation applicable to the parents, which is two years for causes of action based on negligence14 and is one year for most intentional torts.15

 

A parents’ individual claim for damages for injury of a minor child, however, is somewhat unique from other actions under Oklahoma law which have a specific prohibition regarding assignment.16 The Oklahoma legislature has specifically recognized that the parent or parents having a right to recover damages as a result of an injury to a minor may assign their right to recover damages to the minor.17 An assignment of the damages is deemed to have occurred if the parents bring a cause of action, within the statute of limitations applicable to the parents, as guardian or guardian ad litem or next of friend on behalf of the child, and not individually.18 The assignment of the parents’ claims to the minor, however, must occur within the statute of limitations applicable to the parents’ cause of action, otherwise the parents’ claim is deemed extinguished and cannot be assigned at a later date.19 If the assignment does occur, it is important for the practitioner to remember that the parents no longer have any right to the proceeds obtained in a settlement or judgment, and all of the damages recovered are to be handled as money to the minor pursuant to Okla. Stat. tit. 12 § 83.20

 

Because you have two distinct causes of action, the question may arise is there an inherent conflict of interest which would prevent the causes of action from being brought together in a single lawsuit, or prevent the same attorney from providing legal representation on both claims. An Oklahoma Court of Appeals decision found there is no inherent conflict of interest between the two distinct actions.21 Further, the Oklahoma Supreme Court has recognized that there are common issues of fact or law, and that it may be desirable to join both causes of action in one lawsuit in order to avoid application of the doctrine of collateral estoppel in a second case.22 Although concerns regarding collateral estoppel may have to be considered by the practitioner, the Oklahoma Court of Appeals has held that the doctrine of res judicata would not apply to bar a child from bringing suit for the child’s damages after an action has already been brought by the parents for their damages, even though both causes of action arise out of the same set of facts.23

 

It is also important for a practitioner to remember there are distinct and separate claims when representing a parent who has their own individual injury claim out of an accident, and injuries to the minor children. Unless the assignment of the parent’s claim related to the child’s injury occurs within the applicable statute of limitations period, the parent’s claim arising out of the minor’s child’s injury, must be part of any settlement or lawsuit brought by the parent or it will be waived.24 Thus, if the individual parent settles or proceeds to judgment on a lawsuit which only asserts his or her individual injury claim. Oklahoma law will not allow them to come back and file a subsequent action for his or her expenses and loss of services related to their minor child’s injuries.25 If settlement or final judgment of the parent’s individual claim occurs without asserting the parent’s claim for loss of services and expenses related to the minor’s injury, it will not, however, preclude the parent from asserting a claim or prosecuting a lawsuit on the child’s behalf for the child’s claim subsequent to settlement or litigation.26

 

In instances where an infant may have a representative such as a general guardian, committee, conservator or other like fiduciary, the representative may sue on behalf of the minor.27 If the minor does not have a duly appointed representative, the minor may sue by his next friend or a guardian ad litem.28 The court shall appoint a guardian ad litem for a minor not otherwise represented in an action or shall make such order as it deems proper for the protection of the infant or incompetent person.29 The Oklahoma Court of Appeals has recognized that in cases of divorce, the legal custodian of the minor is the proper party to proceed with an action to recover damages for the minor.30

 

The distinction between a next friend and a guardian ad litem is a technical one, and as far as their rights and duties are concerned, there is little, if any, difference between the two, although their function and powers may be different.31 As a general rule, a next friend for a minor plaintiff is required only when the minor is without a parent or general guardian.32

 

Minor Beneficiaries to Wrongful Death Claim

 

Okla. Stat. tit. 12 § 1054 limits who may bring the wrongful death action, but the representative of the decedent can seek damages for many beneficiaries, including some who may be minor beneficiaries.33 Okla. Stat. tit. 12 § 1053 specifically provides that some of the damages which may be recoverable and subject to distribution to minor beneficiaries are (1) pecuniary loss to survivors and (2) grief and loss of companionship of children. The distributions of those two damage elements are to be determined by the judge.34 Additionally, minor beneficiaries may be entitled to some distribution for the damage elements of (1) pain and suffering and anguish of the deceased and (2) punitive or exemplary damages. These later two categories of damages are distributed in accordance with the personal property distribution of the decedent.35

 

Without exception, all wrongful death settlements involving minor beneficiaries must be approved by the court.36 The responsibility of the court to protect all interests of minor children has long been recognized and accepted.37 By statute, approval by court is required where a guardian ad litem has been appointed,38 but since October of 1980, it has been the holding of the Supreme Court that all wrongful death actions where minor children have a beneficiary interest are required to have court approval of the proposed settlement.39

 

Not only is a wrongful death settlement involving minor beneficiaries subject to court approval, the attorney fees received by the practitioner are also subject to court approval and supervision.40 The trial court is clearly given the authority to reduce a child’s attorney fees when reduction is supported by the evidence.41 Although contingent fee contracts are certainly allowable and permissible, they have been specifically subject to restriction when the client is a minor, particularly because of the obvious possibility of unfair advantage. Courts have refused to enforce contingent fee agreements when the amount of the fee is deemed excessive.42 The trial court is allowed to use hindsight in determining reasonable attorney fees for services performed and is not restricted to solely assessing the reasonableness of the contingency fee agreement at the time it was entered into.43 The court’s reduction of the child’s attorney fees, however, cannot be arbitrary and must be the result of an adversary proceeding.44

 

Court Approval of a Minor’s Personal Injury Settlements

 

Oklahoma law is not as clear about when court approval is required for settlements of a minor’s personal injury claims as it is in cases where minors are beneficiaries of wrongful death settlements. Due to the underlying trend of courts to protect the interest of minor children,45 however, one can fairly easily surmise that any settlement of a minor’s personal injury claim (but not the parent’s claim for loss of services and expenses) may be subject to judicial review at a later date, if court approval is not obtained at the time of the settlement.46

 

As a practical matter, it is quite common for a plaintiff’s personal injury attorney or an insurance adjuster to ask whether they must get court approval or friendly suit this settlement. The Oklahoma Supreme Court has recognized that a court does have authority to act upon and provide judicial approval of (1) a litigation compromise agreement, (2) the asserted shares of recovery, and (3) the manner in which to invest the minor’s portion of the judgment proceeds.47 If court approval is obtained at the time the settlement is entered into, the settlement is most likely not subject to any type of collateral attack, absent those grounds available to challenge a settlement with an adult, such as fraud, collusion or error.48 Moreover, once court approval is obtained of a minor’s claim, it cannot be set aside on grounds of subsequent change of condition or evidence showing that the injuries sustained by the infant were more serious than may have been believed at the time of the settlement.49

 

Failure to "friendly suit" or obtain court approval at the time of the settlement, however, will not preclude a trial court from examining the settlement at some later date under the same criteria used at the time of a friendly suit, and with equal force and effect, as if the matter had been presented promptly.50 The basic criteria used by the court to examine a settlement, either at a friendly suit hearing or a subsequent request to undo a settlement which has not been court approved, is basically whether or not the settlement was in the best interest of the minor at the time the settlement agreement was entered.51

 

Evidence the court may consider in trying to determine if a settlement was in the best interest at the time it was entered into would include such things as (1) whether or not the minor was in serious and immediate need of funds for purposes of securing medical treatment, (2) the financial standing of the alleged liable party, including the availability of insurance, (3) the potential executability of personal assets, and (4) whether or not the parents or guardians were acting in what they believed to be the minor’s best interest at the time.52 As a practical matter, the parent or guardian ad litem probably is more likely to provide favorable testimony that the settlement is in the best interest of the minor child at the time the settlement is occurring, as opposed to some later date. The parent or guardian ad litem, however, may still provide favorable testimony to a subsequent challenge if the subsequent challenge to the settlement is being made by someone other than the parent or guardian involved in the settlement, such as a non-custodial parent, grandparents or the minor after reaching the age of majority.

 

Funds Held in Trust for a Minor’s Benefit

 

Okla. Stat. tit. 12 § 83 requires that certain funds obtained on behalf of minors to be held in trust until the minor reaches the age of eighteen or the court otherwise orders. This author’s practical experience has been that Okla. Stat. Tit. 12 § 583 is subject to some different interpretations by various courts and attorneys over the years. Some judges have held if the amount of money left after the payment of medical bills and attorney fees exceeds $1,000, the entire amount of the remaining funds must be deposited at one of the designated financial institutions in the statute. Other courts have interpreted the statutes to mean that only that amount of money in excess of $1,000 of the funds left after payment of costs and expenses including medical bills and attorney fees must be put in trust, allowing the minor to take up to $1,000 for immediate spending and consumption. Some plaintiff’s attorneys have also argued that they can bypass the requirements of this statute in total by not obtaining court approval through a friendly suit process, regardless of the amount of money to be left for paying costs and expenses including medical bills and attorney fees because of the statutory language "moneys recovered in any court proceeding."

 

Assuming that all settlements with minors to be binding must be subject to court approval, (either at the time of the settlement or if not occurring at the time of settlement, subject to some later challenge), then all settlements should probably be friendly suited or court approved at the time of settlement. In that instance, Okla. stat. tit. 12 § 83 probably is applicable to all settlements involving minors if in excess of $1,000 is left after paying costs and expenses, including medical bills and attorney fees. Finally, it appears clear from the plain language of the statute. That, if the minor and the parents wish, they should be allowed up to $1,000 for immediate consumption and spending for the minor’s benefit, and only that amount in excess of $1,000, after the payment of costs and expenses, should be held in trust.

 

The statute requires that the monies to be held in trust must be held at one or more financially insured banking, credit union or savings and loan institutions, or invested by the trust department of a banking institution.53 The only other option for monies left after payment of costs and expenses on the minor’s claim would be to have a structured settlement based on an annuity to be paid to or for the benefit of the minor by an insurance company licensed in the state, which also must be approved by the court.54

 

Until the minor reaches the age of eighteen, he or she may not withdraw any of the money from the account or accounts without an order from the court in the case where the recovery was obtained.55 The discretion of the court in releasing money prior to the age of eighteen is not specifically addressed within this statute, but it would appear to be subject to the limitations set forth in other statutes, which limits it to past and future support and education.56

 

CONCLUSION

 

As stated initially, this article is by no means a comprehensive overview of all the law applicable to handling a minor’s claim. It hopefully will provide the reader with at least the major points, so they have a general basis of knowledge to navigate the minefield, and have some insight to allow better issue recognition in performing legal research and making legal judgments when handling minor’s personal injury claims or wrongful death claims involving minor beneficiaries.

 

 

JON DOUGLAS STARR received his B.S.in international public administration from OSU and his J.D. with distinction from OU.  He is a partner with the law firm of Atkinson, Haskins, Nellis, Holeman, Phipps, Brittingham & Gladd in Tulsa and is AV rated by Martindale-Hubble. Since being licensed to practice in the fall of 1991, his practice has focused on civil litigation.   He has tried more than 70 cases to jury verdict, and presented appellate argument before the Tenth Circuit Court of Appeals.  He is the 2002 President of the Oklahoma Association of Defense Counsel and a member of Tulsa County Fee Arbitration Committee .   He is involved in the American Inns of Court, and has served as a CLE author and speaker on insurance bad faith litigation and soft tissue personal injury litigation.   He is an active member of Church of the Move in Tulsa and serves as a board member for Plumbline Ministries.  His practice includes all areas of civil litigation, including but limited to commercial, contract, torts, insurance law, products liability and defamation.

 

1. 42 Am Jr 2d, Infants § 156, 120, "Observation". When a child is injured, two causes of action arise: (1) a minor’s claim for damages for personal injuries, and (2) and the parents’ claim for loss of services and companionship of the child, and the expenses necessarily incurred by them for the minor’s medical treatment.   2. Independent School District I-29 v. Crawford, 1984 OK 62, 688 P.2d 1291 (Okla. 1984).   3. Id. at 1293.   4. Id.   5. Carlson v. City of Broken Arrow, 1992 OK 163, 844 P.2d 152, 154, 1992 OK 163 (Okla. 1992)   6. Id. at 1293-94, citing Boyett v. Airline Lumber Co., 1954 OK 321, 277 P.2d 676 (1954); Stinchcomb v. Holder, 189 OK 315, 189 Okla. 351, 116 P.2d 891 (Okla. 1941); Retherford v. Halliburton Co., 1977 OK 178, 572 P.2d 966 (Okla. 1970); Okla. Stat. Tit. 10 § 5 (1981).   7. Id at 1294, citing Smittle v. Ererle. 1960 OK 137, 353 P.2d 121 (1960).   8. Carlson v. City of Broken Arrow, 1992 OK 163, 844 P.2d 152, 154, 1992 OK 163 (Okla. 1992).   9. Oglesby v. Liberty Mutual Insurance Company, 1992 OK 61, 832 P.2d 834, 841 (Okla. 1992).   10. Brown v. Jimerson, 1993 OK CIV APP 158, 862 P.2d 91 (Okla. App. 1993).   11. Okla. Stat. tit. 12 § 96.   12. Okla. Stat. tit. 12 § 96.   13. Brown v. Jimerson, 1993 OK CIV APP 158, 862 P.2d 91 (Okla. App. 1993).   14. Okla. Stat. tit. 12 § 95(3).   15. Okla. Stat. tit. 12 § 95(4).   16. Okla. Stat. tit. 12 § 2017(D).   17. Okla. Stat. tit. 10 § 17.1.   18. Okla. Stat. tit. 10 § 17.1.   19. Brown v. Jimerson, 1993 OK CIV APP 158, 862 P.2d 91, 94 (Okla. App. 1993).   20. Okla. Stat. tit. 10 § 17.1.   21. Johnson v. Johnson, 1993 OK CIV APP 28, 848 P.2d 72, 75 (Okla. App. 1993).22. Independent School District I-29 v. Crawford, 1994 OK 62, 688 P.2d 1291, 1294 (Okla. 1984), citing Oklahomans for Life, Inc. v. State Fair of Oklahoma, Inc., 1981 OK 101, 634 P.2d 704 (Okla. 1981).   23. Brown v. Jimerson, 1993 OK CIV APP 158, 862 P.2d 91, 93 (Okla. App. 1993).   24. Retherford v. Halliburton Company, 1977 OK 1978, 572 P.2d 966 (Okla. 1979).   25. Id.   26. Id. at 968.   27. Okla. Stat. tit. 12 § 2017(C).   28. Id.   29. Id.   30. Johnson v. Johnson, 1993 OK CIV APP 28, 848 P.2d 72, 74 (Okla. App. 1993).   31. 42 Am. Jur. 2d, Infants, § 158, 123.   32. Id.   33. Okla. Stat. tit. 12 § 1053.   34. Okla. Stat. tit. 12 § 1053.   35. Id.   36. Abel v. Tisdale, 1980 OK 161, 619 P.2d 608, 610 (Okla. 1980).   37. Id., citing In re Hildebrand’s Estate, 1921 OK 128, 81 Okla. 197, 197 P. 445 (Okla. 1921).   38. Okla. Stat. tit. 30 § 4-702.   39. Abel v. Tisdale, 1980 OK 161, 619 P.2d 608, 610 (Okla. 1980).   40. Abel v. Tisdale, 1980 OK 161, 619 P.2d 608, 611 (Okla. 1980).   41. Abel v. Tisdale, 1980 OK 161, 619 P.2d 608, 612 (Okla. 1980).   42. Abel v. Tisdale, 1980 OK 161, 619 P.2d 608, 611 (Okla. 1980), citing Cappel v. Adams, 434 F.2d 1278 (5th Cir. 1970).   43. Abel v. Tisdale, 1980 OK 161, 619 P.2d 608, 612 (Okla. 1980), citing Donnarumma v. Barracuda Tank Corp., 79 F.R.D. 455 (C.D. Calif. 1978).   44. Abel v. Tisdale, 1980 OK 161, 619 P.2d 608, 612 (Okla. 1980).   45. 42. Am. Jur. 2d, Infants, § 223, 175.   46. Lambert v. Hill, 1937 OK 331, 73 P.2d 124, 127 (Okla. 1937).   47. Tisdale v. Wheeler Brothers Grain Company, Inc., 1979 OK 94, 599 P.2d 1104, 1106 (Okla. 1979).   48. 42 Am. Jur. 2d, Infants, § 223, 175; 42 Am. Jur. 2d, Infants, § 125, 178.   49. Id.   50. Lambert v. Hill, 1937 OK 331, 73 P.2d 124, 127 (Okla. 1937).   51. Id.   52. Id.   53. Okla. Stat. tit. 12 § 1183(A).   54. Id.   55. Okla. Stat. tit. 12 § 83(B).   56. Okla. Stat. tit. 10 § 7; Okla. Stat. tit. 30 § 2-108.