Local Rule Civil Rule 17.1: Actions Involving Minors or Incompetents

Civil Rule 17.1 Actions Involving Minors or Incompetents a. Order of Judgment Required. No action by or on behalf of a minor or incompetent, or in which a minor or incompetent has an interest, will be settled, compromised, voluntarily discontinued, dismissed or terminated without court order or judgment. All settlements and compromises must be reviewed by a magistrate judge before any order of approval will issue. The parties may, with district judge approval consent to magistrate judge jurisdiction under 28 U.S.C. § 636(c) for entry of an order approving the entire settlement or compromise. b. Payment and Disbursement of Funds. 1. Money or property recovered by a minor or incompetent California resident by settlement or judgment must be paid and disbursed in accordance with California Probate Code § 3600, et seq. If the recipient of the money or property is not a California resident, disbursement must occur pursuant to court restrictions which are similar to those of § 3600, et seq. 2. Should a guardian be necessary a certified copy of guardianship letters and a State Court certificate must be filed with the Clerk prior to any distribution to the guardian unless otherwise ordered by the Court. The certificate will verify that the guardian has filed a surety bond in an amount to be determined by the Court. 3. Should money or property be held in a trust for a minor or an incompetent, the proposed trust instrument must be submitted to a magistrate judge on an ex parte petition for review and approval before the settlement is approved or the judgment is entered. The magistrate judge may require approval of the form of the documents by an appropriate state judge in the jurisdiction where the minor or incompetent resides. The parties may also consent to magistrate judge jurisdiction to approve the entire settlement under 28 U.S.C. § 636(c). Where the parties consent to magistrate judge jurisdiction to approve the entire settlement, the approval of the trust documents and the settlement may be consolidated in one properly noticed hearing. 4. Any withdrawals or disbursements from the trust must be made in accordance with the procedures and applicable laws of the state. a) The Ex Parte Petition for Approval of Terms of Trust should generally contain the following information: 1. Identity of the petitioner; 2. The terms and total amount of the settlement and the amount to go into the trust; 3. The circumstances giving rise to the settlement or judgment and a general description of the plaintiff's injuries and needs; 4. Suggested amount of bond; 5. If for a Special Needs Trust, the petition should make the allegations to support the determinations required under California Probate Code § 3600(b) for the establishment of the trust; 6. Any other information that may be required. b) A Proposed Order must be submitted by the attorney for the petitioner and must comply with the requirements of this rule and California Probate Code § 3600, et seq. and include the following: 1. An order for the appropriate bond; 2. An order that the first accounting, if required, be filed within one year of the establishment of the trust with the San Diego Superior Court. If the recipient of the money or property is not a California resident, the accounting must be made to the appropriate court in the jurisdiction where the minor or incompetent resides; 3. If the order is for the approval of the terms of a Special Needs Trust, it should contain:

(a) A statement that the petitioner will provide that all liens have been satisfied prior to the establishment of the trust by the Court; and,

(b) A statement that the "court makes no specific finding or order with respect to whether the Special Needs Trust for the Benefit of _______________ satisfies or complies with applicable federal laws or regulations." 4. The order will provide that the terms of the trust are approved and those terms will be fully set forth within said Order, not as an attachment. The parties are further directed to proceed with settlement approval hearings or the entry of judgment as appropriate. c) A copy of the executed trust document, as approved pursuant to this rule, along with a certification by the trustee that any court ordered surety bond is in force, must be filed with the Court prior to any distribution to the trust.