Appeal from the United States District Court for the District of New Jersey
Before: BECKER and MANSMANN, Circuit Judges, and SCHWARZER *fn*, District Judge
SCHWARZER, District Judge
The question before us is whether the acceptance by a minor's parents of an administrative settlement of the minor's claim under the Federal Tort Claims Act ("FTCA") releases the United States from further liability where the settlement was not judicially approved as required by state law.
On May 23, 1975, plaintiff Sharon Reo was playing in the front yard at the New Jersey home of her aunt, defendant Patricia D'Esposito. While a United States Postal Service employee was handing mail to her aunt, Sharon (who was only 21 months old at the time) apparently stepped off the curb and in front of the Postal Service truck. As the truck drove away, it struck Sharon, crushing the third and fourth fingers of her left hand.
Sharon's parents, through their attorney, filed a tort claim on her behalf. They entered into an administrative settlement, accepting $2,500 to release her claim. Neither Sharon's parents nor the Postal Service sought judicial approval of the settlement.
Subsequent to the settlement, Sharon had three operations on her fingers, which remain deformed. On August 11, 1993, when she was 19 (legally an adult), Sharon filed this action. She seeks damages against the United States and against D'Esposito. The United States moved to dismiss the complaint as barred by the 1976 settlement and release and the district court granted the motion. Sharon dismissed the claim against her aunt. Judgment was entered on January 4, 1996; the notice of appeal was filed December 21, 1995 (after the court had announced its decision to dismiss), and is timely under Federal Rule of Appellate Procedure 4(a)(2). See Fed. R. App. P. 4(a)(2). We have jurisdiction under 28 U.S.C. Section(s) 1291 and reverse.
The FTCA subjects the United States to tort liability for negligence. See 28 U.S.C. Section(s) 1346(b), 2674. Under the FTCA, the United States is liable "in the same manner and to the same extent as a private individual under like circumstances . . . ." 28 U.S.C. Section(s) 2674. Thus, "the extent of the United States' liability under the FTCA is generally determined by reference to state law." Molzof v. United States, 502 U.S. 301, 305, 112 S.Ct. 711, 714, 116 L.Ed.2d 731 (1992).
In order to promote the efficient disposition of claims against the government, the FTCA establishes an administrative system. The claimant is required to file a claim with the agency allegedly responsible for her injuries. 28 U.S.C. Section(s) 2675(a). The agency then may choose to pay the claim in full, to offer to settle the claim, or to deny the claim within six months. Id.; 28 U.S.C. Section(s) 2672. If the agency denies the claim or does not make a ...