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Smith v. Sandals Resorts International

April 19, 2010

CEOLA SMITH INDIVIDUALLY AND AS ADMINISTRATRIX OF THE ESTATE OF JARRED SMITH, DECEASED PLAINTIFF,
v.
SANDALS RESORTS INTERNATIONAL, LTD. D/B/A SANDALS, A FOREIGN BUSINESS ENTITY, ET AL. DEFENDANTS.



The opinion of the court was delivered by: Timothy R. Rice U.S. Magistrate Judge

MEMORANDUM OPINION

Intervenor Evanuel Tate challenges a $6.5 million settlement distribution I approved December 22, 2009 stemming from the wrongful death of Jarred Smith, who died unexpectedly and intestate. Relying on his status as the biological father of the decedent, Tate filed objections to the settlement distribution, alleging: (1) he is entitled to receive one-half of the proceeds of the wrongful death settlement; and (2) the settlement proceeds should be reallocated to award a greater percentage to the survival action. See Brief in Support of Objections to Distribution at 3-10, Smith v. Sandals Resorts Int'l, Ltd, No. 07-3695 (E.D. Pa. Feb. 10, 2010) [hereinafter Objections Brief].

For the following reasons, I will grant his objection, in part, and deny his objection, in part. Tate is not entitled to receive one-half of the proceeds of the wrongful death settlement because he did not suffer a pecuniary loss as a result of the death of decedent. See Gaydos v. Domabyl, 152 A. 549, 551-52 (Pa. 1930). I will, however, modify the award allocation to designate $1 million of the settlement proceeds to the survival action. This is approximately a three-fold increase from the allocation I originally had authorized. See Settlement Conference Tr., 49-50, Dec. 22, 2009 [hereinafter Dec. 2009 Tr.]. Pennsylvania law requires a meaningful allocation of settlement proceeds to the survival action based on Smith's pain and suffering and his estimated lifetime earnings. See Slaseman v. Myers, 455 A.2d 1213, 1218 (Pa. Super. Ct. 1983). Nevertheless, equity demands I acknowledge the critical and indispensable role of decedent's mother, Ceola Smith, in his upbringing, and Tate's virtual abandonment of decedent for almost his entire childhood. Granting Tate the full relief he demands would result in an unjust windfall to Tate, a result at odds with Pennsylvania law and all notions of fundamental fairness. See Coleman v. United States, 2005 WL 2230319, at *1 (E.D. Pa. Sept. 13, 2005) (Robreno, J.); Krause v. B & O R.R., 33 Pa. D. & C.3d 458, 471 (Pa. Ct. Com. Pl. Somerset 1983).

I. Procedural History

On September 5, 2007, Ceola Smith, individually and as Administratix of the Estate of Jarred Smith, filed this action in the Eastern District of Pennsylvania, alleging defendants' negligence*fn1 rendered decedent quadriplegic on July 15, 2006 and caused his untimely death on March 21, 2007. See Complaint, Smith v. Sandals Resorts Int'l, Ltd, No. 07-3695 (E.D. Pa. Sept. 5, 2007) [hereinafter Complaint]. Plaintiff sought damages under the Survival Act, 42 Pa. Cons. Stat. § 8302, and Wrongful Death Act, 42 Pa. Cons. Stat. § 8301. Id.

Pursuant to the Orders of the Honorable Legrome D. Davis, United States District Court Judge of the Eastern District of Pennsylvania, I held settlement conferences with plaintiff and defendants on April 6 and October 28, 2009, which led to an agreement to settle the dispute for $6,520,000. On December 22, 2009, I held a hearing to approve the settlement, including the distribution of proceeds of the settlement and allocation of counsel fees, costs, and expenses to be paid from the proceeds of the settlement. See Notice of Hearing Pursuant to Local Rule 41.2, Smith v. Sandals Resorts Int'l, Ltd, No. 07-3695 (E.D. Pa. Dec. 14, 2009); see also Moore v. Gates, 580 A.2d 1138, 1141 (Pa. Super. Ct. 1990) (court approval is required for settlements involving a survival action).

As decedent's biological father, Tate received notice of the hearing, and attended unrepresented. See id.; Dec 2009 Tr. 4, 8. Immediately preceding and during the hearing, Tate was informed by the parties' counsel of the nature of the case and proceeding, and proposed terms of the settlement. Id. at 4-6.

At the hearing, Tate stated the $32,000 allocated to him in the proposed settlement was unfair. See Dec. 2009 Tr. 8. Therefore, I informed Tate he could present evidence to show he was entitled to a larger portion of the settlement. Id. at 11. Because Tate was unrepresented and only recently became aware of the proposed terms of the settlement, I informed Tate multiple times that I would schedule a hearing at a later date to allow him to obtain counsel and gather witnesses and documents. See, e.g., id. at 11, 37, 41, 42. Tate, however, refused this offer. See id. at 37, 38, 41. Tate testified,*fn2 on his own behalf, as to why the proposed terms of the settlement was unfair. Id. at 9-43.

I found the proposed settlement and fee distribution to be fair, reasonable, and in the best interest of the plaintiff based on the expense and risks of litigation. See Order, Smith v. Sandals Resorts Int'l, Ltd, No. 07-3695 (E.D. Pa. Dec. 22, 2009); Dec. 2009 Tr. 45-46. I discredited Tate's testimony that he had an active familial relationship in the decedent's life. See Dec. 2009 Tr. 44-45. For example, Tate claimed decedent did not play sports, when, in fact, decedent was a varsity letterman in basketball and football. Id. Based on the evidence, I found Tate had no role in decedent's life until decedent was age six, and any role thereafter was marginal. Tate did not establish a family relation under the wrongful death statute and was not entitled to any portion of the wrongful death proceeds. See id. Therefore I approved the following settlement allocation:

Wrongful Death Claim: $6,166,666.67, divided as follows:

Counsel fees and expenses: $2,466,666.67

Ceola Smith: 3,700,000.00

Survival Action: $353,333.33, divided ...


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