United States District Court, W.D. Pennsylvania
ESTATE OF RYAN ECKELBERRY, JANE ECKELBERRY, and HUNTER ECKELBERRY, Plaintiffs,
CSX TRANSPORTATION, INC., Defendant.
MEMORANDUM OPINION AND ORDER
Maureen P. Kelly, Magistrate Judge.
before the Court is Plaintiffs Petition to Approve
Settlement, requesting approval of the settlement of this
litigation and a distribution of the proceeds for the benefit
of Hunter Eckelberry, a minor. ECF No. 68. Upon consideration
of the Petition and the record in the case, the Court will
deny the Plaintiffs Petition to Approve Settlement without
prejudice to renew the motion.
FACTUAL AND PROCEDURAL BACKGROUND
Jane Eckelberry, Hunter Eckelberry, a minor, and the Estate
of Ryan Eckelberry initiated this action in the Court of
Common Pleas of Allegheny County, Pennsylvania, against
Defendants CSX Transportation, Inc. ("CSXT") and
Norfolk Southern Corporation. Pursuant to 28 U.S.C. § 1441
and 28 U.S.C. § 1332, on March 20, 2018, CSXT removed
this action from state court, asserting diversity
jurisdiction and claims exceeding the sum of $75, 000. In
their Complaint, Plaintiffs alleged negligence, wrongful
death, and survival claims arising out of fatal injuries
sustained by Ryan Eckelberry after crashing his all-terrain
vehicle ("ATV") into a recently installed gate
bisecting a path on Defendant's property. ECF No. 1-2.
forth in the Petition, Defendant contends that at the time of
the accident, Ryan Eckelberry was intoxicated and trespassing
on CSXT's property. ECF No. 68 ¶ 9. On July 10,
2019, the Court granted Plaintiffs' Motion to Appoint
Hunter Eckelberry's Motion as Guardian Ad Litem. ECF Nos.
53, 54, 57.
of the mandatory alternative dispute resolution
("ADR") program of this Court, the instant case was
referred to mediation with the Hon. Kenneth Benson (ret.)
serving as mediator. ECF No. 52. The mediation was conducted
on July 22, 2019. ECF No. 59. The mediation resulted in the
resolution of the case with a payment by the Defendant in an
agreed amount. Id. The mediation was conducted
without independent legal representation for Hunter
to Local Rule of Civil Procedure 17.1, on August 15, 2019,
the Estate of Ryan Eckelberry filed its First Motion for
Settlement, ECF No. 65. In the Motion for Settlement,
Plaintiffs acknowledged an outstanding claim on any proceeds
of this action, filed on the docket of the Court of Common
Pleas of Allegheny County Orphans Court by Allegheny Health
Network - Allegheny General Hospital ("AHN-AGH").
ECF No. 65 ¶¶ 16-22. Plaintiffs requested that this
Court resolve such claims against AHN-AGH, despite their
absence as a party to this proceeding and without notice of
Plaintiffs' petition. On August 27, 2019, the Court
entered an Order denying without prejudice the Motion for
Settlement, and directed Plaintiff to obtain any relief as to
the AHN-AGH claims in the Court of Common Pleas of Allegheny
County Orphans Court. On September 27, 2019, AHN-AGH and
Plaintiffs entered into a Mutual Release of All Claims in
consideration of the payment of $10, 000, by Plaintiffs to
AHN-AGH, payment of which has been remitted. ECF No. 68 at
Exhibit G. This payment appears to have been made without
deduction of attorney's fees or costs for AGH-AHN's
proportionate share of the recovery.
September 30, 2019, Plaintiffs filed the pending unopposed
Petition to Approve Settlement. ECF No. 68. The proposed
distribution is as follows: (1) $34, 054.62 for Hunter
Eckelberry, a minor; (2) payment of attorney's fees based
upon a 33% contingency fee, resulting in the amount of $33,
000, as "discounted $2, 000" for a total of $31,
000; and, (3) costs incurred by counsel in the amount of $24,
945.38. The proposed distribution to Hunter Eckelberry is to
be placed in an interest-bearing account for his benefit
until he reaches the age of 18. It is readily apparent to the
Court that as proposed, counsel shall recover all of his
expenses and fees totaling approximately 56% of the
settlement amount, leaving a scant 34% for the decedent's
son, and 10% for AHN-AGH. The Court further notes that the
Petition to Approve Settlement has been filed without benefit
of independent counsel acting on behalf of the Guardian Ad
Litem or Hunter Eckelberry.
STANDARD OF REVIEW
Rule 17.1 requires court approval for any settlement
involving a minor. See Local R. 17.1.A ("[n]o action to
which a minor is a party shall be compromised, settled,
discontinued or dismissed except after approval approved by
the Court"). To determine the fairness of a minor's
compromise, the Court looks to state law. Nice v.
Centennial Area School District, 98 F.Supp.2d 665, 669
(E.D. Pa. 2000); Kane v. County of Chester. No.
12-6649, 2016 WL 3997258 * 1-2 (E.D. Pa. July 25, 2016)
(quoting Nice. 98 F.Supp.2d at 669, "it is
appropriate to apply the rule of decision prescribed by state
law in determining the fairness of a minor's compromise
and the reasonableness of any attorneys' fee allocated
from that settlement."). Accordingly, the Court will
apply Pennsylvania law to determine whether to approve the
explained in J.N, v. Penn-Delco Sch. Dist. No.
14-1618, 2017 WL 395481, at *3-4 (E.D. Pa. Jan. 30, 2017):
Under Pennsylvania law, in considering whether to approve a
settlement in which a minor is a party in interest, "[a]
[c]ourt is charged with protecting the best interests of the
minor." Power v. Tomarchio, 701 A.2d 1371, 1374
(Pa. Super. Ct. 1997); see also Stecyk v. Bell Helicopter
Textron, Inc.. 53 F.Supp.2d 794, 797 (E.D. Pa. 1999)
(Robreno, J.) (citing Wilson v. Bensalem Twp. Sch.
Dist.. 367 A.2d 397, 398 (Pa. Commw. Ct. 1976))
(same): Collier v. Dailey, No. 98-3261, 1998 WL
666036, at *1 (E.D. Pa. Sept. 24, 1998) (noting that under
Pennsylvania law, "in reviewing the settlement
agreement, the court must hold that the best interests of the
child are paramount and of controlling importance").
After evaluating the fairness of the agreement, a district
court must assess the reasonableness of the requested counsel
fees. In assessing the reasonableness of the fees, the court
must "strike a balance between being a 'passive pro
forma rubber stamp' ... and being too intrusive in its
consideration of the fairness of counsel fees."
Stecvk. 53 F.Supp.2d at 800-01 (quoting Gilmore
v. Dondero, 582 A.2d 1106, 1109 (Pa. Super. Ct. 1990)).
Especially where the attorneys' fees affect the amount
ultimately awarded to the minor, "[i]t is incumbent upon
counsel to persuade the court that the attorneys' fees
and costs requested are reasonable and equitable."
Sosenke v. Norwood, No. 91-2623, 19?3 WL 512824, at
*5 (E.D. Pa. Dec. 6, 1993), aff'd, 37 F.3d 1489
(3d Cir. 1994). Simply because the minor's parents have
agreed to a contingent fee agreement does not mean that court
approval is warranted. See Id. at *3 (citing
Estate of Murray v. Love, 602 A.2d 366, 369-70 (Pa.
Super. Ct. 1992); Gilmore. 582 A.2d at 1110).
Regardless of any fee agreement, as the protector of the
minor's interests, the court must independently
investigate the fee to be charged to ensure that it is fair
and reasonable. See Sosenke, 1993 WL 512824, at
Under Pennsylvania law, a court should address the
reasonableness of attorneys' fees to be paid under a
settlement involving a minor through the two-step process
articulated by the Pennsylvania Superior Court in
Gilmore. 582 A.2d at 1109-10. First, the court must
consider whether the Court of Common Pleas with jurisdiction
over the minor has adopted a presumptive lodestar for fees
involving the settlement of a minor's claims. See
id. Second, if a lodestar exists, the court may ...