What Do Courts Look for to Give Judicial Approval of a Settlement?
In North Carolina, the courts have been provided authority to protect and govern over the property of minors and will take such action as is necessary to protect their interests.
Considering that North Carolina law requires a judge to approve a minor settlement, the parties cannot execute the settlement agreement before judicial approval. Put more specifically, parties are permitted to negotiate and agree on a settlement; however, the settlement agreement between the parties will not be binding on the minor child unless a court of competent jurisdiction approves the settlement.
A minor settlement hearing, wherein the judge reviews the facts and circumstances surrounding the case, has been designed to act as a preventive measure to prevent minors from being taken advantage of. The unfortunate part of this process is that the minor and the Guardian ad litem will typically have to go to court as part of the hearing for approval.
While this minor settlement hearing is a fairly simple process, it may be a good idea to have a competent and experienced lawyer to assist you with the process. However, most minor settlement hearings last for less than 30 minutes.
After the minor’s Guardian ad litem or the attorney presents the case, the judge will then ask the opposing party, likely the attorney for the insurance company, to present any other facts and circumstances that they believe are relevant. Thereupon the judge will likely begin asking questions about the injuries, treatment, scarring, emotional impact and any other factor that the judge believes is relevant.
It is typically a good idea to ensure that you have the relevant medical bills and records, outstanding bills, subrogation interests, and any other relevant documents with you during the hearing in the event that the judge requests to review the information.
It is important to remember that the process of getting to a minor settlement hearing involves drafting and filing a “friendly lawsuit.” A friendly lawsuit in this instance means that the parties have determined the desired outcome and are filing a lawsuit as a mere formality. The process of filing a friendly lawsuit typically involves the lawyer for the insurance company drafting a complaint, summons, answer, settlement agreement, motion of judicial approval, and an order for judicial approval.
In most minor settlement hearings, the judge will consider the following component:
- The relative strength of the minor’s claims for relief
- The relative strengths of the at-fault party’s defenses
- The minor’s injuries and medical treatment
- The permanency of the minor’s injuries
- The extent of insurance coverage, if any
- The settlement amount and the net recovery to the minor
- The outstanding bills and liens
- The opinions of the minor’s Guardian ad litem
When is the Best Time for a Minor Settlement?
Timing is one of the more important things to consider when you’re navigating your child’s settlement. Your decision should be shaped by a complete determination of your child’s damages, as well as by the applicable statute of limitations.
Keep in mind that the ultimate goal of settling a minor’s personal injury claim is to make the minor child whole again. The theory of damages in a case like this is to put the plaintiff in as good a position as she was in the moment before the accident occurred.
With that said, it’s important to know that the full scope of damages isn’t always apparent in the hours or days after the accident. In some cases, it can take months or even years to know just how severe the injuries are and whether and to what extent the injured person will recover.
Without knowing the ultimate severity of the injuries, it’s impossible to determine the monetary value of the injured party’s damages. For this reason, it is important to gain a full and complete understanding of the minor’s injuries before proceeding. However, please be mindful of the applicable statute of limitations and be sure not to wait too long.
The statute of limitations is a legal concept that defines the window of time in which a claim can be brought. A statute of limitations is a statutorily imposed deadline that requires you to file a claim within a certain amount of time after the accident. For adults over the age of 18, the statute of limitations in North Carolina is three years from the date of the accident for a claim of negligence.
However, the law in North Carolina regarding minor children’s statute of limitations is significantly different. With minor children, the statute of limitations states that “[a] person entitled to commence an action who is under a disability at the time the cause of action accrued may bring his or her action within the time limited in this Subchapter, after the disability is removed[.]” N.C. Gen. Stat. § 1-17(a) (2009). It is important to note that in North Carolina being under the age of 18, a minor is considered a disability. It is nothing more than a legal term to describe minor children.
As such, while the minor child is under their “disability,” until they reach the age of 18, the minor will have three years after their 18th birthday to bring the claim for negligence in their personal injury claim. This does not mean that you, the parent, are entitled to extend the statute of limitations for your claim for medical expenses or loss of services when your child is injured.
For example, let’s say that your 14-year-old daughter was injured in a car accident on January 1, 2020. Let’s say that she went to the emergency room, her primary care physician and a physical therapist to be treated for her injuries, and you paid a total of $1,000 for her treatment. Since your daughter is a minor (under a legal “disability”), she can bring her claim for personal injury at any time before three years after her eighteenth birthday. However, you are required to bring your claim for medical expenses and loss of services before January 1, 2023.
Parents have attempted to circumvent this legal anomaly by “assigning” their claims to their child, thereby extending the statute of limitations for the parent’s claim as well as the child’s. Judges are not amused by this, and will not allow you access to a larger statute of limitations by assignment. See Ellington v. Bradford, 242 N.C. 159, 162, 86 S.E.2d 925, 927 (1955 ).
Does the Statute of Limitation Change After the Appointment of GAL?
North Carolina provides for a second exception related to minors and the statute of limitations, namely involving the appointment of the Guardian ad litem. The exception states that once a GAL is appointed, the statute of limitations will begin to run only as to the claims and parties which the GAL has been appointed to pursue. See Jefferys v. Tolin, 90 N.C.App. 233, 235, 368 S.E.2d 201, 202 (1988). Let’s illustrate this exception by going back to the previous example.
Your 14-year-old daughter is injured in a car accident on January 1, 2020. In the car accident, she was traveling through an intersection when she was struck simultaneously by an at-fault driver on the left side of her car. On February 15, 2021, a GAL is appointed to pursue your daughter’s personal injury claim against the at-fault driver. The statute of limitations will begin to run against the claim for negligence against the at-fault driver at the time of appointment for the GAL. This means that the claim must be brought before the court on or before the expiration for three years from February 15, 2021.
It is important to note that where a GAL is not appointed, the statute of limitations will not begin to run until the minor’s 18th birthday. The general exception involving the appointment of the GAL only applies to the claims for which the GAL was appointed. As such, if a minor has been involved in two accidents and a GAL is only appointed to one claim, the statute of limitations is unaffected in the claim where the GAL does not represent the minor.
Remember that a parent’s claim for medical expenses, for example, is not the same a minor’s claim for damages. And a parent’s claim for damages is not subject to the same protection provided to minors by way of the statute of limitations. It is always recommended to have the GAL a few weeks before seeking judicial approval of the settlement. Appointing a GAL at the right time ensures that you are protecting your claim and your legal interests.
As discussed above, the two most common options for appointing a GAL are to appoint the parent or to appoint a neutral third-party, often an attorney. Where the GAL is the parent of the minor child, it is highly unlikely that the judge would permit the parent to claim or assert a fee for their services as the GAL.
However, it is commonplace for an insurance company and judges to approve fees associated with a GAL’s service to a minor child where the GAL is a third party or attorney.
As such, there are typically two ways in which the GAL may receive a fee for their services to the minor child. First, the defendant or his liability insurance carrier may agree beforehand to pay the reasonable fee. Alternatively, where the insurance company will not agree to a fee for a GAL, the GAL or the minor’s attorney may request reimbursement of costs and expense, including a reasonable fee for the GAL services.
While it is difficult to accurately predict what reimbursement an insurance company may be willing to offer a GAL for their services, we have typically seen and heard fees ranging from $100 to $750. However, for extremely complicated cases, it may be reasonable to consider asking the court for an hourly fee as opposed to a traditional flat fee. Regardless of what you ask for, please be sure that you are prepared to defend your assertion with a reasonable and thoughtful response.