Obtaining Judicial Approval of a Settlement on Behalf of a Minor in the District of Columbia: The Potential Pitfalls of § 21-120

by Michael Martin

When representing a minor client, or a client that is a parent of an injured minor, many attorneys are surprised to learn (myself included in a recent case) that D.C. law has several requirements that must be met before settling such a case and disbursing the settlement funds. While the relevant law, D.C. Code § 21-120, has long been on the books, it is only recently that the Court (and insurance companies) seem to be consistently enforcing compliance with it. As such, § 21-120 can be a trap for the unwary attorney who is nearing the finish line of a settlement and is trying to get their client (and themselves) paid. Although requirements of § 21-120 are not particularly complex, they are onerous enough that any attorney with a minor client needs to be aware of them before reaching the settlement stage to avoid delays in receiving payment.

Section 21-120(a) provides that although a person entitled to maintain an action on behalf of a minor (usually the minor’s parents) is presumed to be competent to settle the action and execute a release, “such a settlement is not valid unless approved by a judge of the court in which the action is pending.” Section 21-120(b) further requires that when the minor is entitled to receive more than $3,000 from a settlement (after the deduction of costs, fees and other expenses), a person may not receive any money on behalf of the minor “before he is appointed by a court of competent jurisdiction as guardian of the estate of the minor to receive the money or property, and qualifies as such.”

The instructions below will help walk you through the process of appointing a guardian and obtaining judicial approval of the settlement. If your minor client is entitled to receive less than $3,000, you can proceed directly to Step 2.

1. Appointing a guardian

Although there is no requirement that a guardian be appointed before attempting to obtain judicial approval of the settlement, it is much easier to take care of this step before filing the action. The Probate Division of the Superior Court of the District of Columbia has jurisdiction over the appointment of guardians of minors. According to the Probate Division’s website, “[a] proceeding to establish a guardianship for the assets of a minor is begun by the filing of a package of five documents with the Office of the Register of Wills: (1) a petition for appointment as guardian of the estate of the minor, (2) a bond, (3) consents from the minor’s parents (if they do not both sign the petition for appointment), (4) a proposed order, and (5) a consent to the appointment of the guardian signed by the minor if the minor is age 14 or older. When the documents are ready to be filed, the petitioner (ordinarily, the person asking to be appointed as guardian), the minor, and counsel of record, if any, must appear before an Assistant Deputy Register of Wills for a brief interview.” The Court publishes a guide for filing for guardianship of the estate of a minor, and all of the forms required are available on the Probate Division’s website.

Although technically anyone over the age of 18 can be appointed as the guardian of a minor’s estate, keep in mind that in order to post the necessary bond, the guardian will need to pass a credit check. If the parents or other close relatives of the minor have poor credit, the petition form allows for the appointment by the Court of a disinterested attorney. In a recent case where my client had credit problems, I appointed myself as the guardian.

As there are no limitations on who can issue the necessary bond, I recommend the Pilzer-Gullickson Group, LLC, because they are conveniently located in the same building as the Probate Division.

2. Obtaining judicial approval of the settlement

Once the guardian has been appointed, if the case is not already in suit, you will need to file a Complaint (often called a “friendly suit” as the case is only being filed to obtain judicial approval of the settlement). I recommend working with the claims adjuster or defense counsel before filing suit to hammer out which party will pay for the filing fee(s), and to ensure that the defendant will waive service and file an Answer.

Once the Complaint and Answer are filed, you will need to file a motion for judicial approval of the settlement. Your motion should lay out the facts of the case, a list of injuries suffered and costs incurred, and the details of the settlement. The Court’s primary concerns in approving a settlement for a minor is that the settlement amount fairly compensates the minor for both past pain and suffering and any potential future costs and/or permanent injuries; and that it is reasonable for the case to settle rather than going into discovery. In order to satisfy the Court, your motion should therefore also include information on the minor’s potential future damages, whether there are any permanencies or other factors that would lead the Court to believe that there are inadequacies in the settlement, and finally the uncertainties in liability or damages that necessitate a settlement rather than fully litigating the case on the merits. Be sure to attach a copy of the order from the Probate Division appointing the guardian to your motion. Some judges will approve the settlement based on the Motion. Others will schedule a hearing. Make sure that the minor and the guardian attend the hearing in case the judge wants to talk to the minor and/or the guardian directly. Once the settlement has been approved, you can safely disburse the settlement funds.

Section 21-120 isn’t too onerous provided that you’re prepared to comply with it. As long as you follow the instructions above and give yourself enough time to complete them, you should be able to quickly and efficiently get your client paid. If you need further information or templates for any of the required documents, feel free to email me at michael@metroDClaw.com.