Senate Bill No. 215
(By Senators Redd, Burnette, Caldwell, Hunter, Minard, Rowe,
Snyder, Wooton and Mitchell)
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[Introduced January 15, 2002; referred to the Committee on the
Judiciary.]
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A BILL to repeal section fifteen, article ten, chapter forty-four
of the code of West Virginia, one thousand nine hundred
thirty-one, as amended; to repeal section four, article ten,
chapter fifty-six of said code; and to amend and reenact
section fourteen, article ten, chapter forty-four of said
code, relating to the settlement of claims for damages on
behalf of minor children.
Be it enacted by the Legislature of West Virginia:
That section fourteen, article ten, chapter forty-four of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be repealed; that section four, article ten, chapter
fifty-six of said code be repealed; and that section fourteen,
article ten, chapter forty-four of said code be amended and
reenacted to read as follows:
CHAPTER 56. PLEADING AND PRACTICE.
ARTICLE 10. MISCELLANEOUS PROVISIONS RELATING TO PROCEDURE.
§44-10-14. Minor settlement proceedings.
(a) If a minor suffers injury to his or her person or property
the next friend, parent or guardian of the minor may negotiate a
settlement of the minor's claim for damages prior to or subsequent
to the filing of an action for damages.
(b) In order to secure a release of the party causing the
injury or loss, the next friend, parent or guardian of the minor
shall file a verified petition in the circuit court of the county
in which the injury or loss occurred or in which the minor resides
or the person causing the injury resides or may be served. If, at
the time of an agreement to settle, an action for damages of the
minor is pending in circuit court, the petition shall be filed,
verified and served as a motion in the pending action.
(c) The petition shall request approval by the court of the
terms of the proposed settlement, the release of liability, and the
manner of distribution of settlement proceeds.
(d) The petition shall state the name, gender and age of the
minor, the facts of the injury and damages of the minor relied upon
in requesting the court to consider and approve the proposed
settlement and release; the circumstances of the minor at the time
of the petition; the relationship of the petitioner to the minor;
the nature and effect of the injury; the sum of expenses past and
future for treatment and care of the minor; a proposal as to how the costs and expenses of processing the settlement and release are
to be satisfied; a proposal for distribution of settlement proceeds
at the time of approval by the court of the settlement and release
and at times thereafter and upon conditions the court deems
appropriate; and request such other relief in the best interest of
the child as the court may determine is appropriate.
(e) The court shall appoint a guardian ad litem to review the
petition, facts and circumstances of the minor; the injuries and
losses of the minor alleged to have been caused by the party or
parties to be released as alleged in the petition; the treatment
and conditions past, present and in the foreseeable future of the
minor as a result of the injuries and losses at issue; the proposed
amounts and procedures for distribution of settlement proceeds, and
other matters appearing in the petition; and to file an answer to
the petition, on behalf of the minor, to be of record in the
proceeding, stating the opinion of the guardian ad litem as to
whether or not the proposed settlement and release and the proposed
distribution of proceeds are in the best interest of the minor.
(f) If the minor is sixteen years of age or older at the time
of the hearing, the guardian ad litem shall further state an
opinion to the court whether or not a minor, being sixteen years or
older, understands and agrees or disagrees to the terms of the
settlement.
(g) If the minor at the time of the hearing on the petition is sixteen years of age or older, the minor shall testify at the
hearing or shall sign a sworn written statement before a notary
public indicating whether or not the minor agrees to the proposed
settlement and release as set forth in the petition. The sworn
statement shall be filed in the record of the action before or
during the hearing on the petition.
(h) At the hearing on the petition, the court shall take
testimony and hear statements, arguments of or on behalf of the
parties regarding the facts, the proposed settlement and release
and proposed distribution of settlement proceeds. Upon review of
the record, the court shall enter an order with findings of fact,
granting or rejecting the proposed settlement, release or
distribution of settlement proceeds.
(i) If the requested relief is granted, the court shall order,
in its discretion, a responsible party or an attorney in the
proceeding to negotiate and satisfy from settlement proceeds
medical expenses for treatment of the minor related to the injury
at issue, equitable payments to satisfy legally enforceable liens
on settlement proceeds for payments made by third parties for such
expenses as shall be approved by the court in its discretion, and
reasonable personal expenses or lost income of the next friend, a
parent or legal guardian in connection with care of the minor
arising out of the injury or losses of the minor.
(j) The court may order the distribution of settlement proceeds for attorney fees, legal expenses, court costs, filing
fees, and any personal expenses or lost income of the person
processing the settlement for the minor, and other payments in such
reasonable amounts as the court finds in its discretion to be
appropriate after due consideration of the amount to be paid as
damages, the age and necessities of the minor, the nature of the
injury, the probability of recovery in case of suit, the
difficulties involved in effecting the settlement, legal expenses
and the fees paid to attorneys in similar cases, and any other
matters which the court may determine should be considered in
achieving a proper and equitable distribution of settlement
proceeds.
(k) Any amount of distribution of settlement proceeds allowed
by the court in its discretion to be paid to the minor or to
another person to be used for the direct benefit of the minor shall
be specified to be paid upon terms as the court in its discretion
shall set forth in the order approving settlement. Any such
payment or payments allowed by the court to be paid to or for the
benefit of the minor shall be paid within twenty-four months after
the date of the hearing.
(l) If the court grants the requested relief, a release of the
claim of the minor against the person identified in the petition to
be released from liability for allegedly causing injury or losses
to the minor and any party making payment on behalf of that person shall be executed as approved by the court. The release shall be
in form or effect as follows:
I, .........., the guardian of .........., a minor, in
consideration of the sum of $.........., and under authority of an
order of the Circuit Court of .......... County, entered on the
.......... day of .........., 20....., pursuant to West Virginia
Code (cite) .........., do hereby release .......... from all
claims and demands on account of injuries inflicted upon the minor
and any property of the minor, arising out of an accident which
occurred on the .......... day of .........., .........., at
.............................................
______________
(Signature)_________________
Guardian of .......................
(To be executed by a person who is or may be appointed guardian for
the minor with such bond as the court shall determine.)
(m) Settlement proceeds remaining after distributions are made
in accordance with the order of the court approving the settlement
shall be deemed net settlement trust proceeds to be held in trust
by a conservator who is ordered by the court to serve as the person
responsible for investment and control of net settlement trust
proceeds until the minor attains the age of majority or at such later time as the court may order upon terms the court finds to be
in the best of the interest of the minor taking into consideration
any special needs of the minor at any age.
(n) The court shall determine the amount and necessity for
surety of the bond of the conservator, payable on behalf of the
minor, to protect the principal of net settlement trust proceeds,
unless the court finds the conservator is already under bond and
surety of bond sufficient for the purpose. Surety for the bond of
the conservator shall be in form and type acceptable to the clerk
of the county commission designated by the court and shall be
conditioned to account for and pay over the amount of net
settlement trust proceeds as provided for by the order of the
court. The clerk of the county commission shall file and record
any bond or surety of bond of the conservator which may be required
by the court approving the settlement.
Neither the corpus nor
interest accumulating on net settlement trust proceeds shall be
used for the maintenance or care of the minor during his or her
minority absent unusual circumstances or special needs of the minor
to be specified and set forth in the order approving the
settlement. The corpus or income earned thereon may not be
invaded, revised or become subject to assignment, levy, garnishment
or other order, except as shall be first approved by order of the
court approving the settlement.
(o) The court may specify that an attorney handling the distribution of settlement proceeds deposit net settlement trust
proceeds into a regulated financial institution or institutions
with a principal place of business in this state, in interest
bearing certificates of deposit, or accounts or securities which
are fully insured by federal deposit insurance, in the name of the
minor and payable by the financial institution or institutions only
to the minor upon presentation of due identification after the
minor attains the age of majority or at such later time as the
court may provide in its discretion for the special needs of the
minor or for other just purpose to benefit the minor after the
minor attains the age of majority. A conservator or attorney who
handled the distribution of settlement proceeds may be authorized
by the court to transfer funds to a substitute qualified
institution or institutions from the financial institution or
institutions initially selected. Any substitution shall be
reported to any fiduciary officer charged by the court approving
the settlement with review of the status of the investment and
security of net settlement trust proceeds.
(p) The clerk of the court shall provide to any fiduciary
officer specified by the court to review reports of the assets of
the minor, a certified copy of the order of the court approving the
distribution of settlement proceeds when the order is entered.
(q) An initial statement of distribution of settlement
proceeds and an inventory of net settlement trust proceeds and income earned thereon shall be filed with the fiduciary officer
designated by the court to review the status of settlement proceeds
within sixty days of the date of hearing by the conservator or
counsel handling distribution of settlement proceeds. Any annual
reports of net settlement trust proceeds ordered to be made by the
court shall be due on the first day of February, and each year
thereafter. No annual report shall be due if an initial statement
of distribution and inventory report has been filed within ninety
days of the first day of February filing deadline.
(r) When net settlement trust proceeds are deposited to a
financial institution or institutions in the name of the minor
payable only to the minor upon proof of identification of the minor
after majority age is attained, the court approving the settlement
may elect, in its discretion, to dispense with or withdraw
reference to a fiduciary officer and further authorize the
continuing investment of the remainder of net settlement trust
proceeds without surety of bond so long as the net settlement trust
proceeds remain on deposit in a qualified, insured financial
institution or institutions payable only to the minor after the
minor attains the age of majority.
(s) Any time settlement proceeds are not ordered to be
deposited to an insured investment in a qualified financial
institution or institutions as provided for in subsection (r) of
this section, the court shall require an initial statement of distribution of settlement proceeds and an inventory report of net
settlement trust proceeds and income earned thereon within ninety
days of the date of hearing. The court shall require annual
reports to be made by the conservator on the first day of the next
February after the hearing and every first day of February
thereafter during the term of the trust. The court also shall
require that before net settlement trust proceeds may be provided
to the conservator that the conservator provide to any fiduciary
officer charged with review of the status of the net settlement
trust proceeds and income earned thereon, sufficient corporate or
real property surety in form as shall be acceptable to the
fiduciary officer: Provided, That if the amount of net settlement
trust proceeds to be paid over to the conservator is a sum no
greater than fifteen thousand dollars, the court may, in its
discretion, waive the requirement for reference or reports to a
fiduciary officer and may waive requirements for the corporate or
other surety of bond of the conservator.
NOTE: The purpose of this bill is to revise the procedures
for court approval of settlements made on behalf of minors. The
bill eliminates inconsistencies in the present law and provides a
mechanism to protect the interests of the minor and to prevent the
expenditure of the minor's funds prior to the time he or she
reaches majority.
This bill is recommended for introduction and passage this
session by the Joint Standing Committee on the Judiciary.
This section is substantially rewritten; therefore,
strike-throughs and underscoring have been omitted.
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