Apr
29

Friendly Suit

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Personal Injury Settlement for MinorSo many times we hear about personal injury settlements involving adults.  As a Dallas / Fort Worth area personal injury lawyer, I have handled many cases for minor children.  But how are injury settlement for minors handled?  Is the minor’s settlement protected?

The Minor’s Case is Divided into Two Parts.

1.  The first part is the claims of the parent or legal guardians.  Under Texas law, a parent has the legal duty to provide for health and medical care of their child.  If the child is injured in an accident, then the medical expenses related to the treatment of the child are the responsibility of the child’s parents.  Therefore, any medical expenses incurred by the parents for the treatment of the child is a claim that belongs to the parents.  As such, the parents have the legal right to seek reimbursement of the medical bills from the person responsible for causing the injury to the child and to bring suit for those damages.

2.  The second part of the minor’s claims are those that involve the actual physical injury and any effects of the injury.  Examples would include pain and suffering, scarring, physical impairment, mental anguish, etc.  These claims belong to the child and are separate from the claims of the parents. However, under Texas law, a minor lacks the legal capacity to bring a suit in their name for these damages.  Therefore, the child is given two options for seeking damages.  The child could wait until reaching the age of eighteen (18) and bring suit at that time.  Or, the parent can bring the suit on the child’s behalf in their representative capacity as the child’s parents.

This is why you normally see injury lawsuits involving children styled as follows: John Doe, Individually, and as Next Friend of Baby Doe, a minor child.  The “Individually” part includes the claims of the parent, John Doe.  The “Next Friend” part includes the claims of the child, Baby Doe, which being brought by the parent as a legal representative of the child.

Personal Injury Settlements Are Not Binding on Minors.

Another concept to keep remember with minors is that a personal injury settlement for a minor is not binding against the minor.  That is because a minor child lack the legal capacity to enter into a contract.  Additionally, the parent lacks the standing to enter into a binding settlement for the minor’s claims.  Even if a parent settle an injury claim on behalf of their minor child, then the child may re-assert the claim after becoming an adult.

How Does a Minor’s Case Get Settled?

You might be asking: Then how does a minor’s case get settled?  The answer is simple: Get court approval of the settlement.  This is called a “Friendly Suit” and here’s how it works.

It would be unfair to make a child wait until turning eighteen to assert their claims since evidence may be lost or destroyed and witnesses memories may fade.  At the same time, it would be unfair for a potential defendant to have to wait until the child turns eighteen to see if he is going to be sued by the child.  Therefore, a defendant may settle a claim with a minor child through a Friendly Suit.

A Friendly Suit is a lawsuit brought by the parties as a necessary formality in finalizing a settlement involving a minor.  If the defendant wants to be protected against being sued after a settlement when the child turns eighteen, the defendant may insist that the settlement be approved by the court.  Therefore, the parties file a “friendly suit.”

It is not mandatory to have a friendly suit.  However, without court approval of the settlement, a child may bring suit against the defendant after reaching adulthood.  Since a friendly suit costs money, many insurance companies are willing tot settle without a friendly suit if the injuries are relatively minor and the settlement is relatively small.

But where the injuries are more severe and the settlement amount is fairly significant, the defendant or insurance company may elect to get the protections of a friendly suit  before paying the settlement.

Here’s How a Friendly Suit Works….

Once the parties have reached an agreement to settle the minor child’s claim, the insurance company refers the case to their attorney who prepares the court papers for a friendly suit.  Once the friendly suit is filed, the judge then appoints an independent  “guardian ad-litem,” sometimes known as an “attorney ad-litem.”

This person is an attorney appointed by the judge to investigate and review the settlement to determine whether it is in the “best interests” of the child.  The reason an ad-litem is appointed is to make sure the minor’s interests are being objectively protected by someone who has no conflict of interest in the case.

Once the ad-litem concludes the investigation, there will be a short hearing where the terms of the settlement are given to the court.  The ad-litem will then recommend to the court whether the settlement is in he best interest of the child and whether the settlement should be approved.  Unless there is anything out of the ordinary,  the ad-litem and the court will normally approve the settlement after the hearing.

Where Does the Money Go?

The court and ad-litem will normally recommend that the settlement proceeds for the minor child be deposited and held in the court’s registry until the child turns eighteen (18) years old.  This is because the money for the minor must be set aside to compensate the child.  Sometimes, the parties will agree to have the proceeds placed into a private annuity where the funds might gain a higher rate of interest.  Nevertheless, the funds are to be placed into such a fund for the child to enjoy after reaching eighteen.

Sometimes I get asked whether the money can be released to the parents before the child turns eighteen.  Only the court can approve such a request and it is highly unlikely that the court will allow this.  It is of utmost importance that the money is preserved for the benefit of the child.

Once the settlement is approved by the court, then the settlement becomes binding against the minor child.  Likewise, the child cannot reassert any claims after reaching adulthood.

For more information regarding wrongful death and personal injury cases in the Dallas & Fort Worth area, contact Attorney Robert C. Slim, at (214) 321-8225, for a free consultation.

Comments

  1. leslie says:

    my son was hit by a car with minor injuries they settled for about 19,000 however his payout is under 10,000 is there any way to negotiate with the court guardian to release the funds to me since its not a large lump sum

    • Not likely. The Court will order the money to be deposited into an interest bearing account to be managed by the Court clerk. I have only had one occasion when the Court agreed to give the money to the parent. But that was only because the mother had an “iron-clad” investment plan that impressed the guardian ad-litem and the Court. That was a very special situation and is not common at all. Even in that case, the order stated that the mother was to invest the money as she presented and would be held accountable to the Court if she failed to follow the Court’s instructions.

  2. Marcel Notzon says:

    Is there a law as to what an attorney can charge as contingent fee in Texas for a minor personal injury case?
    If not what is standard before trial or after a trial! Thanks

    • There is no specific law about attorney’s fees. There is a rule (in the Texas Rules of Professional Conduct) that a lawyer may not charge an “unconscionable fee.” What is considered “unconscionable” depends on many factors including the amount of the fee collected, the complexity of the case, the amount of time spent on the case, expenses incurred by the attorney, etc…. The rule is the same regardless of whether the case involves a minor or an adult client.

      In Texas, and more specifically the Dallas, Fort Worth area, the most common contingency fee for a personal injury case is 1/3 (or 33.3%) of the gross amount of the settlement recovery. Some attorneys charge a higher percentage if a lawsuit has to be filed (typically 40%), and maybe even a higher percentage if the case goes to trial or is even appealed 45% – 50%). One other thing, under Texas law, an attorney fee contract must be in writing and signed by both the attorney and the client.

  3. AMANDA PERKINS says:

    HELLO IN 2011 MY SON WAS HIT BY A CAR WHILE AT THE END OF THE DRIVEWAY. FOR THIS REASON MY SON HIS HAVING MAJOR PROBLEMS, FAR AS IN SCHOOL , HE HAS BEEN WRITING LETTER ABOUT KILLING HIMSELF AND RUNNING AWAY. MY SON IS NOT THE SAME CHILD AS BEFORE. HE CAN’T EVEN REMEMBER HOW TO TIE HIS SHOE AND HE IS ABOUT TO TURN 11 IN DEC. I GOT A CALL ABOUT THIS FRIENDLY SUIT. THEY STATED THAT I COULD BE GIVING A SMALL AMOUNT FOR HIM FOR XMAS, BUT WOULD BE UP TO THE JUDGE. BUT I JUST DONT THINK WHEN MY CHILD TURNS 18 HE WILL BE ABLE TO HANDLE THIS KIND OF MONEY. CAN IT BE RELEASE TO THE MOTHER IN THIS CASE. I HAVE BEEN GOING THROUGH ALOT TRYING TO GET MY SON HELP AND IT ONLY GETS WORST OVER TIME.

    • I don’t think the Court will approve a request that the money be turned over to you rather than your son. The whole purpose of a friendly suit is to make sure the money is available for the child as compensation for his personal injury when he turns 18. Another option is to ask the court to permit the money to be placed in a private annuity fund rather than in the court’s registry. This way, you can make arrangements to have the money paid out over time or in different increments rather than one lump sum when he turns 18. Annuities have more flexible options for investments and payouts, and usually have higher rate of return than the court’s registry can offer.

  4. Shelby Wade says:

    Is there minimum dollar amount for a friendly suit in TX on a auto bi claim for a minor?

    • There is no minimum amount. It is really up to the person paying the settlement. Many times, on smaller settlements, insurance companies are willing to pay the settlement money directly to the parents (on behalf of the minor) without the need for a friendly suit. However, with larger settlement amounts, the insurance companies may want the extra protection of court approval through a friendly suit.

  5. Lisa says:

    My daughter who is 17 1/2 years old was a passenger in a MVA a year ago, she is still undergoing treatment and both the at fault driver and my UIM carrier have offered policy limits. The at fault drivers insurance company has filed a friendly suit with the court, it is my understanding my UIM will be joining in the same suit and on attorney ad litem will be obtained.
    1. The court date to go before the judge (I received notice shortly after the friendly suit was filed) is not until the end of April. my daughter will be 18,(three weeks from the court date). Should I just delay it until she is 18? It seems pointless to tie her money up when she wants to pay off her car and go to college.
    2. The attorney of the at fault driver (Farmers), Told me that the Judge is unlikely to reimburse me my out of pocket expenses. Considering my daughter was 16 when the accident happened, I have had to attend every appointment, physical therapy, surgery over a year now, missed work, paid for tutoring from 6 weeks of missed school, transportation, medical records ect..He told me it was “my duty as a parent”. I want the best interest for my daughter, but I fully expect to recover my two years worth of deductible, all my co-insurance (20% of in-network) 40% of out of network, expenses, RX reimbursement as well as all my copays which have basically put us in the poor house.
    3. We signed a subrogation agreement with BCBS, they advised me they don’t go after the UIM claim (not what Farmers the at fault defense lawyer said), and they said they would give a reduction in bills according to attorneys fees (I don’t have an attorney). BCBS subrogation advised they would only go after reimbursement for the at fault drivers $50,000. (not sure if that is accurate according to Farmers). So far the bills are at 135k, but with the BCBS discount it’s more like $40,000.
    4. I haven’t hired an attorney because paying 1/3 or 44% after the policy limits have already been offered didn’t seem to make much sense in the interest of my daughters settlement (she is still having medical issues and may require back surgery at some point in the future). Howver, I m feeling a bit overwhelmed with the timing (close to her 18th birthday) and the thought of not being able to recover my out of pocket medical expenses in which I had to get a loan to pay them and am now paying interest.
    I apologize for the lengthy email, Im sure your very busy. Any suggestions you may have would be greatly appreciated. The accident and our residence is in Spring, Texas (north of Houston).

    • You should be able to get reimbursed for the expenses related to the medical bills. But not for transportation costs and other incidental expenses. I would also suggest dismissing the friendly suit and just funding the settlement after your daughter turns eighteen. But it would be better for us to talk on the telephone so that I can get the relevant information more readily. Of course, the consultation would be free: Robert C. Slim, Attorney at Law (214) 321-8225.

  6. Elizabeth says:

    We went through a friendly suit for my son in 2003 after having his face bit by a dog. We areed to place the funds in a savings account until 18. Is there any way to receive any of it before hand. He would like to buy a car.

    • It depends up the state you are in and upon the judge. In Texas, you can make a motion for funds like this to be released earlier, but you have show some kind of emergency need. I don’t believe a car is a good enough reason, but that will depend upon the judge.

  7. Shari Waller says:

    I’m from Missouri, and previously, my children were involved in a “friendly suit” composed of several different families, all in one (1) cause of action.

    A “guardian ad litem” signed the release,but, no written settlement agreement signed by all parties was ever filed, nor an annuity contract nor qualified assignment agreement.

    I’ve been trying to find a law or statute regarding the State of Missouri, that requires a “written” settlement agreement regarding minors’ settlement in a “friendly suit.”

    Do you know of any?

    • I am not sure what the law is in Missouri. But in Texas, any agreement effecting a pending lawsuit must be in writing and signed by the party or their attorney. In your particular case, if the guardian ad-litem signed the release on behalf of the minor children, then it would probably be binding. Additionally, in Texas, the settlement in a “friendly suit” has to get court approval. The court’s signed order approving the settlement would also be binding on the parties and the minor children. However, I must reiterate that I am not familiar with the specifics of Missouri law. You will need to consult with a lawyer in Missouri. Thanks for your comment.

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