Approving Settlements for Minors in Florida

When minors are the victims of a personal injury and seek to recover losses, Florida requires Court approval of settlements.  Once the amount to be received on behalf of the minor exceeds $15,000, Florida requires that a guardian be appointed to receive the recovery.  If the total amount of the settlement to be split among multiple parties exceeds $50,000, a guardian ad litem may be required for approval of the settlement.  

Court approval may also be required if the settlement amount exceeds certain thresholds. Likewise, if there are conflicts of interest among the different potential parties to the lawsuit, a guardian ad litem may be required.  

Settlement Chart for Minors

  Approval of Settlement for Minors and Guardians – Downloadable Chart

Cases Involving Settlements

Allen v. Montalvan

The need for judicial approval of a minor’s settlement was recently at issue in the Fourth District’s opinion in Allen v. Montalvan (4th DCA 2016).  There, three minors involved in a car accident (“Plaintiffs”) attempted to settle potential legal claims against the drivers of the other vehicle (“Defendants”) and their insurer (“Insurer”).

The Plaintiff’s interests were represented in negotiations by the mother of two of the three minors.  The Plaintiffs, through counsel, reached a settlement with the Insurer under which the Insurer would tender full policy benefits.  Pursuant to the settlement, the Insurer paid $50,000.00 to the Plaintiffs in the form of two $25,000 checks:  one addressing a potential wrongful death claim and one addressing potential claims for personal injury.  Notably, the parties did not agree to an apportionment of funds for the personal injury claims.  In exchange, the Plaintiffs gave the Insurer and the Defendants a written release.

Nearly two years after the checks were tendered, Plaintiffs returned the releases to the Insurer.

Shortly after the releases were returned to the Insurer, the Plaintiffs—now being represented by new counsel—sued the Defendants for damages stemming from the same accident.  The Plaintiffs maintained that their previous acceptance of funds from the Insurer for potential personal injury claims was not a settlement and release, but merely a tender of the policy limit.  After the Insurer intervened in this lawsuit and moved to enforce the settlement agreement, the trial court dismissed the Plaintiffs’ claims and entered judgment in favor of Defendants.  Indispensable to the trial court’s finding was its conclusion that the gross settlement to Plaintiffs for the purposes of determining whether a guardianship was required did not include the $25,000 earmarked as “wrongful death” funds. Accordingly, the trial court held that the $50,000 threshold mandating appointment of a guardian was not met.

The Fourth District disagreed.  Drawing from the directives of Fla. Stat. § 744.3025(1)(b), the appellate court found that it was “inescapable” that “the universal settlement involved the minor children and was within the monetary range of [Section 744.3025(1)(b)].”

The court’s decision is significant in two respects.

First, the decision serves to illustrate that the appointment of a guardian ad litem is triggered by the gross settlement amount without regards to a minor’s share of the settlement proceeds.

Second, implicit in the Court’s holding is its interpretation of the aforementioned statute as requiring a guardianship and court approval when the gross settlement amount equals or exceeds $50,000.  Ultimately, the Fourth District found that the failure to obtain court approval of the original settlement rendered the agreement a nullity.  Because no valid settlement was ever reached, the Plaintiffs were not precluded from filing suit.

Fla. Prob. R. 5.636, intended to serve as a companion to Fla. Stat. § 744.3025, employs the term exceeds $50,000 rather than the equals or exceeds language found in the statute.  The Fourth District essentially found this disparity to be an oversight.

Guardianship of Deily

In Re Guardianship of Deily, (Fla. 2nd DCA January 15, 2010), the Court addressed who has the authority to retain counsel.  An adult child was injured in a bicycling accident.  His mother hired a personal injury law firm to represent her son in a potential lawsuit, signing a “standard” contingency fee agreement.  The law firm made formal demands on all of the insurance carriers potentially at risk, and the carriers all tendered full policy limits.  While the settlement of the case was pending, the mother filed an incapacity petition and a guardianship petition.  The incapacity petition was granted; however, instead of appointing the mother as the guardian, the court appointed a professional guardian. 

The professional guardian then challenged the law firm’s fee arrangement.  The trial court judge rejected the fee arrangement, on the ground that the incapacitated ward’s mother was not authorized to act in any capacity on his behalf when she signed the retainer with the personal injury law firm, and that firm had no contract with the guardian. 

The appellate court reversed, holding that, although the guardian had not been appointed, “neither had anyone else.”  The appellate court cited to Florida Rule of Civil Procedure 1.210(b), which provides that

[a] minor or incompetent person who does not have a duly appointed representative may sue by next friend or by a guardian ad litem.

The appellate court remanded the case to the trial court to determine whether the contingency fee agreement was proper, under the authority of Phillips v. Nationwide Mutual Insurance Co., 347 So.2d 465 (Fla. 2d DCA 1977), as follows: