11.4
Petition for Leave to Settle or Compromise An Incapacitated Person's Action (with Special Needs Trust and Structured Settlement)

 
 
 
 

[SEE CAPTION AT 1.3.4]

 
 

ORDER APPROVING SETTLEMENT
AND ORDER FOR DISTRIBUTION

 

Now, this _____ day of ______________, 20____, upon consideration of the Petition For Leave to Compromise an Incapacitated Person's Action, filed May 15, 1999, it is hereby ORDERED and DECREED that Petitioner is authorized to enter into a settlement with Defendant Thomas White in the gross sum of One Million Dollars ($1,000,000).

 

It is further ORDERED and DECREED that the settlement proceeds be distributed as follows:

 
To:
John K. Trustworthy, Esquire
Reimbursement of Costs
$ 15,234.00
 
   
 
 
To:

John K. Trustworthy, Esquire
Counsel Fee

 
328,255.33
 
 
   
 
 
To:

Commonwealth of Pa, Dept. of Public
Welfare, Payment of Lien

 
21,000.00
 
 
   
 
 
To:

XYZ Life Insurance Co. for the
purchase of a structured settlement annuity
to make payments of $42,175 per month
guaranteed for 20 years and life thereafter,
increasing at 3% annually, to commence
8/1/99, in accordance with the Release
attached as Exhibit "F."

 
300,000.00
 
 
   
 
 
To:

Henry Doe, Guardian of the Estate
of John Dunn, an Incapacitated Person,
appointed by the Orphans' Court Division
of Philadelphia County, by Decree dated
5/30/98 (O.C. No. 98-643) for distribution to
a special needs trust to be approved by the
Orphans' Court Division upon petition to be
filed within thirty (30) days of this Order;
provided, however, that no payment shall be
made to the said guardian until the guardian has
posted additional security as may be required
by the Orphans' Court Division pursuant to
20 Pa. C.S. 5516, an appropriate Petition shall
be filed with the Orphans' Court within thirty
(30) days. [Note: If the funds payable to the
incapacitated person are to be placed in one
ore more restricted accounts instead of to a
guardian or trustee, the Order should be
modified to show how the funds will be held and
to describe the restrictions.
]

 
335,510.67
 
 

Pursuant to Phila. Civ. R. *2039.1(I), counsel shall file with the office of Civil Administration within sixty (60) days from the date of this final Order proof of the establishment of the accounts for any incapacitated person set forth herein, by Affidavit from counsel certifying compliance with this Order. [Note: If Order requires distribution to one or more restricted accounts, counsel must attach to the Affidavit proof of the deposit and the restriction in the form of a photocopy, CD or a bankbook.]

 
 
 
   
 
J.
 
ORPHANS' COURT DIVISION
 
 
 

 
 
 
 
 
PETITION FOR LEAVE TO SETTLE
INCAPACITATED PERSON'S ACTION
 
 
The Petition of John Dunn, an Incapacitated Person, by his Guardian, Henry Doe, by his attorney, John K. Trustworthy, Esquire respectfully requests that this Court approve the settlement of the within matter and the distribution of proceeds and in support thereof avers the following:
 
1.

Petitioner is John Dunn, an incapacitated person.
     
2.
The minor was born on January 1, 1963, and his social security number is 222-222-2222.
     
3.
The incapacitated person currently resides at XYZ nursing facility at the following address: 2050 Hampton Road, Philadelphia, Pennsylvania.
     
4.
Henry Doe was appointed Guardian of the Estate of the incapacitated person by Decree of the Honorable Harold S. Jones, dated May 30, 1998. A copy of the Order is attached as Exhibit "A."
     
5.
  The incapacitated person's mother is Jane R. Dunn and the incapacitated person's father is Joseph B. Dunn, both of whom reside at 275 Horse Hair Road, Philadelphia, Pennsylvania.
     
6.
  The Defendant is Thomas White, who resides or whose principal place of business at all relevant times was 564 Main Street, Philadelphia, Pennsylvania.
     
7.
  On November 20, 1997, while crossing the street at the intersection of 15th and Walnut Streets, Philadelphia, Pennsylvania, the incapacitated person was struck by a motor vehicle owned and operated by the defendant. The incapacitated person sustained a traumatic brain injury which has left him with severe physical and cognitive deficits.
     
8.
  A Complaint was filed against the Defendant alleging that the incapacitated person's personal injuries were the result of Defendant's negligence. A copy of the Complaint is attached as Exhibit "B."
     
9.
  Attached hereto as Exhibit "C" is a report by Dr. John Smith dated May 5, 1999, which sets forth the present condition of the incapacitated person. In short, he cannot walk and will be confined to a wheelchair for the rest of his life. He cannot feed himself, dress himself and needs assistance for all of his activities of daily living. He will require 24-hour care for the rest of his life and will never be gainfully employed. He is dependent on a gastrostomy tube for feeding and has a tracheotomy for breathing.
     
10.
  Attached hereto as Exhibits "D" and "E" respectively, are the statements, under oath, of the incapacitated person's parents and Guardian of the Estate certifying the physical and mental condition of the incapacitated person, together with their approval of the proposed settlement and distribution.
   
11.
  The following settlement has been proposed: $700,000 lump sum cash plus a structured settlement (with a present cost value of $300,000), all payable to the incapacitated person. The structured settlement (to be funded with an annuity purchased through ABC Insurance Co, rated A++ by A.M. Best) will provide the incapacitated person with income-tax-free payments of $2,175 per month guaranteed for twenty years and life thereafter, increasing at 3% annually, to commence September 1, 1999. A copy of the Release, which describes the settlement, is attached as Exhibit "F."
   
12.
  The incapacitated person's needs are extraordinary. In light of his disabilities and extraordinary medical needs, he is currently eligible for Medicaid. Although the incapacitated person's settlement is substantial, in reality, for the incapacitated person's funds to provide sustained life enhancing care, it is necessary to preserve his Medicaid entitlement. Accordingly, the settlement proceeds (including the structured settlement payments) are to be distributed to a special needs disability trust under 42 U.S.C. 1396p(d)(4)(A). A separate petition seeking approval of that trust will be filed with the Orphans' Court Division within 30 days of the date of the Order approving the settlement.
   
13.
  Counsel is of the professional opinion that the proposed settlement is reasonable inasmuch as the defendant vigorously contested both liability and causation, the settlement represents the limit on the defendant's insurance policy, and counsel sees little likelihood of any recovery from the defendant's own assets, which are small and held in joint names with his wife.
   
14.
  Counsel has incurred litigation expenses for which reimbursement is sought in the amount of $15,234. Attached hereto as Exhibit "G" is a detailed list of those expenses.
   
15.
  The Commonwealth of Pennsylvania, Department of Public Welfare has asserted a lien under a Statement of Claim in the amount of $31,545. The Department has agreed to accept $21,000 in full satisfaction of its claim.
   
16.
  Counsel requests a fee in the sum of $328,255.33, which is 33 1/3 per cent of the net settlement payable to the incapacitated person after costs. A copy of the Contingent Fee Agreement is attached.
   
17.
  The net settlement payable to the incapacitated person (after deduction of costs, attorney's fees and DPW lien) is $300,000 lump sum cash plus the aforementioned structured settlement payments.
     
18.
  Counsel has not and will not receive collateral payments as counsel fees for representation involving the same matter from third parties (i.e. subrogation).
 

Wherefore, Petitioner requests that he be permitted to enter into the settlement recited above and that the Court enter an Order of Distribution as follows:

 
a: To John K. Trustworthy, Esq
Reimbursement for Costs
$ 15,234.00
     
328,255.33
 
  b:

To John K. Trustworthy, Esq
Counsel Fee

 
 
       
 
  c:

To: Commonwealth of Pa, Dept.
of Public Welfare, Payment of Lien

 
21,000.00
 
       
 
  d. To: XYZ Life Insurance Co. for the
purchase of a structured settlement
annuity to make payments of
$2,175 per month guaranteed for
20 years and life thereafter,
increasing at 3% annually, to
commence 8/1/99, in accordance
with the Release attached as
Exhibit "F."
 
300,000.00
 
       
 
  e. To Henry Doe, Guardian of the Estate
of John Dunn, an Incapacitated Person,
appointed by the Orphans' Court Division
of Philadelphia County, by Decree dated
5/30/98 (O.C. No. 98-643) for distribution
to a special needs trust to be approved by
the Orphans' Court Division upon petition
to be filed within 30 days of the Order.
 
335,510.67
 
 
 
 
   
 
John K. Trustworthy
Attorney for Petitioner
 
 
 
Joint Court Regulation 97-1, paragraph I.(b)(4)(d) provides as follows: "If there is to be an allocation between parents and children or incapacitated persons or among children or other parties, the amounts allocated to each party and specific reasons for such allocation must be set forth." Additionally, if more than one plaintiff is involved, whether minors, incapacitated persons or adults, Petitioner must indicate the amount each plaintiff is to receive for his or her injuries and justification for the requested allocation.
 
Counsel is cautioned to provide specifically the requested distribution. Requests that distribution be "as per the attached Order" are not acceptable.
 
 
 
Note: In appropriate cases, funds for the incapacitated person may be distributed to a restricted account, not to be withdrawn before majority or upon prior leave of the court. The restricted account must be set up in the name of the incapacitated person only. See Pa. R.C.P. 2064(b)(2).
 
 
 
 
 
 

 
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