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T.Y. v. Shawnee Mission School District USD 512

United States District Court, D. Kansas

January 6, 2020

T.Y., as Parent and Next Friend of P.Y., a Minor, Plaintiff,
v.
SHAWNEE MISSION SCHOOL DISTRICT USD 512, et al., Defendants.

          MEMORANDUM AND ORDER

          DANIEL D. CRABTREE, UNITED STATES DISTRICT JUDGE

         This matter is before the court on plaintiff T.Y.'s Motion for Approval of Minor's Settlement and Distribution of Net Proceeds (Doc. 54). The court applied Kansas substantive law to evaluate the settlement agreement on minor P.Y.'s behalf and held a hearing on the Motion on November 20, 2019. See Doc. 59. For reasons explained below, the court grants the motion to approve the settlement agreement on the minor's behalf.

         I. Background

         The Amended Complaint (Doc. 18) asserted four claims against defendants Shawnee Mission School District USD 512, Jim Hinson, Jeremy McDonell, Jade Peters, and Craig Denny-claims under 42 U.S.C. § 1983. See Doc. 18 at 19-32. On defendants' motion, the court dismissed Count Three of the Amended Complaint. Doc. 27 at 28. On April 29, 2019, the parties reported that they had negotiated a settlement and mutual release resolving the remaining claims. Doc. 54. Their agreement, which plaintiff presented at the settlement approval hearing, stipulates that plaintiff will release “any and all claims, appeals, demands, obligations actions, causes of actions, rights, judgments, damages, costs, losses or services, expenses, and compensation of any nature whatsoever . . . whether based in tort, contractor, or any other theory of recovery . . . in any way arising out of events occurring during [P.Y.'s] term as a student in the Shawnee Mission School District.” Exhibit 2 at 2. Plaintiff's release applies to any claims that minor P.Y. may bring, or be able to bring, once P.Y. reaches the age of majority. In exchange, defendants will pay plaintiff $165, 000, on behalf of P.Y., “in full and complete satisfaction of all claims which plaintiffs assert” or could have asserted against defendants. Id. at 1.

         II. Legal Standard

         The court predicts that the Tenth Circuit would direct the court to apply Kansas law when, as here, it exercises federal question jurisdiction over a case involving a settlement on a minor's behalf. Nice v. Centennial Area Sch. Dist., 98 F.Supp.2d 665, 667-69 (E.D. Pa. 2000) (citing Reo v. U.S. Postal Serv., 98 F.3d 73 (3d Cir. 1996)). The court thus borrows Kansas's rule that a court must conduct a hearing before approving a minor's settlement. Adkins v. TFI Family Servs., Inc., No. 13-2579-DDC-GLR, 2017 WL 4338269, at *3-4 (D. Kan. Sept. 29, 2017).

         Kansas law requires courts “to exercise extensive oversight, ensuring that the injured minor's claims are not sold short by an agreed settlement merely outlined at a ‘friendly' hearing.” White v. Allied Mut. Ins. Co., 31 P.3d 328, 330 (Kan.Ct.App. 2001). Courts “‘may not simply rely on the fact that the minor's parents have consented to the proposed agreement. Instead, the court must determine whether the agreement is in the minor's best interests.'” Id. (quoting Baugh v. Baugh ex rel. Smith, 973 P.2d 202, 205 (Kan.Ct.App. 1999)). For example, the Kansas Supreme Court upheld a state trial court's approval of a settlement on a minor's behalf because “it engaged in [a] full examination of [the] facts of [the] accident and [the] extent of [the] minor's injuries.” Id. (citing Perry v. Umberger, 65 P.2d 280 (1937)).

         III. Analysis

         At the November 20, 2019 hearing, the court received three exhibits from the parties: (1) Petition and Application for Court Approval of Minor's Settlement (Exhibit 1); (2) Settlement Agreement and Release (Exhibit 2); and (3) T.Y.'s bond secured through State Farm Insurance (Exhibit 3). The court used the substantive portion of the hearing to “determine whether the [settlement] agreement is in the minor's best interests” as required by Kansas law. White v. Allied Mut. Ins. Co., 31 P.3d 328, 330 (Kan.Ct.App. 2001). Plaintiff asked the court to (1) approve the settlement agreement and attorney's fees award, and (2) seal the record of the case. The court analyzes each request separately, below.

         A. The Settlement Agreement

         At the hearing, T.Y. testified that he believes it is in P.Y.'s best interest to resolve her claims against defendants. And, T.Y. testified, he believes the settlement is fair and reasonable. T.Y. testified that continued exposure to the litigation process would be damaging to P.Y. P.Y. was diagnosed with posttraumatic stress disorder and if P.Y. had to endure the spotlight of trial and other legal proceedings, T.Y. believes P.Y. would suffer significant setbacks in her treatment. Because of these concerns, T.Y. had not discussed the settlement with P.Y. T.Y. believes P.Y. will continue to have medical and counseling expenses related to this incident. He believes putting this money aside for P.Y. will help P.Y. pay for those expenses when she is independent.

         As T.Y. and counsel explained at the hearing, they believe it would be in P.Y's best interest to focus on therapy and treatment. Based on this assessment, plaintiff's counsel reported, they decided that efforts to continue to litigate the claims against defendants would not be worth the increased risk of damage to P.Y's mental health.

         After consideration following the hearing, the court concluded that it was not appropriate-in the context of this case-to approve a settlement when the minor didn't know about the settlement. P.Y. is nearing the age of majority status. In the court's judgment, P.Y. likely could apprehend the terms of the settlement, understand the way it affected her legal rights, and meaningfully evaluate it. See White, 31 P.3d at 330 (parent's consent to a settlement isn't controlling). The court thus conducted a telephone conference with counsel and shared its conclusion. Counsel appropriately requested a chance to consider the court's view, and submit a response. Now, plaintiff has done so. Plaintiff filed P.Y.'s declaration under seal on January 2, 2020. Doc. 64. In it, P.Y. declares that she knows about the settlement and the terms of the settlement agreement. Id. at 1. And, P.Y.'s declaration reports that she “believes the settlement is fair and reasonable” and asks the court to approve the settlement agreement. Id. at 2.

         Based on the efforts made by T.Y. and, indirectly, by plaintiff's counsel to explain the settlement agreement to T.Y. and P.Y., the testimony from T.Y. and plaintiff's counsel at the November 20, 2019, hearing, and P.Y.'s declaration, the court concludes that the settlement agreement satisfies Kansas law governing approval of such agreements. P.Y., through T.Y., brought a Title IX claim and several § 1983 claims that plaintiff later concluded were inadvisable to pursue. T.Y. agreed to settle P.Y.'s claims to avoid placing P.Y. in the spotlight of trial and possibly reversing years of progress in therapy. T.Y. also testified that the settlement proceeds will be used only for P.Y.'s benefit and likely will assist her with future medical ...


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