Delaware Minor Tort Claim Settlement Approval Process Requirements Become More Rigorous
By: Seth Yeager
Pursuant to 12 Del. C. § 3901 and Delaware Superior Court Civil Rule 133, all settlements of tort claims brought my minors (through his/her parent, guardian, etc.) in the state of Delaware are required to be approved by the Delaware Superior Court. The approval process commences by filing a petition for court approval of a minor settlement. The petition includes supporting documentation such as the minor’s birth certificate, treatment records and affidavits by the minor’s natural parents. Generally, settlement funds of $25,000.00 or less are required to be deposited into a Unform Transfer to Minor Act Account (“UTMA”). Settlement funds in excess of $25,000.00 are generally required to be placed in a court-approved annuity or structured financial instrument.
The Court has recently announced to the Delaware bar that it is now strictly adhering to Administrative Directive No. 2007-6, which addresses electronic filing pursuant to Civil Rule 79.1. Specifically, Section 9 of the Administrative Directive (“Section 9”) was highlighted by the Court. Section 9 discusses privacy issues related to electronic filing and has a direct impact on filing petitions for court approval of minor settlements and supporting documents for same. Generally, Section 9 instructs e-filers to redact certain pieces of confidential/personally- identifying information, such as social security numbers, names of minor children, dates of birth and financial account numbers. In addition, Section 9 instructs filers to exercise caution when filing certain documents, such as medical records.
In observing Section 9, the Court has instructed petitioners to follow the guidelines set forth below when preparing and electronically filing petitions for court approval of minor tort settlements:
• The petition should identify the minor by using his/her initials in the caption and body of the petition. The proposed form of order approving the minor settlement should include the minor’s full name in the caption/body.
• The petition shall include the minor’s year of birth only.
• Filers should file documentation supporting the petition which contains the minor’s confidential/ personally-identifying information, such as medical records, birth certificate, settlement sheet and the proposed form of order approving the minor’s bodily injury settlement, under seal. It is recommended that filers contact each specific county to determine its preferred method of filing the documents under seal. In practice, at least one county is currently requiring a motion for authorization to file under seal. In this instance, the filer is authorized to electronically file the supporting documentation under seal once the Court grants the motion. Other counties are not requiring filers to move the Court for authorization to file supporting documentation under seal, and have instructed counsel to simply file the documentation under seal without prior Court approval.
In addition, the New Castle County Superior Court has begun to require counsel to accompany the minor’s custodian of settlement funds to the bank to coordinate the deposit of settlement funds into a UTMA and obtain court-mandated proof of same. This directive applies to counsel who represent the liability carrier involved in the claim and do not represent the minor or minor’s custodian. The directive was in response to the Court repeatedly encountering instances where the minor’s custodian failed to comply with Orders related to the subject funds. Such instances include a custodian’s failure to promptly deposit the minor’s settlement funds into a UTMA and in some instances, utilizing the funds in ways that did not directly benefit the welfare of the minor as required.
If you have any questions , or would like additional information, please contact Seth Yeager, Member of Reger Rizzo & Darnall’s Insurance Practices Group, at 302.477.7105, or via email at firstname.lastname@example.org.