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PA Bulletin, Doc. No. 96-131

THE COURTS

PART I.  GENERAL

[231 PA. CODE CHS. 2020, 2050 and 2200]

Revision of Rules 2039, 2064 and 2206 Governing Minors and Incapacitated Persons as Parties; Proposed Recommendation No. 132

[26 Pa.B. 429]

   The Civil Procedural Rules Committee proposes the amendment of Rules of Civil Procedure 2039, 2064 and 2206 governing minors and incapacitated persons as parties. The proposed recommendation is being submitted to the bench and bar for comments and suggestions prior to its submission to the Supreme Court. All communications should be sent no later than April 12, 1996 to Harold K. Don, Jr., Esquire, Counsel, Civil Procedural Rules Committee, 5035 Ritter Road, Suite 700, Mechanicsburg, PA 17055.

   The Explanatory Comment which appears in connection with the proposed recommendation has been inserted by the Committee for the convenience of the bench and bar. It will not constitute part of the rules of civil procedure nor will it be officially adopted or promulgated by the Court.

Annex A

TITLE 231.  RULES OF CIVIL PROCEDURE

PART I.  GENERAL

CHAPTER 2020.  MINORS AS PARTIES

Rule 2039.  Compromise, Settlement, Discontinuance and Distribution.

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   (b)  When a compromise or settlement has been so approved by the court, or when a judgment has been entered upon a verdict or by agreement, the court upon petition by the guardian or any party to the action, shall make an order approving or disapproving any agreement entered into by the guardian for the payment of counsel fees and other expenses out of the fund created by the compromise, settlement or judgment; or the court may make such order as it deems proper fixing counsel fees and other proper expenses. The balance of the fund shall be paid to a guardian of the estate of the minor qualified to receive the fund, if [he] the minor has one or one is to be appointed. The balance of the fund payable to the guardian of the estate may include a structured settlement as described in subdivision (b)(3) of this rule. If the minor has no such guardian and none is to be appointed, the court may order:

   (1)  an amount not more than [Ten Thousand Dollars ($10,000.00)] twenty-five thousand dollars ($25,000.00) to be paid to the guardian of the person or to the natural guardian or to the person or agency by whom the minor is maintained or to the minor;

   Official Note: The amount payable under subparagraph (1) conforms to the amount set forth in section 5101 of the Probate, Estates and Fiduciaries Code, 20 Pa.C.S. § 5101, relating to when a guardian is unnecessary.

   (2)  any amount in cash of a resident or non-resident minor to be deposited in one or more savings accounts in the name of the minor in banks, building and loan associations or savings and loan associations, deposits in which are insured by a Federal governmental agency, provided that the amount deposited in any one such savings institution shall not exceed the amount to which accounts are thus insured, or in one or more accounts in the name of the minor investing only in securities guaranteed by the United States government or a Federal governmental agency managed by financial institutions. Every such order shall contain a provision that no withdrawal can be made from any such account until the minor attains [his] majority, except as authorized by a prior order of the court. Proof of the deposit shall be promptly filed of record[.];

   Official Note: The order should provide for deposits in more than one savings institution if future accrued interest may reasonably be expected to increase a single deposit beyond the insured limit.

   For the definition of savings account, see Rule 76.

   (3)  an agreement be executed providing for a structured settlement underwritten by a financially responsible entity that assumes responsibility for future payments. All moneys paid from the structured settlement during minority shall be paid into a restricted account as provided by subdivision (b)(2) of this rule.

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CHAPTER 2050.  INCAPACITATED PERSONS AS PARTIES

Rule 2064.  Compromise, Settlement, Discontinuance and Distribution.

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   (b)  When a compromise or settlement has been approved by the court, or when a judgment has been entered upon a verdict or by agreement, the court, upon petition by the guardian or the guardian ad litem or any party to the action, shall make an order approving or disapproving any agreement entered into by the guardian or the guardian ad litem for the payment of counsel fees and other expenses out of the fund created by the compromise, settlement or judgment; or the court may make such order as it deems proper fixing counsel fees and other proper expenses. The balance of the fund shall be paid to the guardian of the estate of the incapacitated person qualified to receive the fund, if there is one or one is to be appointed. The balance of the fund payable to the guardian of the estate may include a structured settlement as described in subdivision (b)(3) of this rule. If the incapacitated person has no such guardian, and none is to be appointed the court may order:

   (1)  an amount not more than [Ten Thousand Dollars ($10,000.00)] twenty-five thousand dollars ($25,000.00) to be paid to the guardian of the person or to the person or agency by whom the incapacitated person is maintained;

   Official Note: The amount payable under subparagraph (1) conforms to the amount set forth in section 5101 of the Probate, Estates and Fiduciaries Code, 20 Pa.C.S. § 5101, relating to when a guardian is unnecessary, incorporated by reference into section 5505 of the Code, 20 Pa.C.S. § 5505.

   (2)  any amount in cash of a resident or non-resident incapacitated person to be deposited in one or more savings accounts in the name of the incapacitated person in banks, building and loan associations or savings and loan associations, deposits in which are insured by a Federal governmental agency, provided that the amount deposited in any one such savings institution shall not exceed the amount to which accounts are thus insured, or in one or more accounts in the name of the incapacitated person investing only in securities guaranteed by the United States government or a Federal governmental agency managed by financial institutions. Every such order shall contain a provision that no withdrawal can be made from any such account unless the incapacitated person is adjudicated to have capacity, except as authorized by a prior order of the court. Proof of the deposit shall be promptly filed of record.

   Official Note: The order should provide for deposits in more than one savings institution if future accrued interest may reasonably be expected to increase a single deposit beyond the insured limit.

   For the definition of savings account see Rule 76.

   (3)  an agreement be executed providing for a structured settlement underwritten by a financially responsible entity that assumes responsibility for future payments. All moneys paid from the structured settlement during incapacity shall be paid into a restricted account as provided by subdivision (b)(2) of this rule.

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CHAPTER 2200.  ACTIONS FOR WRONGFUL DEATH

Rule 2206.  Settlement, compromise, discontinuance and judgment.

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   (b)(1)  When as the result of a verdict, judgment, compromise, settlement or otherwise it has been determined that a sum of money is due the plaintiff in an action for wrongful death, the court, upon petition of any party in interest, shall make an order designating the persons entitled to share in the damages recovered and the proportionate share of the net proceeds to which each is entitled. If a share shall be payable to a minor or incapacitated person, the court shall designate as the person to receive such share a guardian of the estate of the minor or incapacitated person qualified to receive the fund, if there is one or one is to be appointed. The fund payable to the guardian of the estate may include a structured settlement as described in subdivision (b)(4)(ii) of this rule.

   (2)  If the minor has no such guardian, and none is to be appointed, the court upon petition may order an amount not more than [Ten Thousand Dollars ($10,000.00)] twenty-five thousand dollars ($25,000.00) to be paid to the guardian of the person or to the natural guardian or to the person or agency by whom the minor is maintained or to the minor.

   Official Note: The amount payable under paragraph (2) conforms to the amount set forth in section 5101 of the Probate, Estates and Fiduciaries Code, 20 Pa.C.S. § 5101, relating to when a guardian is unnecessary.

   (3)  If the incapacitated person has no such guardian, and none is to be appointed, the court upon petition may order an amount not more than [Ten Thousand Dollars ($10,000.00)] twenty-five thousand dollars ($25,000.00) to be paid to the guardian of the person or to the person or agency by whom the incapacitated person is maintained.

   Official Note: The amount payable under paragraph (3) conforms to the amount set forth in section 5101 of the Probate, Estates and Fiduciaries Code, 20 Pa.C.S. § 5101, relating to when a guardian is unnecessary, incorporated by reference into section 5505 of the Code, 20 Pa.C.S. § 5505.

   (4)  If the minor or the incapacitated person has no such guardian, and none is to be appointed, the court may order

   (i)  any amount in cash of a resident or nonresident minor or incapacitated person to be deposited in one or more savings accounts in the name of the minor or the incapacitated person in banks, building and loan associations or savings and loan associations, deposits in which are insured by a Federal governmental agency, provided that the amount deposited in any one such savings institution shall not exceed the amount to which such accounts are thus insured, or in one or more accounts in the name of the minor or the incapacitated person investing only in securities guaranteed by the United States government or a Federal governmental agency managed by financial institutions. Every such order shall contain a provision that no withdrawal can be made from any such account until the minor attains his majority or unless the incapacitated person is adjudicated to have capacity, except as authorized by a prior order of the court. Proof of the deposit shall be promptly filed of record[.];

   Official Note: The order should provide for deposits in more than one savings institution if future accrued interest may reasonably be expected to increase a single deposit beyond the insured limit.

   For the definition of savings account see Rule 76.

   (ii)  an agreement be executed providing for a structured settlement underwritten by a financially responsible entity that assumes responsibility for future payments. All moneys paid from the structured settlement during minority or incapacity shall be paid into a restricted account as provided by subdivision (b)(4)(i) of this rule.

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Explanatory Comment

   Recommendation No. 132 proposes identical amendments to three rules governing compromise, settlement, discontinuance and distribution: Rule 2039 (Minors), Rule 2064 (Incapacitated Persons) and Rule 2206 (Wrongful Death Actions).

   The first amendment increases from $10,000 to $25,000 the amount which may be paid directly to the guardian of the person, the natural guardian, the person or agency by whom the minor or incapacitated person is maintained or to the minor. This amendment conforms the amount set forth in the rules to the amount stated in section 5101 of the Probate Estates and Fiduciaries Code, 20 Pa.C.S. § 5101, relating to when a guardian is unnecessary in small estates of minors. The amount in section 5101 of the Code was similarly increased from $10,000 to $25,000 by Act No. 102 of 1994. This statutory provision applies also to small estates of incapacitated persons as it is incorporated by reference into section 5505 of the Code, 20 Pa.C.S. § 5505.

   The second amendment is a specific authorization for the court to approve a distribution of funds which includes a structured settlement. The present rule contains no explicit statement in this regard. The rule authorizes structured settlements both where there is a guardian of the estate and where there is no such guardian.

   Presently, the rules limit the investment of funds to savings accounts in banks, building and loan associations or savings and loan associations. The third amendment proposes to expand the permissible investments to include accounts ''investing only in securities guaranteed by the United States government or a Federal governmental agency managed by financial institutions.''

By the Civil Procedural Rules Committee

EDWIN L. KLETT,   
Chairperson

[Pa.B. Doc. No. 96-131. Filed for public inspection February 2, 1996, 9:00 a.m.]


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