Lachenmeier, Enloe & Rall - February, 2004 Publication

NEW OREGON LEGISLATION REGARDING MINORS

     The 2007 Oregon Legislature passed a pair of laws, effective January 1, 2008, which may affect how claims related to injuries to minors are handled. House Bill 3083 addresses how a legal custodian may sign a settlement agreement on behalf of a minor. House Bill 2366 addresses a particular statute of limitations issue. Both laws are discussed below.

Minor Settlements

     Minors generally cannot enter into binding agreements, and for this reason, entering into a binding settlement with a minor can be problematic. A conservator appointed by a court can settle a claim on a minor’s behalf, but this procedure can make a small claim unnecessarily complicated. ORS 126.700 has been relied on to settle claims under $10,000 with minors, but that statute does not explicitly state that a guardian may enter into a settlement agreement which is binding on his or her minor child.

     In response to the above concerns the 2007 Oregon Legislative Assembly passed House Bill 3083, effective January 1, 2008, which provides a method for which a legal custodian may, on behalf of a minor child, settle a claim for $25,000 or less.

     The statute may only be used when: (1) the settlement consideration is $25,000 or less, (2) the person entering into the settlement has legal custody of the minor, (3) no conservator has been appointed for the minor, and (4) the person with legal custody signs both the affidavit or verified statement and a release. The settlement funds must be deposited directly into a federally insured savings account, in the sole name of the minor.

     Although the intent of the law was to simplify settlements for claims by minors, there are some potential complications. For one, unfortunately, the drafters certainly intended the statute to govern any “settlement” of $25,000 or less, but they used the term “claim”. There is a potential question as to whether a $50,000 “claim” that “settles” for $25,000 or less is subject to the statute.

     Since the law requires the funds to be deposited “directly” into the bank account “in the sole name of the minor”, it would seem that under House Bill 3083, the attorney’s name cannot be put on the settlement check, which may prevent the attorney from taking a fee in the customary way (the attorney would need to charge the client in some other way). We would recommend that settlement checks be made payable directly to the bank and the account number, without adding any other payee on the check. Currently, most banks will not set up an account in the sole name of the minor. (As mentioned above, since minors typically cannot be bound by agreements, banks are not typically willing to let a minor be solely in charge of an account). However, this may change as banks become familiar with this new law.

     Also, House Bill 3083 says that such a settlement is binding “without the need for further court approval or review” [emphasis supplied]. The use of the word “further” seems to give rise to at least an argument that there is some basic level of court approval or review required to make these settlements binding. Certainly, that was not the intent of the drafters, but if a minor claimant wishes to later challenge the settlement agreement as non-binding, and there has been no court approval or review at any level, we can envision at least an argument that a settlement agreement without any court approval or review is not binding. It is unfortunate the word “further” was included in the language of House Bill 3083, as we do not believe that this word was meant to have any significance.

     Finally, the statute states that the person entering into the agreement on behalf of the minor may submit an affidavit or a “verified statement.” A “verified statement” would presumably imply a non-notarized document, but since the term “verified statement” does not appear to be defined in the Oregon Revised Statutes, it would be advisable to obtain a notarized affidavit to assure complying with the statute and effectuating a binding settlement. One wonders whether there will be future legislative clarifications to this new law, which is clearly intended to simplify how claims with minors are settled. But, for now, people should consider how they will attempt to comply with the terms of this new law and be aware of the possibility that some settlements made in reliance of the new statute may not be binding.

Statute of Limitations for Minor’s Medical Expenses

     The statute of limitations for claims related to injuries to minors is somewhat complicated. If a person entitled to bring an action is a minor, the statute of limitations is tolled while the person is still a minor. However, the time for commencing an action will not be extended for more than five years, or for more than one year after the person attains 18 years of age.

     A minor is entitled to bring an action for injuries to him or herself. But, since a parent is ultimately responsible for paying for a minor child’s medical expenses, the parent is the real party in interest for bringing a claim for such expenses. (ORS 31.700 provides a procedure in which the parent may consent to the minor’s guardian ad litem bringing a claim for medical expenses). The 2007 Oregon Legislature passed HB 2366 which states that if a child’s cause of action is tolled, a cause of action by the parent, guardian or conservator for medical expenses related to the child’s cause of action is tolled for the same amount of time. The law applies only to causes of action arising after 1/1/2008.

     This should simplify, in part, the statute of limitations issues related to an injury of a minor. However, not all claims related to injuries to minors are subject to the same statute of limitations. Under ORS 30.010 a parent can bring a claim for damages arising out of the death or injury to a minor child. See e.g. Beerbower v. State ex rel Oregon Health Sciences University, 85 Or App 330 (1987) (parent may claim pecuniary loss arising from injury to child). Such a claim, which is personal to the parent, is not affected by the new law and the statute of limitations is not tolled due to the child’s age.

If you have any questions, please feel free to contact the authors: Martin M. Rall (marty@lerlaw.com) and Flavio A. Ortiz (alex@lerlaw.com) at 503-768-9600.