807.10 Settlements in behalf of minors or individuals adjudicated incompetent; judgments.

(1) A compromise or settlement of an action or proceeding to which a minor or individual adjudicated incompetent is a party may be made by the guardian, if the guardian is represented by an attorney, or the guardian ad litem with the approval of the court in which such action or proceeding is pending.

(2) A cause of action in favor of or against a minor or individual adjudicated incompetent may, without the commencement of an action thereon, be settled by the guardian, if the guardian is represented by an attorney, with the approval of the court appointing the guardian, or by the guardian ad litem with the approval of any court of record. An order approving a settlement or compromise under this subsection and directing the consummation thereof shall have the same force and effect as a judgment of the court.

(3) If the amount awarded to a minor or individual adjudicated incompetent by judgment or by an order of the court approving a compromise settlement of a claim or cause of action of the minor or individual does not exceed the amount specified under s. 867.03 (1g) (intro.), exclusive of interest and costs and disbursements, and if there is no guardian of the ward, the court may upon application by the guardian ad litem after judgment, or in the order approving settlement, fix and allow the expenses of the action, including attorney fees and fees of guardian ad litem, authorize the payment of the total recovery to the clerk of the court, authorize and direct the guardian ad litem upon the payment to satisfy and discharge the judgment, or to execute releases to the parties entitled thereto, and enter into a stipulation dismissing the action upon its merits. The order shall also direct the clerk upon the payment to pay the costs, disbursements, and expenses of the action and to dispose of the balance in a manner provided in s. 54.12 (1), as selected by the court. The fee for the clerk's services for handling, depositing, and disbursing funds under this subsection is prescribed in s. 814.61 (12) (a).

History: Sup. Ct. Order, 67 Wis. 2d 585, 746 (1975); 1975 c. 218; 1981 c. 317; 1997 a. 290; 1999 a. 32; 2005 a. 387.

The quasi-judicial immunity of a guardian ad litem applies only to liability for the negligent performance of his or her duties, not as a shield against court-imposed sanctions for failure to obey a court order. Reed v. Luebke, 2003 WI App 207, 267 Wis. 2d 596, 671 N.W.2d 304, 02-2211.

Whether an individual has satisfied the standard for mental incompetence under this section should be determined by considering the person's ability to: 1) reasonably understand pertinent information; 2) rationally evaluate litigation choices based upon that information; and 3) rationally communicate with, assist, and direct counsel. Kainz v. Ingles, 2007 WI App 118, 300 Wis. 2d 670, 731 N.W.2d 313, 06-0963.

Because a claim was resolved when the plaintiff took judgment against the defendant's insurer, the requirement that settlements involving minors be approved by the court was not implicated. Parsons v. American Family Insurance Company, 2007 WI App 211, 305 Wis. 2d 630, 740 N.W.2d 399, 06-2481.