Tustin : Settlement Annuity to Provide Boy $25 Million

The family of a 5-year-old Tustin boy who was severely burned in 1981 when the pilot light of a hot water heater ignited gasoline vapors has settled a lawsuit against Sears, Roebuck & Co. and one of its brand-name manufacturers for an annuity that will pay him about $25 million in his lifetime.

The annuity that Dana Estes will get in monthly installments is part of a settlement package that cost Sears and State Industries $1,357,000.

The settlement with Sears and State Industries, which manufactured the water heater, also provides an annuity that will give older brother Richard, 9, about $9 million during his life for the emotional trauma his parents said he suffered in witnessing the incident. The companies also gave the parents, James and Cheryl Estes, $257,000 in cash.

In June, 1981, Dana, then 22-months-old, and Richard, then 5, were getting toys out of their Anaheim garage.

Vapors from a one-gallon can of gasoline were ignited by the pilot light of a Sears hot water heater, which had been installed by the previous owner on the floor of the garage, according to lawyers on both sides of the case.

Dana caught fire, and his screams brought his mother running into the garage. She said that as she rolled him in the grass to put the flames out, her own clothing caught fire. But Richard quickly pulled the garden hose out to extinguish the flames.

Dana suffered mostly third-degree burns over 60 to 70% of his body and has undergone about 20 surgeries, mostly skin grafts, since the fire, Cheryl Estes said. "His right wrist and arm were burnt to the muscle," she said.

He will need almost yearly skin graft operations until he is fully grown, she said.

James and Cheryl Estes said they twice offered to settle the case for $500,000 in cash if Sears would agree to put warning labels on its hot water heaters. They said Sears refused. "We really don't want to see this happen to anyone else," Cheryl Estes said Wednesday.

Sears claimed such specific warnings were not needed because installation manuals already warned customers to follow local codes, seek any needed permits and have licensed workers install water heaters, said Russell E. Shallcross of Los Angeles, a Sears attorney through most of the litigation. He said the heater was improperly installed without a permit by an unlicensed handyman.

The settlement was reached March 21. The Estes family lawyer, Arthur Hews of Santa Ana, said the family decided to publicize the settlement because Sears would not add the specific warnings the family requested.

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