Judge: Andrew E. Cooper, Case: 22CHCV01208, Date: 2024-07-12 Tentative Ruling

Case Number: 22CHCV01208    Hearing Date: July 12, 2024    Dept: F51

MOTION FOR DETERMINATION OF GOOD FAITH SETTLEMENT

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Motion Filed: 2/16/24

MOVING PARTY: Defendant/Cross-Defendant Genaro Sandoval, Jr. (erroneously sued as Gerardo Sandoval) (“Moving Defendant”)

RESPONDING PARTY: Defendants/Cross-Complainants Juan Ramon Gutierrez; and Sonia Knight (collectively, “Cross-Complainants”)

NOTICE: OK

RELIEF REQUESTED: An order finding the settlement entered between Moving Defendant and Plaintiff to be in good faith pursuant to Code of Civil Procedure section 877.6, and that any claim against Moving Defendant for declaratory relief, apportionment of fault, or partial or comparative indemnity, arising out of the subject action, is barred.

TENTATIVE RULING: The motion is granted.

Moving Defendant is reminded to review the 5/3/19 First Amended General Order Re Mandatory Electronic Filing for Civil. When e-filing documents, parties must comply with the “TECHNICAL REQUIREMENTS” which are set forth at page 4, line 4 through page 5, line 12 of the Court’s 5/3/19 First Amended General Order Re Mandatory Electronic Filing for Civil (particularly bookmarking declarations and exhibits). (CRC 3.1110(f)(4).) Failure to comply with these requirements in the future may result in papers being rejected, matters being placed off calendar, matters being continued so documents can be resubmitted in compliance with these requirements, documents not being considered and/or the imposition of sanctions.

BACKGROUND

This is a personal injury action in which Plaintiff alleges that on 12/23/20, she was injured in a motor vehicle collision between her vehicle and that of Moving Defendant at or near the intersection of Hubbard Street and Foothill Boulevard, Los Angeles, California, 91342. (Compl. pp. 6–7.) Additionally, Plaintiff alleges that on 11/24/21, she was injured in a motor vehicle collision between her vehicle and that of Cross-Complainants at or near the intersection of North Glenoaks Boulevard and East Harvard Road, Burbank, CA 91501. (Id. at pp. 8–9.) Plaintiff alleges that each of the individual defendants “were the agents and/or employees of the remaining Defendants, and in doing the things herein alleged, were acting within the course and scope of said agency and/or employment.” (Id. at pp. 7, 9.)

On 11/21/22, Plaintiff filed her complaint against Defendants, alleging the following causes of action: (1) Premises Liability (against dismissed defendants Penney Opco LLC dba JCPenney and Northridge Fashion Center); (2) General Negligence (against dismissed defendants); (3) Motor Vehicle (against Moving Defendant); (4) General Negligence (against Moving Defendant); (5) Motor Vehicle (against Cross-Complainants); and (6) General Negligence (against Cross-Complainants). On 7/20/23, Plaintiff dismissed the entity defendants from the action.

On 4/28/23, Cross-Complainants filed their answer. On 5/3/23, Cross-Complainants filed their cross-complaint against Moving Defendant and the dismissed entity defendants, alleging the following causes of action: (1) Indemnification; (2) Apportionment of Fault; (3) Declaratory Relief; (4) Premises Liability (against dismissed defendants); and (5) Motor Vehicle (against Moving Defendant). On 7/25/23, Cross-Complainants dismissed the entity cross-defendants from the action. On 2/27/24, Moving Defendant filed his answer to the cross-complaint.

On 10/2/23, Moving Defendant entered into a settlement agreement with Plaintiff. On 2/16/24, Moving Defendant filed the instant application for determination of good faith settlement. On 6/28/24, Cross-Complainants filed their opposition. On 7/5/24, Moving Defendant filed his reply.

ANALYSIS

A plaintiff may settle with one of several joint tortfeasors or co-obligors on a contract without releasing the others, provided that the settlement is made in “good faith” pursuant to Code of Civil Procedure section 877.6. “Where there are multiple defendants, each having potential liability for different areas of damage, an allocation of the settlement amount must be made. … Failure to do so may preclude a ‘good faith’ determination because there is no way to determine the appropriate set off pursuant to section 877 against the nonsettling defendant.” (L. C. Rudd & Son, Inc. v. Superior Court (1997) 52 Cal.App.4th 742, 750.)

Once there is a showing made by the settlor of the settlement, the burden of proof on the issue of good faith shifts to the non-settlor who asserts that the settlement was not made in good faith. (Fisher v. Superior Court (1980) 103 Cal.App.3d 47; Code Civ. Proc. § 877.6, subd. (d).) The ultimate determinant of good faith is whether the settlement is grossly disproportionate to what a reasonable person at the time of settlement would estimate the settlor’s liability to be. (City of Grand Terrace v. Superior Court (1987) 192 Cal. App. 3d 1251, 1262.)

In making such a determination, the Court considers several factors: (1) A rough approximation of the plaintiff’s total recovery and the settlor’s proportionate liability; (2) The amount paid in settlement; (3) A recognition that a settlor should pay less in settlement than if found liable at trial; (4) The allocation of the settlement proceeds among the plaintiffs; (5) The settlor’s financial condition and insurance policy limits, if any; and (6) Evidence of any collusion, fraud, tortious conduct between the settlor and the plaintiff aimed at making the non-settling parties pay more than their fair share. (Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499.)

Here, the terms of the settlement provide, inter alia, that Plaintiff agrees to release her claims against Moving Defendant, with prejudice, in exchange for $15,000.00. (Ex. 2 to Decl. of Jinny A. Cain.) Moving Defendant asserts that the settlement satisfies each Tech-Bilt factor, because “there are no allocation issues between the parties, as there is only one plaintiff, and she brings her claims with respect to the December 23, 2020 Incident against only one named defendant, Mr. Sandoval. … The other causes of action in Plaintiff’s complaint relate to two incidents that are distinct, separate, and wholly-unrelated to the December 23, 2020 Incident.” (Def.’s Mot. 6:12–15.) Moving Defendant maintains that he “agreed to pay Plaintiff a sum of $15,000.00 which represents the policy limits available and which is well within the realm of what a reasonable person would estimate Mr. Sandoval’s potential liability to be at the time of the settlement.” (Id. at 6:18–21.)

A.    Procedural Issues

1.      Applicability of Code of Civil Procedure Section 877.6

As a preliminary matter, Cross-Complainants argue that “section 877.6 does not apply here because Defendants are not co-obligors or alleged to be joint tortfeasors and therefore the motion for good faith settlement should be denied. As three separate accidents are alleged to have occurred, the code section does not apply under these circumstances, and this motion should be denied.” (Opp. 5:16–18.)

Moving Defendant argues in reply that “Cross-Complainants cannot take the two conflicting positions that 1) the two incidents are wholly unrelated, and that Plaintiff’s damages stemming from one incident are distinguishable in their entirety from those stemming from another accident, and 2) the claimed damages are not distinguished from one another.” (Reply 2:24–28.) As Moving Defendant observes, “Plaintiff alleges both Defendant and Cross-Complainants contributed to Plaintiff’s alleged injuries.” (Id. at 2:16–17, citing Compl.)

Based on the foregoing, the Court finds that Code of Civil Procedure section 877.6 does apply in the instant circumstances, where Plaintiff has alleged that her injuries were caused both by Moving Defendant and Cross-Complainants, and where Cross-Complainants have likewise alleged that Moving Defendant is partially responsible for Plaintiff’s injuries.

2.      Applicability of California Rules of Court, Rule 3.1382

Cross-Complainants further argue that the instant motion should be denied on its face because “Defendant SANDOVAL failed to comply with the applicable statutes, including Rules of Court, Rule 3.1382 with respect to identifying parties and pleadings and/or portions of pleadings that would be affected by the proposed settlement, as well as a failure to indicate the dates on which the affected pleading was filed.” (Opp. 8:8–11.)

Rule 3.1382 of the California Rules of Court states that “a motion or application for determination of good faith settlement may include a request to dismiss a pleading or a portion of a pleading. The notice of motion or application for determination of good faith settlement must list each party and pleading or portion of pleading affected by the settlement and the date on which the affected pleading was filed.” (Cal. Rules of Ct., rule 3.1382 [emphasis added].)

Here, Moving Defendant argues in reply that “Defendant’s motion for determination of good faith settlement did not include any request for the dismissal of a pleading or a portion thereof. Thus, Rule 3.1382 is inapplicable and does not constitute any basis for denying Defendant’s motion.” (Reply 5:22–24.) The Court agrees, and finds that Moving Defendant has not violated Rule 3.1382 of the California Rules of Court.

B.     Good Faith Determination

1.      Proportional Liability

Here, Cross-Complainants argue that the proposed settlement is unreasonable because “Plaintiff’s medical bills are far more significant than the policy limit of $15,000 tendered by Defendant SANDOVAL, and the proportion of Plaintiff’s injuries attributable to her accident with Defendant SANDOVAL is far greater than those attributable to Defendant GUTIERREZ.” (Opp. 4:26–5:1.) Cross-Complainants base their contentions on Plaintiff’s 5/1/24 deposition, “wherein Plaintiff confirmed the 2nd Accident was much more severe than the 3rd Accident,” and on Plaintiff’s responses to Cross-Complainants’ Form Interrogatories, Set One, wherein “the damages sought by Plaintiff in this matter for medical treatments alone exceeds $168,000.00.” (Id. at 4:2–3, 4:10–11.)

As Moving Defendant asserts in reply, “the evaluation of whether a proposed settlement agreement was made in good faith is based only on the information available at the time of the settlement.” (Reply 3:17–19, citing Tech-Bilt, 38 Cal.3d at 499 [“practical considerations obviously require that the evaluation be made on the basis of information available at the time of settlement.”].) Moving Defendant notes that here, “Plaintiff was deposed on May 1, 2024, nearly seven (7) months after Plaintiff and Defendant entered the proposed settlement agreement. The information cited from Plaintiff’s deposition testimony was not available to Defendant at the time of the proposed settlement agreement’s execution.” (Id. at 3:23–26.) Furthermore, “Defendant has not filed an Answer to Plaintiff’s complaint. Accordingly, neither Cross-Complainants[’] Form Interrogatories to Plaintiff, nor Plaintiff’s responses thereto, were served on Defendant. Defendant was not aware of the information contained in Plaintiff’s responses to these Form Interrogatories, Set One, at the time [of] the proposed settlement agreement’s execution.” (Id. at 4:5–8.)

Based on the foregoing, the Court agrees with Moving Defendant that “Cross-Complainants’ reliance on these documents and the statements contained therein is improper,” as the information was not available at the time Moving Defendant entered into his settlement with Plaintiff. (Id. at 4:9–10.) Accordingly, the Court declines to consider Cross-Complainants’ arguments to the extent that they rely on Plaintiff’s deposition testimony or discovery responses.

2.      Insurance Policy Limits

Cross-Complainants further argue that “allowing a party to escape claims for indemnity by paying an unreasonably disproportionate share does not further the policy of allocating costs between multiple tortfeasors in an equitable manner.” (Opp. 7:16–18, citing TSI Seismic Tenant Space, Inc. v. Superior Court (2007) 149 Cal.App.4th 159.) To the extent that this argument relies on Plaintiff’s damages figure as stated in her responses to Cross-Complainants’ form interrogatories, the Court disregards these arguments for the reasons discussed above.

Moving Defendant further argues in reply that “when an insurance company pays its total available policy limits, it is very strong evidence of a ‘good faith’ settlement, absent evidence of collusion or grossly inappropriate allocation or apportionment of the settlement proceeds to injure the non-settling tortfeasor.” (Reply 4:20–23, citing Fisher v. Superior Court (1980) 103 Cal.App.3d 434, 446; Ford Motor Co. v. Schultz (1983) 147 Cal.App.3d 941; Stambaugh v. Superior Court (1976) 62 Cal.App.3d 231, 238.) Moving Defendant further asserts that “‘a disproportionately low settlement figure is often reasonable in the case of a relatively insolvent, and uninsured, or underinsured, joint tortfeasor.’” (Id. at 5:7–8, quoting Tech-Bilt, 38 Cal.3d at 499.) Here, “Defendant tendered the policy limits of his automobile insurance policy and has no other policies of insurance which may provide him coverage for the injuries alleged by Plaintiff. … Defendant was not acting in the course or scope of employment at the time of the alleged December 23, 2020 incident.” (Id. at 5:9–13, citing Ex. 1 to Cain Decl., ¶¶ 2–4.)

Based on the foregoing, the Court finds that Cross-Complainants have not met their burden to show that the settlement entered into is grossly disproportionate or unreasonable. Accordingly, the Court finds the settlement entered between Moving Defendant and Plaintiff to be made in good faith pursuant to Code of Civil Procedure section 877.6.¿ 

CONCLUSION

The motion is granted.