Judge: Anne Hwang, Case: 21STCV32955, Date: 2023-08-11 Tentative Ruling

Case Number: 21STCV32955    Hearing Date: August 11, 2023    Dept: 32

PLEASE NOTE:   Parties are encouraged to meet and confer concerning this tentative ruling to determine if a resolution may be reached.  If the parties are unable to reach a resolution and a party intends to submit on this tentative ruling, the party must send an email to the Court at sscdept32@lacourt.org indicating that party’s intention to submit.  The email shall include the case number, date and time of the hearing, counsel’s contact information (if applicable), and the identity of the party submitting on this tentative ruling.  If the Court does not receive an email indicating the parties are submitting on this tentative ruling and there are no appearances at the hearing, the Court may place the motion off calendar or adopt the tentative ruling as the order of the Court.  If all parties do not submit on this tentative ruling, they should arrange to appear in-person or remotely (which is highly encouraged).  Further, after the Court has posted/issued a tentative ruling, the Court has the inherent authority to prohibit the withdrawal of the subject motion and adopt the tentative ruling as the order of the Court. 

TENTATIVE RULING

MOTION

Plaintiffs Ayden Moreno, Christy Moreno, David Moreno, and Isaac Moreno (collectively, “Plaintiffs”) settled their claims against Cross-Defendants Erika Rodriguez and Abel Rodriguez (collectively, “Settling Parties”). Settling Parties move for a determination that their settlement with Plaintiffs was entered into in good faith.  Defendants/Cross-Complainants Pacific Mobile III, LLP dba Parklane Mobile Estates, and Cal-Am Properties Inc. (collectively, “Defendants”) oppose the motion.

ANALYSIS

Under section 877.6 of the California Code of Civil Procedure, “[a] determination by the court that [a] settlement was made in good faith shall bar any other joint tortfeasor . . . from any further claims against the settling tortfeasor . . . for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.”  (Code Civ. Proc., § 877.6, subd. (c).)  “The party asserting the lack of good faith has the burden of proof on that issue.”  (Code Civ. Proc., § 877.6, subd. (d).) 

Section 877.6 requires “that the courts review [settlement] agreements made under its aegis to insure that the settlements appropriately balance the . . . statute’s dual objectives” (i.e., providing an “equitable sharing of costs among the parties at fault” and encouraging parties to resolve their disputes by way of settlement).  (Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 494 (hereafter, Tech-Bilt).)  In Tech-Bilt, the California Supreme Court set forth the factors to consider when determining whether a settlement was made in good faith.  The Tech-Bilt factors are: (1) a rough approximation of plaintiff’s total recovery and the settlor’s proportionate liability; (2) the amount paid in settlement; (3) the allocation of settlement proceeds among plaintiffs; (4) a recognition that a settlor should pay less in settlement than he would if he were found liable after a trial; (5) the financial conditions and insurance policy limits of settling defendants; and (6) the existence of collusion, fraud, or tortious conduct aimed to injure the interests of the non-settling defendants.  (Id. at pp. 498-501.)  “Practical considerations obviously require that the [trial court’s] evaluation [of the settlement] be made on the basis of information available at the time of settlement.”  (Id. at p. 499.) 

“The party asserting the lack of good faith . . . [is] permitted to demonstrate, if he can, that the settlement is so far ‘out of the ballpark’ in relation to [the above] factors as to be inconsistent with the equitable objectives of [Section 877.6].  Such a demonstration would establish that the proposed settlement was not a ‘settlement made in good faith’ within the terms of section 877.6.”  (Tech-Bilt, supra, 38 Cal.3d at pp. 499–500.)  “The issue of the good faith of a settlement may be determined by the court on the basis of affidavits served with the notice of hearing, and any counteraffidavits filed in response, or the court may, in its discretion, receive other evidence at the hearing.”  (Code Civ. Proc., § 877.6, subd. (b); see also City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261.) 

Because a good faith determination bars indemnity claims by non-settling parties, the true value of the settlement to the settlor may not be the amount paid to the plaintiff but rather the value against such indemnity claims.  (TSI Seismic Tenant Space, Inc. v. Superior Court (2011) Cal.App.4th 159, 166.)  Substantial evidence showing the nature and extent of the settling defendant’s liability is required.  Without such evidence, a “good faith” determination is an abuse of discretion.  (Mattco Forge, Inc. v. Arthur Young & Co. (1995) 38 Cal.App.4th 1337, 1348; see Greshko v. County of Los Angeles (1987) 194 Cal.App.3d 822, 834 [attorney’s declaration re settling defendant’s liability insufficient where he failed to provide specific supporting facts or expert opinion].) 

In this case, Plaintiffs alleges they suffered injuries when Plaintiff Ayden Moreno was struck by a vehicle operated by Cross-Defendant Erika Rodriguez in front of his home at the Parklane Mobile Estates, and he was dragged underneath her car. This incident was witnessed by the remaining Plaintiffs. The operative first amended complaint alleges that Defendants failed to maintain the property to create safe roadways even though they were aware that remedial measures were necessary to protect the residents of the mobile home park.  As the parties contesting the good faith of the settlement, Defendants bear the burden to demonstrate that the settlement is not in good faith. 

Defendants argue that Plaintiffs’ settlement with the Settling Parties is not in good faith because it is not within the reasonable range of Settling Defendants’ proportional liability. The Court notes that Plaintiffs should expect to receive less in settlement from the Settling Parties than Plaintiff would receive at the time of trial; however, Defendants assert that the settlement amount of $300,000 represents only 14% of the Plaintiffs’ claimed damages of $2,205,096.66. (Opposition at pg. 4, 5-6, 8; Tabor Decl., Exh. F at pg. 6.) Defendants assert that this is not proportional to the Settling Parties’ liability because Cross-Defendant Erika Rodriguez conceded causing the accident, and the police report of the incident reflects that she was not aware that her vehicle struck Plaintiff Ayden Moreno. (Ibid; Tabor Decl. ¶ 3, Exh. A at pp. 5-6.) They further contend that Plaintiffs’ discovery responses suggest that the Cross-Defendants are primarily responsible for their injuries. (Tabor Decl. ¶ 4, Exh. B at pp. 3-4.) In comparison, Defendants claim that their liability is minimal because there were safety measures in place to prevent motorists from speeding in the mobile home park and warnings in place to drive cautiously. (Motion at pg. 7.)  As a result, Defendants argues that the settlement is out of the ballpark even though Settling Defendants have settled for their insurance policy limits.

Defendants further argue that Plaintiffs’ failure and refusal to name the Settling Parties in their complaint is evidence of collusion considering the extent of the Settling Parties’ liability exceeds that of the Defendants’. (Opposition at pp. 8-9, relying on Mattco Forge, Inc. v. Arthur Young & Co. (1997) 38 Cal.App.4th 1337, 1354.) Moreover, Defendants assert that the allocation of the settlement proceeds amongst the Plaintiffs evidences bad faith because the two adult Plaintiffs are favored even though Plaintiff Ayden Moreno had suffered actual injuries due to the incident. (Opposition at pp. 9-10.) Under the settlement agreement, Ayden Moreno would receive $100,000 and his parents would each receive $98,000. The remaining $4,000 is allocated to Isaac Moreno. Based on Plaintiffs’ claimed damages, Defendants assert that this is disproportionate to the damages incurred because Plaintiff Ayden Moreno has incurred in excess of $431,830 in medical special damages, and the remaining Plaintiffs have incurred less than $8,000 in medical special damages. (Opposition at pg. 10; Tabor Decl., Exh. F at pg. 6.)

The Court finds that the motion does not set forth sufficient evidence to support the nature and extent of the Settling Parties’ proportionate liability, nor address their financial condition.  The declaration of counsel simply states that “[t]he settlement is believed to be within the reasonable range of liability” and that the “settlement was not obtained through collusion, fraud, concealment or for the purpose of prejudicing any other parties to the action. Rather this settlement was made so that the Settling Parties could resolve this case and thereby avoid the expenses litigation as well as the preparation for and attendance at trial.” (Cadena Decl. ¶ 10, 15.) There is no evidentiary showing, through declarations or other means, that the proposed settlement is within the reasonable range of liability. The declaration does not even address a rough approximation of Plaintiffs’ total recovery.

Furthermore, the structure of the settlement does not evidence good faith because it does not properly reflect the damages incurred by Plaintiff Ayden Moreno. As a result, the Court finds the Settling Parties have not adequately addressed the relevant Tech-Bilt factors to demonstrate that their settlement in the amount of $300,000 is in good faith. The Court finds Defendants have met their burden to show that the proposed settlement is so far out of the ballpark that it is not in good faith. 

CONCLUSION AND ORDER

Therefore, the Court denies Settling Parties’ motion for determination of good faith settlement.  

The Settling Parties’ shall provide notice of the Court’s ruling and file proof of service of such.