Judge: Anne Hwang, Case: 21STCV36676, Date: 2024-05-07 Tentative Ruling

Case Number: 21STCV36676    Hearing Date: May 7, 2024    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.  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

BACKGROUND

On October 5, 2021, Plaintiff Mazen Khalil (“Plaintiff”) filed a complaint against Defendants Jack Schneider, Jack Benet, Ever Morales, Jakelin Cordon, and Does 1 to 20 for negligence surrounding a motor vehicle accident. Plaintiff alleges the accident took place on October 7, 2019, on the CA-118 freeway and that defendants Jack Schneider, Jack Benet, and Ever Morales were operating the motor vehicle.

On October 11, 2023, Plaintiff dismissed Jack Benet from the complaint.

On November 3, 2023, Defendant Jack Schneider filed a cross-complaint against Ever Morales, Jackelin Cordon, and Roes 1 to 20 for implied indemnity, comparative indemnity, declaratory relied, equitable indemnity, and contribution.

On January 22, 2024, Plaintiff dismissed Ever Morales and Jakelin Cordon from the complaint.

On February 21, 2024, Cross-Defendants Ever Morales Aldana and Jackelin Corden (“Cross-Defendants”) filed an application (“Application”) for determination of a good faith settlement with Plaintiff. It does not appear a hearing date was reserved for the Application.

On March 5, 2024, Defendant/Cross-Complainant Jack Schneider (“Schneider”) filed the instant motion to contest Cross-Defendants’ Application for determination of good faith settlement. Cross-Defendants oppose and Schneider replies.

LEGAL STANDARD

Under section 877.6 of the 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 (c).) Any party to an action may move for an order determining whether a settlement between the plaintiff and one or more alleged tortfeasors or co-obligors was made in good faith. (Code Civ. Proc., § 877.6, subd. (a)(1).) “The party asserting the lack of good faith shall have the burden of proof on that issue.” (Code Civ. Proc., § 877.6, subd. (d).)

In City of Grand View Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261, the court provided the following guidance regarding a motion for a good faith settlement determination: 

If the good faith settlement is contested, section 877.6, subdivision (d), sets forth a workable ground rule for the hearing by placing the burden of proving the lack of good faith on the contesting party. 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 nonsettlor who asserts that the settlement was not made in good faith. If contested, declarations by the nonsettlor should be filed which in many cases could require the moving party to file responsive counterdeclarations to negate the lack of good faith asserted by the nonsettling contesting party. 

(192 Cal.App.3d 1251, 1260-1261 [citation omitted].) 

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 court set forth the factors to consider when determining whether a settlement is 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. (Tech-Bilt, supra, 38 Cal.3d at p. 498-501.) Not every factor will apply in every case. (Dole Food Co., Inc. v. Sup.Ct. (Shell Oil Co.) (2015) 242 Cal.4th 894, 909.)

“ ‘A determination as to the good faith of a settlement, within the meaning of section 877.6, necessarily requires the trial court to examine and weigh a number of relevant factors, [fn. omitted] one of the most important of which is the settling party's proportionate liability.’ [citation.] If ‘there is no substantial evidence to support a critical assumption as to the nature and extent of a settling defendant's liability, then a determination of good faith based upon such assumption is an abuse of discretion.’” (Mattco Forge, Inc. v. Arthur Young & Co. (1995) 38 Cal.App.4th 1337, 1350.)

However, the rule in Tech-Bilt that the settlement figure must not be grossly disproportionate to what a reasonable person at the time of settlement would estimate the settling defendant’s liability to be, has an exception. “[B]ad faith is not established merely by a showing that a settling defendant with limited ability to satisfy a judgment will pay less than his or her theoretical proportionate share: ‘Such a rule would unduly discourage settlements. “For the damages are often speculative, and the probability of legal liability therefor is often uncertain or remote. And even where the claimant's damages are obviously great, and the liability therefor certain, a disproportionately low settlement figure is often reasonable in the case of a relatively insolvent, and uninsured, or underinsured, joint tortfeasor.” [Citation.]’” (Schmid v. Superior Court (1988) 205 Cal.App.3d 1244, 1248 [quoting Tech-Bilt, supra, 38 Cal.3d at 499]; see also City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1264 [“The wealth or non-wealth of the settling defendant is a factor for the trial court to consider under Tech-Bilt.”].)

Schmid involved a car accident where the plaintiff alleged $500,000 in damages. (Schmid, supra, 205 Cal.App.3d at 1247.) The defendant driver, Schmid, offered her insurance policy limit of $55,000 as a settlement. Even though the trial court denied the motion for good faith because the settlement was disproportional to her liability, the Court of Appeal reversed because the settlement represented the policy limit, there was undisputed evidence that Schmid had no other assets, and the non-settling defendant had failed to oppose the motion. (Id. at 1248–49.)

“All affidavits relied upon as probative must state evidentiary facts; they must show facts and circumstances from which the ultimate fact sought to be proved may be deduced by the court. [citation.] Affidavits or declarations setting forth only conclusions, opinions or ultimate facts are to be held insufficient; even an expert's opinion cannot rise to the dignity of substantial evidence if it is unsubstantiated by facts. [citation.]” (Greshko v. County of Los Angeles (1987) 194 Cal.App.3d 822, 834.)

“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.)

Since there is often little discovery at the settlement stage, the objecting non-settler can move for a continuance of the hearing "if necessary, for the purpose of gathering facts, which could include further formal discovery, to support its statutory burden of proof as to all Tech-Bilt factors non-settlors placed in issue in order that the matter can be fully and fairly litigated." (City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1265.)

DISCUSSION

Cross-Defendants have entered into a settlement with Plaintiff for $15,000, based on their policy limit. This case involves a four-vehicle accident. Schneider contends that Plaintiff’s vehicle was the second car in the accident, followed by Ever Morales (“Morales”) who rear-ended Plaintiff in a vehicle owned by Jakelin Cordon (“Cordon”). Schneider drove the fourth vehicle. Schneider is the last defendant remaining in this action.

Schneider was served the summons in this case in October 2023. On November 3, 2023, Schneider propounded interrogatories on Plaintiff. (Berdan Decl. ¶¶ 3–9.) According to the discovery responses, Plaintiff claims $63,652.80 in past medical specials and $250,000 to $295,000 in future medical damages. (See Berdan Decl., Exh. E, SROG # 6; Exh. B, FROG # 6.7; Exh. C Medical Records.) Schneider argues that the settlement at issue—$15,000—is roughly only 4% of Plaintiff’s total damages. Considering that Morales was driving the first vehicle that rear-ended Plaintiff, Schneider argues the settlement amount is not proportional to Cross-Defendants’ liability. No other discovery has taken place. (Id. ¶ 10.) Schneider contends there are various accounts of the incident and speculates that Morales’ vehicle may have rear-ended Plaintiff’s vehicle first since it has not been confirmed whether Morales’ vehicle hit Plaintiff’s vehicle twice. (Motion, 8.)

In opposition, Cross-Defendants relate a different version of the facts. They contend that Jack Benet (“Benet”) rear-ended Morales, causing her car to rear-end Plaintiff. Schneider was the registered owner of the Benet vehicle. (Opp., 3.) Cross-Defendants argue they have no other liability insurance besides the policy that was used for the settlement. (Opp., 5.) Cross-Defendants each provide a declaration in support. Jakelin Cordon declares under penalty of perjury that she carried only one insurance policy at the time of incident with a limit of $15,000 per person and $30,000 per accident. (Cordon Decl. ¶ 4.) She declares she owned the vehicle Morales was driving and that other than her insurance policy, she is unable to pay any money towards a settlement. (Id. ¶ 6.) Morales similarly declares that she is unable to pay any money judgment besides the insurance policy. (Morales Decl. ¶ 6.)

In reply, Schneider notes that Plaintiff has not provided a value for general damages and discovery is still pending. (Reply, 5.)

Although there is a factual dispute about Cross-Defendants’ liability, Schneider, as the moving party, has not presented evidence in a declaration regarding proportionate liability. Schneider has failed to set forth evidence establishing the Tech-Bilt factors, other than a rough approximation of Plaintiff’s total recovery. The Court also finds significant the undisputed evidence that Cross-Defendants have offered the policy limits of their only insurance and have no other assets, under the reasoning in Schmid.

CONCLUSION AND ORDER

Therefore, the motion to Contest Application for Determination of Good Faith Settlement is DENIED.

Moving party shall give notice of the Court’s order and file a proof of service of such.