Judge: Daniel M. Crowley, Case: 22STCV05857, Date: 2022-09-28 Tentative Ruling
Case Number: 22STCV05857 Hearing Date: September 28, 2022 Dept: 28
Defendant County of Los Angeles’s Motion to Contest Cross-Defendant's Application for Good Faith Settlement
Having considered the moving, opposing and reply papers, the Court rules as follows.
BACKGROUND
On February 15, 2022, Plaintiff Jeffrey Volpei (“Plaintiff”) filed this action against Defendant County of Los Angeles (“Defendant”) for dangerous condition of public property and dangerous condition – failure to warn.
On April 21, 2022, Defendant filed an answer and a Cross-Complaint against Cross-Defendant Tomas Hernandez (“Cross-Defendant”) for implied indemnity, contribution and declaratory relief.
On June 29, 2022, Cross-Defendant filed an answer and a notice of settlement and application for determination of good faith settlement.
On July 19, 2022, Defendant filed a timely Motion to Contest Cross-Defendant's Application for Good Faith Settlement to be heard on September 28, 2022. On September 13, 2022, Cross-Defendant filed an opposition. On September 19, 2022, Defendant filed a reply.
Trial is currently scheduled for August 15, 2023.
PARTY’S REQUESTS
Defendant requests the Court deny the settlement for not being in good faith.
Cross-Defendant requests the motion be denied.
LEGAL STANDARD
CCP § 887.6(a)(2) states that “[i]n the alternative, a settling party may give notice of settlement to all parties and to the court, together with an application for determination of good faith settlement and a proposed order. The application shall indicate the settling parties, and the basis, terms, and amount of the settlement. The notice, application, and proposed order shall be given by certified mail, return receipt requested, or by personal service. Proof of service shall be filed with the court. Within 25 days of the mailing of the notice, application, and proposed order, or within 20 days of personal service, a nonsettling party may file a notice of motion to contest the good faith of the settlement. If none of the nonsettling parties files a motion within 25 days of mailing of the notice, application, and proposed order, or within 20 days of personal service, the court may approve the settlement. The notice by a nonsettling party shall be given in the manner provided in subdivision (b) of Section 1005. However, this paragraph shall not apply to settlements in which a confidentiality agreement has been entered into regarding the case or the terms of the settlement.” The statute further clarifies that the party asserting the lack of good faith shall have the burden of proof on that issue.
CCP § 877 states “[w]here a release, dismissal with or without prejudice, or a covenant not to sue or not to enforce judgment is given in good faith before verdict or judgment to one or more of a number of tortfeasors claimed to be liable for the same tort, or to one or more other co-obligors mutually subject to contribution rights, it shall have the following effect: (a) It shall not discharge any other such party from liability unless its terms so provide, but it shall reduce the claims against the others in the amount stipulated by the release, the dismissal or the covenant, or in the amount of the consideration paid for it, whichever is the greater. (b) It shall discharge the party to whom it is given from all liability for any contribution to any other parties.”
In Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499, the California Supreme Court identified the following nonexclusive factors courts are to consider in determining if a settlement is in good faith under section 877.6: “a rough approximation of plaintiffs' total recovery and the settlor's proportionate liability, the amount paid in settlement, the allocation of settlement proceeds among plaintiffs, and a recognition that a settlor should pay less in settlement than he would if he were found liable after a trial. Other relevant considerations include the financial conditions and insurance policy limits of settling defendants, as well as the existence of collusion, fraud, or tortious conduct aimed to injure the interests of nonsettling defendants.”
Once a Notice of Settlement has been filed and served, 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. (Fisher v. Superior Court (1980) 103 Cal.App.3d 434, 447; § 877.6, subd. (d).)
DISCUSSION
In analyzing whether a settlement was made in good faith, the Court looks to the factors set forth in Tech-Bilt, Inc. v. Woodward- Clyde & Associates (1985) 38 Cal.3d 488. There, the California Supreme Court explained that in making the determination as to whether to extinguish the non-settling defendant(s)’ right to equitable indemnity from the settling defendant, the settling defendant's settlement figure must not be grossly disproportionate to what a reasonable person, at the time of the settlement, would estimate the settling defendant's liability to be. The court set forth factors to consider:
• a rough approximation of plaintiffs' total recovery and the settlor's proportionate liability;
• the amount paid in settlement, the allocation of settlement proceeds among plaintiffs;
• recognition that a settlor should pay less in settlement than he would if he were found liable after a trial;
• the financial conditions and insurance policy limits of settling defendants; and
• the existence of collusion, fraud, or tortious conduct aimed to injure the interests of non-settling defendants.
The Court explained that the evaluation should be made based on information available at the time of settlement. (Tech-Bilt, Inc. v. Woodward- Clyde & Associates, supra, 38 Cal.3d at 499.)
Cross-Defendant, Tomas Hernandez, has filed a Notice of Settlement and Application for a Determination of Good Faith (Application) supported with admissible evidence addressing these factors. The Application indicates that Plaintiff suffered approximately $118,300 in medical expenses and intimates that Mr. Hernandez is likely largely responsible for causing the accident, but it is otherwise silent as to a rough approximation of Plaintiff’s total recovery and Mr. Hernandez’ proportionate share of that recovery. The Application does address the amount paid in settlement – Mr. Hernandez’s $100,000 insurance policy limits and an individual contribution of $15,000. The Application does not address the fact that settling parties should pay less in settlement than if found liable after a trial, but the Court takes judicial notice of that fact. The Application indicates that Mr. Hernandez is paying the entirety of the insurance available for this loss, and that his assets beyond such coverage are limited. The Application establishes the absence of collusion, fraud, or tortious conduct. The burden now shifts to the County of Los Angeles to show that Tomas Hernandez’s settlement was not made in good faith. (Fisher v. Superior Court, supra, 103 Cal.App.3d at 447; § 877.6, subd. (d).)
Recovery and Proportionate Liability
The County’s motion indicates that in Plaintiff's claim for damages filed with the county, Plaintiff stated there was $400,000.00 in damages to date and $2,000,000.00 in prospective damages. The County does not address what it views to be the actual total value of Plaintiff’s claim nor what it views to be its potential liability therefor.
Allocation of Settlement
There is only one Plaintiff, and thus the allocation of the settlement is proper.
Financial considerations
Mr. Hernandes states he “did not have the means to pay any further money beyond that [provided] towards settlement, in light of ongoing mortgage and other financial obligations.” Mr. Hernandez and his wife submit statements stating that they make approximately $10,600.00 a month via their salaries and have monthly mortgage payments of $2,171.00. They also stated that the sum of all accounts in Cross-Defendant's name (jointly or individually) does not exceed $5,000.00.
Collusion or Fraud
There is no indication of fraud or collusion. This factor leaves in favor of granting the motion.
Conclusion
In sum, while the Court finds that Tomas Hernandez’s settlement is likely less than his proportionate liability to Plaintiff, applying the Tech-Bilt factors as a whole, the Court finds that the County has not met its burden to prove that Tomas’ Hernandez’s settlement is so far out of the “ballpark” as to not have been made in good faith. Accordingly, the Court denies the motion and finds the settlement between Plaintiff and Tomas Hernandez to have been made in good faith.
CONCLUSION
The Court DENIES Defendant, County of Los Angeles’s Motion to Contest Cross-Defendant's Application for Good Faith Settlement. The Court GRANTS Tomas Hernandez’s Application for Good Faith Settlement.
Moving party is ordered to give notice of this ruling.
Moving Party is ordered to file the proof of service of this ruling with the Court within five days.
The parties are directed to the header of this tentative ruling for further instructions.