Judge: Deirdre Hill, Case: 19TRCV00959, Date: 2022-10-11 Tentative Ruling

Case Number: 19TRCV00959    Hearing Date: October 11, 2022    Dept: M

Hearing Date:                          October 11, 2022

Moving Parties:                      Defendant American Honda Motor Co., Inc.

Responding Party:                  None

Motion for Good Faith Settlement

            The court considered the moving papers.  No opposition was filed.

RULING

            The motion is GRANTED.  The court ORDERS that in this action and all related actions, all present claims and cross-complaints of any kind for implied indemnity, equitable comparative contribution and apportionment or partial or comparative indemnity and apportionment based on comparative negligence or comparative fault against American Honda Motor Co., Inc. be and are dismissed with prejudice.  Any and all present and future claims against American Honda Motor Co., Inc. by or on behalf of joint tortfeasors or co-obligors are barred.

BACKGROUND

            On October 24, 2019, plaintiffs Shubing Jia and Shiming Chen, both ind. and as personal representatives for decedent Victoria Jialing Chen filed a complaint against American Honda Motor Co., Inc., Honda Motor Company, Ltd, Honda Manufacturing of Alabama, LLC, Nhang Lim, Mui Chi Wong, and A+ Academy Tutoring Center for (1) negligence, (2) strict products liability, and (3) vicarious liability based on a three-vehicle collision on July 18, 2019.

On December 13, 2019, Nhang Lim filed a cross-complaint for indemnity and declaratory relief.

On June 5, 2020, the parties stipulated and the court ordered that the three vehicles involved in the incident be preserved and each party be allowed to inspect them.

On December 1, 2020, defendant A+ Academy Learning Center filed a cross-complaint.

On January 27, 2022, the court granted plaintiffs’ motion for leave to amend.

On January 28, 2022, plaintiffs filed a FAC.

DISCUSSION

            Defendant American Honda Motor Co., Inc. requests an order that the settlement entered into by and among moving defendant and plaintiffs was made in good faith. 

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:

This court notes that of the hundreds of motions for good faith determination presented for trial court approval each year, the overwhelming majority are unopposed and granted summarily by the trial court.  At the time of filing in many cases, the moving party does not know if a contest will develop.  If each motion required a full recital by declaration or affidavit setting forth a complete factual response to all of the Tech-Bilt factors, literally thousands of attorney hours would be consumed and inch-thick motions would have to be read and considered by trial courts in an exercise which would waste valuable judicial and legal time and clients’ resources. . . . That is to say, when no one objects, the barebones motion which sets forth the ground of good faith, accompanied by a declaration which sets forth a brief background of the case is sufficient.

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).

“[Code of Civil Procedure] Section 877.6 was enacted by the Legislature in 1980 to establish a statutory procedure for determining if a settlement by an alleged joint tortfeasor has been entered into in good faith and to provide a bar to claims of other alleged joint tortfeasors for equitable contribution or partial or comparative indemnity when good faith is shown.”  IRM Corp. v. Carlson (1986) 179 Cal. App. 3d 94, 104.

CCP § 877.6(a)(1) provides, in relevant part, that, on noticed motion, “[a]ny party to an action wherein it is alleged that two or more parties are joint tortfeasors or co-obligors on a contract debt shall be entitled to a hearing on the issue of the good faith of a settlement entered into by the plaintiff or . . . and one or more alleged tortfeasors or co-obligors . . . .”  “A determination by the court that the settlement was made in good faith shall bar any other joint tortfeasor or co-obligor from any further claims against the settling tortfeasor or co-obligor for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.”  CCP § 877.6(c).  Although a determination that a settlement was in good faith does not discharge any other party from liability, “it shall reduce the claims against the others in the amount stipulated” by the settlement.  CCP § 877(a).   

“The party asserting the lack of good faith shall have the burden of proof on that issue.”  CCP § 877.6(d).

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.” 

The evaluation of whether a settlement was made in good faith is required to “be made on the basis of information available at the time of settlement.”  Tech-Bilt, 38 Cal.3d at 499.  “‘[A] 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.’ [Citation.]”  Id. at 499. 

“The party asserting the lack of good faith, who has the burden of proof on that issue (§ 877.6, subd. (d)), should be permitted to demonstrate, if he can, that the settlement is so far ‘out of the ballpark’ in relation to these factors as to be inconsistent with the equitable objectives of the statute.  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, 38 Cal.3d at 499-500. 

 “Thus, Tech-Bilt held that in determining whether a settlement was made in good faith for purposes of section 877.6, a key factor a trial court should consider is whether the amount paid in settlement bears a reasonable relationship to the settlor’s proportionate share of liability. (Tech-Bilt, supra, 38 Cal.3d at pp. 499–500 . . . .)  This is because one of the main goals of section 877.6 is ‘allocating costs equitably among multiple tortfeasors.’  (Tech-Bilt, supra, 38 Cal.3d at p. 502 . . . .).”  TSI Seismic Tenant Space, Inc. v. Superior Court (2007) 149 Cal.App.4^th 159, 166.  “Accordingly, a court not only looks at the alleged tortfeasor's potential liability to the plaintiff, but it must also consider the culpability of the tortfeasor vis-à-vis other parties alleged to be responsible for the same injury.  Potential liability for indemnity to a nonsettling defendant is an important consideration for the trial court in determining whether to approve a settlement by an alleged tortfeasor.  [Citation.]”  Id. at 166.

In the FAC, plaintiffs allege that on July 18, 2019, there was a three vehicle collision.  Defendant Wong was driving and entered the intersection of Live Oak Avenue and Baldwin Avenue to make a legal left turn, but she was struck by defendant Lim.  Defendant Lim was driving on Baldwin Avenue and ran a red light, striking Wong’s Odyssey.  The collision caused Wong’s Odyssey to spin out of control and collide with another vehicle.  As a result of the collision, decedent was ejected from Wong’s Odyssey window onto the road.  Decedent was transported for emergency surgery but passed away during the surgery.  FAC, ¶23.  Honda defendants negligently designed, manufactured, sold, and distributed vehicles in 2018 by the name of Odyssey with a faulty restraint system.  Id., ¶24.  Decedent was seated in the third row right seat when the incident occurred.  As a direct result of Honda’s negligence, decedent was ejected from the vehicle.  Id., ¶27.

Although unopposed, the court considered the Tech-Bilt factors as applied to the settlement between moving defendant and plaintiffs.

First, as to a rough approximation of plaintiff’s total recovery, defendant contends that according to plaintiffs’ discovery responses, they incurred $23,904 in funeral expenses in economic damages.  Plaintiffs also suffered non-economic damages.

Second, as to moving defendant’s proportionate liability, defendant explains that there were eight occupants in the Odyssey:  Wong and seven children.  Wong was driving them to an activity for A+ Academy Tutoring Center.  Decedent Victoria Chen was ejected as result of the crash impact and sustained fatal injuries.  The other seven Odyssey occupants did not sustain serious injuries; none were ejected.  LA County Sheriff’s Deputy Gary Clifford investigated the crash and confirmed the decedent was seated in the third row left seat.  Defendant asserts that on September 28, December 1 and 2, 2020 defendant inspected the Odyssey and plaintiffs’ experts attended the December 2020 inspection.  The inspections revealed the third row left seat belt was in a fully retracted position behind the crush damage to the third row seating and cargo area.  There were no load marks on the third row left seat belt components, indicating no one was wearing it when Lim crashed into the Odyssey.  Two witnesses testified that the decedent was seated in the third row, left side.  Thus, defendant contends, it expects it would have prevailed on liability at trial due to the weight of evidence that establishes that the Odyssey was not defective, and that the design of the Odyssey’s restraints was not a substantial factor in causing the decedent’s death.  Further, it would be responsible for its proportionate share of non-economic damages.  Defendant asserts that given Lim caused the crash by running a red light and Wong failed to ensure the decedent was properly belted, it expects the jury would allocate the vast majority of liability, upwards of 90%, between Wong and/or Lim.  See Jordan Tabak decl.

Third, as to the amount paid in settlement, the parties settled for an amount under seal.  

Fourth, as to the allocation of settlement proceeds, the plaintiffs will determine.

Fifth, the court recognizes that defendant should pay less in settlement than if it were found liable after a trial.

Sixth, as to financial condition and insurance policy limits of settling defendant, moving defendant did not state.

Seventh, as to whether there is evidence of collusion, fraud, or tortious conduct aimed to injure the interests of the other defendants or cross-defendants, defendant asserts that the settlement is the product of arms’ length negotiations as they mediated the case with a well-reputed mediator, Brad Safon.  Defendant contends that they did not invite Wong, A+ Academy, or Lin to attend because those parties were underinsured, uninsured, and indigent, respectively.  Further, counsel are experienced in similar litigation and extensive discovery was conducted.

After considering the Tech-Bilt factors that were addressed, the court finds and determines that the settlement entered into between moving defendant and plaintiffs was made in good faith within the meaning of CCP §877.6.  Therefore, the motion is GRANTED.

Moving defendant is ordered to give notice of the ruling.

Hearing Date:                          October 11, 2022

Moving
Parties:                      Defendant American Honda Motor Co., Inc.

Responding
Party:                  None

Motion
to Seal Settlement Amount

            The court considered the moving papers.  No opposition was filed.

RULING

            The motion is GRANTED.  The court ORDERS that the unredacted motion
for determination of good faith settlement and accompanying declaration of
Jordan S. Tabak that reflects the settlement amount be filed and sealed.

At this time, no other records
relating to this case are to be sealed. 
No person other than the court is authorized to inspect the sealed
records.  CRC Rule 2.551(e)(2), (3).  

The court directs the court clerk
to comply with the requirements and procedures set forth in CRC Rule 2.551(e)
and (f) with respect to the records the court has ordered to be filed under
seal. 

LEGAL AUTHORITY

California Rules of Court (“CRC”),
Rule 2.550(c) states:  “Unless
confidentiality is required by law, court records are presumed to be
open.”  But a party may move to seal
records pursuant to Rules 2.550-2.551. 
CRC Rule 2.551(b)(1) states:  “A
party requesting that a record be filed under seal must file a motion or an
application for an order sealing the record. 
The motion or application must be accompanied by a memorandum and a
declaration containing facts sufficient to justify the sealing.”  CRC Rule 2.550(d) states:  “The court may order that a record be filed
under seal only if it expressly finds facts that establish: 

(1) There exists an overriding
interest that overcomes the right of public access to the record;

(2) The overriding interest
supports sealing the record;

(3) A substantial probability
exists that the overriding interest will be prejudiced if the record is not
sealed;

(4) The proposed sealing is
narrowly tailored; and

(5) No less restrictive means exist
to achieve the overriding interest.”

DISCUSSION

            Defendant
American Honda Motor Co., Inc. requests that the court seal the settlement
amount between it and plaintiffs, which is identified in the unredacted motion
for determination of good faith settlement and accompanying declaration of
Jordan S. Tabak.

            Defendant
asserts that a key term of the settlement agreement is that the settlement
amount must remain confidential.

The court
makes the following findings of facts that establish the requirements set forth
in CRC Rule 2.550(d):

(1)              
There exists an overriding interest in protecting
the parties’ contractual agreement to maintain confidentiality of the
settlement amount.  Defendant contends
that the settlement would not have occurred pursuant to the same terms absent a
confidentiality provision.

(2)              
The overriding interest of protecting the settlement
amount supports sealing the records. 
Defendant contends that plaintiffs have an interest in maintaining the
privacy of their financial affairs. 
Defendant also asserts that it has an interest in shielding the amount
of its settlement with plaintiffs as it operates in a highly competitive industry
and has an interest in keeping the amount confidential and shielded from
competitors and other prospective plaintiffs. 
Defendant contends that it considers the settlement amount to be
“commercially sensitive information.” 
Defendant argues that sealing the settlement amount will also advance
public policy supporting settlement.

(3)              
A substantial probability exists that the overriding
interest of protecting the settlement amount will be prejudiced if the records
are not sealed.  Defendant asserts that
publication of the settlement amount could be incorrectly construed as an
admission of fault on the part of defendant “that causes unwarranted
disparagement of the Honda trade name, unfairly damages the goodwill of Honda,
and unfairly impairs Honda’s ability to properly, reasonably, and fairly defend
and dispose of other claims.”

(4)              
The proposed sealing is narrowly tailored to only
include the settlement amount in the documents referenced above and not the
settlement itself.

(5)              
No less restrictive means exist to achieve the
overriding interest because of the nature of the records to be sealed.

The
motion is therefore GRANTED.

Moving
defendant is ordered to give notice of this ruling.