Judge: Donald F. Gaffney, Case: "Chiarenzo v. THC-Orange County, LLC", Date: 2022-10-19 Tentative Ruling
TENTATIVE RULING
Motion for Determination of Good Faith Settlement
The unopposed motion of Defendant THC Orange County, LLC dba Kindred Hospital Los Angeles (“Kindred Los Angeles”) for a determination of good faith settlement between Kindred Los Angeles and Plaintiffs Leona Chiarenzo, buy and through her successor-in-interest, Richard Chiarenza, Richard Chiarenza, and Nominal Defendants Lisa Preston and Ramona Meyer is GRANTED.
A. Legal Authority Re Good Faith Settlements
Requests for determination of good faith settlement are governed by Code of Civil Procedure section 877.6, which provides, in pertinent part:
(a)(1) Any party to an action in which it is alleged that two or more parties are joint tortfeasors ... shall be entitled to a hearing on the issue of the good faith of a settlement entered into by the plaintiff or other claimant and one or more alleged tortfeasors or co-obligors, upon giving notice in the manner provided in subdivision (b) of Section 1005. ...
(2) In 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. ...
(b) 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 counter affidavits filed in response, or the court may, in its discretion, receive other evidence at the hearing.
(c) 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.
(d) The party asserting the lack of good faith shall have the burden of proof on that issue.
(Code Civ. Proc., § 877.6(a)-(d).)
“[T]he intent and policies underlying section 877.6 require that a number of factors be taken into account including 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 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.” (Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499, [internal citations omitted].)
Another key factor is the settling tortfeasor’s potential liability for indemnity to joint tortfeasors. (Far West Financial Corp. v. D & S Co. (1988) 46 Cal.3d 796, 816, fn. 16; TSI Seismic Tenant Space, Inc. v. Superior Court (2007) 149 Cal.App.4th 159, 166.) Because a good faith determination bars indemnity claims by nonsettling parties, the true value of the settlement may not be the amount paid to plaintiff but rather the value of the shield against such indemnity claims. (TSI Seismic, at 149 Cal.App.4th at 166.)
“Finally, practical considerations obviously require that the evaluation be made on the basis of information available at the time of settlement. [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.” (Tech-Bilt, 38 Cal.3d at 499 [internal citations omitted].)
The settlor’s evidentiary burden depends on whether the good faith of the settlement is contested. Specifically, City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251 explains that when a settlor files a motion or application for determination of good faith settlement, the settlor does not know whether the settlement will or will not be contested. (Id. at 1260-1261.) Thus, in the first instance, a “barebones” motion or application is sufficient. (Id. at 1261 [“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.”].)
When the good faith nature of a settlement is disputed, however, the court must consider and weigh the Tech-Bilt factors, irrespective of the fact that the opposing party has the burden of proof on the issue of lack of good faith. (See City of
Grand Terrace, 192 Cal.App.3d at 1261 [“when the good faith nature of a settlement is disputed, it is incumbent upon the trial court to consider and weigh the Tech-Bilt factors”]; id. at 1263-1264.)
While the opposing party does bear the burden of proof on the issue of lack of good faith (Code Civ. Proc., § 877.6(d)), the statutory requirement of “good faith” presents an issue of fact, and a finding of good faith must therefore be supported by substantial evidence. (City of Grand Terrace, 192 Cal.App.3d at 1263-1265.) If, in a contested case, “ ‘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.’ [Citation.]” (Mattco Forge, Inc. v. Arthur Young & Co. (1995) 38 Cal.App.4th 1337, 1350-1351 & fn. 6; Toyota Motor Sales U.S.A., Inc. v. Superior Court (1990) 220 Cal.App.3d 864, 871; Toyota Motor Sales) [same]; City of Grand Terrace, 192 Cal.App.3d at 1263.)
In other words, just because the contesting party has the burden of proof on the issue of lack of good faith and might fail to meet that burden, does not mean that the trial court may properly grant the application if the record lacks sufficient evidence to support the conclusion that the settlement was entered into in good faith. (City of Grand Terrace, 192 Cal.App.3d at 1263-1264; Mattco Forge, 38 Cal.App.4th at 1350, fn. 6.)
Mattco Forge, 38 Cal.App.4th at 1350, fn. 6, provides that once an objecting party challenges a settlement, the settlor must “file counter affidavits ([Code Civ. Proc.,] § 877.6, subd. (b)) to make an evidentiary showing that the settlement was ‘in the ballpark.’ In the absence of such a showing by [the party] seeking approval of the good faith settlement, there is ‘no substantial evidence to support a critical assumption as to the nature and extent of [the] settling [party’s] liability[.]’” (Id.; see id. at 1351 [“in view of the absence of any substantial evidence to show the $250,000 value of the guarantee was within the reasonable range of [the settling party’s] proportionate liability, [the contesting party] met its burden in attacking the settlement as lacking in good faith”]; see also Grand Terrace, 192 Cal.App.3d at 1261, 1263 [“A necessary corollary to the definition of good faith in Tech-Bilt is that the trial court’s consideration of the settlement agreement and its relationship to the entire litigation in a contested setting must proceed upon a sufficient evidentiary basis to enable the court to consider and evaluate the various aspects of the settlement. [Citations.] Because Tech-Bilt mandates a rough approximation of the settling defendant’s proportionate liability and consideration of all other defendants’ proportionate liability and consideration of all other factors that might affect the fairness of the settlement as respects nonsettling defendants, the affidavits, declarations or other evidence should provide the court with the facts necessary to evaluate the settlement in terms of the factors contemplated by Tech-Bilt. Without the facts, in a contested hearing, it is impossible for a court to exercise its discretion in an appropriate fashion.”].)
Furthermore, where good faith is contested, conclusory allegations as to the settling parties’ liability are insufficient to uphold the court’s ruling granting a motion for good faith settlement as a matter of law. There must be substantial, competent evidence of the settling party’s proportionate liability and all other relevant Tech-Bilt factors before the court may grant a request for determination of good faith settlement in a contested case. (Mattco Forge, 38 Cal.App.4th at 1351.) Even an expert’s opinion must be substantiated by facts. (Greshko v. County of Los Angeles (1987) 194 Cal.App.3d 822, 834 [“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.”]; Toyota Motor Sales, 220 Cal.App.3d at 871 [““Substantial evidence, of course, is not synonymous with ‘any’ evidence, but is evidence which is of ponderable legal significance. It must be ‘reasonable in nature, credible, and of solid value; it must actually be ‘substantial’ proof of the essentials which the law requires in a particular case.’ ”].)
Finally, the good faith evaluation must be made on the basis of information available at the time of settlement. (Tech-Bilt, 38 Cal.3d at 499.) “The evidence must be limited to the information available to the settling parties when they settled. ‘Good faith’ is not affected by the fact the parties did not have access to all the evidence ultimately offered at trial on the disputed issues.” (Toyota Motor Sales, 220 Cal.App.3d at 878.)
B. Merits
It is incumbent upon the trial court to consider and weigh the Tech-Bilt factors only when the good faith nature of a settlement is disputed. Where, as it currently appears here, “good faith” is not contested, a “barebones” motion which sets forth the grounds of good faith and is accompanied by a declaration setting forth a brief background of the case is sufficient. (City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261.)
Kindred Los Angeles has satisfied this minimal burden. Together, its moving papers and supporting declaration adequately set forth the nature of the case and all pertinent facts, the settling parties’ relative litigation positions, and the barebones terms of the settlement. (See ROA No. 227 [Memorandum of Points and Authorities] at 1-3, 5-8; Lorant Decl., ¶¶ 1-7.) The motion is GRANTED.
Defendant THC Orange County, LLC dba Kindred Hospital Los Angeles to give notice.