Judge Jill Feeney, Case 22STCV22446 2023-01-25 Tentative Ruling

This is an action for intentional public nuisance and negligence arising from a vehicle collision which took place in June 2022. Plaintiff Lola Ross filed her Complaint against Defendants Fulcrum Construction, Inc. Pacific Portable Services, and Marie Nelson on July 12, 2022.

Defendant Marie Nelson argues that the $2,500 settlement between Pacific Portable Services LLC (“Pacific”) and Plaintiff is not made in good faith. Nelson argues that Plaintiff is seeking $23,000 in damages and Nelson would be exposed to a greater share of recovery than any Plaintiff may be seeking. Plaintiff also argues that the parties have not had a chance to determine the proportion of liability because discovery is still pending and no depositions have been scheduled. Nelson also argues that she has no information about Pacific’s financial condition.

Pacific argues that the Tech-Bilt factors show that the settlement is in good faith because Plaintiff’s total recovery is only $11,523.07. Pacific also argues that its financial condition weighs in favor of a finding that the settlement was in good faith because it has a policy limit of $3 million. Pacific also offers a declaration from its operations manager, who testifies that Pacific had no control over the fencing which allegedly contributed to the subject accident after it was rented to Fulcrum and dropped off at the construction site.

California Code of Civil Procedure section 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 . . . 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.” (Code Civ. Proc. section 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. (Code Civ. Proc. section 877(a).)

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 counter declarations to negate the lack of good faith asserted by the nonsettling contesting party.

In Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499 (Tech-Bilt, Inc.), 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, Inc., supra, 38 Cal.3d at p. 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.]” (Ibid.)

“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.” (Id. at pp. 499-500.)

“[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.]” (TSI Seismic Tenant Space, Inc. v. Superior Court (2007) 149 Cal.App.4th 159, 166.)

Plaintiff and Pacific filed an application for good faith settlement providing that the two parties would settle for $2,500. In exchange, Plaintiff would dismiss the action with prejudice against Pacific. Pacific would also pay $2,499 to Plaintiff’s daughter and the vehicle driver, Anna Ross, and $1 to Plaintiff’s husband, Robert Ross.

Nelson challenges Pacific’s settlement on the grounds that the settlement would leave her with significant liability and that settlement is premature in this matter. Plaintiff seeks damages for property damage and lost use of her vehicle. (Mashkinfam Decl., ¶5.) The Court now applies the Tech-Bilt factors to determine whether the settlement was made in good faith.

Nelson argues that there is no evidence as to the amount of the property damage and loss because Plaintiff’s discovery responses are still pending. Nelson estimates that Plaintiff’s total damages are $23,000 because her 998 offers totaled at least $23,000.

Pacific’s counsel, an employee of Nationwide Mutual Insurance Company, testifies that Robert Ross, Plaintiff’s husband, sent a repair statement and credit card receipt showing that the repairs to Plaintiff’s vehicle totaled $11,523.07. (Hart Decl., ¶4; Exhibit 1.)

Plaintiff’s daughter, Anna Ross, was driving a vehicle owned by Plaintiff on June 3, 2022. As she was exiting a shopping center, she could not see through a fence covered in shade cloth that lined one corner of the shopping center. Defendant Marie Nelson was driving though a parking lot adjacent to the fence and could not see through the shade cloth. Nelson’s vehicle then struck Plaintiff’s vehicle because Nelson could not see Plaintiff’s vehicle. The parties dispute liability.

The affidavit of Corey Vane establishes that Defendant Pacific was a supplier of the fencing and shading material, but that Defendant Pacific did not install the fencing in the area of the accident. It had been moved during the ongoing construction which is customary and which had nothing to do with Defendant Pacific.

Pacific’s evidence is sufficient to show that it would have very little liability, if any, for the subject collision because it shows that Pacific did not move the fencing to the corner where the subject collision took place. Given the remoteness of any liability on the part of Pacific’s, $2,500 appears to be reasonable. This factor weighs in favor of a finding that the settlement was made in good faith.

Nelson argues that she has no evidence of Pacific’s financial condition. In response, Pacific’s operations manager testifies that it has “AMCO Insurance Company commercial general liability policy no. ACP GLAO 3039303908…with general aggregate limit of $2 million and $1 million per occurrence limit” and “$2 million umbrella insurance policy through AMCO.” (Vane Decl., ¶17.) Pacific has the financial capacity to pay a reasonable settlement and did not conceal its financial condition. This factor does not weigh for or against a finding of good faith given that Defendant Pacific has no liability exposure based on the facts as presented.

Other factors weigh in favor of finding that the settlement is in good faith. There is no allegation of collusion or fraud here. Moreover, it is recognized that a settling defendant should pay less for resolving the case early.