Judge Joel L. Lofton, Case 19STCV16763 2022-09-14 Tentative Ruling

CASE: DAVID PEREZ ARAMBULA v. ALEX TANNER SCHLEGER, LUIS AVALOS ULLOA, and DOES 1 to 20.

Defendant Alex Tanner Schleger[1] moves for a determination of good faith settlement for two separate settlements with Plaintiff Lanetta Goshia and Plaintiff David Perez Arambula.

This case arises out of a four-car accident that allegedly occurred on June 21, 2018. The four-vehicle chain started when Defendant Alex Tanner Schleger’s (“Schleger”) vehicle collided with the rear of Plaintiff David Perez Arambula’s (“Arambula”) vehicle. Then, a vehicle driven by Defendant Luis Avalos Ulloa (“Ulloa”), collided with Schleger’s vehicle. Arambula’s vehicle collided with Plaintiffs Oscar and Melinda Rivera’s (“the Riveras”) vehicle. This case was consolidated with two other cases, Rivera v. Schleger, 19STCV29907, and Goshia v. Avalos, 20STCV2330.

Schleger’s motion for determination of good faith settlement as to his settlement with Lanetta Goshia is GRANTED.

Schleger’s motion for determination of good faith settlement as to his settlement with David Perez Arambula is DENIED.

“Any party to an action in which 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 other claimant and one or more alleged tortfeasors or co-obligors”. (Code Civ. Proc. section 877.6, subd. (a)(1).) “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, subd. (c).)

One consideration for whether a settlement was made in good faith is “whether the amount of the settlement is within the reasonable range of the settling tortfeasor's proportional share of comparative liability for the plaintiff's injuries.” (Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499.) The California Supreme Court, in Tech-Bilt, also stated that relevant factors include “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.” (Ibid.)

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

“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 non-settlor who asserts that the settlement was not made in good faith. (Fisher v. Superior Court (1980) 103 Cal.App.3d 47; § 877.6, subd. (d).) If contested, declarations by the non-settlor 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 non-settling contesting party.” (City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261.)

Schleger seeks to settle one of the consolidated cases by offering $250,000 to Arambula and $27,000 to Goshia. Schleger has an insurance policy that covers $250,000 per person and $500,000 total. The Riveras provide that Ulloa has a $15,000/$30,000 insurance policy. The Riveras argue that the settlement should not be approved because it would limit the available recovery for the other Plaintiffs under Schelger’s insurance.

Based on the limited information provided by the parties for the present motion, it appears that there is a consensus that the alleged tortfeasors are Schleger and Ulloa. The plaintiffs include the Riveras, Arambula, and Goshia. The proposed settlement would reduce the funds available to the Riveras under Schleger’s insurance policy from a maximum possible $500,000 to $223,000.

A problem with the moving papers in the present motion is that neither side has provided the Court with any evidence, in the form of a declaration or otherwise, to substantively address the Tech-Bilt factors other than Schlelger’s submission of the accident report.

However, in his moving papers, Schleger asserts that the settlement for $27,000 to Goshia was reached following a global mediation with a third-party neutral. Further, Schleger provides that Goshia had produced medical bills totaling $6,359.00. Based on Schleger’s representation in his motion, Goshia’s settlement for $27,000 based on her injuries and resulting medical fees is not unreasonable. Further, Goshia’s settlement is a relatively small portion of Schleger’s insurance policy. Schleger has established that his settlement with Goshia was in good faith.

In opposition, the Riveras fail to establish Schleger's settlement with Goshia was not in good faith. The Riveras submit no evidence to establish fraud or collusion. Rather, they merely assert that the settlement would reduce the funds available to them. That alone is insufficient to demonstrate a lack of good faith.

Schleger’s motion for determination of good faith settlement as to his settlement with Goshia is granted.

Schleger does not provide any declaration from himself or Arambula to establish good faith settlement as to his settlement with Arambula. He does not provide an estimation of the harm suffered by Arambula or why the settlement was agreed upon for the maximum single-person recovery under his insurance policy. Schleger merely asserts, without any support, that his settlement with Arambula was in good faith. (Motion at p. 5:24.)

The Court in Tech-Bilt stated that “[o]ther 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.” (supra, 38 Cal.3d at p. 499.)

Although Schleger cites Fisher v. Superior Court (1980) 103 Cal.App.3d 434, 445, for the proposition that a payout of the maximum under an insurance policy is “very strong evidence of ‘good faith’ settlement”, the Court in Fisher was contemplating any harm to nonsettling alleged tortfeasor. The facts in Fisher are different than the circumstances here, where the Riveras are other plaintiffs who are arguing that Schleger’s maximum policy payout to Arambula would limit their own recovery and was not made in good faith.

Schleger seeks settlement with Aramabula for a maximum single-person payout under his insurance policy without any reason, estimation, or explanation why that figure was reached. Further, the payout would reduce the possible funds available to the Riveras. Thus, Schleger has failed to establish that his settlement with Arambula was in good faith.

Schleger’s motion for determination of good faith settlement as to his settlement with Lanetta Goshia is GRANTED.

Schleger’s motion for determination of good faith settlement as to his settlement with David Perez Arambula is DENIED.

Parties who intend to submit on this tentative must send an email to the court indicating their

intention to submit. Parties intending to appear are strongly encouraged to appear remotely. alhdeptx@lacourt.org

[1] In his motion and reply, Defendant refers to himself as “Schlegel”. However, because the Court’s records refer to Defendant as “Schleger”, all references to Defendant’s name will be spelled “Schleger”.