Judge: John J. Kralik, Case: 23BBCV01533, Date: 2024-04-12 Tentative Ruling

Case Number: 23BBCV01533    Hearing Date: April 12, 2024    Dept: NCB

Superior Court of California

County of Los Angeles

North Central District

Department B

BACKGROUND

A.    Allegations

Plaintiff Patrick Chua (“Plaintiff”) alleges on April 4, 2023, he was on the premises of Defendants The Camera Division, LLC (“TCD”), Lainer Development, Inc. (“Lanier”), S & S Investments General Partnership (“S&S”), located at 7351 Fulton Avenue, North Hollywood, CA.  He alleges that the premises were negligently and carelessly owned, maintained, managed, controlled, inspected, and/or repaired so as to cause a dangerous condition.  Plaintiff alleges that the dangerous condition consisted of a bathroom sink that became disengaged from the wall, fell, and shattered on Plaintiff, thereby injuring him. 

The complaint, filed July 7, 2023, alleges causes of action for: (1) premises liability; and (2) general negligence.

B.     Cross-Complaint

On August 25, 2023, TCD filed a cross-complaint against Roes 1-100 for: (1) complete indemnity; (2) partial indemnity; (3) equitable contribution; and (4) declaratory relief.

C.     Motion on Calendar

On March 18, 2024, Lanier and S&S filed a motion for judicial determination of good faith settlement. 

On March 29, 2024, TCD filed an opposition to the motion.

On April 5, 2024, Lanier and S&S filed a reply brief.

LEGAL STANDARD

In Tech-Bilt, Inc. v. Woodward-Clyde & Assoc. (1985) 38 Cal.3d 488, 499, the California Supreme Court articulated several factors to be considered in determining whether a settlement is in good faith within the meaning of section 877.6:

[T]he intent and the 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 a recognition that a settlor should pay less in settlement that he would if he were found liable after trial.  Other relevant considerations include the financial conditions and insurance policy limits of the settling defendants, as well as the existence of collusion, fraud, or tortious conduct aimed to injure the interests of nonsettling defendants. [Citation.]  Finally, practical considerations obviously require that the evaluation be made on the basis of information available at the time of settlement.

(Tech-Bilt, supra, 38 Cal.3d at 499.)

            To determine whether a settlement was in “good faith” the judge should inquire as to whether the amount of the settlement is “within the reasonable range” of the settling defendant’s proportional share of comparative liability for the plaintiff’s injuries.  (Abbott Ford, Inc. v. Superior Court (1987) 43 Cal.3d 858, 872; City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1262.)  Generally, a settlement will be found to be in good faith unless the objecting defendant shows it to be “grossly disproportionate to what a reasonable person at the time of settlement would estimate the settlor’s liability to be.”  (Abbott Ford, supra, 43 Cal.3d at 872.)  That is, a party opposing a good faith settlement must demonstrate that “the settlement is so far ‘out of the ballpark’ in relation to” the factors discussed above that it is “inconsistent with the equitable objectives of the statute.”  (Tech-Bilt, supra, 38 Cal.3d at 499-500.)

“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).)

DISCUSSION

Lanier and S&S move determination of good faith settlement between Lanier, S&S, and Plaintiff.  TCD opposes.

In making its determination on the good faith nature of the settlement, the Court evaluates the Tech-Bilt factors.   

1.      Amount Paid in Settlement and Allocation of Settlement Proceeds Among Plaintiffs

Lanier, S&S, and Plaintiff have agreed to settle this action for $5,000.  (Berger Decl., ¶6.)  In exchange for the settlement sum, Plaintiff has agreed to dismiss the complaint with prejudice against Lanier and S&S.  (Id.) 

In opposition, TCD argues that Lanier and S&S have not discussed how the $5,000 will be allocated between Lanier and S&S.  In the reply brief, Lanier and S&S argue that this is a simple settlement agreement and there is no allocation or non-monetary consideration involved in the settlement.  

There is only one Plaintiff in this action, such that the settlement proceeds will not be allocated among multiple plaintiffs.

2.      Rough Approximation of Plaintiff’s Total Recovery and Settlor’s Proportionate Liability

Lanier and S&S are the owners and managers of the premises.   (Lanier Decl., ¶3.)  Zachary Lanier, in-house counsel for Lanier, states that on February 5, 1971, Franklin Orthober entered into a 55-year land lease with Desert Land Managing Corporation for the premises and S&S thereafter purchased Mr. Orthober’s ground lease interests.  (Id., ¶4.)  The lease includes a provision that “Lessor is to be free from all liability or loss by reason of injury to persons or property, from whatever cause, while in or on the leased premises, or in any way connected with the leased premises or with the improvements or personal property therein, including any liability for injury to the person or property of lessee, its agents, officers or employees. Lessee hereby covenants and agrees to and shall indemnify lessor and save him harmless from any and all liability, loss, cost, or obligations on account of, or arising out, any such injury or losses however occurring.”  (Id., Ex. A [1971 Lease].)  On April 7, 2020, Desert Land Managing Corporation entered into a lease with TCD for the premises, which include subsequent amendments.  (Id., ¶¶5-6, Ex. B [2000 Lease], Ex. C [Amendments].)  Mr. Lanier states that the leases with Desert Land Managing Corporation indicate the property was turned over with fixtures and plumbing in good working order and that lessee TCD was to keep in good order the condition and repair of the premises, including plumbing and fixtures.  (Id., ¶7.) 

Lanier and S&S argue that the $5,000 settlement is reasonable in light of their potential liability because they have a complete defense to the action as landlords who surrendered the premises (in good working order) to their tenant TCD.  They argue that they were not aware of any dangerous condition regarding the sink and that their proportional share of liability is $0.  They also argue that Plaintiff would likely be found to be contributorily negligent when he was “engaging in hygiene” by the sink, lost his balance and landed on the sink, which then broke and he fell on the floor bleeding.  (Mot. at p.5.)  They argue the $5,000 is thereby within the reasonable range of potential liability for this reason and if they were to be found liable at trial, they recognize this settlement amount should be potentially less than any award at trial.

In opposition, TCD argues that there are no calculations on how the $5,000 settlement amount was calculated or any showing of how the proposed settlement amount is proportionate to Plaintiff’s respective potential recovery. 

Based on the moving, opposition, and reply papers, none of the parties have provided the Court with any information on the amount of damages Plaintiff is claiming.  None of the parties have provided estimates of Plaintiff’s medical bills or other damages (whether by documentation or discovery responses). 

Based on Tech-Bilt, “practical considerations obviously require that the evaluation be made on the basis of information available at the time of settlement.”  (Tech-Bilt, supra, 38 Cal.3d at 499.)  It may very well be that such information regarding Plaintiff’s damages were not yet discussed or disclosed at the time of settlement.  However, out of the abundance of caution, the Court will make inquiries at the hearing regarding the amount of Plaintiff’s claimed damages to ascertain whether Lanier and S&S’s settlement with Plaintiff is reasonable. 

3.      Other Factors: Financial Condition and Insurance Policy Limits of Settlor, and Existence of Collusion, Fraud, or Tortious Conduct

Lanier and S&S have not provided their financial condition and insurance policy limits in the moving papers.  In their reply brief, they argue that this factor is inapplicable where the settlement is not disproportionately low in relation to their potential liability.  As stated in Tech-Bilt, the financial conditions and insurance policy limits are other relevant considerations but are not necessary factors to consider under CCP § 877.6. 

Lanier and S&S argue that the settlement was entered in good faith without collusion or intent to defraud or tortiously injure non-settling defendants.  Mr. Berger states that the settlement was entered after arms-length negotiations.  (Berger Decl., ¶7.)  He states that upon settlement, he contacted counsel for TCD to inform them about of the settlement and to determine if they would stipulate in good faith, but they would not stipulate.  (Id., ¶10.) 

In opposition, TCD argues that the settlement agreement must be produced to obtain a good faith settlement.  A copy of the settlement agreement is not attached to the moving papers.  However, “[i]f there is no dispute as to its terms, there is no requirement that a written settlement be executed and presented to the court. But, if a dispute exists, a court cannot confirm a settlement without reviewing the written agreement. The court must be able to determine ‘what settlement or settlements took place and what parties agreed to what allocations.’ [Citations.]”  (Rutter Guide, Cal. Prac. Guide Civ. Pro. Before Trial (June 2023 Update) Ch. 12(II)-E, § 12:892.)  Here, there does not appear to be a dispute about the terms of the settlement.  The main provisions of the settlement agreement have been provided in the moving papers.  In the reply brief, Lanier and S&S argue that the settlement is a simple agreement and a written settlement agreement need not be executed and present to the Court to comply with CCP § 877.6.  Nevertheless, the Court will order a copy of the settlement agreement to be produced. 

CONCLUSION AND ORDER

Defendants Lainer Development, Inc. and S & S Investments General Partnership’s motion for determination of good faith settlement is continued to May 3, 2024 at 8:30 a.m.  The moving parties are ordered to file and serve by the end of the business day on April 19, 2024 a copy of the settlement agreement and provide a supplemental brief (not to exceed 5 pages) regarding the amount of Plaintiff’s claimed damages so that the Court may ascertain whether the proposed settlement with Plaintiff is reasonable.  Defendant The Camera Division, LLC may file and serve by the end of the business day on April 26, 2024, a supplemental brief in response, not to exceed 5 pages.  

Defendants shall provide notice of this order.

DATED:  April 12, 2024                                                        ___________________________

                                                                                          John Kralik

                                                                                          Judge of the Superior Court