Judge John J. Kralik, Case Number: 23STCV01717, Date: 2024-10-04 Tentative Ruling

This action concerns the death of pedestrian Denise Eginton (“Decedent”), who died while crossing the street at the intersection of Myrtle Avenue and Foothill Boulevard in the City of Monrovia. Decedent was struck by a vehicle owned by Defendant Doris Ludwig and driven by Defendant Stephen Grollnek. Plaintiffs Joseph Eginton, Zachary Eginton, and Madison Eginton Eick (“Plaintiffs”) are the husband and adult children of Decedent. They sue Defendant City of Monrovia (“City”) for wrongful death on a dangerous condition of public property theory and include a survival cause of action for Decedent’s pain and suffering.

The complaint, filed January 26, 2023, alleges causes of action for: (1) dangerous condition of public property (Gov’t Code, § 835); and (2) survival action.

On March 29, 2023, City filed a cross-complaint against Cross-Defendants Stephen Hayes Grollnek and Doris Ludwig for: (1) indemnification; (2) apportionment of fault; (3) negligent entrustment; and (4) contribution.

On May 2, 2023, Cross-Defendants Stephen Hayes Grollnek and Doris Ludwig filed a motion for determination of good faith settlement.

On May 19, 2023, City filed an opposition. On June 16, 2023, City filed a supplemental opposition.

The matter came for hearing on July 12, 2023 before Judge Margaret L. Olendorf of Department P of the Pasadena Courthouse. The Court continued the hearing to October 25, 2023 and ordered City to file a supplemental opposition by October 9, 2023 and Cross-Defendants to file a supplemental reply by October 16, 2023.

On December 12, 2023, a Stipulation and Order was entered to continue the hearing on the motion to April 12, 2024 to allow the parties to conduct discovery.

On April 11, 2024, the case was reassigned to Department B of the Burbank Courthouse following a preemptory challenge.

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.

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).)

Cross-Defendants Grollnek and Ludwig filed a motion for determination of good faith settlement between Plaintiffs individually and as successors in interest to the Estate of Denise Eginton, and Cross-Defendants Grollnek and Ludwig. City 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

The settling parties have agreed to settle the action for $1,250,000, which is Cross-Defendants’ limits of their Allstate Insurance Company automobile policy and a personal umbrella policy. Cross-Defendants argue that the allocation of settlement proceeds is not at issue since Plaintiffs are family members of Decedent and the successors in interest for the Estate, such that they are a single, legal entity. (Mot. at p.8; Ash Decl., ¶12.)

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

Cross-Defendants argue that the $1,250,000 settlement amount is the full amount of their policy limits and “an amount comparable with settlements involving death.” (Mot. at p.6; Ash Decl., ¶11, Ex. D.) Cross-Defendants argue that this settlement represents a proportionate share of what a reasonable person, at the time of settling, would estimate their liability to be given the damages alleged and that the settlement was negotiated after written discovery, depositions, and lengthy negotiations. (Mot. at p.7; Ash Decl., ¶4.) They argue that based on the evidence, it is unlikely that Cross-Defendants were 100% liable given alleged sun and visibility issues concerning the placement of the intersection and traffic lights that were under City’s control and management, as well as based on Grollnek’s deposition testimony that he believed Decedent was outside the crosswalk at the time of impact. (Ash Decl., ¶¶15-16; Exs. E-F [Grollnek Depo. at pp. 36, 61].) The motion papers do not discuss Plaintiffs’ claim of damages.

In opposition, City argues that Plaintiff’s Statement of Damages (dated February 28, 2023) asserts a claim of $160 million in general damages and $2.4 million in special damages, for a total of $162.4 million in damages. (Hsieh Decl., ¶9, Exs. D-F.)[1] Thus, City argues that Cross-Defendants have not shown that their proposed settlement amount of $1.25 million is within the ballpark of their proportionate liability, particularly since the proposed settlement amount only amounts to 0.78% of Plaintiffs’ claimed damages of $162.4 million. City argues that police investigation supports a finding that Grollnek was at fault for the accident because the sun was in his eyes and blinded him when he made a left turn, and he failed to yield to a pedestrian in a crosswalk. (Hsieh Decl., ¶6, Ex. A [Traffic Collision Report].) In contrast, City argues that there is no showing that City caused any obstruction at the crosswalk or implemented inadequate traffic controls.

The proposed settlement must be considered and evaluated based on the information available at the time of settlement. Cross-Defendants argue that settlement occurred after written discovery and depositions were conducted, and following settlement negotiations. In opposition, City argues that no discovery has occurred in this case and that a continuance is necessary to allow discovery regarding the Tech-Bilt factors.

At the July 12, 2023 hearing on this motion, Judge Olendorf continued the hearing to allow the parties to conduct discovery. The Court ordered the parties to file supplemental opposition and reply papers; however, no supplemental papers were filed following the July 12, 2023 hearing date—even after the matter was continued a second time to allow for further discovery.

As such, this Court in Department B will continue the hearing on the motion so that the parties may file supplemental briefs regarding the Tech-Bilt factors following their discovery efforts.

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

Cross-Defendants state that Ludwig’s policy provided for $250,000 per person and $500,000 per occurrence in limits and that she possessed a $1,000,000 personal umbrella policy, which was utilized for settlement. (Ash Decl., ¶13.) Grollnek signed a declaration of no additional insurance or assets. (Id., ¶5; Ex. C.) Cross-Defendants’ counsel, Paul V. Ash, states that there is no evidence of collusion between the settling parties and that counsel for the settling parties reached a settlement after engaging in good faith negotiations. (Id., ¶14.)

City argues that Grollnek’s insurance company, State Farm Mutual Auto Insurance Company, declined coverage on March 10, 2022, and Grollnek stated in his declaration that he had no assets with an estimated value of over $10,000 or interest in real property. (See Mot., Grollnek Decl., ¶¶3, 6.) However, City argues that the parties have not conducted any discovery, such that City cannot ascertain whether any other policies exist, and it cannot determine Cross-Defendants’ financial condition. In the supplemental opposition brief (filed June 16, 2023), City provided additional information that Plaintiffs filed a lawsuit against Grollnek and Ludwig only on January 28, 2022 (LASC Case No. 22STCV03594), Plaintiffs submitted a government claim against City on May 10, 2022, a criminal case was filed against Grollnek on June 23, 2022, Plaintiffs filed this action against City on January 26, 2023, Plaintiffs dismissed the 22STCV03594 case on February 21, 2023, and Plaintiffs served City with the summons and complaint in this action on February 28, 2023. City argues that there may be evidence of collusion between the settling parties, such as engaging in settlement discussions before dismissing the prior case and filing a new case against City. (Suppl. Opp. at pp.2-4.) In the opposition and supplemental opposition brief, City requested a continuance of the motion so that it could conduct discovery regarding the Tech-Bilt factors.

As stated above, the Court will continue the hearing on the matter and allow the parties to file supplemental briefs regarding the settling parties’ proportionate liability, whether the proposed settlement amount is a rough approximation of Plaintiffs’ total recovery, the Cross-Defendants’ financial condition, and whether there is evidence of collusion in the settlement negotiations.

Cross-Defendants Stephen Hayes Grollnek and Doris Ludwig’s motion for determination of good faith settlement is continued to November 8, 2024 at 8:30 a.m. City is ordered to file and serve a supplemental opposition brief by the end of the business day on October 28, 2024. Cross-Defendants are ordered to file and serve a supplemental reply brief by the end of the business day on November 1, 2024.

[1] This amount includes $40 million in general damages and $400,000 in special damages for Joseph Eginton, $30 million in general damages and $400,000 in special damages for Zachary Eginton, and $30 million in general damages and $400,000 in special damages for Madison Eginton Eick in their individual capacities, as well as $20 million in general damages and $40,000 in special damages for each of the three Plaintiffs in their capacity as successors in interest.

Superior Court of California

County of Los Angeles

Department B