Judge Lee S. Arian, Case Number: 23STCV10874, Date: 2025-01-13 Tentative Ruling

In a case involving two or more alleged joint tortfeasors, a party may seek a court order under Code of Civil Procedure section 877.6 determining that a settlement between the plaintiff and one or more of the alleged tortfeasors is in good faith. A judicial determination of good faith “bar[s] any other joint tortfeasor … from any further claims against the settling tortfeasor … for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.” (Code Civ. Proc. § 877.6(c).)

In evaluating whether a settlement has been made in good faith, courts consider the following factors, as set forth by the California Supreme Court in the landmark case Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488:

5) “a recognition that a settlor should pay less in settlement than he would if he were found liable after a trial”;

7) any evidence of “collusion, fraud, or tortious conduct aimed to injure the interests of nonsettling defendants.” (Id. at 499.)

“Practical considerations obviously require that the evaluation be made on the basis of information available at the time of settlement.” (Ibid.)

The “good faith” concept in Code of Civil Procedure section 877.6 is a flexible principle imposing on reviewing courts the obligation to guard against the numerous ways in which the interests of nonsettling defendants may be unfairly prejudiced. (Rankin v. Curtis (1986) 183 Cal. App. 3d 939, 945.) Accordingly, under Tech-Bilt, the party asserting the lack of “good faith” may meet this burden by demonstrating that the settlement is so far "out of the ballpark" as to be inconsistent with the equitable objectives of the statute. (Tech-Bilt, supra, 38 Cal.3d at 499-500.) Such a demonstration would establish that the proposed settlement was not a “settlement made in good faith” within the terms of section 877.6. (Ibid.)

The Supreme Court explained that Code of Civil Procedure section 877.6 is designed to further two equitable policies:

Those policies would not be served by an approach which emphasizes one to the virtual exclusion of the other. (Ibid.) Accordingly, a settlement will not be found in good faith unless the amount is reasonable in light of the settling tortfeasor's proportionate share of liability. (Std. Pac. of San Diego v. A. A. Baxter Corp. (1986) 176 Cal. App. 3d 577, 589.) Or, as the California Supreme Court has stated, 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, supra, 38 Cal.3d at 499.)

When a motion seeking a determination under Code of Civil Procedure section 877.6 is not opposed, the burden on the moving parties to show that the settlement was made in good faith is slight. (City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261 [holding that a “barebones motion” including a declaration setting forth “a brief background of the case is sufficient”].)

When a good faith motion is contested, however, the moving parties have the initial burden of producing evidence in support of the requested good faith determination. (Id. at pp. 1261-1262.) “Section 877.6 and Tech-Bilt require an evidentiary showing, through expert declarations or other means, that the proposed settlement is within the reasonable range permitted by the criterion of good faith.” (Mattco Forge v. Arthur Young & Co. (1995) 38 Cal.App.4th 1337, 1351.) “Substantial evidence” is required. (Id. at p. 1352.) A declaration from a settling defendant’s attorney that states, in conclusory fashion, that the client has little, or no share of the liability may not be sufficient. (Greshko v. County of Los Angeles (1987) 194 Cal.App.3d 822, 834-35; see also 3 Weil & Brown, California Practice Guide: Civil Procedure Before Trial (The Rutter Group 2023) ¶¶ 12:774, 12:872-873.)

The ultimate burden of persuasion is on the party opposing the good faith determination. The “party asserting a lack of good faith shall have the burden of proof on that issue.” (Code Civ. Proc. § 877.6(d); see also 3 Weil & Brown, supra, at ¶ 12:875.)

On May 15, 2023, Plaintiff filed this personal injury case, which involves a single-car accident occurring at approximately 7:00 PM on May 11, 2022, near the intersection of Mulholland Drive and Torreyson Drive. At that time, Plaintiff was traveling northbound on Torreyson Drive, which intersects with Mulholland Drive. Plaintiff drove straight northbound across Mulholland Drive and went down the hill, sustaining serious injuries that rendered her paraplegic.

Defendants Daniel Sussman and Maria Sussman (hereinafter "the Sussmans") are the owners and residents of 7744 Torreyson Drive, Los Angeles, California 90046, a property adjacent to Mulholland Drive and near the ridge over which Plaintiff’s vehicle careened. Plaintiff contends that the Sussmans allowed extensive vegetation on their property to obscure a stop sign at the intersection of Torreyson Drive and Mulholland Drive. Plaintiff further alleges that, because the relevant stop sign was obscured by overgrown vegetation on the Sussmans' property, she was unable to see the stop sign, failed to stop, and careened over the ridge, resulting in her severe injuries.

Following the exchange of written discovery, on August 29, 2024, the Sussmans and Plaintiff entered into a settlement agreement for the Sussmans’ insurance policy limit of $2.5 million. On November 14, 2024, the Sussmans filed an application for a determination of good faith settlement, stating that a settlement of $2.5 million had been entered into by the settling parties for the Sussmans’ insurance policy limit. The alleged damages amount to approximately $36 million to $39 million, consisting of:

2. Future Medical Care and Services (pursuant to a life-care plan created by Dr. Sharon Kawai): $12,436,661.00

The Sussmans presented evidence regarding both the City’s and Plaintiff’s liability, thereby arguing that despite the high amount of alleged damages, the settlement was made in good faith because the City and Plaintiff bore the majority share of the responsibility for damages to Plaintiff.

The City filed an opposition. The City does not contend that the settlement resulted from collusion, fraud, or any type of misconduct but makes the sole argument that the settlement amount is disproportionate to Defendant Sussman’s liability and Plaintiff’s total recovery. Specifically, the City argues that “the settlement amount of $2.5 million is roughly 6% of plaintiff’s claimed damages. While it is true that for a settlement to be one in “good faith” it need not exactly arithmetically track the potential exposure of the settling defendant, it must not be grossly disproportionate. The City contends that: (1) 6% of a potential jury award is “out of the ballpark”; (2) the Sussmans were in the best position to remedy the obstructed sign and their liability would be primary; and (3) it would be inequitable to cut off the City’s potential indemnity rights in this matter by a finding the subject settlement was in ‘good faith’”.

The Court disagrees for various reasons. First, evidence at the time of the settlement shows that Plaintiff potentially bore portions of the responsibility. Photographs of the scene of the incident show that although the stop sign is obscured by the foliage, a portion of the stop sign is still visible, the horizontal white line adjacent to the stop sign was noticeable, and the presence of the ridge Plaintiff careened over was clearly visible from the intersection of Mulholland and Torreyson. (Application at pp. 294-344.) An argument can be made that a reasonably prudent driver would have noticed that a stop was required at the relevant intersection to avoid careening over the ridge, regardless of the presence of overgrown vegetation on the Subject Property.

Second, photographs also support Plaintiff’s allegation that there were (1) no barriers at the northern edge of the intersection; (2) no signs warning motorists that the roadway ended; and (3) insufficient markings and shadowing on the roadway indicating that the roadway ended. The City potentially failed to ensure the safety of its roadways, including the placement of proper signage, barriers, and markings to prevent accidents. Furthermore, although the Sussmans potentially bore responsibility to trim their bushes so the tree would not overgrow and obscure the stop sign, ultimately, the maintenance of the stop sign is the City’s responsibility.

Third, although Plaintiff alleges total damages of $36 million, Plaintiff acknowledges that it is unlikely a jury will award this sum. Plaintiff concedes that she faces a sizable risk of loss and comparative liability. Plaintiff’s rough approximation of her recovery is $5 million. In Horton v. Superior Court (1987) 194 Cal.App.3d 727, the court stated: "In determining a settling defendant's equitable proportionate share of liability, the judge does not look to the plaintiff's claim for damages; rather the judge tries to determine a 'rough approximation' of what the plaintiff would actually recover if the case should go to trial. Although the sums paid may be grossly disproportionate to the sums prayed for in the complaint, they are not out of proportion to what the trial court might have considered the probable recovery of plaintiffs should they prove their case." (Kohn v. Superior Court (1983) 142 Cal.App.3d 323, 328.) The total alleged damages of $36 million are not controlling, as the judge does not consider that figure in determining rough approximation of total recovery.

Fourth, $2.5 million represents Defendant’s insurance policy limit. In cases involving insurance limits, courts have found settlements to be in good faith even with significantly lower settlement-to-value ratios than in the present case. (See, e.g., Bay Development, Ltd. v. Superior Court (1990) 50 Cal.3d 1012, 1028 [finding a $30,000 settlement reasonable in litigation involving a claim for $1 million in damages]; Cahill v. San Diego Gas & Electric Co. (2011) 194 Cal.App.4th 939, 969-970 [$25,000 settlement on a $40 million estimated value]; Horton v. Superior Court (1987) 194 Cal.App.3d 727 [value of the case was estimated at $320,000; the judge determined the case was worth less than $150,000, and a $50,000 settlement was not “out of the ballpark”]; Kohn v. Superior Court (1983) 142 Cal.App.3d 323 [the Court found that a settlement of $6,000 from each joint tortfeasor was in good faith, even though plaintiffs sought $500,000 in general damages from all defendants].)

Considering all factors, the Court finds the rough approximation of recovery to be much lower than the alleged $36 million and determines Plaintiff’s own evaluation of $5 million to be more reasonable. Furthermore, based on the evidence presented, the Court finds a significant possibility that Plaintiff and the City bear a large portion of the liability. Also, $2.5 million represents Defendant’s insurance policy limit. Accordingly, the settlement amount is well within the ballpark. Thus, the Court finds the settlement was made in good faith.

Parties who intend to submit on this tentative must send an email to the Court at SSCDEPT27@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court’s website at www.lacourt.org. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.

Hon. Lee S. Arian

Judge of the Superior Court