TENTATIVE RULING

Defendants/Cross-Complainants DS Technicians, Inc. and Theron Murdock’s Motion Contesting the Application for Good Faith Settlement of Cross-Defendant Juan Alejandro Gonzalez is DENIED without prejudice.

Defendants/Cross-Complainants DS Technicians, Inc. and Theron Murdock to give notice. 

REASONING

Cross-Defendant Juan Alejandro Gonzalez (“Gonzalez”) has moved the Court for an order determining that his settlement with Plaintiff Francesco Galasso (“Plaintiff”) was made in good faith. Defendants/Cross-Complainants DS Technicians, Inc. and Theron Murdock (“Defendants”) have challenged the application on the ground that the settlement does not adequately reflect Gonzalez’s proportionate share of liability, and the application fails to set forth a rough approximation of Plaintiff’s total recovery, Gonzalez’s proportionate liability, why Gonzalez should pay less than if found liable at trial, or potential liability for indemnity to Defendants.

Code of Civil Procedure section 877.6 enables a settling defendant to free itself not only from any further claims of the plaintiff but also from any subsequent liability to any non-settling defendant for equitable comparative contribution, or partial or comparative indemnity. A settling defendant obtains this immunity by settling in “good faith.” Code of Civil Procedure section 877.6, subdivision (b), provides that the court may determine the good faith of a settlement on the basis of affidavits and counter affidavits or may, in its discretion, receive other evidence at the hearing. Code of Civil Procedure section 877.6 grants the trial court broad discretion in determining whether a settlement is in good faith for purposes of that statute, and “its decision may be reversed only upon a showing of abuse of discretion.” (TSI Seismic Tenant Space, Inc. v. Superior Court (2007) 149 Cal.App.4th 159, 165.)

To determine whether a settlement was in “good faith” the court 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.) Ultimately, the “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 v. Woodward-Clyde & Assocs. (1985) 38 Cal.3d 488, 499 (Tech-Bilt).)

In determining the good faith of a settlement, the court should consider a number of factors, including (1) a rough approximation of the total recovery and the settlor’s proportionate liability, (2) the actual settlement amount, (3) the allocation of settlement proceeds among plaintiffs, (4) the recognition that a settlor should pay less in settlement than he or she would if liability is established after trial, (5) the financial conditions and insurance policy limits of the settlor, and (6) the existence of facts showing collusion, fraud, or tortious conduct aimed to injure the interests of nonsettling defendants. (Tech-Bilt, supra, 38 Cal.3d at p. 499.) Furthermore, the evaluation must “be made on the basis of information available at the time of settlement.” (Ibid.)

The party contesting the settlement bears the burden of proving that the settlement is in bad faith. (Code Civ. Proc., § 877.6, subd. (d).) If the party contesting the settlement can show with admissible evidence “that the settlement is so far ‘out of the ballpark’ in relation to [the above-referenced] factors as to be inconsistent with the equitable objectives of the statute,” then the court should find the settlement to be lacking in good faith. (Tech-Bilt, supra, 38 Cal.3d at pp. 499-500.) If no such showing is made, the settlement should be deemed to be in good faith, and the settlor is entitled to an order barring any further claims by any other joint tortfeasor or co-obligor for “equitable comparative contribution, or partial or comparative indemnity.” (Code Civ. Proc., § 877.6, subd. (c).)

Gonzalez has agreed to settle with Plaintiff for $15,000, which represents the full amount of the insurance policy limit held by Gonzalez which would provide coverage for Plaintiff’s claims arising out of the motor vehicle incident at issue in the complaint. (Application, Boyd Decl. ¶ 5.) Gonzalez was one of several drivers involved in the multi-vehicle collision; Gonzalez’s vehicle was rear-ended by the vehicle driven by Defendant Murdock, causing Gonzalez to impact a third party’s vehicle, which caused that third party to impact Plaintiff’s vehicle. (Application, Boyd Decl. ¶ 3.) Gonzalez was not named as a defendant in this action, presumably because the settlement and release agreement had already been executed. (Ibid.)

As to the rough approximation of the total recovery, Plaintiff has alleged injury to his body, nervous system, and person, requiring medical treatment and preventing him from engaging in his occupation. (Compl. ¶¶ 9-11.) While Gonzalez provides no evidence as to the rough approximation of the total recovery, Defendants represent that Plaintiff has claimed past medical expenses already amounting to $167,632.10, Plaintiff valued his total damages at $651,677.10 as of October 2023, and Plaintiff alleged $2,000,000 in economic damages and $10,000,000 in noneconomic damages as of January 22, 2024. (Mot., Zeitouni Decl. ¶¶ 5-6.)

Defendants provide the police report from the incident, which states that Gonzalez was driving westbound on Slauson Avenue, in the number one lane, at approximately 40 miles per hour, when he observed two vehicles directly in front of him yielding for an oncoming emergency vehicle, and Gonzalez was unable to come to a stop, resulting in his vehicle colliding into another’s vehicle, and that vehicle then collided into Plaintiff’s vehicle. (Mot., Zeitouni Decl. ¶ 7, Ex. A.) 

Gonzalez argues an exception to the proportionality analysis applies where there is no evidence of collusion or fraud and where the party has settled for policy limits or is underinsured. (Tech-Bilt, supra, 38 Cal.3d at p. 499 [“even where the claimant’s damages are obviously great, and the liability therefor certain, a disproportionately low settlement figure is often reasonable in the case of a relatively insolvent, and uninsured, or underinsured, joint tortfeasor”].) In his opposition, Gonzalez’s counsel states that he has no significant assets other than his insurance policy. (Reply, Boyd Decl. ¶ 4.) The evidence in this regard is insufficient, as Gonzalez provides only his attorney’s statement to this effect, and while counsel references a declaration by Gonzalez attesting to his lack of assets, no such declaration has been provided for the Court to review.

The Court finds that this settlement is premature. Because Plaintiff may have significant damages, and the evidence suggests that Gonzalez may be primarily responsible for the accident at issue, the amount of settlement does not appear to represent Gonzalez’s proportionate share of liability, and the Court cannot determine as a matter of fact that Gonzalez is unable to pay more than the settlement amount. Accordingly, Defendants/Cross-Complainants DS Technicians, Inc. and Theron Murdock’s Motion Contesting the Application for Good Faith Settlement of Cross-Defendant Juan Alejandro Gonzalez is DENIED without prejudice.