Judge: Lisa R. Jaskol, Case: 22STCV01663, Date: 2023-08-31 Tentative Ruling
Case Number: 22STCV01663 Hearing Date: January 29, 2024 Dept: 28
Having considered the moving, opposing, and reply papers, the Court rules as follows.
BACKGROUND
On January 14, 2022, Plaintiff Marguerita Ludwig (“Plaintiff”) filed this action against Defendants Richard Lam (“Richard Lam”), Helen Lam (“Helen Lam”), Amy Lam (“Amy Lam”), 380 Sierra Madre, LLC (“380 Sierra Madre”), Lam Property Management (“Management”), Estate of William Jordison, and Does 1-45 for premises liability.
On October 11, 2022, Plaintiff amended the complaint to change the name of Defendant Estate of William Jordison to Estate of William Jordison, Deceased.
On December 16, 2022, Defendant Estate of William Jordison, Deceased (“Estate”) filed an answer.
On March 15, 2023, Richard Lam, Helen Lam, Amy Lam, 380 Sierra Madre, and Management filed an answer and a cross-complaint against Cross-Defendants Estate and Roes 1-10 for declaratory relief, implied partial indemnity, and equitable apportionment.
On May 19, 2023, Estate filed an answer to the cross-complaint.
On November 30, 2023, Estate filed a motion for determination of good faith settlement. On December 19, 2023, Richard Lam, Helen Lam, Amy Lam, 380 Sierra Madre, and Management (“Lam Defendants”) filed an opposition. On December 26, 2023, Estate filed a reply. The Court continued the hearing from January 3, 2024 to January 29, 2024.
Trial is currently scheduled for April 24, 2024.
PARTIES’ REQUESTS
Estate asks the Court to find that its settlement with Plaintiff for $100,000 is in good faith.
The Lam Defendants ask the Court to deny the motion.
LEGAL STANDARD
Code of Civil Procedure section 877.6, subdivision (a)(2), states that “a settling party may give notice of settlement to all parties and to the court, together with an application for determination of good faith settlement and a proposed order. The application shall indicate the settling parties, and the basis, terms, and amount of the settlement. The notice, application, and proposed order shall be given by certified mail, return receipt requested, or by personal service. Proof of service shall be filed with the court. Within 25 days of the mailing of the notice, application, and proposed order, or within 20 days of personal service, a nonsettling party may file a notice of motion to contest the good faith of the settlement. If none of the nonsettling parties files a motion within 25 days of mailing of the notice, application, and proposed order, or within 20 days of personal service, the court may approve the settlement. . . .”
“The issue of the good faith of a settlement may be determined by the court on the basis of affidavits served with the notice of hearing, and any counteraffidavits filed in response, or the court may, in its discretion, receive other evidence at the hearing.” (Code Civ. Proc., § 877.6, subd. (b).)
“The party asserting the lack of good faith shall have the burden of proof on that issue.” (Code Civ. Proc., § 877.6, subd. (d).)
In Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499 (Tech-Bilt), the California Supreme Court identified the following nonexclusive factors courts must consider in determining if a settlement is in good faith under section 877.6: “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. Other 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.”
The evaluation of a settlement is “made on the basis of information available at the time of settlement.” (Tech-Bilt, supra, 38 Cal.3d at p. 499.)
DISCUSSION
A. The complaint
William Jordison (“Jordison”) leased a residential property in Arcadia from the Lam Defendants. On or about January 15, 2020, Plaintiff was at the property to help Jordison prepare to move out of the property.
The rear area of the property, including the back patio and driveway, contained trip hazards due to negligent construction, repair, inspection, and maintenance. As a result of the dangerous condition, Plaintiff fell and struck her head, breaking her neck and suffering permanent brain damage.
B. Plaintiff’s total recovery and settlor’s proportionate liability
Estate asserts that its agreement to pay Plaintiff $100,000 to settle Plaintiff’s claims against Estate is in good faith because $100,000 is the most that Plaintiff could recover against Estate. The amount represents the policy limits of Jordison’s renter’s insurance policy. According to Estate, Probate Code section 554, subdivision (a), limits Plaintiff’s recovery against Estate to the policy limits.
Estate also contends that Jordison’s proportionate liability is irrelevant because, under the Probate Code, Estate is effectively insolvent with respect to damages beyond the $100,000 policy limit. As a result, Estate does not address Jordison’s proportionate liability for Plaintiff’s injuries.
Similarly, Estate does not address the amount of damages that Plaintiff might recover if the case goes to trial.
2. The Lam Defendants’ opposition
The Lam Defendants argue that Probate Code section 554, subdivision (a), does not cap Estate’s liability at the $100,000 policy limits because Plaintiff is not prosecuting the complaint under the provisions of Probate Code sections 550 et. seq. (Opposition p. 3.)
The Lam Defendants also observe that “[n]othing in [Estate’s] motion documents whether Jordison, upon his demise, had money or property which was or may still be available for judgment or settlement purposes.” (Opposition p. 3.)
In addition, the Lam Defendants point out that Plaintiff’s injuries are very serious and her damages will necessarily far exceed $100,000. In an interrogatory response, Plaintiff stated:
“ . . . I suffered a C7 pedicle fracture to my neck. I underwent extensive neurosurgery consisting of, among other things, a C6-C7 anterior cervical discectomy and fusion and additional stabilization in an effort to prevent further damage to my spinal cord. I suffered a severe traumatic brain injury. Someone told me I may have suffered a stroke but I don't know if this was confused with my brain injury. The traumatic brain injury has severely limited my ability to get around, care for myself, engage in activities of daily living, has reduced my cognitive abilities, and has impacted every aspect of my life. I have difficulty in walking, decreased functional activity, balance deficits, mobility deficits, endurance deficits, pain limiting functions, range of motion deficits, strength deficits, and transfer deficits. I continue to have mental deficits in executive function and processing speed, limited speech intelligibility, limited cognition, memory and comprehension, unstable gait, inability to engage in ADLs, and bowel and bladder incontinence.”
Finally, the Lam Defendants argue that Jordison was responsible for the allegedly dangerous condition on the property he rented. The Lam Defendants assert that they had no notice of the allegedly dangerous condition.
C. Allocation of settlement
Plaintiff will receive the entire settlement.
D. Financial considerations
See Section B.
E. Collusion or fraud
The Court has seen no evidence of fraud or collusion.
F. Weighing the Tech-Bilt factors
Probate Code section 550 provides:
“(a) Subject to the provisions of this chapter, an action to establish the decedent’s liability for which the decedent was protected by insurance may be commenced or continued against the decedent’s estate without the need to join as a party the decedent’s personal representative or successor in interest.
“(b) The remedy provided in this chapter is cumulative and may be pursued concurrently with other remedies.”
(Prob. Code, § 550, emphasis added.)
The Law Revision Commission Comments to the statute explain: “If the plaintiff seeks damages in excess of the insurance policy limits, the plaintiff must file a claim and establish the liability other than under this chapter. . . . Subdivision (b) makes clear that this chapter does not preclude the establishment of liability by another procedure.” (Emphasis added.)
Probate Code section 554 provides:
“(a) Except as provided in subdivision (b), either the damages sought in an action under this chapter shall be within the limits and coverage of the insurance, or recovery of damages outside the limits or coverage of the insurance shall be waived. A judgment in favor of the plaintiff in the action is enforceable only from the insurance coverage and not against property in the estate.
“(b) Where the amount of damages sought in the action exceeds the coverage of the insurance, subdivision (a) does not apply if both of the following conditions are satisfied:
“(1) The personal representative is joined as a party to the action.
“(2) The plaintiff files a claim in compliance with Section 9390.”
(Prob. Code, § 554, emphasis added.)
Probate Code section 9390 provides:
“(a) An action to establish the decedent’s liability for which the decedent was protected by insurance may be commenced or continued under Section 550, and a judgment in the action may be enforced against the insurer, without first filing a claim as provided in this part.
“(b) Unless a claim is first made as provided in this part, an action to establish the decedent’s liability for damages outside the limits or coverage of the insurance may not be commenced or continued under Section 550.
“(c) If the insurer seeks reimbursement under the insurance contract for any liability of the decedent, including, but not limited to, deductible amounts in the insurance coverage and costs and attorney’s fees for which the decedent is liable under the contract, an insurer defending an action under Section 550 shall file a claim as provided in this part. Failure to file a claim is a waiver of reimbursement under the insurance contract for any liability of the decedent.”
(Prob. Code, § 9390, emphasis added.)
Estate has not addressed whether it is potentially liable to Plaintiff for damages outside the limits of the renter's policy under Probate Code section 9390 and Part 4 of the Probate Code. Therefore, the Court cannot conclude that Estate is essentially insolvent for amounts above the $100,000.00 policy limits. In addition, Estate has provided no evidence that the insurance policy is its only asset and it has offered no information about its proportionate liability or Plaintiff’s damages. Therefore, the Court denies the motion.
CONCLUSION
The Court DENIES Estate of William Jordison, Deceased’s motion for a determination that its settlement with Plaintiff Marguerita Ludwig is in good faith.
Moving party is ordered to give notice of this ruling.
Moving party is ordered to file the proof of service of this ruling with the Court within five days.