Judge: Lisa R. Jaskol, Case: 22STCV32605, Date: 2025-05-13 Tentative Ruling
Case Number: 22STCV32605 Hearing Date: May 13, 2025 Dept: 28
Having considered the moving, opposition, and reply papers, the Court rules as follows.
BACKGROUND
A. Prior proceedings
On October 5, 2022, Plaintiff Victor Estuardo Jovel (“Plaintiff”) filed this action against Defendants City of Los Angeles (“City”) and Does 1-100 for dangerous condition of public property under Government Code section 835.
On January 17, 2023, the City filed an answer and a cross-complaint against Cross-Defendants Roes 1-10 for indemnification, apportionment of fault, and declaratory relief. On June 27, 2023, the City amended the cross-complaint to include Cross-Defendant L.A. Xpress, Inc. (“Xpress”) as Roe 1. On August 14, 2023, Xpress filed an answer to the City’s cross-complaint.
On August 15, 2023, Plaintiff amended the complaint to include Xpress as Doe 1. On September 13, 2023, Xpress filed an answer to Plaintiff’s complaint.
On September 19, 2023, Plaintiff amended the complaint to include Defendant Laurel Finance Company, Inc. (“Laurel”) as Doe 2.
On January 5, 2024, Laurel filed an answer to Plaintiff’s complaint and filed a cross-complaint against Cross-Defendants City and Roes 1-10 for declaratory relief, equitable indemnity, and contribution.
On August 8, 2024, Plaintiff amended the complaint to include Defendant Kenneth MacKenzie (“MacKenzie”) as Doe 3. On September 20, 2024, MacKenzie filed an answer.
On January 9, 2025, the Court dismissed Laurel with prejudice at Plaintiff’s request. On January 10, 2025, the Court dismissed Xpress and MacKenzie with prejudice at Plaintiff’s request. Also on January 10, 2025, the Court dismissed Laurel’s cross-complaint without prejudice at Laurel’s request.
Trial is currently scheduled for June 3, 2025.
B. This motion
On February 3, 2025, MacKenzie and Xpress (“Moving Defendants”) filed a motion for determination of good faith settlement. The motion was set for hearing on April 1, 2025. Moving Defendants later rescheduled the hearing for March 13, 2025. On March 6, 2025, the City filed an opposition. (The Court exercises its discretion to consider the late opposition.) On March 7, 2025, Moving Defendants filed a reply.
PARTIES’ REQUESTS
Moving Defendants ask the Court to find that their settlement with Plaintiff was in good faith.
The City asks the Court to deny Moving Defendants’ motion.
MOVING DEFENDANTS’ EVIDENTIARY OBJECTIONS
Sustained: 1, 2, 3, 5
Overruled: 4
LEGAL STANDARD
Code of Civil Procedure section 877.6 provides in part:
“(a) (1) Any party to an action in which it is alleged that two or more parties are joint tortfeasors or co-obligors on a contract debt shall be entitled to a hearing on the issue of the good faith of a settlement entered into by the plaintiff or other claimant and one or more alleged tortfeasors or co-obligors, upon giving notice in the manner provided in subdivision (b) of Section 1005. Upon a showing of good cause, the court may shorten the time for giving the required notice to permit the determination of the issue to be made before the commencement of the trial of the action, or before the verdict or judgment if settlement is made after the trial has commenced.
“(2) In the alternative, 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 notice by a nonsettling party shall be given in the manner provided in subdivision (b) of Section 1005. However, this paragraph shall not apply to settlements in which a confidentiality agreement has been entered into regarding the case or the terms of the settlement.
“(b) 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.
“(c) 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.
“(d) The party asserting the lack of good faith shall have the burden of proof on that issue. . . .”
(Code Civ. Proc., § 877.6, subds. (a), (b), (c), (d).)
In Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499 (Tech-Bilt), our 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.”
When a non-settling party contests good faith, the party moving for a good faith settlement determination has the evidentiary burden of making a sufficient showing of all the Tech-Bilt factors. (L. Edmon & C. Karnow, Cal. Practice Guide: Civil Procedure Before Trial (Rutter 2024) ¶ 12:872, p. 12(ll)-104 (Cal. Practice Guide).) “Such showing may be made either in the original moving papers or in counterdeclarations filed after the nonsettling defendants have filed an opposition challenging the good faith of the settlement.” (Ibid.) “Where ‘good faith’ is contested, conclusory allegations as to the settling parties’ liability are insufficient” and “[a]n expert’s opinion must be substantiated by facts.” (Id., ¶ 12:873, p. 12(ll)-104.)
“At the hearing on the motion, the party claiming the settlement was not in good faith has the burden of proof on this issue.” (Cal. Practice Guide, supra, ¶ 12:875, p. 12(ll)-105.) That is, “the nonsettling tortfeasor has the burden of demonstrating that the settlement is ‘so far “out of the ballpark” in relation to these [Tech Bilt] factors as to be inconsistent with the equitable objectives of the statute.” (Ibid., quoting Tech-Bilt, supra, 38 Cal.3d at pp. 499-500.)
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 and cross-complaints
1. The complaint filed October 5, 2022
Plaintiff’s complaint includes the following allegations:
On August 5, 2021, Plaintiff was a pedestrian walking on the sidewalk and tripped over an exposed screw bolt protruding from the sidewalk adjacent to 13360 Sherman Way in North Hollywood, causing him to fall. There were no proper safeguards, blockades, or warnings and the subject area of the sidewalk was not sectioned off or blocked off in any manner. Plaintiff was injured due to the dangerous condition.
Defendants owned, operated, constructed, designed, built, possessed, maintained, repaired, inspected, altered, and/or were otherwise responsible for maintaining in a safe and operable condition, the roadway, sidewalk, parkway, landscaping, etc., located adjacent to 13360 Sherman Way, North Hollywood, CA 91605.
2. The City’s cross-complaint filed January 17, 2023
The City’s cross-complaint asserts claims for indemnification, apportionment of fault, and declaratory relief against Cross-Defendants Roes 1 (Xpress) and Roes 2-10.
In exchange for Plaintiff’s dismissal of the complaint with prejudice against Moving Defendants, Moving Defendants agreed to waive recovery of their costs incurred in defending the action. (Motion p. 1.) Moving Defendants estimate that their waived costs were approximately $4,000.00 at the time of settlement.
C. The Tech-Bilt factors
1. Moving Defendants’ proportionate liability
a. Moving Defendants’ contentions
Moving Defendants contend that they are not liable for Plaintiff’s alleged trip-and-fall on the public sidewalk. According to Moving Defendants, the City has admitted that, in naming Xpress as a cross-defendant, the City mistakenly relied on a newsrack permit record for a different location. The City has no records tying Xpress to the location of Plaintiff’s fall. In addition, Plaintiff cannot prevail against Moving Defendants on his single cause of action for dangerous condition of property under Government Code section 835 because Moving Defendants are not public entities.
b. The City’s contentions
The City observes that Xpress obtained a permit and placed a newsrack at 13324 Sherman Way (a different location from where Plaintiff fell). (Opposition p. 3.) Citing a photograph (which the City did not properly authenticate), the City argues: “The exact same newsrack was installed in front of the strip mall located at 13360 Sherman Way in the spot where the bolts of which plaintiff complains were located.” (Opposition p. 3.) The City admits that it “cannot find a permit for the 13360 Sherman Way location” but contends that the lack of a permit does not mean that Xpress was not responsible for the newsrack. (Opposition p. 4.)
2. Plaintiff’s damages
a. Moving Defendants’ contentions
Moving Defendants acknowledge that Plaintiff is claiming (1) approximately $400,000 in medical expenses and (2) lost business income. But, according to Moving Defendants, Plaintiff’s IME revealed that “Plaintiff was not injured by the trip-and-fall” and “the reported charges associated with medical procedures undertaken by Plaintiff fall outside the accepted norms and value for those procedures by a factor of ten.” (Motion p. 6.) In addition, Plaintiff “has no documents reflecting any business income received or business expenses incurred between January 1, 2019, and the present.” (Motion p. 6.) Thus, “[t]he value of Plaintiff’s case, and total recovery against the Defendants, is zero.” (Motion p. 5.)
b. The City’s contentions
The City asserts: “Plaintiff has over $400,000 in medical bills. It is true that these bills are inflated, but the special damages in this case are large. The payment of $0 in settlement is not in the ballpark, it is not even in the parking lot of the ballpark.” (Opposition p. 5.)
3. Allocation of settlement
Moving Defendants will waive recovery of their costs from Plaintiff.
4. Financial considerations
a. Moving Defendants’ contentions
Moving Defendants have presented evidence and argument that (1) Xpress dissolved in 2016 and is a “defunct” company, (2) neither Xpress nor MacKenzie has insurance covering this dispute, and (3) because Plaintiff did not bring his claim within four years of Xpress’s dissolution, Corporations Code section 2011, subdivision (a)(2)(B) bars all causes of action against MacKenzie in his capacity as an Xpress shareholder.
b. The City’s contentions
The City does not address “the financial conditions and insurance policy limits of settling defendants . . . .” (Tech-Bilt, supra, 38 Cal.3d at p. 499.)
5. Collusion or fraud
a. Moving Defendants’ contentions
Moving Defendants contend there is no evidence of collusion, fraud, or tortious conduct.
b. The City’s contentions
The City argues the settlement “smacks of a collusive arrangement” because, having asserted only a claim for dangerous condition of public property and no negligence claim, Plaintiff was “in a bind.” (Opposition p. 2.)
D. Analysis
Moving Defendants have presented evidence and argument that (1) Xpress is a “defunct” company, (2) neither Xpress nor MacKenzie have insurance covering this dispute, (3) Plaintiff’s medical expenses are inflated, (4) in naming Xpress in its cross-complaint, the City mistakenly relied on a newsrack permit record for a different location, (5) the City cannot find a permit for the 13360 Sherman Way location, (6) Plaintiff has no documents reflecting any business income received or business expenses incurred between January 1, 2019, and the present, and (7) Corporations Code section section 2011, subdivision (a)(2)(B) bars claims against MacKenzie in his capacity as an Xpress shareholder.
In response, the City contends that Xpress placed a newsrack at the location of Plaintiff’s fall, “the special damages in this case are large,” and the settlement “smacks of a collusive arrangement.”
The Court assumes for the sake of argument that the City can present evidence supporting its contention that Xpress placed a newsrack at the location of Plaintiff’s fall. However, the City has presented no evidence of Plaintiff’s damages or evidence supporting the City’s assertion that Plaintiff incurred a large amount of special damages. Although the City claims the settlement was collusive, the City’s evidence on this point -- the lack of a negligence claim against Moving Defendants -- is thin at best. The City has not challenged Moving Defendants’ evidence that they lack insurance covering this dispute or that Xpress is a “defunct” company.
After weighing these factors, the Court concludes that (1) Moving Defendants carried their burden of making a sufficient showing of the Tech-Bilt factors and (2) the City has not carried its burden of showing that the settlement is so far “out of the ballpark” that the Court cannot find the settlement was made in good faith. The Court grants the motion.
CONCLUSION
The Court GRANTS the motion for a good faith settlement determination filed by Defendant and Cross-Defendant L.A. Xpress, Inc. and Defendant Kenneth MacKenzie. The Court finds that the settlement between Defendant and Cross-Defendant L.A. Xpress, Inc. and Defendant Kenneth MacKenzie, on the one hand, and Plaintiff Victor Estuardo Jovel, on the other hand, was made in good faith. The Court dismisses all pending and future claims against Defendant and Cross-Defendant L.A. Xpress, Inc. and Defendant Kenneth MacKenzie by the parties represented by counsel served with this motion (to the extent those claims arise from the facts giving rise to this case), including cross-complaints for equitable indemnity.
Moving parties are ordered to give notice of this ruling.
Moving parties are ordered to file the proof of service of this ruling with the Court within five days.