Judge Mark A. Young, Case Number: BC691517, Date: 2023-07-21 Tentative Ruling

Judge: Mark A. Young, Case: BC691517, Date: 2023-07-21 Tentative Ruling

Case Number: BC691517 Hearing Date: February 2, 2024 Dept: M

CASE NO.: BC691517

MOTION: Motion to Contest Good Faith Settlement

HEARING DATE: 2/2/2024

Legal Standard

In an action in which it is alleged that two or more parties are joint tortfeasors or co-obligors on a contract debt, a party to that action may file a motion seeking a determination from the court that the settlement between the plaintiff or other claimant and one or more alleged tortfeasors or co-obligors was made in good faith. (CCP § 877.6(a).) The notice of motion or application for good faith determination must list each party and pleading or portion of pleading affected by the settlement and the date on which the affected pleading was filed. (CRC Rule 3.1382.)

The California Supreme Court in Tech-Bilt, Inc. v. Woodward-Clyde & Assoc. (1985) 38 Cal.3d 488, established the standard for determining whether a settlement was made in good faith. Under Tech-Bilt, the following factors are considered: (1) a rough approximation of plaintiff’s total recovery and the settlor’s proportionate liability; (2) the amount paid in settlement; (3) the allocation of settlement proceeds among plaintiffs; (4) a recognition that a settlor should pay less in settlement than he would if he were found liable after a trial; (5) the financial conditions and insurance policy limits of settling defendants; and (6) the existence of collusion, fraud, or tortious conduct aimed to injure the interests of the non-settling defendants. (Id. at 498-501.) Additionally, the evaluation must be made based on the information available at the time of settlement. (Id. at 599.)

Where good faith is contested, the moving party must make a sufficient showing of all the Tech-Bilt factors, which can be made in the moving papers or in counter-declarations filed after the nonsettling defendants have filed an opposition. (City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261-62.) “Once there is a showing made by the settlor of the settlement, the burden of proof on the issue of good faith shifts to the non-settlor who asserts that the settlement was not made in good faith.” (Id. at 1262; CCP § 877.6(d).) In other words, the nonsettling defendant should demonstrate “that the settlement is so far ‘out of the ballpark’ in relation to the [Tech-Bilt] factors as to be inconsistent” with a settlement made in good faith. (Id. at 500.)

However, where good faith is uncontested, a “barebones motion which sets forth the ground of good faith, accompanied by a declaration which sets forth a brief background of the case, is sufficient.” (See Grand Terrace, supra,192 Cal.App.3d at 1261 [holding that when no one objects to a motion for good faith determination, a barebones motion that sets forth the ground of good faith, accompanied by a declaration that set forth a brief background of the case was sufficient in action where motion only discussed two of the Tech-Bilt factors, settlement amount and policy limits and declaration only gave a brief background of the case].)

If the court makes a good faith determination, the court may dismiss the settling party from comparative indemnity claims if the settling party has made such a request at the time of making the good faith motion. (CCP §§ 877, 877.6(c); CRC Rule 3.1382.)

EVIDENTIARY ISSUES

Defendant Westlake’s objections are OVERRULED.

Analysis

Defendant Mario Saldivar applies for a good faith settlement with Plaintiff Sandy Le. Defendant Westlake Services LLC contests the application for good faith settlement. As the settlement is contested, the settling parties must make a sufficient showing of all the Tech-Bilt factors.

Saldivar proffers the terms of the settlement. On August 7, 2023, Plaintiff with the assistance of counsel, made a written policy limits demand issued to Saldivar’s counsel and insurer, Mercury Insurance Company (“Mercury”). (Davis Decl., ¶3.) On August 8, 2023, defense counsel and Mercury timely accepted the settlement for Saldivar’s policy limits in the amount of One Hundred Thousand Dollars and Zero Cents ($100,000.00). (Id.) On August 8, 2023, the parties signed a settlement agreement and release, wherein Plaintiff agreed to a full and final release of all claims known or unknown and waiver under Civil Code § 1542 with respect to the subject accident in exchange for the settlement amount. (Id.) Counsel claims that the above negotiations were arm length and done in good faith. (Id., ¶ 4.) Counsel also disclaims any collusion between Saldivar and Plaintiff or tortious/fraudulent conduct aimed to injure the interests of the non-settling defendants. (Davis Decl., ¶ 5.)

Saldivar also argues that his approximate liability would be less than 1% of any recovery.

Saldivar relies on evidence submitted in his Motion for Summary Judgment, which was pending when the parties settled. There, Salidvar presented deposition testimony that he had absolutely no time to react to the vehicle flying in front of him or avoid this accident. (See Davis Decl. iso MSJ, Ex. F.) Saldivar also contends that this conclusion is supported by the police report, investigating officer police officer Wright’s testimony, and the physical evidence at the scene. Saldivar also presented the conclusion of Dr. Judson Welcher, PhD, who examined all the vehicles and “black boxes” in the vehicles. Dr. Welcher concluded that Saldivar had only one second to react to the situation once codefendant DeGuia’s vehicle was catapulted into the path of his car traveling in the opposite direction. (Id., Ex. G.) Thus, at minimum, the record puts into serious doubt whether Saldivar was negligent.

Based on the above record, the rough approximation Saldivar’s proportionate liability would be minimal. Moreover, Saldivar should pay less in settlement than he would if he were found liable after a trial. Therefore, Saldivar presents sufficient evidence demonstrating that the settlement was made in good faith under the Tech-Bilt factors.

Once there is a showing made by the settlor, the burden of proof on the issue of good faith shifts to the non-settlor. Westlake contends that the settlement is “out of the ballpark’ in relation to the Tech-Bilt factors as to be inconsistent with a settlement made in good faith. Specifically, Westlake believes that Plaintiff would ask for $25 million in damages, and thus the $100,000.00 would be a mere pittance. Westlake provides no substantive grounds for such a high recovery by Plaintiff, let alone against Saldivar. At best, Westlake shows that recent verdicts in wrongful death cases ranged from $1 million to $8 million. Even if the court were to conclude that this action was valued at the upper range of recovery, the settlement sum offered here would still be within the ballpark of Plaintiff’s potential recovery against Saldivar. Notably, based on the evidence, Plaintiff’s recovery against Saldivar would likely be $0. Westlake does nothing to show that Saldivar should be held liable here beyond the $100,000.00 settlement sum, aside from citing the allegations in the complaint. As such, Westlake does not show that the settlement was made in bad faith.

Accordingly, the motion is GRANTED.