Judge: Mel Red Recana, Case: 20STCV34421, Date: 2024-04-12 Tentative Ruling
All rulings shown here are TENTATIVE ONLY, and thus oral argument WILL be heard. All Counsel are still required to attend.
Case Number: 20STCV34421 Hearing Date: April 12, 2024 Dept: 45
Hearing Date: April
12, 2024
Moving Parties: Defendant
Joan Allyn Schultz dba Joan Schultz Insurance Agency (erroneously sued as two
separate entities)
Responding Parties: None
Motion for Determination of Good
Faith Settlement
The court
considered the moving papers and Defendants Those Certain Underwriters at
Lloyd’s, London Subscribing to Policy Number HGB0140086 and Washington &
Finnigan, Inc.’s response (not an opposition) that was filed on February 1,
2024.
The court GRANTS Defendant’s application
for determination of good faith settlement. The court determines the settlement
entered into by defendant Joan Allyn Schultz dba Joan Schultz
Insurance Agency and
plaintiffs Shaila Mantri and Subhash Mantri is in good faith
within the meaning of CCP § 877.6(a). All other joint tortfeasors or
co-obligors are barred from any further claims against defendant Joan
Allyn Schultz dba Joan Schultz Insurance Agency for equitable comparative
contribution, or partial or comparative indemnity, based on comparative
negligence or comparative fault. (CCP § 877.6(c).)
Background
Plaintiffs
Shaila Mantri and Subhash Mantri filed this action on September 9, 2020 against
defendants Those Certain Underwriters At Lloyd’s, London Subscribing To Policy
Number HGB0140086 (or “Lloyd’s”); Joan Allyn Schultz dba Joan Schultz Insurance
Agency (erroneously sued as two separate entities); and Washington &
Finnegan, Inc., alleging causes of action for (1) Breach of Contract; (2)
Breach of the Implied Covenant of Good Faith and Fair Dealing; (3) Negligence;
(4) Intentional Infliction of Emotional Distress; (5) Professional Negligence;
and (6) Fraud.
The
Complaint alleges the following: Plaintiffs’ home was burglarized on November
30, 2019. (Compl., ¶ 1.) Plaintiffs submitted a claim to their insurance
carrier, Lloyd’s. (Id. at ¶ 1.) Instead of investigating, adjusting, and
paying the claim in a timely and reasonable manner, Lloyd’s unreasonably and in
bad faith disputed the veracity and extent of the claim, ignored reliable
documents that support the claim, and has thus far paid Plaintiffs nothing. (Id.
at ¶ 1.) Further, Plaintiffs learned that their insurance broker for their
insurance policy, Joan Schultz Insurance Agency, negligently and fraudulently
obtained woefully inadequate insurance coverage for Plaintiffs’ personal
property. (Id. at ¶ 2.) Schultz negligently and fraudulently represented
to Plaintiffs that they could only obtain personal property coverage with a
limit of $300,000. (Id. at ¶ 2.)
Plaintiffs
filed a Notice of Settlement on August 18, 2023 indicating they settled their
claims with defendants Joan Schultz Insurance Agency and Joan Allyn Schultz.
Defendant
Joan Allyn Schultz dba Joan Schultz Insurance Agency filed this motion for
determination of good faith settlement on December 20, 2023. No opposition was
received, but defendants Those Certain Underwriters at Lloyd’s, London
Subscribing to Policy Number
HGB0140086 and Washington & Finnigan,
Inc. filed a “response” to the motion on February 1, 2024.
Legal Standard
In an action involving two or more joint
tortfeasors or co-obligors, when one tortfeasor or obligor enters into a
settlement with the plaintiff, the other tortfeasors or obligors are entitled
to a hearing on the issue of whether the settlement was entered into in good
faith. (CCP § 877.6(a).) The Court’s determination of good faith “bar[s] any
other joint tortfeasor or co-obligor from … [asserting] claims against the
settling tortfeasor… for equitable comparative contribution, or partial or
comparative indemnity, based on comparative negligence or comparative fault.”
(CCP § 877.6(c).) The non-settling tortfeasors or obligors bear the burden of
demonstrating the absence of good faith in the settlement. (CCP § 877.6(d).)
In order to demonstrate lack of good
faith, the non-settling party must show that the settlement is so far “out of
the ballpark” as to be inconsistent with the equitable objectives of Section
877.6. (See Nutrition Now, Inc. v.
Superior Court (2003) 105 Cal.App.4th 209, 213.) In making this
determination, the Court must rely “on the basis of experience rather than
speculation,” and “may enlist … personal experience and of experts in the
field.” (Cahill v. San Diego Gas &
Elec. Co. (2011) 194 Cal.App.4th 939, 959.)
In determining whether a settlement “out
of the ballpark,” the Court considers the following factors: (1) the
plaintiff’s (roughly) approximated total recovery; (2) the settlor’s share of
liability; (3) the size of the settlement at issue; (4) the distribution of
settlement proceeds among plaintiffs; (5) the usual discount value when
plaintiffs settle before trial; the settlor’s financial condition and insurance
policy limits; and finally, (6) whether there is evidence of “collusion, fraud,
or tortious conduct aimed to injury the interests of nonsettling defendants.” (Tech-Bilt, Inc. v. Woodward-Clyde &
Assocs. (1985) 38 Cal.3d 488, 499.) These considerations are referred to as
the “Tech-Bilt factors.” The Tech-Bilt factors must be evaluated
according to what information is available at the time of settlement. (Id.)
Discussion
Defendant Joan
Allyn Schultz dba Joan Schultz Insurance Agency moves for an order determining
that her settlement with plaintiffs Shaila Mantri and Subhash Mantri was entered in
good faith pursuant to CCP § 877.6. Defendants Those
Certain Underwriters at Lloyd’s, London Subscribing to Policy Number HGB0140086
and Washington & Finnigan, Inc do not oppose the entry of an order
determining the settlement between Plaintiffs and Defendant Schultz as being in
good faith, subject to the qualification that the fact, amount, and terms of
the agreement are not “confidential” relative to further proceedings in this
Court.
“[O]nly when the good faith nature of a
settlement is disputed, it is incumbent upon the trial court to consider and
weigh the Tech-Bilt factors. That is to say, when no one
objects, the 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.” (City of Grand Terrace v.
Superior Court (1987) 192 Cal.App.3d 1251, 1261.)
Further, CCP § 877.6(a)(2)
states in relevant part: “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.”
Here, no one opposes whether the
settlement agreement was entered in good faith, and it has been over 25 days
since defendant Schultz noticed the motion. However,
defendants Those Certain Underwriters at Lloyd’s,
London Subscribing to Policy Number HGB0140086
and Washington & Finnigan, Inc. filed a “response” to this motion,
asserting that the purported confidentiality of the settlement agreement should
not impact Defendants’ right to introduce evidence about the agreement at
trial. Defendants argue the settlement amount is relevant to the issues of set
off and Plaintiffs’ alleged damages. Defendants contend the court’s order
should make clear the settlement terms are not confidential for purposes of
this litigation. Defendants do not oppose the instant motion itself.
The court finds it is not
proper to issue a blanket order in this motion as to the admissibility or
confidentiality of the settlement terms between defendant Schultz and
Plaintiffs. If the non-moving Defendants want to compel the use of the
settlement terms or litigate the admissibility thereof for use in this
litigation (should defendant Schultz object to such use), those issues should
be decided in separate proceedings. For purposes of the instant proceedings,
however, the court finds it is only appropriate to rule on the issues that are
dispositive for deciding the motion. No one opposes this motion or whether the
settlement agreement was entered in good faith, and it has been over 25 days
since the motion was noticed. As such, the court finds this motion should be
granted.
The court therefore GRANTS
Defendant’s
application for determination of good faith settlement. The court determines
the settlement entered into by defendant Joan Allyn
Schultz dba Joan Schultz Insurance Agency and plaintiffs Shaila
Mantri and Subhash Mantri is in good faith within the meaning of CCP § 877.6(a).
All other joint tortfeasors or co-obligors are barred from any further claims
against defendant Joan Allyn Schultz dba Joan Schultz
Insurance Agency
for equitable comparative contribution, or partial or comparative indemnity,
based on comparative negligence or comparative fault. (CCP § 877.6(c).)
It is so
ordered.
Dated:
April 12, 2024
_______________________
ROLF M. TREU
Judge of the
Superior Court