Judge Melvin D. Sandvig, Case 19CHCV00450 2022-09-26 Tentative Ruling

Judge: Melvin D. Sandvig, Case: 19CHCV00450, Date: 2022-09-26 Tentative Ruling

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Case Number: 19CHCV00450 Hearing Date: September 26, 2022 Dept: F47

Dept. F47

Date: 9/26/22

Case #19CHCV00450

MOTION FOR ORDER APPROVING GOOD FAITH SETTLEMENT

Motion filed on 7/20/22.

MOVING PARTY: Plaintiff Helen Evans

RESPONDING PARTY: Defendant Cali One Services, Inc.

RELIEF REQUESTED: An order approving the good faith settlement between Plaintiff and Defendants Cary Greene and Brandon Patillo pursuant to CCP 877.6.

RULING: The motion is denied.

This action arises out of a contract between Plaintiff Helen Evans (Plaintiff) and Defendant Cali One Services, Inc. for the installation of solar panels on Plaintiff’s real property located at 16745 Osborne Street, Northridge, California 91343. Plaintiff’s operative Second Amended Complaint contains causes of action for: (1) Breach of Contract against Cali One Services, Inc. and Does 1-100, (2) Negligence against Cali One Services, Inc., Brandon Patillo, Energon Corp. and Does 1-100, (3) Elder Abuse against all defendants, (4) Fraud against Cali One Services, Inc., Brandon Patillo, Cary Greene and Does 1-100 and (5) Negligent Misrepresentation against all defendants.

At the 6/20/22 hearing on Plaintiff’s Motion to Enforce Settlement, which was denied, the Court, pursuant to Plaintiff’s request, advanced the hearing on Plaintiff’s Motion for Determination of Good Faith Settlement which was scheduled for hearing on 10/12/22 to that date and continued the hearing to 7/27/22. (See 6/20/22 Minute Order). On 7/13/22, the Court continued the 7/27/22 hearing to 8/1/22. (See 7/13/22 Notice of Continuance). On 7/20/22, Plaintiff filed a motion seeking an order approving the parties’ good faith settlement pursuant to CCP 877.6 (served by electronic mail on 7/19/22) and a notice of the continuance of the motion from 7/27/22 to 8/1/22 (served by electronic mail on 7/20/22). Despite the untimely filing and service of that motion, Defendants Cali One Services, Inc. and Chuck Goforth filed an opposition to the motion and the Court considered the motion on its merits and denied same, without prejudice. (See 8/1/22 Minute Order).

On 8/4/22, Plaintiff filed and served the instant motion seeking an order approving the good faith settlement between Plaintiff and Defendants Cary Greene and Brandon Patillo pursuant to CCP 877.6. Again, Defendants Cali One Services, Inc. and Chuck Goforth have opposed the motion.

In determining whether a settlement is in good faith, the Court must consider various factors: (1) A rough approximation of the plaintiff’s total recovery and the settler’s proportional liability; (2) The amount paid in settlement; (3) A recognition that a settler should pay less in settlement than he would were he found liable after trial; (4) The financial conditions and insurance policy limits of the settling defendant; (5) The existence of collusion, fraud, or tortious conduct aimed to injure the interests of the non-settling defendants; and (6) The reasonableness of the defendant’s settlement figure. See Tech-Bilt, Inc. (1985) 38 C3d 488, 499-500.

In seeking to have a settlement found to be in good faith, the settling party must present evidence of a rough approximation of the plaintiff’s recovery which establishes that the settlement amount is within the “ballpark” of the settling defendant’s proportionate share of liability. See West (1994) 27 CA4th 1625, 1636; TSI Seismic Tenant Space Inc. (2007) 149 CA4th 159, 161-162; Leung (2012) 55 C4th 291, 299-300.

Based solely on Plaintiff’s counsel’s declaration, the motion indicates that a rough approximation of Plaintiff’s total recovery is between $90,000 and $250,000, that the settling defendants were salesmen or otherwise pre-construction agents of Defendant Cali One and, therefore, the settling defendants are only 5-15% liable for Plaintiff’s damages. (Stelnick Decl. ¶¶4-5). Without any evidence to support counsel’s rough approximation of Plaintiff’s total recovery or the claim that the settling defendants’ were merely agents of Defendant Cali One, who Plaintiff’s counsel believes to be principally at fault, Plaintiff’s counsel concludes that the settlement of $9,000 by Defendant Greene and the settlement of $12,000 by Defendant Patillo are proportionate to their potential liability and reasonable. (Id. at ¶¶5, 6, 10). Plaintiff has not met her burden of establishing that the proposed settlements are proportionate to the settling defendants’ potential liability.

A disproportionately low settlement may be found to be reasonable in cases of “relatively insolvent, and uninsured, or underinsured, settlors.” Stambaugh (1976) 62 CA3d 231, 238. On the other hand, an unreasonably low settlement amount may be evidence of collusion. See River Garden Farms, Inc. 26 CA3d 986, 996. There must be an offer of actual evidence to determine the existence of collusion or fraud in a settlement. Horton (1987) 194 CA3d 727, 737.

Here, Plaintiff’s counsel states that because she has “worked closely with counsel for the settling parties for many months, and ha[s] zealously pursued information about the settling parties’ financial wherewithal and insurance coverage, [counsel] now confidently believes that the settling parties have no applicable insurance and cannot pay significantly more.” (Stelnick Decl. ¶8). However, Plaintiff’s counsel has not provided evidence regarding the information she has received about the settling parties financial conditions and/or insurance coverage (i.e., was it in the form of verified discovery responses; asset searches for the settling defendants; or merely unverified statements from the settling defendants’ counsel who have not provided declarations in support of the motion and whose obligations are to advocate zealously for their clients). Also, the fact that the settling defendants are purportedly unable to pay the settlement amounts in lump sums and are paying the settlements in installments is not evidence that they do not have any other assets or ability to pay a larger settlement amount. (Stelnick Decl. ¶8).

The fact that Plaintiff’s counsel is not aware of any collusion or other misconduct between the settling parties and their counsel intended to harm the interests of the non-settling defendant is insufficient to support this factor. (Stelnick Decl. ¶9). Again, Plaintiff’s counsel gives no indication of what facts or evidence support this conclusion (i.e., how were the settlements reached, what negotiations led up to the settlements, etc.).

In the reply, Plaintiff fails to refute any of the arguments or authority set forth in the opposition. Instead, Plaintiff merely concludes, without any evidence or authority, that the opposition is “frivolous” and if the motion is denied, then no good faith settlement motion could ever be granted without expert declarations.

Defendants’ objections, numbers 1-6, to the declaration of Steffanie Stelnick are sustained.