Judge: Michael E. Whitaker, Case: 21STCV15053, Date: 2023-04-11 Tentative Ruling

Case Number: 21STCV15053    Hearing Date: April 11, 2023    Dept: 32

PLEASE NOTE:   Parties are encouraged to meet and confer concerning this tentative ruling to determine if a resolution may be reached.  If the parties are unable to reach a resolution and a party intends to submit on this tentative ruling, the party must send an email to the Court at sscdept32@lacourt.org indicating that party’s intention to submit.  The email shall include the case number, date and time of the hearing, counsel’s contact information (if applicable), and the identity of the party submitting on this tentative ruling.  If the Court does not receive an email indicating the parties are submitting on this tentative ruling and there are no appearances at the hearing, the Court may place the motion off calendar or adopt the tentative ruling as the order of the Court.  If all parties do not submit on this tentative ruling, they should arrange to appear in-person or remotely (which is highly encouraged). Further, after the Court has posted/issued a tentative ruling, the Court has the inherent authority to prohibit the withdrawal of the subject motion and adopt the tentative ruling as the order of the Court.  

NOTE:  TWO TENTATIVE RULINGS BELOW

TENTATIVE RULING - NO. 1

The Court has reviewed the petition by Carrie Dockery (Petitioner) on behalf of Claimant Finley Dockery (Claimant) and sets a hearing date on May 2, 2023 at 1:30 PM in Department 32 to address or resolve the following issues:

·         Petitioner has failed to advance documentary evidence in support of sections 12(b)(1) and 14(b)(1) which both request that Petitioner be reimbursed $3,155.35 from the proceeds based on Petitioner’s purported payment of Claimants medical expenses in said amount.  Petitioner needs to submit documentary proof evidencing Petitioner’s payment of $3,155.55 of Claimant’s medical expenses on behalf of Claimant.

·         Petitioner has failed to advance a copy of the attorney’s retainer agreement signed by Petitioner and attorney in support of section 13(a) which requests $10,000 in attorney fees.

·         Petitioner has failed to attach documentary proof of the attorney’s costs cited in section 13(b).

·         Petitioner has failed to file form MC-355 in connection with the instant petition.

Petitioner shall file an amended petition on or before April 25, 2023 with a revised MC-351, if applicable, addressing or resolving the issues set forth above.   Petitioner shall provide notice of the Court’s orders and file a proof of service regarding the same.

PLEASE NOTE:   Parties are encouraged to meet and confer concerning this tentative ruling to determine if a resolution may be reached.  If the parties are unable to reach a resolution and a party intends to submit on this tentative ruling, the party must send an email to the Court at sscdept32@lacourt.org indicating that party’s intention to submit.  The email shall include the case number, date and time of the hearing, counsel’s contact information (if applicable), and the identity of the party submitting on this tentative ruling.  If the Court does not receive an email indicating the parties are submitting on this tentative ruling and there are no appearances at the hearing, the Court may place the motion off calendar or adopt the tentative ruling as the order of the Court.  If all parties do not submit on this tentative ruling, they should arrange to appear in-person or remotely (which is highly encouraged).  Further, after the Court has posted/issued a tentative ruling, the Court has the inherent authority to prohibit the withdrawal of the subject motion and adopt the tentative ruling as the order of the Court. 

TENTATIVE RULING - NO. 2

MOTION

Plaintiffs Chad Dockery and Carrie Dockery, as guardian ad litem for Finley Dockery (collectively, Plaintiffs) settled their claims against Defendant Rodeo Realty, Inc. (Rodeo).   Defendant moves for order determining the good faith of its settlement with Plaintiffs.  Defendant/Cross-Defendant/Cross-Complainant Make It Nice, LLC (Make It Nice) oppose the motion.  Rodeo replies. 

ANALYSIS

A.    GOOD FAITH SETTLEMENTS

Under Code of Civil Procedure section 877.6, “[a] determination by the court that [a] settlement was made in good faith shall bar any other joint tortfeasor . . . from any further claims against the settling tortfeasor . . . for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.”  (Code Civ. Proc., § 877.6, subd. (c).)  Additionally, a determination that a settlement was made in good faith will reduce the claims against the non-settling defendants by the amount specified in the settlement agreement.  (Code Civ. Proc., § 877.6, subd. (a).)  “The party asserting the lack of good faith has the burden of proof on that issue.”  (Code Civ. Proc., § 877.6, subd. (d).) 

Section 877.6 requires “that the courts review [settlement] agreements made under its aegis to insure that the settlements appropriately balance the . . . statute’s dual objectives” (i.e., providing an “equitable sharing of costs among the parties at fault” and encouraging parties to resolve their disputes by way of settlement).  (Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 494 (hereafter, Tech-Bilt).)  In Tech-Bilt, the California Supreme Court set forth the factors to consider when determining whether a settlement was made in good faith.  The Tech-Bilt factors are: (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 pp. 498-501.)  “Practical considerations obviously require that the [trial court’s] evaluation [of the settlement] be made on the basis of information available at the time of settlement.”  (Id. at p. 499.) 

“The party asserting the lack of good faith . . . [is] permitted to demonstrate, if he can, that the settlement is so far ‘out of the ballpark’ in relation to [the above] factors as to be inconsistent with the equitable objectives of [Section 877.6].  Such a demonstration would establish that the proposed settlement was not a ‘settlement made in good faith’ within the terms of section 877.6.”  (Tech-Bilt, supra, 38 Cal.3d at pp. 499–500.) 

B.     APPLICATION OF THE TECH-BILT FACTORS

Plaintiffs filed suit based on injuries they sustained when Plaintiff Chad Dockery was attending an open house, descended the last step of the front porch with his daughter, Plaintiff Finley Dockery, in his arms, and he tripped and fell.  The subject property where the open house took place was owned by Make It Nice and listed for sale through Rodeo. The purported cause of Plaintiffs trip and fall on the front porch stairs was the non-code compliant height of said stairs.  As the party contesting the good faith of the settlement, Make It Nice bears the burden to demonstrate “that the settlement is so far ‘out of the ballpark’ . . .” that it was not in good faith. 

1.      A ROUGH APPROXIMATION OF PLAINTIFFS’ TOTAL RECOVERY AND RODEO’S PROPORTIONATE LIABILITY.

The first Tech-Bilt factor consists of two parts – a rough approximation of a plaintiff’s total recovery and the settlor’s proportionate liability.  When approximating a plaintiff’s total recovery or the settling defendant’s proportionate liability, “judges should . . . not yearn for the unreal goal of mathematical certainty.  Because the application of section 877.6 requires an educated guess as to what may occur should the case go to trial, all that can be expected is an estimate, not a definitive conclusion.”  (North County Contractor’s Assn. v. Touchstone Ins. Services (1994) 27 Cal.App.4th 1085, 1090 (hereafter North County).) 

Additionally, “a court not only looks at the alleged tortfeasor’s liability to the plaintiff, but it must also consider the culpability of the tortfeasor vis-à-vis other parties alleged to be responsible for the same injury.  Potential liability for indemnity to a nonsettling defendant is an important consideration for the trial court in determining whether to approve a settlement by an alleged tortfeasor.  [Citation.]”  (TSI Seismic Tenant Space, Inc. v. Superior Court (2007) 149 Cal.App.4th 159, 166.)

a.      Plaintiffs’ Estimated Recovery

Make It Nice estimates Plaintiffs’ total damages to be $3.6 million.  Make It Nice bases this estimation on the statements of damages advanced by each Plaintiff which together request $3.6 million.  (Declaration of Julian Pardo de Zela, ¶¶ 7, 8, Exhibits F, G.)  Make It Nice asserts that this damages amount is further supported by the severity of Plaintiffs’ claimed injuries, which include a purported traumatic brain injury suffered by Plaintiff Finley Dockery (Finley).  Plaintiffs claim Finley’s traumatic brain injury is “remaining the same and/or getting worse.”  (Declaration of Julian Pardo de Zela, Exhibit D, Form Interrogatory No. 6.3.)  Plaintiffs additionally claim Finley has suffered “post-concussion syndrome, post-traumatic headaches, and/or head pain”, and describe associated symptoms of Finley’s traumatic brain injury to include without limitation “neurocognitive disorder, cognitive dysfunction and/or deficits, light and noise sensitivity, behavior, mood, and/or personality change, developmental delays, difficulty with attention, concentrating, speaking, and learning, sleep disturbance, and loss in taste/change in appetite.”  (Declaration of Julian Pardo de Zela Exhibit D, Form Interrogatory Nos. 6.2, 6.3)  Further, Plaintiff Chad Dockery claims the following injuries and treatments: “Left foot and/or ankle injury and chronic pain post-trauma,” “Possible surgical intervention.  Estimated cost unknown as this time,”  and “Ongoing physical therapy and injections, duration and estimated cost unknown at this time.”  (Declaration of Julian Pardo de Zela, Exhibit E, Form Interrogatory No. 6.7.) 

Make It Nice highlights Plaintiffs’ contention that the scope of Plaintiffs’ injuries have not been fully evaluated because Plaintiffs’ treating health care providers have not yet been deposed.  (Declaration of Julian Pardo de Zela, Exhibit H.)  In addition, Make It Nice contends that Finley’s therapists, school counselors, and teachers have not been deposed, and Finley has not been subjected to a physical examination under the Discovery Act. (Declaration of Julian Pardo de Zela, ¶¶ 16, 18.)  But at this juncture, the Court is unable to determine if the outstanding discovery as noted is due to Make It Nice being dilatory, or for other reasons despite Make It Nice’s diligent efforts to obtain discovery. 

In reply, Rodeo first notes that in forming its estimation of Plaintiffs’ claimed damages totaling $3.6 million, Make It Nice cites to Plaintiffs’ unverified statements of damages.  Rodeo relies on Plaintiffs’ verified discovery responses to generate its estimate of damages Plaintiffs’ will be entitled to.  Based on Plaintiffs’ responses to Form Interrogatories, their total amount of medical expenses resulting from the incident in question is $10,164.27.  (See Declaration of Julian Pardo de Zela, Exhibits D, E.)  Rodeo further calls into question Plaintiffs’ claim for future medical treatment based on the fact that Finley’s last doctor’s visit was on April 7, 2021, and Plaintiff Chad Dockery’s last doctor’s visit was on July 23, 2021.  Finally, Rodeo notes the absence of a medical report verifying that Finley suffered a traumatic brain injury as claimed, and points to a medical report produced by Plaintiffs stating that an EEG performed on Finley had entirely normal results.  (See Declaration of Vicki Greco, Exhibit 1.)

The Court notes on March 15, 2023, Petitioner Carrie Dockery filed a petition for minor’s compromise on behalf of Finley.  (See March 15, 2023 Petition.)  The petition indicates that Finley has not recovered completely from the effects of the injuries from the underlying accident.  The petition states the following:

Claimant suffers from noise sensitivity, behavior, mood, and personality changes, developmental delays, difficulty with attention, concentration, speaking, learning, sleep disturbance, and changes in appetite. Due to claimant young age it is unknown at this stage whether effects are temporary or permanent and claimant has been told to wait and see.

(See March 15, 2023 Petition, sections 8(b) and (c).)  In section 12(a)(1), the Petition states Finley’s total medical expenses before any reductions is $7,146.63.  Further, while the Petition lists Finley’s treating medical providers, it fails to advance any of the relevant medical records documenting Finley’s injuries, diagnosis, symptoms and treatments. 

            The Court appreciates the uncertainty of the severity and long term effect of Plaintiffs injuries, in particular, those of Finley’s at this time.  However, based on the amount of medical expenses cited in Plaintiffs’ Petition for Minor’s Compromise totaling a little over $7k, the Court cannot at this time conclude that a reasonable approximation of Plaintiffs’ total damages is $3.6 million, or even close to $3.6 million.  The Court rather finds the ballpark range of Plaintiffs’ potential health care related damages to be closer to $50k to 100k.

b.      Rodeo’s Estimated Proportionate Liability

            Next regarding the estimation of Rodeo’s proportionate liability, Rodeo contends the facts in the case demonstrate it did not breach a duty owed to Plaintiffs or Make It Nice, and thus it is likely Rodeo’s “liability at trial would turn out to be zero.”  (Rodeo’s Motion, p. 7.)  In opposition, Make It Nice asserts that Rodeo’s liability in the underlying case is significant based on the established duty Rodeo owed as Make It Nice’s real estate agent.  Make It Nice states that under California law, a seller’s agent showing a premises to a prospective purchaser owes a duty to disclose a dangerous condition, and further highlights the Rodeo Realty President’s admission that a real estate agent is required to perform a visual inspection of the exterior of a property to identify any conditions that might cause harm to a visitor, such as exterior steps, disclose said conditions to Make It Nice, and provide adequate warning of said conditions.  (Declaration of Julian Pardo de Zela, Exhibit K.)  Make It Nice asserts that this established duty was expanded when Rodeo took exclusive control over the property during the open house when Plaintiffs were injured. 

            Rodeo asserts in reply that because the non-code compliant steps were a latent condition of property which Make It Nice owned and Make It Nice mor than likely had more knowledge of the condition than Rodeo, Rodeo was not likely liable to be for the condition.  Rodeo further contends that even if it was found liable for the condition, Make It Nice would have shared greater liability than Rodeo because of its ownership of the property and non-delegable duty to maintain said property. 

2.      THE AMOUNT PAID IN SETTLEMENT

Rodeo and Plaintiffs’ settlement amount is $50,000.  ‘“[A] defendant’s settlement figure must not be grossly disproportionate to what a reasonable person, at the time of the settlement, would estimate the defendant’s liability to be.’  [Citation.]”  (Tech-Bilt, supra, 38 Cal.3d at p. 499.)  However, even though “an offer of settlement must bear some relationship to one’s proportionate liability, bad faith is not ‘established by a showing that a settling defendant paid less than his theoretical proportionate or fair share.’  [Citation.]”  (North County, supra, 27 Cal.App.4th at p.1090.)  “Such a rule would unduly discourage settlements” and “convert the pretrial settlement approval procedure into a full-scale mini-trial.”  (Tech-Bilt, supra, 38 Cal.3d at p. 499.)  Rather, in order to meet the proportionality requirement, “all that is necessary is that there be a ‘rough approximation’ between a settling tortfeasor’s offer of settlement and his proportionate liability.  [Citation.]”  (North County, supra, 27 Cal.App.4th at pp. 1090–1091.)  In determining whether the settling defendant’s settlement figure is “within the ballpark” of his fair share of liability, the Court may rely on “the judge’s personal experience” and the experience of “experts in the field.”  (Tech-Bilt, supra, 38 Cal.3d at p. 500.)

In light of the tenuous attribution of liability for the underlying incident to Rodeo as a real estate agent with temporary control over the subject property, the more established liability is likely to be imposed upon Make It Nice as the property owner, and Plaintiffs’ damages are likely to be less than $3.6 million, the Court finds Make It Nice does not meet its burden to demonstrate that Rodeo’s settlement is so far out of the ballpark compared to its proportionate liability and that it is not in good faith.

3.      THE ALLOCATION OF SETTLEMENT PROCEEDS AMONG PLAINTIFFS

Make It Nice next argues the allocation of the settlement proceeds amongst Plaintiffs is unfavorable.  However, the Court finds based on the above discussion of Plaintiffs’ verified medical expenses thus far, that the allocation of settlement proceeds is appropriate. 

4.      A RECOGNITION THAT RODEO SHOULD PAY LESS IN SETTLEMENT THAN HE WOULD IF HE WERE FOUND LIABLE AFTER TRIAL

The Court expressly recognizes that a settlor should pay less in settlement that he would if he were found liable after trial.  This factor supports the present motion for good faith determination.  (See Cahill v. San Diego Gas & Elec. Co. 194 Cal.App.4th 939, 968.) 

5.      THE FINANCIAL CONDITIONS AND INSURANCE POLICY LIMITS OF SETTLING DEFENDANTS

An exception to the proportionality requirement described above is that “a disproportionately low settlement figure is often reasonable” when the settling defendant is “relatively insolvent” and uninsured or underinsured.  (Tech-Bilt, supra, 38 Cal.3d at p. 499; see Schmid v. Superior Court (1988) 205 Cal.App.3d 1244, 1245–6 [holding that “a settlement of a personal injury lawsuit is in ‘good faith[]’ . . . where a defendant pays the plaintiff the limit of the defendant’s insurance policy and has no assets, even though the amount paid in settlement is far less than the likely amount of a judgement against the defendant were the case to go to trial”]; see also County of Los Angeles v. Guerrero (1989) 209 Cal.App.3d 1149, 1157–8 [finding that the settling defendant’s “modest” financial condition and insurance limits “are necessarily controlling and effectively override the other Tech-Bilt factors”].)

Make It Nice points to Rodeo’s insurance policy limit of $14 million to contest the good faith of Rodeo’s proposed settlement amount.  (See Declaration of Julian Pardo de Zela, Exhibit I.)  However, the Court finds that Rodeo’s insurance policy limit is irrelevant to the good faith determination because Rodeo’s settlement of $50,000 is not disproportionately low considering the amount of Plaintiffs’ verified medical expenses and Rodeo’s limited liability.

6.      THE EXISTENCE OF COLLUSION, FRAUD, OR TORTIOUS CONDUCT AIMED TO INJURE THE INTERESTS OF THE NON-SETTLING DEFENDANTS

“Any negotiated settlement involves cooperation, but not necessarily collusion.  It becomes collusive when it is aimed to injure the interests of an absent tortfeasor.  Although many kinds of collusive injury are possible, the most obvious and frequent is that created by an unreasonably cheap settlement.”  (River Garden Farms, Inc. v. Superior Court (1972) 26 Cal.App.3d 986, 996.)  “Prevention of collusion is but a means to the end of preventing unreasonably low settlements which prejudice a nonparticipating tortfeasor.  The price of a settlement is the prime badge of its good or bad faith.  Construed in the light of [section 877.6’s] objectives, the good faith release clause extends the obligation of good faith beyond the parties to the negotiations, embracing an absent tortfeasor.”  (Ibid.) 

Make It Nice suggests that Rodeo’s proposed settlement amount is the result of collusion.  Make It Nice advances in support of this contention Plaintiffs’ statements set forth in an August 2022 stipulation to continue the trial.  However, the Court finds the statements made in August 2022 to be insufficient to warrant a finding of collusion. 

Finally, Make It Nice argues that Rodeo is liable for indemnity to Make It Nice for the underlying incident which weighs in favor of denying Rodeo’s request for a determination of good faith settlement.  However, as discussed above, the Court finds that because the extent of Rodeo’s liability is arguably limited vis-à-vis Make It Nice’s culpability, and the amount of Plaintiffs’ health care related damages are likely to be significantly less than what Make It Nice estimates Plaintiffs’ damages to be, Rodeo’s potential status as a joint tortfeasor is adequately reflected in the settlement amount of $50,000. 

CONCLUSION AND ORDER

            Therefore, the Court grants Rodeo’s motion for determination of good faith settlement. Rodeo shall provide notice of the Court’s ruling and file a proof of service of such.