Judge: Michael E. Whitaker, Case: 23SMCV04758, Date: 2025-03-24 Tentative Ruling

Case Number: 23SMCV04758    Hearing Date: March 24, 2025    Dept: 207

TENTATIVE RULING

BACKGROUND

This premises liability case arises from allegations that Plaintiff Emma Sugar’s (“Plaintiff”) feet were burned by liquid nitrogen that had been spilled on the dance floor of her wedding venue by the caterer to create a smoke or fog effect. 

On October 10, 2023, Plaintiff brought suit for premises liability against Defendants Saddlerock Ranch (“Saddlerock”); Ronald Semler (“Ronald”); Lisa Semler (“Lisa”); Urban Pie (“Urban Pie”); Jason Winters (“Winters”) and Speak Cheezy (“Speak”).  Saddlerock owns the venue, and Winters supposedly spilled the nitrogen on the floor, while working the event on behalf of his catering company, Urban Pie.

Urban Pie cross-complained against Roes 1 to 50 for (1) comparative indemnity and apportionment of fault; (2) total equitable indemnity; (3) declaratory relief; (4) contractual indemnity; (5) breach of contract; and (6) declaratory relief – duty to indemnify.

Saddlerock also cross-complained against Moes 1 to 10 for (1) indemnity; (2) contribution; and (3) declaratory relief.

On January 27, 2025, Saddlerock filed a Notice of Settlement and an Application for Determination of Good Faith Settlement.  Defendants Winters and Urban Pie now move to contest the Good Faith Settlement.  Saddlerock opposes the motion, and Winters and Urban Pie reply.

LEGAL STANDARD – GOOD FAITH SETTLEMENTS

Under section 877.6 of the Code of Civil Procedure,[1] “[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.”  (§ 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.  (§ 877.6, subd. (a).)  “The party asserting the lack of good faith has the burden of proof on that issue.”  (§ 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.) 

ANALYSIS

A.    APPLICATION OF THE TECH-BILT FACTORS TO THE FACTS OF THE CASE

1.     FIRST FOUR FACTORS: (1) A ROUGH APPROXIMATION OF PLAINTIFF’S TOTAL RECOVERY; (2) THE SETTLOR’S PROPORTIONATE LIABILITY AND THE AMOUNT PAID IN SETTLEMENT; (3) ALLCATION AMONG PLAINTIFFS; and (4) RECOGNITION THAT SETTLOR PAYS LESS IN SETTLEMENT

The first Tech-Bilt factor consists of two parts – a rough approximation of 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.)

As for the second factor, ‘“[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.)

Here, Plaintiff and Saddlerock have agreed to settle their dispute for $10,000, which is the cost Plaintiff paid to host her wedding at the venue in question.  (MacDonald Decl. ¶¶ 2, 10.)  Plaintiff’s past medical expenses also have a value less than $10,000.  (MacDonald Decl. ¶ 13.) 

Plaintiff further contends that there is no evidence that Saddlerock had notice that Winters, the caterer Plaintiff hired for the wedding, would spill liquid nitrogen on the dance floor or that Saddlerock would have had time to correct the danger before Plaintiff was injured.  As such, Plaintiff contends that Saddlerock has no proportionate liability and could successfully move for summary judgment.

Winters and Urban Pie contest the settlement amount as “grossly disproportionate” because the settlement is premised on the notion that the liquid nitrogen actually caused Plaintiff’s injuries, whereas there is testimony suggesting that Plaintiff’s injuries may have been caused by some other condition at the venue unrelated to liquid nitrogen or Winters and Urban Pie.  Specifically, Winters and Urban Pie point out that Plaintiff testified feeling moisture on her sock, which started to burn, at which point she looked down and saw what appeared to be clear water on the floor.  (Ex. 2 [Plaintiff’s deposition] at pp. 71:2-6, 71:10-12, 73:7-10, 80:21-24.)  At the hospital the next day, Plaintiff was diagnosed with a chemical burn.  (Ex. 2 at pp. 72:2-3, 84:15-19.)

However, when liquid nitrogen is poured it turns into a gas or a cloud and leaves no residue on the floor.  (Ex. 3 [Winters’ deposition] at pp. 156:1-9, 156:23-157:8.)  Further, Winters and Urban Pie argue, liquid nitrogen does not cause chemical burns, because nitrogen is an inert gas that forms nearly 80% of the air we breathe. 

However, Winters is not an expert qualified to opine on the properties of liquid nitrogen, and there is no evidence supporting the argument that liquid nitrogen cannot cause chemical burns.

Moreover, even if Winters and Urban Pie were right, and they ultimately demonstrate that Plaintiffs’ injuries were caused by something else at the venue, they would not be liable, and would therefore not be prejudiced by the settlement.

Therefore, the evidence demonstrates that the proposed settlement is reasonable, in light of the likelihood that Saddlerock will have little or no liability relating to the liquid nitrogen spilled on the dance floor.

2.     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.) 

Winters and Urban Pie argue there is some evidence of collusion because on November 12, 2024, Plaintiff presented Saddlerock with a section 998 Offer to Compromise in the amount of one million dollars.  (Ex. 4.)  Yet, two months later, Plaintiff agreed to settle for 1% of that amount.

Further, on November 12, 2024, Plaintiff also issued a notice of deposition for Saddlerock’s Person Most Knowledgeable (“PMK”) noticed for December 19, 2024, which was taken off calendar.  (Ex. 4.)  Therefore, on January 24, 2025, Winters and Urban Pie issued a new deposition notice for Saddlerock’s PMK noticed for March 20, 2025, and propounded written discovery, which remains outstanding.  (Ex. 6; Tsao Decl. ¶ 9.)  As such, Winters and Urban Pie contend Plaintiff and Saddlerock colluded to settle the case so Saddlerock could avoid discovery, and Winters and Urban Pie could not test their theory of liability that the chemical burns were caused by something else at the venue.

But crucially, between November 12, 2024 when Plaintiff presented the $1,000,000 section 998 offer and January 27, 2025, when Saddlerock filed the application for determination of good faith settlement for $10,000, Winters was deposed on December 9, 2024, during which deposition he revealed that he was the one who spilled the liquid nitrogen on the dance floor to create a smoke effect, and he did not meet or speak with anyone at Saddlerock or tell them of his intention to pour liquid nitrogen on the dance floor.

Further, the Court does not see why Saddlerock would not still be subject to subpoena, as the owner of the venue that may have discoverable information relevant to Winters’ and Urban Pie’s defense.  As such, the Court does not find any collusion or prejudice to Winters or Urban Pie.

CONCLUSION AND ORDER

In sum, the Court finds that Winters and Urban Pie have not met their burden of proof to establish that the settlement between Plaintiff and Saddlerock was not made in good faith.  As such, the Court denies Winters’ and Urban Pie’s Motion Contesting the Determination of Good Faith Settlement. 

Further, the Court grants Saddlerock’s Application for Good Faith Settlement and shall enter the Order approving the application. 

Winters and Urban Pie shall provide notice of this order and file the notice with a proof of service forthwith.    

DATED:  March 24, 2025                                                      ___________________________

                                                                                          Michael E. Whitaker

                                                                                          Judge of the Superior Court