Judge: Michelle C. Kim, Case: 20STCV31044, Date: 2023-05-18 Tentative Ruling

Case Number: 20STCV31044    Hearing Date: May 18, 2023    Dept: 31

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

1. Background 

On August 14, 2020, Plaintiff Reginald Payne (“Plaintiff”) filed an action against Defendant Sharon L. McGann (“Defendant”) for Negligence and Personal Liability arising from Plaintiff’s fall from a pergola at Defendant’s residence.  Defendant had hired Cross-Defendant Ed Williams (“Cross-Defendant”) to wash the windows and solarium of her residence.  Cross-Defendant invited Plaintiff to assist him. 

On March 21, 2021, Defendant filed a cross-complaint against Cross-Defendant for Complete Indemnity, Partial Indemnity, and Declaratory Relief.

On August 11, 2021, Cross-Defendant filed a cross-complaint against Defendant for Indemnity, Partial Idemnification, and Declaratory Relief.

At this time, Cross-Defendant has agreed to settle his claims with Plaintiff in the amount of $75,000.  Cross-Defendant seeks an order from the Court finding that the settlement was made in good faith.  Defendant opposes the motion, and Cross-Defendant replied.

2. Motion  

a.     Legal Standard

“Any party to an action in which it is alleged that two or more parties are joint tortfeasors . . . shall be entitled to a hearing on the issue of the good faith settlement entered into by the plaintiff or other claimant and one or more of the alleged tortfeasors.”  (Code Civ. Proc., §877.6, subd. (a)(1).)   

“A determination by the court that the settlement was made in good faith shall bar any other joint tortfeasor or co-obligor from any further claims against the settling tortfeasor or co-obligor for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.”  (Code Civ. Proc., § 877.6, subd. (c).)

To determine whether a settlement was in “good faith” the court should inquire as to whether the amount of the settlement is “within the reasonable range” of the settling defendant’s proportional share of comparative liability for the plaintiff’s injuries.  (Abbott Ford, Inc. v. Superior Court (1987) 43 Cal.3d 858, 872.)  Ultimately, the “settlement figure must not be grossly disproportionate to what a reasonable person, at the time of the settlement, would estimate the settling defendant’s liability to be.”  (Tech-Bilt v. Woodward-Clyde & Assocs. (1985) 38 Cal.3d 488, 499 (Tech-Bilt).)  In determining the good faith of a settlement, the court should consider a number of factors, including: 

(1) A rough approximation of the total recovery and the settlor’s proportionate liability; 

(2) The actual settlement amount; 

(3) The allocation of settlement proceeds among plaintiffs; 

(4) The recognition that a settlor should pay less in settlement than he or she would if liability is established after trial; 

(5) The financial conditions and insurance policy limits of the settlor; and 

(6) The existence of facts showing collusion, fraud, or tortious conduct aimed to injure the interests of nonsettling defendants. 

(Ibid.)  Furthermore, the evaluation must “be made on the basis of information available at the time of settlement.” (Ibid.)  

The party contesting the settlement bears the burden of proving that the settlement is in bad faith. (Code Civ. Proc., § 877.6, subd. (d).)  Notably, when the good faith nature of a settlement is uncontested, the Court need not consider and weigh the Tech-Bilt factors.  (City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261.) “[W]hen 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.”  (Ibid.) 

b.    Analysis

Here, Cross-Defendant seeks an order from the Court finding that the $75,000 settlement with Plaintiff was made in good faith.  In support of this Motion, Cross-Defendant provides the Declaration of Jason M. Howell, attorney for Cross-Defendant. 

In opposition, Defendant argues that Cross-Defendant’s application for good faith settlement fails to adequately address the Tech-Bilt factors.  As the party contesting the settlement, Defendant bears the burden of proving that the settlement is in bad faith.  Defendant asserts that the proposed settlement is in bad faith pursuant to the first, second, fifth, and sixth Tech-Bilt factors. 

Under the first Tech-Bilt factor, the court should consider “[a] rough approximation of the total recovery and the settlor’s proportionate liability.”  Defendant argues that Plaintiff’s attorney values the damages at $3,000,000 or greater.  (Opposition p. 10; Declaration of Christopher L. Thomas ¶ 7; Ex. “1.”) Defendant points to email conversations between Plaintiff’s attorney and Defendant’s attorney where the former stated, “I will be seeking mid-to-high 7 figures from a jury if this reaches trial…[Plaintiff] has more than $350k in medical bills alone….”  (Ibid.)  Further, in a later email, Plaintiff’s attorney stated, “[Plaintiff’s] medical bills alone are $360k+…I ‘ve obtained verdicts in excess of $1.5m on similar cases. I will be requesting a jury to render a verdict in excess of $3,000,000.00 at trial….”  (Ibid.)  Also, Defendant argues that Cross-Defendant’s potential and actual liability for the incident is 100%.  (Opposition pp. 8-9; Thomas Decl., ¶ 7; Ex. “A.”)  In support, Defendant points to the Deposition of Cross-Defendant, which provides that (1) Cross-Defendant owns Kingdom Cleaning Services; (2) Cross-Defendant  asked Plaintiff to climb the ladder to hand him towels; (3) Defendant did not give Cross-Defendant any instructions about what she wanted Plaintiff to do or not to do; (4) Cross-Defendant inspected the patio structure prior to subject incident and in his opinion the structure did not appear to be unsafe; (5) Cross-Defendant decided to put the ladder where it was before Plaintiff fell; (6) Defendant did not tell Cross-Defendant where to put the ladder; (7) Cross-Defendant stated the beam looked old but it was not moldy and rotten.  (Ibid.)

Under the second Tech-Bilt factor, the court should consider “[t]he actual settlement amount.”  In this case, Cross-Defendant has entered a settlement with Plaintiff in the amount of $75,000. (Opposition pp. 9-12; Motion p. 3; Declaration of Jason M. Howell; Ex. “C” )  Defendant asserts that Cross-Defendant’s proposed settlement amount of $75,000 is .025% of $3,000,000, and it is less than 20% of Plaintiff’s past medical expenses, which does not account for any claim for future medical expenses, life care plan, or general damages.  (Opposition pp. 10-11.)

Under the fifth Tech-Bilt factor, the court should consider “[t]he financial conditions and insurance policy limits of the settlor.”  Defendant and Cross-Defendant agree that Cross-Defendant is insured with a liability policy that has a $1,000,000 policy limit.  (Motion p. 9; Howell Decl., ¶ 13; Opposition p. 11.)  Defendant asserts that Cross-Defendant’s proposed settlement amount of $75,000 is less than 8% of his liability limits.  (Opposition p. 11.)

Lastly, under the sixth Tech-Bilt factor, the court should consider “[t]he existence of facts showing collusion, fraud, or tortious conduct aimed to injure the interests of nonsettling defendants.”  Defendant asserts that it is admitted by Cross-Defendant and Plaintiff that they are cousins and that this relationship suggests why Cross-Defendant was not brought into the case as a direct defendant.  (Opposition p. 11; Thomas Decl. ¶ 4.)  Further, an unreasonably low settlement is suggestive of collusion.  (Opposition p. 12.) 

In reply, Cross-Defendant argues that the opposition fails to meet the burden of establishing that the $75,000 settlement lacks good faith.  Namely, Cross-Defendant asserts (1) there is little, if any, liability against him since he was not the owner of the subject property or responsible for the condition of the property where plaintiff was injured; (2) his policy limits are irrelevant;  and (3) Defendant has provided no evidence of collusion.

The Court finds that Defendant met her burden of proving that the settlement was not made in good faith based on the following.  First, the email conversations proffered by Defendant demonstrates that Plaintiff’s attorney values the damages at $3,000,000 or greater; whereas the Deposition of Cross-Defendant proffered by Defendant seems to demonstrate that Cross-Defendant does not bear “little-to-no liability” for Plaintiff’s damages as Cross-Defendant argues.  Second, considering the $3,000,000 as a rough approximation of Plaintiff’s total recovery and Cross-Defendant’s potential liability, Cross-Defendant’s $75,000 settlement does not appear to be made in good faith.  As Defendant points out the $75,000 settlement amount is .025% of the rough approximation of the total recovery, and it is less than 20% of the past medical expenses.  Third, while the financial conditions of the settlor are not discussed, it is undisputed that Cross-Defendant is afforded $1,000,000 in coverage, which may also demonstrate that the $75,000 settlement was not made in good faith.  Fourth, it is also undisputed that Plaintiff and Cross-Defendant are cousins.  Whether there is any evidence of collusion is a legitimate concern considering the family relationship as well as the factors delineated above.  Further, the Court does not find convincing Cross-Defendant’s argument that the opposition fails to meet the burden of establishing that the $75,000 settlement lacks good faith. 

Therefore, the Motion for Determination of Good Faith Settlement filed by Cross-Defendant is DENIED. 

Cross-Defendant is ordered to give notice.   

PLEASE TAKE NOTICE: 

·         Parties are encouraged to meet and confer after reading this tentative ruling to see if they can reach an agreement. 

·         If a party intends to submit on this tentative ruling,¿the party must send an email to the Court at¿sscdept31@lacourt.org¿with the Subject line “SUBMIT” followed by the case number.¿ The body of the email must include the hearing date and time, counsel’s contact information, and the identity of the party submitting.¿¿ 

·         Unless¿all¿parties submit by email to this tentative ruling, the parties should arrange to appear remotely (encouraged) or in person for oral argument.¿ You should assume that others may appear at the hearing to argue.¿¿ 

·         If the parties neither submit nor appear at hearing, the Court may take the motion off calendar or adopt the tentative ruling as the order of the Court.¿ After the Court has issued a tentative ruling, the Court may prohibit the withdrawal of the subject motion without leave.¿ 

Dated this 18^th day of May, 2023