SUPERIOR COURT OF THE STATE OF CALIFORNIA  

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT 

 

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.  (Code Civ. Proc., § 877.6(a).)  Where a plaintiff settles with one of several joint tortfeasors or co-obligors without releasing the others, a determination of “good faith” discharges the settling defendant from liability to the other defendants for equitable contribution or comparative indemnity.  (CCP § 877(a)-(b).)  The amount paid by the settling defendant reduces the claim against the others (CCP § 877(a)), but a risk of prejudice remains because an unreasonably low settlement (i.e., with the “most culpable” tortfeasor) exposes the remaining defendants to a judgment exceeding their fair share of the liability.  (See Bay Development, Ltd. v. Superior Court (1990) 50 Cal. 3d 1012, 1019-1020.)   

 

There is no precise yardstick for measuring the “good faith” of a settlement with one of several tortfeasors, but it must harmonize the public policy favoring settlements with the competing public policy favoring equitable sharing of costs among tortfeasors.  (See Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499.) 

 

“A more appropriate definition of ‘good faith,’ in keeping with the policies of American Motorcycle and the statute, would enable the trial court to inquire, among other things, whether the amount of the settlement is within the reasonable range of the settling tortfeasor's proportional share of comparative liability for the plaintiff's injuries.  This is not to say that bad faith is ‘established by a showing that a settling defendant paid less than his theoretical proportionate or fair share.’ [Citation.]  Such a rule would unduly discourage settlements.  ‘For the damages are often speculative, and the probability of legal liability therefor is often uncertain or remote.  And even where the claimant's damages are obviously great, and the liability therefor certain, a disproportionately low settlement figure is often reasonable in the case of a relatively insolvent, and uninsured, or underinsured, joint tortfeasor.’ [Citation.]  Moreover, such a rule would tend to convert the pretrial settlement approval procedure into a full scale mini trial [citation]. 

 

“But these considerations do not lead to the conclusion that the amount of the settlement is irrelevant in determining good faith.  Rather, the intent and policies underlying section 877.6 require that a number of factors be taken into account including a rough approximation of plaintiffs' total recovery and the settlor's proportionate liability, the amount paid in settlement, the allocation of settlement proceeds among plaintiffs, and a recognition that a settlor should pay less in settlement than he would if he were found liable after a trial.  Other relevant considerations include the financial conditions and insurance policy limits of settling defendants, as well as the existence of collusion, fraud, or tortious conduct aimed to injure the interests of nonsettling defendants. [Citation.]  Finally, practical considerations obviously require that the evaluation be made on the basis of information available at the time of settlement.  ‘[A] defendant's 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.’ [Citation.]  The party asserting the lack of good faith, who has the burden of proof on that issue (§877.6(d)), should be permitted to demonstrate, if he can, that the settlement is so far ‘out of the ballpark’ in relation to these factors as to be inconsistent with the equitable objectives of the statute.  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, Inc., 38 Cal.3d at 499-500.)   

 

Section 877.6 contemplates that the determination of good faith may be made by the court on the basis of affidavits (subd. (b)), and as the court observed in River Garden Farms, ‘The price levels are not as unpredictable as one might suppose.  Despite the uncertainties, generalized valuation criteria are recognized by the personal injury bar, insurance claims departments and pretrial settlement courts.  When testing the good faith of a settlement figure, a court may enlist the guidance of the judge's personal experience and of experts in the field.  Represented by knowledgeable counsel, settlement negotiators can predict with some assurance whether a settlement is within the reasonable range permitted by the criterion of good faith.  The danger that a low settlement violates the good faith clause will not impart uncertainty so long as the parties behave fairly and the courts maintain a realistic awareness of settlement imponderables.’ [Citation.] 

(Id. at 500-01.)   

 

The Tech-Bilt factors can be summarized as follows: 

(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 defendants; 

(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 nonsettling defendants. 

 

I. First and Second Tech-Bilt Factors – Plaintiff's Total Recovery, Settlor’s Proportionate Liability, and Amount Paid in Settlement 

The Uber Defendants contend that the amount to be paid in settlement is more than the approximation of Plaintiff’s total recovery and the Uber Defendants proportionate liability, because the Uber Defendants argue they have zero liability. In particular, the Uber Defendants emphasize that Plaintiff was sitting in his parked vehicle when Defendant Tran collided with the rear of Plaintiff’s vehicle and that Plaintiff never pursued a claim against the Uber Defendants in this matter. Here, the Uber Defendants refer to Plaintiff’s discovery responses (Decl. Mazzara; Exh. F), in which Plaintiff claims $233,235.82 in medical specials. In opposition, the Trans contend that Plaintiff, at the time of the incident, was an Uber driver and was on the Uber app when he was rear-ended by Defendant’s vehicle. Plaintiff had just finished delivering food for a customer for Uber Eats, and remained in his vehicle while it was dark out without hazard lights on and his vehicle turned off. The Trans contend that the Uber Defendants are liable because they did not conduct “minimal vetting” before letting Plaintiff do food drop-offs, did not provide in-person training, and did not supervise Plaintiff in driving. The Trans argue that, therefore, the proposed settlement is the result of collusion and bad faith because Plaintiff claims over a million dollars in injury.  

When determining whether a settlement was reached in good faith, the Court only accounts for special or economic damages. The Court does not account for general damages. The Uber Defendants provide the rough approximation of Plaintiff’s damages, which amount to approximately $233,235.82 in medical specials. Additionally, The Uber Defendants approximate their own proportionate liability to be 0% based upon their apportionment of fault to Defendant Tran, who rear-ended Plaintiff’s parked vehicle, and that Plaintiff never sought to pursue a claim against the Uber Defendants. The Trans contend Plaintiff was at fault, that the Uber Defendants are vicariously liable for Plaintiff, and that Plaintiff claims over a million dollars in injury.  

The settling defendant's proportionate liability is a critical factor: “The ultimate determinant of good faith is whether the settlement is grossly disproportionate to what a reasonable person at the time of settlement would estimate the settlor's liability to be.” (City of Grand Terrace v. Sup.Ct. (Boyter) (1987) 192 Cal.App.3d 1251, 1262; Cahill v. San Diego Gas & Elec. Co., supra, 194 Cal.App.4th at 968—settlement of 1/2 of 1% of potential damages was within ballpark based on facts known at the time of settlement.)  

 The court must consider the settlor's potential liability to the plaintiff and its proportionate share of culpability as among all parties alleged to be liable for the same injury. (TSI Seismic Tenant Space, Inc. v. Sup.Ct. (Geocon) (2007) 149 Cal.App.4th 159, 166.)  

 Substantial evidence (e.g., factual declarations) showing the nature and extent of the settling defendant's liability is required. Without such evidence, a “good faith” determination is an abuse of discretion. (Mattco Forge, Inc. v. Arthur Young & Co. (1995) 38 Cal.App.4th 1337, 1348— “questionable assumptions" in moving party's memorandum of points and authorities insufficient to show the settlement was reasonable; Greshko v. County of Los Angeles (1987) 194 Cal.App.3d 822, 834—attorney's declaration resettling defendant's liability insufficient where he failed to provide specific supporting facts or expert opinion.) 

The Trans do not provide any substantial evidence in support of their contention that Plaintiff is entitled to over a million dollars, and do not provide any supporting evidence for this claim. The Trans do provide supporting evidence that Plaintiff’s medical specials total $233,235.82, which correlates with the Uber Defendants’ assessment of Plaintiff’s medical specials. Furthermore, the Trans do not provide any substantial evidence in support of their argument that the proposed settlement amount does not represent Uber’s share of liability. The Trans contend that conducting the deposition of Uber’s PMK will provide the Trans an assessment of the Uber Defendant’s share of liability to oppose this motion. However, even if Uber’s PMK provides the Trans some evidentiary basis to assign a percentage of liability, which they argue is possibly 50% or more, in light of the facts currently known of this case such as the amount of Plaintiff’s medical specials and the amount to be paid to Plaintiff, the Court would still find the settlement to not be grossly disproportionate. Consequently, the Trans have not met their burden that the Uber Defendants’ potential liability is grossly disproportionate to the Plaintiff’s approximate total recovery. 

  Accordingly, the first and second factors balance in favor of finding a good faith settlement.   

 

II. Fifth Tech-Bilt Factor – Settling Party’s Financial Condition 

As analyzed above, the only evidence of the Plaintiff’s damages at this time are Plaintiff’s medical expenses totaling $233,235.82. Settlements have been upheld as being in good faith in cases with a $25,000 settlement in a $5 million case, a $30,000 settlement in a $1 million case, a $65,000 settlement in a $7 million case, and a $50,000 settlement in a $1.425 million case. (See Cahill v. San Diego Gas & Elec. Co. (2011) 194 Cal.App.4th 939, 968 [citing Bay Development, Ltd. v. Superior Court (1990) 50 Cal.3d 1012; Wysong & Miles Co. v. Western Industrial Movers (1983) 143 Cal.App.3d 278; Wilshire Ins. Co. v. Tuff Boy Holding, Inc. (2001) 86 Cal.App.4th 627].)  Other damages are speculative or uncertain at this time.  Thus, there is no evidence showing the settlement amount is disproportionately low.  Furthermore, Uber Defendants “deep pocket” of a $1 million dollar coverage policy is not relevant.  

There is no evidence showing the Uber Defendants’ potential liability for Plaintiff’s damages is grossly disproportionate to the Uber Defendants potential. Even if the Trans conducted the deposition of Uber’s PMK and find evidence that the Uber Defendants are 50% or more liable for Plaintiff’s injuries, Plaintiff’s medical specials and the amount the Uber Defendants propose in consideration for a release is still not “out of the ballpark.”  The party asserting the lack of good faith of a settlement agreement, for purposes of determining the good faith of a settlement with alleged joint tortfeasors or co-obligors, has the burden of proof to demonstrate that the settlement is so far “out of the ballpark” in relation to the reasonable range of the settling tortfeasor’s proportionate share of comparative liability for the plaintiff’s injuries as to be inconsistent with the equitable objectives of the statute absolving from further liability for equitable indemnity a tort defendant who has entered into a good-faith settlement.  (Nutrition Now, Inc. v. Superior Court (2003) 105 Cal.App.4th 209, 213-214.)  In this case, The Trans have not shown that the Uber Defendants’ settlement agreement with Plaintiff for is so far out of the ballpark in relation to their proportionate share of the Plaintiff’s claimed damages because the Uber Defendants’ proposed payment represents the majority share of Plaintiff’s medical specials.   

 

III. Sixth Tech-Bilt Factor – Existence of Collusion, Fraud, Or Tortious Conduct 

 

As to the sixth factor, the Trans contend the existence of collusion and bad faith conduct because of the delay and cancellation of Uber’s PMK deposition. In particular, the Trans contend bad faith because the Uber Defendants settled with Plaintiff without the Trans knowledge, without participating in mediation, and without discharging discovery obligations. 

The Trans do not provide any support that other parties must be notified of settlement negotiations “behind-the-scenes” prior to the parties reaching a settlement agreement. Furthermore, there is no support that a settling defendant must first participate in mediation, or that all discovery obligations must be completed prior to settling. The Trans’ contentions are not sufficient to determine the settlement was the result of fraud, collusion, or other tortious conduct. This is in addition to the Court having not found, based on the evidence presented, the settlement is so low such as to establish that it is aimed at making the non-settling Defendants pay more than their fair share. Even if the Uber PMK deposition were to move forward and the Trans found supporting evidence that the Uber Defendants were 50% or more liable, the Court’s assessment would not materially change.  

There is insufficient evidence to show collusion, fraud or tortious conduct between the Uber Defendants and Plaintiff.  Consequently, the sixth factor balances in favor of finding a good faith settlement.   

Based on the foregoing, the Uber Defendants’ settlement with Plaintiff appears reasonable.  There is not sufficient evidence showing otherwise.