SUPERIOR COURT OF THE STATE OF CALIFORNIA  

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT 

 

 

I. Background 

Plaintiff American Home Assurance Company (“AHAC”) filed this action against defendants Santa Clarita Studios Corp. (“SCSC”), Bryan Keith Garst (“Garst”), and Garsteel Designs, alleging negligent installation of a door, which results in a dangerous condition to exist on the premises. Plaintiffs Gilbert Badillo (“Gilbert”) and Teresa Badillo (“Teresa”) (collectively, “the Badillos”) filed a complaint against SCSC and Does 1 to 100 for premises liability, alleging damages arising from the falling door. A multitude of cross-complaints and amendments to complaint were filed thereafter.   

On January 5, 2024, SCSC filed a Motion for Determination of Good Faith Settlement providing that SCS entered into a settlement agreement with the Badillos and AHAC for the total amount of $6,000,000. Cross-defendants Sony Pictures Entertainment, Inc. (“Sony”) and Woodridge Productions, Inc. (“Woodridge”) filed an opposition to the motion. SCSC filed a reply to the opposition for determination of good faith settlement.    

 

“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 

Here, SCSC’s initial burden in moving for good faith determination is to prove there has been a settlement.  (See Franklin Mint Co. v. Superior Court (2005) 130 Cal.App.4th 1550, 1558; see also Mattco Forge, Inc. v. Arthur Young & Company (1995) 38 Cal.App.4th 1337, 1350 n.6.)  SCSC provides it reached a settlement with the Badillos and AHAC for $6,000,000.  Because SCSC met its moving burden, the burden shifts to the non-settling parties to show the settlement was not in good faith. (Mattco, 38 Cal.App.4th at 1350 n.6; CCP 877.6. [“The party asserting lack of good faith shall have the burden of proof on that issue.”].)    

Here, Sony/Woodridge challenge the first and second Tech-Bilt factors.  

 

I. First and Second Factors – Plaintiff's Total Recovery and Amount Paid in Settlement 

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.) 

SCSC provides the lawsuit arises from a 2000 pound “elephant door” which fell on Plaintiff Gilbert while he was in the course and scope of his employment with Woodridge and Sony. The “elephant door” was manufactured and designed by Bryan Garst of Garsteel Designs, who was hired by SCSC. SCSC argues Woodridge failed to inspect the “elephant door” and to provide training to Plaintiff Gilbert prior to operation. SCSC contends Woodridge was cited by OSHA after the accident for failing to instruct its employee in the safe operation of the door, and that an inspection would have determined that the door had too small a lower track and no upper track. SCSC further argues Plaintiff’s use of Soma, a narcotic hydrocodone for severe pain, in addition to smoking marijuana the night before the accident, affected his reaction time, ability to focus, and judgment when operating the “elephant door.” As a result of the door falling on Plaintiff Gilbert, he alleges head injury/traumatic brain injury, neurobehavioral symptoms, cognitive dysfunction, shattered eye socket, broken nose, thoracic spine, pelvic fractures, liver laceration, rib fractures, right tibial fracture, right fibula fracture, right ankle, extraperitoneal space bleeding, sexual difficulty, post-traumatic stress disorder, depression, and insomnia. Plaintiff Gilbert claims a total of $839,906.74 in past medical expenses. However, his worker’s compensation carrier paid for medical treatment, and is asserting a $978,018.06 lien. Plaintiff Gilbert’s loss of earnings claim approximates to a total of 181,395.35, calculated by using a salary of $7,500 per month; however, Plaintiff Gilbert’s earnings have not been substantiated. Plaintiff Teressa is making a loss of consortium claim, and has not received any medical treatment in connection with her claim. SCSC contends that Woodridge, Garst, and Plaintiff bear varying amounts of fault for the incident. The settlement of $6,000,000 represents SCSC’s policy limits, to be apportioned as follows: $5,000,000 to the Badillos, and $1,000,000 to Gallagher Bassett Services, Inc.” pursuant to a separate Reimbursement Agreement.  

In opposition, Sony argues it has nothing to do with the incident other than being the parent entity of Woodridge. Sony/Woodridge contend SCSC hired T-Sets, LLC owned by Tomas Sallvin (“Sallvin”) to help buildout space on Stages 26 and 27 for a television production. Sallvin then recommended Garsteel, owned by Garst, to build elephant doors for Stages 26 and 27. Sony/Woodridge aver Garst had never built elephant doors before, and Garst inadequately installed the doors. While preparing Stage 26 for production, Plaintiff Gilbert, a construction foreman, operated the door, which came off its track and pinned him underneath. Sony/Woodridge argues SCSC did not state whether it intends to continue prosecuting its First Amended Cross-Complaint (“FACC”) against Sony and Woodridge, which would potentially allow SCSC to recoup the $6,000,000 paid out to the Badillos. Simultaneously, Sony and Woodridge argue that it filed a motion for summary judgment against SCSC’s FACC, and that SCSC cannot prove its causes of action for indemnity. 

In reply, SCSC argues Sony/Woodridge offer no evidence that the settlement is “out of the ballpark” in relation to the Tech-Bilt factor, and reassert that the policy limit settlement of $6,000,000 was in good faith. 

Here, Sony/Woodridge argument that SCSC may potentially recover the $6,000,000 from them based on SCSC’s FACC implicitly recognizes that Sony/Woodridge may potentially be found liable for the Badillos injuries, yet conversely they argue that they have a meritorious motion for summary judgment against SCSC’s FACC to be not liable as a matter of law. The Court will not consider the merits or potential successes of either SCSC’s FACC or Sony/Woodridge’s motion for summary judgment on this motion for determination of good faith settlement. The focus to assess good faith settlement is based on facts known at the time of settlement. Sony/Woodridge argue SCSC has not supported that it has no liability to Plaintiffs, but SCSC provides it is not disputing liability. Although SCSC does not give an apportionment of the approximate comparative fault between each party, based on the shared factual recitations of the matter, the parties appear to agree that the incident involved the collective actions or inactions of multiple actors, notably between SCSC, Woodridge, Sallvin, T-Sets, and Garst regarding installation, operation, and inspection of the “elephant door”. The settlement of $6,000,000 represents nearly six times over the combination of Plaintiff’s currently known damages and approximate loss of earnings claim. The party asserting a lack of good faith bears the burden, not the party seeking determination of good faith settlement. Further, the fourth Tech-Bilt factor recognizes that a settlor should pay less in settlement than it would if found liable after trial. Sony/Woodridge have not demonstrated that the settlement figure representing close to six times over the amount of Plaintiff’s known medical expenses/approximate loss of earning claims is not in good faith, or met their burden demonstrating that SCSC’s potential liability is grossly disproportionate to the Badillos’ approximate total recovery.  

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

 

 III. Conclusion  

Based on the foregoing, SCSC’s settlement with the Badillos and AHAC appears reasonable and there is insufficient evidence showing otherwise. The SCSC’s motion for good faith determination pursuant to CCP § 877.6 is GRANTED.