SUPERIOR COURT OF THE STATE OF CALIFORNIA  

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT 

 

 

I. Background 

Plaintiff Siddharth Saravat (“Plaintiff”) filed this action against defendants Lily Sellers, Dylan Sellers, and the City of Santa Monica (“the City”) for damages arising from a motor vehicle vs. pedestrian accident. Plaintiff alleges that on July 23, 2021, Lily was operating a motor vehicle owned by Dylan, when she struck Plaintiff while Plaintiff was crossing the street in a marked crosswalk.  Plaintiff alleges the City failed to maintain the crosswalk and created a dangerous condition of public property.      

On December 7, 2023, the City filed an Application for Determination of Good Faith Settlement providing Plaintiff and the City entered into a settlement agreement for the total amount of $95,000. On December 14, 2023, Defendants Dylan Sellers and Lily Sellers (collectively, “the Sellers”) filed an opposition to the application. On December 20, 2023, the City filed a reply to the Sellers’ opposition for determination of good faith settlement.    

This matter was initially set to be heard on December 28, 2023. However, the Court continued the hearing to January 17, 2024 for the City to file the referenced exhibits in connection with the instant application. On January 3, 2024, the City filed a supplemental declaration and compendium of evidence. Thus, the Court will now consider the moving papers on the merits. 

 

“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, the City’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.)  The City provides it reached a settlement with Plaintiff for $95,000.  Because the City met its moving burden, the burden shifts to the Sellers 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, the Sellers challenges the first, second, and fifth 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.) 

The City contends the lawsuit arises from a vehicle v. pedestrian car incident, in which Plaintiff and his friend were walking northbound in the crosswalk at Ocean Park Boulevard and 18th Street when Defendant Lily Sellers, driving westbound on Ocean Park Blvd., struck both Plaintiff and his friend. Plaintiff brought a cause of action against driver Lily Sellers and her father Dylan Sellers for negligence, and a cause of action for dangerous condition of public property against the City. Plaintiff alleges the City’s inoperative in-ground roadway warning lights made the crosswalk dangerous; the City contends the crosswalk was safe when used with due care.  

As a result of the collision, Plaintiff claims permanent nerve injury to his right-dominant arm. The City avers Plaintiff testified he recovered from his brain injury without residuals, and two months after the accident, he was able to return to work as Vice President/Economics at Payden & Rygel, in addition to being able to study for a rigorous financial certification exam. The City contends no life care plans were produced in discovery, and Plaintiff testified to his competence in activities of daily living, with no substantial ongoing care beyond physical therapy. The City argues the verdicts and settlements for similar nerve damage to the dominant arm ranges from $900,000 to $1,600,000, and that Plaintiff’s total damages is in the range of $2,000,000 prior to any assessment for comparative liability. The City avers Plaintiff bears some comparative liability for entering the crosswalk without using due care. The City contends its liability is “slim to none,” and that it has the likelihood of dismissal by way of its motion for summary judgment. Thus, the City argues the settlement of $95,000 represents a reasonable approximation of Plaintiff’s recovery against the City.  

In opposition, the Sellers contend the City fails to provide sufficient evidence that the settlement is commensurate with its proportionate share of liability. The Sellers argue proportionality is not only a defendant’s potential for liability to Plaintiff, but also to each of its proportionate shares of culpability among all parties alleged to be liable for the same injury. The Sellers refer to Prop 51, arguing that the City must state what percentage of the settlement with Plaintiff was attributed to economic vs. non-economic damages to extinguish the Sellers’ cross-complaint for indemnity. The Sellers contend that Plaintiff incurred approximately $446,000 in medical care expenses as of May 2022, but Plaintiff’s letter from Optum dated May 31, 2022 indicates $446,523.05 had been paid based on a billed amount of $788,379.52. The Sellers argue this was not the final lien as treatment was continuing, and that it is unknown of what amount Plaintiff is legally obligated to pay of the total $788,379.52 medical bill. The Sellers further contend that Plaintiff’s verified responses to discovery state loss of earnings in the amount of $98,664, and that he may be making a claim for loss of future earning capacity depending on how he recovers from his surgeries.  

In reply, the City argues the Sellers provide no supporting evidence demonstrating the City’s liability. The City contends the known economic damages are $446,000, and this evaluation was made based on information available at the time of settlement. Four months ago, Plaintiff testified he made an exceptional recovery with no further cognitive defects, and was able to return to work as an economist. The City argues the Sellers set forth no evidence that $95,000 is grossly disproportionate to be in bad faith. Further, the City avers that Plaintiff’s inflated medical costs are not admissible to prove general damages or future medical costs, especially when the negotiated amount has already been paid. (Howell v. Hamilton Meats (2011) 52 Cal.4th 541.) The City contends Plaintiff and Plaintiff’s counsel confirmed at Plaintiff’s August 2023 deposition that he is not seeking loss of earnings, and thus there are no known additional special damages for loss of earnings. Further, the City’s subpoena to Plaintiff’s employer was quashed on the grounds that Plaintiff represented he has abandoned any loss of earnings claim.   

 The party asserting a lack of good faith bears the burden, not the party seeking determination of good faith settlement. Plaintiff’s medical bill, dated May 31, 2022, from Optum demonstrates $446,328.34 was paid out of the $788,379.52 billed. (Opp. Caldwell Decl. ¶ 4; Exh. A.) In accordance with Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal. 4th 541, a plaintiff's recovery for past medical expenses will be limited to the amounts actually paid or owed or the reasonable value of the care provided, whichever is less. In other words, an injured plaintiff is limited to recovering the discounted amount health insurance pays on their behalf as past medical damages, not the inflated amount medical providers bill health insurance companies for their services. The Sellers argue the amount paid was not finalized and may have changed, yet the Sellers provide no evidence that the amount paid on behalf of Plaintiff has at all changed since May 31, 2022 to substantially alter the estimate of Plaintiff’s past medical specials.  

Further, in terms of proportionate share of liability, the City proffers various evidence to support the argument that it bore little to no liability. The City provides the Declaration of Justin Buonarati (“Buonarati”), the investigating officer for the Santa Monica Police Department for the subject incident, authenticating the Traffic Collision Report authored by him that Lily Sellers failed to yield to pedestrians in the crosswalk and that Officer Buonarati, after testing the pedestrian lights, found that the recessed electric amber markers in the asphalt were not working, but that the amber lights above the pedestrian signs were functional. (Duryea Decl. ¶ 2-3; Exh. B.) Additionally, traffic engineer Nazir Lalani, PE, TE (“Lalani”) opined that the replaced above-ground lightning system was not a dangerous condition, and at the time of the incident, the location had supplemental Rapid Rectangular Flashing Beacons (RRFB) mounted below the yellow pedestrian crossing signs, in which no supplemental crosswalk warning system was required. (Id. at ¶ 4; Exh. C.) In support of the City’s contention that the above-ground RRFB was operational immediately after the accident, the City provides excerpts of the deposition of witness Gareth Nicholson, who testified the he pressed the button on the opposite side of the incident about 15 to 20 minutes after, and the lights came on and was flashing. (Id. at ¶ 6; Exh. E.) Witness Elena Estwick, who as a passenger in the vehicle immediately behind Lily Sellers, testified that she saw the pedestrians in the crosswalk prior to them getting hit, and that nothing obstructed the view of the driver. (Id. at ¶ 8; Exh. G.) Lastly, Plaintiff testified that he and his friend Kreitlow had at least one alcoholic drink at nearby restaurant prior to the accident, and that Kreitlow testified she and Plaintiff hesitated as to whether cars were stopping, but continued forward into the crosswalk. (Id. at ¶ 10; Exh. H and I.) The Sellers have not defeated the contention with any supporting evidence that the City bore little to no proportionate share of fault in this vehicle v. pedestrian accident, such that the settlement figure of $95,000 representing 21.28% of Plaintiff’s known medical expenses is not in good faith. In sum, even if Plaintiff’s potential recovery is actually around $1.5 million as the Sellers contend, the Sellers have not met their burden demonstrating the City’s potential liability is grossly disproportionate to 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 $446,523.05 based on the amount actually paid. 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. The Sellers provide no evidence showing the settlement amount is disproportionately low.   

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 Sellers have not shown that the City’s settlement agreement with Plaintiff for is so far out of the ballpark in relation to its proportionate share of Plaintiff’s known damages at the time of settlement, because the proposed settlement represents approximately 21.28% of Plaintiff’s known medical specials. Even if the Court were to consider the Sellers’ contention that Plaintiff’s total recovery is around 1.5 million, the Court would still find $95,000 to be in good faith. If other courts have found a $25,000 settlement in a $5 million dollar case and a $30,000 settlement in a $1 million dollar case to be in good faith, then a $95,000 settlement in an upward to $1.5 million case cannot be said to be so far out of the ballpark.  

The Sellers contend the City is self-insured for up to $1 million dollars, and that the settlement is not in good faith because the City did not tender its policy limits when the potential verdict is $1.5 million. However, the City provides no supporting authority that settlements must not be found in good faith unless the settlor, carrying a high value policy limit, tendered the policy limit or settled for an amount substantially close to the policy limit. The fourth Tech-Bilt factor recognizes that a settlor should pay less in settlement than it would if found liable after trial. The crucial factor in determining good faith settlement is whether a reasonable value in proportion to the settlor’s share of liability was reached based on the available information at the time of settlement. As previously analyzed, the evidence submitted by the City supports this, and the burden is therefore on the Sellers to demonstrate lack of good faith. However, the Sellers have failed to meet the shifted burden with any substantial evidence. 

Therefore, the fifth factor weighs in favor of finding good faith settlement. 

 

 III. Conclusion  

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

 

Moving party is ordered to give notice.   

 

 

Dated this 16th day of January 2024