SUPERIOR COURT OF THE STATE OF CALIFORNIA  

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT 

 

 

I. Background 

Plaintiff Cathy Konstandatos Perrera (“Plaintiff”) filed this action against defendants Tanya Degnan, Taylor Degnan, and Robert Degnan (“the Degnans”) for damages arising from a three-vehicle accident.   

On September 26, 2022, the Degnans filed a cross-complaint against Daniel Milan Tannous (“Tannous”) asserting claims for indemnification, equitable contribution, and declaratory relief.  The Degnans allege that Tannous owned and operated a motor vehicle involved in the underlying incident.  

 

II. Application for Good Faith Determination  

On June 8, 2023, Tannous filed a Notice and Application for Good Faith Settlement pursuant to CCP § 877.6 for a determination the settlement was entered into in good faith and barring all claims and cross-complaints against them. Tannous entered into a settlement agreement with Plaintiff, whereby the Tannous, through his insurer, agreed to pay $30,000 to Plaintiff in exchange for a duly executed release of all claims and a dismissal with prejudice.  

Tannous asserts that Plaintiff provided a statement that Plaintiff was initially rear-ended by Defendant Taylor Degnan (“Taylor”), and Taylor was subsequently rear-ended by Tannous, which pushed Degnan into Plaintiff’s vehicle a second time. Tannous asserts that the settlement amount of $30,000 is not grossly disproportionate to the estimated settlement of Tannous’ potential exposure in this incident.  Further, Tannous contends that Plaintiff’s initial demand of $168,823.95 was based on $56,274.65 in billed lien treatment. Tannous’ insurer initially offered $18,500, and after negotiations, Tannous and Plaintiff agreed to settle for $30,000.  

 

III. Motion to Contest the Application for Determination of Good Faith Settlement  

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. 

 

Accordingly, if the party contesting the settlement can show, with admissible evidence, that the settlement is “so far ‘out of the ballpark’ in relation to [the above-referenced factors] as to be inconsistent with the equitable objectives of the statute,” then the court should find the settlement to be lacking in good faith.  (Id. at 499-500.)  If no such showing is made, the settlement should be deemed to be in good faith and the settlor is entitled to an order barring any further claims by any other joint tortfeasor or co-obligor for “equitable comparative contribution, or partial or comparative indemnity” and/or an order dismissing any such claims.  (CCP §877.6(c).)  Additionally, “[w]hen 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.”  (Tech-Bilt,, 38 Cal.3d at 500.) 

 

 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 Degnans contend that the settlement figure of $30,000 represents only half of Plaintiff’s medical bills, and is unreasonable low and disproportionate to Tannous’ proportionate share of liability. The Degnans contest the facts of the incident; simply put, the Degnans contend Taylor did not rear-end Plaintiff’s vehicle until Tannous rear-ended Taylor first, whereas Tannous contends Taylor had already rear-ended Plaintiff when Tannous also rear-ended Taylor to cause a second impact with Plaintiff. The Degnans contend Tannous has failed to provide evidence of the extent of Tannous’ own share of liability. However, the Degnans are mistaken about who bears the burden. The party asserting a lack of good faith bears the burden, not the party seeking determination of good faith settlement. The Degnans provide no substantial evidence demonstrating that Taylor bore 0% of the responsibility for the incident. The Degnans refer to the Traffic Collision Report (“TCR”), which is inadmissible hearsay. Accordingly, the lack of evidence does not defeat Tannous’ contention that Taylor or Plaintiff bears some proportionate share of fault, such that the settlement figure of $30,000 representing more than half of Plaintiff’s medical expenses of $56,274.65 is grossly disproportionate. The Degnans do not dispute Tannous’ estimate of Plaintiff’s medical expenses. Consequently, the Degnans have not met their burden that the Tannous’ 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 $56,274.65. 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, Tannous’ coverage policy limit of $100,000 is not relevant. The fact that Tannous did not exhaust his policy limit does not, in itself, demonstrate bad faith or tortious conduct aimed at injuring the interests of non-settling defendants.  

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 Degnans have not shown that the Tannous’ settlement agreement with Plaintiff for is so far out of the ballpark in relation to his proportionate share of Plaintiff’s known damages at the time of settlement, because Tannous’ proposed settlement represents approximately 53.31% of Plaintiff’s medical specials. Even if the Court were to consider the Degnan’s contention that the “realistic number evidencing Plaintiff’s total recovery” is Plaintiff’s demand of $168,823.95, which approximates general damages together with incurred medical specials, the Court would still find $30,000 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 $30,000 settlement in a $168,823.95 cannot be said to be so far out of the ballpark. Therefore, the fifth factor weighs in favor of finding good faith settlement. 

 

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

As to the sixth factor, the Degnans contend it is unclear whether collusion and bad faith conduct exists because there is no information regarding the Degnans proportionate liability. The Degnans’s conclusory contention of lack of knowledge is 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.  

Consequently, the sixth factor balances in favor of finding a good faith settlement.   

  

V. Conclusion  

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