Judge: Robert B. Broadbelt, Case: BC665258, Date: 2022-09-08 Tentative Ruling

Case Number: BC665258    Hearing Date: September 8, 2022    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTIES:              Defendants Roger B. Frederickson and Frederickson Law

RESPONDING PARTIES:    Defendants Dennis P. Riley and Mesisca, Riley, and Kreitenberg LLP

Motion for Determination of Good Faith Settlement

The court considered the moving, opposition, and reply papers filed in connection with this motion.

DISCUSSION

Defendants Roger B. Frederickson and Frederickson Law (“Frederickson Defendants”) move the court, pursuant to Code of Civil Procedure sections 877 and 877.6, for an order (1) determining that the settlement agreement entered into by and between plaintiff Madeline Moore, individually and as Successor Trustee of the Moore Family Trust dated June 1, 1983 (“Plaintiff”), on the one hand, and Frederickson Defendants, on the other hand, is in good faith, and (2) barring any and all cross-claims based on comparative contribution or indemnity against Frederickson Defendants. 

“[Code of Civil Procedure] Section 877.6 was enacted by the Legislature in 1980 to establish a statutory procedure for determining if a settlement by an alleged joint tortfeasor has been entered into in good faith and to provide a bar to claims of other alleged joint tortfeasors for equitable contribution or partial or comparative indemnity when good faith is shown.”  (IRM Corp. v. Carlson (1986) 179 Cal.App.3d 94, 104.)

In Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499, the California Supreme Court identified the following nonexclusive factors courts are to consider in determining if a settlement is in good faith under section 877.6:  “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.”  The party asserting the lack of good faith has the burden of proof on that issue.  (Code Civ. Proc., § 877.6, subd. (d).)  The party challenging the good faith settlement “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, supra, 38 Cal.3d at pp. 499-500.)

Frederickson Defendants do not submit a copy of the Confidential Settlement Agreement and Release (the “Settlement Agreement”) for the court’s review, but counsel for Frederickson Defendants provides a declaration describing the following terms of the parties’ Settlement Agreement: (1) Frederickson Defendants’ liability carrier shall pay $162,500 to Plaintiff in exchange for Plaintiff’s release of her claims against Frederickson Defendants; (2) cross-complainant Roger B. Frederickson agrees to dismiss his claims alleged in his First Amended Cross-Complaint against Plaintiff; and (3) the parties will bear their own costs and attorney’s fees.  (Moura Decl., ¶ 9.)  Defendants Dennis P. Riley and Mesisca, Riley & Kreitenberg, LLP (“Riley Defendants”) contend that the Settlement Agreement is not in good faith, and does not satisfy the Tech-Bilt factors because (1) the settlement amounts to 3.61 percent of the $4.5 million demanded by Plaintiff in her complaint and 2.26 percent of the $7.2 million exposure; (2) Frederickson Defendants were at fault; (3) Plaintiff has not offered Riley Defendants the same settlement; and (4) the settlement does not exhaust Frederickson Defendants’ insurance limits, as conceded by the moving papers.

The court finds that (1) the Settlement Agreement between Frederickson Defendants and Plaintiff satisfies the factors set forth in Tech-Bilt, and (2) Riley Defendants have not met their burden of establishing that the parties’ Settlement Agreement “is so far ‘out of the ballpark’” in relation to the Tech-Bilt factors as to be inconsistent with the equitable objectives of section 877.6.  (Code Civ. Proc., § 877.6, subd. (d) [“The party asserting the lack of good faith shall have the burden of proof on that issue”]; Tech-Bilt, supra, 38 Cal.3d at pp. 499-500.)  The court therefore grants Frederickson Defendants’ motion for determination of good faith settlement.

First, although Plaintiff prayed for damages in the sum of $4,500,000, there is no evidence that the demanded sum is an accurate approximation of Plaintiff’s total recovery, and, subsequently, Frederickson Defendants’ proportionate liability.  Instead, the court record and evidence demonstrate that Plaintiff settled with defendant David S. Hamilton for $15,000, and tendered to Riley Defendants a section 998 settlement offer in the sum of $999,000.  (July 9, 2019 order granting defendant Hamilton’s application for determination of good faith settlement; Nemecek Decl., Ex. 15, p. 091.)  The court finds relevant Frederickson Defendants’ contention that it is unlikely that Plaintiff would have prevailed on the merits on the ground that the evidence shows that it was Riley Defendants, and not Frederickson Defendants, that retained the allegedly unqualified expert, Alan Wallace.  The opposition does not dispute that Riley Defendants designated Alan Wallace as Plaintiff’s expert on November 30, 2015.  (Opp., p. 4:22-25; Nemecek Decl., Ex. 1.)  Riley Defendants argue that, if they were negligent in designating Alan Wallace, then “so w[ere] Frederickson [Defendants] for advising” Plaintiff to reject the settlement, and for failing to augment the expert designation.  (Opp., p. 11:17-19.) 

Although the court has considered these arguments, the court finds that Riley Defendants have not met their burden of establishing that the Settlement Agreement executed by Frederickson Defendants and Plaintiff “is so far ‘out of the ballpark’” in relation to Frederickson Defendants’ proportionate liability.  There is no evidence establishing that the rough approximation of Plaintiff’s recovery is $4.5 million or $7.2 million, and Riley Defendants appear to argue that both they and Frederickson Defendants were at fault.  (Opp., p. 11:17-19.)  The court also recognizes “that a settlor should pay less in settlement than he would if he were found liable after a trial.”  (Tech-Bilt, supra, 38 Cal.3d at p. 499.) 

Second, the court finds that the other relevant considerations set forth in Tech-Bilt establish that the parties’ Settlement Agreement is in good faith as follows: (1) the settlement payment will be paid to sole plaintiff Madeline Moore; (2) although the Settlement Agreement does not fully exhaust Frederickson Defendants’ policy limits, Frederickson Defendants state that the settlement “represents a substantial portion of the available policy limits”; (3) the Settlement Agreement was reached after Plaintiff and Frederickson Defendants attended an arms-length, informed settlement negotiation under the guidance of Michael D. Moorhead of Judicate West; and (4) Riley Defendants did not provide evidence establishing the existence of collusion, fraud, or tortious conduct aimed to injure the interests of non-settling Riley Defendants.  (Motion, p. 12:4-7 [emphasis added]; Moura Decl., ¶ 8.)

For the reasons set forth above, the court finds that Riley Defendants have not met their burden of establishing that the Settlement Agreement between Frederickson Defendants and Plaintiff is so far ‘out of the ballpark’” as to be inconsistent with the equitable objectives of section 877.6.  (Tech-Bilt, supra, 38 Cal.3d at pp. 499-500.)  The court therefore finds that the Confidential Settlement Agreement and Mutual Release executed by Frederickson Defendants and Plaintiff is in good faith, and grants Frederickson Defendants’ motion.  (Code Civ. Proc., § 877.6.)

ORDER

            The court grants defendants Roger B. Frederickson and Frederickson Law’s Motion for Determination of Good Faith Settlement.  

The court finds that the settlement agreement entered into by plaintiff Madeline Moore, individually and as Successor Trustee of the Moore Family Trust dated June 1, 1983, on the one hand, and Roger B. Frederickson and Frederickson Law, on the other hand, with its terms set forth in the declaration of Zachariah E. Moura, is in good faith within the meaning of Code of Civil Procedure § 877.6, subdivision (a). 

The court orders that all other joint tortfeasors or co-obligors are barred from any further claims against defendants Roger B. Frederickson and Frederickson Law for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.  (Code Civ. Proc., § 877.6, subd. (c).) 

The court orders defendants Roger B. Frederickson and Frederickson Law to give notice of this ruling.

IT IS SO ORDERED.

DATED:  September 8, 2022

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court