Judge: Ronald F. Frank, Case: 21STCV12593, Date: 2025-01-27 Tentative Ruling

Case Number: 21STCV12593    Hearing Date: January 27, 2025    Dept: 8

Tentative Ruling

HEARING DATE: January 27, 2025

CASE NUMBER: 21STCV12593

CASE NAME: Grace Gangapersaud, et al. v. Robinson Helicopter Company, Inc., et al.

MOVING PARTY: Defendants, Cross-Complainants, Cross-Defendants HBD Industries, Inc. and HBD/Thermoid, Inc.

RESPONDING PARTY: Defendant, Robinson Helicopter Company, Inc.

TRIAL DATE: February 18, 2025

MOTION:

Motion for Determination of Good Faith Settlement

TENTATIVE RULING: GRANT but subject to argument as to the issues identified below.

I. BACKGROUND

A. Factual

On April 1, 2021, Plaintiffs, Grace Gangapersaud, Ryan Persaud, Sharita Persaud, Lavendranauth Persaud, Jamwantee Sukhu, and Neelomie Cooper (“Plaintiffs”) filed a Complaint against Defendants, Robinson Helicopter Company, Inc., Lycoming Engines, an operating division of Avco Corporation, Massachusetts Corporation, HBD Industries, Inc., an Ohio Corporation, HBD/Thermoid, Inc., an Ohio Corporation, FSH Maintenance, LLC, a Florida, Corporation, Florida Suncoast Helicopters, LLC, a Florida Corporation, and DOES 1 through 25 (“Defendants”). The Complaint alleges causes of action for: (1) Strict Products Liability – Against Robinson Helicopter Company; (2) Negligence – product Liability – Against Robinson Helicopter Company; (3) Negligence – Diagnosis, Repair and Transport/Flight – Against Robinson Helicopter Company; (4) Breach of Implied Warranty of Merchantability – Against Robinson Helicopter Company; (5) Negligence – Against Florida Suncoast Helicopters and FSH Maintenance, LLC; (6) Strict Products Liability – Against Lycoming; (7) Negligence Products Liability – Against Lycoming; (8) Strict Products Liability – Against HBD; and (9) Negligence Products Liability – Against HBD.

Before the Court is the motion by Defendants HBD/Thermoid, Inc. and HBD Industries, Inc. (collectively, “HBD”) for an order determining that their settlement reached with plaintiffs for a dismissal and release of all claims in exchange for $16,000,000 and a waiver of fees and costs is in good faith.

B. Procedural

On December 30, 2024, HBD filed the Motion for Determination of Good Faith Settlement. On January 17, 2025, subject to a briefing schedule set by the Court, Defendant, Robinson Helicopter Company, Inc. filed an opposition brief. On January 23, 2025, HBD filed a reply brief. On that same date, Plaintiffs filed a reply brief in support of HBD’s motion.

II. ANALYSIS

A. Legal Standard

California Code of Civil Procedure section 877.6(a)(1), provides, in relevant part, that, on noticed motion, “[a]ny party to an action wherein it is alleged that two or more parties are joint tortfeasors or co-obligors on a contract debt shall be entitled to a hearing on the issue of the good faith of a settlement entered into by the plaintiff . . . and one or more alleged tortfeasors or co-obligors . . . .” “A determination by the court that the settlement was made in good faith shall bar any other joint tortfeasor or co-obligor from any further claims against the settling tortfeasor or co-obligor for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.” (Code Civ. Proc. § 877.6(c).) Although a determination that a settlement was in good faith does not discharge any other party from liability, “it shall reduce the claims against the others in the amount stipulated” by the settlement. (Code Civ. Proc. § 877(a).)

“The party asserting the lack of good faith shall have the burden of proof on that issue.” (Code Civ. Proc. § 877.6(d).) On Westwood’s application, that places the burden on HH Drywall to show a lack of good faith.

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.”

In City of Grand View Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261, the court provided the following guidance regarding a motion for a good faith settlement determination:

This court notes that of the hundreds of motions for good faith determination presented for trial court approval each year, the overwhelming majority are unopposed and granted summarily by the trial court. At the time of filing in many cases, the moving party does not know if a contest will develop. If each motion required a full recital by declaration or affidavit setting forth a complete factual response to all of the Tech-Bilt factors, literally thousands of attorney hours would be consumed, and inch-thick motions would have to be read and considered by trial courts in an exercise which would waste valuable judicial and legal time and clients’ resources. . . . That is to say, when no one objects, the barebones motion

which sets forth the ground of good faith, accompanied by a declaration which sets forth a brief background of the case is sufficient.

If the good faith settlement is contested, section 877.6, subdivision (d), sets forth a workable ground rule for the hearing by placing the burden of proving the lack of good faith on the contesting party. Once there is a showing made by the settlor of the settlement, the burden of proof on the issue of good faith shifts to the nonsettlor who asserts that the settlement was not made in good faith. If contested, declarations by the nonsettlor should be filed which in many cases could require the moving party to file responsive counter declarations to negate the lack of good faith asserted by the nonsettling contesting party.

(192 Cal.App.3d 1251, 1260-61 (citation omitted).)

The evaluation of whether a settlement was made in good faith is required to “be made on the basis of information available at the time of settlement.” (Tech-Bilt, Inc., supra, 38 Cal.3d at 499.) “‘[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.]” (Id.)

“The party asserting the lack of good faith, who has the burden of proof on that issue (§ 877.6, subd. (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.” (Id. at 499-500.)

“[A] court not only looks at the alleged tortfeasor's potential liability to the plaintiff, but it must also consider the culpability of the tortfeasor vis-à-vis other parties alleged to be responsible for the same injury. Potential liability for indemnity to a nonsettling defendant is an important consideration for the trial court in determining whether to approve a settlement by an alleged tortfeasor. [Citation.]” (TSI Seismic Tenant Space, Inc. v. Superior Court (2007) 149 Cal.App.4th 159, 166.)

B. Discussion

Rough Approximation of Plaintiffs’ Total Recovery

HBD’s moving papers state that the settlement is for $16,000,000, which is 75% of Plaintiffs’ last demand to HBD at mediation ($20,000,000). HBD’s reply papers imply that the plaintiffs total recovery is $60M and that Plaintiffs assume each of the three key defendants would bear 1/3 each.

In opposition, Robinson argues that this factor weighs heavily against a finding of good faith settlement because HBD failed (in its moving papers as distinct from its reply papers) to provide any approximation of Plaintiffs’ total potential recovery, let alone any evidentiary basis to enable the Court to determine this factor. Robinson opines that based on proportionate liability of HBD, the failure to extricate the Subject Air Inlet Duct Hose from the litigation, and the amount ultimately paid of HBD’s insurance policy, Plaintiffs may likely seek an eight-figure

number at trial. Thus, Robinson contends this factor does not support HBD’s motion, and bolsters the conclusion that the settlement was in bad faith.

In the reply brief, HBD asserts that its offer to settle its share of the matter for $16,000,000 is not insubstantial given Plaintiffs’ demand was $20,000,000. HBD’s reply brief also states that Plaintiffs’ demand suggests a rough approximation of $60,000,000, assuming that the parties’ proportionate liability is roughly one-third each. But Mr. Wilner’s reply declaration does not provide any statement that the potential verdict might be int eh $60M range, nor that his assessment is that each of the three principal defendants might be expected to be paying 1/3 of that amount. HBD argues that if the settlement here were “akin to the settlement in Long Beach Mem. Med. Ctr. v. Superior Court (Connors) (2009) 172 Cal.App.4th 865, in which the settling defendant settled for 2% of the damage estimate” such as Robinson argues, that Plaintiffs would be expecting something in the ballpark of $800M. HBD asserts that this amount seems high, and that as it stands, $16M is well within the ballpark of Plaintiffs’ expected recovery at least as against HBD if it were found to be equally responsible as Robinson and FSH for a $60M total verdict. The Court will entertain oral argument from Plaintiff as to whether the record before the Court is sufficient for the Court to make the rough approximations of verdict potential and proportionate liability.

In Plaintiffs’ reply brief, they also argue that the $16M figure alone demonstrates that the settlement was in good faith. Plaintiffs emphasize that they are not asserting economic loss – i.e., no wage loss, no loss of financial support, no medical specials, etc. Instead, Plaintiffs explain that their damages are for the “loss of Mr. Gangapersaud’s love, companionship, comfort, care, assistance, protection, affection, society, [and] moral support” (See CACI 3921) as to five of the six Plaintiffs. Ryan Persaud seeks compensation for physical injuries (largely lacerations) and emotional distress. Thus, Plaintiffs contend that a $16M settlement is well within the range of HBD’s liability exposure, even prior to considering its defenses and the comparative fault of Robinson and FSH.

The Court will take oral argument on the estimated damages Plaintiff would be seeking in this case. No evidence has been submitted by either party as to the potential verdict value in this case, although the Court is aware from matters tried to a jury in Inglewood in the last 18 months in wrongful death matters have ranged from defense verdicts to $800,000 for the wrongful death of an adult parent of adult children to over $60 Million for the wrongful death of a minor child (plus bodily injury claim of the father) in a suit brought by the child’s parents. The Court has, in recent wrongful death trials, inquired of prospective jurors as to their ability to follow the admonition of CACI 3921 that “no fixed standard exists for determining the amount of non-economic damages” and that the jury is required instead to use their “judgment to decide a reasonable amount based on the evidence and [their] common sense.” Given the Court’s knowledge of the facts in this case, given the Court’s 33 years of experience as a civil trial lawyer before appointment to the bench 9-1/2 years ago, the Court’s experience in bodily injury and wrongful death cases as a trial judge where non-economic damages were being sought, and the waiver by most of the plaintiffs here of economic damages, the Courts tentative is that $16M in a case where Plaintiffs have factual bases for claims against three financially viable defendants but only non-economic damages are being pursued seems to be within the Tech-Bilt ballpark for purposes of a good faith settlement motion, regardless of evidence of HBD’s counsel’s approximation of what HBD’s share of responsibility for Plaintiffs’ claimed loss might be at trial.

Rough Approximation of Proportionate Liability

As far as HBD’s approximation of proportional liability, HBD admits that its duct contained a manufacturing defect, but that notwithstanding the defect, it is indisputable that HBD is not an aviation company and had no control of knowledge of or involvement in the troubleshooting process that took place regarding the engine failure or how to transport the damaged helicopter following the initial engine failure prior to the one that led to this accident.

As weighed against the proportional liability from both Robinson and FSH, HBD argues that it is likely that the jury will hear evidence that Robinson shares in the liability for this accident including, but not limited to the following: (1) Robinson manufactured the helicopter, designed the hose specifications which it communicated to HBD, and was the party responsible for incorporating the hose into the subject helicopter; (2) As the manufacturer, Robinson was solely responsible for vetting products to ensure that they were appropriate for use on its helicopters as components; (3) HBD’s sales materials expressly warned Robinson against using the duct in a negative pressure application, yet it did so anyway; and (4) Robinson and FSH were in communication regarding how to deal with the initial engine failure prior to the decision to transport or fly the helicopter in its final, ill-fated voyage.

Further, as far as FSH’s potential culpability at trial, HBD argues the jury will hear evidence of negligence on the part of FSH including, but not limited to the following: (1) FSH ‘s mechanic misdiagnosed the engine failure as being caused by a defective fuel servo; (2) The FSH mechanic held the defective duct in his hands to access the fuel servo but failed to observe the delamination that had taken place inside the duct; (3) The FSH mechanic was responsible for inspecting the parts that could have accounted for the initial engine failure; (4) FSH participated in the decision to fly the helicopter -- which had just experienced an engine failure and was in need of further diagnoses -- over a busy urban area rather than simply loading it onto a flatbed truck and driving it to their nearby maintenance facility; and (5) as to causation, had FSH trucked the helicopter instead of flying it, this accident would have never happened. There also is an argument that the jury could find that FHS’s negligence was so extraordinary as to constitute a superseding cause of this accident, which if the jury so found would absolve Robinson of any proportionate responsibility.

In opposition, Robinson argues that HBD failed to provide any approximation of Plaintiffs’ total potential recovery or any evidentiary basis to enable the Court to determine this factor. For example, Robinson state that HBD’s statements about their “limited” proportionate liability are unsupported. For example, Robinson argues it is undisputed that HBD bore sole responsibility for the manufacturing and quality control of its products, including the Subject Air Inlet Duct Hose. Robinson further argues that HBD did not advise Robinson against using the Robinson-specific air inlet duct hose, including the Subject Air Inlet Duct Hose, with a negative pressure application. On the other hand, Robinson has also not provided the Court with evidence of the total verdict potential in this case, such as from prior helicopter crashes or other wrongful death verdicts in California courts. Nor has Robinson provided the Court with evidence of what share or percentage of proportionate liability HBD could or would be assessed, particularly with at least two other viable defendants remaining after HBD’s settlement.

The Court requires oral argument as to this proportional liability argument.

Amount Paid in Settlement

Next, as explained in the moving papers, HBD agreed to pay $16M. As far as allocation of that settlement proceeds goes, HBD asserts that it is unaware as to how the proceeds will be divided.

In Robinson’s opposition brief, it argues that this factor also weighs against a determination of good faith because despite the monetary amount seeming large, HBD failed to set forth what Plaintiffs’ potential total recovery would be, or whether Plaintiff asked for more than HBD’s insurance policy of $20M. The Court will consider oral argument as to these points but its tentative conclusion is that it is not material to a good faith determination here whether Plaintiffs asked for more than the $20M final demand at mediation.

Recognition that Settling Party Should Pay Less in Settlement than if Found Liable At Trial

HBD provides that a $16M settlement may or may not be less than the amount that could be awarded against HBD at trial. HBD states that this is particularly true where, as here, Plaintiffs are seeking non-economic damages only in which case HBD’s liability would be several as opposed to joint and several in the context of evidence the jury will hear regarding the partial comparative liability of Robinson and FSH.

Robinson argues that this factor also weighs against a determination of good faith settlement. Robinson bases its argument, again, on the fact that HBD failed to even provide their rough approximation of Plaintiffs’ potential total recovery in this matter.

Financial Considerations and Insurance Policy Limits of Settling Defendants

In opposition, Robinson highlights that HBD provides no information regarding their financial condition, except regarding their coverage limits of $20M, however, Robinson asserts that HBD’s $20M insurance policy is appropriate to consider, Robinson reports that HBD’s annual revenue is estimated to be approximately $300M. Robinson argues that HBD has set forth no case law and no basis to unilaterally conclude that their financial condition is not relevant to this matter. In contrast, HBD argues that the Court should use the Plaintiffs’ final demand at mediation rather than its income or net worth as the yardstick.

Evidence of Collusion or Fraud Between Settling Party and Plaintiffs Aimed at Making Non-Settling Parties Pay More than Their Fair Share

Robinson asserts that HBD committed fraud against Robinson, which was hidden from Robinson until after the settlement with Plaintiffs. Robinson explains that it was harmed by HBD’s misrepresentations which included, but are not limited to: reliance on the Certificate of Conformance and use of the products from this lot of apparently defective products, the costs incurred to investigate and address the issues caused by HBD, the damage to Robinson’s and the R-44’s reputation.

In HBD’s reply brief, it argues Robinson’s assertion that the settlement was the first time that HBD acknowledged the manufacturing defect is false, and that to the contrary, HBD’s corporate representative, Jamie Robertson, testified on October 13, 2022 of the existence of a defect through the introduction of a contaminant (castor oil) during the manufacturing process. Furthermore, HBD contends that on March 14, 2024, HBD’s retained expert, Douglas Stimpson, expressly admitted that this was a manufacturing defect.

In Plaintiffs’ reply brief, they also argue that there was no fraud or collusion, acknowledging that HBD has always conceded in this litigation that there was a manufacturing defect, but emphasizing that what has been disputed is whether the manufacturing defect was a proximate cause of the accident. Plaintiffs also argue that there was no fraud as to Robinson, and that Robinson will benefit from a $16M set-off. For example, Plaintiffs state that they will only recover against Robinson if the jury finds Robinson liable for at least 1%, and awards a total of monetary damages in excess of $16M.

Robinson also argues that Plaintiffs and HBD colluded to injure the interests of Robinson. Robinson specifically alleges that HBD’s apparent admission regarding their allegedly defective product after their settlement, their express failure to have their allegedly defective product dismissed from the case as part of the $16 million settlement, and their failure to provide any specifics in their Motion other than the amount of the settlement, all raise an inference of collusion. The Court does not agree that the inference of collusion is raised on this record.

Nonetheless, the Court requires oral argument from the parties with respect to the claimed “admission” of a defective product. In 2022, when Jamie Robertson testified that he knew that the Hose was defective immediately after the subject accident, why does Robinson believe the admission of defect in the motion papers came as a surprise? Robinson’s opposition brief asserts that “HBD knew the representations were false when they made them to Robinson (including as recently as 2022 in discovery), or made the representations recklessly and without regard for the truth, based on the timing of the representations as well as the timing of the switch in position.” (Opp. at 16.) In the Court’s view, it does not appear that the Plaintiff and HBD defrauded or colluded against Robinson, or that the facts bearing on HBD’s acknowledgement of a manufacturing flaw with its hose were concealed until this motion was filed. However, the Court will hear from Robinson on this point.

Whether the Cross-Complaint Should be Discharged

HBD includes a request that Robinson’s cross-complaint against HBD be discharged, in the event of a finding of good faith. Robinson argues, in its opposition brief, that its opposition brief should not be dismissed until the Court has had the opportunity to review and the parties have had the chance to argue, as to leave for Robinson to file an amended complaint to add causes of action for intentional misrepresentation, fraudulent misrepresentation, and fraud and deceit. In the Court’s view, the determination of a good faith settlement only bars cross-complaints for equitable comparative indemnity and contribution, rather than claims of express contractual indemnification or fraud by the settling party against the non-settling co-defendant. Thus, the Court can find a settlement was in good faith under Section 877.6 but Robinson could still potentially bring a separate action against HBD, if not barred by a statute of limitations, for causes of action that are not barred as a matter of law by a good faith determination.

Neither reply brief discusses this argument made by Robinson. But the Court is unlikely to delay the looming trial date any further while awaiting pleadings, discovery, and trial preparation on newly asserted potential causes of action among the cross-action parties.

III. CONCLUSION

For the foregoing reasons, the Court’s tentative ruling is to GRANT the Motion for Determination of Good Faith Settlement. However, the Court requires oral argument as to the issues identified above.