Judge: Serena R. Murillo, Case: 20STCV22656, Date: 2022-12-20 Tentative Ruling

Case Number: 20STCV22656     Hearing Date: December 20, 2022    Dept: 29

TENTATIVE

Defendant Eusebio’s Application for Determination of Good Faith Settlement with STARR  is GRANTED.

Legal Standard

The Court must approve any settlement entered into by less than all joint tortfeasors or co-obligors.  (Code Civ. Proc. § 877.6.)  This requirement furthers two sometimes-competing policies: (1) the equitable sharing of costs among the parties at fault, and (2) the encouragement of settlements.  (Erreca’s v. Superior Court (1993) 19 Cal.App.4th 1475, 1487.)

If the settlement is made in good faith, the Court “shall bar any other joint tortfeasor or co-obligor from any further claims against the settling tortfeasor . . . for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.”  (Code Civ. Proc. § 877.6(c).)  The non-settling tortfeasors or obligors bear the burden of demonstrating the absence of good faith in the settlement.  (Code Civ. Proc. § 877.6(d).)

To demonstrate a lack of good faith, the non-settling party must show that the settlement is so far “out of the ballpark” as to be inconsistent with the equitable objectives of Code of Civil Procedure section 877.6.  (Nutrition Now, Inc. v. Superior Court (2003) 105 Cal.App.4th 209, 213.)  The Court will typically consider: (1) the plaintiff’s (roughly) approximated total recovery; (2) the settlor’s share of liability; (3) the size of the settlement at issue; (4) the distribution of settlement proceeds among plaintiffs; (5) the usual discount value when plaintiffs settle before trial; (6) the settlor’s financial condition and insurance policy limits; and (7) whether there is evidence of “collusion, fraud, or tortious conduct aimed to injure the interests of non[-]settling defendants.”  (Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499.)  These factors will be evaluated accordingly to what information is available at the time of settlement.  (Ibid.)

Discussion

The terms of the settlement between defendants Starr and Eusebio are as follows:

a) [Eusebio] will pay [Starr] and [Starr’s] attorney of record [$20,000] in exchange for a full and final release of all claims, and a dismissal with prejudice from [Starr’s separate] action.

b) [Starr] releases all causes of action which she had or may have against [Eusebio] related to any act or omission by [Eusebio].

c) [Eusebio] shall admit no liability.

d) This settlement is inclusive of any additional insured obligations that may be owed by [Eusebio]’s carrier to [Starr].

e) [Starr] waives the protection of California Civil Code [section] 1542.

f) No confidentiality clause of any nature is contained in this agreement.

(Memorandum of Points and Authorities in Support of Application, p. 2.)

To determine the good faith of the settlement, the terms of the agreement are analyzed under the Tech-Bilt factors.  There is no evidence of Plaintiff’s approximated total recovery, the settlor’s share of liability, the usual discount value when plaintiffs settle before trial, the settlor’s financial condition and insurance policy limits, and whether there is evidence of collusion, fraud, or tortious conduct aimed to injure the interests of non-settling defendants.  Thus, the only factors the Court considers are the size of the settlement at issue and the distribution of settlement proceeds.

The size of the settlement at issue is $20,000.  The distribution of proceeds is to Starr and Starr’s attorney of record.  Under the settlement agreement, Plaintiff receives nothing.  Plaintiff does not meet the burden of demonstrating the settlement is so far “out of the ballpark” as to be inconsistent with the objectives of section 877.6.

However, Plaintiff demonstrates well-founded concern.  In Eusebio’s moving papers, Eusebio states, “[t]hat all complaints or cross-complaints arising out of the alleged acts or omissions by [Eusebio] be dismissed with prejudice.”  (Memorandum of Points and Authorities in Support of Application, p. 1, ¶ 3.)  The Proposed Order provided to the Court states that “any and all present and future cross-complaints by defendants, cross-defendants, cross-complainants, interveners, lien holders and by any other actual or potential parties are dismissed, with prejudice, in their entirety and/or forever barred as against [Eusebio].”  (Proposed Order ¶ 3.)  These statements contradict the argument in Eusebio’s Reply, which argues, “The application simply resolves claims alleged by [Starr] against [Eusebio].”  (Reply pp. 1-2.)

Thus, the Court finds it necessary to provide clarification.  The settlement agreement between Starr and Eusebio does not have any bearing on Plaintiff’s direct claims against Eusebio.  The settlement agreement only resolves Starr’s direct claims against Eusebio for liability to Starr and Starr’s direct claims against Eusebio for contribution and indemnity.

Therefore, the application for determination of good faith settlement is GRANTED, but the Court declines to adopt Eusebio’s proposed order, which does not accurately reflect the terms and effect of the settlement agreement.

Conclusion

Accordingly, Eusebio’s Application for Determination of Good Faith Settlement is GRANTED, but the Court declines to adopt the Proposed Order.

Eusebio is ordered to give notice.