Judge: Steven A. Ellis, Case: 20STCV28172, Date: 2023-10-06 Tentative Ruling
Case Number: 20STCV28172 Hearing Date: October 6, 2023 Dept: 29
TENTATIVE
The Motion for Determination of Good Faith Settlement filed by
Defendants Mundo Trucking, Inc. and Manuel Rodriguez Santos pursuant to Code of Civil Procedure section 877.6 is GRANTED.
Background¿
Plaintiff Amy Korn (“Plaintiff”) commenced this action on July 27, 2020 against
Defendants Manuel Rodriguez Santos (“Santos”) and Mundo Trucking, Inc.,
(Mundo”) alleging causes of action for general and motor vehicle negligence,
arising out of a vehicle collision that occurred on August 3, 2018.
On July 29,
2023, Plaintiff filed another complaint against Defendant Josh Fleming
(“Fleming”) alleging causes of action for general and motor vehicle negligence
as well as intentional tort, arising out of a separate vehicle collision that
occurred on February 11, 2019.
Plaintiff
filed a motion to consolidate actions as the vehicle collisions occurred within
six months of each other and Plaintiff’s injuries from the two collisions are
overlapping. The Court granted Plaintiff’s motion to consolidate
actions.
On September 1, 2023, Defendants Santos and Mundo filed
the instant motion for determination of good faith settlement pursuant to Code
of Civil Procedure section 877.6.
On September 25, 2023, Defendant Fleming filed his
opposition. Defendant Santos and Mundo filed their reply on September 29,
2023.
Trial is set for January 11, 2024.
Legal Standard
In a case involving two or more alleged joint
tortfeasors, a party may seek a court order under Code of Civil Procedure
section 877.6 determining that a settlement between the plaintiff and one or
more of the alleged tortfeasors is in good faith. A judicial determination of
good faith “bar[s] any other joint tortfeasor ... 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 subd. (c).)
In evaluating whether a settlement has been made in
good faith, courts consider the following factors, as set forth by the
California Supreme Court in the landmark case Tech-Bilt, Inc. v.
Woodward-Clyde & Associates (1985) 38 Cal.3d 488:
1) “a rough approximation of plaintiffs’ total
recovery”;
2) “the settlor’s proportionate liability”;
3) “the amount paid in settlement”;
4) “the allocation of the settlement proceeds among plaintiffs”;
5) “a recognition that a settlor should pay less in settlement than he would if
he were found liable after a trial”;
6) the settling party's “financial conditions and
insurance policy limits”;
7) any evidence of “collusion, fraud, or tortious conduct aimed to injure the
interests of nonsettling defendants.”
(Id. at 499.) “Practical considerations obviously
require that the evaluation be made on the basis of information available at
the time of settlement. (Ibid.)
The “good faith” concept in Code of Civil Procedure
section 877.6 is a flexible principle imposing on reviewing courts the
obligation to guard against the numerous ways in which the interests of
nonsettling defendants may be unfairly prejudiced. (Rankin v. Curtis
(1986) 183 Cal. App. 3d 939, 945.) Accordingly, under Tech-Bilt, the party
asserting the lack of “good faith” may meet this burden by demonstrating that
the settlement is so far "out of the ballpark" as to be inconsistent
with the equitable objectives of the statute. (Tech-Bilt, supra,
38 Cal.3d at 499-500.) Such a demonstration would establish that the proposed
settlement was not a “settlement made in good faith” within the terms of
section 877.6. (Ibid.)
The Supreme Court explained that Code of Civil
Procedure section 877.6 is designed to further two equitable policies:
1)
encouragement of
settlements; and
2)
equitable allocation of
costs among joint tortfeasors.
(Ibid.)
Those policies would not be served by an approach
which emphasizes one to the virtual exclusion of the other. (Ibid.)
Accordingly, a settlement will not be found in good faith unless the amount is
reasonable in light of the settling tortfeasor’s proportionate share of
liability. (Std. Pac. of San Diego v. A. A. Baxter Corp. (1986) 176 Cal.
App. 3d 577, 589.) Or, as the California Supreme Court has stated, 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.” (Tech-Bilt, supra, 38 Cal.3d at
499.)
When a
motion seeking a determination under Code of Civil Procedure section 877.6 is
not opposed, the burden on the moving parties to show that the settlement was
made in good faith is slight. (City of Grand Terrace v. Superior Court (1987)
192 Cal.App.3d 1251, 1261 [holding that a “barebones motion” including a
declaration setting forth “a brief background of the case is sufficient”].)
When a good faith motion is contested, the moving
parties have the initial burden of producing evidence in support of the
requested good faith determination. (Id. at 1261-62.) “Section 877.6 and
Tech-Bilt require an evidentiary showing, through expert declarations or other
means, that the proposed settlement is within the reasonable range permitted by
the criterion of good faith.” (Mattco Forge v. Arthur Young & Co.
(1995) 38 Cal.App.4th 1337, 1351.) “Substantial evidence” is required. (Id. at
1352.) A declaration from a settling defendant’s attorney that states, in
conclusory fashion, that the client has little or no share of the liability may
not be sufficient. (Greshko v. County of Los Angeles (1987) 194
Cal.App.3d 822, 834-35; see also 3 Weil & Brown, California Practice Guide:
Civil Procedure Before Trial (The Rutter Group 2023) ¶¶ 12:774, 12:872-873.)
The ultimate burden of persuasion, however, is on
the party opposing the good faith determination. The “party asserting a lack of
good faith shall have the burden of proof on that issue.” (Code Civ. Proc., §
877.6 subd. (d); see also 3 Weil & Brown, supra, at ¶ 12:875.)
Discussion
Defendants
Santos and Mundo (the “Settling Defendants”)
seek an order determining that the settlement between them and Plaintiff is a
settlement entered into good faith.
Under the settlement agreement, the Settling Defendants have agreed to
pay Plaintiff $399,999.00 to settle any and all claims against them that relate
or arise from the August 3, 2018, automobile accident.
Defendant
Fleming opposes the motion arguing that the settlement has not been made in
good faith. Defendant Fleming contends
the proposed settlement is not close to the reasonable range of the Settling
Defendants’ proportionate share of liability.
Also, Defendant Fleming contends that the Settling Defendants have not
provided any information regarding their financial condition nor have they
addressed Plaintiff’s alleged damages.
To resolve
the dispute, the Court will examine the evidence and argument of each side on
the Tech-Bilt factors, based on the information available as of the time
of settlement.
1.
A rough approximation of plaintiff’s total
recovery and the settlor’s proportionate liability.
Plaintiff’s
likely total recovery is unclear and was unclear as of the time of the
settlement. In the first accident, with
Settling Defendants, Plaintiff claims to have sustained injuries to her back
and neck. (Beagle Decl., ¶ 3; Rizzi
Decl., ¶ 7.) In the second accident,
with Fleming, Plaintiff claims to have sustained further injuries to her back
and neck, a separate shoulder, post-concussive syndrome, and neurological
injuries. (Beagle Decl., ¶¶ 4, 10; Rizzi
Decl., ¶ 11; Supp. Beagle Decl., ¶ 3 & Exh. 2.)
Plaintiff’s known
medical expenses, as of the time of settlement, were approximately
$52,000-$54,000 after adjustment.
(Beagle Decl., ¶ 10; Rizzi Decl., ¶ 8.)
Plaintiff’s medical treatments are ongoing. (Beagle Decl., ¶ 4.) She may need spinal fusion in the future but
to date she has not undergone that procedure.
(Beagle Decl., ¶ 10.) According
to Settling Defendants, most of her treatments relate to her neurological
complaints, which are the result of the accident with Fleming. (Ibid.; Supp. Beagle Decl., ¶ 3 &
Exh. 2.) In addition, even before these
accidents, Plaintiff had significant pre-existing spinal conditions and was
receiving treatment for these conditions.
(Beagle Decl., ¶ 10; Supp. Beagle Decl., ¶ 2 & Exh. 1.) Plaintiff is also making a claim for a loss
of future earnings in the amount of $22,000-$66,000, but Fleming notes that she
has not produced any documents to support that claim. (Rizzi Decl., ¶ 9.)
The Settling
Defendants estimate Plaintiff’s damages to be between $300,000-$400,000. (Beagle Decl., ¶ 10.)
2.
The amount paid in settlement.
Under the settlement agreement, the Settling Defendants have agreed
to pay Plaintiff $399,999.00 to settle all claims. (Beagle Decl., ¶ 7.)
3.
The allocation of settlement proceeds among
plaintiffs.
There is only one
plaintiff here. Accordingly, there are
no issues relating to allocation. (Cahill
v. San Diego Gas & Electric Co. (2011) 194 Cal.App.4th 939, 968; but
see Opp. at 8.)
4.
A recognition that a settlor should pay
less in settlement than he would if he were found liable after trial.
The Settling Defendants have agreed to settle before trial,
and the law recognizes that settling defendants may pay less than they would
pay if they were found liable at trial.
5.
The financial conditions and insurance
policy limits of settling defendants.
The Settling Defendants state that
Defendant Mundo is a small trucking company with insurance policy limits of $1
million. (Beagle Decl.. ¶ 12.) Defendant Fleming rightly criticizes the
Settling Defendants for the thin nature of their evidence on this point (Opp.
at 8.) Nonetheless, this factor is of
little importance where, as here, the Settling Defendants argue that the amount
of the settlement is “in the ballpark” in relation to their approximate share
of the potential liability. Instead, ,
this factor is primarily significant, and takes on greater weight, when a
settling defendant argues that the Court should consider its poverty and lack
of insurance (or low policy limits) and make a good faith determination even
though the amount of the settlement is not “in the ballpark” and is actually
substantially lower than the settling defendant’s approximate share of
potential liability.
6.
The existence of collusion, fraud, or
tortious conduct aimed to injure the interests of the non-settling defendants.
The settlement
was reached after an unsuccessful mediation and after Plaintiff served a demand
under Code of Civil Procedure section 998.
(Beagle Decl., ¶¶ 6-7, 11.) Settling
Defendants state that there was no collusion, fraud, or other tortious conduct
in connection with the settlement. (Id.,
¶ 13.)
The Court has
carefully considered all of the evidence in the record and the arguments of
counsel and has considered and balanced each of the Tech-Bilt factors
(to the extent that they apply here). The
Court finds that the Settling Defendants have met their initial burden of
presenting evidence on the Tech-Bilt factors and that Defendant Fleming
has not met his burden of proving a lack of good faith. The Settling Defendants are paying
approximately $400,000 to settle Plaintiff’s claims that cannot be calculated
precisely at this time (as is almost always the case in the settlement of a
personal injury action); Plaintiff’s medical costs appear to be in the range of
$52,000-$54,000 with a possible but unknown increase in the future. She claims loss of earning capacity of up to
an additional $66,000, but Defendant Fleming is skeptical of Plaintiff’s
ability to succeed on these claims. It
appears on this record, based on the information available at the time of
settlement, that Plaintiff’s special damages are roughly in the range of
$100,000. Her injuries are significant,
and so an additional amount of general damages would be expected, but, in the
Court’s experience, a ratio of 3:1 between general damages and special damages
is a fair approximation – and that brings Plaintiff’s total expected recovery
to the approximate range of $400,000 or less.
Against that total recovery, a settlement of approximately $400,000 is
certainly a reasonable amount, even assuming that the Settling Defendants have the
majority of the potential liability here (which is not necessarily the case). There is no direct evidence of fraud,
collusion, or bad faith, and the Court finds that there is no circumstantial
evidence of such in this record. And, of
course, by settling before trial, a settling defendant can receive some
discount against what the defendant would have to pay if the matter were tried
and the result were adverse to the defendant.
In sum, the Court
finds that the settlement amount is not “grossly disproportionate to what a
reasonable person, at the time of the settlement, would estimate the settling
defendant’s liability to be.” (Tech-Bilt, supra, 38 Cal.3d at
499.) Accordingly, the Court rules that
the settlement is in good faith under Code of Civil Procedure 877.6
Conclusion
The Motion for Determination of Good Faith Settlement filed by
Defendants Mundo Trucking, Inc. and Manuel Rodriguez Santos pursuant to Code of Civil Procedure section 877.6 is GRANTED.
Moving defendants are ordered to give notice of this ruling.