Judge: Steven A. Ellis, Case: 21STCV26244, Date: 2023-09-14 Tentative Ruling

Case Number: 21STCV26244    Hearing Date: September 14, 2023    Dept: 29

TENTATIVE

Defendant American Airlines Group, Inc.’s unopposed motion for good faith settlement determination is GRANTED.

Background 

On July 16, 2021, Plaintiff Joseph Lyes (“Plaintiff”) filed a complaint against Defendants Ray Pepi and American Airlines Group, Inc., asserting causes of action for negligence; negligent hiring, training, supervision, or retention of an employee; assault; battery; intentional infliction of emotional distress; and negligent infliction of emotional distress. The complaint alleges that Plaintiff sustained personal injuries as a result of an incident in which Mr. Pepi, an employee of American Airlines, grabbed and struck Plaintiff at a Transportation Security Administration (“TSA”) security checkpoint in the Los Angeles International Airport.

At the time of the incident, Mr. Pepi was wearing an American Airlines uniform but he had not yet started his shift and was not on duty. (Kustic Decl., ¶ 3.) Mr. Pepi was arrested at the scene and charged with and convicted of criminal conduct. (Id., ¶ 7.) American Airlines also terminated Mr. Pepi’s employment. (Ibid.)

Defendant American Airlines has agreed to pay $70,000 to Plaintiff in settlement of his claims. On August 4, 2023, Defendant American Airlines Group, Inc.  filed a motion for good faith settlement determination. On August 10, 2023, Plaintiff filed a joinder to Defendant’s motion. No opposition has been filed.

Legal Standard

Under Code of Civil Procedure section 877.6, “[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.” (Code Civ. Proc., § 877.6, subd. (a)(1).) “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.”  (Id., subd. (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.  (Id., subd. (a).)      

“The party asserting the lack of good faith shall have the burden of proof on that issue.”  (Id., subd. (d).)  

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 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, supra, 38 Cal.3d at p. 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.]”  (Ibid.)    

“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 pp. 499-500.)    

 “[A] key factor a trial court should consider is whether the amount paid in settlement bears a reasonable relationship to the settlor’s proportionate share of liability. … This is because one of the main goals of section 877.6 is allocating costs equitably among multiple tortfeasors.” (TSI Seismic Tenant Space, Inc. v. Superior Court (2007) 149 Cal.App.4th 159, 166.)  “Accordingly, 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. ” (Ibid.)  

Discussion

Here, although there is no opposition, the Court considers the Tech-Bilt factors as applied to the settlement between Plaintiff and American Airlines.  

As to a rough estimate of Plaintiffs’ total recovery and Defendants’ share of liability, Defendant argues that it should bear no liability, either directly or vicariously, for the off-duty criminal conduct of Mr. Pepi. Moreover, in the criminal prosecution of Mr. Pepi, Plaintiff submitted a claim for restitution of economic damages that were, in total, less than $7,000 (including $3,488 in lost wages and $3,354 in medical expenses). (Kustic Decl., ¶ 8.) The settlement amount to be paid by American Airlines is $70,000, more than ten times that amount.

Given the evidence of limited economic damages and the assertion that Mr. Pepi’s actions occurred while he was off duty, the settlement amount is not grossly disproportionate to what a reasonable person would estimate American Airlines’ liability to be at the time of the settlement. Nor is the settlement otherwise unfair to Defendant Pepi.

Allocation of settlement is not applicable here since Plaintiff is the sole plaintiff.

There is no evidence of collusion, fraud or tortious conduct between the settlor and the plaintiff aimed at making the nonsettling party pay more than their fair share.

No other Defendant has opposed this motion or contested the good faith of this settlement.  

After considering the Tech-Bilt factors, the Court finds and determines that the settlement entered into between Plaintiff and American Airlines was made in good faith within the meaning of Code of Civil Procedure section 877.6.  Therefore, the motion is GRANTED.   

Conclusion

The Court GRANTS the motion for a good faith settlement determination.

Moving Defendant is ordered to give notice of this ruling.