Judge: Steven A. Ellis, Case: 22STCV09063, Date: 2024-03-08 Tentative Ruling
Case Number: 22STCV09063 Hearing Date: April 9, 2024 Dept: 29
Motion for Determination of Good Faith
Settlement filed by Defendant Echo Incorporated.
Tentative
The motion is granted.
Background
This action arises out of an accident that allegedly occurred on
October 7, 2019, while Plaintiff Rodolfo Sanchez (“Plaintiff”) was attempting
to trim trees located on the property owned by David and Valerie Dingwall.
Plaintiff filed the Complaint in this action on March 14, 2022, asserting
causes of action for negligence and premises liability against David Dingwall,
Valerie Dingwall, and Doe defendants; a cause of action for products liability
against Defendant Echo, Inc. (“Echo”) and Doe defendants; a cause of action for
negligent supervision against all defendants; and a violation of California
Labor Code section 2750.5 against David and Valerie Dingwall.
By stipulation of the parties, the Court on July 18, 2022, dismissed
with prejudice Plaintiff’s cause of action for negligent supervision against
Echo (only).
Defendant Valerie Dingwall (“Dingwall”) filed her Answer on
October 21, 2022. Defendant Echo filed its Answer on August 1, 2022.
On November 20, 2023, Dingwall filed a motion
for summary judgment. Following a hearing on March 18, 2024, the Court ordered
supplemental briefing. The motion is now under submission.
Meanwhile, on February 29, 2024, Plaintiff
signed a settlement agreement with Echo (dated as of January 12, 2024),
pursuant to which Plaintiff will dismiss and release all claims against Echo in
exchange for a payment of $25,001. (Maxwell Decl., ¶ 3 & Exh. C.)
On March 15, 2024, Echo filed this
motion for determination of good faith settlement. On March 26, Dingwall filed
an opposition. On April 2, Echo and Plaintiff each filed a reply brief in
support of the motion.
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,
however, the moving parties have the initial burden of producing evidence in
support of the requested good faith determination. (Id. at pp. 1261-1262.)
“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 p. 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 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
Echo has
agreed to pay Plaintiff $25,001 in exchange for a dismissal and release of
Plaintiff’s claims. (Maxwell Decl., ¶ 3 & Exh. C.) Echo seeks a
determination that its settlement with Plaintiff is a good faith settlement
under Code of Civil Procedure section 877.6. Dingwall opposes the motion.
The Court
will now consider each of the Tech-Bilt factors:
1. Rough
approximation of Plaintiff’s total recovery. The Court has received some
evidence regarding the total amount of Plaintiff’s recovery. The evidence is
limited, but it is in the record and can be considered by the Court.
Plaintiff
suffered a severe injury. According to his discovery responses, Plaintiff has
approximately $60,000 in medical bills to date and lost earnings in the past of
approximately $40,500. (Huey Decl., ¶ 4 & Exh. B.) In addition, Plaintiff alleges
ongoing complaints and the need for future medical treatment; Plaintiff has presented
a preliminary life care plan with expenses of approximately $1.53 million,
including more than $1.17 million in future medical treatment . (Id., ¶ 5
& Exh. C.)
Plaintiff’s
claim for future expenses may represent little more than a “wish list” from
Plaintiff’s side. This claim has not been tested in discovery. Moreover, the
Court notes that Plaintiff has incurred only $60,000 in medical expenses in the
four years since the accident; although future medical expenses may well be
necessary, the projected amount (20 times more than his past care) seems likely
to be somewhat inflated.
Based on the
information in the record, the Court is able to approximate, roughly, Plaintiff’s
total recovery as somewhere in the range of $750,000 to $1.25 million,
including general damages for pain and suffering as well as special damages
(including medical expenses and lost past and future earnings).
2. The
settlor’s proportionate liability. Echo argues that there is no absolutely merit
in Plaintiff’s products liability claim (the only claim in the Complaint
against Echo). Among other things, Echo argues that Plaintiff has made
contradictory statements in discovery, including on such critical issues as
when the chainsaw was purchased, whether Plaintiff read the safety
instructions, and whether the chain was the original chain, altered, or replaced.
(Maxwell Decl., ¶ 6 & Exhs. E-H.) Plaintiff also made inconsistent
statements regarding his maintenance of the chainsaw, and Plaintiff used the
chainsaw and performed maintenance on it approximately one week prior to Echo’s
scheduled inspection of the chainsaw in August 2023, years after the incident. (Id.,
Exhs. E-F.)
Plaintiff
has never been able to identify any alleged defect in the chainsaw or to point
to any facts supporting any such claimed defect. (Id., ¶ 6.) In his
brief in support of Echo’s motion, Plaintiff says that he conducted “a thorough
investigation into the matter” and “has no evidence of any Echo Incorporated
chainsaw defect constituting a product liability” and has no expert lined up to
testify at trial regarding any such defect. (Plaintiff’s Brief, at pp. 1-2.)
The Court need
not, and does not, express any views on Dingwall’s liability – and, indeed,
Dingwall’s motion for summary judgment remains under submission. But on this
record it does not appear that anyone has any evidence of any liability on the part
of Echo – not Plaintiff, not Echo, and not Dingwall. Zero percent of a
liability of $750,000 to $1.25 million is still zero, and even if the Court
were to include that Echo had some small share of liability in the range of
five percent, Echo’s share of Plaintiff’s approximate total recovery would be
in the range of $37,500 to $62,500.
3. The
amount paid in settlement. The agreement requires Echo to pay Plaintiff $25,001.00.
(Maxwell Decl., ¶ 3.)
4. The
allocation of the settlement proceeds among plaintiffs. As there is only
one plaintiff, this factor does not apply here.
5. A recognition
that a settlor should pay less in settlement than it would if it were found
liable after a trial. This factor supports the request for a good faith
determination.
6. The
settling party’s financial conditions and insurance policy limits. Echo
contends its financial condition is a non-issue, as Echo is not making an
argument that it lacks the resources to satisfy a judgment against it.
7. Any
evidence of collusion, fraud, or tortious conduct aimed to injure the interests
of nonsettling defendants. There is no direct evidence of any fraud or
other tortious or improper conduct. Echo states the settlement was reached at an
arms-length negotiation. (Maxwell Decl., ¶ 7.)
The Court
also notes that Dingwall’s motion for summary judgment remains under
submission. If the motion is granted, Plaintiff, who unquestionably sustained a
severe injury, will receive nothing from Dingwall (other than a cost bill) and
only $25,001 from Echo. Despite that risk, Plaintiff has entered into this
settlement agreement with Echo.
The Court
has carefully considered the evidence and the argument presented by both sides.
Taking into account all of the Tech-Bilt factors, and all of the evidence
in the record, the Court finds that as of the time of the settlement, the
agreement of Echo to pay $25,001.00 in exchange for a release and dismissal of
Plaintiff’s claims was a good faith settlement under Code of Civil Procedure
section 877.6. Dingwall has not met her ultimate burden of persuasion as to the
absence of good faith.
Accordingly,
the motion is GRANTED.
Conclusion
The Court GRANTS Echo’s Motion for Determination of Good Faith
Settlement under Code of Civil Procedure section 877.6.
Moving
party is ordered to give notice.