Judge: Steven A. Ellis, Case: 22STCV17179, Date: 2023-10-12 Tentative Ruling
Case Number: 22STCV17179 Hearing Date: February 14, 2024 Dept: 29
Motion for Determination of Good Faith Settlement filed by Cross-Defendant Brittney Hernandez
TENTATIVE
The motion is GRANTED.
Background
This case arises out of an automobile accident on December 27, 2020, at or near the intersection of Victory Boulevard and Woodley Avenue in Los Angeles, California. The vehicles involved in the accident were driven by Defendants Brittney Hernandez and Mostafa El Sekaly. Plaintiff Suzanna Hernandez (“Plaintiff”) was a passenger in the vehicle driven by Defendant Hernandez, her daughter, and sustained significant injuries in the accident.
On May 24, 2022, Plaintiff filed a complaint against Defendant El Sekaly, Defendant Hernandez, Rebecca Pedroza Steele, and DOES 1 through 100, inclusive, asserting causes of action for (1) motor vehicle negligence and (2) general negligence. On June 29, 2022, Defendants El Sekaly and Steele filed an answer and a cross-complaint against Defendant Hernandez and Roes 1 through 20. On August 24, 2022, Defendant Hernandez filed an answer to the complaint.
Defendant Hernandez has agreed to pay Plaintiff a settlement amount of $30,000 in exchange for a full release of all claims. This is the amount of the policy limits on Defendant Hernandez’s insurance policy.
On July 27, 2023, Defendant Hernandez filed a motion for determination of good faith settlement. On September 29, 2023, Defendant El Sekaly filed an opposition. On October 4, 2023, Defendant Hernandez filed a reply.
The matter came on for hearing on October 12, 2023. At the conclusion of the hearing, the Court granted the alternative request of Defendant El Sekaly for a continuance so that additional discovery could be conducted. The Court advised both sides that they needed to submit evidence, and not mere argument or speculation, on the various factors set forth under the good faith settlement case law.
On January 3, Plaintiff submitted additional argument and evidence in support of the good faith determination. Defendant Hernandez did the same on January 9.
On January 23, 2024, Defendant El Sekaly submitted additional argument and evidence in opposition to the requested good faith determination.
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 burden is greater: 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
Defendant Brittney Hernandez (“Hernandez”) seeks a determination that her settlement with Plaintiff is a good faith settlement under Code of Civil Procedure section 877.6. Defendant Mostafa El Sekaly (“El Sekaly”) opposes the motion.
Hernandez has the initial burden of producing evidence in support of a good faith determination. She has presented evidence on some, but not all, of the Tech-Bilt factors:
1. Rough approximation of Plaintiff’s total recovery. In her initial moving papers, Hernandez attached Plaintiff’s verified responses to Form Interrogatories (Set One) propounded by El Sekaly in which Plaintiff stated that as of August 2022, she had incurred in excess of $112,000 in medical bills that she attributed to the accident; that Plaintiff was receiving continuing treatment; and that Plaintiff also asserted a claim for general damages. (Katz Decl., Exh. A.) These amounts remained the same in discovery responses verified by Plaintiff in November 2022. (Wright Decl., Exh. B.)
Accounting for future medical expenses and general damages, Hernandez now estimates that a “rough approximation” of the amount of Plaintiff’s total recovery “could range from $300k to $500k.” (Supp. Mem., at 2:22-23.)
El Sekaly provided the Court with recently updated discovery responses from Plaintiff in which, as of January 9, 2024, Plaintiff states that she has incurred approximately $132,000 in medical expenses and that she is continuing to treat. (Foster Decl., Exh. A.)
This evidence suggests that a rough approximation of Plaintiff’s total recovery is somewhere in the mid six figure range, including special damages incurred as of January 2024, additional and subsequent special damages, and general damages.
2. The settlor’s proportionate liability. Hernandez and El Sekaly blame each other for the accident. Hernandez contends that she entered the intersection on a green light; El Sekaly contends that the light was red when Hernandez entered the intersection. No determination of fault has been made. In her initial reply brief, Hernandez stated that she contends “that liability is 100% against Defendant Sekaly, or at the very least 50%-50% between her and Sekaly.” (Reply at 3.)
Using $500,000 as a rough approximately of Plaintiff’s total recovery and an allocation of 50 percent of the fault to Hernandez, then the proportionate liability of Hernandez is approximately $250,000.
(To be clear, this is a calculation made on the evidence before the Court for purposes of ruling on the request for a good faith settlement determination only. It is not a judicial finding that El Sekaly bears 50 percent, or any other percent, of the fault for the accident and does not in any way preclude El Sekaly from arguing at or before trial that he bears no portion of the fault or a lesser portion of the fault.)
3. The amount paid in settlement. The agreement requires Hernandez to pay Plaintiff $30,000.
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 she would if she 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. Hernandez has settled for the full limit of her insurance policy. Hernandez stated in a declaration submitted with her initial motion that she is currently employed and earns $18.37 per hour, that she is a renter, that she does not own a house or any real property, that she does not own a vehicle, that she has less than $10,000 combined in her checking and savings account, and that she has no other investments or assets. (Hernandez Decl., ¶¶ 2-6.) El Sekaly conducted additional discovery, and in response Hernandez reaffirmed, under oath, her modest financial means. (Wright Decl., Exh. C.) El Sekaly does not argue otherwise.
7. Any evidence of collusion, fraud, or tortious conduct aimed to injure the interests of nonsettling defendants. Hernandez is the daughter of Plaintiff. In light of the close family relationship, there is certainly a risk of collusion. Nonetheless, there is no direct evidence of any fraud, collusion, or other tortious or improper conduct, and the settling parties deny any collusion. (Daneshrad Decl., ¶¶ 10-17; Wright Decl., Exhs. C-D.)
On this record, the Court GRANTS the motion for a good faith settlement determination. Although the amount of the settlement is substantially less than Hernandez’s proportionate share of the liability, Hernandez settled for her policy limits and has little or no additional assets with which to satisfy a judgment against her. As the California Supreme Court stated in the Tech-Bilt decision, “[e]ven where the claimant’s damages are obviously great, and the liability therefor certain, a disproportionately low settlement figure is often reasonable in the case of a relatively insolvent, and uninsured, or underinsured joint tortfeasor.” (Tech-Bilt, supra, 38 Cal.3d at p. 499.) In other words, even a settlement that appears to be disproportionate may nonetheless be determined to be in good faith where, as is the case here, the settling party is in fact “relatively insolvent.”
As noted above, El Sekaly has ultimate burden of persuasion on the good faith issue. (Code Civ. Proc., § 877.6, subd. (d).) After carefully considering the arguments of the parties, the evidence in the record, and all of the factors set forth in the case law, the Court concludes that El Sekaly has not carried his burden of showing a lack of good faith.
Conclusion
The Court GRANTS the motion for a good faith settlement determination under Code of Civil Procedure, section 877.6.
Counsel for Defendant Brittney Hernandez is ordered to give notice.