Judge Steven A. Ellis, Case Number: 23STCV18862, Date: 2024-11-07 Tentative Ruling

Judge: Steven A. Ellis, Case: 23STCV18862, Date: 2024-11-07 Tentative Ruling

Case Number: 23STCV18862 Hearing Date: November 7, 2024 Dept: 29

Thompson v. Li
23STCV18862
Defendant Li’s Motion for Determination of Good Faith Settlement

Tentative

The motion is granted.

Background

On August 9, 2023, Keniatta Thompson (“Plaintiff”) filed a complaint against Yiwen Li (“Li”) Evelyn Yenis Reyes (“Reyes”), and Does 1 through 40, asserting two causes of action for motor vehicle negligence. The first causes of action arises out of an accident with Defendant Li on September 1, 2021, and the second causes of action arises out of an accident with Defendant Reyes on July 18, 2023.

On November 3, 2023, Li filed an answer.

On December 7, 2023, Reyes filed an answer and a cross-complaint against Li and Roes 1 through 10.

On January 8, 2024, Li filed an answer to the cross-complaint and filed a cross-complaint against Reyes and Roes 11 through 20.

On October 9, 2024, Li filed this motion for determination of good faith settlement. Reyes filed an opposition on October 21, and Li filed a reply on October 31.

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(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(d); see also 3 Weil & Brown, supra, at ¶ 12:875.)

Discussion

Plaintiff was injured in two automobile accidents, the first on September 1, 2021 with Li, and the second on July 18, 2023 with Reyes. (Complaint, pp. 4-5.)

Li settled with Plaintiff for $50,000. (Berger Decl., ¶ 8.)

Li then filed this motion a for determination of good faith settlement. Reyes opposes the motion.

The Court must now consider and weigh the various factors set forth in Tech-Bilt and its progeny to determine whether the Li’s settlement with Plaintiff is a good faith settlement under Code of Civil Procedure section 877.6.

1. Rough approximation of Plaintiff’s total recovery.

In connection with the first accident, Plaintiff claims to have sustained $4,000 in property damage and approximately $63,108 in past and future medical special damages. (Sheedy Decl., ¶¶ 10-11 & Exh. C; Berger Decl., ¶ 7 & Exh. D.) In connection with the second accident, Plaintiff claims to have sustained $10,995 in past medical special damages, plus additional, unquantified, future medical damages. (Sheedy Decl., ¶¶ 12 & Exh. D; Berger Decl., ¶ 7 & Exh. E.)

If Plaintiff were to succeed at trial (which is by no means guaranteed), a rough approximation of Plaintiff’s total recovery, including general damages, is in the range of $150,000-300,000.

2. The settlor’s proportionate liability.

Li argues that both liability and the reasonableness of Plaintiff’s claimed damages are vigorously disputed. Reyes argues that Li has a significant share of the parties’ proportionate liability, as Li was involved in the first accident and the bulk of Plaintiff’s medical damages resulted from the first accident.

If Plaintiff were to succeed at trial, a rough approximation of Li’s liability is 75 percent of the total, or approximately $112,500 to $225,000. That amount must be discounted, however, to take into account the possibility that Li would succeed at trial in showing that he was not at fault or that Plaintiff’s claimed damages were not caused by the accident or are not reasonable.

3. The amount paid in settlement.

Li has agreed to pay Plaintiff $50,000.

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 he would if he were found liable after a trial.

This factor supports a good faith determination.

6. The settling party’s financial conditions and insurance policy limits.

Li has a policy limit of $50,000. (Berger Decl., ¶ 8.)

7. Any evidence of collusion, fraud, or tortious conduct aimed to injure the interests of nonsettling defendants.

Li’s counsel states that the settlement was the result of an arms-length negotiation over the course of several months. (Id., ¶ 9.) There is no direct evidence of collusion, fraud, or tortious conduct aimed to injure Reyes.

Taking all of these factors into account, and after considering all of the argument and all of the evidence in the record, the Court finds that the settlement between Plaintiff and Li was made in good faith. The settlement amount is “in the ballpark,” in light of Li’s proportionate share of the liability, after discounting for Li’s defenses as to liability, causation, and damages. Moreover, the Court recognizes that a settling defendant should pay less in settlement than he would if found liable after trial.

Therefore, the motion is granted.

Court GRANTS Li’s motion for determination of good faith settlement; the settlement between the Li and Plaintiff was made in good faith.

Conclusion

The Court determines that the settlement between Plaintiff Keniatta Thompson and Defendant Yiwen Li was made in good faith under Code of Civil Procedure section 877.6.

The Court GRANTS Defendant Li’s motion for a good faith settlement determination.

The Court ORDERS Defendant Li’s cross-complaint (filed January 8, 2024) dismissed as against Reyes.

The Court ORDERS Defendant Reyes’s cross-complaint (filed December 7, 2023) dismissed as against Li.

Moving Party is ordered to give notice.