Judge: Teresa A. Beaudet, Case: 20STCV14748, Date: 2023-01-11 Tentative Ruling

Case Number: 20STCV14748    Hearing Date: January 11, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

            Background

Plaintiff Earl Douberley (“Plaintiff”) filed this action on April 16, 2020 against Defendant Alexander Andrew, Inc. d/b/a FallTech (“FallTech”), alleging causes of action for (1) negligence, (2) strict products liability – design defect, (3) strict products liability – manufacture defect, (4) strict products liability – failure to warn, (5) breach of express warranty, (6) breach of implied warranty, and (7) negligent misrepresentation.

In the Complaint, Plaintiff alleges that on or about October 22, 2018, he was working on the roof portion of the Gold Bar Mine near Elko, Nevada, installing insulation and roof panels. (Compl., ¶¶ 10, 11.) In the course of such work, Plaintiff accidentally fell from the roof, directly onto the concrete floor. (Compl., ¶ 11.) For fall protection and general safety measures, Plaintiff utilized a certain Self Retracting Device (SRD), part No. 7232S, (the “Subject SRD”). (Compl., ¶¶ 3, 10.) Plaintiff alleges that FallTech was engaged in the business of designing, manufacturing, sale, development, testing, inspecting, packaging, labeling, advertising, merchandising, and distribution of the Subject SRD manufactured on or about March 19, 2018. (Compl., ¶ 3.) Plaintiff alleges that although he had properly secured the Subject SRD to his harness and lanyard, the Subject SRD’s retractable rope severed completely during the fall. (Compl., ¶ 11.) Plaintiff lost consciousness upon impacting the concrete floor and was then air lifted to the hospital where doctors diagnosed him with multiple rib fractures, fractured vertebrae, brain hemorrhages, and amnesia. (Compl., ¶ 12.)

On January 7, 2021, Plaintiff filed an amendment to the Complaint naming Motion Industries, Inc. (“Motion Industries”) in place of “Doe 1.” On February 9, 2022, Plaintiff filed an amendment to the Complaint naming Phoenix Industrial, Inc. (“Phoenix”) in place of “Doe 4.”

On February 4, 2021, Motion Industries filed a Cross-Complaint against Roes 1 through 100. On July 26, 2022, Phoenix filed a Cross-Complaint against Industrial Construction & Engineering Co. (“IC&E”).

Phoenix, IC&E, and Plaintiff entered into a settlement. (Ralls Decl., ¶ 7.) The settlement provides, inter alia, that Plaintiff will release any and all claims he may have against Phoenix and IC&E, and Phoenix will release any and all claims it may have against IC&E arising out of the incident which occurred on October 22, 2018 that is the subject of this lawsuit, in exchange for payment in the amount of $250,000.00. (Ralls Decl., ¶ 8.)

Phoenix now moves for an order determining that the settlement of Phoenix, IC&E, and Plaintiff is in good faith, and barring any current or future cross-complaints or complaints against Phoenix and IC&E for equitable contribution or partial or comparative indemnity, based on comparative negligence or comparative fault arising out of the subject matter of this lawsuit. FallTech opposes, and Motion Industries joins in the opposition.

Evidentiary Objections

The Court sustains Phoenix’s objection to paragraph 16 of the Declaration of Randolph T. Moore.

Discussion

“[Code of Civil Procedure] Section 877.6 was enacted by the Legislature in 1980 to establish a statutory procedure for determining if a settlement by an alleged joint tortfeasor has been entered into in good faith and to provide a bar to claims of other alleged joint tortfeasors for equitable contribution or partial or comparative indemnity when good faith is shown.” (Irm Corp. v. Carlson (1986) 179 Cal.App.3d 94, 104.)

Section 877.6, subdivision (a)(1) provides, in relevant part, that, on noticed motion, “[a]ny party to an action in which 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 or other claimant and one or more alleged tortfeasors or co-obligors.” (Code Civ. Proc., § 877.6, subd. (a)(1).) “The party asserting the lack of good faith shall have the burden of proof on that issue.” (Code Civ. Proc., § 877.6, subd. (d).)

“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.” (Code Civ. Proc., § 877.6, subd. (c).) 

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, Inc. v. Woodward-Clyde & Associates, supra, at p. 499)

 Phoenix asserts that the subject settlement was made in good faith and is the result

of a series of arms’ length negotiations between the parties with the assistance of a mediator. (Ralls Decl., ¶ 10.) Phoenix also contends that there is no basis for liability against Phoenix and IC&E, such that the $250,000 settlement exceeds their proportionate share of liability.  Specifically, Phoenix asserts that Plaintiff’s theory of liability against it is that Phoenix loaned Plaintiff the safety device (manufactured by FallTech) that Plaintiff was using at the time of the accident, thereby placing Phoenix in the “stream of commerce” for a products liability action. (Ralls Decl., ¶ 4.) Phoenix contends that there is no evidence to support Plaintiff’s theory that loaning someone a safety device places them in the stream of commerce regarding that device for products liability purposes. (Ralls Decl., ¶ 9.) Phoenix also asserts that “Plaintiff’s only remedy as to Phoenix and IC&E is workers compensation since Plaintiff was an employee of IC&E and IC&E was a subcontractor to Phoenix, and Phoenix’s workers compensation insurance would have covered Plaintiff’s injuries if Plaintiff was not first covered by IC&E’s worker’s compensation policy.” (Ralls Decl., ¶ 9.)  

            In its opposition, FallTech contends that Phoenix’s proposed settlement is outside of the Tech-Bilt ballpark.

First, FallTech contends that Phoenix’s proportionate share of liability exceeds the settlement value. Specifically, FallTech argues that “[b]ut for Phoenix’s safety representative’s negligence in disregarding Plaintiff’s request for a leading-edge SRD and representing that the one that he was providing Plaintiff was a leading-edge SRD – when it clearly was not – this accident would never have happened.” (Opp’n at p. 11:25-27.) FallTech notes that Plaintiff’s discovery responses indicate that “Plaintiff informed Phoenix’s safety representative that he needed a leading edge self-retracting device” and that “Plaintiff was informed by Defendant’s safety representative that the subject product he had given Plaintiff was suitable for the job.” (Moore Decl., ¶ 8; Ex. 6, Plaintiff’s Response to Phoenix’s Form Interrogatory No. 17.1, RFA No. 7.) However, the instruction manual for the subject SRD states: “WARNING…The SRD discussed in this manual is not intended for Leading Edge applications…Take action to avoid sharp and/or abrasive surfaces and edges.” (Moore Decl., ¶ 11; Ex. 9C, p. 4.) FallTech indicates that in response to Plaintiff’s requests for admission, Phoenix admitted that prior to the subject incident, it was aware of the “safety limitations of the [subject product] standard and leading-edge variants.” (Moore Decl., ¶ 9; Ex. 7, Phoenix’s Supplemental Response to Plaintiff’s Request for Admission No. 21.)

In the reply, Phoenix counters that IC&E’s foreman, Matthew Lindbom, asked Michael Gomes, Phoenix’s site safety coordinator, if he could borrow a self-retracting device (“SRD”) from Phoenix. (Gomes Decl., ¶ 5; Lindbom Decl., ¶¶ 3, 5.)[1] Mr. Gomes states that Mr. Lindbom was alone, and there was nobody else in his office at that time. (Gomes Decl., ¶ 5) Mr. Lindbom also indicates that Plaintiff was not present during his discussion with Mr. Gomes. (Lindbom Decl., ¶ 6.) Mr. Lindbom did not specify what type of SRD he needed other than to request the longest one available, and Mr. Gomes and Mr. Lindbom both state that there was no discussion about whether or not the subject SRD was a “leading edge” SRD.  (Gomes Decl., ¶¶ 5, 7; Linbom Decl., ¶ 7.) Mr. Gomes thus asserts that he never spoke with the Plaintiff about the subject SRD, and Plaintiff did not ask him for an “SRD-LE” or leading edge self-retracting device. (Gomes Decl., ¶10.) Phoenix thus contends that Plaintiff could not have relied upon any representations by Phoenix that allegedly induced him to ignore the safety warnings, because  Mr. Gomes never spoke with Plaintiff about the subject SRD.

            FallTech also asserts that Phoenix’s counsel’s declaration is devoid of evidence and cannot support the instant motion. But as set forth above, “[t]he party asserting the lack of good faith shall have the burden of proof on that issue.” (Code Civ. Proc., § 877.6, subd. (d).)

            In addition, FallTech asserts that Plaintiff’s damages are potentially significant. FallTech indicates that Plaintiff’s retained damages expert, Enrique Vega, calculated that Plaintiff’s loss of earning capacity is $3,132,333 stated in terms of present value. (Moore Decl., ¶ 15; Ex. 13.) As set forth above, the Court sustains Phoenix’s evidentiary objection to FallTech’s counsel’s additional statements in paragraph 16 of his declaration concerning Plaintiff’s asserted damages.  

            FallTech also asserts that Phoenix has substantial insurance for this loss. (Moore Decl.,

¶ 17, Ex. 14, Phoenix’s Response to Plaintiff’s Form Interrogatory, No. 4.1.) FallTech contends that given the insurance policy limits which are available here, Phoenix’s settlement with Plaintiff for $250,000 is not justified by its financial condition. Phoenix counters that it “has ample insurance to cover this loss, however, Phoenix’s workers’ compensation policy would be the exclusive policy to provide coverage for this type of accident.” (Reply at p. 10:8-9.)

            Lastly, FallTech argues that Phoenix’s settlement conflicts with Code of Civil Procedure section 877.6’s equitable objectives. FallTech notes that “Tech-Bilt and its progeny make clear that the requirement of good faith in sections 877 and 877.6, which a settling defendant must satisfy to invoke the statutory bar against indemnity claims, was imposed primarily to protect the interests of nonsettling defendants. [We] accept as a general proposition that the Legislature intended the good faith concept in section 877.6 to be a flexible principle imposing on reviewing courts the obligation to guard against the numerous ways in which the interests of non-settling defendants may be unfairly prejudiced.” (City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1263 [internal quotations and citations omitted].) FallTech argues that the non-settling defendants would be prejudiced by a determination of good faith of Phoenix’s settlement because Phoenix is the most culpable tortfeasor. As discussed, FallTech asserts that “while Phoenix knew the difference between an SRD and SRD-LE, the safety representative provided Plaintiff the subject SRD – an overhead SRD – but assured him that it was a leading-edge SRD and was the suitable for the work he was performing.” (Opp’n at p. 15:11-14.) As set forth above, this is disputed by Phoenix.

Based on a consideration of all of the applicable Tech-Bilt factors and the argument and evidence presented by the parties, the Court finds that FallTech has not shown that the settlement is so far out of the “ballpark” as to lack good faith.

            Conclusion

            Based on the foregoing, Phoenix’s motion for determination of good faith settlement is granted.

Phoenix is ordered to provide notice of this ruling.

DATED:  January 11, 2023                            ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court