Judge: Teresa A. Beaudet, Case: 20STCV15869, Date: 2023-01-26 Tentative Ruling

Case Number: 20STCV15869    Hearing Date: January 26, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

On April 24, 2020, Plaintiffs Noel C. McDaid, Eileen McDaid, Jon Wesley Christensen, Hanne Jo Christensen, Kalista Grace Base, and Kendra Georgeann Base (collectively, “Plaintiffs”) filed this action against various defendants, including Defendant Allianz Life Insurance Company of North America (“Allianz”). The operative Third Amended Complaint (“TAC”) was filed on March 11, 2021, and asserts causes of action for professional negligence, breach of fiduciary duty, and intentional deceit/fraud.  

Allianz entered into a settlement agreement with Noel C. McDaid, Eileen McDaid, Jon Wesley Christensen, Hanne Jo Christensen. 

Allianz now moves for an order determining that the settlement agreement is a good faith settlement. The motion is unopposed.

Allianz also moves for an order: (1) sealing the settlement agreement attached to the Declaration of Melanie J. Vartabedian in support of Allianz’s motion for good faith settlement determination (the “Good Faith Motion”); (2) sealing the Good Faith Motion, including any attached declaration, and any opposition or reply papers filed in connection with the Good Faith Motion that discuss the terms of the settlement agreement; (3) sealing the portions of any transcript of the hearing on the Good Faith Motion that discuss the terms of the settlement agreement; and (4) directing Harry Vernon Dawson III, S&S Holding Company, Inc., Brian Lee Zeek, Surf City Financial Group[1] and their attorneys to maintain the confidentiality of the sealed records. The motion is unopposed.

Motion to Seal

Generally, court records are presumed to be open unless confidentiality is required by law. (Cal. Rules of Court, rule 2.550(c).) If the presumption of access applies, the court may order that a record be filed under seal “if it expressly finds facts that establish: (1) There exists an overriding interest that overcomes the right of public access to the record; (2) The overriding interest supports sealing the record; (3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; (4) The proposed sealing is narrowly tailored; and (5) No less restrictive means exist to achieve the overriding interest.” (Cal. Rules of Court, rule 2.550(d).)

As set forth above, Allianz seeks to seal: (1) the settlement agreement attached to the Declaration of Melanie J. Vartabedian in support of Allianz’s Good Faith Motion; (2) the Good Faith Motion, including any attached declaration, and any opposition or reply papers filed in connection with the Good Faith Motion that discuss the terms of the settlement agreement, including but not limited to the confidential settlement amount; (3) portions of any transcript of the hearing on the Good Faith Motion that discuss the terms of the Settlement Agreement. Allianz also seeks an order directing Harry Vernon Dawson III, S&S Holding Company, Inc., Brian Lee Zeek, Surf City Financial Group and their attorneys to maintain the confidentiality of the sealed records by (a) not disseminating the sealed records or information contained therein to third parties or attorneys in their office that are not directly working on this matter, and (b) placing the word “CONFIDENTIAL” on any correspondence regarding the sealed records and following the requirements of CRC, Rule 2.550 in connection with any court filed documents.

Allianz indicates that Noel C. McDaid, Eileen McDaid, Jon Wesley Christensen, Hanne Jo Christensen, and Allianz (collectively, the “Settling Parties”) entered into a Confidential Settlement Agreement and Release (the “Settlement Agreement”). (Vartabedian Decl., ¶ 7.) Allianz states that pursuant to the Settlement Agreement, plaintiffs and their counsel agreed not to disclose the terms of the Settlement Agreement to any third-party, with exceptions for tax advisors and authorities, and by order of court with notice to Allianz. (Vartabedian Decl., ¶ 7.) Allianz also indicates that the Settlement Agreement contains personal, private information including insurance policy numbers, amounts of premium paid towards the insurance policies, and the amount of settlement relief. (Vartabedian Decl., ¶ 8.) Allianz also indicates that that Settlement Agreement contains confidential matters relating to the business interests of Allianz, the public revelation of which could interfere with Allianz’s ability to protect its business interests.

A “contractual obligation not to disclose can constitute an overriding interest within the meaning of rule [2.550 (formerly 243.10(d))].” (Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, 1283.) Allianz also notes that “[t]he privacy of a settlement is generally understood and accepted in our legal system, which favors settlement and therefore supports attendant needs for confidentiality. Routine public disclosure of private settlement terms would chill the parties’ ability in many cases to settle the action before trial. Such a result runs contrary to the strong public policy of this state favoring settlement of actions.” (Monster Energy Co. v. Schechter (2019) 7 Cal.5th 781, 793 [internal quotations and citations omitted].)

The Court finds that the overriding interest of the parties to adhere to their contractual obligation supports sealing the Settlement Agreement, as well as a discussion of the terms of the Settlement Agreement in Allianz’s Good Faith Motion.[2] The Court also finds that Allianz has shown that a substantial probability exists that the overriding interest will be prejudiced if the Settlement Agreement and terms of the settlement are not sealed.

The proposed sealing is “narrowly tailored,” as Allianz seeks to seal the Settlement Agreement and the discussion of the settlement terms in Allianz’s Good Faith Motion. As discussed, the conditions of the parties’ settlement include confidentiality of the settlement. (Vartabedian Decl., ¶ 7.) Further, as noted by Allianz, there is no less restrictive means to achieve the overriding interest.

Based on the foregoing, the Court finds that there is good cause to seal the Settlement Agreement attached to the Declaration of Melanie J. Vartabedian in support of Allianz’s Good Faith Motion, as well as the redacted portions of the Good Faith Motion, including the redacted portions of the attached declaration. The Court declines to seal any entire court transcript regarding the hearing on Allianz’s Good Faith Motion, but finds good cause to seal any discussion of the settlement amount and other settlement terms agreed to in the subject Settlement Agreement.

In light of the foregoing, and the lack of any opposition, the Court also orders Harry Vernon Dawson III, S&S Holding Company, Inc., Brian Lee Zeek, Surf City Financial Group and their attorneys to maintain the confidentiality of the sealed records by not disseminating the sealed records or information contained therein to third parties or attorneys in their office that are not directly working on this matter, and placing the word “CONFIDENTIAL” on any correspondence regarding the sealed records.

Lastly, the Court notes that no opposition or reply papers were filed in connection with the Good Faith Motion, such that no order is necessary as to such documents.  

Pursuant to California Rules of Court, rule 2.551, subdivision (e), the Court directs the clerk to file this order, maintain the records ordered sealed in a secure manner, and clearly identify the records as sealed by this order. The Court further orders that no persons other than the Court is authorized to inspect the sealed records.

Motion for Good Faith Settlement Determination

“[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.) 

Code of Civil Procedure 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(a)(1).) “The party asserting the lack of good faith shall have the burden of proof on that issue.” (Code Civ. Proc., § 877.6(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(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)   

Significantly, when the good faith nature of a settlement is uncontested, the Court need not consider and weigh the Tech-Bilt factors. (City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261.) “[W]hen no one objects, the barebones motion which sets forth the ground of good faith, accompanied by a declaration which sets forth a brief background of the case is sufficient.” (Ibid.) 

Here, the unopposed motion describes the background of this case, details the nature of the proposed settlement, and provides sufficient reasoning as to why the settlement was reached in good faith. Allianz asserts that the settlement is “well within the ‘reasonable range’ of [Allianz’s] potential liability to Plaintiffs, particularly considering that [Allianz] vigorously contests liability to the Plaintiffs and has a number of meritorious defenses to the causes of action asserted in the Complaint which [Allianz] would assert by way of a motion for summary judgment if this action continues.” (Mot. at p. 8:16-20.) The motion sets forth the asserted reasons as to why Allianz contests liability.

All indications are that the settlement was reached as a result of arm’s length negotiations between the settling parties.  

Conclusion

Based on the foregoing, Allianz’s motion for good faith settlement determination is granted. The Court also grants Allianz’s motion to seal, as limited above. 

Allianz is ordered to give notice of this ruling.

DATED:  January 26, 2023                            ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court