Judge: Teresa A. Beaudet, Case: BC691481, Date: 2022-10-06 Tentative Ruling

Case Number: BC691481    Hearing Date: October 6, 2022    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

            Background

Plaintiff Jonathan Fowkes (“Fowkes”) filed the Complaint in this action on January 26, 2018 against Defendants Toyota Motor North America, Inc. and The Anschutz Corporation, asserting causes of action for premises liability and general negligence. Fowkes alleges that he fell to the ground and sustained injuries while attempting to sit on a suspended motorcycle during an automobile exhibition at the Los Angeles Convention Center. (Compl., pp. 4-5.) Fowkes asserts that members of the public were invited to sit on the motorcycle, but that it was inadequately installed, secured, created, and maintained. (Ibid.)

On July 18, 2018, Toyota Motor Sales, U.S.A., Inc. (“Toyota”), erroneously sued as Toyota Motor North America, Inc., answered the Complaint and filed a Cross-Complaint for indemnity, partial indemnity, and declaratory relief against Cross-Defendant George P. Johnson & Company. On January 31, 2019, Fowkes filed an amendment to the Complaint naming AEG Management LACC, LLC (“AEG Management”) in place of a Doe defendant.

On February 13, 2019, AEG Management, erroneously sued as The Anschutz Corporation, answered the Complaint and filed a Cross-Complaint against Roes 1 through 20 for express indemnification, equitable indemnification, equitable contribution, and declaratory relief.

On April 23, 2020, Fowkes filed an amendment to the Complaint naming Productions Plus, Inc. in place of a Doe defendant. On July 10, 2020, Fowkes filed another amendment to the Complaint naming George P. Johnson Company (“Johnson Company”) in place of a Doe Defendant.

On July 28, 2020, Productions Plus, Inc., dba Productions Plus the Talent Shop (“Productions Plus”) filed an answer to the Complaint and a Cross-Complaint against Johnson Company for equitable indemnity on a comparative fault basis and for comparative contribution, total indemnity, apportionment of fault, and declaratory relief. On August 10, 2021, Productions Plus filed an amendment to its Cross-Complaint naming “MC2” in place of “Moe 1.”

On August 16, 2021, Johnson Company filed an amendment to its Cross-Complaint naming MC2 in place of Roe 1.

On October 8, 2021, Creative Management Services, LLC dba MC2 (“MC2”) filed answers to Productions Plus’s Cross-Complaint and Johnson Company’s Cross-Complaint.

MC2 and Plaintiff have entered into a settlement. MC2 now moves for an order determining the proposed settlement between MC2 and Plaintiff to be in good faith. Productions Plus, Toyota, and AEG Management oppose.[1]

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) 

            MC2 indicates that per the parties’ settlement, MC2 will pay Plaintiff $100,000.00 in exchange for Plaintiff executing a release of all claims as to MC2. (Myers Decl., ¶ 12; Mot. at   p. 9:22-24.) In addition, the settlement is contingent on the Court determining the proposed settlement is in good faith. (Ibid.) 

            MC2 asserts that the settlement is reasonable and well within the “ballpark” range of its share of liability for Plaintiffs’ damages claims. MC2 notes that it is not a defendant named in Plaintiff’s complaint, but is a cross-defendant in this action. MC2 indicates that it fabricated the subject “green screen exhibit” used by Plaintiff. (Myers Decl., ¶ 8.) MC2 asserts that there is no evidence that MC2 knew the exhibit would be used at the Los Angeles Auto Show, instead of the of the Las Vegas “dealer convention.” (Myers Decl., ¶ 3, Ex. A (Buteyn Depo.) at p. 69:24-70:8 and 65:25-66:16.) MC2 also provides evidence that the exhibit was going to be used as a “photo opportunity” and was “aesthetic.” (Myers Decl., ¶ 5, Ex. C. (Counterman Depo.) at p. 21:20-24.)  MC2 asserts that documentary evidence relating to the exhibit refers to the Las Vegas dealer convention and not the Los Angeles Auto Show. (Myers Decl., ¶ 4, Ex. B.) 

In addition, MC2 contends that the majority of liability lies with Productions Plus, citing to an email from Productions Plus’s Person Most Qualified, which indicates, inter alia, “[v]ery sorry to report that this area was left alone for a length of time while a BA covered another for a bathroom break. One side (skateboard side) was covered, but the back/bicycle area was not…” (Myers Decl., ¶ 8, Ex. E.) 

Opposition by Productions Plus

In its opposition, Productions Plus asserts that “MC2’s motion makes no attempt at providing factual evidence related to its liability” and that “MC2 has not provided support from any expert evidencing that their liability is ‘near zero if not zero.’” (Opp’n at p. 4:3-6.) 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, as discussed, MC2 does provide evidence concerning its asserted proportionate share of liability in this action.

            Productions Plus also asserts that MC2’s settlement is so far out of the “ballpark” of its potential liability (to either Plaintiff or to the non-settling parties) so as to render it extremely prejudicial to Productions Plus. Productions Plus asserts that Plaintiff’s global settlement demand is $2.4 million, and that MC2’s $100,000 settlement with Plaintiff constitutes 4.17% of the total global demand by Plaintiff. (Garcia Decl., ¶¶ 2, 6.) MC2 counters that a Plaintiff’s settlement demand is not the standard by which good faith settlements are determined. As discussed above, one of the Tech-Bilt factors is “a rough approximation of plaintiffs’ total recovery and the settlor’s proportionate liability.” (Tech-Bilt, Inc. v. Woodward-Clyde & Associates, supra, 38 Cal.3d at p. 499.)

Productions Plus asserts that the subject exhibit was designed by MC2. (Opp’n at p. 2:23.) The Court notes that the evidence cited to by Productions Plus (Garcia Decl., ¶ 4, Ex. 2 (Counterman Depo.) at p. 16:6-14) does not appear to support this assertion.[2] Productions Plus also submits the Declaration of Kenneth A. Solomon, a scientist who conducted research in risk assessment, including accident reconstruction, biomechanics, and human factors. (Garcia Decl.,  ¶ 3, Ex. 1; Solomon Decl., ¶ 2.) Mr. Solomon states that the bicycle green screen exhibit at issue in this case did not contain any warning signs to inform guests such as Plaintiff not to mount the bicycle. (Garcia Decl., ¶ 3, Ex. 1; Solomon Decl., ¶ 6.) Mr. Solomon asserts that the exhibit was not meant to be mounted or to be weight bearing. (Garcia Decl., ¶ 3, Ex. 1; Solomon Decl., ¶ 5.) Mr. Solomon also asserts that within a reasonable degree of certainty, MC2’s failure to include warning signs contributed to Plaintiff’s injury. (Solomon Decl., ¶ 6.) MC2 counters with the argument that Plaintiff’s claims are for premises liability and negligence, and not for product liability, design defect, manufacturing defect, failure to warn, or breach of the warranty of fitness for particular purpose.

Lastly, Productions Plus argues without citing to any evidence that “[t]he settlement is so disproportionate to MC2’s liability that the presumption is there is collusion, fraud, or tortious conduct afoot aimed to injure the interests on this non-settling party.” (See Opp’n at p. 6:17-26.)

            Opposition by Toyota and AEG Management

            First, Toyota and AEG Management assert in their opposition that MC2’s motion does not provide or take into consideration a rough approximation of Plaintiff’s total potential recovery in this action. But MC2’s counsel contends that the likely jury verdict for this case is

between $350,000.00 on the low end and $1,500,000 on the high end. (Myers Decl., ¶ 10.)

Second, Toyota and AEG Management note that “an indemnity claim against a codefendant based on express contract survives a good faith section 877.6 settlement.” (C. L. Peck Contractors v. Superior Court (1984) 159 Cal.App.3d 828, 834.) They assert that in the instant case, the contract between Toyota and MC2 includes claims for express contractual indemnity. But the Court does not see how this is grounds for denying the instant motion. Pursuant to Code of Civil Procedure section 877.6, subdivision (c), “[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.” As Toyota and AEG Management note, this provision does not address express indemnity causes of action. In addition, MC2 notes that Toyota did not file a Cross-Complaint against MC2 in this action. 

Third, Toyota and AEG Management assert that the $100,000 settlement is disproportionate to Plaintiff’s damages and MC2’s asserted liability. They assert that Plaintiffs’ medical billings are approximately $45,000, and that Plaintiff’s pain management doctor is also of the opinion that Plaintiff will more than likely require surgical intervention in form of lumbar stabilization and fusion. Toyota and AEG Management do not appear to cite to any evidence in support of these assertions.

Fourth, Toyota and AEG Management contend that a jury would almost certainly apportion more than 4% of the liability to MC2. They provide evidence that Plaintiff testified in his deposition that there were “[n]o signs, no ropes,” and that “[i]t’s not that there just wasn’t a sign with any kind of instruction saying how to use it or how not to use it, but there wasn’t even a sign indicating what it was for in the first place.” (Fazel Decl., ¶ 3, Ex. B (Fowkes Depo.) at p.  75:21-75:25.) Toyota and AEG Management argue that assuming Defendants were negligent in failing to place warning and/or instructions directly onto the display, MC2 would have been responsible for those warnings. As set forth above, MC2 counters that Plaintiff did not allege causes of action for product liability, strict liability, design defect, manufacturing defect, failure to warn, or breach of warranty for fitness for particular purpose. 

Fifth, Toyota and AEG Management assert that the allocation of the purported settlement proceeds was not defined. They cite to Espinoza v. Machonga (1992) 9 Cal.App.4th 268, 275, where the Court of Appeal noted that “[a]pplying the § 877(a) ‘good faith’ settlement credit is even more problematic in Prop. 51 cases: The settlement value must be allocated between economic and noneconomic damages, because each defendant may only be held liable for his or her proportionate share of noneconomic damages in direct proportion to his or her share of fault ([Civ. Code] § 1431.2(a)); thus, only that part of the settlement value attributable to plaintiff’s economic damages may be credited against the nonsettling defendants’ liability.” (Emphasis in original; see also Weil & Brown, Cal. Practice Guide: Civ. Proc. Before Trial (The Rutter Group 2022) ¶ 12:775, “Defendants in actions for personal injury, property damage or wrongful death are jointly liable for plaintiff’s ‘economic damages’ (e.g., medical expenses, lost earnings); but each defendant is separately liable for ‘noneconomic damages’ (e.g., pain and suffering) in proportion to his or her respective fault in causing such damage. [See Civ.C. §§ 1431.1-1431.5, commonly known as ‘Prop. 51.’]” (emphasis in original).)

Toyota and AEG Management note that MC2’s motion does not offer evidence concerning the amount of the settlement that is attributable to Plaintiff’s alleged economic damages. However, the Court notes that Weil & Brown, Cal. Practice Guide: Civ. Proc. Before Trial (The Rutter Group 2022), cited to by Toyota and AEG Management, provides at ¶ 12:777, “the parties’ allocation between economic and noneconomic damages is not binding on the court in a § 877.6 hearing because plaintiff may deliberately minimize economic damages in an attempt to limit the credit given to nonsettling defendants.” (Emphasis omitted; see also Jones v. John Crane, Inc. (2005) 132 Cal.App.4th 990, 1009, “[w]here an allocation is made of settlement proceeds which will affect the ultimate setoff or credit that a nonsettling defendant will receive against any future judgment, the allocation may not be given presumptive effect unless it was the product of adverse negotiation.”)

Sixth, Toyota and AEG Management assert that MC2 has not made any showing of its financial condition. In the motion, MC2 asserts that such information is covered by a right of privacy given there is no claim for punitive damages. Toyota and AEG Management do not respond to this point in their opposition.

Lastly, Toyota and AEG Management assert that MC2 does not offer sufficient evidence in support of a finding that its $100,000 settlement with Plaintiff is in good faith. As Toyota and AEG Management acknowledge, “[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, as discussed, MC2 does provide evidence concerning its asserted liability in this action in relation to the other parties.  

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 Productions Plus, Toyota, and AEG Management have not shown that the settlement is so far out of the “ballpark” as to lack good faith.    

            Conclusion

            Based on the foregoing, MC2’s motion for determination of good faith settlement is granted.

MC2 is ordered to provide notice of this ruling.

DATED:  October 6, 2022                             ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court