Judge: William A. Crowfoot, Case: 21STCV09377, Date: 2022-10-21 Tentative Ruling

Case Number: 21STCV09377    Hearing Date: October 21, 2022    Dept: 27

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

On March 10, 2021, plaintiffs Jose Mariaca (“Plaintiff”) and Monique Cruz (“Cruz”) (collectively, “Plaintiffs”) filed this action against defendants BNSF Railway Company (“BNSF”), Michael Johnpaul Beeson (“Beeson”), and James Edward Orr (“Orr”) arising from a May 15, 2019, motor vehicle collision.  Plaintiffs alleges that Beeson, who was employed by BNSF at the time, turned left in front of oncoming traffic and caused Orr to rear-end Plaintiff’s vehicle.  Cruz asserts a cause of action for loss of consortium. 

On June 24, 2021, Orr filed a cross-complaint against BNSF and Beeson for indemnity, apportionment, and declaratory relief.  On November 15, 2021, BNSF filed a cross-complaint against Orr for equitable and implied indemnity, apportionment, contribution, and declaratory relief. 

On July 20, 2022, Orr filed this motion for determination of good faith settlement after he and Plaintiff reached a settlement of $20,000.  BNSF opposes the motion.

On September 21, 2022, the Court continued the hearing on this motion.  On October 14, 2022, BNSF filed a supplemental declaration in support of its opposition. 

The Court must approve any settlement entered into by less than all joint tortfeasors or co-obligors.  (Code Civ. Proc., § 877.6.)  This requirement furthers two sometimes-competing policies: (1) the equitable sharing of costs among the parties at fault, and (2) the encouragement of settlements.  (Erreca’s v. Superior Court (1993) 19 Cal.App.4th 1475, 1487.)  If the settlement is made in good faith, the Court “shall bar any other joint tortfeasor or co-obligor 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).) 

“A determination as to the good faith of a settlement, within the meaning of section 877.6, necessarily requires the trial court to examine and weigh a number of relevant factors, one of the most important of which is the settling party’s proportionate liability.  In making such examination, the court must look at the state of the evidence as it exists at the time the motion for a good faith determination is heard.  [Citation.]  If . . . there is no substantial evidence to support a critical assumption as to the nature and extent of a settling defendant’s liability, then a determination of good faith based upon such assumption is an abuse of discretion.”  (Toyota Motor Sales U.S.A., Inc. v. Superior Court (1990) 220 Cal.App.3d 864, 871; L.C. Rudd & Son, Inc. v. Superior Court (1997) 52 Cal.App.4th 742, 750 [“It is the burden of the settling parties to explain to the court and to all other parties the evidentiary basis for any allocations and valuations made sufficient to demonstrate that a reasonable allocation was made”].)  “In order to encourage settlement, it is quite proper for a settling defendant to pay less than his proportionate share of the anticipated damages.  What is required is simply that the settlement not be grossly disproportionate to the settlor’s fair share.”  (Abbott Ford, Inc. v. Superior Court (1987) 43 Cal.3d 858, 874-875.)

The non-settling tortfeasors or obligors bear the burden of demonstrating the absence of good faith in the settlement.  (Code Civ. Proc., § 877.6, subd. (d).)  To demonstrate a lack of good faith, the non-settling party must show that the settlement is so far “out of the ballpark” as to be inconsistent with the equitable objectives of Section 877.6.  (Nutrition Now, Inc. v. Superior Court (2003) 105 Cal.App.4th 209, 213.)  The Court will typically consider: (1) the plaintiff’s (roughly) approximated total recovery; (2) the settlor’s share of liability; (3) the size of the settlement at issue; (4) the distribution of settlement proceeds among plaintiffs; (5) the usual discount value when plaintiffs settle before trial; the settlor’s financial condition and insurance policy limits; and (6) whether there is evidence of “collusion, fraud, or tortious conduct aimed to injure the interests of nonsettling defendants.”  (Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499.)  These factors will be evaluated accordingly to what information is available at the time of settlement.  (Ibid.)

Orr provides a description of the accident, stating that at the time of the collision, Orr had been traveling in the number two lane on Rosecrans in Santa Fe Springs, California.  Plaintiff was traveling in the number one lane ahead of Orr.  Beeson, while working for BNSF, was driving a van owned by BNSF and pulled out of a cross-street and onto oncoming traffic.  Orr claims that the collision between Plaintiff and BNSF’s vehicle caused Plaintiff’s vehicle to pivot and pushed Plaintiff into Orr’s lane, at which point Orr and Plaintiff’s vehicles made contact.  As a result of this accident, Plaintiff claims to have suffered injury to his neck and low back with past medical expenses of approximately $178,298.

On June 8, 2022, Orr served Plaintiffs with an offer to compromise pursuant to Code of Civil Procedure section 998 for $20,000, which is Orr’s policy limit.  The offer was verbally accepted by Plaintiff’s counsel.  Orr contends that the settlement is in good faith because it reflects the reasonable evaluation of liability and meets the standards set forth under Tech-Built.

BNSF opposes Orr’s motion and argues that the settlement figure is grossly disproportionate because Plaintiffs’ demand letter estimated a recovery of $2,000,000, which includes past and future medical expenses, lost wages, and a possible jury verdict.  BNSF states that even if Plaintiffs’ damages are limited to Plaintiff’s past medical expenses (more than $190,000), future medical expenses ($150,000) and lost wages ($83,436.65), Orr’s settlement of $20,000 is barely above 3% of that sum, even though Plaintiffs’ demand letter claims that Orr is 10% at fault.  BNSF also asserts that Plaintiff’s vehicle collided with the van’s side rear bumper and states that Plaintiff testified in his deposition that he felt the impact from behind (from Orr’s vehicle) first and then was pushed into BNSF’s van.  BNSF also argues that Orr has not submitted evidence of his financial condition, as Orr only declares that he does not have any available excess or umbrella insurance to satisfy any judgment. 

On reply, Orr submits a declaration stating that he is a full-time electrician but the nature of his work is on a project-to-project basis.  (Reply, Orr Decl., ¶ 9.)  Accordingly, there are times when he is not earning any income.  (Ibid.)  Orr declares he does not own any real property, his checking account balance ranges from $0 to $2,500, and he does not have a savings account.  (Id., ¶¶ 10-12.)  His investments include $200 in Bitcoin and $50 in Tesla stock.  (Id., ¶ 15.)  He currently owns a 2016 Jeep Latitude with $300 in monthly payments and a balance of $4,500 remaining towards full payment for the vehicle.  (Ibid.)  He also has $2,000-$3,000 in credit card debt.  (Orr Decl., ¶ 14.)

In a supplemental declaration filed on October 14, 2022, BNSF’s counsel, Elise D. Rice, states that she has attempted to meet and confer with Orr’s counsel regarding Orr’s finances, but Orr has refused to produce financial documents that substantiate his claims in his declaration.  In a letter dated October 7, 2022, Ms. Rice requested bank statements, insurance policy documents, pay stubs, stock certificates, and credit card statements.  In an email dated October 13, 2022, Ms. Rice specifically asked for a a copy of Orr’s July statement from California Credit Union, and proofs of sale for his stock in Tesla and Bitcoin.  Ms. Rice declares she was unable to determine whether Orr’s payments for his Capital One credit card were originating from his California Credit Union account or if there was another unknown account.  Ms. Rice states that she does not have sufficient information to prove the veracity of Orr’s reply declaration.  In light of Ms. Rice’s declaration, the Court DENIES Orr’s motion for determination of good faith settlement. 

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SSCDEPT27@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org.  Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter.  Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue.  If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.