Judge: William A. Crowfoot, Case: 21STCV46786, Date: 2022-12-30 Tentative Ruling

Case Number: 21STCV46786    Hearing Date: December 30, 2022    Dept: 27

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

I.            INTRODUCTION AND RELEVANT PROCEDURAL BACKGROUND

On December 23, 2021, plaintiff Russell Patten, individually and as the successor-in-interest to and administrator of the Estate of Daniel Patten II (“Decedent”), along with plaintiff Jennifer Patten (collectively, “Plaintiffs”), filed this action against defendants City of Carson (“City”), County of Los Angeles (“County”) (also erroneously sued as “Los Angeles County Sheriff’s Department”), the State of California, acting by and through the California Highway Patrol (“State”), and the California Department of Transportation (“CalTrans”).  Plaintiffs also named Alonzo Salazar (“Salazar”) and Gustavo Tarin-Cruz (“Tarin-Cruz”) as individual defendants.  The action arises from illegal drag racing between Tony Tatum (“Tatum”) and Henry Hurtado (“Hurtado”).  Plaintiffs allege that Salazar and Tarin-Cruz were involved in organizing, coordinating, and starting the race between Tatum and Hurtado; Plaintiffs did not name Tatum and Hurtado as defendants. 

On August 8, 2022, Plaintiffs filed a First Amended Complaint (“FAC”). 

On August 16, 2022, City filed a cross-complaint against Tatum and Hurtado for indemnity, apportionment of fault, declaratory relief, and contribution. 

On October 21, 2022, Tatum filed a notice of settlement and application for determination of good faith settlement.  On November 14, 2022, County filed a motion to challenge the good faith settlement between Plaintiffs and Tatum.  On November 15, 2022, City filed an opposition to Tatum’s application for determination of good faith settlement. 

II.          LEGAL STANDARD

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”].) 

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.)

A plaintiff and a cross-defendant may enter into a good faith settlement, even if the plaintiff’s claims against the cross-defendant are time-barred.  [Citation.]  However, in such a situation, the proffered good faith settlement must be subjected to particular scrutiny to ensure the settlement amount is reasonable and that there is no collusion aimed at injuring the interests of the non-settling cross-complainant.”  (Mattco Forge, Inc. v. Arthur Young & Co. (1995) 38 Cal.App.4th 1337, 1354.) 

III.        ARGUMENTS

Tatum’s Arguments

Tatum reached a global settlement with Plaintiffs, Salazar, and nonparties Horacio Didios, Jr., Joseph Julian Salazar, Andie Alish Salazar, and Andrew Salazar for his full policy limits in the amount of $30,000.  Out of this $30,000, $10,000 will be paid to Plaintiffs, $10,000 will be paid to Horacio Didios, Jr., and Salazar, Andrew Salazar, and Andie Alish Salazar will each be paid $2,500.  Tatum argues that the settlement is in good faith and “within the ballpark.”  Tatum acknowledges that his proportionate liability could be as high as 50% but contends that paying his full policy limits is sufficient to satisfy his share of liability.  According to a declaration by counsel, Tatum is currently incarcerated and will not be eligible for parole until 2025.  (Application, Ex. A.)   He does not have any other insurance policy available to him.  (Application, Ex. B.)  

County’s Arguments

County first argues, without referring to any legal authority, that the Court cannot issue a good faith order as to Tatum’s settlement with nonparties, including Horacio Didios, Jr., Andrew Salazar, and Andie Alish Salazar.  Second, County argues (again, with no citation to legal authority) that the application should be denied because a determination of good faith would disregard the restitution orders issued by the criminal court.  Third, County calculates that Tatum should complete his sentence no later than January 9, 2023, since he was sentenced to 16 months in prison and with good time/work time credits, he should serve only 50 percent of his sentence.  County adds that Tatum is currently assigned to the fire crew, which has enhanced release credits. 

City’s Arguments

Like County, City argues that the settlement of $10,000 does not begin to approach Tatum’s proportionate liability for non-economic damages, especially when Plaintiffs’ demand is $1 million.  City also argues that it is inequitable to allow an individual to be relieved of liability because he was incarcerated for pleading no contest to a criminal action.  City also argues that there is no evidence that Tatum does not have any financial assets, including real property or financial capital; City contends that the declaration of no additional insurance is not sufficient. 

IV.         DISCUSSION

As a preliminary matter, the Court dispels County’s claims that a determination of good faith will obviate any restitution order.  “While a settlement agreement with, and release of, a defendant's insurance company may reflect a victim's willingness to accept the amount paid in full satisfaction for all civil liability, it does not reflect the willingness of the People to accept that sum in satisfaction of the defendant's rehabilitative and deterrent debt to society.  A restitution order pursuant to a defendant's plea is an agreement between the defendant and the state.  [Citation.] The victim is not party to the agreement, and a release by the victim cannot act to release a defendant from his financial debt to the state any more than it could terminate his prison sentence.  (People v. Bernal (2002) 101 Cal.App.4th 155, 162.)

Second, whether Tatum will be released from jail earlier and his employment prospects are too speculative and, as stated in Tech-Bilt, “practical considerations obviously require that the evaluation [of good faith] be made on the basis of information available at the time of the settlement.” 

Third, as stated above, County offers no legal authority for its contention that the Court cannot make a determination of good faith regarding Tatum’s global settlement. 

Fourth, in Schmid v. Superior Court (1988) 205 Cal.App.3d 1244, 1248-1249, the court stated: “[W]e can think of no earthly good that would come from requiring defendant Schmid to remain in the action. . . . No evidence suggests that Schmid has any assets, or any prospect of acquiring assets, other than her insurance policy. Yet disapproval of the good faith of the settlement would doubtless require Schmid to continue her defense, possibly at the expense of her insurer, [Fn. omitted] to avoid a judgment in excess of her policy limits that could require her to declare bankruptcy. [¶]. . . . [¶] Schmid's continued defense would simply increase her defense costs . . . and needlessly add to the work of all personnel of the court."

While the Court agrees with the concept expressed in Schmid, that prolonging Tatum’s involvement in this litigation would be fruitless if he is, in fact, judgment-proof, the Court notes that Tatum has not submitted a declaration of no assets, and his declaration that no additional insurance policy exists is insufficient to show that he is relatively insolvent.  (See Schmid v. Superior Court (1988) 205 Cal.App.3d 1244, 1247 [disproportionately low settlement figure is often reasonable in the case of a relatively insolvent, and uninsured, or underinsured joint tortfeasor].) 

Accordingly, the hearing on this motion is CONTINUED so that Tatum may provide an additional declaration regarding his assets. 

V.           CONCLUSION

The hearing is CONTINUED to February 9, 2023 at 1:30 p.m.  Any supplemental declaration by Tatum should be filed by January 25, 2023.  Any party opposing the finding of good faith should file a supplemental brief, not to exceed five pages, by February 1, 2023. 

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.  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.