Judge: William A. Crowfoot, Case: BC663094, Date: 2022-09-15 Tentative Ruling

Case Number: BC663094    Hearing Date: September 15, 2022    Dept: 27

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

I.         BACKGROUND

This is an action for bodily injury and loss of consortium arising from a multi-vehicle collision that occurred on February 20, 2016 in San Pedro, California. On May 30, 2017, plaintiffs Richard Evans and Lydia Evans (collectively, “Plaintiffs”) filed this action against defendants Gregg Kawczynski (“Kawczynski”), the City of Los Angeles, and Home Depot U.S.A., Inc. for negligence, dangerous condition of public property, premises liability, and loss of consortium.

On December 1, 2017, Kawczynski filed a cross-complaint against Home Depot U.S.A., Inc. and the City of Los Angeles.

On November 6, 2018, Plaintiffs and Kawcznski separately dismissed Home Depot USA, Inc. from their respective pleadings in exchange for a waiver of costs. 

On December 6, 2018, the City of Los Angeles filed a cross-complaint against Kawcznksi.

On February 14, 2019, Plaintiffs amended their complaint naming Organizing for Action (“OFA”) as Doe 1.

On April 30, 2019, OFA filed a cross-complaint against Kawzcnski, City of Los Angeles, and Home Depot U.S.A., Inc. for (1) indemnification, (2) apportionment of fault, and (3) declaratory relief.  On August 30, 2022, OFA dismissed Home Depot USA, Inc. with prejudice.

On June 5, 2019, Plaintiffs agreed to dismiss the City of Los Angeles in exchange for a waiver of costs.

On August 21, 2019, the City of Los Angeles dismissed its cross-complaint.

On October 31, 2019, Kawczynski amended his cross-complaint naming OFA as Roe 2.

On November 26, 2019, the Court denied OFA’s motion for summary judgment as to the Complaint.

On July 8, 2022, Kawczynski filed a Notice of Settlement and Application for Court Order Determining Good Faith Settlement Pursuant to CCP § 877.6 (“Application”).

On August 2, 2022, OFA filed the instant motion to oppose Kawczynski’s Application.

On August 30, 2022, OFA dismissed Home Depot U.S.A., Inc. with prejudice.

II.        LEGAL STANDARD

Code of Civil Procedure § 877.6, subdivision (a)(1), provides, in relevant part, that, on noticed motion, “[a]ny party to an action wherein 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 . . . and one or more alleged tortfeasors or co-obligors . . . .”  “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).)  Although a determination that a settlement was in good faith does not discharge any other party from liability, “it shall reduce the claims against the others in the amount stipulated” by the settlement.  (Code Civ. Proc., § 877, subd. (a).)

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

In City of Grand View Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261, the court provided the following guidance regarding a motion for a good faith settlement determination:

This court notes that of the hundreds of motions for good faith determination presented for trial court approval each year, the overwhelming majority are unopposed and granted summarily by the trial court.  At the time of filing in many cases, the moving party does not know if a contest will develop.  If each motion required a full recital by declaration or affidavit setting forth a complete factual response to all of the Tech-Bilt factors, literally thousands of attorney hours would be consumed and inch-thick motions would have to be read and considered by trial courts in an exercise which would waste valuable judicial and legal time and clients’ resources. . . . That is to say, when 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.

If the good faith settlement is contested, section 877.6, subdivision (d), sets forth a workable ground rule for the hearing by placing the burden of proving the lack of good faith on the contesting party.  Once there is a showing made by the settlor of the settlement, the burden of proof on the issue of good faith shifts to the nonsettlor who asserts that the settlement was not made in good faith.  If contested, declarations by the nonsettlor should be filed which in many cases could require the moving party to file responsive counterdeclarations to negate the lack of good faith asserted by the nonsettling contesting party.

(192 Cal.App.3d 1251, 1260-1261 [citation omitted].)

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., supra, 38 Cal.3d at p. 499.)  “‘[A] defendant’s settlement figure must not be grossly disproportionate to what a reasonable person, at the time of the settlement, would estimate the settling defendant’s liability to be.’ [Citation.]”  (Ibid.)

“The party asserting the lack of good faith, who has the burden of proof on that issue (§ 877.6, subd. (d)), should be permitted to demonstrate, if he can, that the settlement is so far ‘out of the ballpark’ in relation to these factors as to be inconsistent with the equitable objectives of the statute.  Such a demonstration would establish that the proposed settlement was not a ‘settlement made in good faith’ within the terms of section 877.6.”  (Id. at pp. 499-500.)

“[A] court not only looks at the alleged tortfeasor's potential liability to the plaintiff, but it must also consider the culpability of the tortfeasor vis-à-vis other parties alleged to be responsible for the same injury.  Potential liability for indemnity to a nonsettling defendant is an important consideration for the trial court in determining whether to approve a settlement by an alleged tortfeasor.  [Citation.]”  (TSI Seismic Tenant Space, Inc. v. Superior Court (2007) 149 Cal.App.4th 159, 166.)

III.      DISCUSSION

Plaintiffs and Kawczynski entered into a settlement wherein Plaintiff agreed to accept the applicable policy limit of $100,000 through Mercury Insurance Company in exchange for a release of Kawczynski from further liability. (See Application at pg. 4; Johnson Decl. ¶¶ 8-9.) In the complaint, Plaintiffs allege that Kawczynski is liable for causing the subject motor vehicle collision, which caused Plaintiffs’ injuries, and that OFA is liable for negligence because Kawczynski was acting within the course and scope of his agency with OFA at the time of the collision. (See Application at pg. 4; Johnson Decl. ¶ 7.)

First, while not raised by OFA, it is noted that Kawczynski has failed to include a copy of the settlement agreement for review in his Application, which is necessary for the nonsettling party to competently oppose an application for determination of good faith settlement. As stated in Mediplex of California, Inc. v. Superior Court (1995) 34 Cal.App.4th 74:

[T]he nonsettling party should have been permitted to see the settlement agreement. The Second District explained: "[W]hile the parties are free to maintain the confidentiality of their sliding scale recovery agreement, they may not claim a privilege of nondisclosure when they move to confirm the good faith of their settlement under section 877.6. In California, '[e]xcept as otherwise provided by statute[,] . . . [n]o person has a privilege to refuse to disclose any matter or to refuse to produce any writing, object, or other thing.' ( Evid. Code, § 911, subd. (b).) Since no statute allows the moving party under section 877.6 to refuse to disclose the very terms of the sliding scale settlement agreement that it contends was made in good faith, [the] settlement agreement was not privileged against [the nonsettling party's] request for disclosure." ( J. Allen Radford Co. v. Superior Court, supra, 216 Cal. App. 3d at p. 1423.) Noting the party asserting lack of good faith bears the burden of proof on that issue (§ 877.6, subd. (d)) and burden of producing evidence ( Evid. Code, § 550, subd. (b)), the appellate court held the nonsettling party must be allowed to review the agreement if he is to meet [*752] his burden of proof. ( J. Allen Radford Co. v. Superior Court, supra, 216 Cal. App. 3d at pp. 1423-1424.)

(Id. at 751-752.)

Second, OFA argues that the settlement was not entered into in good faith and does not meet the standard set forth in Tech-Bilt, Inc. because the proposed settlement is not proportionate to Kawczynski’s liability. (Motion at pp. 5-7.) OFA argues that it would be barred from seeking contribution or indemnity from Kawczynski if a good faith determination pursuant to Code of Civil Procedure § 877.6 is made. (Far West Financial Corp v. D & S Co. (1988) 46 Cal.3d 796, 815-816 [“a vicariously or derivatively liable tortfeasor, like any other minimally culpable tortfeasor, is afforded substantial protection against harm from an unfair settlement between a more culpable tortfeasor and the plaintiff.”]) In this regard, OFA contends that, based on the complaint, its liability stems solely from Kawczynski’s conduct. (Motion at pg. 7.) Moreover, OFA argues that the allegations of vicarious liability are tenuous because Kawczynski was a part-time volunteer for OFA, and on the day of the incident, Kawczynski was volunteering on his own initiative. (Motion at pg. 7; Kramer Decl. ¶ 6.) Even if Kawczynski is deemed an agent or employee of OFA, it argues that the Kawczynski was not providing any services to OFA during his commute. (Motion at pg. 7, relying on Hinman v. Westinghouse Elec. Co. (1970) 2 Cal.3d 956, 961 and Ducey v. Argo Sales Co. (1979) 25 Cal.3d 707, 722; Kramer Decl. ¶ 7.)

In opposition, Kawczynski shifts the blame by arguing that the incident would not have had happened if it was not for OFA’s meeting. (Opposition at pg. 1.)  However, the Court does not find this persuasive. As alleged in the Complaint, only Kawczynski is directly liable for Plaintiff’s injuries. “If the more culpable tortfeasor settles with the plaintiff before the vicariously liable tortfeasor, and if the settlement does not require the more culpable tortfeasor to bear its fair share of the loss, the trial court can find that the settlement is not in good faith and, as a consequence, the settlement will not bar the less culpable tortfeasor from pursuing its equitable indemnity claim against the more culpable tortfeasor.” (Far West Financial Corp., supra, 46 Cal.3d at 815.) Thus, the Court finds that the settlement is not necessarily proportionate to Kawczynski’s liability.

Third, OFA argues that the proposed settlement is not a rough approximation of the total recovery because Plaintiff’s damages is claimed to be $8,000,000 on the low end. (Motion at pg. 8; Kramer Decl. Exh. C [Plaintiff Richard Evans’ Response to Request for Statement of Damages].) Also, Plaintiff Lydia Evans’ claims damages of $1,000,000 for loss of consortium. (Kramer Decl., Exh. D [Lydia Evans’ Response to Request for Statement of Damages].) Thus, Kawczynski’s proposed settlement is a small fraction of Plaintiffs’ claimed damages. (Motion at pg. 8.)

In opposition, Kawczynski argues that payment of his total policy limits is a good indication of a good faith settlement. (Opposition at pg. 2, relying on Fisher v. Superior Court (1980) 103 Cal. App. 3d 434.) Also, the amount offered is not disproportionate to what would be reasonable under the circumstances because Plaintiff’s current medical expenses have been reduced. (Application at pg. 4, Johnson Decl. ¶ 10-11, Exh. B; Opposition at pp. 2-3.) However, while Plaintiff’s current medical bills have been reduced, Kawczynski fails to take into account Plaintiff’s claim future medical expenses, which comprise the majority of Plaintiff’s claimed damages. (Kramer Decl., Exh. C.) Thus, while Kawczynski is seeking to settle based on his policy limits, the settlement amount is not within a reasonable range.  

Fourth, OFA argues that the settlement does not properly allocate the settlement offer between the Plaintiffs because they are no longer married. (Motion at pg. 9.) In opposition, Kawczynski argues that allocation is proper because, out of the settlement amount, only $5,000 would be attributed to the loss of consortium claim. (Opposition at pg. 3.) In this regard, the Court finds that the proposed allocation is adequate.

Lastly, OFA seeks to continue the hearing to conduct further discovery to determine Kawczysnki’s financial condition. (Motion at pg. 9.) Considering that the Court is inclined to grant OFA’s motion, the request for a continuance is moot.  

Accordingly, because the application for good faith settlement does not abide by the standard set forth in Tech-Bilt, Inc., the Court grants OFA’s motion.

IV.      CONCLUSION

             Based on the foregoing, the Motion to Oppose Kawczynski’s Application for Good Faith Settlement is GRANTED.

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’s 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.