2017-00211524-CU-PA

Alyssa Castillo Heir/Successor vs. Five Star Towing

Nature of Proceeding: Motion Contesting Good Faith Settlement Determination

Filed By: Wheatley, Christine M.

Defendants Five Star Towing & Transport, Inc. and Singh’s (collectively “Five Star”) motion to contest the good faith of the settlement by defendants Ranjit and Satnam Sandher and Market Transport, LTD (collectively “Sandher”) is DENIED, as follows.

The notice of motion does not provide notice of the court’s tentative ruling system, as required by Local Rule 1.06, and does not provide the correct address for Dept. 53/54. Moving counsel is directed to contact opposing counsel and advise him/her of Local Rule 1.06 and the court’s tentative ruling procedure and the manner to request a hearing, along with the correct address for Dept. 53/54. If moving counsel is unable to contact opposing counsel prior to hearing, moving counsel is ordered to appear at the hearing in person or by telephone.

Factual Background

This is a wrongful death action arising from a motor vehicle accident. Plaintiffs are the widow and two minor daughters of the decedent who was a passenger in a vehicle driven by defendant Balestra. Mr. Balestra is alleged in the complaint to have been intoxicated at the time of the accident and is apparently now in prison as a result of the subject accident. The three plaintiffs filed suit on 4/25/2017 and each of them has served an unverified statement of damages which claims $3 Million in general damages plus special damages according to proof.

In early December 2017, Sandher made a written $60,000 settlement offer to the three plaintiffs with at least $15,000 going to each minor. The offer was expressly contingent on a good faith determination and plaintiffs securing court approval of the compromise of each daughter’s claims. Plaintiffs accepted the offer and on 12/18/2017, Sandher served a notice of settlement and application for good faith

determination.

On 1/11/2018, Five Star filed the present motion to contest the good faith of the settlement between Sandher and plaintiffs.

Moving Papers. According to the present motion, Sandher’s settlement with plaintiffs is not in good faith primarily because (1) Sandher has not presented evidence which shows the settlement is within Tech-Bilt’s “ballpark” and (2) Sandher has not provided an allocation of the settlement proceeds to plaintiffs’ economic and non-economic damages, so that the non-settling defendants can determine the amount of the credit against the eventual verdict to which they are entitled. Five Star also points out that virtually no discovery has been completed in this case and that additional discovery must be done in order to determine whether this settlement is in the good faith ballpark.

Opposition. Sandher opposes, pointing out that Code of Civil Procedure §877.6(d) explicitly states that the non-settling parties asserting the lack of good faith “have the burden of proof on that issue” and thus, the moving papers’ suggestion that Sandher was obliged to produce evidence of good faith is legally incorrect. The opposition adds that Five Star’s moving papers actually tend to show that Sandher has little, if any, liability for the death of the decedent and therefore, the $60,000 settlement easily falls within the ballpark of Sander’s proportionate liability in this case. The opposition further asserts that under CACI 3921, no allocation of the settlement to the economic and non-economic damages is needed here inasmuch as a wrongful death case culminates in a single sum verdict of all damages resulting from the decedent’s death, with the trial judge then determining how much each plaintiff shall recover.

Reply. In the reply, Five Star contends the settlement cannot be found in good faith in the absence of evidence on Sandher’s potential liability or plaintiffs’ likely recovery in this case. Alternatively, Five Star requests a three month continuance so additional discovery on these issues can be completed.

Objections to Evidence

Five Star’s objections to evidence are overruled except as to Nos. 1, 7 and 12. The Court notes that the outcome of this motion would not be altered even if all objections to evidence were sustained.

Analysis

The Court begins its analysis with the requirement that the non-settling parties opposing the good faith determination clearly bear the burden of demonstrating with admissible evidence that the settlement proposed here is not in good faith. (Code Civ. Proc. §877.6(d) [the party asserting the lack of good faith has “the burden of proof on that issue”].) Here, Five Star has essentially offered no evidence which tends to show that Sandher’s settlement with plaintiffs falls outside of the Tech-Bilt ballpark and the evidence it did offer, including but not limited to the Traffic Collision Reports, tends to show Sandher bears little or no liability for the alleged wrongful death of the decedent. As such, even if plaintiffs’ total approximate recovery in this case were to exceed $1 Million, Sandher’s payment of $60,000 (with at least $15,000 allocated to each minor daughter) would not appear to this court to be grossly disproportionate to Sandher’s limited liability.

Notably, Five Star did not offer any evidence of what plaintiffs’ total approximate recovery might be in this case and the assumption that each plaintiff’s statement of damages exceeding $3 Million is evidence of the total recovery does not withstand scrutiny. Having failed to offer competent evidence of plaintiffs’ total approximate recovery, Five Star has shown the proposed settlement is not a fair approximation of Sandher’s proportionate liability of the total and consequently, Five Star has failed to meet its ultimate burden of demonstrating the proposed settlement does not satisfy the Tech-Bilt standards.

The court also rejects Five Star’s contention that Sandher is obligated to provide an allocation of the settlement proceeds to plaintiffs’ economic and non-economic damages, to the extent there is joint and several liability for economic damages former and a disproportionately low settlement could unfairly shift Sandher’s liability to the non -settling defendants. Although there is some authority suggesting that setting parties must provide an allocation of the settlement proceeds to the plaintiffs’ economic and non-economic damages, the recent decision of Dole Food Co. v. Superior Court (Shell Oil Co.) (2015) 242 Cal.App.4th 894 indicates that such an allocation is necessary for a good faith determination only where the settling parties have agreed to allocate less than all of the settlement amount to a portion of the causes of action in an attempt to exclude a portion of the payment from the setoff to which non-settling defendants are entitled. (Dole, at 916-917 (citing Knox v. County of Los Angeles (1980) 109 Cal.App.3d 825, 826-837; Erreca’s v. Superior Court (1993) 19 Cal.App.4th 1475, 1491; Alcal Roofing & Insulation v. Superior Court (1992) 8 Cal.App.4th 1121, 1122-1129).)

Thus, in Dole, the Second District Court of Appeal rejected the non-settling defendants’ challenge to the trial court’s good faith determinations despite the absence of an allocation of the settlement proceeds among the numerous plaintiffs and their economic/non-economic damages since the full amount paid by the settling defendant was available as a setoff to the non-settling defendants and since the allocation economic/non-economic damages could be easily determined after trial as permitted under California Supreme Court precedent. (Dole, at 917-918 (citing Rashidi v. Moser (2014) 60 Cal.4th 718, 722 [absent a pretrial settlement allocation between economic/non-economic damages, trial court shall apply jury’s ratio of economic/non-economic damages to prior settlement to determine non-settling defendant’s credit]); see also, Greathouse v. Amcord, Inc. (1995) 35 Cal.App.4th 831, 840-841 [if jury’s determination of economic/non-economic damages is supported by substantial evidence, trial court should allocate pretrial settlement proceeds between economic and non-economic damages according to proportion reflected in verdict]; Ehret v. Congoleum Corp. (1999) 73 Cal.App.4th 1308, 1320-1321 [accord].)

In light of these authorities, the court concludes that unless either Sandher or plaintiffs intend to allocate less than the full amount of the settlement proceeds to the claims or damages asserted by plaintiffs, no allocation between economic and non-economic damages is needed for a good faith determination since an eventual verdict at trial will include findings for both economic and non-economic damages, which ratio can then be applied retrospectively to this pretrial settlement in order to calculate the setoff or credit to which non-settling defendants may subsequently be entitled with respect to economic damages. Moreover, even if such an allocation were required and provided in this case, any allocation proposed by the settling parties in connection with a good faith proceeding is not necessarily binding at time of trial. (See, e.g., Gouvis

Engineering v. Superior Court (Cambridge Terrace) (1995) 37 Cal.App.4th 642, 650-651.)

Finally, Five Star’s claim about there being “insufficient evidence” to determine the good faith of this settlement and the resulting need for additional discovery on the Tech-Bilt factors is unavailing since California law makes clear that the settlement must be evaluated based on the information available at the time of the settlement, not on information which might be developed in the future. (See, e.g., Ex-Cell-O Corp. v. Holdener (1986) 181 Cal.App.3d 25.)

Conclusion

Because non-settling defendant Five Star failed to offer evidence which shows the amount plaintiffs are likely to recover at trial, which shows Sandher’s settlement plaintiffs is disproportionately low in relation to Sandher’s proportionate liability to plaintiffs and/or which shows the proposed settlement will unfairly shift a disproportionate percentage of liability to any of the non-settling defendants, Five Star has failed to satisfy its burden of demonstrating the lack of good faith and therefore, this motion to contest the good faith settlement is denied.

Pursuant to CRC Rule 3.1312, counsel for Sandher to prepare a proposed order determining the settlement with plaintiffs to be in good faith and shall have the effect specified in Code of Civil Procedure §877 and §877.6.