Case Number: BC666109 Hearing Date: February 07, 2019 Dept: A

# 5. Minnie Watkins et al. v. Joze Guzman et al.

Case No.: BC666109

Matter on calendar for: application for determination of good faith settlement

Tentative ruling:

I. Background

This is a wrongful death action. On June 28, 2017, Plaintiffs Robert Watkins, Sr. and Minnie Faye Watkins filed a Complaint against Defendants Jose Guzman, Mario Guzman, Navistar Inc., Utopia Transport, Inc., and U.S. Storage Centers, Inc.

Robert Watkins Sr.’s action arose out of injuries sustained from a semi-truck rolling over him. The semi-truck was undergoing inspection. Jose Guzman was the driver. He stepped out of the vehicle but failed to set the parking brake. When Watkins removed the chock behind the tires, the truck rolled backwards. Utopia Transport is Guzman’s employer. U.S. Storage was the premises owner. Robert Watkins Sr. succumbed to his injuries and passed on May 11, 2018. His wife, Minnie Watkins amended her complaint to allege that she is successor in interest.

The First Amended Complaint (“FAC”) alleges a wrongful death action with the following causes of action:

1) Negligence;

2) Premises liability; and

3) Strict products liability

Defendants Jose Guzman, Mario Driver, U.S. Storage Centers, Inc., and Utopia Transport, Inc. (“settlors”), apply for a determination by the Court that their settlement with the plaintiffs was made in good faith. Defendant Navistar opposes the application.

For the reasons set forth below, the Court denies the application without prejudice.

II. Standard

California Code of Civil Procedure § 877.6(b) allows a party to request determination by the court that a settlement was made in good-faith. A determination of good faith bars “joint tortfeasors or co-obligors from any further claims against the settling tortfeasor for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.” (C.C.P., § 877.6(c).) A party asserting bad faith has the burden of proof on the issue. (C.C.P., § 877.6(d).)

“The determination as to whether a settlement is in good faith is a matter left to the discretion of the trial court. [Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 502]” (Dole Food Co., Inc. v. Superior Court (2015) 242 Cal.App.4th 894, 909.) In reaching the determination, the court weighs multiple factors that include: “a rough approximation of the plaintiff’s total recovery and the settlor’s proportionate liability, the amount paid in settlement, the allocation of settlement proceeds among plaintiffs, a recognition that a settlor should pay less in settlement than if found liable after trial.” (Tech-Bilt, supra, 38 Cal.3d at 499.) “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 at injuring the interests of nonsettling defendants.” (Ibid.) “Finally, practical considerations obviously require that the evaluation be made on the basis of information available at the time of settlement. ‘[A] defendant’s settlement figure should 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.]” (Id. at 499–500.) The burden is on the party asserting a lack of good faith. (Dole Foods Co., supra, 242 Cal.App.4th at 909.)

III. Analysis

The Court grants the request for judicial notice and notices the record for this action.

A. Terms of the settlement agreement

The settlement agreement totals $750,000. The proposed allocation is:

· Minnie Faye Watkins: $245,000

· Bryon Watkins: $245,000

· Robert Watkins, Jr.: $245,000

· Estate of Robert Watkins, Sr.: $15,000

B. Merits

1. Collusion

Navistar argues that the settlors are colluding: “At the request of Plaintiffs, the settlement proceeds are being paid out to Mr. Watkins’ successors in interest in equal apportionment, as follows . . . .” (Mtn. pg. 9.) This does not support collusion. Although the parties may have agreed on an allocation suggested by plaintiffs, it does not suggest that this number was arrived at lightly, nor that negotiations did not take place. Further discussion on allocation is provided below.

Navistar also suggests that the settlors’ unification timeline is suspicious. Both US Storage and Utopia have tendered their defenses to Guzman. These actions were based on prior contractual agreements between the parties. Guzman agreed to defend and indemnify Utopia in their independent contractor agreement. (Reply Decl. Sanchez Exh. B.) Guzman’s obligation to defend and indemnify US Storage stems from a California Parking Rental Agreement. (Reply Decl. Sanchez Exh. A.) US Storage tendered its defense on July 24, 2018. Utopia tendered its defense on November 18, 2018. Settlement negotiations between plaintiffs and Guzman began in approximately November 2018, and culminated in his agreement to pay his policy limits. (Reply Decl. Sanchez ¶ 2.)

Neither the language nor the timeline suggests collusion.

2. Total recovery vs settlors’ proportionate liability

Navistar argues that US Storage is potentially liable for premises liability. It also argues that Utopia was Guzman’s employer and may have independent liability as they arranged the inspection. The settlors deny any liability and maintain that decedent’s injury was the result of his own negligence. Decedent told Guzman to exit the vehicle and it was decedent who removed the chock block.

Navistar points the difference between the $750,000 settlement and plaintiffs’ July 22, 2017 statements of damages, in which they state damages totaling $275 million dollars. (Opp. Exh. A.) Such a comparison is not persuasive because this amount appears grossly exaggerated. (Bay Development, Ltd. v. Superior Court (1990) 50 Cal.3d 1012, 1028.)

The settlors also deny the injury was connected to the condition of the property or that Guzman was an employee of Utopia (Guzman and Utopia operated under an independent contractor agreement). In review of the circumstances of the incident and the overall settlement agreement, the Court finds that the settlement is within the Settlor’s proportionate share of liability.

3. The amount paid in settlement

The amount being paid, $750,000, is the limit of Guzman’s insurance policy. As he is contractually obligated to defend and indemnify US Storage and Utopia, this is the settlors’ applicable policy limit. “When the insurance company for a settling defendant pays its total available policy limits, that is very strong evidence of a ‘good faith’ settlement, absent evidence of collusion or grossly inappropriate allocation or apportionment of the settlement proceeds to injure the nonsettling alleged tortfeasors.” (Fisher v. Superior Court (1980) 103 Cal.App.3d 434, 445.)

4. Allocation

Navistar argues that the allocation was intended to minimize any offset to a potential judgment against Navistar. Of the $750,000, 98% is allocated to the wrongful death claims. Navistar argues that this is disproportionate as Robert Watkins lived for more than a year after the incident. Settlors argue that the allocation was the result their negotiations and derived from the information known at the time of the settlement, but settlors’ arguments and declaration do not include any facts to allow the Court to evaluate the allocation. Absent facts to support the allocation, it is too disproportionate to support an application for good faith.

Settlors, perhaps in recognition that the allocation is problematic, alternatively request that the Court use its discretion to set the allocation. Although that may be proper in a post-verdict setoff determination, to do so in an application for good faith determination would be to conduct a “minitrial” on the valuation issue. (Dole, supra, 242 Cal.App.4th at 919.) This would be improper. Settlors and plaintiffs are welcome to reformulate their allocation or to renew their application with an evidentiary basis.

IV. Ruling

The motion for good faith determination is denied without prejudice.