Case Number: GC049224    Hearing Date: September 05, 2014    Dept: B

GC049224
DUNG BOI TRAN vs FRANKLIN ANAYA, et al
Motion for Good Faith Settlement
Trial Setting Conference

This case arises from the Plaintiff’s claim that she suffered personal injuries in a motor vehicle accident caused by the Defendants’ negligence.
No trial is set. A trial setting conference is set for the same date as this hearing.

This hearing concerns the motion of the Defendants, Robert Elguezabal and Rudy Elguezabal, for an order finding that the settlement between the Plaintiff and the Defendant, Franklin Anaya, was not a good faith settlement under CCP section 877.6. Under the settlement, Franklin Anaya agreed to pay $15,000 in return for a dismissal.

CCP section 877.6 permits the Court to evaluate a settlement made between a plaintiff and a defendant when the defendant is a joint tortfeasor with other non-settling defendants. When a motion seeking a determination under CCP section 877.6 is not opposed, the burden on the moving parties to show that the settlement was made in good faith is slight. City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261 (holding that a barebones motion including a declaration setting forth a brief background is sufficient).
However, when the motion is contested, then the moving parties must make a sufficient showing in the moving papers or in the reply papers. Id. at 1262 (holding that evidence showing a lack of good faith requires the moving party to provide evidence to negate the lack of good faith asserted by the contesting party). CCP section 877.6(d) then imposes the burden of showing that the settlement was not made in good faith on the contesting party.
In order to determine whether the settlement was made in good faith under CCP section 877.6, the Court applies the following factors identified by the California Supreme Court in Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488 to determine whether the settlement amount is “in the ballpark” of the settling party’s share of liability for the injuries:

1) a rough approximation of the plaintiff’s total recovery;
2) an approximation of the settling party’s share of the liability;
3) recognition that a settling party should pay less in settlement than if found liable after a trial;
4) the allocation of the settlement proceeds among plaintiffs;
5) the settling party’s financial condition and insurance policy limits;
6) evidence that the plaintiff and the settling party acted with an intent to make the non-settling parties pay more than their fair share (considered fraud and collusion under Tech-Bilt).

The Supreme Court explained that CCP section 877.6 is designed to further two equitable policies: 1) encouragement of settlements and 2) equitable allocation of costs among joint tortfeasors. Id. Those policies would be not be served by an approach which emphasizes one to the virtual exclusion of the other. Id. Accordingly, a settlement will not be found in good faith unless the amount is reasonable in light of the settling tortfeasor’s proportionate share of liability. Std. Pac. of San Diego v. A. A. Baxter Corp. (1986) 176 Cal. App. 3d 577, 589.
Further, the Legislature intended “good faith” to encompass a broader range of considerations than mere absence of palpable wrongdoing. Id. at 588. It’s not necessary to find collusion; instead, “good faith” encompasses the problem of a settling defendant not paying an amount “in the ballpark” of the settling party’s share of liability.

Here, the Plaintiff seeks damages for personal injuries caused in a three car accident. The three Defendants were in two separate motor vehicles that struck the Plaintiff’s motor vehicle. The Defendants, Rudy Elguezabal and Robert Elguezabal, were in the first motor vehicle and the Defendant, Franklin Anaya, was in the second.

The following proceeds through an analysis of Franklin Anaya’s application with the Tech-Bilt factors.

1) A rough approximation of the plaintiff’s total recovery
In 2012, the Plaintiff claimed approximately $15,000 in medical special damages for treatment by chiropractors for the injuries to her back. In June 22, 2012, the Plaintiff served an offer to compromise for $15,000 (see copy of offer in exhibit C to opposition papers). However, in 2013, the Plaintiff claimed that additional medical costs of $147,250.44 were caused by the accident (see opposition, Kimberly Sakai decl., paragraph 11).
The parties’ experts offer contradictory opinions on whether the additional amounts were caused by the motor vehicle accident. For example, Boyd Flinders, M.D., the orthopedic expert for the Defendants, Rudy Elguezabal and Robert Elguezabal, drafted a medical report in which he disputed that the additional medical procedures were medically necessary (Sakai decl., paragraph 13). Further, Dr. Flinders states in the report that the charges for the additional medical procedures are “outlandish and inappropriate”. Dr. Flinders states that the entire cost for the services would be $5,000 to $7,500. A copy of Dr. Flinders’ report is attached as exhibit G to the opposition papers.
Based on the Plaintiff’s new claims for $150,000 in medical expenses, the Defendant, Franklin Anaya, sought leave to take a second deposition of the Plaintiff, which was granted on December 13, 2013 (Sakai decl., paragraph 16 and 17). Further, the Defendant, Franklin Anaya, filed a motion to compel a medical examination (Sakai decl., paragraph 18). The Court granted this motion on February 7, 2014 (Sakai decl., paragraph 19).
The Plaintiff filed a petition for a writ of mandate regarding the Court’s order compelling her to appear for a physical examination. The Court of Appeal denied the petition on March 26, 2014 (Sakai decl., paragraph 22). Eleven days later, on April 7, 2014, the Plaintiff accepted Franklin Anaya’s offer to settle for $15,000.

These facts indicate that there is a substantial dispute regarding the amount of the Plaintiff’s total recovery. It appears to the Court that the amount of $40,000 for her initial medical specials plus pain and suffering is the best estimate of the rough approximation of the Plaintiff’s total recovery because it is most likely that the Plaintiff will recover this amount at trial. Based on the evidence in Dr. Flinders’ medical report, the Plaintiff’s delay in seeking the additional treatment, and the Plaintiff’s decision to accept the $15,000 settlement, it does not appear likely that the Plaintiff will recover the additional amount of $150,000.
Accordingly, a rough approximation of the Plaintiff’s total recovery is $40,000.

2) An approximation of the settling party’s share of the liability
A review of Rudy Elguezabal’s deposition indicates that the sequence of events in the motor vehicle accident were the following:

1) the motor vehicle operated by Rudy Elguezabal and Robert Elguezabal struck the rear of the Plaintiff’s motor vehicle;
2) the motor vehicle operated by Franklin Anaya struck the rear of the Elguezabal’s motor vehicle; and
3) the Elguezabal’s motor vehicle struck the Plaintiff’s motor vehicle a second time.
(see opposition papers, exhibit E, pages 27 to 32).

The Defendant, Franklin Anaya, retained an accident reconstruction expert, Michael Rice. Mr. Rice testified in his deposition that there was evidence of one clear impact between the Elguezabal’s motor vehicle and the Plaintiff’s motor vehicle. Mr. Rice also testified that he found no physical evidence indicating that there was a second impact. Mr. Rice then testified that if a second impact occurred, the impact could not have been significant because there was no evidence of additional damage caused by the second impact. Further, Mr. Rice testified that the first impact was the stronger of the two impacts and the primary cause of damage to the Plaintiff’s vehicle.

This evidence indicates that the Plaintiff’s injuries were caused by two collisions:

1) an initial collision that struck the Plaintiff’s vehicle with substantial force that left physical evidence on the Plaintiff’s motor vehicle; and
2) a subsequent collision that struck the Plaintiff’s vehicle with a force insufficient to leave physical evidence on the Plaintiff’s motor vehicle.

Further, this evidence indicates that Franklin Anaya’s motor vehicle caused the second collision when it struck the Elguezabal’s motor vehicle and propelled it into the rear of the Plaintiff’s motor vehicle. The evidence that Franklin Anaya’s motor vehicle caused a collision with the Plaintiff’s motor vehicle that was insufficient to leave physical evidence is evidence that Franklin Anaya’s proportionate share of liability for the Plaintiff’s injuries is small.
This indicates that Franklin Anaya’s proportionate share of liability would be approximately 10 to 20 percent.
Franklin Anaya has offered to pay $15,000. This is 37.5% of the Plaintiff’s likely recovery of $40,000. If the additional medical specials of $150,000 and potential pain and suffering of $50,000 for the additional medical specials are added, then Franklin Anaya’s offer is approximately 6% of the total recovery. In both circumstances, Franklin Anaya’s offer to pay $15,000 is within the ballpark of his 10 to 20 percent share of liability.

3) recognition that a settling party should pay less in settlement than if found liable after a trial
As noted above, there are substantial disputes whether the Plaintiff’s claimed medical specials were caused by the motor vehicle accident. Since there will be a substantial amount of expert fees involved in the trial of this issue, the settlement will avoid these costs and is a reasonable compromise of the Plaintiff’s dispute with Franklin Anaya.

4) The allocation of the settlement proceeds among plaintiffs
This is not a factor because there is a single plaintiff.

5) The settling party’s financial condition and insurance policy limits
Franklin Anaya states in his declaration that he is a full time student who lives with his parents, that he has no net worth, and that he is employed with a parking company where he makes $240 to $320 a week. In addition, Franklin Anaya’s insurance policy limit is $15,000, which is the amount he will pay under the settlement.
This indicates that the $15,000 payment is a reasonable compromise of the Plaintiff’s dispute with Franklin Anaya because the Plaintiff is unlikely to obtain any further amount of substantial monetary value from Franklin Anaya.

6) Evidence that the plaintiff and the settling party acted with an intent to make the non-settling parties pay more than their fair share (considered fraud and collusion under Tech-Bilt).
Kimberly Sakai, the attorney for Franklin Anaya, states in paragraph 25 of her declaration that her office did not engage in any secret discussion or meeting with the Plaintiff to harm the Elguezabal’s case or settlement position. Ms. Sakai states in paragraph 25 that the settlement occurred when the Plaintiff’s counsel was discussing whether he would further appeal the decision to deny the petition for a writ of mandate. Ms. Sakai states that she understood it was the testimony of the accident reconstruction expert, Michael Rice, and the denial of the petition for a writ of mandate regarding the order to compel the Plaintiff to submit to a medical examination that were major factors in the settlement.
This evidence indicates that there was no intent to make the Elguezabal Defendants pay more than their fair share for the Plaintiff’s injuries.

The motion of Rudy Elguezabal and Robert Elguezabal includes no evidence that the Plaintiff and Franklin Ayada engaged in fraud and collusion. Instead, the Elguezabal Defendants suggest that there is circumstantial evidence of collusion because the settlement occurred after the Court of Appeal denied the Plaintiff’s petition for a writ of mandate.
It is not reasonable to draw an inference that the timing of the Plaintiff’s decision to accept the settlement offer after the Court of Appeal’s decision to deny the Plaintiff’s petition is evidence that the Plaintiff and Franklin Anaya were acting with an intent to make the Elguezabal Defendants pay more than their fair share. As noted above, Kimberly Sakai states in her declaration that the settlement offer occurred when she was discussing a further appeal. Instead, it is reasonable to draw the inference that the Plaintiff’s attorney decided to accept the settlement offer to avoid further appellate expenses and because Franklin Anaya’s expert had offered an opinion that supported a finding that Franklin Anaya’s share of liability was small.

Accordingly, there are no grounds to find that fraud or collusion taint the settlement.

This analysis demonstrates that Franklin Anaya is entitled to a finding that the settlement is a good faith settlement under CCP section 877.6. Franklin Anaya has offered to make a payment of $15,000, which is in the ballpark of his proportionate share of liability for the Plaintiff’s injuries. Further, there is no evidence that Franklin Anaya and the Plaintiff engaged in fraud and collusion when they settled the claim.

Therefore, the Court demoes the motion of Defendants, Robert Elguezabal and Rudy Elguezabal, to contest the application for a good faith settlement. Further, the Court grants the application of Franklin Anaya for a finding under CCP section 877.6 that his settlement with the Plaintiff was a good faith settlement.