Case Number: BC497708 Hearing Date: June 24, 2014 Dept: 92

SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES – CENTRAL DISTRICT

MARCOS BARRERAS-MARTINEZ,
Plaintiff(s),
vs.

ANTONIO GALICIA, ET AL.,

Defendant(s).

CASE NO: BC497708

[TENTATIVE] ORDER DENYING MOTION FOR DETERMINATION OF GOOD FAITH SETTLEMENT

Dept. 92
1:30 p.m. — #28
June 24, 2014

Defendants, Los Angeles Unified School District and Antonio Galicia’s Motion for Determination of Good Faith Settlement is Denied.

1. Background Facts
Plaintiff, Marcos Barreras-Martinez (“Martinez”) filed this action against Defendants, Antonio Galicia, Los Angeles Unified School District, the City of Los Angeles, and Tomovich & Associates (“Tomovich”) for damages arising out of a truck v. bicycle accident. Plaintiff was riding his bicycle on Figueroa when he was struck by a truck driven by Galicia, in his capacity as an employee of LAUSD/City of Los Angeles. Defendant, Tomovich was performing construction work in the area at the time of the accident (no employee of Tomovich was present at the exact time of the accident, 7:20 p.m., but construction was ongoing on a daily basis in the area), and Plaintiff alleges Tomovich’s failure to use due care in connection with the construction project caused or contributed to the accident.

2. Motion for Determination of Good Faith Settlement
Defendants, LAUSD and Galicia have agreed to settle this case with Plaintiff for $350,000. Defendants seek a determination from the Court that the settlement is in good faith. Defendant, Tomovich opposes the motion.

a. Law Regarding Good Faith Settlement
In order to determine the good faith of a proposed settlement, the trial court must inquire, among other things, whether the amount of the settlement is within the reasonable range of the settling tortfeasor’s proportional share of comparative liability for the plaintiff’s injuries. This is not to say that bad faith can be established by showing that a settling defendant paid less than his theoretical proportionate or fair share. Such a rule would unduly discourage settlements. Damages are often speculative, and the probability of legal liability therefor is often uncertain or remote. Moreover, such a rule would tend to convert the pretrial settlement approval procedure into a full scale mini trial. These considerations, however, do not mean that the amount of the settlement is irrelevant in determining good faith. Rather, the intent and policies underlying CCP §877.6 require that a number of factors be taken into account including:
(1) A rough approximation of plaintiff¿s total recovery and the settlor¿s proportionate liability;
(2) The amount paid in settlement;
(3) The allocation of settlement proceeds among defendants;
(4) A recognition that a settlor should pay less in settlement than he would if he were found liable after a trial;
(5) The financial conditions and insurance policy limits of settling defendants; and
(6) The existence of collusion, fraud, or tortious conduct aimed to injure the interests of the nonsettling defendants.

Practical considerations require that the evaluation be made on the basis of information available at the time of settlement. 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. The party asserting the lack of good faith has the burden of proof on that issue (CCP ¿877.6(d)) and should demonstrate, if he can, that the settlement is so far “out of the ballpark” in relation to the above as to be inconsistent with the equitable objectives of the statute. When testing the good faith of a settlement figure, a court may enlist the guidance of the judge’s personal experience and of experts in the field. The danger that a low settlement violates the good faith clause will not impart uncertainty so long as the parties behave fairly and the courts maintain a realistic awareness of settlement imponderables. (Tech-Bilt, Inc. v. Woodward-Clyde & Assoc. (1985) 38 Cal.3d 488, 498-501 [citations and quotations omitted].)

If the nonsettling defendants do not oppose the motion on the good faith issue, a “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.” City of Grand Terrace v. Sup.Ct. (Boyter) (1987) 192 CA3d 1251, 1261. However, where the nonsettling defendants contest “good faith,” the moving party must make a sufficient showing of all the Tech-Bilt factors. Such showing may be made either in the original moving papers or in counter-declarations filed after the nonsettling defendants have filed an opposition challenging good faith of the settlement. City of Grand Terrace, supra, 192 CA3d at 1262.
Where “good faith” is contested, conclusory allegations as to the settling parties’ liability are insufficient. Even an expert’s opinion must be substantiated by facts. Greshko v. County of Los Angeles (1987) 194 CA3d 822, 829.

b. Analysis
Tomovich argues that the settlement is too low because (a) LAUSD has under-valued Plaintiff’s total potential recovery; (b) LAUSD is not paying a proper proportionate share of its liability; and (c) LAUSD’s insurance is well in excess of what’s being offered to settle the case.

As an initial note, LAUSD argues in reply that Tomovich should not be concerned with whether this motion is granted or not because (a) Tomovich does not have a cross-complaint against LAUSD, and (b) Tomovich contends it is 100% not liable for Plaintiff’s injuries. Both of these arguments fail. If Plaintiff’s claims proceed to trial against both Tomovich and LAUSD, the jury can apportion fault between them; there is no reason to believe LAUSD is insolvent or would have any problem paying any judgment against it, and therefore Tomovich will not be left “holding the ball” for LAUSD’s percentage of damages. If, on the other hand, LAUSD’s claims are settled and Plaintiff proceeds to trial against Tomovich, there is a risk that Tomovich will be found only slightly at fault, but will have to pay 100% of Plaintiff’s economic damages (after off-set for LAUSD’s settlement). Thus, Tomovich has an interest in the good faith of the settlement regardless of whether it has filed a cross-complaint or not. As to the second argument, of course Tomovich hopes to be found 100% not liable for Plaintiff’s injuries; if, however, Tomovich is found even 1% at fault, Tomovich will be liable for 100% of Plaintiff’s economic damages (after off-set for LAUSD’s settlement). Thus, even though Tomovich believes it is not liable for Plaintiff’s damages, Tomovich has a clear interest in the settlement in case Tomovich is ultimately found to be wrong at trial in this regard.

The first issue before the Court is what the reasonable value of Plaintiff’s case is. LAUSD argues the total value of the case, on the high end, is between $1 and $1.5 million. Tomovich argues the total value of the case is $2.8 million.

LAUSD bases its analysis on the fact that the total medical damages to date are $1.3 million, but the Medi-Cal lien is only in the amount of $137,000, rendering only $137,000 recoverable as past medical damages. LAUSD estimates future medical damages and pain and suffering damages at approximately $1 million, and argues the total claim is therefore worth between $1 million and $1.5 million. Notably, LAUSD does not provide any declaration or evidence to support its position.

Tomovich argues Plaintiff, in settlement negotiations, has valued his case at up to $2,715,307. Tomovich attaches a settlement letter in support of this position; notably, the settlement letter expressly bears the notation “Confidential – Privileged – Settlement Discussion Only.”

Substantial evidence (e.g., factual declarations) showing the nature and extent of the settling defendant’s liability is required. Without such evidence, a “good faith” determination is an abuse of discretion. See Mattco Forge, Inc. v. Arthur Young & Co. (1995) 38 CA4th 1337, 1348, holding that “questionable assumptions” in the moving party’s memorandum of points and authorities are insufficient to show the settlement is reasonable; see also Greshko v. County of Los Angeles (1987) 194 CA3d 822, 834, holding that an attorney’s declaration re the settling defendant’s liability is insufficient where he failed to provide specific supporting facts or expert opinion.

LAUSD’s moving papers are insufficient in this regard. The motion for determination of good faith settlement is therefore denied. The Court declines to consider the other issues (proportionate liability and insurance ramifications) because, absent competent evidence on the value of Plaintiff’s claim, LAUSD did not meet its threshold burden to show the settlement is in good faith. The motion is therefore denied.

Dated this 24th day of June, 2014

Hon. Elia Weinbach
Judge of the Superior Court