2016-00203259-CU-PO

Wayne Houseman vs. Brian Heaps

Nature of Proceeding: Motion Contesting Good Faith Settlement Determination

Filed By: Fitzgerald, Avalon J.

Brian Heaps’ Motion to Contest Good Faith Settlement between Cordova Community Council Foundation (“CCF”) and Plaintiffs is DENIED. The request for good faith settlement is GRANTED.

Plaintiffs Wayne Houseman and Shelly Houseman’s personal injury complaint, alleging negligence and loss of consortium, premises liability and loss of consortium was filed Nov. 14, 2016.

Cross-complaints for equitable indemnity, apportionment of fault, contribution and declaratory relief were filed by all defendants against each other.

The action arises out of an incident that occurred on April 23, 2016 on the premises of the Empire Ranch Golf Course in Folsom, California. Plaintiff Wayne Houseman was participating in a charity golf tournament and was injured while riding as a passenger in a golf cart being driven by co-defendant Brian Heaps. After finishing their last hole, Plaintiff Wayne Houseman and co-defendant Brian Heaps were returning to the clubhouse in the golf cart when Plaintiff was ejected or fell from the cart as it was being driven downhill on a cart path.

Plaintiffs allege that “CCF had alcohol service on virtually every hole of the golf course, actively furnishing participants with alcohol,” including those participants, such as Heaps, “who were operating” carts that were “required to be used as part of the tournament.” Plaintiffs allege that “neither CCF nor Empire Ranch took any steps to ensure or verify that the volunteer alcohol servers at the event underwent any training” relating to alcohol consumption and intoxication. (Id.) Plaintiffs allege that Wayne Houseman’s injuries were caused by Heaps’ alleged intoxication, which CCF and Empire Ranch supposedly knew about. (Compl. ¶ ¶ 9-12.)

Settling party defendant Cordova Community Council Foundation (“CCCF”) is a 501(c)

(3) benefit non-profit, which participates in community events. The event here was the First Annual Rancho Cordova Community Gold Classic, held at the Empire Ranch Golf Course in Folsom. The event was organized by individuals in Rancho Cordova.
Settling party Cordova Community Council Foundation was not a sponsor, but the event was to benefit six non-profits, including settling party Cordova Community Council Foundation.

The tournament sponsors provided non-alcoholic and alcoholic beverages at various locations on the course. CCCF obtained a single-day liquor license for the tournament at the request of Julie Hagan-Belka, but did not provide or serve alcohol to the tournament.

Discovery reflects that settling party did not own or control the golf cart involved, did not sell or provide alcoholic beverages to the players, and there is no basis for a claim of negligent entrustment against settling party.

Following discovery, CCCF advised that it would be filing a motion for summary judgment in the absence of any viable theory of liability, but would accept a dismissal with prejudice in exchange for a waiver of costs. After further discussions, Plaintiffs

have agreed to settle their claims against Cordova Community Council Foundation for $3,000 and a dismissal with prejudice.

The parties affected by the settlement are Brian Heaps, Empire Ranch LLC, d.b.a.

Empire Ranch Gold Club and Julie Hagan-Belka.

CCCF characterizes Defendant Heaps’ opposition to the Notice of Good Faith Settlement as follows: CCCF obtained a single day liquor license for the event; Plaintiff drank alcohol, became drunk, and fell out of a golf cart. CCCF should be held liable for Plaintiffs injuries that resulted from his intoxication.

Settling party CCCF relies upon Business & Professions Code § 25602 to assert that it is immune from any liability for injuries arising from the acts of any person in furnishing alcohol at the event.

That statute provides in full:

“(a) every person who sells, furnishes, gives, or causes to be sold, furnished, or given away, any alcoholic beverage to any habitual or common drunkard or to any obviously intoxicated person is guilty of a misdemeanor.

(b) No person who sells, furnishes, gives, or causes to be sold, furnished, or given away, any alcoholic beverage pursuant to subdivision (a) of this section shall be civilly liable to any injured person or the estate of such person for injuries inflicted on that person as a result of intoxication by the consumer of such alcoholic beverage.

(c) The Legislature hereby declares that this section shall be interpreted so that the holdings in cases such as Vesely v. Sager (5 Cal. 3d 153), Bernhard v. Harrah’s Club (16 Cal. 3d 313) and Coulter v. Superior Court ( Cal. 3d ) be abrogated in favor of prior judicial interpretation finding the consumption of alcoholic beverages rather than the serving of alcoholic beverages as the proximate cause of injuries inflicted upon another by an intoxicated
person.” (Bus. & Prof. Code, § 25602.)

In considering whether a settlement is entered in good faith, the court considers the following factors: (1) a rough approximation of the plaintiffs’ total recovery and the settling party’s proportionate liability; (2) the amount to be paid in the settlement; (3) the proposed allocation of the settlement proceeds; (4) a recognition that the settling parties should pay less in settlement than if they were found to be liable after trial; (5) the financial condition of the settling parties, and the insurance policy limits, if any; and

(6) the existence of collusion, fraud or tortuous conduct aimed to injure the interests of the non-settling defendants. (Tech-Bilt v. Woodward-Clyde & Assoc. (1985) 38 Cal.3d 488, 499.) The ultimate test is whether the settlement is grossly disproportionate to what a reasonable person at the time of settlement would estimate the settlor’s liability to be. (Id.) Settling defendants may properly pay less than their proportional share of the anticipated damages. In order to encourage settlement, what is required is simply that the settlement not be grossly disproportionate to the settlor’s fair share of liability. This determination is made based on the information available at the time of the settlement. (Tech-Bilt, supra, 38 Cal.3d at p. 499.)

The party contesting the good faith settlement has the burden of proof. C.C.P., sec.

877.6(d).

(1) A Rough Approximation of the Plaintiffs’ Total Recovery And The Settling Party’s Proportionate Liability

Houseman had a beer open the entire tournament, approximately one per hole; 18 during the day. Hard alcohol was also provided on the course. Both Houseman and Heaps had several shots of hard alcohol. The fire department who responded to the accident, reported heavy ETOH smell emanating from the patient. Heaps observed that Houseman was “hammered” and that Houseman passed out and fell out of the cart.

Plaintiff Houseman has suffered serious cerebral injuries, resulting in medical bills of $157,988 and wage loss of $30,197.37. Plaintiffs assert that he suffered permanent injuries and will no longer be able to pay golf or softball, has undergone personality changes, which led to the destruction of his marriage. The case has a jury potential of at least $500,000.

However, the settling party’s proportional liability is low.

Moving party Brian Heaps asserts that there has been no determination of whether CCCF “furnished” alcohol to Houseman, by virtue of providing the liquor license for the event. The Court disagrees. Fiorini v. City Brewing Co., LLC (2014) 231 Cal.App.4th 306, 309, cited by Heaps, states that “Prior cases have interpreted ‘furnish’ to require the defendant to have some control of the alcohol and to take an affirmative step to supply it to the consumer.”

In the absence of the liquor license obtained by CCCF, there would have been no alcohol provided at the event. As the alcohol was provided without charge to all participants in the golf event, and the motion before the Court is a settlement, the Court need not make the narrow distinctions urged by Heaps as to whether Houseman was a “habitual drunkard” or “obviously intoxicated” at the time the alcohol was furnished to him.

The Court concludes that Bus. & Prof. Code § 25602 would likely provide complete immunity from civil liability for CCCF as a person who furnished or caused to be furnished alcohol to any obviously intoxicated person.

CCCF has no liability for negligent entrustment, as it did not own or control the golf cart in which plaintiff was riding.

(2) The Amount To Be Paid In The Settlement Plaintiffs have agreed to accept $3,000 from CCCF.

Empire Ranch has pending before the Court, its own motion for good faith settlement in the amount of $5,000.

(3) The Proposed Allocation Of The Settlement Proceeds

There is no allocation of the proposed settlement proceeds between the two plaintiffs.

(4) A Recognition That The Settling Parties Should Pay Less In Settlement Than If

They Were Found To Be Liable After Trial

As above, liability is low to non-existent, so a small amount in settlement is appropriate.

(5) The Financial Condition Of The Settling Parties, And The Insurance Policy Limits, If Any

CCCF provided insurance for the event, in the amount of $1,000,000. (Caldwell Dec., Exh. C)

(6) The Existence Of Collusion, Fraud Or Tortuous Conduct Aimed To Injure The Interests Of The Non-Settling Defendants.

Defendant Heaps has no direct evidence of collusion, fraud or tortious conduct aimed to injure the non-settlors, but asserts that the small amount to be paid by the settling defendants reflects a strong suggestion of collusion against Heaps.

In opposition, CCCF asserts that the deposition testimony conclusively established that there exists no basis for liability by CCCF to plaintiffs.

Here, the Court cannot find that the $3,000 settlement is so far out of the ballpark as to be inconsistent with the goals of the statute, nor that it is grossly disproportionate to what a reasonable person would estimate CCCF’s liability to be.

Based on the court’s review of the evidence presented, the settlement appears to be reasonable and in good faith considering the factors set forth in Tech-Bilt Inc. v Woodward Clyde & Associates , supra, 38 Cal.3d at p. 499; CCP 877.6.