2013-00138981-CU-MM

Ashmeeta Sharma vs. Dignity Health

Nature of Proceeding: Motion Contesting Good Faith Settlement Determination (Joinder by Jan

Filed By: Lanius, Patrick A.

Defendant Michael Mirhadi, M.D.’s Motion Contesting Good Faith Settlement entered
into by defendants Mercy Medical Group and Kevin Vu M.D. is granted, without
prejudice to future application/motion.

Joinder in motion to contest filed by Jan Elsbach, M.D. is granted.

The Requests for Judicial Notice filed by defendants Mercy Medical Group and
defendant Mirhadi are granted.

Plaintiff alleges a claim of medical negligence contending she was given excessive
sodium replenishment that resulted in plaintiff suffering central pontine myelinolysis
with significant catastrophic neurological damage. Plaintiff is permanently
incapacitated and contends that her medical costs are likely to exceed $1,000,000
annually for the remainder of her life. The Complaint was filed January 29, 2013.
Plaintiff has made 998 offers to each of the physician and entity defendants for their
respective insurance policy limits. Defendants Vu and Mercy Medical Group accepted
the 998 offer for $1,000,000 each, for a total settlement of $2,000,000. The Petition for
Compromise of Claim of the plaintiff, who is under conservatorship, was granted on
February 11, 2013 and the balance of the settlement has been placed in a special
needs trust.

Plaintiff has also sued seven doctors, Drs. Vu, Lynton, Mirhadi, Angell, Elsbach ,
Khalsa, and Howard. The Complaint alleges no facts whatsoever about each
physician’s involvement in the treatment that resulted in the catastrophic injuries, The
Court recently granted Mirhadi’s discovery motion requesting facts supporting his
liability, stating: “There must be some factual basis for the allegations of negligence
other than listing plaintiff’s injuries. No effort was made to distinguish between the
alleged negligent acts of each defendant.” (See minute order September 23, 2013,
Department 53) Plaintiff has yet to comply with Mirhadi’s discovery requests.
Parenthetically, Plaintiff has a right to engage in discovery to elicit evidence relevant
to the critical Tech-Bilt factors.

The application for good faith settlement is similarly deficient. The settling parties and
plaintiff focus only on the catastrophic injuries and the liability limits of physician
defendants’ policies without any evidence of each defendant’s role in the care of
plaintiff and the proportionate liability of each defendant. Settling parties have ignored
the requirement that proportionate liability must be shown in the application or motion
for good faith settlement. When no such showing at all has been made in the
application, the burden never shifted to Mirhadi to show the settlement is “out of the
ballpark.”

Mercy Medical Group and Kevin Vu M.D. filed their application for good faith
settlement determination on September 5, 2013 (RJN Ex. C) The application, like the
Complaint, contains no facts about the respective roles of the physicians in the events
that resulted in the damages, inter alia.

Counsel for plaintiff states he has made a diligent inquiry regarding the ability of
settling defendants to respond to a judgment against them and is satisfied that there is
no additional insurance coverage or substantial assets beyond the $2,000,000
coverage provided by The Doctor’s Company. (Declaration of William C. Callaham)
This declaration is not supported by any facts about the diligent inquiry or the nature of
the assets available. Of course, facts in regard to financial condition are in the
particular knowledge of the settlor.

Defendant Michael Mirhadi contends that Vu is the most culpable defendant as he was
the primary physician responsible for the elevated sodium levels. Mirhadi’s contends
he was the emergency room physician who admitted plaintiff to the hospital. Although
settling defendants challenge the lack of evidence to support contesting party’s
position, the burden did not shift to Mirhadi due to the absence of any evidence
supporting the Tech-Bilt factors in the application for good faith settlement.

In Tech Bilt, Inc. v. Woodward-Clyde & Associates. (1984) 38 Cal. 3d 488, the
California Supreme Court laid out the analysis that should be employed by courts
when evaluating a settlement under CCP § 877.6. The following factors are to be
considered by the court when determining if settlement was made in good-faith:
1. A rough approximation of the plaintiffs total recovery and the settlor’s
proportionate liability. 2.The amount paid in the settlement. 3. The allocation of
settlement proceeds among plaintiffs. 4. The financial conditions and insurance
policy limits of the settling defendants. 5. The existence of collusion, fraud or tortious conduct aimed to injure the interests of non-settling defendants. Id. At
499.(emphasis added).

The settling defendant’s proportionate liability is a critical factor: “The ultimate
determination of good faith is whether the settlement is grossly disproportionate to
what a reasonable person at the time of the settlement would estimate the settlor’s
liability to be.” City of Grand Terrace v Sup. Ct. (1987) 192 Cal.App.3d 1251, 1262.
Where a nonsettling defendant contests the good faith, the party seeking the good
faith determination must make a sufficient showing of all of the Tech-Bilt factors. Such
showing may be made either in the original papers or in counter-declarations filed after
the non-settling defendants challenge the good faith of the settlement. Id. Another
key factor is the settling tortfeasor’s potential liability for indemnity to joint tortfeasors.
Far West Fin’l Corp v D&S Co. (1988) 46 Cal.3d796, 816. The true value of a
settlement to the settlor may not be the amount paid to plaintiff but rather the value of
the shield against indemnity claims. TSI Seismic Tenant Space Inc. v Superior Court
(2007) 149 Cal.App.4th 159, 166.

Once the settling party has made a showing of the above elements, the nonsettling
defendant has the burden of proving that the settlement is out of the ballpark.
Tech-Bilt v. Woodward-Clyde & Assoc. (1985) 38 Cal.App.3d 488, 499-500; Long
Beach Memorial Medical Center v Superior Court (2009) 172 Cal.App.4th 865, 873.
However, before the burden shifts, admissible evidence in support of the motion or
application for good faith determination is required. Factual declarations showing the
settlement’s confluence to the Tech-Bilt factors, e.g. the nature and extent of the
settling parties’ liability, is required. Without such evidence, a good faith determination
is an abuse of discretion. Mattco Forge, Inc. v Arthur Young & Co. (1995) 38 Cal.
App.4th 1337, 1348.

Two equitable policies are designed to be furthered by CCP § 877.6, encouragement
of settlements, and equitable allocation of costs among joint tortfeasors. Neither goal
should be emphasized to the virtual exclusion of the other. Standard Pacific of San
Diego v. A. A. Baxter Corp. (1986) 176 Cal App 3d 577. To find that this settlement is
in good faith based on the content of the application would ignore the policy of
equitable allocation of costs among joint tortfeasors.

The minute order is effective immediately. No formal order pursuant to CRC Rule
3.1312 or further notice is required.