Case Number: BC604069??? Hearing Date: July 21, 2016??? Dept: 98
STATE FARM INSURANCE COMPANY,
Plaintiff,
vs.
DOMETIC CORPORATION, et al.,
Defendants.
And Related Cross-Actions. )
) CASE NO: BC604069
[TENTATIVE] ORDER RE: MOTIONS CONTESTING GOOD FAITH SETTLEMENTDept. 98
1:30 p.m.
July 21, 2016
On December 15, 2015, Plaintiff State Farm Insurance Company (?Plaintiff?) filed this action against Defendants Dometic Corporation (?Dometic?); Niel?s Motor Homes, Inc. (?Niel?s?); and Benchmark RV Center, Inc. (?Benchmark?). Plaintiff alleges that on January 26, 2013, the motor home of Plaintiff?s insured, Bari Y. Bonnett, caught on fire due to a refrigerator manufactured by Dometic. The motor home was allegedly sold by Niel?s. Plaintiff further alleges that Benchmark repaired the refrigerator in 2012 and advised Mr. Bonnett that the refrigerator was working.
Plaintiff has agreed to accept $1,000.00 as full and final settlement from Niel?s. Niel?s filed an Application for Determination of Good Faith Settlement (?Application?) on May 25, 2016. Dometic and Benchmark have separately filed Motions to contest Niel?s Application.
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. Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499. 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. Id. ?[D]amages are often speculative, and the probability of legal liability therefor is often uncertain or remote.? Id. ?Moreover, such a rule would tend to convert the pretrial settlement approval procedure into a full scale mini trial.? Id. This does not mean that the amount of the settlement is irrelevant in determining good faith. Rather, the intent and policies underlying section 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 plaintiffs;
(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.
Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499.
The evaluation must ?be made on the basis of information available at the time of settlement.? Id. Making a good faith settlement determination necessarily requires the trial court to examine and weigh all of the Tech-Bilt factors, one of the most important of which is the settling party?s proportionate liability. Toyota Motor Sales U.S.A., Inc. v. Superior Court (1990) 220 Cal.App.3d 864, 871. Indeed, the ultimate determinant of good faith 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. City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1262.
Dometic?s Evidentiary Objections
Objections to Declaration of Aneta B. Dubow OVERRULED
Objections to Declaration of Bethany Everson Na OVERRULED
Plaintiff?s damages amount to $66,462.48 as a result of the incident. Niel?s denies any liability, contending that it did not perform any maintenance on the subject refrigerator. Plaintiff named Niel?s as a Defendant under the belief that Niel?s had serviced the subject refrigerator. Declaration of Bethany Everson Na, ? 6. Plaintiff has been unable to obtain any documentation or verification that its insured actually took the motor home to Niel?s for refrigerator maintenance. Id., ? 7. The files provided by Niel?s in response to discovery requests reflect that Niel?s did not work on the refrigerator. Declaration of Aneta B. Dubow, ? 4.
Dometic asserts that Niel?s has failed to provide any evidence showing that the settlement has been made in good faith. Dometic also points to Plaintiff?s response to Special Interrogatories, Set One, propounded by Niel?s, in which Plaintiff states that the motor home was taken to both Niel?s and Benchmark for repair of the refrigerator prior to the incident and neither Niel?s nor Benchmark informed Plaintiff?s insured about a product recall on the refrigerator. Dometic contends that these discovery responses illustrate that Niel?s was negligent and its share of the proportionate liability is greater than the $1,000.00 settlement.
Benchmark also contends that Plaintiff?s discovery responses support the conclusion that the settlement does not accurately reflect the potential liability of Niel?s to Plaintiff. Benchmark further contends that Niel?s has failed to produce any evidence showing that it is not liable to Plaintiff under either a strict products liability theory or breach of implied warranty theory. Benchmark requests that the Application be denied or, alternatively, that the hearing be continued to allow the parties to conduct more extensive discovery.
While discovery may have shown that Plaintiff?s negligence cause of action against Niel?s is unsupported, Niel?s has not shown that Plaintiff?s causes of action for strict liability and breach of implied warranty are not viable against it. With these remaining theories of liability against Niel?s, the Court finds that the $1,000.00 settlement is not within a reasonable range of Niel?s? proportionate share of liability for Plaintiff?s claimed damages of $66,462.48.
In light of the foregoing, Benchmark and Dometic?s Motions are GRANTED. Niel?s Application is hereby DENIED.
Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT98@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion will be placed off calendar.
Dated this 21st day of July, 2016
Hon. Holly J. Fujie
Judge of the Superior Court