BARSEGH GHAZARIAN VS VARUZH AZIZIAN ET AL

Tentative Rulings

Case Number: BC676909    Hearing Date: February 04, 2020    Dept: 31

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

1. Background Facts

Plaintiff, Basegh Ghazarian filed this action against Defendants, Varuzh and Seda Azizian for damages arising out of a fall from a ladder on Defendants’ property. Defendants hired Plaintiff, an unlicensed handyman, to install a skylight in their dental office. Plaintiff alleges he fell off a stepladder while doing so and fractured his shoulder. Notably, Plaintiff alleges Defendants did not have workers’ compensation insurance, and he seeks Labor Code penalties against them for failure to obtain such insurance.

Defendants filed a cross-complaint against Werner Co. for products liability. Defendants allege Werner supplied the step-ladder on which Plaintiff was injured, and contend defects in the ladder caused the fall. Plaintiff has not, to date, filed an action against Werner.

2. Motion for Determination of Good Faith Settlement

At issue today is a settlement between Plaintiff and Werner pursuant to which Werner would pay Plaintiff $7500 in full settlement of all potential claims against it. Werner seeks a good faith determination, and the Azizians oppose the motion.

a. Parties’ Positions

Werner contends there is absolutely no evidence that the ladder was faulty. Werner notes that Plaintiff has not actually sued it, but it wishes to buy its peace in connection with this litigation. Werner contends Plaintiff’s medical damages are in the amount of $13,000, and he has no loss of earnings claim. It contends its payment of $7500, more than half of the claimed medical damages, is in good faith.

The Azizians oppose the motion. They contend the settlement is out of the ballpark, as Plaintiff recently made a $400,000 demand to settle the action. They contend they have been trying to depose Werner’s PMK, and Werner has not made the PMK available for deposition; attendant to the notice of deposition was a demand for production of documents, which they contend will show whether the subject ladder was defective. Additionally, the parties are working on a protective order concerning testing of the ladder itself. The Azizians also complain that they have not received a copy of the settlement agreement, and that Werner did not make a showing concerning its solvency in connection with the motion.

In reply, Werner contends it has done nothing to obstruct discovery, and the Azizians are at fault for failing to conduct the discovery they seek earlier. It shows that it recently produced a copy of the signed settlement agreement to the Azizians. It continues to maintain that there is no evidence the ladder, which was a common older model, was defective in any way.

b. Analysis

i. Law Governing Good Faith Settlement

“A more appropriate definition of ‘good faith,’ in keeping with the policies of American Motorcycle and the statute, would enable the trial court to 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 is ‘established by a showing that a settling defendant paid less than his theoretical proportionate or fair share.’ [Citation.] Such a rule would unduly discourage settlements. ‘For the damages are often speculative, and the probability of legal liability therefor is often uncertain or remote. And even where the claimant's damages are obviously great, and the liability therefor certain, a disproportionately low settlement figure is often reasonable in the case of a relatively insolvent, and uninsured, or underinsured, joint tortfeasor.’ [Citation.] Moreover, such a rule would tend to convert the pretrial settlement approval procedure into a full scale mini trial [citation].

“But these considerations do not lead to the conclusion 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 a rough approximation of plaintiffs' total recovery and the settlor's proportionate liability, the amount paid in settlement, the allocation of settlement proceeds among plaintiffs, and a recognition that a settlor should pay less in settlement than he would if he were found liable after a trial. Other relevant considerations include the financial conditions and insurance policy limits of settling defendants, as well as the existence of collusion, fraud, or tortious conduct aimed to injure the interests of nonsettling defendants. [Citation.] Finally, practical considerations obviously 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.’ [Citation.] The party asserting the lack of good faith, who has the burden of proof on that issue (§877.6(d)), should be permitted to demonstrate, if he can, that the settlement is so far ‘out of the ballpark’ in relation to these factors as to be inconsistent with the equitable objectives of the statute. Such a demonstration would establish that the proposed settlement was not a ‘settlement made in good faith’ within the terms of section 877.6.

“Section 877.6 contemplates that the determination of good faith may be made by the court on the basis of affidavits (subd. (b)), and as the court observed in River Garden Farms, ‘The price levels are not as unpredictable as one might suppose. Despite the uncertainties, generalized valuation criteria are recognized by the personal injury bar, insurance claims departments and pretrial settlement courts. 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. Represented by knowledgeable counsel, settlement negotiators can predict with some assurance whether a settlement is within the reasonable range permitted by the criterion of good faith. 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.’ [Citation.]” Tech-Bilt, Inc. v. Woodward-Clyde & Assoc. (1985) 38 Cal.3d 488, 498-501.

The Tech-Bilt factors can be summarized as follows:

(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.

CCP §877.6(d) places the burden of proof on a motion concerning settlement on the party contesting the settlement. However, where the non-settling 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 non-settling defendants have filed an opposition challenging good faith of the settlement. City of Grand Terrace v. Sup.Ct. (1987) 192 Cal.App.3d 1251, 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 Cal.App.3d 822, 834; Mattco Forge, Inc. v. Arthur Young & Co. (1995) 38 Cal.App.4th 1337, 1351.

ii. Continuance

Often, in connection with a motion for determination of good faith settlement, there has been no discovery on various Tech-Bilt factors, including the settlor's financial condition or claims of collusion . In such cases, the non-settling party may be entitled to a continuance for that purpose. City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1265; see also Franklin Mint Co. v. Superior Court (2005) 130 Cal.App.4th 1550, 1561.

iii. Analysis

There is currently no evidence before the Court that the ladder was defective. Absent such evidence, the Court would be inclined to find the settlement in good faith, even if the settlement is small and/or there is no evidence concerning Werner’s financial condition.

The Court does tend to find that any failure to conduct discovery concerning the potential defects in the ladder is the fault of the Azizians. However, in an abundance of caution, the Court is inclined to continue the hearing on the motion to permit the discovery to go forward. The Court asks the parties to work together forthwith to create a protective order concerning the desired discovery, depose Werner’s PMK, and conduct any necessary testing.

The Court continues the hearing on the motion for two months, to Monday, 4/06/20 at 1:30 p.m. in Department 31 of the Spring Street Courthouse. Supplemental and opposition are due per Code. If the pending discovery does not reveal evidence of a defect in Werner’s ladder, the Court asks the Azizians to seriously consider stipulating to the good faith of the settlement.

Werner is ordered to give notice.

Parties who intend to submit on this tentative must send an email to the court at sscdept31@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 may be placed off calendar. If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.