Guy v. Lorenzen

[5] 6 UNITED STATES DISTRICT COURT 7 SOUTHERN DISTRICT OF CALIFORNIA [8] Case No.: 20cv2027-BAS(BLM) 9 DEOVANTE L. GUY, by and through Guardian Ad Litem for Deovante Guy, QUINTASIA 10 WALKER, REPORT AND RECOMMENDATION FOR ORDER APPROVING PARTIAL 11 Plaintiff, SETTLEMENT 12 v. 13 MATTHEW LORENZEN, an individual; ANNIE BRADY, an individual; and THE CITY OF SAN [14] DIEGO, a governmental entity, [15] Defendants. [16] 17 On November 20, 2020, Plaintiff Deovante L. Guy (“Plaintiff”), by and through his 18 guardian , Defendant Annie Brady (“Defendant Brady”), and Defendants Lorenzen, City 19 of San Diego, and San Diego Police Department filed a Joint Motion for a Determination of Good 20 Faith Settlement. ECF No. 7. The parties explain that Defendant Brady and Plaintiff have agreed 21 to settle this case as to Defendant Brady for a payment of $100,000.00. Id. at 2-3. All of the 22 parties recommend that the Court approve this settlement because the payment constitutes the 23 policy limit of Defendant Brady’s insurance coverage, Defendant Brady does not have the 24 financial ability to contribute further to the settlement, and the settlement is within the “’ballpark’ 25 of Defendant [Brady’s] proportionate liability and was entered into in good faith within the 26 standards set forth in California Code of Civil Procedure § 877.6 and Tech-Bilt v. Woodward27 Clyde & Associates, (1958) 38 Cal.3d 488 . [sic] Schmid v. Superior Court (1988) 205 Cal.App.3d 1 After reviewing the motion, the Court issued an order requiring supplemental briefing to 2 enable it to perform its duty of evaluating whether the settlement funds were being handled in 3 a fair and reasonable manner to benefit the incompetent plaintiff, Deovante Guy. ECF No. 9; 4 Civ. L.R. 17.1.a. In response, Plaintiff filed a Statement in Support of Approval of Good Faith 5 Settlement with a supporting declaration from the guardian , Quintasia Walker (“GAL 6 Walker”). ECF No. 10. Plaintiff reiterates the previously-stated reasons why the proposed 7 $100,000 settlement is a good faith settlement that should be approved by the Court. Id. at 3 . 8 Plaintiff also asserts that the liability against Defendant Brady is “not at all a certainty” and that 9 “the overwhelming responsibility” for Plaintiff’s injuries belong to the other defendants. Id. With 10 regard to the issue of the manner of distribution of the funds, GAL Walker asks the Court to 11 delay making the required determination that the settlement funds are being handled in a fair 12 and reasonable way. ECF No. 10 at 4. Ms. Walker explains that Plaintiff was severely injured 13 by the actions of the defendants, remains “bedridden with severe cognitive defects,” and likely 14 will require extensive future medical treatment, therapy, and care. ECF No. 10-1, Declaration 15 of Quintasia Walker, Guardian Ad Litem for Plaintiff Deovante Guy (“Walker Decl.”), at ¶¶ 2-9. 16 Because the majority of the Plaintiff’s claims remain at issue and because Plaintiff’s damages 17 dramatically exceed the insurance policy limits, Plaintiff asks the Court to defer approval of the 18 distribution of the proposed settlement funds and to authorize the insurance proceeds to be 19 deposited into an “interest bearing trust account or money market account with interest.” Id. 20 at 4. Plaintiff states that after the entire case is resolved, Plaintiff will file a “Petition for Approval 21 and Distribution, supported by Special Needs Trust and Proposed Special Needs Trustee.” Id. 22 Defendants Lorenzen and the City of San Diego (“City Defendants”) filed a response to 23 Plaintiff’s supplemental filing. ECF No. 11. City Defendants reiterate that they support the 24 Court’s finding of good faith under the Tech-Bilt standard based on “Defendant Annie Brady’s 25 stated insurance policy limits and insolvency” and the fact that a “pursuit of a contribution or 26 indemnity claim would be fruitless.” Id. at 1-3 . However, City Defendants note that they 27 “adamantly disagree” with Plaintiff’s claims that the “overwhelming responsibility” of Plaintiff’s 1 that they do not waive their rights to “request a setoff against the total recoverable damages or 2 to request that the jury make an apportionment determination (including an allocation as to 3 Defendant Brady) for purposes of awarding damages at trial.” Id. 4 Under California Code of Civil Procedure section 877, “[w]here a release ... is given in 5 good faith before . . . judgment to one or more of a number of tortfeasors claimed to be liable 6 for the same tort, or to one or more other co-obligors mutually subject to contribution rights,” 7 the release shall “reduce the claims against the others in the amount stipulated by the release” 8 and “discharge the party to whom it is given from all liability for any contribution to any other 9 parties.” Cal. Civ. Proc. Code § 877 (a), (b). To obtain a determination that it reached a 10 settlement in good faith, “a settling party may give notice of settlement to all parties and to the 11 court, together with an application for determination of good faith settlement.” Id. § 12 877.6(a)(2). Further, a “plaintiff’s claims for damages are not determinative in finding good 13 faith; rather, the court is called upon to make a ‘rough approximation’ of what the plaintiff would 14 actually recover.” West v. Superior Ct., 27 Cal. App. 4th 1625, 1636 (1994) (internal citation 15 omitted). 16 To determine whether a settlement has been made in good faith, the Court considers the 17 factors set out in Tech-Bilt including: (1) a rough approximation of plaintiffs' total recovery and 18 the settlor's proportionate liability; (2) the amount paid in settlement; (3) a recognition that a 19 settlor should pay less in settlement than he would if he were found liable after a trial; (4) the 20 allocation of settlement proceeds among plaintiffs; (5) the settling party's financial condition and 21 the availability of insurance; and (6) evidence of any collusion, fraud or tortious fraud between 22 the settlor and the plaintiffs aimed at requiring the non-settling parties to pay more than their 23 fair share. Tech-Bilt, 38 Cal. 3d at 499 ; see also Mason & Dixon, 632 F.3d at 1064. The Court's 24 determination must be based on the information available at the time of settlement. Tech-Bilt, [25] 38 Cal. 3d at 499 . 26 A court must only weigh the Tech–Bilt factors when the good-faith nature of a settlement 27 is disputed. Marine Grp., LLC v. Marine Travelift, Inc., 2013 WL 416407 , at *4 (S.D. Cal. Jan.30, 1 absence of a dispute, a “barebones motion which sets forth the ground of good faith, 2 accompanied by a declaration which sets forth a brief background of the case is sufficient.” Id. 3 Here, the Parties filed a joint motion for a determination of a good faith settlement. ECF No. 7. 4 As there is no objection to the good-faith nature of the settlement, the Court does not deem it 5 necessary to engage in a comprehensive Tech-Bilt analysis. The Court notes that City 6 Defendants objected to Plaintiff’s claims that the majority of Plaintiff’s injuries rests with 7 Defendants Lorenzen and the City of San Diego. ECF No. 11 at 1-3. However, City Defendants 8 also stated that it would prove fruitless to pursue a claim for contribution or indemnity from 9 Defendant Brady in light of her insolvency and insurance policy limit. Id. Under California law, 10 when a “‘claimant’s damages are obviously great . . . a disproportionately low settlement figure 11 is often reasonable in the case of a relatively insolvent, and uninsured, or underinsured, joint 12 tortfeasor.’” Fed. Deposit Ins. Corp. v. Dellen, No. CV 10-4915 DSF, 2012 WL 12887408 , at *3 13 (C.D. Cal. Oct. 30, 2012) (quoting Tech-Bilt, 38 Cal. 3d at 499 ); see GATX/Airlog Co. v. Evergreen 14 Int'l Airlines, Inc., No. C 96-2494 CW, 2000 WL 36741015 , at *4 (N.D. Cal. Aug. 4, 2000) (finding 15 that a settlement was reached in good faith when the settling party did not have sufficient funds 16 to satisfy a larger judgment against it); see also Lewis v. Russell, No. 2:03-CV-02646 WBS AC, [17] 2019 WL 5260731 , at *4 (E.D. Cal. Oct. 17, 2019) (finding that the parties sufficiently analyzed 18 the fifth Tech-Bilt factor by evaluating their available insurance policy limits and financial 19 conditions); see also Cnty. of L.A. v. Guerreo, 209 Cal. App. 3d 1149, 1157-58 (1989) (finding 20 that a settling defendant’s modest financial condition and insurance policy limits are necessarily 21 controlling and effectively override the other Tech-Bilt factors). The Court has reviewed the 22 terms of the settlement and, in light of Defendant Brady’s financial status, is satisfied that the 23 settlement is made in good faith. Cal. Civ. Proc. Code § 877 . There is no evidence of collusion 24 or fraud, and the amount to be paid by Defendant Brady under the settlement agreement is 25 reasonable. 26 District courts have a special duty to protect the interests of incompetent and minor [27] 1 plaintiffs. See Fed. R. Civ. P. 17(c)1; Robidoux v. Rosengren, 638 F.3d 1177, 1181 (9th Cir. 2 2011). “In the context of proposed settlements in suits involving minor plaintiffs, this special 3 duty requires a district court to ‘conduct its own inquiry to determine whether the settlement 4 serves the best interests of the minor.’” Robidoux, 638 F.3d at 1181 (quoting Dacanay v. 5 Mendoza, 573 F.2d 1075, 1080 (9th Cir. 1978)); see also Salmeron v. United States, 724 F.2d 6 1357, 1363 (9th Cir. 1983) (holding that “a court must independently investigate and evaluate 7 any compromise or settlement of a minor’s claims to assure itself that the minor’s interests are 8 protected, even if the settlement has been recommended or negotiated by the minor’s parent 9 or guardian .”). This inquiry should focus on “whether the net amount distributed to 10 each minor plaintiff in the settlement is fair and reasonable, in light of the facts of the case, the 11 minor’s specific claim, and recover in similar cases.” Robidoux, 638 F.3d at 1181-82 . Though 12 the Robidoux court’s decision involved a settlement for a minor, courts have applied the 13 Robidoux inquiry to cases involving settlement approval for incompetents. Mugglebee v. Allstate 14 Ins. Co., No. 14-CV-2474 JLS (JMA), 2018 WL 1410718 , at *2 (S.D. Cal. Mar. 21, 2018); see, 15 e.g., Smith v. City of Stockton, 185 F. Supp. 3d 1242, 1243 (E.D. Cal. 2016); see, e.g., Banuelos 16 v. City of San Bernardino, No. EDCV 13-736-GW(DTBX), 2018 WL 6131190 , at *2 (C.D. Cal. Apr. 17 26, 2018). To facilitate courts within this district fulfilling the duty to safeguard, Civil Local Rule 18 17.1(a) provides that “[n]o action by or on behalf of a minor or incompetent will be settled, 19 compromised, voluntarily discontinued, dismissed or terminated without court order or 20 judgment.” CivLR. 17.1(a). This requires the Court to question if the settlement is in the best 21 interests of the minor or incompetent and consider not only the fairness of the settlement, but 22 the structure and manner of the plan for the payment and distribution of the assets for the 23 benefit of the minor or incompetent. In light of the partial settlement, status of the ongoing 24 litigation, and Plaintiff’s medical needs, the Court finds that Plaintiff’s proposal to delay 25 distribution of the settlement proceeds is in the best interest of Mr. Guy. [27] 1 Rule 17(c) requires a district court to appoint a guardian to protect an incompetent [1] 2 Accordingly, the Court RECOMMENDS that District Judge Bashant find that the proposed 3 $100,000 settlement between Plaintiff and Defendant Brady is made in good faith and approve 4 ||the settlement. The Court also RECOMMENDS that District Judge Bashant approve the 5 || following settlement procedure: 6 1. Plaintiff's counsel, attorney Tanisha Bostick, must deposit the entire $100,000 7 || settlement payment in an interest-bearing account within 14 days of receiving the payment; 8 2. Plaintiff's counsel must ensure that neither she nor anyone else withdraw any of 9 || the settlement money without the Court's approval; and 10 3. Within thirty days after preliminary settlement with the remaining Defendants or 11 resolution of the remaining claims, Plaintiff's counsel must file a motion seeking approval of the 12 || proposed settlement in accordance with Local Rule 17.1., California Probate Code section 3600, 13 || ef seqg., and related case law. 14 This Court further RECOMMENDS that the parties’ Joint Motion for a Determination of 15 || Good Faith Settlement be GRANTED. 16 IT IS HEREBY ORDERED that any written objections to this Report and 17 || Recommendation must be filed with the Court and served on all parties no later than January 18 2021. The document should be captioned “Objections to Report and Recommendation.” 19 IT 1S FURTHER ORDERED that any reply to the objections shall be filed with the Court 20 || and served on all parties no later than January 25,2021. The parties are advised that failure 21 || to file objections within the specified time may waive the right to raise those objections on 22 || appeal of the Court’s order. Turner v. Duncan, 158 F.3d 449, 455 (9th Cir. 1998); Martinez v. 23 || Yist, 951 F.2d 1153, 1157 (9th Cir. 1991). 24 IT 1S SO ORDERED. 25 ||Dated: 1/11/2021 " 27 United States Magistrate Judge