The opinion of the court was delivered by: Oliver W. Wanger United States District Judge
ORDER RE UNITED STATES' MOTION FOR DETERMINATION OF MOTION TO FAITH SETTLEMENT GOOD FAITH AND DISMISS BASED UPON GOOD AND RELATED CROSS-ACTIONS
This case entails a settlement reached between the United States Postal Service ("Postal Service") and the parents of Maria Celeste Espinoza-Portillo, a four-year-old girl who was hit and killed by a Postal Service vehicle. After the parents settled with the Postal Service, the parents filed a lawsuit in state court against their neighbors, Raudel Moreno and Maricela Moreno, claiming that the Morenos negligently supervised Maria who was playing at the Morenos' house moments before the accident. The Morenos filed a cross-complaint in state court against the Postal Service asserting causes of action for "comparative indemnification" and "implied equitable indemnification." The United States then removed the case to federal court.
Before the court is a motion by the United States for an order determining good faith settlement, and a motion to dismiss the cross-complaint based upon good faith settlement or alternatively, a motion for summary judgment. The following background facts, which no party disputes, are taken from the materials submitted in connection with the motion.
On April 10, 2006, the United States received a wrongful death claim from Roldolfo Espinoza and Gaudalupe Portillo (collectively "plaintiffs" or "claimants") alleging that the negligence of a Postal Service driver, who was delivering mail to their home, caused the death of their daughter, Maria. (Doc. 4 at 3.) The Postal Service's National Tort Center handled the claim pursuant to the Federal Tort Claims Act, 28 U.S.C. § 2671 et seq. On the claim form they submitted, the claimants, through their attorney, demanded three million dollars in damages for Maria's wrongful death. (Doc. 4, Ex. 1.) Attorney Joseph R. Doyle negotiated the claim on behalf of the Postal Service. (Doc. 4, Doyle Decl. ¶ 3.)
Prior to negotiations with claimants' counsel, Doyle learned of a Traffic Collision Report ("Report") prepared by an officer at the scene of the accident. (Doc. 4, Ex. 3, Doyle Decl. ¶ 6.) The Report concludes that Maria caused the collision by running across the street and into the vehicle's path. (Doc. 4, Ex. 3 at 13.) The Report contains various statements from individuals at the scene, including Maria's mother, Ms. Moreno, and a purported eye witness, Ismael Cruz. The Report contains the following statement from Cruz:
I WAS WALKING NORTH IN THE STREET AND I WAS ON MY WAY TO PLAY WITH HER [MARIA'S] BROTHERS. I SAW THE MAIL MAN STOPPED AT THE MAIL BOX. I SAW HER [MARIA] COME THE SMALL GATE FROM THE HOUSE ON THE RIGHT AND SHE RAN OUT OF ACROSS THE STREET AND SHE WAS TRYING TO GET TO THE MAIL BOX TO GET THE MAIL. IN FRONT OF THE MAIL TRUCK. I THINK THE MAIL MAN DROVE FORWARD AND RAN OVER HER.
IT HAPPENED TO (SIC) QUICK AND PUT HER HANDS STRAIGHT AS IF TRYING TO STOP THE ITRUCK BUT SAW HER I THINK THE TIRES RAN OVER HER. I WENT TO THE MAIL MAN AFTER IT HAPPENED AND I TOLD OUT OF NOWHERE.
HIM THAT I THOUGHT IT WASN'T HIS FAULT BECAUSE SHE CAME
(Doc. 4, Ex. 3 at 10.) In light of the Report, during negotiations with the claimants, the United States took the position that it was not responsible for the accident. (Doc. 4, Doyle Decl. ¶ 11.) During the pendency of negotiations, Doyle learned that the claimants intended to pursue a separate claim against the Morenos on the theory that they negligently supervised Maria on the day of the accident. (Doc. 4, Doyle Decl. ¶ 10.) According to a statement in the Report attributed to Ms. Portillo, she walked her daughter Maria across the street and stood on the sidewalk while Maria entered the Morenos' yard and began playing. (Doc. 4, Ex. 3 at 11.) Ms. Portillo saw Ms. Moreno and they acknowledged each other -- Ms. Portillo had left her daughter at the Morenos before. (Id.) Thereafter, Ms. Portillo walked across the street, engaged in some yard work in the front of her home and then walked into her backyard to cut some branches. (Id.) Approximately forty minutes later, her son came and informed her of the accident. (Id.)
Ultimately, in July 2007, the claimants settled with the Postal Service for $270,000. (Doc. 4, Doyle Decl. ¶ 4, Ex. 2.) The parties, including the claimants attorney, executed a settlement agreement (entitled "Stipulation For Compromise Settlement And Release Of Federal Tort Claims Act Claims Pursuant To 28 U.S.C. § 2672"), a copy of which the United States has provided in support of its motion. (Doc. 4, Ex. 2.) Following approval by the Department of Justice, the Postal Service tendered payment to claimants and their attorney in one check for the full settlement amount. (Doc. 4, Doyle Decl. ¶ 13, Ex. 4.) Given the informal nature of negotiations, claimants were not required to participate in formal discovery or prove negligence on the part of the postal carrier.
In January 2008, approximately six months after they reached a settlement with the Postal Service, Maria's parents filed an action in state court against their neighbors, the Morenos, on the theory that they "negligently and recklessly failed to provide proper supervision to [the] decedent minor." (Doc. 8, Ex. A at 3.) The Morenos then filed a cross-complaint against the Postal Service for indemnity (Doc. 8, Ex. B.), and thereafter the United States removed the action to federal court and filed the instant motion.
During the pendency of the motion, counsel for the United States communicated with counsel for Maria's parents, Fernando F. Chavez, and learned that on April 30, 2007, they made a written demand on the Morenos' insurance company to settle the negligent supervision claim for $300,000, the policy limits. The United States included a copy of this written demand in its reply brief. (Doc. 10, Lodge Decl., Ex. 1.) Through its ...