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Abf Freight Systems, Inc. v. United States

United States District Court, Ninth Circuit

June 26, 2013



SUSAN ILLSTON, District Judge.

Currently before the Court is the motion by defendant United States of America ("USA") for determination of good faith settlement. The other defendants in this action have not opposed the motion. Pursuant to Civil Local Rule 7-1(b), the Court finds this matter suitable for disposition without oral argument and therefore VACATES the hearing currently scheduled for June 28, 2013. Having carefully considered the papers submitted, the Court hereby GRANTS defendant's motion, for the reasons set forth below.


The facts of this case are recounted in substantial detail in the Court's March 6, 2013 order granting the motion by defendants West Bay Builders, Inc. ("WBB") and Daley's Drywall ("Daley's") for determination of good faith settlement. See Docket No. 82 ("Order"). This case arises from the alleged slip and fall of plaintiff Thomas Mills, who was employed as a driver by plaintiff ABF Freight Systems, Inc. ("ABF"). On December 12, 2008, Mills was leaving an elevator in the Department of Homeland Security facility's loading dock while hauling a 1, 800-pound pallet, and he slipped and fell on an allegedly wet surface, injuring himself.

These consolidated lawsuits followed. Defendant USA owned the facility and contracted with defendant Security Consultants Group, Inc. ("SCG") to provide security for the facility, including the loading dock area. Defendant WBB was performing construction services on the facility, and it hired defendant Daley's to perform drywall work at the facility. On November 16, 2010, plaintiff ABF filed suit against the USA under the Federal Tort Claims Act seeking $200, 000 in reimbursement for past and future workers' compensation benefits paid to or on behalf of Mills as a result of the injury. On September 20, 2011, plaintiff Mills filed an action (Case No. 11-4663) under the Federal Tort Claims Act alleging negligence against the USA. The cases were consolidated, and on April 5, 2012, Mills filed an amended complaint alleging negligence against all four defendants for damages in excess of $3, 000, 000.

On February 5, 2013, the parties engaged in a daylong mediation session. After that session, plaintiffs agreed to settle with WBB and Daley's, which together agreed to pay $390, 000. The Court determined the settlement was in good faith.

Plaintiffs and the USA continued their settlement discussions though the court-appointed mediator. Decl. of Neill T. Tseng ("Tseng Decl.") ¶ 4. On April 1, 2013, the USA agreed to settle with both plaintiffs for a total payment of $50, 000. Id. Under the terms of the settlement agreement, the USA would pay Mills the $50, 000, ABF would receive workers' compensation credit for that amount, and both plaintiffs would dismiss the USA with prejudice. Id., Ex. A. Defendant SCG signed a stipulation that the settlement was in good faith, and none of the USA's co-defendants opposed this motion for determination of good faith settlement.


Under California law, "[w]here a release, dismissal with or without prejudice or a covenant not to sue or not to enforce judgment is given in good faith before verdict or judgment to one or more of a number of tortfeasors claimed to be liable for the same tort... [i]t shall discharge the tortfeasor to whom it is given from all liability for any contribution to any other tortfeasors." Cal. Civ. Pro. § 877. As a check on the validity of settlement agreements that might affect joint tortfeasors not a party to the settlement, California law further requires the court to make a determination that a settlement has been entered in good faith before that settlement can become final. See Cal. Civ. Pro. § 877.6. Section 877.6 allows a party to a proposed settlement to move the court for an order making such a determination.[1] See id. That section provides further that "[a] determination by the court that the settlement was made in good faith shall bar any other joint tortfeasor from any further claims against the settling tortfeasor for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault." See Cal. Civ. Pro. § 877.6(c).

A good faith settlement is one 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 & Assoc., 38 Cal.3d 488, 499 (1985). To determine whether a proposed settlement fits that description, the court should consider: (1) a rough approximation of the settlor's proportionate liability; (2) the amount of the settlement; (3) the fact that a settlor should pay less in settlement that the amount of damages for which the settlor would be liable at trial; (4) the financial condition of the settling defendant and insurance policy limits, if any; (5) allocation of the settlement proceeds among the plaintiffs; and (6) the existence or absence of any collusion, fraud or tortious conduct aimed to injure the interests of any non-settling defendants. Id. at 499-500. The court assesses these factors "on the basis of the information available at the time of settlement." Id. at 499.

Ultimately, "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." Torres v. Union Pacific R.R. Co., 157 Cal.App.3d 499, 509 (1984). The court should approve even a contested settlement, unless there is a showing "that the settlement is so far out of the ballpark in relation to these factors to be inconsistent with the equitable objectives of the statute." Tech-Bilt, 38 Cal.3d at 499-500. The burden of proving that a settlement between the parties was not made in good faith is on the non-settling tortfeasor. Cal. Civ. Pro. § 877.6(d).


The USA seeks a court order determining that the settlement agreement was entered by the parties in good faith and barring any present or potential joint tortfeasor from bringing any future claims against it. The Court finds that the six factors outlined by the ...

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