Moore v. ANG Transport Inc. ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 TIM MOORE, No. 2:18-cv-02919 WBS KJN 13 Plaintiff, 14 v. MEMORANDUM & ORDER RE: MOTION FOR GOOD FAITH SETTLEMENT 15 ANG TRANSPORT INC., MOORE FREIGHT BROKERS INC., TUFF 16 MACHINERY LLC, 17 Defendants. 18 19 ----oo0oo---- 20 Plaintiff Tim Moore filed this lawsuit against 21 defendants ANG Transport, Inc. (“ANG Transport”), Tuff Machinery 22 LLC (“Tuff Machinery”), and Moore Brokers Inc., doing business as 23 Moore Transportation Services (“Moore Transportation”), alleging 24 violations of state and federal laws to recover costs of a 25 tractor destroyed while in transport. Before the court now is 26 ANG Transport’s motion for a determination of good faith 27 settlement. (Docket No. 49.) 28 I. Background 1 Plaintiff purchased a John Deere Model 650H LT Tractor 2 from defendant Tuff Machinery in October 2017. (Compl. ¶ 7 3 (Docket No. 1).) The parties agreed that Tuff Machinery would 4 deliver the tractor to the plaintiff. (Id. ¶ 10.) Pursuant to 5 that agreement, Tuff Machinery hired Moore Transport to act as 6 the shipping broker for the tractor shipment. (Id. ¶ 11.) Moore 7 Transport then hired ANG Transport to deliver the tractor. (Id. 8 ¶ 12.) While transporting the tractor from Texas to California 9 in November 2017, ANG Transport’s truck transporting the tractor 10 was involved in an accident and the tractor was destroyed. (Id. 11 ¶ 13.) The total estimated cost of replacement parts for the 12 tractor was approximately $63,506.79. (Decl. of Stephen W. 13 Robertson (“Robertson Decl.”) ¶ 3 (Docket No. 51).) 14 After ANG Transport ignored plaintiff’s demand for 15 payment, plaintiff filed this action against it alleging 16 violation of the Carmack Amendment to Interstate Commerce Act, 49 17 U.S.C. § 14706.1 (Compl. ¶¶ 26-35.) Following the filing, 18 Travelers Property Casualty Company of America (“Travelers”) 19 asserted a claim in subrogation against ANG Transport relating to 20 the damage of a roller machine that occurred in the same 21 accident.2 (Robertson Decl. ¶ 4.) Travelers’ claims exceeded 22 $100,000. (Id.) Plaintiff, ANG Transport, and Travelers 23 1 Plaintiff also brought a breach of contract claim 24 against Tuff Machinery and a negligence claim against Moore Transportation. (Compl. ¶¶ 16-25, 36-46.) In July 2019, this 25 court granted Moore Freight’s motion for good faith settlement (Docket No. 40) and granted Tuff Machinery’s motion to dismiss 26 (Docket No. 41). 27 2 Travelers did not file an independent complaint. 28 (Robertson Decl. ¶ 4.) 1 proceeded through this court’s Voluntary Dispute Resolution 2 Process and reached a settlement. (Id. ¶¶ 4, 7-8, Exs. B-C.) 3 ANG Transport now seeks this court’s determination that the 4 settlement was made in good faith. (Docket No. 49.) The motion 5 is unopposed. (Pl.’s Statement of Non-Opp’n (Docket No. 54).) 6 II. Discussion 7 A. Applicable Law 8 In California, state substantive law on settlements is 9 codified at California Code of Civil Procedure Section 877. 10 Section 877.6, the procedural mechanism for implementing § 877, 11 is intended to promote the equitable sharing of costs among the 12 parties at fault and encourage settlement. Tech-Bilt, Inc. v. 13 Woodward-Clyde & Ass’n, 38 Cal. 3d 488, 494 (1985). While the 14 procedures set forth in § 877.6 “do not govern a federal action” 15 like the one here, “the substantive provisions of California law” 16 are applicable. Fed. Sav. & Loan Ins. Corp. v. Butler, 904 F.2d 17 505, 511 (9th Cir. 1990). 18 Courts are permitted to approve a settlement under § 19 877.6 if it was made in good faith. Cal. Civ. P. § 877.6. To 20 assess whether a settlement was made in good faith, courts must 21 determine whether the settlement is within the “reasonable range” 22 of the settling tortfeasor’s share of liability for the 23 plaintiffs’ injuries. Tech-Bilt, 38 Cal. 3d at 499. Courts 24 consider the following, among other practical factors: (1) a 25 rough approximation of the plaintiffs’ total recovery and the 26 settlor’s proportionate liability; (2) the amount to be paid in 27 settlement; (3) the allocation of settlement proceeds among the 28 plaintiffs; (4) a recognition that a settlor should pay less in 1 settlement than he would if he were found liable after a trial; 2 (5) the financial conditions and insurance policy limits of the 3 settling defendants; and (6) the existence of collusion, fraud, 4 or tortious conduct aimed to injure the interests of non-settling 5 defendants. Id. Ultimately, the determination is left to the 6 trial court’s discretion. Id. at 502. 7 B. Application to Plaintiff’s Claims 8 The first, second, and third Tech-Bilt factors consider 9 whether the agreed upon settlement accurately reflects the 10 settling parties’ proportionate liability and whether the 11 allocation of the settlement proceeds is equitable under the 12 circumstances. Id. at 499. Settlements need only be “in the 13 ballpark” of the settling party’s proportionate share of 14 liability, rather than calculated with exacting mathematical 15 certainty. Id. at 501 n.9. Under the settlement agreement here, 16 ANG Transport will pay a total of $100,000 between plaintiff and 17 Travelers. (Robertson Decl. ¶¶ 6-8, Exs. A-C.) This sum 18 represents the policy limits of ANG Transport’s insurance policy. 19 (Robertson Decl. ¶ 6, Ex. A.) Plaintiff will recover $45,000, 20 roughly 70 percent of the total estimated cost to repair the 21 damage to the tractor. (Robertson Decl. ¶ 7, Ex. B.) Travelers 22 will receive $55,000 in subrogation, slightly over half of its 23 claim. (Robertson Decl. ¶¶ 4, 8, Ex. C.) Accordingly, this 24 falls within the reasonable range articulated in Tech-Bilt. 25 The fourth factor stresses that the settling parties 26 should pay less in settlement than they would at trial. Tech- 27 Bilt, 38 Cal. 3d at 499. If plaintiff and Travelers were to 28 recover the total amount claimed, ANG Transport would be liable 1 for far more than $100,000. (See Robertson Decl. ¶¶ 3-4.) ANG 2 Transport submits that it is waiving its right to trial and 3 suggests that settlement would conserve the court’s and the 4 parties’ resources. These considerations weigh in favor of 5 settlement. See City of West Sacramento v. R & L Bus. Mgmt., No. 6 2:18-cv-900 WBS EFB, 2019 WL 2249629, at *3 (E.D. Cal. May 24, 7 2019) (citing Coppola v. Smith, No. 1:11-CV-1257 AWI BAM, 2017 WL 8 4574091, at *4 (E.D. Cal. Oct. 13, 2017)). Accordingly, this 9 factor favors a finding of good faith. 10 The fifth factor accounts for ANG Transport’s financial 11 conditions and insurance policy limits. Tech-Bilt, 38 Cal. 3d at 12 499. As discussed, the $100,000 settlement will exhaust ANG 13 Transport’s insurance policy limit. (Robertson Decl. ¶ 6, Ex. 14 A.) Accordingly, this favor favors approval of the settlements 15 because ANG could not offer any greater settlement through its 16 insurance. 17 Finally, the sixth factor considers the existence of 18 collusion, fraud, or tortious conduct aimed to injure the 19 interests of non-settling defendants. Tech-Bilt, 38 Cal. 3d at 20 499. ANG Transport’s counsel certified that the negotiations for 21 both settlements were conducted at arm’s length through the 22 Voluntary Dispute Resolution Process and the settlement was 23 reached fairly and properly. (Robertson Decl. ¶ 9.) There is no 24 evidence to suggest otherwise, and the settling parties agree 25 their settlements are reasonable compromises. (Id.) 26 Additionally, the other defendants in this matter have already 27 settled their claims with plaintiff or had claims against them 28 dismissed, and thus, their interests will be unimpaired by the 1 present settlement. (See Docket Nos. 40-41.) Accordingly, this 2 factor, too, favors the court’s finding of good faith. 3 Overall, the Tech-Bilt factors favor a finding of good 4 faith. Accordingly, THE COURT HEREBY FINDS that: 5 6 1. The settlement between plaintiff and ANG Transport was 7 in good faith under Cal. Civ. P. § 877.6 and Tech Bilt, 8 Inc. v. Woodward-Clyde & Associates, 38 Cal. 3d 488 9 (1985); 10 2. The settlement between subrogated plaintiff Travelers 11 and ANG Transport was also in good faith under Cal. 12 Civ. P. § 877.6 and Tech Bilt, Inc. v. Woodward-Clyde & 13 Associates, 38 Cal. 3d 488 (1985); and 14 3. Any and all claims or future claims for contribution or 15 indemnity, arising out of the facts alleged in the 16 complaint, and as further identified and provided for 17 in the settlement, regardless of when such claims were 18 asserted or by whom, are barred. 19 IT IS THEREFORE ORDERED that ANG Transport’s motion for 20 determination of good faith settlement (Docket No. 49) be, and 21 the same hereby is, GRANTED; 22 AND IT IS FURTHER ORDERED that plaintiff’s complaint 23 (Docket No. 1) be, and the same hereby is, dismissed with 24 | prejudice as to ANG Transport, Inc.; and the Clerk of Court is 25 || directed to close this case. 26 Dated: January 23, 2020 27 aithow A, A. WILLIAM B. SHUBB 28 UNITED STATES DISTRICT JUDGE