Dole Food Co. v. Superior Court ( 2015 )

Filed 12/1/15
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
DOLE FOOD COMPANY, INC., et al., B262044
Petitioners, (Los Angeles County
Super. Ct. Nos. NC053643, BC499369
v. [related case Nos. NC053684,
NC053766, BC433429, BC433430,
SUPERIOR COURT OF LOS ANGELES BC433656, BC433657, BC454472,
COUNTY, BC544786])
Respondent;
SHELL OIL COMPANY et al.,
Real Parties in Interest.
Petition for writ of mandate from an order of the Superior Court of Los Angeles
County, William F. Highberger, Judge. Petition denied.
Gibson, Dunn & Crutcher, Andrea E. Neuman, Thomas A. Manakides and
William E. Thomson for Petitioners.
Frederick Bennett for Respondent.
Girardi Keese, Thomas V. Girardi, Robert W. Finnerty and Christopher T.
Aumais; Law Offices of Martin N. Buchanan and Martin N. Buchanan for Real Parties in
Interest Adelino Acosta et al. and City of Carson.
Morgan, Lewis & Bockius, David L. Schrader and Deanne L. Miller for Real
Parties in Interest Shell Oil Company and Equilon Enterprises LLC.
_________________________
This mass tort litigation arises out of an environmental investigation which
revealed that soil beneath a housing tract in Carson, California, was contaminated with
residual petroleum hydrocarbons. In this writ proceeding challenging the trial court’s
determination of good faith settlements, we are called upon to address whether a
government-ordered environmental cleanup was part of the settlement consideration, and
whether the good faith settlement could be approved without an individualized allocation
of the settlement proceeds among the numerous plaintiffs and between their economic
and noneconomic damages.
Petitioners Dole Food Company, Inc. (Dole), Oceanic Properties, Inc. (Oceanic),
and Barclay Hollander Corporation (Barclay Hollander) (collectively, Developer
Defendants) seek a writ of mandate directing respondent superior court to vacate its order
approving good faith settlements (Code Civ. Proc., § 877.6)1 between codefendants Shell
Oil Company (Shell) and Equilon Enterprises LLC dba Shell Oil Products US (Equilon)
(collectively Shell) and approximately 1,491 individual plaintiffs (Adelino Acosta et al.)
(collectively, Plaintiffs) as well as plaintiff City of Carson (Carson). We issued an order
to show cause.
The essential issues presented are twofold. First, we address whether the trial
court erred in approving the good faith settlements without first calculating the monetary
value of Shell’s obligation to comply with a cleanup and abatement order of the
California Regional Water Quality Control Board (Water Board) to implement a
Remedial Action Plan (RAP) which allegedly will cost Shell $146 million. The
nonsettling Developer Defendants contend the exclusion of the cost of the RAP from the
settlement valuation is collusive and will enable Plaintiffs to obtain a windfall, by
reducing the amount that will be set off against the nonsettling defendants’ liability.
Second, we address whether the trial court erred in approving the $90 million good faith
1
All further statutory references are to the Code of Civil Procedure, unless
otherwise specified.
2
settlement between Plaintiffs and Shell without an allocation of the settlement proceeds
among the various Plaintiffs, and between their economic and noneconomic damages.2
We conclude that Shell’s compliance with the RAP, which was mandated by the
Water Board pursuant to the state’s police powers, was not part of the settlement
consideration, and therefore should not be included in the valuation of the good faith
settlement. Although the trial court gave some weight to the value of the RAP
remediation in approving the good faith settlements, the error was harmless; on the record
presented, the $90 million monetary payment, standing alone, was well within the range
of Shell’s proportionate liability.
Finally, the determination of good faith settlement did not require an allocation of
the $90 million settlement consideration among the 1,491 individual Plaintiffs and
between their economic and noneconomic damages. Such individualized allocations,
which would have necessitated 1,491 mini-trials in this matter, are not required as part of
the good faith settlement process.
FACTUAL AND PROCEDURAL BACKGROUND
1. Parties.
The petitioners, the three Developer Defendants, are codefendants in two related
actions currently pending in respondent superior court, Adelino Acosta, et al. v. Shell Oil
Company, et al. (L.A. Super. Ct. No. NC053643 and related cases) (the Acosta action)
and City of Carson v. Shell Oil Company, et al. (L.A. Super. Ct. No. BC499369 and
related cases) (the Carson action).
Real parties in interest are: codefendants Shell and Equilon, whose joint motion
for determination of good faith settlement was granted by the trial court; approximately
2
The allocation is of concern to the nonsettling defendants because under
Proposition 51, “ ‘only that part of the settlement value attributable to plaintiff’s
economic damages may be credited against the nonsettling defendants’ liability.’ ”
(Espinoza v. Machonga (1992) 9 Cal.App.4th 268, 275 (Espinoza); see generally,
Bostick v. Flex Equipment Co., Inc. (2007) 147 Cal.App.4th 80, 89-90.)
3
1,491 individual plaintiffs in the Acosta action (Plaintiffs), who settled their claims
against Shell; and plaintiff Carson, which also settled its claims against Shell.
2. Sale and redevelopment of the site.
The 1,491 individual plaintiffs lived or worked in or near the Carousel housing
tract, a neighborhood of approximately 285 homes in Carson, California. Between the
1920’s and the early 1960’s, Shell owned and operated three crude oil storage reservoirs,
known as the Kast Tank Farm, at the site which later was developed as the Carousel tract.
It is alleged that at least one of the storage tanks was leaking its contents into the soil,
causing the site to become contaminated with toxic substances.3
In October 1965, Shell entered into an agreement to sell the land to Richard
Barclay and his associates (Barclay), a group of residential developers who intended to
convert the property into a residential subdivision. Shell transferred title to the property
in October 1966. In preparation for the change in use, the oil storage reservoirs were
decommissioned, the reservoir walls were torn down and buried on site, and the land was
graded for home construction.4 The land was rezoned from industrial to residential, and
the Carousel homes were constructed and sold by the early 1970’s.
3. Cleanup and abatement order against Shell.
In 2008, after discovering contamination nearby, the Water Board directed Shell to
conduct environmental testing at the Carousel tract. These investigations revealed the
presence of petroleum hydrocarbons in the areas where Shell’s former oil reservoirs had
been located. In March 2011, the Water Board issued a cleanup and abatement order to
Shell, directing it to submit a proposed remediation plan. This order was based on
Shell’s “ownership of the former Kast Property Tank Farm” and its “former operation of
a petroleum hydrocarbon tank farm at the Site.”
3
Shell denies it was aware that oil was leaking into the soil.
4
There is a dispute as to Shell’s role in preparation of the site.
4
After submitting an initial RAP that was rejected, Shell submitted a revised RAP
in June 2014, with an addendum in October 2014.5 Under the revised RAP, Shell will,
inter alia, excavate five to ten feet beneath the homes, following excavation will install a
vapor extraction and venting mechanism, and will institute comprehensive long-term
monitoring. In addition, Shell will provide temporary relocation assistance in connection
with implementing the RAP, and will compensate Carousel homeowners to ensure they
receive fair market value if they elect to sell their homes.6
Shell’s corporate representative, William Platt, has estimated it will cost Shell
$146 million to implement the RAP.
4. Superior court proceedings.
Apart from the Water Board proceeding, there are three pending actions in the
superior court relating to Shell’s use and sale of the site.
a. The Acosta action.
In October 2009, seventeen months after the Water Board ordered Shell to conduct
an investigation of the site, the numerous individual plaintiffs filed their lawsuit. They
are current and former Carousel homeowners and other persons who lived or worked in
the vicinity of the site.
The operative second amended complaint (SAC), filed in May 2011, named as
defendants Shell and Equilon, the alleged purchasers of the Kast property in 1922, as well
as three successors to the original developers, namely, Barclay Hollander, later acquired
by Oceanic and then Dole. The SAC asserted 12 causes of action against all the
defendants, to wit: negligence, intentional infliction of emotional distress, strict liability
5
According to real parties, the Water Board recently approved the revised RAP.
6
The Water Board staff subsequently recommended that Barclay Hollander, as a
successor to the past owner and developer of the property, be named as a discharger and
additional responsible party to the 2011 cleanup and abatement order. According to the
returns to the petition, the Water Board recently adopted the staff’s recommendation, thus
making Barclay Hollander responsible for contributing to the cost of the board-ordered
remediation.
5
for ultra-hazardous activity, permanent trespass, continuing trespass, public nuisance,
private nuisance, fraudulent concealment, negligent misrepresentation, public continuing
nuisance causing special injury, public permanent nuisance causing special injury, and
fraudulent and intentional deceit. Plaintiffs prayed for monetary and injunctive relief,
including remediation, for their alleged injuries to property, and monetary damages for
alleged personal injuries, including medical expenses, emotional distress, and medical
monitoring.
As against Shell, the SAC alleged, inter alia, that Shell’s liability arises out of its
ownership and operation of the leaking oil reservoirs, that Shell sold the site to the
developers “without fully disclosing the true extent of the dangerous contamination,” and
that “[d]espite [its] superior knowledge of [the] hazards and likely injury to individuals
such as PLAINTIFFS, [Shell] failed to disclose [its] knowledge and/or take any actions to
warn subsequent purchasers of the [presence of] toxic chemicals.”
The trial court subsequently granted Shell’s motion to strike Plaintiffs’ claims for
property damage as against Shell on statute of limitations grounds. (Code Civ.
Proc., § 338.) 7
b. The Carson action.
In January 2013, Carson, represented by the same law firm representing Plaintiffs,
filed suit against Shell and Developer Defendants alleging public nuisance and inverse
condemnation. By way of relief, Carson requested “full and total abatement of the
contamination down to approximately 40 feet below the Carousel neighborhood.” Before
the parties engaged in any discovery, the trial court stayed the Carson action.
7
The parties differ as to whether the trial court’s order eliminated all property
damage claims against Shell, or whether Plaintiffs’ claims against Shell for continuing
nuisance and continuing trespass survived that ruling. We note that at the hearing on the
motion for determination of good faith settlement, the trial court stated “Shell is out on
the property damages; Shell is in on personal injury.” The trial court then added,
however, “[t]here may be some more, but the heart of it is . . . personal injury.” (Italics
added.)
6
c. The indemnity action and cross-action.
In May 2014, Shell sued Barclay Hollander and others, seeking indemnity and
contribution with respect to the Acosta action, the Carson action, and the cost of
complying with Water Board orders. Shell alleged it had already incurred more than
$40 million in costs and expenses for site investigation and remediation.
In October 2014, Barclay Hollander filed a cross-complaint against Shell, seeking
indemnity and contribution on the ground that Shell contaminated the site and failed to
disclose the contamination. Barclay Hollander also sought a declaration that Shell was
not entitled to indemnification.
5. Shell’s settlements in the Acosta and Carson actions.
In October 2014, Shell reached settlements with Plaintiffs and Carson, with an
effective date of November 10, 2014.
a. The Acosta settlement agreement.
The Acosta settlement agreement requires Shell to pay Girardi Keese (counsel for
both Plaintiffs and Carson) $90 million in “full and final settlement of all Claims of all
Plaintiffs,” with Girardi Keese to be “solely responsible for determining the process by
which the Settlement Funds are allocated” among the Plaintiffs.
Under the terms of the Acosta settlement agreement, Shell would deliver
90 percent of the settlement funds to Girardi Keese once certain conditions are satisfied,
including: Girardi Keese’s delivery to Shell’s counsel of signed individual releases from
at least 90 percent of the individual Plaintiffs (with Girardi Keese remaining under a
continuing obligation to secure releases from the remaining Plaintiffs); issuance of a final
order approving all settling minors’ compromises; issuance of a final order determining
the settlement to be in good faith; and the filing of executed requests for dismissal with
prejudice of the Acosta litigation and the Carson action, with the parties to bear their own
fees and costs.
The Acosta agreement expressly addresses the Water Board proceeding. At
paragraph 3.6, it requires Plaintiffs and Girardi Keese “to cooperate in good faith in the
7
ongoing regulatory proceedings overseen by the Water Board,” and requires Plaintiffs to
“waive and release any rights to challenge any decision of the Water Board in evaluating
and approving the RAP for the Carousel Tract.” It also includes an acknowledgement
that the “Agreement fully and fairly addresses and compensates [Plaintiffs] for any and
all claims against Shell for alleged nuisance . . . and/or any other RAP-related impacts
created by the alleged contamination of the Carousel Tract and implementation of the
RAP.” Paragraph 3.7 thereof requires Plaintiffs to provide access for investigation and
RAP implementation, and provides that “Shell’s work on the Carousel project shall
continue to be done only in accordance with Water Board-approved work plans.” To
enforce these provisions, the agreement requests that the superior court “retain
jurisdiction over the Parties and the Actions for purposes of finalizing and enforcing the
Agreement, including, without limitation, the provisions requiring cooperation in the
ongoing regulatory proceedings overseen by the Water Board, access to properties, and
implementation of the RAP.”
To determine the allocation of the $90 million settlement proceeds among the
1,491 individual Plaintiffs, Shell and Plaintiffs stipulated to, and the trial court ordered,
the appointment of retired Justice Edward Panelli as Special Master to oversee the
settlement and subsequent apportionment of the funds.8
The Acosta settlement agreement does not differentiate between economic and
noneconomic damages. If there were a pro rata distribution, each plaintiff would receive
approximately $60,362 minus attorney fees and costs. Once the Acosta settlement is
funded, Justice Panelli will make an allocation to each plaintiff, based upon the plaintiff’s
inclusion in one of four categories: cancer claims; non-cancer personal injury claims;
medical monitoring and/or fear of cancer only; or property damage without physical
personal injury.
8
According to Plaintiffs’ counsel, in mass tort cases it is common practice for the
parties to agree upon a global settlement with a future allocation among the plaintiffs to
be made by plaintiffs’ counsel or a retired judge or mediator.
8
b. The Carson settlement agreement.
Unlike the Acosta settlement, the Carson settlement did not include a cash
payment. Rather, it consisted of mutual releases of all claims (although it does not
appear that Shell had asserted any claims against Carson) and a waiver of costs. The
Carson settlement defined the term “claim(s)” as specifically excluding “any benefits
provided for in the revised [RAP],” and it included a representation by Shell that “the
RAP is separate from this Agreement and any other settlement agreements in this
Action.” The Carson settlement required Carson to “cooperate in good faith” in the
Water Board proceedings and the “implementation of the RAP,” and sought retention of
jurisdiction by the superior court in “implementation of the RAP” and enforcement of the
settlement agreement.
6. Good faith settlement proceedings.
a. Shell’s motion for good faith settlement.
On December 12, 2014, Shell filed a motion for an order determining that the two
settlements, between Plaintiffs and Shell, and Carson and Shell, were entered into in good
faith, so as to bar any claims against Shell for indemnity or contribution arising out of
this matter. Shell asserted its payment of $90 million to settle Plaintiffs’ clams, along
with Carson’s dismissal of its public nuisance action in exchange for a mutual release and
waiver of costs, were well within the reasonable range of Shell’s alleged proportionate
liability.
Shell emphasized that a good faith settlement does not require “perfect or even
nearly perfect apportionment of liability. In order to encourage settlement, it is quite
proper for a settling defendant to pay less than his proportionate share of the anticipated
damages. What is required is simply that the settlement not be grossly disproportionate
to the settlor’s fair share.” (Abbott Ford, Inc. v. Superior Court (1987) 43 Cal.3d 858,
874-875 (Abbott Ford).) Further, a plaintiff’s claims for damages are not determinative
in finding good faith; rather, the court is called upon “to make a ‘rough approximation’ of
what the plaintiff would actually recover” (West v. Superior Court (1994) 27 Cal.App.4th
9
1625, 1636 (West)), with the evaluation to be made “on the basis of information available
at the time of settlement.” (Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985)
38 Cal.3d 488, 499 (Tech-Bilt).)
Shell asserted that notwithstanding the sizable claims by the numerous Plaintiffs,
it had “multiple defenses to liability that must be factored. Shell sold the property in
its as-is condition, with the crude oil storage reservoirs in place, to the Developer
Defendants, who took responsibility to decommission the reservoirs and remove residual
wastes. Property damage claims cannot be recovered against Shell in light of the Court’s
prior ruling and Shell’s RAP-related efforts. Personal injury claims are likely subject to
challenge on general and specific medical causation grounds, among other defenses. In
addition, there have been no expert designations or discovery yet on the issue of
Plaintiffs’ alleged damages. [¶] Given the facts and circumstances of these cases where
liability is contested and fault lies with the non-settling Developer Defendants, Shell’s
$90 million settlement payment is well ‘within the ballpark’ of its potential liability. It
cannot be shown that the settlement is ‘grossly disproportionate’ to what a reasonable
person at the time of settlement would estimate Shell’s proportionate liability to be.”
The supporting declaration of Attorney Deanne Miller stated in part: The trial
court randomly selected 50 test plaintiffs, and the pool subsequently was narrowed to
35 individuals. Extensive fact discovery was conducted regarding each of the test
plaintiffs, which revealed their claims were subject to substantial potential defenses.
There were no clusters of disease among the test plaintiffs, most of whom claimed a
variety of common illnesses and ailments. Further, although no expert discovery had
been conducted yet on causation, establishing causation would be challenging for
Plaintiffs. For example, one of the test plaintiffs was a 79 year old man who asserted a
claim for prostate cancer. However, medical literature indicates that 80 percent of men
who reach age 80 have prostate cancer. Another test plaintiff decedent allegedly died of
stomach cancer; however, her medical records and treating physician’s testimony
indicated that she was never diagnosed with stomach cancer. Other test plaintiffs claimed
10
a variety of common illnesses and ailments such as asthma, allergies, headaches,
diabetes, heart conditions and high blood pressure, but the causal connection between
those diagnoses and environmental conditions in the Carousel neighborhood were
“tenuous at best.”
With respect to Shell’s alleged liability vis-à-vis Developer Defendants, the Miller
declaration relied, inter alia, on a letter dated December 1, 1965, indicating that Barclay
sought permission from Shell, prior to close of sale, to conduct “site clearing work” on
the property. The Barclay letter stated, “We would like to begin immediately to remove
the liquid waste and petroleum residues from the property. . . . We estimate it will take
about three months for completion. [¶] As we discussed, the removal of waste should
improve the value of your property and, therefore, there should be no exposure to Shell
Oil Company other than possible public liability, which may be incurred during the
course of the work. To protect Shell against this possibility, we will furnish you with
liability insurance in such form as you may require.” Miller also cited a March 1966
letter from Pacific Soils Engineering, Inc. to the original developers, indicating the soil
beneath one of the reservoirs at the Kast site was “highly oil stained,” and that the soils
had a “petroleum odor.”
The Miller declaration also asserted Plaintiffs were incapable of prevailing against
Shell on their fraud claims, in that discovery conducted to date indicated that Plaintiffs
had no interaction with Shell -- they purchased their homes from the original developers.
Thus, Plaintiffs did not rely on any statements by Shell, let alone any misrepresentation
by Shell.
b. Developer Defendants’ opposition to the motion for good faith
settlement.
In opposition, Developer Defendants contended that the settling parties’ joint
attempt to exclude from the settlement consideration the $146 million value of the RAP
was a “transparent effort to improperly minimize Developer Defendants’ offset.”
11
Developer Defendants argued that the trial court “should either include the full amount of
the remediation in determining good faith or deny Shell’s motion.”9
Developer Defendants attacked the Acosta settlement as lacking in good faith.
They contended Shell failed to show the $90 million settlement amount, which
represented less than one percent of Plaintiffs’ $11 billion in alleged damages, was within
the ballpark of Shell’s proportionate liability.10
Developer Defendants also contended the Carson settlement was not in good faith
because it purported to exclude Shell’s costs in implementing the RAP. By excluding the
value of the RAP, the Carson settlement “is a walk away in which Shell is not paying a
dime,” even though the Carson action sought abatement of the contamination to a depth
of 40 feet below the Carousel neighborhood.
Developer Defendants argued that the entire settlement consideration must be
assigned a dollar value, including any non-monetary relief. “[A]ny settlement that is not
purely cash must be assigned a dollar value.” Here, by excluding the value of the RAP
remediation, the settlement failed the good faith standard.
Developer Defendants also argued that Shell’s failure to allocate the settlement
proceeds was fatal to a good faith determination. “There are 1,491 individual Plaintiffs
with varying claims. Allocating the settlement proceeds among them and their alleged
injuries is necessary to ensure that the offset, and thus the settlement, are fair to
Developer Defendants.” They contended the trial court could not determine good faith
without knowing how the settlement proceeds were being allocated between Plaintiffs’
economic and non-economic damages, and among the 1,491 individual plaintiffs.
9
In the court below, Developer Defendants offered to stipulate to a good faith
settlement determination if Shell and Plaintiffs included the $146 million value of the
RAP in the economic damages offset.
10
Plaintiffs deny they sought $11 billion in damages.
12
c. Hearing and trial court’s ruling.
On January 30, 2015, the matter came on for hearing. After hearing arguments of
counsel, the trial court granted the motion for good faith settlement consistent with its
tentative ruling, which provided in substance:
“Moving parties have set forth the particulars of their settlement with plaintiffs
and the current state of knowledge about their commitment to abate the underlying
pollution nuisance. Some aspects of the contract are definite (e.g. the commitment to pay
the many plaintiffs and their counsel $90M in the aggregate) whereas some aspects of the
settlement are necessarily imprecise estimates, e.g. the cost/value of Shell’s commitment
to perform abatement as directed by the [Water Board]. There are over 1,400 plaintiffs
and many separate parcels of real estate at issue in this case, most of which are in fairly
close proximity to each other.
“The test plaintiffs’ settlement demands, when extrapolated over the full set of
1,400 [plus] plaintiffs produce a very large number, but any experienced civil judge (or
[personal injury] litigator) knows that there is huge variance between a plaintiff’s ‘best
case’ demand and associated hopes for a heroic victory at trial as compared to the much
more common reality that some more pallid amount is awarded by a jury in due course
once a typical [personal injury] case is tried. While this case has been pending for some
time, in many ways the moving parties are settling early and thus deserve a substantial
discount, especially because vitally important expert discovery is still in mid-gestation
(especially as of the day that this settlement agreement was actually reached).
“This case is complicated by the fact that the settlement includes Shell’s promise
to comply with the final abatement order from the [Water Board]. Shell’s [designated
person most knowledgeable deponent, William Platt] put the anticipated cost of
compliance with the anticipated [Water Board] order at $146M. While hard to quantify
in value terms, this should be seen by any rational individual plaintiff or by the City of
Carson as a promise of overwhelming value since it solves the root cause of the tort
claims even though it cannot magically eliminate the tort plaintiffs’ accumulated claims
13
for past damage to real estate and personal injury. The fact that it is hard to quantify does
not, however, make it worthless.
“Given the amount of the $90M cash settlement (over $60,000 per plaintiff on a
straight pro rata basis, but still subject to Justice Panelli’s actual allocation process),
combined with the hard-to-value promise to abate the underlying problem to the
satisfaction of the relevant state government agency charged with responsibility for this
exact type of problem, it is hard to find this inadequate or collusive. The Court is
therefore satisfied that moving parties have made a sufficient showing to put any
objecting party to its/their burden to show that the settlement is not made in good faith.
Simply put, the combination of the $90M hard cash settlement promise and the harder-to-
value promise to abate per [Water Board] direction is a large enough payment of
consideration by Shell and its affiliates as to be ‘within the ballpark’ for purposes of
Tech-Bilt . . . .
“Plaintiffs and their very experienced trial counsel have tried to make this case
look as valuable as possible but they lack any persuasive showing at this time that there
are clusters of cancer or other diseases plausibly associated with the in-ground
petrochemical pollution at issue here. While the [Water Board] has issued cautionary
messages to the residents of the housing tract to limit their exposure to their own yards,
the [Water Board] is obviously well informed of the conditions in the area, and it has not
directed to the Court’s knowledge that even one of the many homes should be
temporarily or permanently vacated. Politely put, plaintiffs have done an excellent job in
maximizing the potential value of their claims . . . but these inflated numbers tell an
experienced judge very little about the actual value of the [personal injury] case. Simply
put there is more that is unknown about the ultimate value of these claims as compared to
what is known. Under the circumstances, the burden of proof on a motion like this makes
it susceptible of ready resolution since the inability to make a persuasive showing due to
the underlying uncertainty of the available information burdens the opposing party, not
the moving party.
14
“Having found that the Moving Parties have fulfilled the Tech-Bilt factors and that
Developer Defendants have failed to carry their burden of proof and persuasion, the
motion [is] granted.”
7. Writ proceedings.
Developer Defendants filed a petition for writ of mandate, challenging the trial
court’s approval of the good faith settlement on the ground it failed to “monetize” the
value of the RAP and failed to allocate the consideration among the 1,491 individual
plaintiffs and between their economic and non-economic damages.
This court summarily denied the petition. Developer Defendants filed a petition
for review. The Supreme Court granted the petition for review and transferred the matter
back to this court with directions to vacate its order denying mandate and to issue an
order to show cause. We issued an order to show cause and set the matter for hearing.
CONTENTIONS
Developer Defendants contend: the trial court erred in failing to assign a dollar
value to Shell’s contractual commitment to remediate the Carousel tract; the trial court
further erred in finding good faith in the absence of an allocation of the settlement
consideration among the 1,491 individual Plaintiffs and their alleged economic and
noneconomic damages; and the trial court’s failure to calculate Developer Defendants’
offset was legally erroneous.
DISCUSSION
1. General principles with respect to determination of good faith settlement.
Section 877 “establishes that a good faith settlement bars other defendants from
seeking contribution from the settling defendant (§ 877, subd. (b)), but at the same time
provides that the plaintiff’s claims against the other defendants are to be reduced by ‘the
amount of consideration paid for’ the settlement (§ 877, subd. (a)).” (Abbott Ford,
supra, 43 Cal.3d at p. 873.)
The factors to be taken into account in the determination of whether a settlement is
in “good faith” include: a rough approximation of plaintiff’s total recovery and the
15
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 if found liable after a trial. (Tech-Bilt, supra, 38 Cal.3d at p. 499.) 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 at
injuring the interests of nonsettling defendants. (Ibid.) The Tech-Bilt factors are
nonexhaustive and “may not apply in all cases.” (PacifiCare of California v. Bright
Medical Associates, Inc. (2011) 198 Cal.App.4th 1451, 1464.) Further, practical
considerations obviously require that the evaluation be made on the basis of information
available at the time of settlement. (Tech-Bilt, supra, at p. 499.) “ ‘[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.]” (Ibid.)
The determination as to whether a settlement is in good faith is a matter left to the
discretion of the trial court (Tech-Bilt, supra, 38 Cal.3d at p. 502; Mattco Forge, Inc. v.
Arthur Young & Co. (1995) 38 Cal.App.4th 1337, 1349 (Mattco Forge)), with the party
asserting the lack of good faith having the burden of proof on that issue. (§ 877.6,
subd. (d); Tech-Bilt, supra, at p. 499; Mattco Forge, supra, at p. 1350, fn. 6.) “On
appellate review, a trial court’s determination of good faith of a settlement involving the
resolution of factual issues will be upheld if supported by substantial evidence.
[Citation.]” (Erreca’s v. Superior Court (1993) 19 Cal.App.4th 1475, 1490 (Erreca’s).)11
11
We are mindful that “any factual findings or determinations made on contested
issues of liability or damages are tentative and solely for the purposes of evaluating the
good faith of a proposed settlement as of the date of such evaluation. [¶] On writ review,
our determination is similarly circumscribed. It is limited solely to the question of the
trial court’s abuse of discretion in ruling on the good faith motion. As must the trial
court, we rely upon the state of the record, and the respective showings made by the
parties, as of the time of the motion.” (Toyota Motor Sales U.S.A., Inc. v. Superior Court
(1990) 220 Cal.App.3d 864, 878, fn. 9, italics omitted.)
16
2. No merit to Developer Defendants’ contention the trial court should have
assigned a specific value to the RAP remediation; because Shell already was obligated to
comply with the RAP, the remediation thereunder was not part of the settlement
consideration and should not be included in the settlement valuation.
a. The question of whether Shell’s cost to implement the RAP should be
included in the settlement consideration is properly before this court.
Developer Defendants’ theory is that in ruling on the motion for good faith
settlement, the trial court was required to assign a dollar value to Shell’s implementation
of the RAP, in addition to the $90 million cash settlement, in order to determine the
proper amount of the offset to which the nonsettling parties would be entitled. This
raises, as a threshold question, whether Shell’s cost of complying with the RAP should be
included at all in evaluating the good faith settlements.
As indicated, the trial court approved the settlements as being in good faith
without assigning a specific value to the RAP. It simply found “the combination of the
$90M hard cash settlement promise and the harder-to-value promise to abate per [the
Water Board’s] direction is a large enough payment of consideration by Shell . . . as to be
‘within the ballpark.’ ”
In their returns to the petition, Plaintiffs, Carson and Shell take the position that
the remediation is not part of the consideration paid by Shell in settlement and therefore
Developer Defendants are not entitled to a valuation or an offset in any amount for
Shell’s cost of remediation.
In their reply, Developer Defendants assert that because Plaintiffs, Carson and
Shell did not seek review by way of a writ petition of their own, they waived their right to
attack the trial court’s findings that the good faith settlements included a promise by Shell
to comply with the RAP and that Shell’s promise was of great value because it solved the
root cause of the tort claims. Developer Defendants’ argument that real parties waived
the issue is meritless. The settling parties were not aggrieved by the trial court’s decision
approving the good faith settlements. (See Code Civ. Proc. § 902; In re Marriage of
17
Burwell (2013) 221 Cal.App.4th 1, 13 [only aggrieved party may appeal].) The settling
parties were not required to file a writ petition simply to challenge the reasons the trial
court gave for approving the good faith settlements.
Accordingly, we reject Developer Defendants’ argument that this court cannot
address the threshold issue of whether the RAP remediation was part of the settlement
consideration. Indeed, Developer Defendants’ petition for writ of mandate squarely
presents the issue, by arguing that “all elements of consideration” must be assigned a
dollar value at the time of the good faith hearing. This contention is sufficient to raise the
issue of whether the RAP remediation constituted part of the settlement consideration.
Further, the question of whether the RAP remediation was part of the settlement
consideration has been extensively briefed by the parties. We therefore proceed to
address the merits of the issue.
b. Shell’s compliance with the RAP, already mandated by the Water Board
pursuant to the state’s police powers, was not part of the settlement consideration, and
therefore could not be weighed by the trial court as part of the amount paid in settlement.
It is hornbook law that “[d]oing or promising to do what one already is legally
bound to do cannot be consideration for a promise.” (Asmus v. Pacific Bell (2000)
23 Cal.4th 1, 32 (dis. opn. of George, C. J.) (Asmus); accord, Garcia v. World Savings,
FSB (2010) 183 Cal.App.4th 1031, 1040; 1 Witkin, Summary of Cal. Law (10th ed.
2005) Contracts, § 218, p. 251; see also Civ. Code § 1605 [defining good consideration
as “[a]ny benefit conferred, or agreed to be conferred, upon the promisor, by any other
person, to which the promisor is not lawfully entitled, or any prejudice suffered, or
agreed to be suffered, by such person, other than such as he is at the time of consent
lawfully bound to suffer, as an inducement to the promisor”].)
Shell’s performance of environmental remediation at the site of the former Kast
Tank Farm is not pursuant to its settlements with Plaintiffs and Carson, and is not
contingent on the fate of any good faith settlement motion. Rather, the remediation
already was mandated by the Water Board in March 2011, pursuant to Water Code
18
section 13304, well before Plaintiffs, Carson and Shell reached settlements in this
litigation.12 The cleanup and abatement order was based on Shell’s “ownership of the
former Kast Property Tank Farm” and its “former operation of a petroleum hydrocarbon
tank farm at the Site.” The Water Board directed Shell to clean up the waste and abate
the effects of the discharge, and ordered Shell to prepare a full-scale impacted soil
remedial action plan for the site. The cleanup and abatement order specified: “All
obligations are imposed pursuant to the police powers of the State of California intended
to protect the public health, safety, welfare, and environment.” (Italics added.)
Thus, Shell is under a preexisting obligation, imposed by the Water Board
pursuant to the state’s police powers, to remediate the site. It follows that Shell’s
compliance with the Water Board’s cleanup and abatement order is not part of the
amount paid in settlement. Therefore, there is no merit to Developer Defendants’
contention that in ruling on the motion for good faith settlement, the trial court should
have included the value of the RAP (the cost of which has been estimated at $146
million) to determine the proper amount of the offset to which the nonsettling defendants
will be entitled.
Further, because Shell’s remediation in compliance with the RAP is not part of the
consideration it paid in settlement, there is no merit to Developer Defendants’ contention
12
Water Code section 13304 states in relevant part at subdivision (a): “A person
who has discharged or discharges waste into the waters of this state in violation of any
waste discharge requirement or other order or prohibition issued by a regional board or
the state board, or who has caused or permitted, causes or permits, or threatens to cause
or permit any waste to be discharged or deposited where it is, or probably will be,
discharged into the waters of the state and creates, or threatens to create, a condition of
pollution or nuisance, shall, upon order of the regional board, clean up the waste or
abate the effects of the waste, or, in the case of threatened pollution or nuisance, take
other necessary remedial action, including, but not limited to, overseeing cleanup and
abatement efforts. . . . Upon failure of a person to comply with the cleanup or abatement
order, the Attorney General, at the request of the board, shall petition the superior court
for that county for the issuance of an injunction requiring the person to comply with the
order. In the suit, the court shall have jurisdiction to grant a prohibitory or mandatory
injunction, either preliminary or permanent, as the facts may warrant.” (Italics added.)
19
that the settling parties’ exclusion of the cost of the RAP from the settlements was
collusive and intended to minimize the amount that would be set off against the
nonsettling parties’ liability.
c. To the extent the trial court gave weight to the value of the RAP in
approving the good faith settlements, the error was harmless; on the record presented,
the $90 million payment by Shell, standing alone, is well within the range of Shell’s
proportionate liability.
Although the trial court erred to the extent that it relied on Shell’s remediation of
the site, in addition to the $90 million cash settlement, to find “a large enough payment of
consideration by Shell . . . as to be ‘within the ballpark,’ ” on the record presented the
error was harmless because the $90 million, in and of itself, is well within the “ballpark.”
(1) The Acosta settlement.
The damages asserted by Plaintiffs do not drive our analysis. A plaintiff’s claims
for damages are not determinative – rather, the court is called upon “to make a ‘rough
approximation’ of what the plaintiff would actually recover.” (West, supra,
27 Cal.App.4th at p. 1636.)
Based on our review of the record, the $90 million Acosta settlement, amounting
to over $60,000 per plaintiff, was well within the range of Shell’s liability for Plaintiffs’
damages, particularly given the earlier disposition of Plaintiffs’ property damage claims
against Shell. As indicated, the trial court previously had granted Shell’s motion to strike
Plaintiffs’ claims for property damage on statute of limitations grounds. As noted in
footnote 7, above, the parties disagree as to whether the trial court’s order eliminated all
property damage claims against Shell, or whether Plaintiffs’ claims against Shell for
continuing nuisance and continuing trespass survived that ruling. At the hearing on the
motion for good faith settlement, the trial court stated “Shell is out on the property
damages; Shell is in on personal injury,” and then added, “[t]here may be some more, but
the heart of it is . . . personal injury.” (Italics added.) Assuming arguendo that Plaintiffs’
causes of action against Shell for continuing nuisance and continuing trespass remained
20
intact after the ruling on the motion to strike, the trial court reasonably could conclude
that Shell’s remediation of the Carousel tract, pursuant to the RAP, largely moots those
claims, making this essentially a personal injury action as against Shell. In other words,
although the RAP was not part of the amount paid by Shell in settlement, the impact of
the remediation need not be ignored in determining the good faith of the settlements.
Turning to the adequacy of the consideration given by Shell, on the record
presented, the $90 million payment to Plaintiffs is not “ ‘grossly disproportionate to what
a reasonable person, at the time of the settlement, would estimate the settling defendant’s
liability to be.’ ” (Tech-Bilt, supra, 38 Cal.3d at p. 499.)
The Miller declaration, filed in support of Shell’s motion for good faith settlement,
demonstrated the difficulty Plaintiffs would have in proving causation and in prevailing
on their personal injury claims. The pool of test plaintiffs showed there were no clusters
of disease among them, most of whom claimed a variety of common illnesses and
ailments such as asthma, allergies, headaches, diabetes, heart conditions and high blood
pressure, with the causal connection between those diagnoses and environmental
conditions in the Carousel neighborhood appearing to be questionable. One of the test
plaintiffs was a 79 year old man who asserted a claim for prostate cancer, but medical
literature shows that prostate cancer at that age is ubiquitous. Another test plaintiff
decedent allegedly died of stomach cancer, but that allegation was inconsistent with her
medical records. Thus, at the time of settlement, as Shell has argued, evidence of a
causal connection between Plaintiffs’ diagnoses and environmental conditions in the
Carousel neighborhood was “tenuous at best.” Tech-Bilt teaches that “practical
considerations obviously require that the evaluation be made on the basis of information
available at the time of settlement.” (Tech-Bilt, supra, 38 Cal.3d at p. 499.) Given the
slight evidence of injuries stemming from the environmental contamination, the
compensation of over $60,000 per plaintiff on a pro rata basis appears to be well within
the proverbial ballpark.
21
As for Shell’s proportionate liability, vis-à-vis Developer Defendants, we begin
with the premise that “a settlor should pay less in settlement than he would if he were
found liable after a trial.” (Tech-Bilt, supra, 38 Cal.3d at p. 499.) Shell’s moving papers
below presented evidence that Barclay sought permission from Shell in 1965, prior to the
close of sale, to conduct “site clearing work” on the property. The Barclay letter stated,
“We would like to begin immediately to remove the liquid waste and petroleum residues
from the property.” The evidence also included a March 1966 letter from a soils engineer
to the original developers, indicating the soil beneath one of the reservoirs at the Kast site
was “highly oil stained,” and that the soils had a “petroleum odor.” Thus, there is
substantial evidence to show the original developers were aware of the contamination at
the site, and that it was the original developers who undertook to remove the liquid waste
and petroleum residues to prepare the site for home development. Given this showing
that substantial liability should be allocated to Developer Defendants, Shell’s payment of
over $60,000 on a pro rata basis for its share of Plaintiffs’ purported personal injuries
does not appear to be “ ‘grossly disproportionate to what a reasonable person, at the time
of the settlement, would estimate [Shell’s] liability to be.’ ” (Tech-Bilt, supra, 38 Cal.3d
at p. 499.)
(2) The Carson settlement.
Turning to the Carson settlement, which provided for mutual releases and a
waiver of costs, Developer Defendants characterize it as a “walk away” by Shell, which
gives Carson nothing of substance if the RAP remediation cost is excluded. However,
Developer Defendants’ argument disregards the nature of the relief which Carson sought
in this litigation. Carson’s complaint did not seek monetary damages; rather, it requested
“full and total abatement of the contamination down to approximately 40 feet below the
Carousel neighborhood.”
The RAP will achieve abatement, albeit not to the depth originally sought by
Carson. Pursuant to the Water Board’s order, Shell will excavate to a depth of five to ten
feet beneath the homes, following excavation will install a vapor extraction and venting
22
mechanism, and will institute comprehensive long-term monitoring. Developer
Defendants admit in their petition that “[t]hrough its promise to remediate down to depths
of 5 to 10 feet, Shell is substantially providing the relief that Carson sought.” (Italics
added.) That being the case, it would appear that Shell did not need to provide any
additional consideration in its good faith settlement with Carson. Because the RAP
remediation basically moots the claims pled by Carson, the trial court did not err in
approving the good faith settlement in the Carson action.
3. Good faith settlement determination did not require an allocation of the
$90 million settlement fund among the 1,491 individual Plaintiffs and between their
economic and noneconomic damages; individualized allocations would require 1,491
mini-trials at the good faith settlement stage, an approach which the Supreme Court has
cautioned against.
Developer Defendants contend the trial court erred in finding good faith without
an allocation of the entire settlement consideration among the 1,491 individual Plaintiffs
and between their economic and noneconomic damages. Our conclusion that the
estimated $146 million cost of complying with the RAP is not part of the settlement
consideration makes it unnecessary to address Developer Defendants’ arguments with
respect to the calculation and allocation of an offset for the RAP remediation costs.
Therefore, we confine our analysis to the allocation of the $90 million monetary payment
among Plaintiffs. For the reasons discussed below, we reject Developer Defendants’
allocation arguments.
a. Case law does not support Developer Defendants’ assertion that
individualized allocations were required to be made at the time of the good faith
determination.
Developer Defendants contend that two decisions, Knox v. County of Los Angeles
(Knox) (1980) 109 Cal.App.3d 825, and Alcal Roofing & Insulation v. Superior Court
(1992) 8 Cal.App.4th 1121 (Alcal), “control the analysis here,” so as to require an
23
allocation among the individualized claims at the time of the good faith determination. It
appears to this court that Developer Defendants’ reliance on Knox and Alcal is misplaced.
In Knox, three plaintiffs sued a market and three of its employees (the market
defendants) as well as three governmental defendants, for unlawful arrest and other
causes of action, arising out of a single incident in which the plaintiffs were arrested by
sheriff’s deputies for allegedly violating a temporary restraining order regulating
picketing. (Knox, supra, 109 Cal.App.3d at pp. 828-829.) The plaintiffs reached a
pretrial settlement with the market defendants amounting to $4,000 per plaintiff, for a
total of $12,000. (Id. at pp. 829-830.) At trial, the governmental defendants were found
liable for a total of $52,500 in damages. (Id. at pp. 830-831.) Following trial, the court
denied the governmental defendants’ request for a $12,000 offset for the amount the three
plaintiffs received in settlement from the market defendants. (Id. at p. 831.)
The reviewing court reversed and remanded for further proceedings to determine
the amount of the offset to which the governmental defendants were entitled. (Knox,
supra, 109 Cal.App.3d at p. 837.) It explained, “the [lower] court should have required
an evidentiary showing by plaintiffs establishing and justifying an agreed allocation of
less than all of the $4,000 settlement figure to the first and second causes of action [for
unlawful arrest and false imprisonment in which the market defendants were alleged to
be joint tortfeasors with the governmental defendants]. Had such an allocation been
shown, its effectiveness would depend upon finding it to be a good faith allocation. The
statutory requirement of good faith extends not only to the amount of the overall
settlement but as well to any allocation which operates to exclude any portion of the
settlement from the setoff. [Citations.] It is apparent, therefore, that an evidentiary
hearing is required to establish a factual basis, if any there is, for denying [the
governmental defendants] credit for the full amount of the settlement.” (Id. at pp. 836-
837, italics added.)
Clearly, Knox does not stand for the proposition that the allocation must be made
at the time of the good faith settlement determination. Rather, as stated in the Erreca’s
24
decision, Knox held, “Where the settling parties have agreed to allocate less than all of
the settlement amount to a portion of the causes of action, an evidentiary showing is
required to justify such allocation. (Knox v. County of Los Angeles (1980)
109 Cal.App.3d 825, 836-837.)” (Erreca’s, supra, 19 Cal.App.4th at p. 1491.)
The concern expressed in Knox about an “allocation which operates to exclude any
portion of the settlement from the setoff” (Knox, supra, 109 Cal.App.3d at p. 837) is not
present here. In the instant case, the $90 million settlement was entirely unallocated.
Therefore, in ruling on the motion for good faith settlement, the trial court was not called
upon to scrutinize an allocation which excluded some portion of the settlement from the
setoff.
Alcal, the other case on which Developer Defendants heavily rely, also involved a
settlement allocation which excluded a portion of the settlement from the setoff. In Alcal,
a roofer, the sole nonsettling defendant in a multiparty construction defect action,
challenged the trial court’s approval of a $4.4 million settlement pursuant to section
877.6. The roofer did not object to the amount of the settlement, but challenged the
settling parties’ allocation of only $100,000 of the settlement to roofing issues. This
allocation left the roofer vulnerable to remaining damages that could reach $2 million,
with an offset of only $100,000 from the settlement. (Alcal, supra, 8 Cal.App.4th at
pp. 1122-1123.)
Alcal agreed with the roofer that the lower court erred in approving the settlement.
(Alcal, supra, 8 Cal.App.4th at p. 1123.) It explained: “We cannot determine from the
documents before us what settlement or settlements took place and what parties agreed to
what allocations.” (Id. at p. 1128.) The settling parties “la[id] blame on roofer for failing
to present convincing evidence that $100,000 was an improper joint allocation to roofing
issues. We conclude, however, that roofer’s burden to show an improper allocation did
not arise during the proceedings below because the settling parties failed to present to
roofer and the court a clear and complete description of the settlement or settlements. At
a minimum, a party seeking confirmation of a settlement must explain to the court and to
25
all other parties: who has settled with whom, the dollar amount of each settlement, if any
settlement is allocated, how it is allocated between issues and/or parties, what
nonmonetary consideration has been included, and how the parties to the settlement value
the nonmonetary consideration. [¶] Because we cannot determine (1) what settlement or
settlements the court approved, (2) when and in what way the subcontractors settled and
joined in the allocation, and (3) the value of the assigned rights, we cannot allow the
court’s order to stand.” (Id. at p. 1129, italics added.)
To reiterate, in the instant case, no portion of the $90 million was allocated and
excluded from the setoff. Therefore, the concern present in Alcal, where only a fraction
of the settlement was allocated to roofing issues to the detriment of the nonsettling roofer,
has no application here. (See, also, Erreca’s, supra, 19 Cal.App.4th at p. 1491 [by
allocating only $1.5 million of total settlement to soils issues, parties reduced amount of
setoff available to soils defendants].)
Here, the full $90 million is theoretically available as a setoff to the nonsettling
Developer Defendants. Because no portion of the settlement fund was excluded from the
setoff, the allocation issue is simply the distribution of the $90 million among the 1,491
Plaintiffs, and between their economic and noneconomic damages. Hypothetically,
Justice Panelli may award one plaintiff $30,000 and may award a neighboring plaintiff
$120,000. However, how much each of the Plaintiffs will receive in settlement, and what
each one’s ratio of economic and noneconomic damages will be, appears to have slight
bearing on whether the $90 million settlement, in the aggregate, is fair to Developer
Defendants.
b. Approval of the $90 million good faith settlement did not require
individualized allocations among the 1,491 Plaintiffs and between their economic and
noneconomic damages.
Developer Defendants contend the trial court erred in finding good faith “in the
absence of an allocation of the settlement consideration among the 1,491 individual
Plaintiffs and their alleged economic and noneconomic damages,” and in the absence of
26
an allocation by the settling parties, the trial court was required to allocate the settlement
proceeds in the manner most favorable to the nonsettling defendants. The allocation
issue is of concern to nonsettling defendants because Civil Code “[s]ection 1431.2
provides that the responsibility for the noneconomic portion of the damages allocated to
each defendant shall be several and not joint. Therefore, each defendant is solely
responsible for his or her share of the noneconomic damages. Thus, that portion of the
settlement attributable to noneconomic damages is not subject to set-off.” (Espinoza,
supra, 9 Cal.App.4th at p. 276.)
The trial court ruled the lack of an allocation of the $90 million settlement
proceeds did not require it to deny the motion for good faith settlement; instead, the
allocation could be determined at a later date -- after each trial, the court would allocate
that plaintiff’s settlement proceeds by applying the jury’s ratio of economic to
noneconomic damages. The trial court gave the following illustration: if Justice Panelli
were to award $50,000 to lead plaintiff Adelino Acosta, and the jury later were to
determine that Mr. Acosta’s damages against Developer Defendants were two-thirds
noneconomic, then two-thirds of his $50,000 Shell settlement would be deemed
noneconomic and not available to Developer Defendants as an offset.
The trial court’s ruling was entirely consistent with Espinoza, supra,
9 Cal.App.4th at pages 276-277, which, as the Supreme Court recently noted in Rashidi
v. Moser (2014) 60 Cal.4th 718 (Rashidi), provides a “widely accepted method” for
making a postverdict allocation. (Id. at p. 722.) “The percentage of the jury’s award
attributable to economic damages is calculated and applied to the settlement, yielding the
amount that the nonsettling defendant is entitled to offset. [Citations.]” (Rashidi, supra,
at p. 722.)
27
We note the concluding footnote in Espinoza states: “We do not here reach the
issue of whether a trial court presiding over a good faith settlement hearing should make
any such allocation if it is requested to do so.” (Espinoza, supra, 9 Cal.App.4th at p. 277,
fn. 9, italics added.) 13
The question left open by Espinoza is presented here. Our analysis is informed by
the Supreme Court’s seminal decisions in Tech-Bilt and Abbott Ford. In Tech-Bilt, the
court adopted the “ballpark” rule, which is “an attempt to make only a ‘rough
approximation of plaintiffs’ total recovery and the settlor’s proportionate liability’
modified by several considerations.” (Abbott Ford, supra, 43 Cal.3d at pp. 887-888,
conc. opn. of Broussard, J., citing Tech-Bilt, supra, 38 Cal.3d at p. 499.) Tech-Bilt was
concerned that an alternative approach “would tend to convert the pretrial settlement
approval procedure into a full-scale minitrial . . . .” (Tech Bilt, supra, at p. 499, italics
added.) Abbott Ford reiterated that concern, stating “the fact a nonsettling defendant may
challenge the agreement’s assigned value should not be interpreted as giving such
defendant a right to a mini-trial on the valuation issue. The nature, extent and the
procedure regarding any such challenge is left to the discretion of the trial court.”
(Abbott Ford, supra, at p. 880, fn. 23, italics added.)
Under Developer Defendants’ theory, the trial court would have had to conduct
1,491 mini-trials to scrutinize or determine any individualized allocations of the
$90 million settlement fund. Developer Defendants’ argument is not tenable in light of
the cautionary language found in Tech-Bilt and Abbott Ford. Moreover, an approach
requiring individualized allocations of the settlement fund at the good faith settlement
stage would severely impede good faith settlements in multi-plaintiff cases of this
complexity.14
13
Apparently, in the years since Espinoza, the issue has remained unresolved. (See
Haning, Flahavan, Cheng & Wright, California Practice Guide: Personal Injury (The
Rutter Group 2015) para. 4:185.23.)
14
It is unnecessary to address any remaining arguments raised by the petition.
28
DISPOSITION
The order to show cause is discharged. The stay of proceedings previously
ordered by this court is lifted upon finality of this opinion. The petition for writ of
mandate is denied. Real parties in interest shall recover their costs in this proceeding.
(Cal. Rules of Court, rule 8.493.)
CERTIFIED FOR PUBLICATION
EDMON, P. J.
We concur:
LAVIN, J.
JONES, J.*
*
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
29