City of Grand Terrace v. Superior Court

• Decision Date: 23 June 1987
• Court: California Court of Appeals Court of Appeals
• Parties: CITY OF GRAND TERRACE, etc., et al., Petitioners, v. The SUPERIOR COURT OF SAN BERNARDINO COUNTY, Respondent. Henry J. BOYTER, Real Party in Interest. E003709.

Page 119

238 Cal.Rptr. 119

192 Cal.App.3d 1251

CITY OF GRAND TERRACE, etc., et al., Petitioners, v. The SUPERIOR COURT OF SAN BERNARDINO COUNTY, Respondent.

Henry J. BOYTER, Real Party in Interest.

E003709.

Court of Appeal, Fourth District, Division 2, California.

June 23, 1987.

As Modified July 22, 1987.

[192 Cal.App.3d 1254]

Bruggeman, Smith & Peckham, G. Clifton Smith, and Edward Hazel, San Bernardino, for petitioner City of Grand Terrace

Wilson, Borror, Dunn & Scott, and James R. Dunn, San Bernardino, for petitioner City of Colton.

No appearance for respondent.

Parker, Stanbury, McGee, Babcock and Combs and William M. Freeman, Los Angeles, for real party in interest Henry J. Boyter.

[192 Cal.App.3d 1255]

OPINION

HEWS, Associate Justice.

In these original proceedings, we are called upon to review the propriety of the trial court's order which determined that plaintiff's settlement with her defendant husband (settlor) had been entered into in good faith under Code of Civil Procedure section 877.6, subdivision (c). ¹ Defendant City of Grand Terrace and City of Colton (non-settlors) contend that (1) the motion together with the accompanying threshold declaration by settlor was insufficient as a matter of law under Tech-Bilt, Inc., ² (2) that the trial court abused its discretion in finding a good faith settlement, (3) that the trial court abused its discretion in dismissing all cross-complaints against settlor for equitable indemnity or for contribution, and (4) that they were deprived of a significant property interest without due process of law.

We have determined from the evidence presented at the hearing on the motion for determination of good faith settlement the trial court erred in making the determination the settlement was made in good faith, and we further determine a subsequent hearing is required.

FACTUAL AND PROCEDURAL BACKGROUND

The factual background is drawn from the verified pleadings presented, the declarations of the parties, and extracts from depositions under oath attached thereto.

Plaintiff Betty Jo Boyter received serious permanent injuries in a single car accident that occurred in the City of Grand Terrace or City of Colton at 1:55 a.m. on May 12, 1984. At the time plaintiff was a passenger in a recently purchased Masarati Biturbo car operated by settlor who was an experienced driver. They were traveling home from Phil's Pub. There was no evidence whether or not either or both of them had consumed any alcoholic beverages while at Phil's or at any time earlier in the evening. The Masarati was proceeding in a southeasterly direction on Barton Road traveling at a speed of 40 miles per hour or less. The weather was clear and dry. The right wheels of the Masarati went off the pavement as the car entered a turn to the left on the roadway and the car plunged down a parallel embankment. Plaintiff was thrown clear of the car. Settlor was somewhat familiar with the road having

driven it day and night at least 50 times. He was not surprised by the curve. Paddle markers on the shoulder delineated the curve. Prior to the accident, settlor, a resident of Grand Terrace, had [192 Cal.App.3d 1256] told the City Manager of Grand Terrace and a city councilman in a social context that the curve was dangerous and needed barriers

Settlor had been employed as a TWA captain pilot for 23 years. Neither his salary nor his net worth were before the trial court at the time of the hearing on the motion. He was insured by United Services Automobile Association (USAA) for liability in the amount of $300,000 per person. The policy was in force at the time of the accident. Prior to the accident, USAA added an endorsement to the policy which specifically excluded liability coverage for injuries suffered by spouses and/or residents of the same household. Once again neither the policy nor the family member exclusionary endorsement were made part of the record at or prior to the court hearing.

Plaintiff sued settlor, the two non-settlors and the County of San Bernardino in negligence. The action against the County of San Bernardino was later voluntarily dismissed. The theory asserted against the non-settlors was based on the existence of a dangerous condition in that the roadway was not properly designed, maintained, marked, barricaded or lit. The plaintiff claimed no loss of earnings but claimed to have incurred between $25,000 and $60,000 in medical special damages.

The City of Grand Terrace answered the complaint and cross-complained against settlor and the City of Colton for total and/or partial indemnity, alleging that if liable, its liability was either secondary to the cross-defendants on a passive versus active negligence basis or derivative by reason of the special relationship between cross-complainant and cross-defendants or should be apportioned on a comparative negligence basis.

The City of Colton also filed a similar cross-complaint against settlor.

During the pendency of the instant action, USAA filed a declaratory relief action against its policyholder, settlor, contending the policy written by USAA contained a valid and enforceable family exclusion clause and that because plaintiff was the wife of settlor, there was no coverage due or owing to settlor. Plaintiff's attorney described the coverage issues raised in the declaratory relief action as "unsurmountable." He further stated the settlement with USAA was a "very good result for plaintiff." Thereafter, plaintiff agreed to dismiss her complaint against settlor and USAA agreed to dismiss its declaratory relief action in exchange for $60,000 to be paid to plaintiff by USAA.

Meanwhile, the plaintiff, through counsel, had served an offer to compromise her claim pursuant to Code of Civil Procedure section 998 only as to City of Grand Terrace for [192 Cal.App.3d 1257] $85,000. According to the plaintiff's claim filed with the City of Grand Terrace pursuant to Government Code section 905, plaintiff was claiming $225,000 in damages. Taking into consideration $60,000 to be paid to plaintiff by USAA, plaintiff's estimate of damages in this case ranges from a low of $135,000 to a high of $285,000.

A motion under section 877.6 ³ for determination of good faith settlement was filed by settlor, responded to by non-settlors and following a nontestimonial hearing thereon,

the trial court issued an order, portions of which we quote

"... Plaintiff and her husband had a policy of auto liability insurance which had an apparently valid family exclusion clause. The insurance company brought a suit for declaratory relief, but before trial agreed to settle with plaintiff for $60,000. Policy limits were $300,000.

"After reviewing the points and authorities and other materials submitted by petitioner and objector, and in view both of the amount of the settlement and the circumstances under which it was offered and accepted, the Court finds the settlement to have been made in good faith and to be free of any element of collusion, fraud or tortious conduct. It is 'in the ballpark' of the amount plaintiff might have collected from the defendant driver after verdict.

"All complaints and cross complaints against the settling defendant Henry James Boyter for equitable indemnity or for contribution are ordered dismissed."

This petition followed pursuant to section 877.6, subdivision (e), for review of the trial court's determination by writ of mandate.

[192 Cal.App.3d 1258]

DISCUSSION

1. Sufficiency of the Motion

Non-settlors contend that the motion of settlor was insufficient in that there were no declarations or affidavits describing the basic facts concerning the litigation sufficient to permit the trial court to make an intelligent assessment of the settlement's good faith and to permit an appellate court to determine whether the trial court's determination is supported by the evidence. In essence, non-settlors contend that a complete factual background in reference to the several factors which must be considered by the trial court under Tech-Bilt (supra, at p. 499, 213 Cal.Rptr. 256, 698 P.2d 159) must be set forth in settlor's motion, affidavits and declarations and if not, the court abuses it discretion in granting the motion. We disagree and in this regard analyze the history and background of section 877.6 and the conflicting settlement objectives that were resolved by Tech-Bilt.

We quote at length from the analysis of the development of the requirements necessary for a good faith settlement set forth in Shane v. Superior Court (1984) 160 Cal.App.3d 1237, 207 Cal.Rptr. 210, and California Practice Guide, Personal Injury (Rutter Group, 1986) Bodily Injury Claim Settlements, §§ 4:193-4:194.2, pp. 4-64--4-66.

"In American Motorcycle Assn. v. Superior Court (1978) 20 Cal.3d 578 [146 Cal.Rptr. 182, 578 P.2d 899] (AMA), the Supreme Court decided 'that the California common law equitable indemnity doctrine should be modified to permit a concurrent tortfeasor to obtain partial indemnity from other concurrent tortfeasors on a comparative fault basis.' (Id., at p. 591 [146 Cal.Rptr. 182, 578 P.2d 899].) The court further held 'that under the governing statutory provisions a defendant is generally authorized to file a cross-complaint against a concurrent tortfeasor for partial indemnity on a comparative fault basis, even when such concurrent tortfeasor has not been named a defendant in the original complaint.' (Id., at p. 607 [146 Cal.Rptr. 182, 578 P.2d 899] (fn. omitted).) Finally, the court reconciled these substantive and procedural holdings with the 'strong public policy in favor of settlement' (id., at p. 603 [146 Cal.Rptr. 182, 578 P.2d 899] ) reflected and effectuated by section 877,3 by declaring 'that a tortfeasor who has entered into a "good faith" settlement [citation] with the plaintiff must also be discharged from [192 Cal.App.3d 1259] any claim for partial or comparative indemnity that may be pressed by a concurrent tortfeasor.' (20...