Espinoza v. Machonga

• Citation: 11 Cal.Rptr.2d 498,9 Cal.App.4th 268
• Decision Date: 01 September 1992
• Docket Number: No. F016135,F016135
• Court: California Court of Appeals
• Parties: Richard ESPINOZA, Plaintiff and Respondent, v. Larry MACHONGA, Defendant and Appellant.

Page 498

11 Cal.Rptr.2d 498

9 Cal.App.4th 268

Richard ESPINOZA, Plaintiff and Respondent, v. Larry MACHONGA, Defendant and Appellant.

No. F016135.

Court of Appeal, Fifth District, California.

Sept. 1, 1992.

[9 Cal.App.4th 269] Finkle, Davenport & Barsamian, Robert J. Rosati, Fresno, for plaintiff and appellant.

Miles, Sears & Eanni, William J. Seiler, Fresno, for defendant and respondent.

OPINION

ARDAIZ, Associate Justice.

Richard Espinoza sued Albert Kantor, Larry Machonga and the Housing Authority of Fresno County (hereinafter "Housing Authority") for personal injuries after the glass portion of a door shattered and glass fragments struck Espinoza's eye. The Housing Authority settled with Espinoza for $5,000. The superior court found the settlement to have been made in good faith. The case then went to judicial arbitration.

Espinoza, Kantor, Machonga and the Housing Authority all participated in the arbitration. The parties stipulated that Kantor had no liability in the case. The arbitrator found that Espinoza had incurred medical expenses of $6,242.94. He found that Espinoza himself was 10 percent at fault, that the Housing Authority was 45 percent at fault, and that Machonga was 45 percent at fault. The arbitrator's award also stated that "Plaintiff is hereby awarded the sum of $6,242.94 and an additional amount of $15,000 for general damages." The arbitrator also awarded costs of suit to Espinoza.

The "Decision of Arbitrator" was filed with the court. No party sought a trial de novo. After more than 30 days had passed from the filing of the arbitrator's decision (see Code Civ.Proc., § 1141.20(a), and Cal.Rules of Court, rule 1615(c)), Espinoza moved in superior court for entry of an "amended judgment." The declaration of Espinoza's attorney, submitted as part of the motion, declared in part:

"That by agreement of the parties, the arbitrator was not advised of the amount of the settlement with the Housing Authority, nor was he asked to determine the effect of the settlement on the amount of the award against the remaining defendants. Instead, the parties have agreed to submit this issue to the court for resolution." ¹

Machonga opposed Espinoza's motion. Machonga did not contest the court's authority to "amend" the "judgment" so as to specify a particular dollar amount of the judgment against Machonga and in favor of Espinoza. ² Rather, the dispute between Espinoza and Machonga was about what this dollar amount should be, and about how the Housing Authority's $5,000 settlement with Espinoza figured into the calculation of the appropriate amount of Machonga's liability to Espinoza. Espinoza contended that the proper amount of his judgment against Machonga, exclusive of costs, should be $10,900.88. Machonga contended that the correct figure should be $7,368.65. The superior court ruled that Espinoza's figure was the correct figure and entered an "amended judgment" stating that Machonga was liable to Espinoza for $10,900.88 plus costs. ³ Machonga now appeals.

CALCULATION OF THE NON-SETTLING DEFENDANT'S LIABILITY

The issue presented on this appeal is the same issue that was presented to the superior court: how does the settling defendant's (Housing Authority's) $5,000 settlement with the plaintiff (Espinoza) affect the amount for which the non-settling defendant (Machonga) is liable to the plaintiff? After we first set forth the applicable principles of law, we will then set forth how each party contends that the calculation of the non-settling defendant's (Machonga's) liability should be made. We will then explain why we hold that the plaintiff's calculation, adopted by the superior court, was correct.

Code of Civil Procedure section 877 states in relevant part:

"Where 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, or to one or more other co-obligors mutually subject to contribution rights, it shall have the following effect:

"(a) It shall not discharge any other such party from liability unless its terms so provide, but it shall reduce the claims against the others in the amount stipulated by the release, the dismissal or the covenant, or in the amount of the consideration paid for it whichever is the greater."

Section 877, subdivision (a) was already in effect in 1986 when the electorate approved the Initiative Measure popularly known as Proposition 51. ⁴ Section 4 of this Initiative Measure now appears at Civil Code section 1431.2, which states:

"(a) In any action for personal injury, property damage, or wrongful death, based upon principles of comparative fault, the liability of each defendant for non-economic damages shall be several only and shall not be joint. Each defendant shall be liable only for the amount of non-economic damages allocated to that defendant in direct proportion to that defendant's percentage of fault, and a separate judgment shall be rendered against that defendant for that amount.

"(b)(1) For purposes of this section, the term 'economic damages' means objectively verifiable monetary losses including medical expenses, loss of earnings, burial costs, loss of use of property, costs of repair or replacement, costs of obtaining substitute domestic services, loss of employment and loss of business or employment opportunities.

"(2) For the purposes of this section, the term 'non-economic damages' means subjective, non-monetary losses including, but not limited to, pain, suffering, inconvenience, mental suffering, emotional distress, loss of society and companionship, loss of consortium, injury to reputation and humiliation."

Under subdivision (a) of Civil Code section 1431.2, a personal injury defendant is no longer liable for any amount of the plaintiff's non-economic damages which exceeds the percentage of those non-economic damages attributable to that defendant. This is a change from pre-Proposition 51 law of joint and several liability, under which a defendant who bore only a small share of fault could be left with the obligation to pay all or a large share of the plaintiff's damages if other more culpable tortfeasors were insolvent. (Evangelatos v. Superior Court (1988) 44 Cal.3d 1188, 1198-1200, 246 Cal.Rptr. 629, 753 P.2d 585.) The change abolished the rule of joint and several liability for "non-economic damages" as defined by subdivision (b)(2) of the statute, and retained the joint and several liability rule for "economic damages" as defined in subdivision (b)(1). (Evangelatos, supra.) ⁵

Espinoza points out that under pre-Proposition 51 law, Machonga's liability to him would have been computed as follows:

$21,242.94 total damages incurred by Plaintiff Espinoza.

-2,124.29 reduction of total damages by 10% due to plaintiff's 10% fault.

$19,128.65

-5,000.00 amount of Housing Authority's settlement with Plaintiff.

$14,128.65 Machonga's liability under pre-Proposition 51 law.

Espinoza's computation in the present case, which was adopted by the superior court, was as follows. First, the damages suffered by Espinoza totalled $21,242.94 (economic damages of $6,242.94 plus non-economic damages of $15,000.00). The percentage of total damages which were economic damages was 29.388 percent ($6,242.94 of $21,242.94). The economic portion of the Housing Authority's $5,000 settlement with Espinoza was thus 29.388 percent of $5,000, or $1,467.77. Machonga's liability to Espinoza was therefore:

$ 6,242.94 total economic damages incurred by Plaintiff.

- 624.29 reduction of economic damages by 10% due to Plaintiff's 10% fault.

$ 5,618.65

-1,467.77 the economic portion of the Housing Authority settlement (29.388%

of $5,000).

$ 4,150.88 Machonga's share of the remaining economic damages.

k6,750.00 Machonga's 45% of Plaintiff's $15,000 non-economic damages.

$10,900.88 Machonga's liability to Plaintiff.

Appellant Machonga contends, however, that no portion of the Housing Authority's $5,000 settlement with Espinoza should be considered payment by the Housing Authority for those non-economic damages for which the Housing Authority alone could have been held liable. Machonga contends that his liability should be calculated as follows:

$ 6,242.94 total economic damages incurred by Plaintiff.

- 624.29 reduction of economic damages by 10% due to Plaintiff's 10% fault.

$ 5,618.65

k6,750.00 Machonga's 45% of Plaintiff's $15,000 non-economic damages.

$12,368.65

-5,000.00 reduction due to Housing Authority's $5,000 settlement.

$ 7,368.65 Machonga's liability to Plaintiff.

While Machonga refers to this calculation as reflecting an "undifferentiated" settlement by the Housing Authority for $5,000, what Machonga's calculation actually does is use the Housing Authority's $5,000 settlement to pay $5,000 of the $5,618.65 in economic damages (here, medical expenses) for which the Housing Authority and Machonga would have been jointly and severally liable if the Housing Authority had not settled. ⁶ Thus, Machonga contends that the Housing Authority's settlement should be used to pay 88.99% of Espinoza's recoverable economic damages, even though the arbitrator found that Machonga and the Housing Authority were equally at fault (45% each) for Espinoza's damages, and even though only 29.388% of Espinoza's damages were economic. While Espinoza concedes that Machonga's liability to Espinoza is $3,227.77 lower than it would have been under pre-Proposition 51 law ($14,128.65 under pre-Prop 51, compared to $10,900.88 under post-Prop 51), Machonga's computation would reduce that liability yet another $3,532.23 (the difference between plaintiff's and the superior court's computation of $10,900.88 and Machonga's figure of $7,368.65).

It is true that the language of Code of Civil Procedure section 877 states that a release given in good faith "to one or more of a number of tortfeasors claimed to be liable for...