Prado-Guajardo v. Perez
| Decision Date | 08 September 2017 |
| Docket Number | Case No. 2:16-cv-00546-GMN-VCF |
| Parties | DEYSSI JANNETH PRADO-GUAJARDO, Plaintiff, v. MARTIN GUZMAN PEREZ and El RAYO, Defendants. MARTIN GUZMAN PEREZ, Third-Party Plaintiff, v. SHAYNA DIAZ, Third-Party Defendant. |
| Court | U.S. District Court — District of Nevada |
Before the Court is Third-Party Defendant Shayna Diaz's Supplemental Brief (ECF No. 44) and Defendant/Third-Party Plaintiff Martin Guzman Perez and Defendant El Rayo's (collectively, "Perez") Response (ECF No. 45) regarding Diaz's Motion for Determination of Good Faith Settlement (ECF No. 38). Plaintiff Deyssi Janneth Prado-Guajardo moved to join Diaz's Motion for Good Faith Settlement (ECF No. 39). Perez filed a Response to Diaz's Motion for Determination of Good Faith Settlement (ECF No. 40), and Diaz filed a Reply (ECF No. 42). The Court held a hearing about the Motion for Determination of Good Faith Settlement on May 2, 2017 and denied that motion without prejudice. See Mins. Proceedings (ECF No. 43).1
At the conclusion of the May 2, 2017 hearing, the Court raised two main issues with the Motion for Determination of Good Faith Settlement: (1) whether a settlement between a plaintiff and a third-party defendant against whom the plaintiff did not assert a direct claim could support a finding of good faith; and (2) whether Defendant/Third-Party Plaintiff Perez would still have the right to argue at trial (if the case proceeded to trial) pursuant to Nev. Rev. Stat. § 41.141 that Diaz's comparative fault due to negligent entrustment reduces the percentage of the liability attributable to Perez. See Mins. Proceedings (ECF No. 43). In other words, assuming the Court approves the good faith settlement and Perez's indemnity and contribution claim against Diaz based on negligent entrustment is discharged, should the issues of fault attributable to Diaz remain in the case as a defense for Perez even though recovery against Diaz would be precluded? Id. The Court granted the parties two weeks to file new motions addressing these issues. Id. The Court has reviewed and considered the moving and responsive papers. A hearing was held on September 8, 2017. For the reasons stated below, the Court reconsiders Diaz's Motion for Good Faith Settlement (ECF No. 38) and recommends that it should be conditionally GRANTED.
The parties are familiar with the facts of the case and the Court will repeat them only as necessary. This action arises from a non-contact accident between a 2012 Yamaha Cruiser XV250 motorcycle driven by Prado-Guajardo and Perez's 2010 Kenworth T800 DS-Tractor Truck on December 5, 2013. See ECF No. 32. Due to injuries Prado-Guajardo sustained from this accident, which she alleges Perez caused, Prado-Guajardo brought a personal injury suit against Perez on December 4, 2015 in Nevada District Court. See ECF No. 1 at 1. Perez removed the action to Federal District Court on March 11, 2016. Id. Prado-Guajardo filed an Amended Complaint in February 2017, naming El Rayo as an additional defendant. See ECF No. 32 at 1.
In August 2016, Perez filed a Third-Party Complaint for indemnity and contribution against Third-Party Defendant Shayna Diaz. See ECF No. 19. The Third-Party Complaint alleges that Diaz was the registered owner of the motorcycle that Prado-Guajardo operated and the insured under a motorcycle insurance policy on the day of the accident. The Third-Party Complaint alleges that Diaz negligently entrusted the motorcycle to Prado-Guajardo because Prado-Guajardo did not have a license to operate the motorcycle. Id. at 2. The motorcycle was insured by State Farm Automobile Insurance Company with policy limits of $15,000. See ECF Nos. 38-2; 38-3. After being served with the Third-Party Complaint, Diaz filed an answer on October 26, 2017. See ECF No. 27. Diaz "made a Demand for Prior Pleadings and Discovery and began her investigation into the allegations." See ECF No. 38 at 3. Based on that investigation, Diaz "made an offer to Prado to tender her $15,000 policy limits to settle the third-party claim asserted against her." Id. Prado-Guajardo accepted Diaz's offer, subject to the Court's determination that the settlement was made in good faith. Prado-Guajardo and Diaz are engaged to be married. See ECF No. 38-2.
On March 24, 2017, Diaz brought the instant Motion for Determination of Good Faith Settlement, which Prado-Guajardo moved to join. See ECF Nos. 38; 39. The Court held a hearing on Diaz's Motion on May 2, 2017. See ECF No. 43. The Court denied Diaz's Motion, but granted the parties two weeks to file moving and responsive papers on the issues identified by the Court at the hearing. On May 16, 2017, Diaz filed a Supplemental Brief In Support of Her Motion for Determination of Good Faith Settlement. See ECF No. 44. On June 8, 2017, Perez filed a Response to Third-Party Defendant Shayna Diaz' Supplemental Brief in Support of Her Motion for Determination of Good Faith Settlement. See ECF No. 45.
Plaintiff Prado-Guajardo and Third-Party Defendant Diaz seek a determination from this Court that the proposed settlement between them was made in good faith. Under Nev. Rev. Stat. § 17.245(l)(a) and (b):
Under Nev. Rev. Stat. § 17.245(2), equitable indemnity means "a right of indemnity that is created by the court rather than expressly provided for in a written agreement." The goal of Nev. Rev. Stat. § 17.245 is "to encourage settlements by discharging all liability for contribution by a settling tortfeasor to others upon a finding that the settlement was entered in 'good faith.' " See Kerr v. Wanderer & Wanderer, 211 F.R.D. 625, 631 (D. Nev. 2002) (quoting In re MGM Grand Hotel Fire Litig., 570 F. Supp. 913, 926 (D. Nev. 1983)).
The statute also considers the interests of non-settling defendants. Indeed, even if a court determines that a settlement was entered into in good faith, under Nev. Rev. Stat. § 17.245(1), the "non-settling defendant receives a credit in the amount contributed by the settling defendant in any subsequent verdict against that defendant." See In re MGM Grand Hotel Fire Litig., 570 F. Supp. at 927; see also Nev. Rev. Stat. § 17.245(1). The determination of good faith under Nevada law is "left to the discretion of the ... court based upon all relevant facts available ...." See Velsicol Chem. Corp. v. Davidson, 811 P.2d 561, 563 (1991); see also Otak Nevada, L.L.C. v. Eight Jud. Dist. Ct., 312 P.3d 491, 497 (2013) ().
In The Doctors Co. v. Vincent, the Nevada Supreme Court stated that, as evidenced by the ruling In re MGM Grand Hotel Fire Litigation, the following factors may be considered in evaluating good-faith issues under Nev. Rev. Stat. § 17.245: "[1] [t]he amount paid in settlement, [2] the allocation of the settlement proceeds among plaintiffs, [3] the insurance policy limits of settling defendants, [4] the financial condition of settling defendants, and [5] the existence of collusion, fraud or tortious conduct aimed to injure the interests of non-settling defendants." See The Doctors Co. v. Vincent, 98 P.3d 681, 686 (2004) (quoting In re MGM Grand Hotel Fire Litig., 570 F. Supp. at 927). These factors are not exhaustive. See Duk v. MGM Grand Hotel, Inc., 320 F.3d 1052, 1060-61 (9th Cir. 2003), as amended on denial of reh'g (Apr. 17, 2003); see also Velsicol Chem. Corp. 811 P.2d at 563. In the court's exercise of its discretion, among the relevant facts it may choose to consider, the court may indeed take into account the factors discussed by MGM, but "Nevada law includes no requirement that a court consider or limit its analysis to the MGM factors ...." See Clark County School District v. Travelers Casualty and Surety Company of America, No. 2:13-cv-01100-JCM-PAL, 2016 WL 4443160, at *4 (D. Nev. Aug. 18, 2016) (citation omitted).
Applying the Nevada Supreme Court's list of non-exhaustive factors and the policy that underlies them for determining whether a settlement agreement was reached in good faith and considering the relevant points and authorities, including the parties' supplemental briefs and the representations of counsel at the hearing, the Court finds pursuant to Nev. Rev. Stat. § 17.245 that the proposed $15,000 settlement between Third-Party Defendant Diaz and Plaintiff Prado-Guajardo was made in good faith subject to the conditions described below.
At the May 2, 2017 hearing, the Court explained that the proposed settlement on its face satisfies Nev. Rev. Stat. § 17.245's good-faith requirement. The Court predicated its finding on, inter alia, the MGM factors. The settlement amount is for $15,000 which Diaz's insurance company would pay toward Prado-Guajardo's damages if any are awarded to her at the conclusion of this case. Diaz made an offer to Prado-Guajardo to tender her $15,000 insurance policy limits to settle the third-party claim asserted against Diaz by Perez, which Diaz alleges is "the extent of coverage that [she] [was] able to afford." See ECF No. 38-2 at 2; see also ECF No. 38-3 at 1. Diaz also claims that she does "not have funds sufficient to pay any judgment rendered against [her] in excess of $15,000." Id. Although discovery is still ongoing, at the May 2, 2017 hearing, Counsel for...
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