Schreiber v. Lee

• Decision Date: 09 April 2020
• Docket Number: A150093,A149969
• Citation: 47 Cal.App.5th 745,260 Cal.Rptr.3d 859
• Court: California Court of Appeals Court of Appeals
• Parties: Marthe SCHREIBER, Plaintiff and Respondent, v. Stepehen K. LEE et al., Defendants and Appellants. Marthe Schreiber, Plaintiff and Respondent, v. Golden Prosperities Management Company, LLC, Defendant and Appellant.

47 Cal.App.5th 745

260 Cal.Rptr.3d 859

Marthe SCHREIBER, Plaintiff and Respondent,

v.Stepehen K. LEE et al., Defendants and Appellants.

Marthe Schreiber, Plaintiff and Respondent,

v.Golden Prosperities Management Company, LLC, Defendant and Appellant.

A149969

A150093

Court of Appeal, First District, Division 1, California.

Filed April 9, 2020

Certified for Partial Publication.^*

Brent Fiol & Pratt LLP, Peter Joseph Brent, Wesley R. Pratt and David L. Fiol, San Rafael, for Plaintiff and Respondent.

Bledsoe, Diestel, Treppa & Crane LLP, Alison McNaboe Crane, San Francisco, Jamie Nicolas Bernate and Jocelyn S. Koo, San Francisco; Berding & Weil LLP, Arthur Fredrick Hagen and Daniel Rottinghaus, Walnut Creek, for Defendants and Appellants.

Banke, J.

I. INTRODUCTION

Plaintiff Marthe Schreiber was seriously injured when she fell through a skylight built into the deck of her apartment. Defendant Stephen K. Lee built the three-unit apartment building and previously owned the property. At the time of the accident, Lee’s adult children owned the property, and it was managed by defendant Golden Prosperities Property Management Company LLC (Golden Prosperities). Prior to trial, Schreiber settled with the Lee children for $2.5 million.

At the close of Schreiber’s case, Lee moved for nonsuit on the ground her claims against him were based on a patent construction defect and therefore barred by the statute of repose set forth in Code of Civil Procedure section 337.1. The trial court denied the motion, and the jury thereafter awarded Schreiber damages totaling just over $2.6 million. The jury also apportioned fault, allocating 12 percent to Schreiber, 54 percent to Lee, 16 percent to Golden Prosperities, and 18 percent collectively to the Lee children (allocations Schreiber does not challenge on appeal).

After reducing the verdict to reflect Schreiber’s percentage of fault, the trial court offset the entirety of the economic damages by the amount of the settlement attributable to such damages. However, it denied any credit to Lee and Golden Prosperities as to the noneconomic damages and entered judgment against Lee for $756,000 and against Golden Prosperities for $224,000.

Lee and Golden Prosperities make numerous claims of error during trial, and also claim they are entitled to a full settlement credit as to noneconomic damages. We affirm in all respects except as to the settlement credit, concluding Golden Prosperities, but not Lee, is entitled to a credit against both economic and noneconomic damages. We publish our discussion of the settlement credit issue given the somewhat unusual circumstances, namely that the Lee children were not only found independently negligent but also bore imputed liability for Golden Prosperities’ negligence.

II. BACKGROUND ¹

Schreiber has resided in the apartment building at issue since it was built in 1980. Lee, who then owned the property, did the development work. The building has a garage on the ground floor and three residential units on the upper floors. Schreiber’s apartment has a deck atop the roof of the garage, with an imbedded skylight that lets light into the garage.

In the late 1980’s, Lee and his wife transferred ownership of the property to their six children. Although Schreiber sought to have the deed declared invalid, the trial court found the Lee children were, indeed, the lawful owners of the property.

In 2005, Golden Prosperities was formed and took over management of the property. It was a "member-owned management company," with Lee and the Lee children serving as board members. Lee was also chairman of the board and chief executive officer. Sons Gordon Lee and Peter Lee handled day-to-day operations, and were the only ones paid.

At some point, Schreiber hired a contractor to install planter boxes around the skylight because she was concerned it might pose a danger to visiting children playing on the deck. She never thought the skylight was strong enough to stand on, and never put anything on it.

In 2013, Schreiber and an employee of hers were gardening on the deck. As she was handing him a "six-pack of flowers from one end of the skylight to the other," she fell through the skylight.

Schreiber was hospitalized at San Francisco General Hospital for about two weeks, and at Laguna Honda for approximately five weeks. She had no insurance at the time, and was billed $230,843.06 by San Francisco General and $56,841 by Laguna Honda. Schreiber later became retroactively eligible for Medi-Cal, and under Medi-Cal’s contract with San Francisco General and Laguna Honda, the medical bills were resolved for far lesser amounts, $43,243.64 for San Francisco General and $14,283.45 for Laguna Honda.

Schreiber subsequently filed the instant action, eventually naming as defendants Lee, Golden Prosperities, the Lee children, and Stephen K. Lee Enterprises, a partnership formed around 1988 that previously managed the property.² Prior to trial, she settled with the Lee children and Stephen K. Lee Enterprises for $2.5 million.

Following the close of Schreiber’s case-in-chief, Lee moved for nonsuit, asserting her claims against him were based on a patent construction defect and therefore barred by the four-year statute of repose. The court denied the motion.

The jury eventually awarded Schreiber just over $2.63 million in damages: $1.23 million in economic damages and $1.4 million in noneconomic damages.³ It allocated 12 percent of the fault to Schreiber, 54 percent to Lee, 16 percent to Golden Prosperities, and 18 percent collectively to the Lee children (3 percent each).

Prior to entry of judgment, Lee and Golden Prosperities moved for an offset for the full amount of the settlement. Following further briefing on whether the Lee children, as the owners of the property, had a nondelegable duty with respect to its condition, the court denied the motion. Thereafter, the court offset the economic damages in full and entered judgment against Lee for $756,000 (his proportional share of the noneconomic damages) and against Golden Prosperities for $224,000 (its proportional share). The court also denied motions for a new trial, to set aside the verdict, and for judgment notwithstanding the verdict.⁴

III. DISCUSSION

A.-F.^**

G. Settlement Credit

Lee and Golden Prosperities lastly claim the trial court erred in providing a settlement credit only as to economic damages and not as to noneconomic damages. This is a significant issue, as a credit against both the economic and noneconomic damages would result in a zero net judgment given the size of the pre-trial settlement. (See Syverson v. Heitmann (1985) 171 Cal.App.3d 106, 110, 214 Cal.Rptr. 581, abrogated by statute on another ground as stated in Goodman v. Lozano 47 Cal.4th 1327, 1330, 104 Cal.Rptr.3d 219, 223 P.3d 77.)

As we explain, this is not a typical Proposition 51 case, where all defendants faced joint and several liability for economic damages, but only several liability for noneconomic damages in accordance with their percentages of fault. Here, the settling defendants faced joint and several liability not only for the entirety of the economic damages but also for that portion of the noneconomic damages attributable to a defendant for which they faced imputed liability, as well as several liability for that portion of the noneconomic damages attributable to their own negligence. As a result, a different settlement credit analysis is required from that employed in the usual Proposition 51 case. Under this analysis, Golden Prosperities is entitled to a full settlement credit, but Lee is not.

To recap the salient facts, the Lee children, who owned the property, settled with Schreiber before trial for $2.5 million. The jury subsequently found Schreiber sustained past and future damages totaling just over $2.6 million. It also apportioned fault, allocating 12 percent to Schreiber, 54 percent to Lee (as the developer of the property), 16 percent to Golden Prosperities, and 18 percent collectively to the Lee children (as the owners of the property). Thus, taking into account Schreiber’s own comparative fault, the jury found she was entitled to recover $2.3 million—an amount she had already recovered in full through the settlement.

In resolving the settlement credit issue before us, we first examine the nature of the liability the Lee children faced as the owners of the property. Specifically, the question is whether the Lee children would have been entitled to the benefit of Proposition 51’s limitation on liability for noneconomic damages. (See Rashtian v. BRAC-BH, Inc. (1992) 9 Cal.App.4th 1847, 1851–1852, 12 Cal.Rptr.2d 411 [first examining the nature of a vehicle owner’s liability for the negligence of a permissive driver in determining whether Proposition 51 applied].)

Henry v. Superior Court (2008) 160 Cal.App.4th 440, 448–450, 72 Cal.Rptr.3d 808 ( Henry ), nicely summarizes the backdrop against which Proposition 51 was enacted: " ‘Under well-established common law principles, a negligent tortfeasor is generally liable for all damage of which his negligence is a proximate cause.... A tortfeasor may not escape this responsibility simply because another act—either an "innocent" occurrence such as an "act of God" or other negligent conduct—may also have been a cause of the injury.’ ( American Motorcycle Assn. v. Superior Court (1978) 20 Cal.3d 578, 586 [146 Cal.Rptr. 182, 578 P.2d 899] ... ( American Motorcycle ).) [¶] ‘In cases involving multiple tortfeasors, [this] principle ... has commonly been expressed in terms of "joint and several liability." ’ " ( Henry, at p. 448, 72 Cal.Rptr.3d 808, quoting American Motorcycle, at p. 586, 146 Cal.Rptr. 182, 578 P.2d 899.)

"In American Motorcycle the Court concluded its adoption of principles of comparative negligence in Li v. Yellow Cab Co. (1975) 13 Cal.3d 804 [119 Cal.Rptr. 858, 532 P.2d 1226] ..., which eliminated the all-or-nothing doctrine of contributory negligence, ‘does not warrant the abolition or contraction...