White v. Sabatino, Civ. No. 04-00500 ACK/LEK.

• Decision Date: 29 June 2007
• Docket Number: Civ. No. 05-00025 ACK/LEK.,Civ. No. 04-00500 ACK/LEK.
• Citation: 526 F.Supp.2d 1135
• Parties: Sarah C. WHITE, Individually and as Special Administrator of the Estate of Stefan Bournakel, Deceased, and as Next Friend of Nicos Robert Bournakel, a minor, Plaintiffs, v. Carol Ann SABATINO, Bob's Maui Dive Shop, Inc. dba Maui Dive Shop, a Hawaii Corporation; 3090 Incorporated, a Hawaii Corporation; Ronald E. Wallach; County of Maui; Franklyn L. Silva, Individually and in his capacity as Director of the Department of Liquor Control, County of Maui; Wayne M. Pagan, Individually and in his capacity as Deputy Director of the Department of Liquor Control, County of Maui; John Does 1-20; Jane Does 1-20; Doe Corporations 1-20; Doe Partnerships 1-20; Doe Associates 1-20; Doe Governmental Agencies 1-20; and Other Entities 1-20, In Personam and M/V Alii Nui O.N. 567359 In Rem, Defendants. Franklyn Silva, Wayne M. Pagan, and County of Maui, Cross-claimants, v. Carol Ann Sabatino, Robert Wallach, Bob's Maui Dive Shop, Inc. dba Maui Dive Shop, a Hawaii Corporation; and 3090 Incorporated, a Hawaii Corporation, Cross-Defendants. Franklyn L. Silva, Wayne M. Pagan, County of Maui, Third-Party Plaintiffs, v. Carol Ann Sabatino, Third-Party Defendant. In the Matter of the Complaint of 3090, Incorporated, a Hawaii Corporation as owners of the M/V Alii Nui O.N. 567359, for Exoneration from and/or Limitation of Liability.
• Court: U.S. District Court — District of Hawaii

526 F.Supp.2d 1135

Sarah C. WHITE, Individually and as Special Administrator of the Estate of Stefan Bournakel, Deceased, and as Next Friend of Nicos Robert Bournakel, a minor, Plaintiffs, v. Carol Ann SABATINO, Bob's Maui Dive Shop, Inc. dba Maui Dive Shop, a Hawaii Corporation; 3090 Incorporated, a Hawaii Corporation; Ronald E. Wallach; County of Maui; Franklyn L. Silva, Individually and in his capacity as Director of the Department of Liquor Control, County of Maui; Wayne M. Pagan, Individually and in his capacity as Deputy Director of the Department of Liquor Control, County of Maui; John Does 1-20; Jane Does 1-20; Doe Corporations 1-20; Doe Partnerships 1-20; Doe Associates 1-20; Doe Governmental Agencies 1-20; and Other Entities 1-20, In Personam and M/V Alii Nui O.N. 567359 In Rem, Defendants.

Franklyn Silva, Wayne M. Pagan, and County of Maui, Cross-claimants, v. Carol Ann Sabatino, Robert Wallach, Bob's Maui Dive Shop, Inc. dba Maui Dive Shop, a Hawaii Corporation; and 3090 Incorporated, a Hawaii Corporation, Cross-Defendants.

Franklyn L. Silva, Wayne M. Pagan, County of Maui, Third-Party Plaintiffs, v. Carol Ann Sabatino, Third-Party Defendant.

In the Matter of the Complaint of 3090, Incorporated, a Hawaii Corporation as owners of the M/V Alii Nui O.N. 567359, for Exoneration from and/or Limitation of Liability.

Civ. No. 04-00500 ACK/LEK.

Civ. No. 05-00025 ACK/LEK.

United States District Court, D. Hawai`i.

June 29, 2007.

COPYRIGHT MATERIAL OMITTED

Carol Ann Sabatino, Pro Se.

Eve M. Green, Eve M. Green Esq., Wailuku, HI, Denise M. Hevicon, Earl I. Anzai, Law Offices of Earl I. Anzai, Glenn H. Uesugi, Michael Jay Green, Honolulu, HI, for Plaintiffs/Claimant.

Brianne L. Ornellas, Lyons Brandt Cook & Hiramatsu, Honolulu, HI, for Claimant/Cross Claimant/Cross Defendant.

Emily A. Gardner, Lesser & Associates, PLC, Redondo Beach, CA, for Defendants.

Madelyn S. D'Enbeau, Department of the Corporation Counsel, Wailuku, HI, for Defendants/Cross Claimant/Third-Party Plaintiff.

Jacqueline E. Thurston, Terrance Matthew Revere, Motooka Yamamoto & Revere LLC, Honolulu, HI, for Defendants/Claimant/Cross Claimant/Cross Defendant.

Jeana Sciarappa Schott, Lesser & Associates PLC, Redondo Beach, CA, for Cross Defendant.

David A. Gruebner, Jeffrey H.K. Sia, Ayabe Chong Nishimoto Sia & Nakamura, Honolulu, HI, Richard A. Lesser, Steven M. McGuire, Michele N. Bass, Lesser & Associates, PLC, Redondo Beach, .CA, for Defendants/Cross Defendant.

Jason P. Healey, Motooka Yamamoto & Revere LLC, Honolulu, HI, for Cross Claimant/Cross Defendant.

ORDER REJECTING FINDINGS AND RECOMMENDATION TO GRANT DEFENDANT BOB'S MAUI DIVE SHOP'S PETITION FOR DETERMINATION OF GOOD FAITH SETTLEMENT AND FINDING SETTLEMENT IS GOVERNED BY ADMIRALTY LAW

ALAN C. KAY, Sr., District Judge.

BACKGROUND¹

On February 13, 2004, an automobile driven by Defendant Carol Ann Sabatino collided with a car driven by Stefan Bournakel, who died as a result of the collision. Prior to the accident, Sabatino was a passenger on a cruise vessel named the Alii Nui, where she allegedly became intoxicated from being over-served with alcoholic beverages. Defendant 3090, Inc. owns the Defendant M/V Alii Nui, and Defendant Maui Dive Shop owns Defendant 3090, Inc.

In her Fourth Amended Complaint, Plaintiff Sarah White, Individually and as Special Administrator of the Estate of Stefan Bournakel, Deceased and next friend of Nicos Robert Bournakel, a minor (hereinafter "Plaintiff"), asserts that this Court has jurisdiction over the action pursuant to the general admiralty law of the United States; Rule 9(h) of the Federal Rules of Civil Procedure; and 46 App.U.S.C. § 740, the Admiralty Jurisdiction Extension Act, which extends admiralty jurisdiction to all cases of damage and personal injury caused by a vessel on navigable water, notwithstanding that the injury occurred on land. See Fourth Amended Complaint at ¶¶ 1, 2. Plaintiff's Fourth Amended Complaint asserts claims against the following Defendants: Carol Ann Sabatino;² Ronald E. Wallach;³ Bob's Maui Dive Shop, Inc., dba Maui Dive Shop (hereinafter "Maui Dive Shop"); 3090 Inc.; in rem Defendant MN Alii Nui O.N. 567359, a vessel in navigable waters; the County of Maui; Franklyn L. Silva, Individually and in his capacity as Director of the. Maui County Department of Liquor Control; and Wayne M. Pagan, Individually and in his capacity as Deputy Director of the Maui County Department of Liquor Control. Plaintiff asserts generally that Defendants were the legal cause of her injury and damages. Id. at ¶ 18. Plaintiff next asserts that Defendants 3090, Inc. and Maui Dive Shop negligently served Defendant Sabatino intoxicating liquor in violation of State law and Maui County liquor regulations. Id. at ¶ 22. Plaintiff also asserts that the Maui County, Silva, and Pagan ("County Defendants") are liable to her for failing to enforce Section 08-101-69(a) of the Rules Governing the Sale and Manufacture of Liquor for the County of Maui. Id. at ¶ 26.

Defendant Maui Dive Shop and Plaintiff reached a settlement agreement. On November 16, 2006, Maui Dive Shop filed a Petition for Determination of Good Faith Settlement before Magistrate Judge Kobayashi. On December 1, 2006, the Defendants Franklyn L. Silva and Wayne M. Pagan, filed objections to the Petition on their behalf in their individual and official capacities and on behalf of Defendant County of Maui.⁴ Defendant 3090, Inc., filed an opposition to the petition on December 4, 2006. A hearing was held before Magistrate Judge Kobayashi on December 19, 2006, and per the court's order, the County Defendants filed supplemental objections to the Petition for Determination of Good Faith Settlement on December 27, 2006.

On January 16, 2007, Magistrate Judge Kobayashi entered an Order granting Maui Dive Shop's Petition for Determination of Good Faith Settlement. Subsequently, on. May 7, 2007, Magistrate Judge Kobayashi withdrew the January 16, 2007 Order granting the Petition for Determination of Good Faith Settlement and issued a Findings and Recommendation ("F & R") that the Court grant Maui Dive Shop's Petition for Determination of Good Faith Settlement.

On May 21, 2007, the County Defendants filed an objection to the Findings and Recommendation to grant Maui Dive Shop's Petition.

STANDARD

A district court reviews de novo a magistrate's findings and recommendation for dispositive motions. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); L.R. 74.2. The court may accept, reject, or modify and accept as modified the same. 28 U.S.C. § 636(b)(1)(C); Fed.R.Civ.P. 72(b); L.R. 74.2. A petition for determination of good faith settlement under section 663-15.5 of the Hawaii Revised Statutes is a dispositive motion because the court's decision to grant the petition results in the dismissal of all cross-claims against the settling party. Haw.Rev.Stat. § 663-15.5(d). De novo review means the district court must consider the matter anew, as if it had not been heard before and as if no decision previously had been rendered. See Ness v. Commissioner of Internal Revenue Service, 954 F.2d 1495, 1497 (9th Cir.1992). The district court must arrive at its own independent conclusion about those portions of the magistrate's ruling to which objections are made, but a de novo hearing is not required. United States v. Remsing, 874 F,2d 614, 617-18 (9th Cir. 1989); L.R. 74.2.

DISCUSSION

The settling Defendant, Maui Dive Shop, asks the Court to find that the settlement agreement reached with Plaintiff was made in good faith, pursuant to section 663-15.5 of the Hawaii Revised Statutes. Non-settling Defendants 3090, Inc. and County Defendants argue that federal admiralty law, rather than Hawaii law, governs the settlement of all claims in this case. The County Defendants go on to argue that even if state law applies, the petition should not be approved because the factors set forth in Troyer v. Adams to determine whether a settlement is in good faith weigh against finding good faith in this case. 102 Hawaii 399, 427, 77 P.3d 83, 111 (Haw.2003).

A. State and Federal Admiralty Law Approaches to Settlement Credit for Non-Settling Defendants

Hawaii law provides for a pro tanto credit approach to addressing how a nonsettling defendant will be credited for another defendant's settlement. Haw.Rev. Stat. § 663-15.5(a); Troyer, 102 Hawai`i at 414, 77 P.3d at 98. Under the pro tanto approach, when settlement is deemed by a court to be given in good faith, the nonsettling defendants are entitled to a set-off credit equal to the greater of the amount stipulated by the settlement or the amount of consideration paid for settlement. § 663-15.5(a).⁵ In addition, the settling defendant is discharged from any liability to co-defendants for contribution, and a determination of good faith settlement results in a bar and dismissal of any crossclaims by co-defendants against the settling defendant. Haw.Rev.Stat. § 663-15.5(a),(d).

Under federal admiralty law, there is no analogous determination by the court of good faith settlement. The United States Supreme Court established that the rule in admiralty is the "proportionate share" approach. McDermott, Inc. v. AmClyde and River Don Castings, Ltd., 511 U.S. 202, 217-21, 114 S.Ct. 1461, 128 L.Ed.2d 148 (1994); see also In Re Exxon Valdez, 229 F.3d 790, 797 (9th Cir. 2000)("The proportionate share approach is the law in the Ninth Circuit, has been adopted by the Supreme Court for use in maritime actions, and is the approach recommended by the American Law Institute"). Under the proportionate share approach, the amount of the plaintiff's claim against the non-settling defendants is diminished by the proportion of fault attributed to the settling defendant. Furthermore, the proportionate share approach bars suits for contribution from the settling defendants as unnecessary because the non-settling defendants pay no more than their share of the judgment. McDermott, 511 U.S. at...