Nixon-Egli Equipment v. Superior Court CA4/2 ( 2016 )

Filed 7/8/16 Nixon-Egli Equipment v. Superior Court CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
NIXON-EGLI EQUIPMENT CO. et al.,
Petitioners, E064305
v. (Super.Ct.No. CIVRS1305081)
THE SUPERIOR COURT OF OPINION
SAN BERNARDINO COUNTY,
Respondent;
COAST CONSTRUCTION, INC. et al.,
Real Parties in Interest.
ORIGINAL PROCEEDINGS; petition for writ of mandate. Keith D. Davis,
Judge. Petition is denied.
Chapman Glucksman Dean Roeb & Barger, Glenn T. Barger and Aneta B.
Dubow; Stella Dugan Gunn, Morris & Stella, Joseph N. Stella and Jeffrey W. Gunn, for
Petitioners.
No appearance for Respondent.
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Yukevich/Cavanaugh, James J. Yukevich, Patrick J. Cimmarusti, and Sara M.
Greco for Real Party in Interest Coast Construction, Inc.
The Boccardo Law Firm and John C. Stein for Real Parties in Interest, Rui Costa
and Kimberly Costa.
The trial court granted the motion by real party in interest Coast Construction, Inc.
(Coast) for a determination that its settlement with plaintiff Rui Costa1 was in good faith
within the meaning of Code of Civil Procedure section 877.6.2 Codefendants Nixon-Egli
Equipment Co., Wirtgen GmbH, and Wirtgen America, Inc., seek review of the ruling by
petition for writ of mandate. (§ 877.6., subd. (e).) Having reviewed the petition and the
return filed by real parties in interest, we uphold the determination of the trial court and
deny the petition.
I
STATEMENT OF FACTS
The underlying lawsuit is a personal injury action brought by Rui Costa against
petitioners. Costa was at work on a highway construction site when the heavy equipment
vehicle he was assisting ran over him, severing both legs, one at the hip and the other just
below the hip. Petitioners are the owners/manufacturers/sellers of the vehicle, described
as a “pavement grinder” or “road-milling machine.”
1 Costa’s wife is also a plaintiff, suing for loss of consortium. For convenience,
we will generally refer to Costa as plaintiff in the singular.
2 All subsequent statutory references are to the Code of Civil Procedure.
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In its motion, Coast presented three grounds on which the motion should be
granted. First, that as the contractor that hired Costa’s employer to perform work on the
project, it was immune from liability under Privette v. Superior Court (1993) 5 Cal. 4th
689 (Privette) and therefore even a modest payment must be deemed to have been in
good faith. Second, that because the statute of limitations had run and plaintiff had not
sued Coast, as a matter of law Coast could not be liable for any damages. Third, that as a
matter of fact Coast bore no responsibility for the accident so that a nominal settlement
was fair.
Coast did adequately establish that it exercised and retained no control over the
operation of the grinder, which was operated by Costa’s employer, ABSL Construction
(ABSL).3 In Coast’s view, the accident was either due to Costa’s negligence, or that of
the grinder operator because they failed to maintain eye contact while the grinder was in
motion.
Coast settled with Costa (and his family) for $200,000. The motion contained no
information about Coast’s financial situation or potential insurance coverage.
Needless to say, petitioners’ view of the accident was somewhat different. They
asserted (and Coast does not dispute) that Coast, as general contractor, was handling
traffic control at the project site—that is, the flow and control of vehicles using the public
Costa cannot sue his employer due to the exclusive nature of the workers’
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compensation remedy. (Lab. Code, § 3602, subd. (a).)
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highways under repair, as well as traffic on cross streets. In petitioners’ scenario, Coast
failed to take appropriate precautions as the grinder was moved across an intersection.
Petitioners’ argument is that either the driver or Costa or both were distracted by a
perceived need to check for traffic due to Coast’s failure to provide reliable, adequate
traffic control. Their support for this theory came from deposition testimony by the
driver, Richard Crain, who testified that the accident occurred when he was driving the
grinder across Highway 395 in order to reach a location on a cross street, Carlos, where
the grinder would be loaded up for transport. Coast had one man positioned to stop north
or southbound traffic on Highway 395. Crain testified “The whole thing right there is
they had one traffic control guy right there. So I had to rely on Rui [plaintiff] and my
own eyesight to watch the traffic on Carlos.” When asked why he had taken his eyes off
of plaintiff just before the accident, Crain replied “Because I’m watching traffic and I’m
lining it up for the low bed.” Plaintiff himself also testified that he was “looking out for
the traffic, pedestrians, the safety” just before he was struck by the grinder.4
Petitioners also demonstrated that Coast had available insurance of at least seven
million dollars. Plaintiff’s medical expenses exceeded $2.3 million and he claimed to be
permanently unable to work as well as to be suffering from phantom limb pain and
depression.
Finally, it appears also that plaintiff’s theory of liability against petitioners is that
the grinder was defectively designed either because it did not have suitable rear-view
4 We will comment on contrary evidence later in this opinion.
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mirrors and/or a closed-circuit television system so that the driver could have more easily
kept an eye on plaintiff.
II
DISCUSSION
Section 877.6 provides a mechanism through which a defendant who makes a
good faith settlement with the plaintiff can obtain immunity from most obligations to
indemnify joint tortfeasors under the doctrine of equitable immunity. (Fullerton
Redevelopment Agency v. Southern California Gas Co. (2010) 183 Cal. App. 4th 428,
432.) It is well-established both that the settling tortfeasor must pay an amount within the
“ ‘ballpark’ ” of its proportional liability to the plaintiff, and that a settling defendant may
reasonably offer less than might be awarded to plaintiff at trial. (See Tech-Bilt, Inc. v.
Woodward-Clyde &Associates (1985) 38 Cal. 3d 488, 499 (Tech-Bilt); Dole Food Co.,
Inc. v. Superior Court (2015) 242 Cal. App. 4th 894, 904 (Dole Food).) The settlor’s
financial ability to respond to a judgment and the possibility of collusion with the
plaintiff are also factors to be considered. (Tech-Bilt, at p. 499.) We review the trial
court’s ruling under the deferential “abuse of discretion” standard and any factual
findings of the trial court, express or implied, will be upheld if supported by substantial
evidence. (Cahill v. San Diego Gas & Electric Co. (2011) 194 Cal. App. 4th 939, 957
(Cahill); Dole Food, at p. 909.) While the party bringing the motion need not provide
any factual information, if the “good faith” is challenged by other tortfeasors the moving
party must demonstrate that the settlement is reasonable. (§ 877.6, subd. (d); Mattco
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Forge, Inc. v. Arthur Young & Co. (1995) 38 Cal. App. 4th 1337, 1350 at fn. 6 (Mattco
Forge).)
As noted above, petitioners estimated plaintiff’s damages as at least the $7 million
in insurance available to Coast, and pointed out that the settlement represented only about
2.85 percent of that amount.
A.
Privette Does not Immunize Coast from Liability to Petitioners
In Privette and cases amplifying on its rule, the Supreme Court held that the hirer
of an independent contractor cannot be liable to an employee of the contractor for injuries
suffered in the course and scope of his or her employment and due to the negligence of
the employer. (Privette, supra, 5 Cal.4th at p. 702; see SeaBright Ins. Co. v. US Airways,
Inc. (2011) 52 Cal. 4th 590, 598-600.) The rationale is that the hirer should not be liable
to the employee because the employer’s obligations are limited to the payment of
workers’ compensation benefits. Because the hirer (not at fault) cannot seek indemnity
from the employer (at fault), it is unfair to impose upon the hirer liability for tort
damages. (Privette, at p. 701.)
However, this does not prevent the hirer (here, Coast) from being liable if its own
negligence contributes to the employee’s injury. (Hooker v. Department of
Transportation (2002) 27 Cal. 4th 198, 214.) In this case, Coast was responsible for
traffic control at the work site, and petitioners argue that Coast’s performance of this
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obligation was done negligently and contributed to the accident. If petitioners are
correct, Privette and its progeny do not apply.
B.
Coast next argued that because plaintiff never named it as a defendant, and the
statute of limitations had long since expired, it could not be liable to plaintiff or
petitioners. In considering whether a settlement is in good faith, the court must consider
not only the settling defendant’s liability to the plaintiff, but also any potential indemnity
liability to other tortfeasors. (PacifiCare of California v. Bright Medical Associates, Inc.
(2011) 198 Cal. App. 4th 1451, 1465-1466 (PacifiCare); TSI Seismic Tenant Space, Inc. v.
Superior Court (2007) 149 Cal. App. 4th 159, 165-166.) Coast’s reliance on Widson v.
International Harvester Co. (1984) 153 Cal. App. 3d 45 (Widson) is misplaced. In that
case, the plaintiff made a tardy attempt to add defendant Louetto to the case but the trial
court rejected the effort. Louetto then settled with plaintiff for $30,000; a jury
subsequently fixed plaintiff’s total damages at $791,743. (Widson, at pp. 49-50.) Widson
does not hold that because plaintiff could not recover from Louetto, any settlement by
Louetto would be in good faith because it would be more than Louetto’s potential
liability to the plaintiff. Instead, the Widson court carefully considered the varying
evaluations both of Louetto’s proportionate liability and plaintiff’s potential recovery at
the time of the settlement. Because Louetto’s liability was estimated to be between zero
and 10 percent, or worst case 25 percent, and the estimated recovery by plaintiff was
estimated to be from $200,000 to $750,000, Louetto’s payment of $30,000 was not
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unreasonable. (See Mattco Forge, supra, 38 Cal.App.4th at pp. 1353-1354, citing
Widson.)
Hence, plaintiff’s inability to recover from Coast does not bar petitioners’
indemnity claim as a matter of law.
C.
Finally, we reach the issue of whether Coast’s settlement may be considered to be
within the ballpark. We conclude that it is and that the trial court correctly approved it as
being in “good faith.”
A good faith settlement under sections 877 and 877.6 must strike a balance
between the competing public policies of encouraging settlements (and thus discouraging
litigation) and the equitable sharing of financial responsibility. (PacifiCare, supra, 198
Cal.App.4th at p. 1464.) Factors to be evaluated include the overall likely recovery and
the settlor’s proportionate liability, the amount paid, the allocation of the settlement
among plaintiffs, the possibility of collusion, and the settlor’s financial ability to pay,
including available insurance. (Tech-Bilt, supra, 38 Cal.3d at p. 499.) And as we noted
above, a settling defendant must be expected to benefit by the decision to settle early and
therefore need not pay its entire “fair share” of the potential judgment.
In this case, both Crain, the driver, and plaintiff have testified that they were
looking for traffic on the cross street, Carlos, and were thus distracted from watching
each other. However, there is no evidence that it was necessary to watch for traffic
because Coast’s traffic control was inadequate. Multiple witnesses described traffic on
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Carlos as “light” or “almost nonexistent,” and even plaintiff agreed that it was “light.” In
their initial statements concerning the accident, neither Crain nor plaintiff mentioned
watching for traffic. Statements attributed to plaintiff in a CAL-OSHA report reflected
only that he “did not realized [sic] that he was too close to the grinder track.” Crain at the
time simply reported that he was taking precautions not to hit a nearby building with the
boom of the grinder when another worker ran up and told him he had struck plaintiff.
Thus, neither appears to have contemporaneously proffered the explanation for the failure
to maintain eye contact with each other on which plaintiff now relies.
There is no dispute that plaintiff’s potential recovery is in the high seven figures
and in this context a payment of $200,000 is nominal. Although Coast argues that its
available insurance has “[n]o [b]earing” on the good faith issue, it concedes that it is a
proper factor to consider under Tech-Bilt.5 Nevertheless, if the trial court reasonably
concludes that the settlor’s potential liability is minimal or remote, even a small
settlement may be found to have been offered in good faith. (Cahill, supra at pp. 962-
964.) That is the case here.
We agree that the question of allocation is not significant here and that there is no
evidence of collusion; although Costa has filed opposition to the petition (that is,
5 Coast cites the trial court’s comment that evidence of insurance was “ ‘simply
not an issue here.’ ” But the trial court meant only that there was no dispute that Coast,
through its insurance, had the financial ability to pay much more than $200,000. It did
not mean that this point was irrelevant to the analysis.
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justifying the settlement), this may well reflect only his desire to obtain something from
Coast. The court did not abuse its discretion by granting the motion.
III
DISPOSITION
The petition for writ of mandate is denied. Real parties in interest to recover their
costs.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
MILLER
J.
We concur:
McKINSTER
Acting P. J.
CODRINGTON
J.
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