Van Maanen v. Youth With a Mission-Bishop et al

Filing 133

FINDINGS and RECOMMENDATION Granting Defendant youth With A Mission-International's Application for Determination of Good Faith Settlement 74 signed by Magistrate Judge Jennifer L. Thurston on 11/29/2011. Objections to F&R due by 12/13/2011. (Leon-Guerrero, A)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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JACO VAN MAANEN,

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Plaintiff,
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v.
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YOUTH WITH A MISSION-BISHOP; YOUTH )
WITH A MISSION INTERNATIONAL, INC. )
d/b/a YWAM-OFFICE OF THE FOUNDERS; )
UNIVERSITY OF THE NATIONS, INC. d/b/a )
YWAM- UNIVERSITY OF THE NATIONS; )
and DOES 1-10,
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Defendants.
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_______________________________________ )

Case No.: 1:10-cv-00493 AWI JLT
FINDINGS AND RECOMMENDATION
GRANTING DEFENDANT YOUTH WITH A
MISSION-INTERNATIONAL’S
APPLICATION FOR DETERMINATION OF
GOOD FAITH SETTLEMENT
(Doc. 74)

Defendant Youth With a Mission- Ahualani, formerly known as Youth With a Mission-

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International, Inc. (“Ahualani”) seeks entry of a determination of good faith settlement. (Doc. 74).

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The Court reviewed the application and its supporting documents, and found the matter was suitable

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for decision without oral argument pursuant to Local Rule 230(g). Therefore, the matter was taken

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under submission on November 16, 2011. (Doc. 96).

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For the reasons set forth below, the Court recommends Ahualani’s application for
determination of good faith settlement be GRANTED.

26 I. Factual and Procedural History
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Plaintiff Jaco Van Maanen initiated this action on March 18, 2010 by filing his complaint

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against defendants Youth With a Mission-Bishop; Youth With a Mission-International, Inc., dba
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YWAM- Office of the Founders; and University of the Nations, Inc., dba YWAM- University of the

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Nations (collectively, “Defendants”). (Doc. 1). Plaintiff seeks damages for injuries he suffered

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while using a zip line on June 17, 2009. Plaintiff alleges Defendants failed to properly erect the zip

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line in a safe manner, failed to properly supervise or train Plaintiff in its use, and failed to have

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polices and procedures in place to ensure his safety. (See Doc. 34 at 2).

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The parties engaged in mediation on September 1, 2011, at which time Plaintiff and Ahualani

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reached a settlement agreement. (Doc. 74-1 at 4). On October 10, 2011, Ahualani filed an

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application for determination of good faith settlement, seeking approval of the settlement and an

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order barring any other defendant’s cross-complaints. (Doc. 74).

10 II.
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Legal Standards for Good Faith Settlement
A motion for good faith settlement arises under California Code of Civil Procedure § 877,

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which is applies to federal court actions and authorizes the Court to determine whether a settlement

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agreement was entered into good faith. See Slottow v. American Casualty Co. of Reading,

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Pennsylvania, 10 F.3d 1355 (9th Cir. 1993) (en banc). In relevant part, the California law states,

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Where a release, dism issal with or without prejudic e, or covenant 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 such party f
rom liability unless its terms so provide, but it
shall reduce the claim s against the others in the am ount stipulated by the release, the
dismissal or the covenant, or in the amount of the consideration paid for it, whichever
is greater.
(b) It shall discharge the party to whomit is given from all liability for any contribution
to any other parties.

22 Cal. Civ. Proc. Code § 877; see also Rutgard v. Haynes, 61 F.Supp.2d 1082, 1085 (S.D. Cal. 1999).
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The objectives of this legislation were “equitable sharing of costs among the parties at fault, and . . .

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encouragement of settlements.” River Garden Farms, Inc. v. Superior Court, 26 Cal.App.3d 986,

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993 (1972). However, “equitable sharing” does not require equal sharing. Id.

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The California Supreme Court stated, “The good faith provision of section 877 mandates that

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the courts review agreements purportedly made under its aegis to insure that such settlements

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appropriately balance the contribution statute’s dual objectives.” Tech-Bilt, Inc. v. Woodward-Clyde
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& Assoc., 698 P.2d 159, 163 (Cal. 1985). In the determination of good faith, factors to be

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considered include:

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a rough approxim ation of plaintiff’s total recovery and the settlor’s proportionate
liability, the allocation of settlement proceeds among plaintiffs, and a recognition that
a settler should pay less in settlem than he would if he were found liable after a trial.
ent
Other relevant considerations include the financial conditions insurance policy limits
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of settling defendants, as well as the existence of collusion, fraud, or tortuous conduct
aimed to injure the interests of nonsettling defendants.

7 Id. at 166 (citation omitted). The burden of proof lies on a party opposing a motion for good faith
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settlement to establish a lack of good faith. Id. at 167; see also Cal. Civ. Proc. Code §877.6(d). An

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opposing party “must demonstrate . . . that the settlement is so far ‘out of the ballpark’ in relation to

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these factors as to be inconsistent with the equitable objectives of the statute.” Id. at 499-500. The

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determination as to whether a settlement is made in good faith is a matter of the Court’s discretion.

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Id. at 502.

13 III. Discussion and Application
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One of the most important Tech-Bilt factors is the proportion of liability, and where “there is

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no substantial evidence to support a critical assumption as to the nature and extent of a settling

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defendant’s liability, then determination of good faith upon such assumption is an abuse of

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discretion.” Toyota Motor Sales U.S.A., Inc. v. Superior Court, 220 Cal.App.3d 864, 871 (1990);

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see also City of Grand Terrace v. Superior Court, 192 Cal.App.3d 1251, 1262 (1987). A

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“settlement figure must not be grossly disproportionate to what a reasonable person, at the time of

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the settlement, would estimate the . . . liability to be.” Torres v. Union Pacific R. Co., 157

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Cal.App.3d 499, 509 (1984). According to Ahualani, the entity “had no control or influence

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whatsoever” over the activities of the other defendants, and no entity commingled funds, assets, or

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shared employees or officers. (Doc. 74-1 at 7). Therefore, Ahualani believes that it was unlikely

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that Plaintiff could establish negligence by Ahualani–either through direct negligence, actual

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agency, or alter ego theories. Id.

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Ahualani notes that “all parties have confirmed that they will not challenge this Application

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and, on the contrary, believe that the settlement agreement is in good faith.” (Doc. 74-1 at 7).

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According to Ahualani, it has “no insurance policy applicable to plaintiff’s claims.” Id. at 8.
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Ahualani assets that this fact “is a further factor demonstrating that its settlement with plaintiff is

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both fair reasonable and in good faith.” Id.

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.” (Doc. 71 at 1). Ahualani’s lack of insurance weighs in favor of finding the parties have

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entered into a good faith settlement. In addition, there is no evidence of collusion, fraud, or tortuous

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conduct aimed to injure the interests of the other defendants.

7 IV. Findings and Recommendations
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The Tech-Bilt factors weigh in favor of granting Ahualani’s application for determination of

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good faith settlement. Significantly, this application was unopposed, and no party has demonstrated

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the settlement agreement is unreasonable or is inconsistent with the equitable objectives of Cal. Civ.

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Proc. Code §877.6(d).

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Accordingly, the Court HEREBY RECOMMENDS:

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Ahualani’s application for determination of good faith settlement be GRANTED;
and

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Any and all claims for equitable comparative contribution, and partial and complete

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comparative indemnity, based on comparative negligence or comparative fault, which

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may be brought by Defendants be forever barred pursuant to California Code of Civil

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Procedure §877.6(d).

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These Findings and Recommendations are submitted to the United States District Judge

20 assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1)(B) and Rule 304 of the
21 Local Rules of Practice for the United States District Court, Eastern District of California. Within
22 fourteen days after being served with these Findings and Recommendations, any party may file
23 written objections with the court. Such a document should be captioned “Objections to Magistrate
24 Judge’s Findings and Recommendations.” The parties are advised that failure to file objections
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within the specified time may waive the right to appeal the District Court’s order. Martinez v. Ylst,

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951 F.2d 1153 (9th Cir. 1991).

27 IT IS SO ORDERED.
28 Dated: November 29, 2011
9j7khi

/s/ Jennifer L. Thurston
UNITED STATES MAGISTRATE JUDGE
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