Wilson v. Pan Norcal, LLC et al

Filing 202

ORDER signed by Senior District Judge Kimberly J. Mueller on 3/6/2025 DENYING 175 Motion to Dismiss without prejudice. Parties are directed to appear for a status conference on 4/11/2025, at 2:30 p.m. to discuss issues in the case that remain unresolved. Parties to submit a joint status report by 4/4/2025 at 12 noon providing their positions on how the case should proceed. (Deputy Clerk KEZ)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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Sheryl Wilson,

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Plaintiff,

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No. 2:18-cv-00660-KJM-CSK
ORDER

v.
Pan NorCal, LLC, et. al.,

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Defendants.

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Sheryl Wilson alleges Pan Norcal, LLC, and TJM Plaza, GRF2, LLC, are liable for her

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slip and fall accident in 2017. She now seeks to dismiss TJM as a defendant because the two

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parties reached a settlement. Pan NorCal opposes dismissal, arguing it would suffer legal

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prejudice as a consequence. As described more fully below, the court denies Wilson’s motion.

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I.

BACKGROUND

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Wilson alleges she was injured when she left a Panera Bread restaurant in Roseville,

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California several years ago. See Pl.’s Resp. to Statement of Facts (SoF) ¶¶ 1–3, ECF No. 61-1.

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Pan NorCal operated the restaurant on a lease from TJM. Id. ¶ 5. Wilson asserts federal and state

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claims against both entities. See Compl. at 4–9, ECF No. 1. Both Pan NorCal and TJM have

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filed crossclaims against one another. Pan NorCal seeks equitable indemnity from TJM because,

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as alleged, TJM is responsible for the upkeep of all common areas of the shopping center,

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including where Wilson fell. See First Am. Cross-cl., ECF No. 13. Pan NorCal also seeks
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declaratory relief and attorneys’ fees. See id. In response, TJM brings a crossclaim against Pan

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NorCal for (1) express indemnity; (2) breach of contract; (3) breach of implied covenant of good

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faith and fair dealing and (4) declaratory relief. See generally TJM Cross-cl., ECF No. 16.

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Discovery has closed, and the court has resolved the parties’ motions for summary judgment. See

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Order (July 25, 2022) at 14, ECF No. 70. In short, Wilson’s California law claims against TJM

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and Pan NorCal remain to be adjudicated at trial, and the court retained supplemental jurisdiction

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over these claims. See id. at 7–8.

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After the parties submitted their pretrial statement, see ECF No. 82, after the court had

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issued its final pretrial order, see ECF Nos. 85–86, and after a trial date was set, see ECF No. 85

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at 9, Wilson filed an ex parte application to continue the trial date because her attorney, Joseph D.

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Zink, had suffered a heart attack, see Ex Parte App. Cont. Tr. Date, ECF No. 95; Zink Decl., ECF

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No. 95-1. The court denied the request without prejudice but accepted a renewed request to

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continue in January 2024. See Ex Parte App. (Dec. 29, 2023), ECF No. 130; Order (Jan. 3,

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2024), ECF No. 136. The court also instructed the parties to meet and confer within 90 days and

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request a status conference for setting new trial dates, and it directed Zink to file a report within

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60 days on his efforts to find new counsel for Wilson. Order (Jan. 3, 2024) at 3.

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Rather than submitting any responses to these orders, Wilson filed a motion to dismiss

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TJM under Federal Rule of Civil Procedure 41(a)(2), see ECF No. 175, because she and TJM had

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arrived at a settlement agreement and because in her assessment, Pan NorCal would not be

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prejudiced by the dismissal, see Mem. P. & A. Support Pl.’s Mot. Vol. Dismissal with Prejudice,

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ECF No. 175-1. The court then ordered the parties to show cause why they had not obeyed its

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January order. Order (June 7, 2024), ECF No. 176. Pan NorCal submitted declarations from its

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lawyers, Allen Nolley and Kelly Stephan, who stated they had attempted to discuss an updated

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trial schedule with Wilson and TJM without success and had not been involved in the settlement

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discussions. See generally ECF Nos. 178, 180. Meanwhile Wilson submitted two declarations

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from Zink, who claimed he did not comply with the court’s orders because he believed he was

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near settlement and did not need to prepare for trial dates or arrange for appointment of new

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counsel. See generally ECF Nos. 177, 179.
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The court then ordered the parties to a settlement conference before the assigned

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Magistrate Judge and deferred its decision on Wilson’s motion to dismiss. See Status Conf.

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(Aug. 2, 2024), ECF No. 186. After the parties informed the court they had not settled, see ECF

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No. 194, the court ordered additional briefing on Wilson’s motion to dismiss, see ECF No. 197.

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Wilson renews her motion to dismiss. See Mot., ECF No. 198. The matter is fully briefed. See

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Opp’n, ECF No. 199; Reply, ECF No. 200. Wilson moves to dismiss TJM and argues the

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dismissal would not unfairly prejudice Pan NorCal. See Mot. at 4. Pan NorCal opposes the

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dismissal of TJM, arguing the settlement reached between TJM and Wilson was for a “much

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higher amount than Plaintiff’s claims are worth” and Pan NorCal would be prejudiced by the

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settlement because it could be forced to pay the settlement amount should the court find in favor

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of TJM on its crossclaims. Opp’n at 5. The court takes this matter under submission without

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holding a hearing. See E.D. Cal. L.R. 230(g).

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II.

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LEGAL STANDARD
Rule 41(a)(2) allows courts to dismiss parties by court order at the plaintiff’s request “on

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terms that the court considers proper.” The court has “sound discretion” in decisions over

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whether to grant a Rule 41(a)(2) dismissal, and “the court’s order will not be disturbed unless the

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court has abused its discretion.” Stevedoring Servs. of Am. v. Armilla Intern. B.V., 889 F.2d 919,

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921 (9th Cir. 1989) (citations omitted). Courts may deny a Rule 41(a)(2) dismissal when

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defendants can show they will “suffer some plain legal prejudice as a result.” Smith v. Lenches,

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263 F.3d 972, 975 (9th Cir. 2001).

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Under California law, when a plaintiff dismisses “one or more of a number of tortfeasors

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claimed to be liable for the same tort . . . it shall discharge the party to whom it is given from all

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liability for any contribution to any other parties . . . .” Cal. Civ. Proc. Code § 877. However, any

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party to an action “in which it is alleged that two or more parties are joint tortfeasors or

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co-obligors on a contract debt shall be entitled to a hearing on the issue of the good faith of a

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settlement entered into by the plaintiff or other claimant and one or more alleged tortfeasors . . . .”

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Cal. Civ. Proc. Code § 877.6(a)(1). A settling party may also “give notice of settlement to all

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parties and to the court, together with an application for determination of good faith settlement
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and a proposed order.” Id. § 877.6(a)(2). A court may determine good faith on the basis of

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affidavits and counter affidavits. Id. § 877.6(b). A determination by the court “that the

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settlement was made in good faith shall bar any other joint tortfeasor or co-obligor from any

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further claims against the settling tortfeasor . . . for equitable comparative contribution, or partial

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or comparative indemnity, based on comparative negligence or comparative fault.” Id.

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§ 877.6(c). “The party asserting the lack of good faith shall have the burden of proof on that

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issue.” Id. § 877.6(d). The Ninth Circuit construes section 877 as substantive, and therefore

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federal courts applying California law must rely on its provisions when a plaintiff in a joint

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tortfeasor case seeks to voluntarily dismiss one tortfeasor due to settlement. See Mason & Dixon

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Intermodal, Inc. v. Lapmaster Int’l LLC, 632 F.3d 1056, 1060 (9th Cir. 2011). By contrast,

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“section 877.6 is essentially a procedural statute . . . [h]owever nothing is to prevent the district

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court from granting a [section 877.6] motion for an early determination of the good faith

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question.” Fed. Savings & Loan Ins. Corp. v. Butler, 904 F.2d 505, 511 (9th Cir. 1990).

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III.

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ANALYSIS
The court denies Wilson’s motion to dismiss TJM at this time as the court cannot apply

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Federal Rule of Civil Procedure 41(a)(2) without also applying section 877, and the current

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record does not permit the court to do so. See Mason & Dixon Intermodal, Inc., 632 F.3d at 1060.

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Even if it could dismiss solely under Rule 41(a)(2), the court would decline to do so as the

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dismissal would not advance this litigation. TJM would still be a party due to the crossclaims

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with Pan NorCal, and the court would still have to adjudicate the good faith of TJM’s settlement

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with Wilson under section 877.6. See id. Further, the court is persuaded it should first adjudicate

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the good faith determination under section 877.6 before dismissing a defendant under section 877.

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See, e.g., Bayview Hunters Point Residents v. Tetra Tech. EC, Inc., No. 19-1417, 2025 WL

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562890 (N.D. Cal. Feb. 20, 2025) (hearing a section 877.6 motion before dismissing defendant);

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Doe v. County of Sacramento, 21-1438, 2025 WL 449291 (E.D. Cal. Feb. 10, 2025) (same);

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Driver v. Pape Trucks, Inc., No. 17-1968, 2025 WL 392404 (E.D. Cal. Feb. 4, 2025) (same);

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Alisu Invs. Ltd. v. TriMas Corp., No. 16-686, 2024 WL 3461079 (C.D. Cal. June 21, 2024)

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(same); Rainey v. County of San Diego, 19-1650, 2024 WL 3293890 (S.D. Cal. May 21, 2024)
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(same). Finally, dismissing under section 877 before the good faith of a settlement agreement has

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been adjudicated under section 877.6 could impair Pan NorCal’s legal rights, as the dismissal

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would bar Pan NorCal from seeking contribution from TJM. See Cal. Civ. Proc. Code § 877(b);

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Smith, 263 F.3d at 975.

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Wilson argues it is Pan NorCal’s burden to bring a section 877.6 motion, and she contends

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it still can bring such a motion after TJM has been dismissed under section 877. See Reply at

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2–3. While it is Pan NorCal’s burden to prove the absence of good faith, see Cal. Civ. Proc. Code

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§ 877.6(d), Pan NorCal is not required to bring a section 877.6 motion, see id. § 877.6(a). Any

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party can bring such a motion, including Wilson. See id. § 877.6(a)(2). Further, Wilson has not

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cited any cases in which a court has adjudicated a section 877.6 motion after a party has been

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dismissed and, as noted above, courts in the Ninth Circuit generally adjudicate a section 877.6

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motion before they dismiss a joint tortfeasor from a case.

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The court denies the motion without prejudice to renewal, but only after a proper party

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brings a section 877.6 motion and the court adjudicates the good faith of the settlement between

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Wilson and TJM.

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IV.

CONCLUSION

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The court denies Wilson’s motion to dismiss without prejudice. The parties are directed

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to appear for a status conference on April 11, 2025, at 2:30 p.m. to discuss issues in the case that

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remain unresolved. The parties must submit a joint status report by April 4, 2025 at 12 noon

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providing their positions on how the case should proceed. In the joint status report, Wilson’s

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lawyer should explain why he has not yet associated new counsel as the court previously ordered,

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and the parties should propose potential dates for a final pretrial conference and trial.

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This order resolves ECF Nos. 175, 176, 198.

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IT IS SO ORDERED.

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DATED: March 6, 2025.
SENIOR UNITED STATES DISTRICT JUDGE

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