Pilibos Sisters, Inc. v. Mavericks Ranch, LLC

“[T]he intent and policies underlying section 877.6 require that a number of factors be taken into account including a rough approximation of plaintiffs' total recovery and the settlor's proportionate liability, the amount paid in settlement, the allocation of settlement proceeds among plaintiffs, and a recognition that a settlor should pay less in settlement than he would if he were found liable after a trial. Other relevant considerations include the financial conditions and insurance policy limits of settling defendants, as well as the existence of collusion, fraud, or tortious conduct aimed to injure the interests of nonsettling defendants. [Citation.]

Finally, practical considerations obviously require that the evaluation be made on the basis of information available at the time of settlement. ‘[A] defendant's settlement figure must not be grossly disproportionate to what a reasonable person, at the time of the settlement, would estimate the settling defendant's liability to be.’ [Citation.] The party asserting the lack of good faith, who has the burden of proof on that issue (§ 877.6, subd. (d)), should be permitted to demonstrate, if he can, that the settlement is so far ‘out of the ballpark’ in relation to these factors as to be inconsistent with the equitable objectives of the statute. 11

Such a demonstration would establish that the proposed settlement was not a ‘settlement made in good faith’ within the terms of section 877.6.” (Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499-500.)

“Another key factor is the settling tortfeasor's potential liability for indemnity to joint tortfeasors. The trial court calculates ‘the culpability of the [settling] tortfeasor vis-à-vis other parties alleged to be responsible for the same injury. Potential liability for indemnity to a nonsettling defendant is an important consideration for the trial court in determining whether to approve a settlement by an alleged tortfeasor.’” (Long Beach Memorial Medical Center v. Superior Court (2009) 172 Cal.App.4th 865, 873, internal citations and italics omitted.)

“Section 877.6 and Tech–Bilt require an evidentiary showing, through expert declarations or other means, that the proposed settlement is within the reasonable range permitted by the criterion of good faith.” (Mattco Forge, Inc. v. Arthur Young & Co. (1995) 38 Cal.App.4th 1337, 1351, internal citations omitted.)

“If ‘there is no substantial evidence to support a critical assumption as to the nature and extent of a settling defendant's liability, then a determination of good faith based upon such assumption is an abuse of discretion.’” (Id. at p. 1350, internal citation and italics omitted.)

In the present case, defendant Nutrien has met its burden of showing that its settlement with plaintiffs is in good faith. Plaintiffs’ claim against Nutrien alleges that Nutrien failed to apply pesticides to plaintiffs’ crops in a timely manner and thus allowed plaintiffs’ crops to become infested with navel orangeworm (NOW).

However, the evidence produced during discovery showed that the neighboring landowner, Mavericks Ranch, LLC, was at fault for the infestation by allowing its orchards to become neglected and infested with NOW, which caused the infestation to spread to plaintiffs’ property. Plaintiffs also admitted that Mavericks was the primary cause of the infestation, and that they had no evidence that Nutrien had done anything negligent in applying pesticides on plaintiffs’ property.

Plaintiffs conceded that Nutrien’s percentage of fault was small compared to Mavericks’ percentage, that Nutrien timely sprayed plaintiffs’ crops, and that the small part of plaintiffs’ fields that Nutrien was unable to spray in a timely manner was due to the field being too wet to spray. Nutrien was finally able to spray the last portion of the field about two days later. Plaintiffs’ manager concluded that Nutrien did everything it could have done under the circumstances.

Nutrien’s expert also testified that Nutrien’s pesticide recommendation was timely and that it made its pesticide applications “by the book.” He also testified that the cause of the NOW infestation was Mavericks’ neglect of its almond orchard, not any negligence on Nutrien’s part.

Thus, plaintiffs’ chances of prevailing against Nutrien were small, and it was reasonable for them to settle their claim for $30,000. In fact, it appears that the settlement is generous given the lack of evidence that Nutrien had any share of the liability. The settlement is well within the ballpark of reasonable settlement amounts in light of the lack of evidence that Nutrien caused plaintiffs’ damages. There is no evidence that the settlement was the product of fraud or collusion.

The other Tech-Bilt factors are also neutral or weigh in favor of finding that the settlement is in good faith. Under the terms of the settlement, Nutrien will have no involvement in the allocation of the settlement payment after paying the settlement to plaintiff. Nutrien’s financial condition is also not a factor, since it is a large and wellcapitalized corporation that is not in financial distress.

Finally, Nutrien’s share of liability appears to be far less than Mavericks’ share, since the evidence indicates that Nutrien did not breach its duty or unduly delay when it applied pesticides to plaintiffs’ crops. In addition, Mavericks has not filed any opposition or made any showing that the settlement was collusive, fraudulent, or grossly disproportionate to Nutrien’s probable share of liability.

Therefore, the court intends to grant Nutrien’s motion finding that the settlement is in good faith under Code of Civil Procedure section 877.6.

Pursuant to California Rules of Court, rule 3.1312(a), and Code of Civil Procedure section 1019.5, subdivision (a), no further written order is necessary. The minute order adopting this tentative ruling will serve as the order of the court and service by the clerk will constitute notice of the order.

Tentative Ruling

Issued By: KCK on 07/01/26. (Judge’s initials) (Date)

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