Nixon-Egli Equipment v. Superior Court CA4/2
E064305
Cal. Ct. App.Jul 8, 2016Background
- Rui Costa, a highway construction worker, suffered catastrophic injuries when a pavement grinder ran over him; he sued multiple parties including Nixon-Egli, Wirtgen entities, and Coast Construction.
- Coast was the general contractor on the project and handled traffic control; the grinder was operated by Costa’s employer, ABSL, whose employees cannot be sued due to workers’ compensation exclusivity.
- Coast and Costa settled for $200,000; Coast moved for a § 877.6 determination that the settlement was made in good faith, shielding it from contribution claims by codefendants.
- Petitioners (manufacturer/owner defendants) contested the settlement, arguing Coast was potentially significantly more liable (and had at least $7 million in insurance), that Coast’s inadequate traffic control contributed to the accident, and that the settlement was a small fraction of potential recovery.
- The trial court found the settlement to be in good faith; petitioners sought writ review under § 877.6(e). The Court of Appeal denied the petition and upheld the trial court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Privette immunizes Coast from liability to codefendants | N/A (Privette protects hirer from employee claims) | Coast: Privette bars liability so any modest payment is necessarily in good faith | Court: Privette does not apply if hirer’s own negligence (traffic control) contributed; Privette not dispositive |
| Whether statute of limitations/absent joinder makes Coast immune from indemnity exposure | N/A | Coast: Plaintiff didn’t sue Coast and SOL expired, so Coast couldn’t be liable; settlement should be good faith per se | Court: Plaintiff’s inability to recover from Coast is not dispositive; potential indemnity to others must be evaluated |
| Whether $200,000 settlement is within the “ballpark” of proportional liability (good faith) | Costa: Sought to justify settlement (opposed petition) | Petitioners: Settlement is nominal relative to mult-millions of potential recovery and Coast’s available insurance; suggests unfair allocation/collusion | Court: Upheld trial court—evidence supported conclusion Coast’s proportional liability was minimal/remote, no collusion, and settlement was within ballpark |
Key Cases Cited
- Privette v. Superior Court, 5 Cal.4th 689 (1993) (hirer of independent contractor not liable for contractor-employee’s injuries absent hirer’s own negligence)
- Tech-Bilt, Inc. v. Woodward-Clyde & Associates, 38 Cal.3d 488 (1985) (factors for § 877.6 good-faith settlement include proportional liability, amount paid, collusion, and settlor’s ability to pay)
- Hooker v. Department of Transportation, 27 Cal.4th 198 (2002) (Privette does not bar liability when hirer’s own negligence contributes to injury)
- Widson v. International Harvester Co., 153 Cal.App.3d 45 (1984) (settlement evaluated against estimated proportionate liability and plaintiff’s potential recovery; no blanket rule for tardy-added defendants)
- Mattco Forge, Inc. v. Arthur Young & Co., 38 Cal.App.4th 1337 (1995) (settling party must show reasonableness when good faith challenged)
- PacifiCare of California v. Bright Medical Associates, Inc., 198 Cal.App.4th 1451 (2011) (court must consider potential indemnity liability to other tortfeasors when evaluating settlement good faith)
- Cahill v. San Diego Gas & Electric Co., 194 Cal.App.4th 939 (2011) (affirming deferential abuse-of-discretion review of good-faith settlement determinations)
- Dole Food Co. v. Superior Court, 242 Cal.App.4th 894 (2015) (settlor may reasonably pay less than potential trial award; good-faith analysis flexible)