PacifiCare of California v. Bright Medical Associates, Inc.
198 Cal. App. 4th 1451
Cal. Ct. App.2011Background
- Martins sue PacifiCare for insurance bad faith after Elsie dies awaiting out-of-network treatment for a cerebral aneurysm.
- Bright Medical Associates, as PacifiCare’s delegated provider, made key decisions delaying Elsie’s care; Martins did not sue Bright directly.
- Bright settled with Martins for $300,000 during jury selection, conditioned on a finding of good faith settlement.
- Trial court granted Bright’s good faith settlement motion and dismissed PacifiCare’s cross-complaint for indemnity against Bright.
- PacifiCare appeals, arguing lack of joint liability to justify a good faith determination and contesting indemnity-related considerations.
- Martins alleged PacifiCare contributed to the delay via design/implementation of its health care service plan, supporting joint liability with Bright.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Authority to determine good faith | Martins allege Bright and PacifiCare are joint tortfeasors; good faith could be determined. | PacifiCare argues no joint liability with Bright due to 1371.25; no basis for joint tortfeasor status. | Trial court validly determined good faith as joint tortfeasors. |
| Consideration of indemnity/attorney fees | West/TSI require considering indemnity-related costs to nonsettling defendants. | Bright’s indemnity fees are unsupported; no viable indemnity claim against Bright. | No abuse; court properly considered indemnity framework and dismissed cross-appeal as moot. |
| Effect of section 1371.25 | Section 1371.25 does not bar joint liability; plaintiffs alleged direct liability against PacifiCare. | Section 1371.25 prevents vicarious liability for acts/omissions of others and costs of defending others. | Section 1371.25 does not bar joint and several liability where both parties contribute to delays. |
| Indemnity liability vs. direct liability | Martins alleged both direct and nondelegable duties against PacifiCare. | Martins failed to prove direct liability; PacifiCare not liable for Bright’s acts. | Martins’ and Bright’s settlement permissible; PacifiCare remains liable only to extent of proven theories. |
Key Cases Cited
- Tech-Bilt, Inc. v. Woodward-Clyde & Associates, 38 Cal.3d 488 (Cal. 1985) (nonexhaustive factors for good faith settlement; 'reasonable range' test)
- West v. Superior Court, 27 Cal.App.4th 1625 (Cal. App. 4th 1994) (indemnity liability must be considered in good faith determination)
- TSI Seismic Tenant Space, Inc. v. Superior Court, 149 Cal.App.4th 159 (Cal. App. 4th 2007) (indemnity considerations in good faith where settling party may owe nonsettling parties)
- American Motorcycle Assn. v. Superior Court, 20 Cal.3d 578 (Cal. 1978) (joint and several liability; proximate cause concept for multiple tortfeasors)
- Watanabe v. California Physicians' Service, 169 Cal.App.4th 56 (Cal. App. 4th 2008) (interpretation of 1371.25 and joint liability framework)
- Martin v. PacifiCare of California, 198 Cal.App.4th 1390 (Cal. App. 2011) (Martins’ direct vs. vicarious liability analysis against PacifiCare)