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Sawyer v. Westchester Fire Insurance Company11/20/2002
lement, the entry of judgment was based on an independent review and adjudication of the evidence by the trial court." (Pruyn, at p. 517.) Even a judgment entered after a default hearing or uncontested trial provides "an opportunity for independent judicial review and adjudication of the evidence relating to the fact and amount of the insured's liability." (Id. at p. 527.)
The record contains the tentative ruling of Judge Fruin, who presided over the so-called "default" proceedings on November 5 and 6, 1997 in the underlying actions. In his tentative ruling dated January 23, 1998, Judge Fruin noted that while the State participated in the proceedings and sought to limit the damage award by cross-examining appellants' economic damages experts, it did not call any witnesses of its own. The State presented no defenses or evidence pertaining to liability. Thus, as Judge Fruin acknowledged, he did not conduct an independent review of the evidence to determine liability; he was called upon only to determine the amount of damages to be awarded appellants. Under these circumstances, the trial court in the instant action correctly held that the judgment entered by Judge Fruin against the State was not the procedural equivalent of a judgment entered after a default hearing or an uncontested trial, and was therefore not entitled to binding effect on St. Paul.
However, as the trial court also noted, under certain circumstances a stipulated judgment may raise a presumption as to liability and damages. " n insured who has been abandoned by his or her insurer and elects to settle rather than risk an adverse judgment is entitled to an evidentiary presumption, in a subsequent action against the insurer to enforce policy provisions, as to the `insured's liability on the underlying claim, and the amount of such liability.'" (Pruyn, supra, 36 Cal.App.4th at p. 527, citing Isaacson v. California Ins. Guarantee Assn. (1988) 44 Cal.3d 775, 791-792.) But in order to invoke this evidentiary presumption the insured must establish three "foundational" facts: "(1) the insurer wrongfully failed or refused to provide coverage or a defense, (2) the insured thereafter entered into a settlement of the litigation which was (3) reasonable in the sense that it reflected an informed and good faith effort by the insured to resolve the claim." (Pruyn, at p. 528.) Having found that appellants established the first two foundational facts, as discussed below, the trial court found that the third foundational fact could not be established.
Appellant's judgment was not reasonable
Under Pruyn, the proof necessary to establish the third foundational fact is "the same kind of evidence which would support a determination of good faith under [Code of Civil Procedure] section 877.6." (Pruyn, supra, 36 Cal.App.4th at p. 528.) Thus, the court must inquire into the factors outlined in Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499-500. These factors include "a rough approximation of plaintiffs' total recovery and the settlor's proportionate liability," the "recognition that a settlor should pay less in settlement than he would if he were found liable after a trial," "`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 non-settling defendants.'" (Pruyn, at pp. 528-529.) Under Tech-Bilt, the court must also consider "`whether the amount of the settlement is within the reasonable range of the settling tortfeasor's proportional share of comparative liability for the plaintiff's injuries.'" (Pruyn, at p. 528.) A determination of good faith under section 877.6 is sufficient to
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