Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-00812/USCOURTS-casd-3_11-cv-00812-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1331 Fed. Question

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MINNESOTA LIFE INSURANCE

COMPANY,

Plaintiff,

Case No. 11cv00812 BTM (POR)

ORDER RE MOTIONS TO DISMISS

v.

BRIAN MICHAEL PHILPOT, et al.,

Defendants.

Pending before the Court are motions for determination of good faith settlement filed

by Plaintiff and Defendants Samuel Brooks (Doc. 82); Brian Michael Philpot, Daniel

Volsteadt, C Richie McNamee, Derrick Allen Moore, Michael Yolton, Scott Neil Pearlman,

Stan Pearlman d/b/a Terrace Insurance Services, Nissim Najjar, Sarah Haber, Marketing

Partnerships, Inc., Richard J. Wira, Rene Lacape, and Equote (the “Continental Insureds”)

(Doc. 83), and Yvette S. Wira, Co-trustee of the Wira Family Trust (Doc. 93). For the 1

reasons set forth herein, the Court GRANTS all three motions. 

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Defendants Richard J. Wira, Rene Lacape, and Equote (the “Non-settling 1

Defendants”) have not signed the settlement agreement referenced in this motion, but are

insured by the same insurance carrier as the other moving defendants, and have joined the

motion. (See Doc. 83 at 4 n.1.)

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I. BACKGROUND

This action arises out an alleged fraudulent scheme, coordinated among the various

defendants (insurance sales agents, their employers, and their funding entities), to elicit

large sales commissions from Plaintiff for policies that were deliberately allowed to lapse—

resulting in Plaintiff paying more in sales commissions than it earned in policy payments. 

For a more comprehensive overview of the events giving rise to this lawsuit, see the Court’s

September 25, 2012 Order re Motions to Dismiss (Doc. 101). 

After receiving the first amended complaint, the defendants filed various motions to

dismiss and motions to strike. While those motions were pending, certain of these

defendants filed three separate motions for determination of good faith settlement, along

with the accompanying settlement agreements (filed under seal). The material terms of the

settlement agreements, all three of which are substantially similar, provide:2

• Each of the settling defendants will cause a certain amount to be paid

to Plaintiff. Travelers Insurance has agreed to pay Plaintiff $61,000

to fully settle and resolve this action on behalf of Samuel Brooks, its

insured. Continental Casualty Company has agreed to pay to Plaintiff

the remaining limits on its policy for Defendants Brian Michael

Philpot, Daniel Volsteadt, C Richie McNamee, Derrick Allen Moore,

Michael Yolton, Scott Neil Pearlman, Stan Pearlman d/b/a Terrace

Insurance Services, Nissim Najjar, Sarah Haber, Marketing

Partnerships, Inc., Richard J. Wira, Rene Lacape, and Equote—an

approximate value of $500,000 as of June 21, 2012—to resolve this

action on behalf of all Continental Insureds (including the Non-settling

Defendants). (Doc. 83 at 11.) Yvette Wira, as Co-Trustee of the

Wira Family Trust, has agreed to pay Plaintiff $12,500 to resolve this

action on her behalf. The Court excepts from the sealed settlement

agreements the amount of settlement funds.

• Each of the parties shall bear their own attorneys’ fees and costs.

• In return for the payments, Plaintiff will dismiss the case as to the

moving defendants and release the Continental insured defendants

and defendants Brooks and Wira.

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The Court excepts from the sealing the terms of the settlements set forth in this

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Order.

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II. DISCUSSION

The settling defendants seek a determination by the Court that their settlement with

Minnesota Life is in good faith. As discussed below, the Court finds that it is.

Under Cal. Civ. Proc. Code § 877.6(a)(1), “[a]ny party to an action wherein it is

alleged that two or more parties are joint tortfeasors shall be entitled to a hearing on the

issue of the good faith of a settlement entered into by the plaintiff or other claimant and one

or more alleged tortfeasors . . . .” If the court determines that the settlement was made in

good faith, such determination “shall bar any other joint tortfeasor from any further claims

against the settling tortfeasor for equitable comparative contribution, or partial or

comparative indemnity, based on comparative negligence or comparative fault.” Cal. Civ.

Proc. Code § 877.6(c). A party asserting the lack of good faith bears the burden of proof on

that issue. Cal. Civ. Proc. Code § 877.6(d).

In Tech-Bilt, Inc. v. Woodward-Clyde & Assoc., 38 Cal. 3d 488, 499 (1985), a case

in which the good faith nature of the settlement was disputed, the California Supreme Court

set forth a number of factors to be considered by the court in determining whether a

settlement is in good faith, including: (1) a rough approximation of plaintiffs’ total recovery

and the settlors’ proportionate liability; (2) the amount paid in settlement; (3) the allocation

of settlement proceeds among plaintiffs; (4) a recognition that the settlor should pay less in

settlement than he would if he were found liable after trial; (5) the financial condition and

insurance policy limits of settling defendant; and (6) the existence of collusion, fraud, or

tortious conduct aimed to injure the interests of non-settling defendants. 

The California Court of Appeal has held that it is incumbent upon the court deciding

the motion for good faith settlement to consider and weigh the Tech-Bilt factors only when

the good faith nature of a settlement is disputed. City of Grand Terrace v. Superior Court,

192 Cal. App. 3d 1251, 1261 (1987). “That is to say, when no one objects, the barebones

motion which sets forth the ground of good faith, accompanied by a declaration which sets

forth a brief background of the case is sufficient.” Id.; see also Hernandez v. Sutter Medical

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Center of Santa Rosa, 2009 WL 322937 (N.D. Cal. Feb. 9, 2009) (granting motion for good

faith settlement without performing Tech-Bilt analysis because there were no objections);

Bonds v. Nicoletti Oil, Inc., 2008 WL 4104272 (E.D. Cal. Sept. 3, 2008) (declining to weigh

Tech-Bilt factors because there was no opposition to the motion for good faith settlement).

Here, no opposition or objections have been filed to the motion. Accordingly, the

Court does not deem it necessary to engage in a comprehensive Tech-Bilt analysis.

The Court has reviewed the terms of the settlement and is satisfied that the

settlement is in good faith. There is no evidence of collusion or fraud, and the amount to be

paid by the settling defendants under the settlement agreements is reasonable, considering

that Plaintiff alleges it paid approximately $4,000,000 in commissions pursuant to the

schemes allegedly perpetrated by the defendants in this case (see Compl. ¶ 59), and that

amount is offset, to a degree, by the premium payments made on the policies issued by

Plaintiff.

The Court concludes that the settlement is in good faith and GRANTS the Settling

Defendants’ motion. 

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III. CONCLUSION

For the reasons discussed above, the settling defendants motions for determination

of good faith settlement are GRANTED. The settlements reached between Plaintiff and

Defendants Samuel Brooks, Brian Michael Philpot, Daniel Volsteadt, C Richie McNamee,

Derrick Allen Moore, Michael Yolton, Scott Neil Pearlman, Stan Pearlman d/b/a Terrace

Insurance Services, Nissim Najjar, Sarah Haber, Marketing Partnerships, Inc., Richard J.

Wira, Rene Lacape, Equote, and Yvette S. Wira, Co-trustee of the Wira Family Trust are

found to be in good faith within the meaning of Cal. Civ. Proc. Code § 877.6, and any other

joint tortfeasor is barred from any further claims against these settling defendants for

equitable comparative contribution or comparative indemnity based on comparative

negligence or comparative fault.

IT IS SO ORDERED.

DATED: October 30, 2012

BARRY TED MOSKOWITZ, Chief Judge

United States District Court

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