Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-02945/USCOURTS-cand-3_06-cv-02945-1/pdf.json

Parties Involved:
James Cronin
Counter-defendant
John Defreitas
Counter-claimant
Craig Kolos
Counter-claimant
Brian McDonald
Counter-defendant
Molly McKenna
Counter-claimant

Document Text:

United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

In the Matter of

The Complaint of JOHN DEFREITAS, as

Owner of the 21' 2004 Malibu VLX

vessel bearing Hull No.

MB2K7976B404, for exoneration from

or limitation of liability.

AND

In the Matter of 

The Complaint of JAMES CRONIN and

BRIAN MCDONALD, as Owners of the

21' 2005 Mastercraft Prostar 209

vessel bearing Hull No.

MBCMTLZZD505, for exoneration from

or limitation of liability

 

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No. C-06-5874 SC

ORDER DENYING JOHN

DEFREITAS' MOTION FOR

GOOD FAITH SETTLEMENT

Related to 

No. C-06-2945 SC

I. INTRODUCTION

On March 9, 2007, Petitioner John Defreitas filed a Motion

for Determination of Good Faith Settlement in each of the related

cases listed in the caption. See In the Matter of the Complaint

of John Defreitas ("Defreitas Action"), C-06-5874, Docket No. 33;

In the Matter of the Complaint of James Cronin and Brian McDonald

("Cronin Action"), C-06-2945, Docket No. 37. The Motion seeks

court approval of a purported settlement between Molly McKenna,

the injured claimant, on the one hand and John Defreitas and Craig

Kolos on the other. In the Defreitas Action, McKenna filed an

Case 3:06-cv-02945-SC Document 41 Filed 04/24/07 Page 1 of 4
United States District Court

For the Northern District of California

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Opposition to Defreitas' Motion. See Docket No. 36. Also in the

Defreitas Action, James Cronin and Brian McDonald filed a

memorandum stating that they do not object to the settlement

between Defreitas, Kolos, and McKenna. See Docket No. 37.

For the reasons stated herein, the Court DENIES Petitioner's

Motion for Determination of Good Faith Settlement.

II. BACKGROUND

The Defreitas Action and Cronin Action arise out of the same

circumstances and involve the same parties. According to the

Motions, on July 30, 2005, McKenna was waterskiing behind a boat

owned by John Defreitas and operated by Craig Kolos in Woodward

Canal in the Bay Area Delta. McKenna dropped her tow-line and was

floating in the water while waiting to be picked up. As the

Defreitas vessel was turning around, McKenna was struck by a boat

owned by James Cronin and Brian McDonald and operated by Steven

Cronin. See Motion for Settlement, 3. McKenna suffered severe

injuries including leg fractures and deep lacerations. McKenna

estimates the total value of the case to be approximately $4

million. See Opp'n, 5.

Defreitas asserts that he maintains an insurance policy

covering his vessel and its operator. The policy has a $300,000

liability limit, which is reduced by litigation expenses. 

According to Defrietas' Motion: 

Defreitas and Kolos, through their counsel of record, have

offered to McKenna, through her counsel of record, whatever

policy limit remains after costs of defense/representation of

Defreitas and Kolos in Action Nos. 2945 and 5874. McKenna

has tentatively accepted and a proposed settlement agreement

Case 3:06-cv-02945-SC Document 41 Filed 04/24/07 Page 2 of 4
United States District Court

For the Northern District of California

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is being circulated. It is anticipated that if the

settlement is approved as being in good faith, the total

amount that will remain on the policy and which will be paid

to McKenna will exceed $275,000. 

Motion for Settlement, 5 (emphasis added). 

III. DISCUSSION

The Defreitas Motion fails for two significant reasons. 

First, Defreitas improperly bases his Motion upon California Code

of Civil Procedure § 877.6, which does not apply in this federal

admiralty action. See Miller v. Christoper, 887 F.2d 902, 903

(9th Cir. 1989). Defreitas acknowledges this error in his Reply

Brief, though it only came to his attention because Claimants

Cronin and McDonald noted the error in their Response. See Docket

Nos. 37, 38. In his Reply, Defreitas asserts that Federal

Admiralty and California State law provide the same standard for

Court approval of a good faith settlement. See Docket No. 38. 

Yet, Defreitas' legal argument cannot cure the second significant

error in his Motion: the lack of a settlement agreement for the

Court to approve. 

Petitioner improperly moves the Court to determine that his

settlement is in good faith when it is nothing more than an offer. 

See Motion for Settlement, 5. Defreitas admits as much in the

facts section of his Motion, describing McKenna's acceptance as

tentative and stating that "a proposed settlement agreement is

being circulated." Motion for Settlement, 5. Furthermore,

Defreitas attaches as Exhibit 1 the latest version of the

tentative settlement agreement, a document which has not been

Case 3:06-cv-02945-SC Document 41 Filed 04/24/07 Page 3 of 4
United States District Court

For the Northern District of California

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executed by either party. See Motion for Settlement, Ex. 1. As a

result, Defreitas' Motion appears intended to encourage the Court

to find the settlement offer in good faith and effectively force

McKenna to accept the remainder of the insurance policy in

exchange for releasing her claims against Defreitas and Kolos. 

The fact that McKenna filed an Opposition to Petitioner's Motion

should have sent a clear message that she had not agreed to

settle. See Opp'n, Docket No. 36. 

The Court will pay close attention to future filings of

Petitioner Defreitas to ensure that the $300,000 insurance policy

is not depleted by legally suspect and untimely court filings.

IV. CONCLUSION

For the reasons described herein, the Court DENIES Petitioner

Defreitas' Motion for Determination of Good Faith Settlement.

IT IS SO ORDERED.

Dated: April 24, 2007

 

UNITED STATES DISTRICT JUDGE 

Case 3:06-cv-02945-SC Document 41 Filed 04/24/07 Page 4 of 4