Espinoza v. Machonga

In Espinoza v. Machonga (1992) 9 Cal.App.4th 268, the jury found that the settling defendant was 45 percent at fault, the nonsettling defendant was 45 percent at fault, and the plaintiff was 10 percent at fault. The settling defendant's apportioned share of the $ 15,000 noneconomic damages award therefore was $ 6,750, and the nonsettling defendant's apportioned share of noneconomic damages was an equal amount. Espinoza determined that the economic portion of the $ 5,000 settlement was $ 1,467.77 (and the noneconomic portion was $ 3,532.23) by multiplying the total settlement amount by the ratio of economic damages to the total damages awarded by the jury ($ 21,242.94). ( Id. at p. 273.) The court reduced by means of a setoff the economic damages award against the nonsettling defendant by that amount. (Ibid.) The Court determined the portion of a settlement to be set off from the economic damages portion of a judgment by applying the percentage of the economic damages award in relationship to the total award of damages. (Id. at pp. 276-277.) The formula that was adopted in Espinoza, determines the portion of the settlement to be set off from the economic damages judgment by applying the percentage of the economic damages award in relationship to the total award of damages. (Espinoza, supra, 9 Cal. App. 4th at pp. 276-277.) That case considered the proper offset for a settlement that did not differentiate the amounts attributable to economic and noneconomic damages. Although Code of Civil Procedure section 877 provides that a settlement shall reduce joint tortfeasors' liability by the amount stipulated in the settlement "or in the amount of the consideration paid for it whichever is the greater," Espinoza held that, in order properly to implement Civil Code section 1431.2, an undifferentiated settlement must be apportioned between economic and noneconomic damages so that the setoff applies only to economic damages. (Espinoza, supra, 9 Cal. App. 4th at pp. 274-277.) "To do otherwise would, in effect, cause money paid in settlement to be treated as if it was paid as a joint liability. This could not properly be done on a verdict and we see no basis why it should be done on a settlement." ( Id. at pp. 276-277.) Espinoza provides that the percentage of economic damages reflected in the jury verdict be applied to determine the percentage of the settlements to be offset. (Espinoza, supra, 9 Cal. App. 4th at pp. 276-277.) In Espinoza, the court did not reach the question "whether a trial court presiding over a good faith settlement hearing should make an allocation of a settlement between economic and noneconomic damages if it is requested to do so." (Espinoza, supra, 9 Cal. App. 4th at p. 277, fn. 9, citing Code Civ. Proc., 877.6.)