United States District Court, D. Nevada
REPORT AND RECOMMENDATION
FERENBACH UNITED STATES MAGISTRATE JUDGE
the Court is Third-Party Defendant Shayna Diaz's
Supplemental Brief (ECF No. 44) and Defendant/Third-Party
Plaintiff Martin Guzman Perez and Defendant El Rayo's
(collectively, "Perez") Response (ECF No. 45)
regarding Diaz's Motion for Determination of Good Faith
Settlement (ECF No. 38). Plaintiff Deyssi Janneth
Prado-Guajardo moved to join Diaz's Motion for Good Faith
Settlement (ECF No. 39). Perez filed a Response to Diaz's
Motion for Determination of Good Faith Settlement (ECF No.
40), and Diaz filed a Reply (ECF No. 42). The Court held a
hearing about the MotionjQL Determination of Good Faith
Settlement on May 2, 2017 and denied that motion without
prejudice. See Mins. Proceedings (ECF No.
conclusion of the May 2, 2017 hearing, the Court raised two
main issues with the Motion for Determination of Good Faith
Settlement: (1) whether a settlement between a plaintiff and
a third-party defendant against whom the plaintiff did not
assert a direct claim could support a finding of good faith;
and (2) whether Defendant/Third-Party Plaintiff Perez would
still have the right to argue at trial (if the case proceeded
to trial) pursuant to Nev. Rev. Stat. §41.141 that
Diaz's comparative fault due to negligent entrustment
reduces the percentage of the liability attributable to
Perez. See Mins. Proceedings (ECF No. 43). In other
words, assuming the Court approves the good faith settlement
and Perez's indemnity and contribution claim against Diaz
based on negligent entrustment is discharged, should the
issues of fault attributable to Diaz remain in the case as a
defense for Perez even though recovery against Diaz would be
precluded? Id. The Court granted the parties two
weeks to file new motions addressing these issues.
Id. The Court has reviewed and considered the moving
and responsive papers. A hearing was held on September 8,
2017. For the reasons stated below, the Court reconsiders
Diaz's Motion for Good Faith Settlement (ECF No. 38) and
recommends that it should be conditionally GRANTED.
parties are familiar with the facts of the case and the Court
will repeat them only as necessary. This action arises from a
non-contact accident between a 2012 Yamaha Cruiser XV250
motorcycle driven by Prado-Guajardo and Perez's 2010
Kenworth T800 DS-Tractor Truck on December 5, 2013.
See ECF No. 32. Due to injuries Prado-Guajardo
sustained from this accident, which she alleges Perez caused,
Prado-Guajardo brought a personal injury suit against Perez
on December 4, 2015 in Nevada District Court. See
ECF No. 1 at 1. Perez removed the action to Federal District
Court on March 11, 2016. Id. Prado-Guajardo filed an
Amended Complaint in February 2017, naming El Rayo as an
additional defendant. See ECF No. 32 at 1.
August 2016, Perez filed a Third-Party Complaint for
indemnity and contribution against Third-Party Defendant
Shayna Diaz. See ECF No. 19. The Third-Party
Complaint alleges that Diaz was the registered owner of the
motorcycle that Prado-Guajardo operated and the insured under
a motorcycle insurance policy on the day of the accident. The
Third-Party Complaint alleges that Diaz negligently entrusted
the motorcycle to Prado-Guajardo because Prado-Guajardo did
not have a license to operate the motorcycle. Id. at
2. The motorcycle was insured by State Farm Automobile
Insurance Company with policy limits of $15, 000.
See ECF Nos. 38-2; 38-3. After being served with the
Third-Party Complaint, Diaz filed an answer on October 26,
2017. See ECF No. 27. Diaz "made a Demand for
Prior Pleadings and Discovery and began her investigation
into the allegations." See ECF No. 38 at 3.
Based on that investigation, Diaz "made an offer to
Prado to tender her $15, 000 policy limits to settle the
third-party claim asserted against her." Id.
Prado-Guajardo accepted Diaz's offer, subject to the
Court's determination that the settlement was made in
good faith. Prado-Guajardo and Diaz are engaged to be
married. See ECF No. 38-2.
March 24, 2017, Diaz brought the instant Motion for
Determination of Good Faith Settlement, which Prado-Guajardo
moved to join. See ECF Nos. 38; 39. The Court held a
hearing on Diaz's Motion on May 2, 2017. See ECF
No. 43. The Court denied Diaz's Motion, but granted the
parties two weeks to file moving and responsive papers on the
issues identified by the Court at the hearing. On May 16,
2017, Diaz filed a Supplemental Brief In Support of Her
Motion for Determination of Good Faith Settlement.
See ECF No. 44. On June 8, 2017, Perez filed a
Response to Third-Party Defendant Shayna Diaz'
Supplemental Brief in Support of Her Motion for Determination
of Good Faith Settlement. See ECF No.
Prado-Guajardo and Third-Party Defendant Diaz seek a
determination from this Court that the proposed settlement
between them was made in good faith. Under Nev. Rev. Stat.
§ 17.245(1)(a) and (b):
When a release or a covenant not to sue or not to enforce
judgment is given in good faith to one of two or more persons
liable in tort for the same injury or the same wrongful
(a) It does not discharge any of the other tortfeasors from
liability for the injury or wrongful death unless its terms
so provide, but it reduces the claim against the others to
the extent of any amount stipulated by the release or the
covenant, or in the amount of the consideration paid for it,
whichever is the greater; and
(b) It discharges the tortfeasor to whom it is given from all
liability for contribution and for equitable indemnity to any
Nev. Rev. Stat. § 17.245(2), equitable indemnity means
"a right of indemnity that is created by the court
rather than expressly provided for in a written
agreement." The goal of Nev. Rev. Stat. § 17.245 is
"to encourage settlements by discharging all liability
for contribution by a settling tortfeasor to others upon a
finding that the settlement was entered in 'good
faith.' " See Kerr v. Wanderer &
Wanderer, 211 F.R.D. 625, 631 (D. Nev. 2002) (quoting
In re MGM Grand Hotel Fire Litig., 570 F.Supp. 913,
926 (D. Nev. 1983)).
statute also considers the interests of non-settling
defendants. Indeed, even if a court determines that a
settlement was entered into in good faith, under Nev. Rev.
Stat. § 17.245(1), the "non-settling defendant
receives a credit in the amount contributed by the settling
defendant in any subsequent verdict against that
defendant." See In re MGM Grand Hotel Fire
Litig., 570 F.Supp. at 927; see also Nev. Rev.
Stat. § 17.245(1). The determination of good faith under
Nevada law is "left to the discretion of the ... court
based upon all relevant facts available ...." See
Velsicol Chem. Corp. v. Davidson,811 P.2d 561, 563
(1991); see also Otak Nevada, L.L.C. v. Eight ...