Connecticut General Life Insurance v. New Images of Beverly Hills

MEMORANDUM **

Connecticut General appeals the order of the district court declaring its $2.9 million judgment against Haya Zilka satisfied and ordering Connecticut General to re *51 fund excess payments. We have jurisdiction under 28 U.S.C. § 1291 , and reverse and remand.

The court improperly credited Zilka with the full amount of Connecticut General’s settlements with seven other settling defendants without undertaking an independent allocation of the settlement payments. Sims v. DeArmond, 42 F.3d 1181 (9th Cir.1994). Here, the underlying fraud was perpetrated at ten separate surgery clinics over a five-year period. The seven settling defendants engaged in fraudulent activities at different clinics and at different times; Zilka was a participant only at Westwood and only during part of the time that the fraud was occurring there. The judgment was for damages suffered on account of Zilka’s activities at Westwood. This suggests that not all of the settlement payments overlap or are in common with the Zilka judgment. In these circumstances, Sims requires the court to attempt an allocation whether or not the settling parties themselves have done so. Sims, 42 F.3d at 1185 .

This…