Judge: Andrew E. Cooper, Case: 24CHCV00964, Date: 2025-04-04 Tentative Ruling

Case Number: 24CHCV00964    Hearing Date: April 4, 2025    Dept: F51

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F-51

MOTION FOR DETERMINATION OF GOOD FAITH SETTLEMENT

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Motion Filed: 11/21/24

MOVING PARTY: Defendant A to Z Construction, Inc. (“Moving Defendant”)

RESPONDING PARTY: Defendant LA Standard HVAC Inc. (“Responding Defendant”)

NOTICE: OK

RELIEF REQUESTED: An order finding the settlement entered between Moving Defendant and Plaintiff to be in good faith pursuant to Code of Civil Procedure section 877.6.

TENTATIVE RULING: The motion is denied without prejudice.

BACKGROUND

This is a subrogation action in which Plaintiff QBE Insurance Corporation alleges that “on and after June 18, 2021, PROCONNECT HOME SOLUTIONS, INC.; and LA STANDARD HVAC, INC.; were performing routine maintenance of the air conditioning unit at the home of Theresa Corvino located at 28537 Alder Peak Avenue, Canyon Country, CA 91387.” (Compl. ¶ 8.) Plaintiff further alleges that Defendants caused damages to the subject resident for which Plaintiff repaid Corvino in the sum of $79,170.81. (Id. at ¶¶ 9–11.) Plaintiff therefore alleges that it suffered losses for which Defendants are liable. (Id. at ¶ 12.)

On 3/20/24, Plaintiff filed its complaint, alleging against Defendants the following causes of action: (1) Breach of Contract; and (2) Negligence. On 8/12/24, Responding Defendant filed its answer.

On 11/21/24, Moving Defendant filed the instant application for determination of good faith settlement. On 3/24/25, Responding Defendant filed its opposition. No reply has been filed to date.

ANALYSIS

A plaintiff may settle with one of several joint tortfeasors or co-obligors on a contract without releasing the others, provided that the settlement is made in “good faith” pursuant to Code of Civil Procedure section 877.6. “Where there are multiple defendants, each having potential liability for different areas of damage, an allocation of the settlement amount must be made. … Failure to do so may preclude a ‘good faith’ determination because there is no way to determine the appropriate set off pursuant to section 877 against the nonsettling defendant.” (L. C. Rudd & Son, Inc. v. Superior Court (1997) 52 Cal.App.4th 742, 750.)

Once there is a showing made by the settlor of the settlement, the burden of proof on the issue of good faith shifts to the non-settlor who asserts that the settlement was not made in good faith. (Fisher v. Superior Court (1980) 103 Cal.App.3d 47; Code Civ. Proc. § 877.6, subd. (d).) The ultimate determinant of good faith is whether the settlement is grossly disproportionate to what a reasonable person at the time of settlement would estimate the settlor’s liability to be. (City of Grand Terrace v. Superior Court (1987) 192 Cal. App. 3d 1251, 1262.)

In making such a determination, the Court considers several factors: (1) A rough approximation of the plaintiff’s total recovery and the settlor’s proportionate liability; (2) The amount paid in settlement; (3) A recognition that a settlor should pay less in settlement than if found liable at trial; (4) The allocation of the settlement proceeds among the plaintiffs; (5) The settlor’s financial condition and insurance policy limits, if any; and (6) Evidence of any collusion, fraud, tortious conduct between the settlor and the plaintiff aimed at making the non-settling parties pay more than their fair share. (Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499.)

Here, Moving Defendant asserts that “after conducting informal discovery and informal settlement negotiations, Plaintiff and A2Z negotiated their $11,500 settlement through their respective counsel, after months of negotiations.” (Decl. of Efrat Levy ¶ 2.) Moving Defendant further asserts that “the settlement is ‘within the ballpark’ of A2Z’s share of liability based on the information, allocation, and cost of repair known at the time of the settlement pursuant to Code of Civil Procedure section 877.6 and Tech-Bilt.” (Mot. 7:17–19.)

In opposition, Responding Defendant argues that “this motion lacks any evidentiary support tying the settlement amount to A TO Z’s actual share of liability and fails to provide the most basic facts on the location, time, scope or any other mitigation work A TO Z performed, how it contributed to the alleged damage, or how the amount was calculated.” (Opp. 1:18–21.) Responding Defendant further argues that “the [settlement] agreement was negotiated and executed without the participation, knowledge, or consent of LA Standard or any other defendant. Despite seeking to extinguish co-defendants’ indemnity rights, QBE has failed to produce any documentation showing how the $11,500 figure reflects A TO Z’s proportionate share of liability. Nor has QBE clarified what mitigation work A TO Z performed, where it was performed, or how that work contributed to the loss.” (Id. at 3:19–23.) “Rather than coordinate a fair and transparent resolution, QBE proceeded with a private side deal with A TO Z that disregards the procedural safeguards and equitable principles codified in Code of Civil Procedure §877.6 and interpreted in Tech-Bilt, even as the settlement is being actively opposed.” (Id. at 4:4–7.)

The Court agrees with Responding Defendant, noting that the motion lacks facts or evidence measuring Plaintiff’s damages in this action. Without an approximation of the total damages, there can be no determination of whether the proposed settlement is reasonably within the ballpark based on Moving Defendant’s proportional liability. Therefore, the Court is unable to make a good faith determination based on “rough approximation of the plaintiff’s total recovery and the settlor’s proportionate liability.” (Tech-Bilt, 38 Cal.3d at 499.)

The Court notes that Moving Defendant has failed to reply to Responding Defendant’s opposition. Based on the foregoing, the Court agrees with Responding Defendant that, at this juncture, there is insufficient evidence before the Court to make a determination of whether the settlement entered into between Plaintiff and Moving Defendant was made in good faith. Accordingly, the motion is denied without prejudice.

CONCLUSION

The motion is denied without prejudice.