Judge: Blaine K. Bowman, Case: 37-2019-00043047-CU-OR-NC, Date: 2023-11-09 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - November 08, 2023

11/09/2023  01:30:00 PM  N-31 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Blaine K. Bowman

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Civil - Unlimited  Other Real Property Motion Hearing (Civil) 37-2019-00043047-CU-OR-NC MARK HENKEL VS BLASI [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion for Determination of Good Faith Settlement, 09/20/2023

The Motion for Good Faith Settlement brought by defendant/cross-complainant The Crosby Estate at Rancho Santa Fe Master Association (the HOA) and defendant/cross-complainant Keystone Pacific Property Management LLC (the Property Manager) is DENIED without prejudice on grounds that issuing a ruling would appear to be advisory at this juncture.

Factual Background and Procedural History This lawsuit pertains to a disputed over a lot line between two neighbors in a wealthy community. There is some slope or grade between the two parcels, and the neighbor with the lower parcel has significant glass windows and doors along the side of the home facing the neighbor on the higher parcel, leading to some desire for privacy. The neighbor with the lower parcel thus grew out some honeysuckle vegetation in an apparent effort to obfuscate views directly into their home. Said honeysuckle grew over the lot line, became unsightly, and began to flow into the pool of the neighbor with the higher parcel. So, the neighbor owning the higher parcel hired workers to trim the honeysuckle back to the lot line, and, in so doing, a jury has now found that the neighbor owning the higher parcel trespassed – not by actually crossing the physical lot line, but by reaching into the neighboring space owned by the lower parcel and pulling honeysuckle across the lot line so that it could be cut and trimmed. For this, the jury awarded $500 in damages against the neighbors who own the higher parcel. The jury also awarded punitive damages in the amount of $50,000.00 against those neighbors, but this Court subsequently entered judgment notwithstanding the verdict because, under the technical legal standard, insufficient specific evidence of the net worth of the neighbors who own the higher parcel had been presented at trial.

Amidst all of the above throughline, a separate case was filed by the neighbors who own the higher parcel against the homeowners' association that governs both properties. The theory of that lawsuit involved issues pertaining to the fact that the properties exist in a 'recycled water district.' While the issues pertaining to that claim were never fully litigated, it appeared that the gist of the claim had to do with the fact that in order to obtain enough water rights to maintain the honeysuckle, the neighbors who owned the lower parcel would have had to obtain some sort of waiver or easement or permission to utilize certain additional water reserves that the HOA had to approve. The position of the neighbors who owned the higher parcel was that the HOA breached a duty or otherwise engaged in legal wrongdoing by approving the lower parcel's request for additional water for the honeysuckle (and other foliage).

That case was consolidated with the underlying case between the neighbors. The parties made some mediation efforts, and, for a brief moment at that mediation, it appeared that both sets of neighbors were prepared to settle with the HOA (and the Property Manager, which, for most intents and purposes in this lawsuit seems to be one and the same as the HOA, so references herein to the HOA are intended to Calendar No.: Event ID:  TENTATIVE RULINGS

3035613 CASE NUMBER: CASE TITLE:  MARK HENKEL VS BLASI [IMAGED]  37-2019-00043047-CU-OR-NC include both unless otherwise specified). However, as was represented in prior motions before this Court, the neighbors owning the lower parcel preferred a 'global' settlement and backed-out of settling with the HOA. They did so, however, after a settlement had already been entered between the HOA and the owners of the higher parcel.

Before this case went to trial, it appears that the owners of the higher parcel nonetheless did reach a settlement with the HOA. That settlement is the subject of the instant Motion for Determination of Good Faith Settlement. However, before the instant motion could be heard – in fact, before the settling parties bothered to file it – this case proceeded to trial and a verdict was rendered on June 16, 2023. (ROA 591.) As such, the HOA is now seeking approval of a settlement after the trial of this matter has been resolved and after judgment has been entered.

The statute providing the process for approval that a settlement has been entered in good faith exists to 'provide a 'defensive' procedure by which a joint tortfeasors may extricate itself from a lawsuit and bar actions for equitable indemnity by the remaining joint tortfeasors.' (Weil and Brown, California Practice Guide: Civil Procedure Before Trial (The Rutter Group, 2023) ¶ 12:760, citing Heppler v. J.M. Peters Co., Inc. (1999) 73 Cal.App.4th 1265, 1284.) In opposing the instant motion, the neighbors who own the higher parcel – Peter and Tamara Blasi (the Blasis) – contend that there is nothing 'joint' about the liability of the HOA and the liability of the Henkels. Indeed, the Blasis filed their lawsuit against the HOA as a completely separate lawsuit. The HOA, however, contends that this Court consolidated the matters for a reason such that the claims are not entirely separate.

Nonetheless, that particular issue does not appear to be the real reason for the instant motion, which is some of the conundrum created by this particular request. A more common motion for good faith settlement is brought before trial so that the extricated defendant can achieve peace knowing that, regardless of how liability is assigned to the other remaining defendants at trial, the settling defendant will be immune from claims by – as the Practice Guide and the Blasis repeatedly emphasize – joint tortfeasors.

In a vacuum, it would thus not be terribly difficult – or terribly meaningful – to grant the instant motion in favor of the HOA (and, incidentally, the owners of the lower parcel, since they are also parties to the settlement that will be approved), since the case-in-chief between the neighbors has been resolved.

Yes, the granting of such a motion might provide one more layer of security to the HOA in terms of immunity from future suit on the specific issues raised in the instant case, but with the case having been resolved via judgment that additional layer of security rings a bit hollow and raises a bit of a question as to: what is the real purpose of the instant motion? The Blasis offer an answer to this question in their opposition. According to the Blasis, during the underlying litigation, but after they reached their initial settlement with the HOA, the HOA shared private information about the Blasis – specifically, information about the Blasis gate access key cards, which, in turn, provide information about their comings and goings to and from the HOA. As it happens, that information had some relevance to a prior motion in this Court about whether or not the Blasis had sufficient presence in San Diego to be compelled to deposition here. The Blasis take the position that in sharing their gate access information, the HOA violated their rights and/or breached certain duties that it owed to the Blasis regarding their privacy.

It appears that the Blasis and the HOA have agreed to engage in mediation over this issue. Said mediation was initially set to take place before the ruling on the instant motion, but the HOA successfully requested that this Court advance the hearing on the instant motion to a time prior to the mediation. The Blasis take the position that the HOA did this in order to obtain a certain amount of leverage in the mediation. While it seems that the Blasis may be correct as to that motive, what is unclear is how a ruling on the instant motion impacts mediation about a set of circumstances that appears to have been outside of the scope of the instant litigation and/or the settlements at issue. In other words, the Blasis settled with the HOA regarding the HOA's duties vis-à-vis extending recycled water rights to their neighbors (the owners of the lower parcel, Mark and Tiffany Henkel (the Henkels)). This subsequent act Calendar No.: Event ID:  TENTATIVE RULINGS

3035613 CASE NUMBER: CASE TITLE:  MARK HENKEL VS BLASI [IMAGED]  37-2019-00043047-CU-OR-NC of sharing gate code information after settling the underlying dispute regarding recycled water rights does not appear to have any particular connection – at least not insofar as the concerns about a joint tortfeasor obtaining 'peace' when entering into a settlement. In other words, even if this Court grants the instant motion, how the instant motion impacts the status of any claims about sharing gate code information is a mystery.

Merits of Motion The briefing on this motion focuses very little on the substantive factors that are to be analyzed when determining whether or not a settlement with one of several potential joint tortfeasors is made in 'good faith.' Those factors include: --a rough approximation of plaintiffs' total recovery and the settlor's proportionate liability --the amount paid in settlement --a recognition that a settlor should pay less in settlement than if found liable after a trial --the allocation of the settlement proceeds among plaintiffs --the settlor's financial condition and insurance policy limits, if any, and --evidence of any collusion, fraud, or tortious conduct between the settlor and the plaintiffs aimed at making the nonsettling parties pay more than their fair share.

(Weil and Brown, California Practice Guide: Civil Procedure Before Trial (The Rutter Group, 2023) ¶ 12:772, citing Tech-Bilt, Inc. v. Woodward-Clyde & Assocs. (1985) 28 Cal.3d 488, 499.) The settlement between the HOA and the Henkels is for $385,292.53. Given the Court's familiarity with the issues in this case (particularly after having presided over an entire trial of the matter), it certainly appears that all of these factors are satisfactorily met and weigh in favor of approving the fact that the settlement itself was, in fact, made in good faith.

The larger problem in this case, however, is that, to put it in slightly creative language, there does not appear to be any jointness to the tortfeasing that is at issue. In other words, the issue resolved in this lawsuit between the homeowners was trespass. There does not appear to be any theory under which the Henkels, as the plaintiffs, are seeking to assign liability to the Blasis when that liability might otherwise be assigned to the HOA as a joint tortfeasor. Notably within the context of good faith settlements: Cases are split on whether settlements to which plaintiff is not a party are subject to a 'good faith' determination. Thus, it is unclear whether joint tortfeasor defendants can extricate themselves from litigation (i.e., preclude indemnity claims from nonsettling defendants) by settling between themselves without concurrently settling with the plaintiff.

(Weil and Brown, California Practice Guide: Civil Procedure Before Trial (The Rutter Group, 2023) ¶ 12:763, citing Arizona Pipeline Co. v. Sup.Ct. (Southern Pac. Transp. Co.) (1994) 22 Cal.App.4th 33, 46, also citing KAOM, Inc. v. Sup.Ct. (C&D Coatings, Inc.) (1995) 35 Cal.App.4th 549, 555.) If the HOA is settling with the Henkels for claims the Henkels made against the HOA, it is unclear how those claims against the HOA by the Henkels would jointly amount to liability against the Blasis.

In some circumstances, this question might seem like an academic one, as good faith settlement motions often go unopposed by 'joint' tortfeasors such that one could take the position that if the Blasis are not actually 'joint' tortfeasors, how do they even have standing to oppose the instant motion? Were this motion brought prior to trial of this case, this Court might be inclined to treat it differently, as at that time there still remained an open question about how liability would be assigned in this case for the underlying wrongs that were alleged (and that were consolidated together into this one lawsuit). But trial of the matter has now occurred, and judgment has been entered, and there is no indication that either party intends to seek indemnity from the HOA for the $500 verdict that was rendered for trespass.

Taking a broader view, the case involving the HOA was about recycled water rights. Both the Henkels Calendar No.: Event ID:  TENTATIVE RULINGS

3035613 CASE NUMBER: CASE TITLE:  MARK HENKEL VS BLASI [IMAGED]  37-2019-00043047-CU-OR-NC and the Blasis have now settled with the HOA over that issue. As such, there is no clear indication that the Henkels have any basis to sue the Blasis as joint tortfeasors with the HOA on those issues either.

The issue presented here is a legally difficult one – not because the actual terms of the settlement raise any real question as to their genuineness or good faith, but because it appears that, post-trial, the granting of this motion would be advisory. On the other hand, the parties to the instant litigation have proven to be quite litigious and capable of advancing rather creative new legal theories at times. For that reason, while the Court presently denies the motion on grounds that granting it would be issuing an advisory ruling, the Court does so without prejudice so that, should it become relevant or percolate to the point of bearing on an actual dispute between the parties, the good faith settlement issue can be re-raised.

Unless the ruling(s) above indicate that an appearance is necessary, parties who wish to submit, who are satisfied with the above tentative ruling(s), and/or who do not otherwise wish to argue the motion(s) are encouraged to give notice to the Court and each other of their intention not to appear.

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