Judge Blaine K. Bowman, Case Number: 37-2021-00049029-CU-CD-CTL, Date: 2024-04-05 Tentative Ruling

Judge: Blaine K. Bowman, Case: 37-2021-00049029-CU-CD-CTL, Date: 2024-04-05 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - April 04, 2024

04/05/2024 08:30:00 AM C-74 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Blaine K. Bowman

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Civil - Unlimited Construction Defect Motion Hearing (Civil) 37-2021-00049029-CU-CD-CTL BOWEN VS CHARCO DESIGN & BUILD INC [E-FILE] CAUSAL DOCUMENT/DATE FILED:

Plaintiff Sally Bowen and Defendant/Cross-Complainant Charco Design & Build, Inc.'s motion for good faith settlement determination is GRANTED. CCP § 877.6.

Addressing the preliminary procedural issues, the court exercises its discretion in favor of considering Cross-Defendant Vicente Paul Meja dba Master Hardscapes' untimely filed and served opposition. The court finds any prejudice to Charco ameliorated by Charco timely filing its reply. The court exercises its discretion against considering the untimely filed and served opposition from Defendant C-Me Trim Company, Inc. C-Me's opposition was not filed and served until April 2, 2024, 3 days prior to the hearing on this motion. Such tardiness is a fortiori prejudicial to Charco as Charco has been deprived of the ability to timely file a reply. Such tardiness also places an undue burden on the court. Even if the court was to consider C-Me's untimely opposition, the result would not change. C-Me raises arguments similar to those raised by Master Hardscapes, and similarly fails to submit any evidence to support the arguments it raises. C-Me's arguments are rejected for the same reasons set forth below.

A settling party's burden in applying for a good faith determination is to prove there has been a settlement. Fisher v. Superior Court (1980) 103 Cal.App.3d 434, 447. See also, City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261-1262. Moving parties meet this burden via evidence of a settlement between Plaintiff and Charco whereby Charco and its insurers will pay to Plaintiff the sum of $1,900,000.00 in exchange for Plaintiff's release of all claims against Charco. The settlement also includes terms whereby Charco assigns to Plaintiff Charco's claims against the non-settling subcontractors, the additional insured carriers for the non-settling subcontractors and the insurance brokers for the non-settling subcontractors. As the court finds moving parties meet their burden, the burden shifts to opposing party Master Hardscapes to show that the settlement was not made in good faith. Fisher, 103 Cal.App.3d at 447. The court finds Master Hardscapes fails to meet this burden.

The only issues Master Hardscapes raises in opposition are issues related to the allocation proposed by moving parties. Regan Roofing Co. v. Superior Court (1994) 21 Cal.App.4th 1685 sets forth the applicable standards for evaluating allocations on a motion for good faith.

In Erreca's, we adhered to the guidelines set forth in Alcal Roofing & Insulation v. Superior Court (1992) 8 Cal.App.4th 1121 [10 Cal.Rptr.2d 844] (Alcal), for establishing the good faith of a settlement that includes allocations among particular disputed issues. (2) That court stated: 'At a minimum, a party seeking confirmation of a settlement must explain to the court and to all other parties: who has settled with whom, the dollar amount of each settlement, if any settlement is allocated, how it is allocated Calendar No.: Event ID: TENTATIVE RULINGS

3099628 5 CASE NUMBER: CASE TITLE: BOWEN VS CHARCO DESIGN & BUILD INC [E-FILE] 37-2021-00049029-CU-CD-CTL between issues and/or parties, what nonmonetary consideration has been included, and how the parties to the settlement value the nonmonetary consideration.' (Alcal, supra, 8 Cal.App.4th at p. 1129.) To those Alcal guidelines, we added in Erreca's the considerations that the party seeking confirmation of a settlement must explain to the court and to all other parties the evidentiary basis for any allocations and valuations made, and must demonstrate that the allocation was reached in a sufficiently adversarial manner to justify a presumption that the valuation reached was reasonable. (Erreca's, supra, 19 Cal.App.4th at pp. 1495-1496; Abbott Ford, supra, 43 Cal.3d at p. 879.) We emphasized, however, that the court hearing the good faith motion was not required to conduct an evidentiary hearing on the basis for the allocation, but instead had been accorded wide discretion to control '[t]he nature, extent and the procedure' applicable to any challenges to the valuation placed on the settlement by the settling party.

(43 Cal.3d at pp. 879-880, fn. 23.) Regan Roofing, 21 Cal.App.4th at 1700–1701.

As Regan Roofing goes on to explain, the inquiry at the good faith settlement stage is not the same as the inquiry at trial, where complete precision of allocation could presumably be achieved. Since we are dealing with a pretrial settlement, in which the factual findings or determinations made on contested issues of liability or damages are tentative, and made solely for purposes of evaluating the good faith of a settlement as of the date of the valuation (Toyota Motor Sales U.S.A., Inc. v. Superior Court, supra, 220 Cal.App.3d at p. 878, fn. 9), we must necessarily apply a broader and more permissive standard for evaluating good faith of a settlement as to such allocation. To require settling parties to make a complete explanation of their rationale for the allocation of settlement consideration or to set forth a factual matrix showing the allocation by trade or by defendant would serve to discourage pretrial settlements in complex matters such as this, due to the difficulty of making such a precise showing at the settlement stage.

Instead what should be required of the settling parties is that they furnish to the court and to all parties an evidentiary showing of a rational basis for the allocations made and the credits proposed. They must also show that they reached these allocations and credit proposals in an atmosphere of appropriate adverseness so that the presumption may be applied that a reasonable valuation was reached. (Abbott Ford, supra, 43 Cal.3d at p. 879.) The settlement should represent a rough approximation of the settlor's proportionate liability, as well as a recognition that a settlor should pay less in settlement than after a trial. (Tech-Bilt, supra, 38 Cal.3d at p. 499.) Regan Roofing, 21 Cal.App.4th at 1704.

Moving parties' allocation is based on the percentage of the dollar value of the parties' settlement (approximately $2,110,000.00) to Plaintiff's total potential recovery against Charco ($6,620,280.35) – 31.87% – and application of this percentage to each of the line items contained within Plaintiff's Cost of Repair. To support this allocation, moving parties submit declarations from Plaintiff's counsel and Charco's counsel to support both Charco's potential exposure of approximately $6,600,000.00 and the value of the settlement of $2,110,000.00. Moving parties also submit declarations from Plaintiff's architect and general contractor/cost of repair experts as well as documentary evidence.

The court finds moving parties provide sufficient evidentiary basis for the allocations and valuations made, and demonstrate that the allocations were 'reached in a sufficiently adversarial manner to justify the presumption that a reasonable valuation was reached.' Erreca's v. Superior Court (1993) 19 Cal.App.4th 1475, 1496 citing Abbott Ford, Inc. v. Superior Court (1987) 43 Cal.3d 858, 879. See also, Regan Roofing, 21 Cal.App.4th at 1704 ['we believe the trial court was justified in concluding that the use of the pro rata formula to allocate settlement consideration among the various categories of defects was an adequate resolution of the credit or offset issue at the good faith settlement stage of the proceedings'].

To test the good faith of these allocations which operate to exclude a portion of the settlement from the Calendar No.: Event ID: TENTATIVE RULINGS

3099628 5 CASE NUMBER: CASE TITLE: BOWEN VS CHARCO DESIGN & BUILD INC [E-FILE] 37-2021-00049029-CU-CD-CTL setoff available to individual nonsettling defendants, the overall inquiry is whether the settlement is 'grossly disproportionate to the settlor's fair share' and thus not subject to approval by the court. (Abbott Ford, supra, 43 Cal.3d at pp. 874-875.) Regan Roofing, 21 Cal.App.4th 1685 at 1702.

The court is not persuaded by any of the arguments Master Hardscapes raises in opposition.

Preliminarily, the only evidence Master Hardscapes offers is Plaintiff's Cost of Repair which, alone, does not support any of Master Hardscapes' arguments. As to Master Hardscapes' first argument regarding allocation of the 'multiple issues of damages' as moving parties confirm in reply, the same 31.87% applies to all items of damages. On Master Hardscapes' second and fourth arguments, the court finds moving parties' evidence sufficient to support moving parties' calculation of Charco's potential exposure.

Absent evidence to the contrary, there is no basis to conclude that Charco's potential exposure is anything other than that presented by moving parties - $6,620,280.35. Addressing Master Hardscapes' third argument, the burden used for Plaintiff's calculation is supported by the evidence and Master Hardscapes offers no evidence to support any other calculation. Master Hardscapes' proffered allocation is also without any evidentiary basis.

The court finds Master Hardscapes fails to establish that moving parties' proposed allocations render the settlement 'grossly disproportionate to the settlor's fair share' and, accordingly, fails to meet its burden of establishing lack of good faith as to the settlement allocations. Also, as Gouvis Engineering v. Superior Court (1995) 37 Cal.App.4th 642, recognizes '[t]he effect of an order adjudicating good faith of a settlement under sections 877 and 877.6 is to bar cross-complaints against parties who have settled and to provide an offset in the amount of the settlement to subsequent liability of nonsettlors' nothing more. Gouvis, 37 Cal.App.4th 642, 649. Thus, an allocation made at a good faith hearing is only presumptive evidence of liability and the amount thereof. Gouvis, 37 Cal.App.4th at 650-651.

Based on the foregoing, the court finds the settlement to be in good faith. The court finds that the amount of the settlements is within the reasonable range of Charco's proportionate share of comparative liability for Plaintiff's claimed injuries. Tech-Bilt, 38 Cal.3d at 499. This determination bars any other joint tortfeasor or co-obligor from any further claims against Charco Design & Build, Inc. for equitable comparative contribution or partial or comparative indemnity based on comparative negligence or comparative fault. CCP §877.6.

If this tentative ruling is confirmed the Minute Order will be the final order of the court and the parties shall not submit any further order on this motion.

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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