Department 58

Hearing Date: July 28, 2022

Case Name: Zero Gravity Management, Inc. v. Oltmans Construction Co.

Case No.: 22STCP01918

Matter: Application for Determination of Good Faith Settlement

Moving Party: Petitioner Zero Gravity Management, Inc. dba ATC Design Group

Responding Party: Unopposed

Tentative Ruling: The Motion for Determination of Good Faith Settlement is granted.

This is a case involving a general contractor and a subcontract with its surveyor for the construction of a car wash building. The parties have settled, and the general contractor seeks a determination of good faith settlement by the Court.

Background

Petitioner Zero Gravity Management, Inc. dba ATC Design Group (ATC) was the subcontractor surveyor who was allegedly responsible for staking grid lines as part of the construction of a car wash (Project) for the Toyota Logistics Services Vehicle and Processing Distribution Center. Respondent Oltmans Construction Company (Oltmans) was the general contractor assigned to the Project.

Oltmans alleged that the improper staking caused it to install the piles for the car wash in the wrong position. Therefore, Oltmans sought the costs to remove and reinstall the piles from ATC. There was no complaint filed. Instead, Petitioner ATC filed this Application for Determination of Good Faith Settlement to “bar any claims for indemnity, contribution, or apportionment of fault by a joint tortfeasor.” The other potential parties involved include the project architect (Lundstrom Architects), project civil engineer (DCI Engineers), project structural engineer (KPFF), and project owner (Toyota Motor Sales, U.S.A., Inc.)

The Settlement provides that ATC will pay $60,000.00 to Oltmans in exchange for a full settlement and release of all claims against ATC. The Settlement depends upon the Court’s approval of the Application for Good Faith Settlement; within 20 days of the Order, ATC, or its insurer, shall pay Oltmans under the agreement. ATC does not admit fault, but desires to buy peace and to extricate itself from further involvement as to this matter. No opposition was filed.

Legal Standard

“A determination by the court that the settlement was made in good faith shall bar any other joint tortfeasor or co-obligor from any further claims against the settling tortfeasor or co-obligor for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.” (Code Civ. Proc., § 877.6, subd. (c).)

When a motion seeking a determination under Code of Civil Procedure section 877.6 is unopposed, the burden on the movant to show that the settlement was made in good faith is slight. (City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261 [holding that a bare motion including a declaration with a brief background of the case is sufficient].)

There is no precise method to determine whether parties entered into a good faith settlement. (Tech-Bilt, Inc. v. Woodward-Clyde Assoc. (1985) 38 Cal.3d 488, 495 (Tech-Bilt).) The court must balance between the public policy favoring settlements and the competing policy favoring equitable allocation of costs between tortfeasors. (Id. at pp. 498-99.) To accomplish this, the California Supreme Court provided the following factors for determining whether a proposed settlement is based on good faith: (1) a rough approximation of plaintiff’s total recovery and the settling defendant’s proportionate liability; (2) the amount paid in settlement; (3) allocation of settlement amounts among plaintiffs; (4) recognition that a settlor should pay less in settlement than it would if it were found liable after trial; (5) financial conditions and insurance policy limits of the settling defendant; and (6) the existence of collusion, fraud, or tortious conduct aimed to injure the interests of non-settling defendants. (Id. at 499-500.) The burden of proof in asserting that a settlement lacked good faith falls upon the party making the assertion and it must show that “the settlement is so far ‘out of the ballpark’ in relation to these factors as to be inconsistent with the equitable objectives of [CCP § 877.6].” (Ibid.)

Discussion

As there is no opposition, the Application may be granted without consideration of the Tech-Bilt factors and on the basis of a “barebones motion which sets forth the ground of good faith, accompanied by a declaration which sets forth a a brief background of the case.” (City of Grand Terrace v. Superior Court, supra, 192 Cal.App.3d at p. 1261 [“[W]e . . . conclude that only when the good faith nature of a settlement is disputed, it is incumbent upon the trial court to consider and weigh the Tech-Bilt factors.”)

Petitioner submits the declaration of its counsel, Sterling Henderson, who summarizes the dispute as to the “alleged improper staking of gridlines for the carwash” at the Toyota distribution center. (Henderson Decl., ¶ 3-4.) The gridlines were alleged to be misplaced by 50 feet. (Id., Ex. 1, ¶ B.) The $60,000.00 payment from ATC is reasonable, given that ATC strongly disputes liability but recognizes that it would otherwise be engaged in protracted litigation and ongoing dispute. (Id. at ¶¶ 5-6.)

Under the circumstances, the Court cannot find that “the settlement is so far ‘out of the ballpark’ in relation to [the Tech-Bilt] factors as to be inconsistent with the equitable objectives of the statute.” (Tech-Bilt, Inc., supra, 38 Cal.3d at pp. 499–500.) Accordingly, the Court finds that the settlement was made in good faith. The Application for Determination of Good Faith Settlement is granted.