Judge: Daniel M. Crowley, Case: 20STCV41761, Date: 2022-08-24 Tentative Ruling
Case Number: 20STCV41761 Hearing Date: August 24, 2022 Dept: 28
Defendant Prime Constructions & Development, Inc.’s Motion for Determination of Good Faith Settlement; Cross-Complainant Cemex Construction Materials Pacific, LLC’s Motion for Leave to File First Amended Cross-Complaint
Having considered the moving papers, the Court rules as follows.
BACKGROUND
On October 30, 2020, Plaintiff Karolina Peysakhov (“Plaintiff”) filed this action against Defendants Prime Constructions & Development, Inc. (“Prime”), Shahan Sanossian (“Sanossian”) and Bojana Banyasz (“Banyasz”) for general negligence. Plaintiff later amended the complaint to include Defendants Cemex Construction Materials Pacific, LLC (“Cemex”) and National Ready Mixed Concrete Sales LLC (“Ready”).
On December 14, 2020, Prime filed an answer and a Cross-Complaint against Cemex for comparative indemnity, declaratory relief, comparative contribution against cross-defendants and negligence. Cemex filed an answer on February 4, 2021.
On February 26, 2021, the Court dismissed Banyasz, without prejudice, pursuant to Plaintiff’s request. On February 8, 2021, Sanossian filed an answer. On March 10, 2021, Cemez filed an answer. On April 22, 2022, Ready was dismissed, without prejudice, pursuant to Plaintiff’s request.
On February 4, 2021, Cemex filed a Cross-Complaint against Cross-Defendants Moes 1-50 for implied indemnity, contribution and indemnity, declaratory relief and express indemnity. Cemex later amended the Cross-Complaint to include Cross-Defendant Prime.
On April 25, 2022, Prime filed a Motion for Determination of Good Faith Settlement to be heard on May 27, 2022. The Court continued the hearing on the motion to August 24, 2022. On May 16, 2022, Cemex filed an opposition. On May 20, 2022, Prime filed its reply.
On May 18, 2022, Cemex filed a Motion for Leave to File the First Amended Cross-Complaint to be heard on August 18, 2022. The Court continued the hearing on the motion to August 24, 2022. On August 10, 2022, Prime filed an opposition. On August 17, 2022, Cemex filed a reply.
Trial is currently scheduled for January 6, 2023.
PARTY’S REQUESTS
Prime requests that the Court find that the settlement between Plaintiff and Prime was made in good faith.
Cemex requests the Court deny the motion for good faith settlement.
Cemex requests the Court grant leave to file the First Amended Cross-Complaint, adding in clarification that Prime was the previously identified MOE Cross-Defendant and three new causes of action.
Prime requests the Court deny the motion and issue monetary sanctions totaling $4,154.40.
LEGAL STANDARD
CCP § 887.6(a)(2) states that “[i]n the alternative, a settling party may give notice of settlement to all parties and to the court, together with an application for determination of good faith settlement and a proposed order. The application shall indicate the settling parties, and the basis, terms, and amount of the settlement. The notice, application, and proposed order shall be given by certified mail, return receipt requested, or by personal service. Proof of service shall be filed with the court. Within 25 days of the mailing of the notice, application, and proposed order, or within 20 days of personal service, a nonsettling party may file a notice of motion to contest the good faith of the settlement. If none of the nonsettling parties files a motion within 25 days of mailing of the notice, application, and proposed order, or within 20 days of personal service, the court may approve the settlement. The notice by a nonsettling party shall be given in the manner provided in subdivision (b) of Section 1005. However, this paragraph shall not apply to settlements in which a confidentiality agreement has been entered into regarding the case or the terms of the settlement.” The statute further clarifies that the party asserting the lack of good faith shall have the burden of proof on that issue.
CCP § 877 states “[w]here a release, dismissal with or without prejudice, or a covenant not to sue or not to enforce judgment is given in good faith before verdict or judgment to one or more of a number of tortfeasors claimed to be liable for the same tort, or to one or more other co-obligors mutually subject to contribution rights, it shall have the following effect: (a) It shall not discharge any other such party from liability unless its terms so provide, but it shall reduce the claims against the others in the amount stipulated by the release, the dismissal or the covenant, or in the amount of the consideration paid for it, whichever is the greater. (b) It shall discharge the party to whom it is given from all liability for any contribution to any other parties.”
In Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499, the California Supreme Court identified the following nonexclusive factors courts are to consider in determining if a settlement is in good faith under section 877.6: “a rough approximation of plaintiffs' total recovery and the settlor's proportionate liability, the amount paid in settlement, the allocation of settlement proceeds among plaintiffs, and a recognition that a settlor should pay less in settlement than he would if he were found liable after a trial. Other relevant considerations include the financial conditions and insurance policy limits of settling defendants, as well as the existence of collusion, fraud, or tortious conduct aimed to injure the interests of nonsettling defendants.”
Under CCP § 426.50, “A party who fails to plead a cause of action subject to the requirements of this article, whether through oversight, inadvertence, mistake, neglect, or other cause, may apply to the court for leave to amend his pleading, or to file a cross-complaint, to assert such cause at any time during the course of the action. The court, after notice to the adverse party, shall grant, upon such terms as may be just to the parties, leave to amend the pleading, or to file the cross-complaint, to assert such cause if the party who failed to plead the cause acted in good faith. This subdivision shall be liberally construed to avoid forfeiture of causes of action.”
CCP § 428.10 states “A party against whom a cause of action has been asserted in a complaint or cross-complaint may file a cross-complaint setting forth either or both of the following: (a) Any cause of action he has against any of the parties who filed the complaint or cross-complaint against him. Nothing in this subdivision authorizes the filing of a cross-complaint against the plaintiff in an action commenced under Title 7 (commencing with Section 1230.010) of Part 3. (b) Any cause of action he has against a person alleged to be liable thereon, whether or not such person is already a party to the action, if the cause of action asserted in his cross-complaint (1) arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause brought against him or (2) asserts a claim, right, or interest in the property or controversy which is the subject of the cause brought against him.”
DISCUSSION
Tech-Bilt Factors
Plaintiff accepted a settlement offer of $18,000.00 from Prime to settle Plaintiff’s claims against PRIME. The Court analyzes the Tech-Bilt factors in determining if Prime has met its burden of proving the settlement was entered into in good faith.
Recovery and Proportionate Liability
Plaintiff’s claim arises from an alleged incident in which Plaintiff was riding her bicycle when she hit spilled material, with the appearance of cement, causing her to crash and fall onto the ground. Prime was responsible for providing concrete work and rough framing at the subject location; Prime hired Cemex to deliver cement. Cemex was responsible for the delivery. During the delivery, Cemex spilled cement on the public roads and purportedly cleaned the cement spill.
Prime claims that, based on the facts provided above, that Prime “played no role in Plaintiff’s purported injuries,” and as such is likely liable for very little. Additionally, Prime claims that Prime would pay very little at trial, given its lack of involvement. However, Cemex notes that Prime also had a spill on the same day, one of which was cleaned exclusively by Prime employees. Regardless, without an estimate of the entire case value and Prime’s proportionate share of that, the Court has no way to determine whether Prime’s settlement is in the ballpark of it percentage of fault.
Allocation of Settlement
There is only one Plaintiff, and thus the allocation of the settlement is proper.
Financial considerations
Prime claims that the only source of funding for the settlement is Prime’s respective insurance carriers, which satisfies this Tech-Bilt factor. However, this is a misinterpretation of the Tech-Bilt factors; the Tech-Bilt factors are interested in a settling party’s capability to pay a settlement based on their total financial ability and insurance options. Thus, the Court needs information about Prime’s financial capability and insurance limits—it is not sufficient to merely state that the settlement is covered by insurance.
Collusion or Fraud
There is no indication of fraud or collusion. This factor leaves in favor of granting the motion.
Conclusion
The Court finds that Prime has not met its burden to prove that it has satisfied the Tech-Bilt factors. There is insufficient information as to the total recovery, proportionate liability, and financial considerations. The Court denies the motion without prejudice.
Cemex’ Motion for Leave to File Amended Cross-Complaint
Cemex requests the Court grant leave to amend to include three new causes of action and an allegation identifying Prime as the previously identified MOE Cross-Defendant. One of these three causes of action was previously asserted against Prime but was dismissed, without prejudice, under the mistaken belief there was no express indemnity between parties. Further investigation has revealed there is such a basis, and thus Cemex wishes to revive the cause of action. The other two causes of action for breach of Contract and Declaratory Relief stem from the same transaction or occurrence as the entire action, as well as the Cross-Complaint, as they stem from the relationship between Cemex and Prime in the context of Plaintiff’s negligence claim. These causes of action also assert a right or interest of Cemex, meaning that Cemex is allowed to bring forward such causes of action.
Prime argues that Cemex failed to provide a declaration stating when the facts giving rise to the amended allegations were discovered and why the request was not made earlier. The Court agrees. Prime has established that CEMEX has had knowledge of the basis for express indemnity since September 29, 2020, when it issued Prime “Weighmaster Certificates” purportedly containing the express indemnity provisions. Based on the above, the Court finds there is not good cause to grant the motion, and so denies it.
CONCLUSION
Defendant Prime Constructions & Development, Inc.’s Motion for Determination of Good Faith Settlement is DENIED.
Cross-Complainant Cemex Construction Materials Pacific, LLC’s Motion for Leave to File First Amended Cross-Complaint is DENIED.
Cross-Defendant Prime Constructions & Development, Inc.’s Request for Sanctions is DENIED.
CEMEX is ordered to give notice of this ruling.
CEMEX is ordered to file the proof of service of this ruling with the Court within five days.
The parties are directed to the header of this tentative ruling for further instructions.