Judge Daniel M. Crowley, Case 21SMCV01061 2023-03-30 Tentative Ruling

Judge: Daniel M. Crowley, Case: 21SMCV01061, Date: 2023-03-30 Tentative Ruling

Case Number: 21SMCV01061-01 Hearing Date: March 30, 2023 Dept: 207

Background

This action concerns alleged damage to real property owned by Plaintiffs Gary Schultz and Maria Schultz (“Plaintiffs”) caused by construction activities undertaken at a neighboring property owned by Defendant Shawn Yashar (“Yashar”) by contractor Precision Building & Development, Inc. (“Precision”) and subcontractors Century Construction Builders, Inc. (“Century”) and Leon Krous Drilling, Inc. (“Krous”). Yashar, Precision, Century, and Krous have filed Cross-Complaints against each other raising claims for indemnity. Yashar’s Cross-Complaint, filed August 3, 2020, asserts additional causes of action for breach of warranty and negligence. Century has filed a separate action, Case No. 21SMCV01061, seeking payment for work performed on Yashar’s property. On March 6, 2023, the Court consolidated the two actions.

Krous has reached a settlement with Plaintiffs and now moves the Court for a determination that its settlement was entered into in good faith pursuant to Code Civ. Proc. § 8776. Krous’ motion is unopposed.

Legal Standard

The Court must approve any settlement entered into by less than all joint tortfeasors or co-obligors. (C.C.P. § 877.6.) This requirement furthers two sometimes-competing policies: (1) the equitable sharing of costs among the parties at fault, and (2) the encouragement of settlements. (Erreca’s v. Superior Court (1993) 19 Cal.App.4th 1475, 1487.)

If the settlement is made in good faith, the Court “shall bar any other joint tortfeasor or co-obligor from any further claims against the settling tortfeasor . . . for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.” (C.C.P. § 877.6(c).) The non-settling tortfeasors or obligors bear the burden of demonstrating the absence of good faith in the settlement. (C.C.P. § 877.6(d).)

In order to demonstrate a lack of good faith, the non-settling party must show the settlement is so far “out of the ballpark” as to be inconsistent with the equitable objectives of section 877.6. (Nutrition Now, Inc. v. Superior Court (2003) 105 Cal.App.4th 209, 213.) The Court will typically consider: (1) the plaintiff’s (roughly) approximated total recovery; (2) the settlor’s share of liability; (3) the size of the settlement at issue; (4) the distribution of settlement proceeds among plaintiffs; (5) the usual discount value when plaintiffs settle before trial; (6) the settlor’s financial condition and insurance policy limits; and (7) whether there is evidence of “collusion, fraud, or tortious conduct aimed to injure the interests of nonsettling defendants.” (Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499 (Tech-Bilt).) “Another key factor is the settling tortfeasor's potential liability for indemnity to joint tortfeasors.” (Long Beach Memorial Medical Center v. Superior Court (2009) 172 Cal.App.4th 865, 873 [as modified (Apr. 1, 2009].)

These factors will be evaluated accordingly to what information is available at the time of settlement. (Ibid.)

Analysis

Several parties reached a global settlement of Plaintiffs’ claims. As part of this settlement, Krous’ insurer paid Plaintiffs $70,000 and Plaintiffs in turn dismissed their claims against Krous and the other settling parties. Krous argues Plaintiffs’ damages stemmed from work which not performed by Krous, specifically Krous contends its scope of work on the subject project did not involve the removal of an underground pipe or backfilling the void with slurry. Krous represents Plaintiffs’ claimed damages stem from the slurry used during this excavation work.

Krous’ representations are uncontested, and the Court finds Krous has shown the $70,000 it contributed toward the $150,000 global settlement of Plaintiffs’ claims is a reasonable approximation of its proportionate share of liability of Plaintiff’s claims given it was not directly involved in the work which led to Plaintiffs’ damages. The Court notes the amount of these settlements are in range with the settlements reached between Plaintiffs and other parties, which included a $75,000 payment by Century. The Court finds the remaining Tech-Bilt factors are satisfied as well. While there are two plaintiffs in this action, there do not appear to be any concerns regarding the allocation of settlement funds between multiple plaintiffs. The Court also finds no evidence of collusion, fraud, or other tortious conduct on behalf of Plaintiffs or Krous, and the Court notes no other party has opposed this motion or otherwise suggested any such fraud or collusion is present here.

On such facts, the Court finds the settlements between Plaintiffs and Krous was entered into in good faith under Code Civ. Proc. § 877.6 and accordingly Krous’ motion is GRANTED.

Conclusion

Defendant Leon Krous Drilling, Inc.’s motion for determination of good faith settlement is GRANTED. Pursuant to Code Civ. Proc. § 877.6(c) all claims by any other party, or any other joint tortfeasor or co-obligor against Krous based upon equitable or comparative contribution, partial or comparative indemnity, implied indemnity, equitable indemnity, or otherwise based in any way on comparative negligence or comparative fault, are dismissed.