Judge: Daniel M. Crowley, Case: 21STCV23175, Date: 2023-03-10 Tentative Ruling

Case Number: 21STCV23175    Hearing Date: March 10, 2023    Dept: 28

Defendant Universal Casket MFR Corp.’s Motion to Challenge Defendant Scott McAulay Family New Options Funeral Service’s Application for Good Faith Settlement

Having considered the moving, opposition and reply papers, the Court rules as follows. 

BACKGROUND

On June 22, 2021, Plaintiff Tania Morales (“Plaintiff”) filed this action against Defendants Sunset Funeral & Cremation Services, LLC (“Sunset”) and Universal Casket MFR Corp. (“Universal”) for negligence, negligent misrepresentation, negligent infliction of emotional distress, strict product liability, negligent design and/or maintenance – product liability and fraud. Plaintiff later amended the complaint to include Defendant Scott McAulay Family New Options Funeral Service (“Options”).

On July 22, 2021, Universal filed an answer and a Cross-Complaint against Cross-Defendant Sunset for implied equitable indemnity, comparative contribution, equitable indemnity and declaratory relief. On October 27, 2021, Sunset filed an answer.

On August 2, 2021, Sunset filed an answer. On October 27, 2021, Sunset filed a Cross-Complaint against Cross-Defendant Universal for implied equitable indemnity, equitable indemnity, apportionment of fault and contribution and declaratory relief. On December 23, 2021, Universal filed an answer.

On June 22, 2022, Options filed an answer and a Cross-Complaint against Cross-Defendant Universal for indemnity, apportionment of fault, contribution and declaratory relief. On July 29, 2022, Universal filed an answer.

On December 14, 2022, Options filed an Application for Determination of Good Faith Settlement.

On January 12, 2023, Universal filed a Motion to Challenge Good Faith Settlement to be heard on March 10, 2023. On February 28, 2023, Options filed an opposition. On March 3, 2023, Universal filed a reply.

Trial is currently set for June 22, 2023.

PARTY’S REQUESTS

Universal requests the Court deny the application for good faith settlement.

Options requests the Court find the settlement in good faith.

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.”

DISCUSSION

First, the Court notes that although Mcaulay filed an application for determination of good faith settlement, Mcaulay did not reserve a date for a hearing on the application. Thus, this is the first time the Court has reviewed the settlement.

Plaintiff alleges that Defendants provided a faulty casket to Plaintiff for Decedent, resulting in the casket ‘failing’ during the funeral and the remains falling out of the casket. Options claims they were uninvolved with selecting, ordering, selling, designing, manufacturing or shipping the casket, only preparing the remains for burial and placing them in the subject casket.

Recovery and Proportionate Liability 

Options and Plaintiff agreed to settle for $3,000.00, based on Options’ relatively low proportionate liability. However, Plaintiff provided no information as to the requested damages by Plaintiff, and thus the Court cannot determine the amount made in proportion to the amount requested.

Allocation of Settlement 

Options provided no information as to who will receive the settlement. The Court assumes all will be allocated to Plaintiff, but no information has been provided to verify this assumption.

Financial considerations  

Options provided no information as to their insurance or financial status.

Collusion or Fraud 

There is no indication of fraud or collusion. This was an arms-length settlement conducted after extensively engaging in discovery with all parties.

Conclusion 

The Court finds that Options has not satisfied the Tech-Bilt factors. Options provided insufficient information for the Court to determine if the settlement was made in good faith. The Court denies Options’ application and grants Universal’s motion.

CONCLUSION

Defendant Universal Casket MFR Corp.’s Motion to Challenge Defendant Scott McAulay Family New Options Funeral Service’s Application for Good Faith Settlement is GRANTED. Defendant Scott McAulay Family New Options Funeral Service’s Application for Good Faith Settlement is DENIED.

            Moving party is ordered to give notice of this ruling.

Moving Party 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.