Judge Daniel M. Crowley, Case Number: 21STCV43735, Date: 2023-11-14 Tentative Ruling

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Cross-Defendant B. Raeen Construction, Inc.’s motion for a determination that the settlement between Plaintiffs Ephraim Shraga and Jila Babezedeh Shraga and Cross-Defendant B. Raeen Construction, Inc. was entered into in good faith is granted.

Raeen is dismissed, with prejudice, from the Cross-Complaint of GM Gutierrez Construction Company, Inc.

Cross-Defendant B. Raeen Construction, Inc. (“Raeen”) (“Cross-Defendant”) moves for a determination that the settlement between Plaintiffs Ephraim Shraga (“Ephraim”) and Jila Babezedeh Shraga (“Jila”) (collectively, “Plaintiffs”) and Raeen was entered into in good faith thereby barring and dismissing any pending or future claims or cross-complaints against Raeen based on negligence, apportionment of fault, equitable indemnification, and declaratory relief and for a determination that Raeen is released from all liability for negligence, contribution and indemnity, as to any other non-settling parties herein, for damages allegedly arising from the subject of the instant litigation. (Notice Motion, pg. 2; C.C.P. §§877.6(a)(1), 877.6(c), Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488.)

Raeen also seeks the dismissal, with prejudice of the Cross-Complaint of GM Gutierrez Construction Company, Inc. (“GM”) (“Cross-Complainant”). (Notice Motion, pg. 2.)

On November 30, 2021, Plaintiffs filed their Complaint against GM alleging two causes of action: (1) negligence; and (2) breach of written contract.

On October 17, 2022, GM filed its cross-complaint (“GM XC”) against Cross-Defendants Luis Montoya (“Montoya”) and Luis Montoya dba Carved Stone Design (“Carved Stone”) (collectively, “Montoya Cross-Defendants”) and ROES 1-25, alleging six causes of action: (1) breach of contract; (2) equitable indemnity; (3) negligence; (4) equitable apportionment; (5) contribution; and (6) declaratory relief. On February 28, 2023, GM filed a ROE Amendment to the GM XC, naming Raeen as ROE 1, and alleging the 2nd, 3rd, 4th, 5th, and 6th causes of action against Raeen.

On May 1, 2023, Raeen filed its cross-complaint (“Raeen XC”) against GM for three causes of action: (1) equitable indemnity; (2) contribution; and (3) declaratory relief.

On December 1, 2023, the parties attended a mandatory settlement conference (“MSC”) with Judge John Doyle (ret.) where Plaintiffs and Raeen settled.

Raeen filed the instant motion on December 8, 2023 with a notice of settlement. Plaintiffs filed their motion in support of Raeen’s motion on December 13, 2023. GM filed its late opposition on December 14, 2023. As of the date of this hearing no reply has been filed.

“Any party to an action in which it is alleged that two or more parties are joint tortfeasors or co-obligors on a contract debt shall be entitled to a hearing on the issue of the good faith of a settlement entered into by the plaintiff or other claimant and one or more alleged tortfeasors or co-obligors, upon giving notice in the manner provided in subdivision (b) of Section 1005.” (C.C.P. §877.6(a)(1).)

“The issue of the good faith of a settlement may be determined by the court on the basis of affidavits served with the notice of hearing, and any counteraffidavits filed in response, or the court may, in its discretion, receive other evidence at the hearing.” (C.C.P. §877.6(b).)

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.” (C.C.P. §877.6(c).)

There is no precise yardstick for measuring “good faith” of a settlement with one of several tortfeasors. But it must harmonize the public policy favoring settlements with the competing public policy favoring equitable sharing of costs among tortfeasors. To accomplish this, the settlement must be within the “reasonable range” (within the “ballpark”) of the settling tortfeasor’s share of liability for the plaintiff’s injuries—taking into consideration the facts and circumstances of the particular case. (Tech-Bilt, Inc., 38 Cal.3d at pg. 499.)

Whether the settlement was within the “good faith ballpark” is to be evaluated on the basis of information available at the time of settlement, including: (1) a rough approximation of plaintiffs’ total recovery and the settlor’s proportionate liability; (2) the amount paid in settlement; (3) a recognition that a settlor should pay less in settlement than if found liable after a trial; (4) the allocation of the settlement proceeds among plaintiffs; (5) the settlor’s financial condition and insurance policy limits, if any; and (6) evidence of any collusion, fraud, or tortious conduct between the settlor and the plaintiffs aimed at making the nonsettling parties pay more than their fair share. (Id.)

“The party asserting lack of good faith (in a settlement) shall have the burden of proof on that issue.” (C.C.P. §877.6(d).)

The Court determines the settlement between Plaintiffs and Raeen was made in good faith. GM’s Cross-Complaint against Raeen is completely derivative of Plaintiffs’ Complaint. Raeen is settling for a portion of Plaintiffs’ alleged damages and GM will receive a set-off equal to the settlement amount; only economic damages are alleged. (Decl. of Asuncion ¶¶12-13.)

Raeen sufficiently demonstrated the first and second factors are met for the test to determine if a settlement is made in good faith. First, Raeen’s expert, Joseph John Callanan (“Callanan”) declares that a general contractor who does not self-perform any work, like Raeen, is typically liable for up to twenty percent (20%) of a plaintiff’s alleged damages. (Decl. of Callanan ¶4.) President of B. Raeen Construction, Inc., Bahram Raeen (“B. Raeen”) declares that Raeen does not self-perform any work. (Decl. of B. Raeen ¶6.) Callanan declares that a general contractor’s scope is to oversee and supervise the work of subcontractors; however, a general contractor is not responsible for determining the means and methods used by the subcontractors on any given project. (Decl. of Callanan ¶4.) Callanan declares that typically, a general contractor is only responsible for overseeing and supervising the work of subcontractors it contracts with. (Decl. of Callanan ¶4.)

Second, Raneen argues at the MSC, Plaintiffs’ global demand to the defense was $1,100,000. (Decl. of Asuncion ¶9.) Twenty percent of the global demand is $220,000, which is the amount of the settlement that Raeen has agreed to pay. (Decl. of Asuncion ¶9.) Raeen is paying the maximum percentage usually assigned to a general contractor that does not self-perform work. (Decl. of Asuncion ¶9.) Accordingly, the Court finds Raeen’s settlement amount is reasonable.

The Court is not convinced by GM’s arguments in its late opposition, and GM has not met its burden to present substantial evidence that the settlement was not made in good faith. GM’s expert’s opinion that the $200,000 settlement between Plaintiffs and Raeen is insufficient, and Raeen’s responsibility is closer to 50% is a conclusory assertion not supported by additional evidence. (Decl. of Clark ¶¶4-6.) Further, the Court is not convinced by GM’s expert’s opinion that as the general contractor, B. Raeen should have encouraged Plaintiffs to allow the installation of the isolation membrane and expansion joints to avoid the cracking of which Plaintiffs now complain. (Decl. of Clark ¶5.)

The Court determines all cross-complaints and causes of action therein, either pending or may be made in the future, are dismissed and barred as to Raeen. (C.C.P. §877.6(c).) First, GM’s negligence cause of action against Raeen is really an equitable indemnity claim, despite the title given to the cause of action. No breach of contract action has been brought against Raee, and no statute would entitle GM to recovery of non-prevailing party fees or costs from Raeen. The damages that GM could actually recover from Raeen in negligence are those that the court would consider in determining the proportionate liability of Raeen. (See GM XC ¶¶22-25 [“Cross-Complainant alleges that any damages or losses allegedly incurred by Plaintiffs were contributed to by negligence and other acts and omissions of Cross-Defendants and that Cross-Defendants did so negligently, carelessly, conduct themselves so as to cause the alleged injuries and damages allegedly incurred by Plaintiffs as alleged in his Complaint.”].)

Second, based on GM’s pleadings, the cause of action of GM for declaratory relief against Raeen is based on the other causes of action against Raeen that seeks equitable indemnity, apportionment, and contribution. (See GM XC ¶¶33-35 [“An actual controversy has arisen and now exists between Cross-Complainant and Cross-Defendants, regarding the respective liabilities and responsibility of each of them for the alleged injuries, damages, and losses of Plaintiffs.”].) These allegations demonstrate the declaratory relief being sought is derivative, or the same, as the relief being sought in the equitable indemnity cause of action, namely allocation of responsibility, allocation, and equitable indemnity.

Accordingly, the Court dismisses, with prejudice, all causes of action alleged against Reen in the GM XC since GM only alleges equitable comparative contribution, or partial comparative indemnity, based on comparative negligence or comparative fault.

Raeen’s motion for a determination that the settlement between Plaintiffs and Raeen was entered into in good faith is granted.

Raeen is dismissed, with prejudice, from all causes of action alleged in the GM XC.

Hon. Daniel M. Crowley

Judge of the Superior Court