Judge Deirdre Hill, Case 18STCV07856 2022-07-29 Tentative Ruling

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The court considered the moving, opposition, and reply papers and plaintiff’s counsel’s declaration in support of the motion.

The motion is GRANTED. The court ORDERS that in this action and all related actions, all present claims and cross-complaints of any kind for implied indemnity, equitable comparative contribution and apportionment or partial or comparative indemnity and apportionment based on comparative negligence or comparative fault against Creo Hospitality, LLC be and are dismissed with prejudice. Any and all present and future claims against Creo Hospitality, LLC by or on behalf of joint tortfeasors or co-obligors are barred.

On December 6, 2018, plaintiff Prabhakar Reddy filed a complaint against Twenty4Seven Hotels, Corporation for (1) negligence, (2) strict products liability defective manufacturing, (2) strict products liability design defect, and (4) strict products liability defect due to inadequate warning.

On February 25, 2019, defendant filed a cross-complaint against Unifactor Corporation for equitable indemnity, contribution, and declaratory relief.

On February 27, 2019, plaintiff filed an amendment designating Unifactor Corporation as Doe 25.

On June 4, 2020, plaintiff filed amendments designating Creo Hospitality, LLC as Doe 1 and Evolution Hospitality, LLC as Doe 2.

On July 24, 2020, Creo Hospitality filed a cross-complaint against Unifactor and Evolution Hospitality.

On September 24, 2020, plaintiff filed an amendment designating Steve’s Plating Corporation as Doe 26.

On November 30, 2020, plaintiff filed an amendment designating FDR Construction, Inc. as Doe 3.

Defendant Creo Hospitality, LLC (sued as Doe 1) requests an order that the settlement entered into by and among moving defendant and plaintiff was made in good faith.

In City of Grand View Terrace v. Superior Court (1987) 192 Cal. App. 3d 1251, 1261, the court provided the following guidance regarding a motion for a good faith settlement determination:

This court notes that of the hundreds of motions for good faith determination presented for trial court approval each year, the overwhelming majority are unopposed and granted summarily by the trial court. At the time of filing in many cases, the moving party does not know if a contest will develop. If each motion required a full recital by declaration or affidavit setting forth a complete factual response to all of the Tech-Bilt factors, literally thousands of attorney hours would be consumed and inch-thick motions would have to be read and considered by trial courts in an exercise which would waste valuable judicial and legal time and clients’ resources. . . . That is to say, when no one objects, the barebones motion which sets forth the ground of good faith, accompanied by a declaration which sets forth a brief background of the case is sufficient.

If the good faith settlement is contested, section 877.6, subdivision (d), sets forth a workable ground rule for the hearing by placing the burden of proving the lack of good faith on the contesting party. Once there is a showing made by the settlor of the settlement, the burden of proof on the issue of good faith shifts to the nonsettlor who asserts that the settlement was not made in good faith. If contested, declarations by the nonsettlor should be filed which in many cases could require the moving party to file responsive counterdeclarations to negate the lack of good faith asserted by the nonsettling contesting party.

“[Code of Civil Procedure] Section 877.6 was enacted by the Legislature in 1980 to establish a statutory procedure for determining if a settlement by an alleged joint tortfeasor has been entered into in good faith and to provide a bar to claims of other alleged joint tortfeasors for equitable contribution or partial or comparative indemnity when good faith is shown.” IRM Corp. v. Carlson (1986) 179 Cal. App. 3d 94, 104.

CCP § 877.6(a)(1) provides, in relevant part, that, on noticed motion, “[a]ny party to an action wherein 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 . . . and one or more alleged tortfeasors or co-obligors . . . .” “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.” CCP § 877.6(c). Although a determination that a settlement was in good faith does not discharge any other party from liability, “it shall reduce the claims against the others in the amount stipulated” by the settlement. CCP § 877(a).

“The party asserting the lack of good faith shall have the burden of proof on that issue.” CCP § 877.6(d).

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.”

The evaluation of whether a settlement was made in good faith is required to “be made on the basis of information available at the time of settlement.” Tech-Bilt, 38 Cal.3d at 499. “‘[A] defendant’s settlement figure must not be grossly disproportionate to what a reasonable person, at the time of the settlement, would estimate the settling defendant’s liability to be.’ [Citation.]” Id. at 499.

“The party asserting the lack of good faith, who has the burden of proof on that issue (§ 877.6, subd. (d)), should be permitted to demonstrate, if he can, that the settlement is so far ‘out of the ballpark’ in relation to these factors as to be inconsistent with the equitable objectives of the statute. Such a demonstration would establish that the proposed settlement was not a ‘settlement made in good faith’ within the terms of section 877.6.” Tech-Bilt, 38 Cal.3d at 499-500.

“Thus, Tech-Bilt held that in determining whether a settlement was made in good faith for purposes of section 877.6, a key factor a trial court should consider is whether the amount paid in settlement bears a reasonable relationship to the settlor’s proportionate share of liability. (Tech-Bilt, supra, 38 Cal.3d at pp. 499–500 . . . .) This is because one of the main goals of section 877.6 is ‘allocating costs equitably among multiple tortfeasors.’ (Tech-Bilt, supra, 38 Cal.3d at p. 502 . . . .).” TSI Seismic Tenant Space, Inc. v. Superior Court (2007) 149 Cal.App.4^th 159, 166. “Accordingly, a court not only looks at the alleged tortfeasor's potential liability to the plaintiff, but it must also consider the culpability of the tortfeasor vis-à-vis other parties alleged to be responsible for the same injury. Potential liability for indemnity to a nonsettling defendant is an important consideration for the trial court in determining whether to approve a settlement by an alleged tortfeasor. [Citation.]” Id. at 166.

In the complaint, plaintiff alleges that on October 23, 2017, he was staying in room 634 at DoubleTree by Hilton LAX – El Segundo located at 1985 E. Grand Avenue, El Segundo. Complaint, ¶1. He moved a marble-top table that was placed next to his bed in order for him to be able to safely enter and exit the bed. When he moved the table, the marble-top detached from its base and began to fall towards plaintiff’s feet, causing him to fall backwards and hit his back on the frame of the bed. As a result, he sustained a L1 anterior compression fracture resulting in 50% loss in height. Id., ¶2.

The court considered the Tech-Bilt factors as applied to the settlement between moving defendant and plaintiff.

First, as to a rough approximation of plaintiff’s total recovery, defendant contends that plaintiff is seeking substantial damages but that $50,000 is fair and reasonable consideration “in light of the fact that there is no evidence establishing” that defendant is liable for any of the claims. In their opposition, defendants Unifactor and Steve’s Plating assert that according to plaintiff’s retained vocational economist, plaintiff sustained and will sustain past and future income losses of $2.3 million. Defendants also contend that the Life Care Plan indicates that future care costs are not less than $553,000. Defense counsel states that he anticipates that plaintiff will ask a jury to return an award of no less than $6 million and perhaps as much as $10 million. Richard Ozowski decl.

Second, as to moving defendant’s proportionate liability, defendant Creo argues that it is not liable on a theory of products liability because it merely acted as a purchasing agent for the hotel and “is not in the stream of commerce” and that it has “strong defenses.” Defendant asserts that it did not design, redesign, alter, manufacture, ship, or receive the table. Its sole role was to coordinate the parties, which designed and manufactured the table. Defendant explains that during the course of the remodel project, Creo was contacted by Reynolds and Evolution to procure or act as an agent to purchase and have constructed certain goods, including side tables, such as the one involved in the subject incident. Creo was provided with a design by Linda Snyder Associates and facilitated getting the design to Unifactor Corp., which created the CAD drawings for the manufacture of the table. Linda Snyder Associates and Unifactor worked together for the final design. Creo asserts that it was in no way involved in the design of the table or any changes to that design. Unifactor contracted with Steve’s Plating to manufacture certain parts of the table; it also procured the marble table tops. Unifactor shipped the tables and marble table tops directly to the hotel. At no time did Creo have possession of the tables or any component part thereof or even see the tables. FDR Construction affixed the marble to the table tops by using an adhesive to fasten the marble tops to the plywood, which was fastened with screws to the base of the tables. After a 2015 incident, Creo was copied on email exchanges but did not go to the hotel or work with Unifactor regarding the “fix” to the tabletop issue. See Ann Hall decl.

According to plaintiff, Unifactor and Steve’s Plating are primarily responsible for the “defectively designed table.” Plaintiff estimates that Creo has less than 5% proportional liability. Andrew Ryan decl.

Fourth, as to the allocation of settlement proceeds, there is only one plaintiff.

Fifth, the court recognizes that defendant should pay less in settlement than if it were found liable after a trial.

Sixth, as to financial condition and insurance policy limits of settling defendant, moving defendant has commercial general liability with a $1 million policy limit.

Seventh, as to whether there is evidence of collusion, fraud, or tortious conduct aimed to injure the interests of the other defendants or cross-defendants, defendant asserts that the settlement is the product of arms’ length negotiations among experienced counsel and that the case has proceeded through many depositions and extensive written discovery.

After considering the Tech-Bilt factors that were addressed, the court finds and determines that the settlement entered into between moving defendant and plaintiffs was made in good faith within the meaning of CCP §877.6. Therefore, the motion is GRANTED.

The motion is GRANTED. The court ORDERS that in this action and all related actions, all present claims and cross-complaints of any kind for implied indemnity, equitable comparative contribution and apportionment or partial or comparative indemnity and apportionment based on comparative negligence or comparative fault against Twenty4Seven Hotels Corporation be and are dismissed with prejudice. Any and all present and future claims against Twenty4Seven Hotels Corporation by or on behalf of joint tortfeasors or co-obligors are barred.

On February 25, 2019, defendant filed a cross-complaint against Unifactor Corporation for equitable indemnity, contribution, and declaratory relief.

On February 27, 2019, plaintiff filed an amendment designating Unifactor Corporation as Doe 25.

On June 4, 2020, plaintiff filed amendments designating Creo Hospitality, LLC as Doe 1 and Evolution Hospitality, LLC as Doe 2.

On July 24, 2020, Creo Hospitality filed a cross-complaint against Unifactor and Evolution Hospitality.

On September 24, 2020, plaintiff filed an amendment designating Steve’s Plating Corporation as Doe 26.

On November 30, 2020, plaintiff filed an amendment designating FDR Construction, Inc. as Doe 3.

Defendant Twenty4Seven Hotels Corporation requests an order that the settlement entered into by and among moving defendant and plaintiff was made in good faith.

In City of Grand View Terrace v. Superior Court (1987) 192 Cal. App. 3d 1251, 1261, the court provided the following guidance regarding a motion for a good faith settlement determination:

“The party asserting the lack of good faith shall have the burden of proof on that issue.” CCP § 877.6(d).

The court considered the Tech-Bilt factors as applied to the settlement between moving defendant and plaintiff.

First, as to a rough approximation of plaintiff’s total recovery, defendant does not address. In their opposition, defendants Unifactor and Steve’s Plating assert that according to plaintiff’s retained vocational economist, plaintiff sustained and will sustain past and future income losses of $2.3 million. Defendants also contend that the Life Care Plan indicates that future care costs are not less than $553,000. Defense counsel states that he anticipates that plaintiff will ask a jury to return an award of no less than $6 million and perhaps as much as $10 million. Richard Ozowski decl.

Second, as to moving defendant’s proportionate liability, defendant denies fault and argues that its proportionate share of liability, if any, would be de minimis. Defendant was the operating agent at the DoubleTree hotel where plaintiff alleges he was injured. Defendant asserts that neither plaintiff nor any of the other parties have been able to produce any admissible evidence that tends to show that defendant negligently or improperly maintained the subject table or the subject room or that it had any prior actual or constructive notice of any alleged defect to the table. Twenty4Seven had only taken over operations of the hotel less than three months prior to the incident. See Melissa Saracyan decl.

According to plaintiff, Unifactor and Steve’s Plating are primarily responsible for the “defectively designed table.” Plaintiff estimates that Twenty4Seven has 5-10% proportional liability because it was not informed of the prior incident in 2015 when it took over operations of the hotel although it did have a non-delegable duty to keep its premises safe. Andrew Ryan decl.

Fourth, as to the allocation of settlement proceeds, there is only one plaintiff.

Fifth, the court recognizes that defendant should pay less in settlement than if it were found liable after a trial.

Sixth, as to financial condition and insurance policy limits of settling defendant, moving defendant does not address.

Seventh, as to whether there is evidence of collusion, fraud, or tortious conduct aimed to injure the interests of the other defendants or cross-defendants, defendant asserts that it settled after three and a half years of litigation, including two mediations (June 3, 2020 and December 15, 2021), extensive discovery, and an IME. Further, defendant explains, defense counsel reached out to all defense counsel on June 24, 2022 in light of the pending trial date and informed them of its intention to engage in meaningful settlement negotiations before extensive expert discovery commenced.

Moving Parties: Defendants Evolution Hospitality, LLC and Reynolds Project Management, Inc.

Responding Party: Defendants Unifactor Corporation (Doe 25) and Steve’s Plating Corporation (Doe 26)

The court considered the moving, opposition, and reply papers and plaintiff’s counsel’s declarations in support of the motion.

The motion is GRANTED. The court ORDERS that in this action and all related actions, all present claims and cross-complaints of any kind for implied indemnity, equitable comparative contribution and apportionment or partial or comparative indemnity and apportionment based on comparative negligence or comparative fault against Evolution Hospitality, LLC and Reynolds Project Management, Inc. be and are dismissed with prejudice. Any and all present and future claims against Evolution Hospitality, LLC and Reynolds Project Management, Inc. by or on behalf of joint tortfeasors or co-obligors are barred.

On February 25, 2019, defendant filed a cross-complaint against Unifactor Corporation for equitable indemnity, contribution, and declaratory relief.

On February 27, 2019, plaintiff filed an amendment designating Unifactor Corporation as Doe 25.

On June 4, 2020, plaintiff filed amendments designating Creo Hospitality, LLC as Doe 1 and Evolution Hospitality, LLC as Doe 2.

On July 24, 2020, Creo Hospitality filed a cross-complaint against Unifactor and Evolution Hospitality.

On September 24, 2020, plaintiff filed an amendment designating Steve’s Plating Corporation as Doe 26.

On November 30, 2020, plaintiff filed an amendment designating FDR Construction, Inc. as Doe 3.

Defendants Evolution Hospitality, LLC (sued as Doe 2) and Reynolds Project Management, Inc. (sued as Doe 4) request an order that the settlement entered into by and among moving defendants and plaintiff was made in good faith.

In City of Grand View Terrace v. Superior Court (1987) 192 Cal. App. 3d 1251, 1261, the court provided the following guidance regarding a motion for a good faith settlement determination:

“The party asserting the lack of good faith shall have the burden of proof on that issue.” CCP § 877.6(d).

The court considered the Tech-Bilt factors as applied to the settlement between moving defendants and plaintiff.

First, as to a rough approximation of plaintiff’s total recovery, moving defendants do not address. In their opposition, defendants Unifactor and Steve’s Plating assert that according to plaintiff’s retained vocational economist, plaintiff sustained and will sustain past and future income losses of $2.3 million. Defendants also contend that the Life Care Plan indicates that future care costs are not less than $553,000. Defense counsel states that he anticipates that plaintiff will ask a jury to return an award of no less than $6 million and perhaps as much as $10 million. Richard Ozowski decl.

Second, as to moving defendants’ proportionate liability, defendants deny liability. Evolution was the third-party hotel management company for the hotel at which the subject incident occurred from February 14, 2014 until July 24, 2017—three months before the subject incident. Evolution operated/managed the hotel under contract with the hotel owner, El Segundo – AREP III Associates, LLC, during the course of a remodeling project that involved refurbishing the guest rooms and certain common areas within the hotel. RPM oversaw the hotel remodeling project under contract with Evolution, acting as the hotel owner’s agent. RPM’s purpose was to facilitate communication among the various entities involved in the project and to try to keep the project on schedule. See James F.B. Sawyer decl.

According to plaintiff, Unifactor and Steve’s Plating are primarily responsible for the “defectively designed table.” Plaintiff estimates that Evolution and Reynolds Project Management’s proportional liability is 20-25%. Plaintiff asserts that Evolution, as the operator of the hotel at the time of the incident, had responsibility to ensure that the tables were appropriately fixed following the 2015 incident. Its agent, RPM, was acting on its behalf to manage the renovations. Andrew Ryan decl.

In opposition, defendants Unifactor and Steve’s Plating argue that as the hotel operators, Evolution and Twenty4Seven “will absorb substantial separate and combined fault apportionments of no less than 50%, if not 75%, or more” because “they had the ability to remedy simply if they had installed the new screws Unifactor provided. They failed to do so.”

Fourth, as to the allocation of settlement proceeds, there is only one plaintiff.

Fifth, the court recognizes that defendants should pay less in settlement than if they were found liable after a trial.

Sixth, as to financial condition and insurance policy limits of settling defendants, moving defendants do not address. Plaintiff asserts that he settled for the policy limits. In opposition, defendants Unifactor and Steve’s Plating assert that the policy limits are $25 million. Plaintiff’s counsel submitted his counsel’s declaration in reply stating that he had settled for the policy limits of the primary policy and that “there were coverage issues regarding the excess policy.” See Andrew Ryan decl.

Seventh, as to whether there is evidence of collusion, fraud, or tortious conduct aimed to injure the interests of the other defendants or cross-defendants, in December 2021, the parties participated in a mediation. According to plaintiff, following the mediation, plaintiff’s experts began to inspect and perform testing of the subject table and the hotel room. The settlements “were spawned by an unsolicited phone call” from moving defendants’ Senior Adjuster at Zurich Insurance in June 2022 and offer, and plaintiff’s counter offer, and Evolution’s 998 offer, and plaintiff’s counsel’s contact with mediator to determine his view of the amounts being offered.