Judge: Gary Y. Tanaka, Case: 19STCV05087, Date: 2022-08-30 Tentative Ruling


Case Number: 19STCV05087    Hearing Date: August 30, 2022    Dept: B

LOS ANGELES SUPERIOR COURT – SOUTHWEST DISTRICT

 

 

Honorable Gary Y. Tanaka                                                                                                  Tuesday, August 30, 2022

Department B                                                                                                                                        Calendar No. 10   


 

 

PROCEEDINGS

 

Maria Cursage, Trustee of the Maria Cursage Trust v. Steve Larkin dba SRL Construction, et al.

19STCV05087

  1. Alberto Navarro dba Ocean Pools Plastering Company’s Motion for Determination of Good Faith Settlement   

  2. Steve Larkin dba SRL Construction’s Motion to Contest Good Faith Settlement

     

    TENTATIVE RULING

         

                Alberto Navarro dba Ocean Pools Plastering Company’s Motion for Determination of Good Faith Settlement is granted.

     

                Steve Larkin dba SRL Construction’s Motion to Contest Good Faith Settlement is denied.

     

                Background

     

                Plaintiff filed the Complaint on February 19, 2019.  Plaintiff’s Second Amended Complaint was filed on June 22, 2020.  Plaintiff alleges the following facts.  This case involves the alleged defective construction of Plaintiff’s multi-million-dollar home located at 38 Saddleback Road in Rolling Hills, California.  The project consisted of the construction of an approximately 9,500 square foot single family residence as well as appurtenances, including hardscape, a swimming pool and spa, outdoor patios, barbeques, and other facilities, and landscaping, which was to be built pursuant to architectural and building plans provided to Defendant Steve Larkin.  Defendant Larkin was the general contractor and construction manager on the project.  Plaintiff alleges defects in construction and fraudulent overbilling practices.  Plaintiff alleges the following causes of action: 1. Recovery of Damages Pursuant to SB 800; 2. Breach of Oral Contract; 3. Breach of Implied Warranty; 4. Fraud. Several Cross-Complaints have been filed in this action including a Cross-Complaint filed by Anglo American Pool naming Alberto Navarro dba Ocean Pools Plastering Company (“Navarro”) as a Cross-Defendant.

     

                Motion for Determination of Good Faith Settlement/Motion to Contest Good Faith Settlement

     

                Cross-Defendant Navarro moves for an order finding that the settlement between Plaintiff Cursage and settling Cross-Defendant was made in good faith pursuant to CCP §§ 877 and 877.6.  Defendant/Cross-Defendant Larkin opposes the motion for determination of good faith settlement and filed his own motion to contest the good faith settlement.

     

                “[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 . . . 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).   

     

                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. 4th 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 July 2021, Cross-Defendant/Cross-Complainant Anglo American Pool reached a settlement with Plaintiff whereby Plaintiff would be paid $25,000 in exchange for a full release and dismissal and assignment of its rights to pursue relief pursuant to its cross-complaint against moving party Navarro.  As part of the settlement, a payment of $10,000 was made on behalf of Navarro to Plaintiff.  Navarro denies any and all claims related to alleged defective work or materials supplied by Navarro.  Moving Cross-Defendant has provided evidence to meet all the applicable Tech-Bilt factors.  Notably, settling party submitted evidence that it only performed tile installation work on the project and that the claimed damages for this work only encompassed $11,570.00.  (Declaration, Alberto Navarro, ¶¶ 8-15); (Declaration, Xue Chang, ¶¶ 2-22.)  The Court finds that this evidence is sufficient to support a good faith determination.

     

                Opposing/Contesting party has not met his burden to show that the settlement was entered into in bad faith.  Larkin failed to submit competent evidence to show that the settlement was grossly disproportionate to settlor’s potential liability.  Larkin’s belief of disproportionality is simply based on Plaintiffs’ own self-serving statements and demands with respect to their claims.  No competent evidence was submitted to support either Larkin’s or Plaintiff’s beliefs or demands.

     

                Larkin also argues that the settlement is in bad faith as there is no joint allocation of the amount of the offset.  Alcal Roofing and Insulation v. Superior Court (1992) 8 Cal. App. 4th 1121, 1124; L.C. Rudd & Son, Inc. v. Superior Court (1997) 52 Cal.App.4th 742, 750.  However, allocation is only required when the settling parties agreed to allocate less than all of the settlement amount to a portion of the causes of action, or between issues or parties.  Here, however, settling parties did not allocate any settlement amount to separate causes of action or issues.

     

                Therefore, Cross-Defendant’s Motion for Determination of Good Faith Settlement is granted.     

     

                Cross-Defendant’s settlement with Plaintiff is deemed to be in good faith.  Because the Court has determined that the settlement was made in good faith, the determination “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.”  Code Civ. Proc., § 877.6(c).

     

                Alberto Navarro dba Ocean Pools Plastering Company is ordered to give notice of this ruling.