Judge Holly J. Fujie, Case Number: 211STCV42481, Date: 2024-01-11 Tentative Ruling

DEPARTMENT 56 JUDGE HOLLY J. FUJIE, LAW AND MOTION RULINGS. The court makes every effort to post tentative rulings by 5.00 pm of the court day before the hearing. The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)], and are also available in the courtroom on the day of the hearing [see CRC 3.1308(b)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) call Dept 56 by 8:30 a.m. on the day of the hearing (213/633-0656) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no telephone call is necessary and all parties should appear at the hearing in person or by Court Call. Court reporters are not provided, and parties who want a record of motions and other proceedings must hire a privately retained certified court reporter.

This order concerns: (1) a motion for leave to permit service by publication (the “Service Motion”); and (2) a motion for determination of good faith settlement (the “Settlement Motion”).

MOVING PARTIES: (1) Defendants/Cross-Complainants Brian Paya and Bita Paya (the “Paya Defendants”); (2) Defendants/Cross-Complainants S & A Realty Corp. and Nina Hunt (collectively, the “S & A Defendants”)

This action arises out of a landlord/tenant relationship. Plaintiffs’ complaint (the “Complaint”) alleges: (1) violation of Civil Code section 1950.5; (2) statutory fraud or deceit and common law fraud; (3) intentional misrepresentation; (4) negligent misrepresentation; (5) fraudulent concealment; (6) negligence; (7) negligence per se; (8) conversion; (9) breach of fiduciary duty; (10) breach of contract; (11) breach of the implied covenant of good faith and fair dealing; (12) violation of Business and Professions Code section 17200 et seq; (13) intentional infliction of emotional distress; (14) negligent infliction of emotional distress; (15) unjust enrichment and restitution; (16) intentional interference with contractual relations; and (17) conspiracy to breach contract and to interfere with contractual relations.

On October 3, 2023, the Paya Defendants filed the Service Motion to request leave to serve Cross-Defendant Charles Krebs (“Krebs”) by publication. On November 28, 2023, the S & A Defendants filed the Settlement Motion to request approval of a settlement agreement (the “Settlement Agreement”) entered into by the S & A Defendants and Plaintiffs.

Under California Code of Civil Procedure (“CCP”) section 415.50, subdivision (a). summons may be served by publication if upon affidavit it appears to the satisfaction of the court in which the action is pending that the party to be served cannot with reasonable diligence be served in another manner specified in this article and that either: (1) cause of action exists against the party upon whom service is to be made or he or she is a necessary or proper party to the action; or (2) the party to be served has or claims an interest in real or personal property in this state that is subject to the jurisdiction of the court or the relief demanded in the action consists wholly or in part in excluding the party from any interest in the property. (CCP § 415.50, subd. (a).)

The Paya Defendants named Krebs as a Cross-Defendant on May 22, 2023. (Declaration of Brian Paya (“Paya Decl.”) ¶ 2.) The Paya Defendants have been unable to serve Krebs by personal service or by mail, despite retaining a service that conducted a skip trace of Krebs. (See Paya Decl. ¶¶ 5-9, Exhibit A.) The Paya Defendants wish to publish service in The Daily Breeze, a print publication that circulates in the neighborhood of Krebs’s last known address in the Pacific Palisades. (See Paya Decl. ¶¶ 6, 15.)

The Court finds that the Leave Motion demonstrates the Paya Defendants’ inability to serve Krebs despite their numerous attempts effect service. The Court therefore GRANTS the Leave Motion.

Under CCP section 877, 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 reduces the claims against other defendants 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, and discharges the party to whom it is given from all liability for any contribution to any other parties. (CCP § 877, subds. (a)-(b).) A determination by the court that the settlement was made in good faith bars 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, subd. (c).) The party asserting the lack of good faith has the burden of proof on that issue. (CCP § 877.6, subd. (d).)

In Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499 (“Tech-Bilt”), the California Supreme Court identified the following nonexclusive factors for courts to consider in determining if a settlement is in good faith under CCP section 877.6: (1) a rough approximation of plaintiffs' total recovery and the settlor's proportionate liability; (2) the amount paid in settlement; (3) the allocation of settlement proceeds among plaintiffs; (4) a recognition that a settlor should pay less in settlement than he would if he were found liable after a trial; (5) the financial conditions and insurance policy limits of settling defendants; and (6) the existence of collusion, fraud, or tortious conduct aimed to injure the interests of nonsettling defendants. (Id.) 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. (Id.) 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. (Id.)

The party asserting the lack of good faith, who has the burden of proof on that issue 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 CCP section 877.6. (Id. at 499-500.)

In addition to considering the alleged tortfeasor's potential liability to the plaintiff, the court must also consider the culpability of the tortfeasor vis-à-vis other parties alleged to be responsible for the same injury. (TSI Seismic Tenant Space, Inc. v. Superior Court (2007) 149 Cal.App.4th 159, 166.)

The court in City of Grand View Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261, provided the following guidance for evaluating a motion for 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.”

(City of Grand View Terrace v. Superior Court 192 Cal.App.3d 1251, 1260-61 (internal citations omitted).)

In support of the Settlement Motion, the S & A Defendants provide evidence of the Settlement Agreement entered into with Plaintiffs in August 2023. (Declaration of Brianda Herrera (“Herrera Decl.”) ¶ 2, Exhibit A.) The Settlement Agreement was entered into after arms’ length settlement negotiations and provides that the S & A Defendants agree to pay $76,000 to Plaintiffs in exchange for dismissal of Plaintiffs’ claims. (See Herrera Decl. ¶ 4.) The settlement amount, which is more than twice the amount of the $30,000 security deposit at issue in the Complaint, is intended to avoid the costs and uncertainty associated with trial. (Herrera Decl. ¶ 8.)

The Paya Defendants’ opposition (the “Settlement Opposition”) does not clearly articulate why the Settlement Motion should be denied. Nor does the Motion present evidence that the Settlement Agreement was not entered into in good faith.[1]

The Court finds that the Settlement Agreement was entered into in good faith and therefore GRANTS the Settlement Motion.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

[1] In law and motion practice, factual evidence is provided to the court by way of declarations. (Calcor Space Facility, Inc. v. Superior Court (1997) 53 Cal.App.4th 216, 224.)