Judge Holly J. Fujie, Case Number: 21STCP24228, Date: 2025-02-11 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.

RESPONDING PARTY: Defendant/Cross-Defendant/Cross-Complainant Stoneland (“Stoneland”) and Defendant/Cross-Complainant Landry Design Group Incorporated (“Landry”)

The Court has considered the moving and opposition papers. No reply has been filed.

This action arises out of alleged construction defects. On June 29, 2021, Plaintiff Ted Waitt Trustee of The Nightingale Trust dated November 1, 2017 (“Plaintiff”) filed a complaint (“Complaint”) against defendants Tyler Development Corporation (“Tyler Development”); Landry Design Group Incorporated; Planned Partners Limited; Mark L. Smith; James West Roofing & Waterproofing; California Energy Designs, Inc.; and DOES 1 through 100, inclusive for: (1) Breach of Contract; (2) Negligence; (3) Professional Negligence; (4) Strict Products Liability; (5) Breach of Express Warranty; (6) Breach of Implied Warranty of Merchantability; (7) Breach of Implied Warranty Of Fitness For Particular Purpose; and (8) Declaratory Relief.

On January 22, 2025, MSI filed a motion for determination of good faith settlement (the “Motion”). On February 4, 2025, Stoneland filed an opposition (the “Stoneland Opposition”). Also on February 4, 2025, Landry filed an opposition (the “Landry Opposition”).

Pursuant to Evidence Code section 452, subdivision (d), the Court may take judicial notice of “[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States”.

The court, however, may not take judicial notice of the truth of the contents of the documents. (Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375.) Documents are only judicially noticeable to show their existence and what orders were made such that the truth of the facts and findings within the documents are not judicially noticeable. (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 885.)

Per MSI’s request, the Court takes judicial notice of the following: (1) Plaintiff’s June 29, 2021 Complaint filed in this action; (2) Tyler Development’s July 9, 2021 Cross-Complaint filed in this action; (3) MSI’s November 5, 2021 Request for Dismissal; (4) Stoneland’s Cross-Complaint filed in this action on December 21, 2023; (5) Request for Dismissal of MSI by Stoneland, filed in this action on October 30, 2024; (6) Plaintiff’s Amendment to Complaint adding MSI as DOE #63, filed and served in this action on or about June 5, 2024; and (7) MSI’s Motion to Quash Service of Summons and Amendment to Complaint as to DOE #63, filed in this action on October 7, 2024.

California Code of Civil Procedure (“CCP”) section 877.6, subdivision (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, subd. (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, subd. (a).)

In Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499 (Tech-Bilt, Inc.), 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 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.” (Id. at pp. 499-500.)

MSI moves to have the Court determine that the settlement agreement was entered into in good faith. Plaintiff and MSI executed a settlement agreement on October 25, 2024. The key settlement terms are as follows: “In exchange for a $75,000 payment to Plaintiff by MSI’s insurer, Plaintiff will provide MSI with a general release and a waiver of CC § 1542. This settlement is contingent on this Court’s determination of good faith precluding all actions against MSI for equitable comparative contribution, or partial or comparative indemnity based on comparative negligence or comparative fault. Further, upon satisfaction of the settlement terms, Plaintiff will dismiss MSI from its Complaint with prejudice. No assignment of any rights is part of the terms of settlement, nor is MSI assigning its cross-complaint.” (Olsen Decl., ¶ 24.)

The Court finds that the factors set forth in Tech-Bilt have been met for the current case MSI asserts that Plaintiff’s total claimed cost of repair is over $32M, plus approximately $17M in living expense and $590,000.00 in Stearman costs. (Mot. p. 10.) MSI argues that Plaintiff has sued many different defendants under different theories but has only sued MSI under a negligence theory. (Mot. pp. 10:21-22.) MSI has agreed to settle for $75,000.00. (Mot. p. 11:16.) MSI argues that Plaintiff’s consultants attribute most of the issues associated with the travertine stone to improper installation and design considerations, as to which MSI, as the supplier and not the installer or contractor, was not responsible. (Mot. pp. 11:20-12:6.) MSI also argues that, unlike other defendants in this matter, MSI has no statutory or contractual obligations upon which economic loss or attorney’s fees could be recovered. (Mot. p. 12:6-9.) Due to MSI’s relatively limited involvement in the damage attributed to the travertine stone, the settlement amount represents a reasonable proportion of its liability.

Regarding the third Tech-Bilt factor, the parties have allocated the $75,000.00 as follows: “$70,000 towards Plaintiff’s claimed cost of repair; and $5,000 towards Plaintiff’s claimed Stearman costs.” (Mot. p. 12:27-28.)

MSI argues that the fourth Tech-Bilt factor, recognizing that a settlor should pay less in settlement than he would if he were found liable after a trial, weighs in its favor as well because the settlement “was reached in order to avoid the significant fees and costs associated with litigating this through trial.” (Mot. p. 13:15-16.)

Lastly, MSI argues that as to the other Tech-Bilt factors, insurance policy limits and existence of fraud or collusion, the settlement amount is being funded by MSI’s insurance carrier and there has been no collusion, fraud or tortious conduct aimed at injuring the non-settling parties. (Mot. pp. 13:20-14:12.)

In opposition, Stoneland and Landry both argue that $75,000.00 is not within the ‘ballpark’ of MSI’s share of liability for Plaintiff’s damages. (Stoneland Opp. pp. 13:18-16:16; Landry Opp. pp. 6:19-7:22.) Stoneland and Landry both argue that the travertine was an important design element of the home and that the stone procured by MSI failed to meet Plaintiff’s expectations, leading Plaintiff to replace it. (Stoneland Opp., pp. 16:19-18:27; Landry Opp. pp. 5:4-10.) As MSI was not the manufacturer of the stone but merely served as a broker between the manufacturer and Plaintiff’s contractor, Tyler Development, the modest settlement amount is reasonable and aligns with MSI’s proportionate share of liability for Plaintiff’s damages. Thus, the Motion is GRANTED.

RESPONDING PARTY: Defendant/Cross-Complainant Landry Design Group, Inc. (“Landry”)

On February 18, 2022, Landry filed a cross-complaint (“Cross-Complaint”). On September 20, 2023, Landry amended the Cross-Complaint adding ECM as MOE 2.

On November 22, 2024, ECM filed a motion for judgment on the pleadings (the “MJOP”). On January 29, 2025, Landry filed an opposition (“MJOP Opposition”). On February 4, 2025, ECM filed a reply (“MJOP Reply”).

On February 3, 2025, ECM filed a motion for good faith settlement which is currently set for hearing on March 3, 2025. As the Court anticipates that the issues raised in this MJOP may become moot or redundant depending on the resolution of ECM’s motion for good faith settlement, it will, on its own motion, continue the MJOP hearing to allow both motions to be considered together.

The hearing on E.C.M Exotic Pools, Inc.’s Motion for Judgment on the Pleadings is CONTINUED to March 3, 2025 at 8:30 am.

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.

Hon. Holly J. Fujie

Judge of the Superior Court