Judge Holly J. Fujie, Case Number: 821STCV42481, Date: 2024-07-26 Tentative Ruling

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 April 19, 2024, Simco filed the instant Motion for Determination of Good Faith Settlement (the “Motion”).

California Code of Civil Procedure 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.” (Code Civ. Proc., § 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. (Code Civ. Proc., § 877, subd. (a).)

“The party asserting the lack of good faith shall have the burden of proof on that issue.” (Code Civ. Proc., § 877.6, subd. (d).)

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. (192 Cal.App.3d 1251, 1260-1261 [citation omitted].) (Emphasis supplied.)

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 settlement agreement that Plaintiffs and Simco (collectively, “Parties”) entered into in April 2024 (the “Settlement Agreement”) is attached in support of the Motion. (Declaration of Lee David Lubin (“Lubin Decl.”), Exh. A.) Under the Settlement Agreement, Simco agrees to pay $3,000 to Plaintiffs within fifteen (15) days of the entry of the Order determining that it is a good faith settlement, in exchange for dismissal of Plaintiffs’ claims. In addition, Parties have agreed to bear their own attorneys’ fees and costs. The Settlement Agreement also includes a general release, which contains, among other items, a waiver of Civil Code § 1542 provisions. (Lubin Decl., ¶ 6; Exh. A.)

Simco’s counsel attests that the “settlement was entered in good faith and [was] a product of extensive arm’s length negotiations, and not [a] result of collusion or fraud.” (Id., ¶ 2.) Simco’s counsel further attests that after negotiations, the Parties have agreed that a $3,000 settlement represents Simco’s share of potential liability, taking into consideration that Plaintiffs previously received $76,000 from Defendants Nina Hunt and S&A Realty Corp through a prior settlement. (Id., at ¶ 4.)

The Court notes that the main basis of Plaintiffs’ claims appears to be that their $30,000 deposit for the lease of the subject property was wrongfully converted in connection with the itemized list of deductions after the pre-moveout walkthrough inspection. The settlement amount of $3,000, when combined with the $76,000 that Plaintiffs have already received in a prior settlement, is more than double that of the at-issue property deposit. Given the rough approximation of Plaintiff’s total recovery, the Court finds that the settlement amount of $3,000 does not weigh against a finding of good faith.

Importantly, the Court also notes that the Motion is not contested. There is, therefore, no evidence to suggest that the Settlement Agreement was not entered into in good faith. There is no evidence of fraud, collusion, or misconduct by the Parties, nor is there any proof that the non-settling parties will suffer particularly severe consequences if the settlement is approved. 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.). The Court thus finds no reason for the Motion to be denied.

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

Hon. Holly J. Fujie

Judge of the Superior Court