Judge: Jon R. Takasugi, Case: BC707386, Date: 2023-02-06 Tentative Ruling

Case Number: BC707386    Hearing Date: February 6, 2023    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Cross-Defendants’ KCC and CCS motion to stay is DENIED as the requests 4-5, but GRANTED as requests 1-3.

Plaintiff Aetna, Inc (Plaintiff) filed this action on 5/23/2018. On 5/23/2018, Plaintiff filed a first amended complaint (FAC) against Whatley Kallas, LLP, Whatley Kallas, LLC, and Consumer Watchdog, alleging: (1) equitable indemnity; (2) contribution; and (3) declaratory relief.

            On 3/1/2022, Whatley Kallas, LLP (Whatley) filed a Cross-Complaint (XC) for implied equitable indemnity against KCC Class Action Services, LLC (KCC), Kurtzman Carson Consultants (KCC), Computershare Communication Services, Inc. (CCS), and Gibson Dunn & Crutcher, Inc (Gibson).

            Now, KCC and CCS (Cross-Defendants) move to stay proceedings pending the hearing on their 3/17/2023 motion for determination of good faith settlement.

Discussion

            Cross-Defendants seek an order including the following relief:

(1)  Staying Cross-Defendants’ December 14, 2022 deadline to respond to WK’s cross-complaint pending determination of the 877.6 Motion;

(2)  Staying Cross-Defendants’ December 14, 2022 deadline to file counterclaims against WK pending determination of the 877.6 Motion and a stay of Cross-Defendants’ motion for leave to file counterclaims against Aetna;

(3)  Staying Cross-Defendants’ January 12, 2023 deadline to file their motions for summary judgment pending determination of the 877.6 Motion;

(4)  Staying all discovery as to Cross-Defendants’ pending determination of the 877.6 Motion; and

(5)  Quashing the premature deposition notices and document requests served by WK.

Cross-Defendants argue that good cause exists to grant a stay as to requests 1-3 because they will be forced to proceed with highly involved motion practice and discovery which could be otherwise unnecessary if their settlement with Aetna is entered. Moreover, as to requests 4-5, Cross-Defendants argue that further discovery is not appropriate because: “Discovery as to the 877.6 Motion is complete — the KCC-Aetna Litigation was vigorously litigated, resulting in 261 entries on the federal docket between February 2018 and September 2020, and the parties engaged in extensive discovery (including 14 depositions).” (Motion, 8: 24-26.)

As conceded by Cross-Defendants, 877.6-related discovery may be requested and may be allowed by the court in its discretion. (See L. C. Rudd & Son, Inc. v. Superior Ct., 52 Cal. App. 4th 742, 749–50.)  Indeed, on 1/4/2023, the Court granted WK’s ex parte application to continue the hearing date on the 877.6 motion in order to allow for additional discovery.

In opposition, WK informed the Court that Cross-Defendants have continued to argue that WK has no right to take its own discovery, and that it should be limited only to the transcripts of depositions taken in Aetna v. KCC.  However, as noted by WK, WK was not a party to that action and had no opportunity to participate in those depositions for the sole purpose of opposing the 866.7 motion.

In City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, the court pointed out that “[a]t the time of the hearing, the objecting nonsettlor in many instances does not possess sufficient factual information to carry its burden of proof as to lack of good faith.” (Id. at p. 1265.) Thus, the court held that “it would be appropriate for the objecting nonsettlor to move for a continuance of the hearing, if necessary, for the purpose of gathering facts, which could include further formal discovery, to support its statutory burden of proof as to all Tech Bilt factors nonsettlors placed in issue in order that the matter can be fully and fairly litigated.” (Ibid.) Further, the court held that “[t]his rule shall apply to all contested good faith settlement hearings, no matter which of the Tech-Bilt factors are in issue.” (Ibid.)

The Court agrees that without discovery the Court may not have the necessary evidence to determine if the settlement was in good faith. The following evidence is essential for the Court to assess good faith: (1) a rough approximation of Aetna’s total recovery, (2) the KCC Cross-Defendants’ proportionate liability, (3) the amount paid in settlement, (4) the financial conditions and insurance policy limits of the KCC Cross-Defendants, (5) whether there is any evidence of collusion, fraud, or tortious conduct aimed to injure the interests of WK, and (6) whether CCS was a party to the settlement agreement between Aetna and KCC. (Tech-Bilt, 38 Cal.3d at 499.)  The Court will provide WK an opportunity to satisfy its statutory burden of proof.

Based on the foregoing, Cross-Defendant’s motion to stay is denied in part, granted in part.

It is so ordered.

Dated:  February    , 2023

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar. 

            Due to Covid-19, the court is strongly discouraging in-person appearances.  Parties, counsel, and court reporters present are subject to temperature checks and health inquiries, and will be denied entry if admission could create a public health risk.  The court encourages the parties wishing to argue to appear via L.A. Court Connect.  For more information, please contact the court clerk at (213) 633-0517.  Your understanding during these difficult times is appreciated.

Superior
Court of California

County
of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Cross-Defendants’
motion to seal is GRANTED.

Plaintiff Aetna, Inc (Plaintiff) filed this action on
5/23/2018. On 5/23/2018, Plaintiff filed a first amended complaint (FAC)
against Whatley Kallas, LLP, Whatley Kallas, LLC, and Consumer Watchdog,
alleging: (1) equitable indemnity; (2) contribution; and (3) declaratory
relief.

            On 3/1/2022, Whatley Kallas, LLP
(Whatley) filed a Cross-Complaint (XC) for implied equitable indemnity against
KCC Class Action Services, LLC (KCC), Kurtzman Carson Consultants (KCC),
Computershare Communication Services, Inc. (CCS), and Gibson Dunn &
Crutcher, Inc (Gibson).

            Now,
KCC and CCS (Cross-Defendants) move to seal portions of their motion for
determination of good faith settlement.

            The
motion is unopposed.

Discussion

            Cross-Defendants
move to seal the following portions of the motion for determination of good
faith settlement:

-        
877.6 Motion, p. 1, lines 5-6, 17-18, 21-22,
25-26

-        
877.6 Motion, p. 4, lines 23-26

-        
877.6 Motion, p. 5, lines 5-10, 13-28

-        
877.6 Motion, p. 6, lines 1-12, 16-17, 20-21

-        
877.6 Motion, p. 9, lines 3-6, 8-13, 15-17,
19-26

-        
877.6 Motion, p. 10, lines 5, 22-24

-        
877.6 Motion, p. 11, lines 1, 3, 6-7, 9, 14,
15-17, 25-28

-        
877.6 Motion, p. 12, lines 1-2, 8-20

-        
877.6 Clark Declaration, p. 4, ¶¶ 16-19

-        
877.6 Clark Declaration, p. 5, ¶¶ 20-29

-        
877.6 Clark Declaration, p. 6, ¶¶ 30-32, 34

-        
877.6 Clark Declaration, p. 7, ¶ 45

-        
Stay Motion, p. 4, lines 5-6, 7-10

-        
Clark Stay Declaration, p. 3, ¶ 13

-        
Clark Stay Declaration, p. 4, ¶¶ 13, 14

Cross-Defendants
request that the Court seal the above-described portions of the Demurrer
because these materials discuss or reflect what KCC, Kurtzman, and Aetna have
agreed to treat as confidential information pursuant to the February 2021
protective order.

Given the
overriding interest in protecting confidential information, alongside the lack
of opposition, the Court is persuaded that the motion should be granted.

Based on the
foregoing, Cross-Defendants’ motion to seal is granted.

It is so ordered.

Dated:  February   
, 2023

   Hon. Jon R.
Takasugi

   Judge of the
Superior Court

Parties who intend to submit on this tentative must
send an email to the court at smcdept17@lacourt.org
by 4 p.m. the day prior as directed by the instructions provided on the court
website at www.lacourt.org.  If a party submits
on the tentative, the party’s email must include the case number and must
identify the party submitting on the tentative. 
If all parties to a motion submit, the court will adopt this tentative
as the final order.  If the department
does not receive an email indicating the parties are submitting on the
tentative and there are no appearances at the hearing, the motion may be placed
off calendar. 

            Due to Covid-19, the court is strongly
discouraging in-person appearances. 
Parties, counsel, and court reporters present are subject to temperature
checks and health inquiries, and will be denied entry if admission could create
a public health risk.  The court
encourages the parties wishing to argue to appear via L.A. Court Connect.  For more information, please contact the
court clerk at (213) 633-0517.  Your
understanding during these difficult times is appreciated.