Judge: Jon R. Takasugi, Case: BC707386, Date: 2023-02-14 Tentative Ruling

Case Number: BC707386    Hearing Date: February 14, 2023    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Whatley Kallas’s motion to compel is GRANTED.

On 5/23/2018, Plaintiff Aetna, Inc (Plaintiff) filed this action. 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 (WK) filed a Cross-Complaint (XC) for implied equitable indemnity and declaratory relief against KCC Class Action Services, LLC (KCC), Kurtzman Carson Consultants (KCC), Computershare Communication Services, Inc. (CCS), and Gibson Dunn & Crutcher, Inc (Gibson).

            Now, WK moves to compel depositions of KCC’s PMK, Kurtzman’s PMK, KCC Cross-Defendants’ KCC, Daniel Burke, Charles Harper, Drake Foster, and Jonathan Carameros.

Discussion

            WK argues that the testimony of these witnesses is necessary, material and critical discovery that is essential to WK’s preparation of its opposition to the KCC Cross-Defendants’ Motion for Good Faith Settlement that is current scheduled for 3/17/2023, as well as defense of Aetna’s claims and the prosecution of WK’s Cross-Complaint against the KCC Cross-Defendants.

            The Court agrees, as it has indicated multiple times in the past several court hearings.

            Parties are entitled to pursue discovery regarding the Tech-Bilt factors. In City of Grant Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, the court pointed out that “[a]t the time of the hearing, the objecting non-settlor 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 non-settlor 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 non-settlors placed in issue in order that the matter can be fully and fairly litigated.” (Id.) 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.” (Id.) (emphasis added).

In North County Contractor’s Assn. v. Touchstone Ins. Services (1994) 27 Cal.App.4th 1085, the court pointed out that the non-settling party “could have conducted additional discovery and moved to continue the hearing” in order to obtain additional evidence to support its argument that the settlement was not in good faith. (Id. at p. 1094.) In Spectra–Physics, Inc. v. Superior Court (1988) 198 Cal.App.3d 1487, the court noted that the trial court had “allowed the nonsettling defendants an opportunity for discovery in preparing their challenge to the settlement agreement.” (Id. at p. 1492.)

In opposition, Cross-Defendants argue that such discovery is not warranted because WK has never advanced any argument that the settlement between Cross-Defendant’s and Aetna was made in bad faith, and “[e]xcept in rare cases of collusion or bad faith . . . a joint tortfeasor should be permitted to negotiate settlement of an adverse claim according to his own best interests, whether for his financial advantage, or for the purchase of peace and quiet, or otherwise.” (Stambaugh v. Superior Court (1976) 62 Cal. App. 3d 231, 238.)

However, as noted in the Court’s ruling on the motion to stay, this ignores two important points. First, the presence of fraud, collusion, or tortious conduct is only one of the six Tech-Bilt Factors. (Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 37 Cal.3d 448.) WK is entitled to conduct further 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….” (City of Grant Terrace, supra, 192 Cal.App.3d at p. 1265, emphasis added). While Cross-Defendants have submitted the settlement agreement for this Court’s review, proportionate liability is one of the Tech-Bilt factors. Without discovery concerning the underlying events, WK is unable to speak to whether or not the settlement amount is commensurate with Cross-Defendants’ alleged proportion of liability.

Second, and most importantly, Cross-Defendants remain relevant third-party witnesses, regardless of whether or not they remain parties in this action. Cross-Defendants argue that the list of individuals WK seeks to depose is overbroad. However, WK’s reply persuasively sets forth precisely how and why each witness is likely to have relevant information regarding the Tech-Bilt factors and Aetna’s claims against WK. (Reply, 3:14-4: 15.)

Cross-Defendants argue that WK already has the discovery from the federal litigation. However, as noted by WK, “Aetna has not stipulated to the use of those depositions in this case.” (Reply, 10: 10-11.) More importantly, WK should not be forced to rely on Aetna’s questioning of the witnesses, especially given that WK was not a party to the litigation, and Aetna and WK have fundamentally different motivations for examining the relevant witnesses.

Finally, Cross-Defendants argue that WK has moved for complete summary judgment, meaning “no further affirmative discovery for WK is justified.” (Opp., 8:21-22.) However, the fact that WK has filed a motion for summary judgment does not mean further discovery is prohibited in this matter. In the case law set forth above, the Court did not condition the right to Tech-Bilt discovery on the stage of the proceedings. Moreover, WK has the right and obligation to continue to prepare for trial in the event its summary judgment motion is denied.

Based on the foregoing, WK’s motion to compel 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. 

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