Judge Mark A. Young, Case 19SMCV00951 2022-09-14 Tentative Ruling

Judge: Mark A. Young, Case: 19SMCV00951, Date: 2022-09-14 Tentative Ruling

Case Number: 19SMCV00951 Hearing Date: September 14, 2022 Dept: M

CASE NAME: Smith v. Abco Pacific Builders Inc., et al.

CASE NO.: 19SMCV00951

MOTION: Motion for Determination of Good Faith Settlement

HEARING DATE: 9/14/2022

BACKGROUND

This case arises from the remodel of a property located at 34 South Venice Boulevard, Unit 2, Los Angeles, California 90291-4365, Parcel Number 4426-015-029. Plaintiff Smith contracted with Abco Pacific Builders, Inc (Abco) for the remodel work. Abco hired a number of subcontractors, including Hartford, Greene, and Anco. Hartford’s work primarily related to roofing on the property, Greene’s work related to bathrooms and plumbing, and Anco’s work related to doors and windows. Smith alleges a number of defects related to the remodel, including roofing, doors, windows, bedrooms, bathrooms, the kitchen, and decks.

On August 23, 2022, Defendant/Cross-Defendant/Cross-Complainant Abco and Defendant/Cross-Defendant James Oland McBeth dba Hartford Builders (“Moving Parties”) moved for the Court to determine that their settlement with Plaintiff Sallie Smith and Cross-Defendant Anco Glass Inc. was entered in good faith per CCP § 877.

Defendant/Cross-Complainant Greene & Son Plumbing (Jeffrey Greene) opposes the determination.

Legal Standard

In an action in which it is alleged that two or more parties are joint tortfeasors or co-obligors on a contract debt, a party to that action may file a motion seeking a determination from the court that the settlement between the plaintiff or other claimant and one or more alleged tortfeasors or co-obligors was made in good faith. (CCP § 877.6(a).) The notice of motion or application for good faith determination must list each party and pleading or portion of pleading affected by the settlement and the date on which the affected pleading was filed. (CRC Rule 3.1382.)

The California Supreme Court in Tech-Bilt, Inc. v. Woodward-Clyde & Assoc. (1985) 38 Cal.3d 488, established the standard for determining whether a settlement was made in good faith. Under Tech-Bilt, the following factors are considered: (1) a rough approximation of plaintiff’s 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 the non-settling defendants. (Id. at 498-501.) Additionally, the evaluation must be made based on the information available at the time of settlement. (Id. at 599.)

Where good faith is contested, the moving party must make a sufficient showing of all the Tech-Bilt factors, which can be made in the moving papers or in counter-declarations filed after the nonsettling defendants have filed an opposition. (City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261-62.) “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 non-settlor who asserts that the settlement was not made in good faith.” (Id. at 1262; CCP § 877.6(d).) In other words, the nonsettling defendant should demonstrate “that the settlement is so far ‘out of the ballpark’ in relation to the [Tech-Bilt] factors as to be inconsistent” with a settlement made in good faith. (Id. at 500.)

However, where good faith is uncontested, a “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.” (See Grand Terrace, supra,192 Cal.App.3d at 1261 [holding that when no one objects to a motion for good faith determination, a barebones motion that sets forth the ground of good faith, accompanied by a declaration that set forth a brief background of the case was sufficient in action where motion only discussed two of the Tech-Bilt factors, settlement amount and policy limits and declaration only gave a brief background of the case].)

If the court makes a good faith determination, the court may dismiss the settling party from comparative indemnity claims if the settling party has made such a request at the time of making the good faith motion. (CCP §§ 877, 877.6(c); CRC Rule 3.1382.)

Analysis

Moving parties request that the Court determine that the subject settlement was made in good faith. As the motion is contested, the moving parties must make a sufficient showing of all the Tech-Bilt factors.

Moving parties provide the amount paid in settlement and the allocation among the settling Defendants. Plaintiff will receive $210,000.00 from Abco and McBeth, and $50,000 from Anco in exchange for a full and final release of any and all claims, known or unknown against the moving parties. The Court further recognizes that moving parties should pay less in settlement than they would if found liable after a trial. Moving parties also disclaim the existence of collusion, fraud, or tortious conduct aimed to injure the interests of the non-settling defendants. (Sobel Decl., ¶ 7.)

Moving parties do not provide any rough approximation of Plaintiff’s total recovery and their own proportionate liability. (See Sobel Decl.) Moving parties also do not submit any information regarding their financial conditions and insurance policy limits. Without these critical pieces of information, moving parties do not meet their initial burden. The Court lacks sufficient evidence to determine that the settlement was made in good faith.

Therefore, the motion is denied without prejudice. In any subsequent application, the moving parties should also address the issues raised by Greene & Sons counsel, namely, whether Abco was assigning its rights to Plaintiffs, or if the settlement was in an alternate amount. (See Turner Decl., ¶ 3.)