Judge: Maurice A. Leiter, Case: 20STCV16589, Date: 2022-10-10 Tentative Ruling

Case Number: 20STCV16589    Hearing Date: October 10, 2022    Dept: 54

Hearing Date: October 10, 2022

Department 54, Judge Maurice A. Leiter

Motion Contesting Good Faith Settlement

Moving Party: Defendants T&L Air Conditioning, Inc. and DWC Enterprise Group, Inc.

Responding Party: Plaintiff Cal Garden, LLC and Defendants EGL Associates Inc., Environmental Geotechnology Laboratory Inc., and Hank Hsing-Lian Jong

T/R:    THE MOTION TO CONTEST GOOD FAITH SETTLEMENT IS DENIED.

THE APPLICATION FOR GOOD FAITH SETTLEMENT IS GRANTED.

            DEFENDANTS TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at¿SMCdept54@lacourt.org¿with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

            The Court considers the moving papers, opposition, and reply.

BACKGROUND

            This is a construction defect case arising out of the construction of condominium complex and its subterranean garage. The owners of property adjoining the complex claim that the construction caused substantial subsidence and settlement issues on its property. The action involves several contractors and sub-contractors, complaints and cross-complaints.

ANALYSIS

Any party to an action in which 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 or other claimant and one or more alleged tortfeasors or co-obligors upon giving notice in the manner provided in Code of Civil Procedure, section 1005(b).  (CCP § 877.6(a)(1).)  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 (c).)  The party contesting the settlement bears the burden of proving that the settlement is in bad faith.  (CCP § 877.6 (d).) 

Defendants T&L Air Conditioning, Inc. and DWC Enterprise Group, Inc. challenge Plaintiff and Defendants BLE, Inc., Environmental Geotechnology Laboratory, Inc., EGL Associates, Inc., Hank Hsing-Lian Jong, Queens Land Builder, Inc., Tie Gao, and Ning Wang’s application for good faith settlement.

The settlement disposed of various related cases, including those brought by the Homeowner’s Association. Plaintiff and settling Defendants agreed that Plaintiff would pay the Homeowner’s Association $500,000.00; Queens Land Builder would pay the association $675,000.00; BLE would pay $250,000.00; EGL Associates would pay $35,000.00; and Cal Garden’s insurance company would pay $25,000.00. Plaintiff agreed to release any claims against the settling Defendants.

Moving Defendants emphasize that the settling Defendants paid the Plaintiff nothing. Moving Defendants assert that this shows bad faith and would unfairly preclude claims against the settling Defendants without providing an offset to a settlement or verdict against the non-settling Defendants.

The Court ordered supplemental briefing on this issue. In that briefing, Plaintiff and the settling Defendants concede that Moving Defendants will be entitled to an offset as a result of this settlement, the amount of which is yet to be determined.

The Court finds no evidence of bad faith. This is a complex series of actions and involves complex settlement strategy. The non-settling Defendants will be entitled to an offset as a result of the settlement.

The motion to contest good faith settlement is DENIED. The application for good faith settlement is GRANTED.