Judge Michael P. Linfield, Case Number: 23STCV18064, Date: 2023-11-29 Tentative Ruling

Judge: Michael P. Linfield, Case: 23STCV18064, Date: 2023-11-29 Tentative Ruling

Moving Party: Defendants LNP Everland, Inc., The H Realty, Eui S. Chang, and Christina Kwon

Resp. Party: Defendant Emotional Health Association; Plaintiff Sean McDowell

On July 31, 2023, Plaintiff Sean McDowell filed his Complaint against Defendants LNP Everland Inc., Emotional Health Association, Eui S. Chang, Hee Kyung Chang, The H Realty, and Christina Kwon. Multiple causes of action are pleaded against Defendants.

On January 2, 2024, Defendants LNP Everland, Inc., Eui S. Chang, H Realty, and Christina Kwon filed their Answer to the Complaint.

On January 5, 2024, Defendant Emotional Health Association filed its Answer to the Complaint.

On February 28, 2024, Defendants LNP Everland, Inc., The H Realty, Eui S. Chang, and Christina Kwon (“Settling Defendants”) filed their Motion to Determine Good Faith Settlement.

On March 13, 2024, Defendant Emotional Health Association (“Non-Settling Defendant”) filed its Opposition to the Motion. In support of its Opposition, Non-Settling Defendant concurrently filed: (1) Declaration of Jason Robison; (2) Declaration of Matthew M. Gorman; (3) Request for Judicial Notice; and (4) Evidentiary Objections.

On March 15, 2024, Plaintiff filed his Brief in support of the Motion. Plaintiff concurrently filed: (1) Declaration of Michael S. Traylor; and (2) Notice of Lodging Declaration of Sean McDowell.

Settling Defendants filed objections to Non-Settling Defendant’s evidence. The following are the Court’s rulings on these objections.

Objection
1	SUSTAINED
2	SUSTAINED
3	SUSTAINED
4	SUSTAINED

Non-Settling Defendant objects to Plaintiff’s Brief and the documents Plaintiff filed in support of his Brief. The Court SUSTAINS this objection and does not consider Plaintiff’s Brief and exhibits.

Non-Settling Defendant requests that the Court take judicial notice of various items previously filed in this matter.

The Court DENIES as superfluous judicial notice of these items. Any party that wishes to draw the Court’s attention to an item filed in this action may simply cite directly to the document by execution and filing date. (See Cal. Rules of Court, rule 3.1110(d).)

“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 subdivision (b) of Section 1005.” (Code Civ. Proc., § 877.6, subd. (a)(1).)

“In the alternative, a settling party may give notice of settlement to all parties and to the court, together with an application for determination of good faith settlement and a proposed order.” (Code Civ. Proc., § 877.6, subd. (a)(2).)

“The issue of the good faith of a settlement may be determined by the court on the basis of affidavits served with the notice of hearing, and any counteraffidavits filed in response, or the court may, in its discretion, receive other evidence at the hearing.” (Code Civ. Proc., § 877.6, subd. (b).)

Settling Defendants move the Court to determine that there has been a good faith settlement between them and Plaintiff. (Motion, p. 1:19–27.)

Non-Settling Defendant opposes the Motion, arguing: (1) that the Motion is not supported by substantial evidence and thus must be denied as matter of law; (2) that the settlement is grossly disproportionate with Settling Defendants’ potential liability and does not pass the Tech-Bilt factors; (3) that good faith cannot be founds without the Settling Defendants addressing how their settlement affects Non-Settling Defendant; (4) that the Motion lacks any explanation as to Defendant The H Realty; (5) that if the Motion is not denied outright, it should be continued so that discovery can be completed on elements critical to determining good faith. (Opposition, pp. 1:24–25, 3:7–8, 8:21–22, 9:22–23, 11:4–5.)

In their Reply, Settling Defendants argue: (1) that the Motion is supported by substantial evidence; (2) that the proposed settlement is not grossly disproportionate; (3) that good faith is abundant; and (4) that the Motion explains role of Defendant The H Realty here. (Reply, pp. 3:5, 3:12, 4:11, 4:18.)

Settling Defendants are: (1) LNP Everland, Inc. — the property owner; (2) Christina Kwon — the president of LNP Everland, Inc.; (3) The H Realty — the property manager; and (4) Eui Chang — the real estate broker who controls The H Realty.

Non-Settling Defendant is Emotional Health Association — a non-profit 501(c) corporation that partners with local governments and housing providers to find housing for homeless and distressed persons, provide them supportive services, and coordinates memoranda of understanding.

The Parties discuss the California Supreme Court’s decision in Tech-Bilt, Inc., which states:

“[T]he intent and policies underlying section 877.6 require that a number of factors be taken into account including 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. Finally, practical considerations obviously require that the evaluation be made on the basis of information available at the time of settlement. ‘[A] defendant's settlement figure must not be grossly disproportionate to what a reasonable person, at the time of the settlement, would estimate the settling defendant's liability to be.’ The party asserting the lack of good faith, who has the burden of proof on that issue (§ 877.6, subd. (d)), should be permitted to demonstrate, if he can, that the settlement is so far ‘out of the ballpark’ in relation to these factors as to be inconsistent with the equitable objectives of the statute. Such a demonstration would establish that the proposed settlement was not a ‘settlement made in good faith’ within the terms of section 877.6.” (Tech-Bilt, Inc. v. Woodward-Clyde & Assocs. (1985) 38 Cal.3d 488, 499–500, citations omitted.)

In this case, Plaintiff pleads five causes of action: (1) breach of oral contract; (2) tortious interference with beneficial use of leased premises; (3) civil harassment; (4) intentional infliction of emotional distress; and (5) violation of the Ellis Act. (Complaint, pp. 8:13–16, 9:4–6, 10:21–24, 12:8–11, 13:20–24.)

The proposed Settlement between Plaintiff and Settling Defendants is for $9,000.00 — which includes the $2,000.00 awarded by the Court in favor of Plaintiff and against Settling Defendants and Defense Counsel Chad Biggins on November 29, 2023 because of frivolous anti-SLAPP motions that the Settling Defendants filed.

Except for the $9,000.00 in damages for the first cause of action for breach of oral contract, Plaintiff has not clarified the exact sums he seeks in damages.

In addition, Settling Defendants have not presented the Court with evidence regarding their financial conditions and insurance policy limits.

Finally, the Court has not been presented with an adequate explanation for whether the proposed settlement proportionately approximates their respective liability or credible evidence that would support such an explanation.

Upon considering the Tech-Bilt factors, the Court has not at this time been presented with sufficient evidence to determine that the proposed settlement has been made in good faith. Rather, the Court is concerned that (1) Settling Defendants may be trying to settle their liability for a disproportionately low amount of money given the allegations made against them and (2) both Plaintiff and Non-Settling Defendant may be severely prejudiced by this proposed Settlement.