Judge Peter A. Hernandez, Case 22PSCV00127 2022-10-04 Tentative Ruling

Defendant Bank of the West’s unopposed Motion for Determination of Good Faith Settlement is GRANTED.

Plaintiff first met Sophie Gore (“Gore”) in 2019. In or around January 2021, Gore introduced Plaintiff to Jerry Chao Min Hung (“Hung”). Hung wanted to borrow money from Plaintiff to repay a loan with Bank of the West. Gore represented to Plaintiff that Hung would be able to repay the loan within three weeks. On or about February 2021, Hung convinced Plaintiff to lend him $90,000.00 At Hung’s insistence, Plaintiff met Hung at the Bank of the West branch where she would fund the loan. At that time, they were joined by branch manager Karen Su (“Karen”). Karen and Hung convinced Plaintiff to give the funds directly to KW Bridge Capital, Inc. (“KW Bridge”) in return for Hung’s promise to repay the loan. Plaintiff lent the monies directly to KW Bridge. Karen’s sister, Ariel Su (“Ariel”), was KW Bridge’s designated agent for service of process. On or about March 28, 2021, Hung tendered three check to Plaintiff for $35,000.00, $40,000.00 and $30,000.00, but asked that she not cash them because he did not have sufficient funds. In April 2021, Hung rewrote the repayment checks into smaller amounts. On or about April 30, 2021, Plaintiff deposited a $5,000.00 check from Hung, but this bounced. On or about August 7, 2021, Hung retendered checks for $35,000.00, $40,000.00 and $30,000.00 to Plaintiff. Plaintiff deposited these checks on or about January 6, 2022, but they all bounced. On or about January 24, 2022, Plaintiff deposited another $5,000.00 check from Hung, but Hung told his bank this check had been forged. Chase Bank assessed fees for the NSF deposits and froze Plaintiff’s account. Plaintiff has not been repaid.

On April 14, 2022, Chu filed a First Amended Complaint, asserting causes of action against Hung, Karen, Bank of the West, KW Bridge, Ariel, Gore and Does 1-20 for:

“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-obligators, upon giving notice in the manner provided in subdivision (b) of Section 1005 . . .” (Code Civ. Proc., § 877.6, subd. (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.” (Code Civ. Proc., § 877.6, subd. (c).)

“[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.” (Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499.) Additionally, “the trial court’s good faith determination must take into account the settling tortfeasor’s potential liability for indemnity to a cotortfeasor, as well as then settling tortfeasor’s potential liability to the plaintiff.” (Far West Financial Corp. v. D&S Co. (1988) 46 Cal.3d 796, 816, fn. 16.) “If section 877.6 is to serve the ends of justice, it must prevent a party from purchasing protection from its indemnification obligation at bargain-basement prices.” (Long Beach Memorial Medical Center v. Superior Court (2009) 172 Cal.App.4^th 865, 876.)

The moving party’s initial evidentiary burden depends on whether the good faith of the settlement is being contested. If the nonsettling defendants do not oppose the motion on the good faith issue, a “barebones” motion which sets forth the grounds of good faith, accompanied by a declaration which sets forth a brief background of the case, is sufficient. (City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261.)

When a motion for determination of good faith settlement is contested, however, the moving party must make a more specific showing under the Tech-Bilt factors. (Id. at 1261-62.) Such a showing may be made either in the original moving papers or in counter-declarations filed after the nonsettling defendants have filed an opposition challenging good faith of the settlement. (Id. at 1262.) Where good faith is contested, the showing requires competent evidence in support of “good faith.” (Greshko v. County of Los Angeles (1987) 194 Cal.App.3d 822, 834.)

“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.” (City of Grand Terrace, supra, 192 Cal.App.3d at 1262; Code Civ. Proc., § 877.6, subd. (d).)

Bank of the West moves the court, pursuant to Code of Civil Procedure § 877.6, for an order determining that the settlement between Plaintiff, on the one hand, and Bank of the West and Karen, on the other hand, was made in good faith and barring all existing and future cross-complaints and claims for equitable, comparative, implied indemnity and/or contribution, or for any cause of action based on comparative fault.

Preliminarily, Bank of the West failed to comply with California Rules of Court Rule 3.1382 (i.e., “[a] motion or application for determination of good faith settlement may include a request to dismiss a pleading or a portion of a pleading. The notice of motion or application for determination of good faith settlement must list each party and pleading or portion of pleading affected by the settlement and the date on which the affected pleading was filed”). The court admonishes counsel for Bank of the West in this regard.

Bank of the West and Karen[1] have agreed to settle this matter for $30,000.00 (i.e., which represents 1/3 of the amount of money Plaintiff loaned to KW Bridge/Hung) in exchange for Plaintiff’s dismissal and release, along with a Civil Code § 1542 waiver. The parties are to bear their own fees and costs.[2]

No non-settling defendant has objected to the settlement. In this situation, it is enough for a settling defendant to make a “barebones motion which sets forth the ground of good faith, accompanied by a declaration which sets forth a brief background of the case…” (City of Grand Terrace, supra, 192 Cal.App.3d at 1261.)

[1] Karen has never been served. (Wraight Decl., ¶ 5.)

[2] Bank of the West represents that the settlement agreement is not attached because it contains a confidentiality provision but will be submitted to the court for in camera review, if necessary.