Judge: Robert B. Broadbelt, Case: 19STCV34676, Date: 2022-08-31 Tentative Ruling

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Case Number: 19STCV34676    Hearing Date: August 31, 2022    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTIES:              Defendants Bjork Plumbing, Inc., and Timothy Bjork

RESPONDING PARTIES:     Defendants Paul Lauer and Laura Lauer, individually and as trustees of the Paul and Laura Lauer Family Trust

Motion to Challenge and Contest Good Faith Settlement

The court considered the moving, opposition, and reply papers filed in connection with this motion.

DISCUSSION

            Defendants Bjork Plumbing, Inc., and Timothy Bjork (“Bjork Defendants”) move the court for an order, pursuant to Code of Civil Procedure section 877.6, determining that the Settlement and Release Agreement (the “Settlement Agreement”) entered into by and between plaintiff Melissa DeMarco (“Plaintiff”) on the one hand, and defendants Paul Lauer and Laura Lauer, as individuals and trustees of the Paul and Laura Lauer Family Trust (“Lauer Defendants”) on the other hand, is not in good faith.

“[Code of Civil Procedure] Section 877.6 was enacted by the Legislature in 1980 to establish a statutory procedure for determining if a settlement by an alleged joint tortfeasor has been entered into in good faith and to provide a bar to claims of other alleged joint tortfeasors for equitable contribution or partial or comparative indemnity when good faith is shown.”  (IRM Corp. v. Carlson (1986) 179 Cal.App.3d 94, 104.)

In Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499, the California Supreme Court identified the following nonexclusive factors courts are to consider in determining if a settlement is in good faith under section 877.6:  “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.”  The party asserting the lack of good faith has the burden of proof on that issue.  (Code Civ. Proc., § 877.6, subd. (d).)  The party challenging the good faith settlement “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, supra, 38 Cal.3d at pp. 499-500.)

The challenged Settlement Agreement provides that Plaintiff will release all claims on behalf of herself and her children against Lauer Defendants in exchange for the Lauer Defendants’ settlement payment of $85,000.  (Spaniac Decl., Ex. A, Settlement Agreement, ¶ 4.)  The Settlement Agreement expressly excludes all claims against Bjork Defendants from its terms.  (Ibid.)  Bjork Defendants contend that the Settlement Agreement is not in good faith because (1) Plaintiff’s testimony establishes that her damages were caused by defendant Paul Lauer’s conduct; (2) Bjork Defendants’ work was approved by the County of Los Angeles Department of Public Works Building and Safety Division; (3) the actions complained of were not performed by Bjork Defendants; and (4) because the Lauer Defendants are completely liable, the proposed settlement amount of $85,000 is unfair because it represents only 28 percent of Plaintiff’s claimed damages and Plaintiff’s global settlement demand of $295,000.  (See Spaniac Decl., ¶¶ 3-4 [Plaintiff’s initial settlement demand was for $295,000, but Plaintiff’s final global settlement demand was $275,000].)

The court finds that Bjork Defendants have not met their burden of establishing that the Settlement Agreement “is so far ‘out of the ballpark’” in relation to the Tech-Bilt factors as to be inconsistent with the equitable objectives of section 877.6, and therefore denies Bjork Defendants’ motion to challenge the good faith settlement.  (Code Civ. Proc., § 877.6, subd. (d); Tech-Bilt, supra, 38 Cal.3d at pp. 499-500.)

First, the court finds that Bjork Defendants have not met their burden of establishing that Lauer Defendants are 100 percent responsible for Plaintiff’s claimed damages in support of their argument that the Settlement Agreement does not appropriately account for Lauer Defendants’ proportionate liability.  Bjork Defendants attach portions of testimony from Plaintiff explaining that Paul Lauer “tore up the stucco outside the house,” “tore up the wall inside the garage,” and used bleach on the walls, which caused Plaintiff to become dizzy and nauseous.   (Daley Decl., Ex. A, Pl. Dep., 86:4-14, 147:22-148:5.)  In opposition, Lauer Defendants attach portions of Plaintiff’s testimony explaining that both Bjork Defendants and Paul Lauer contributed to cutting walls open, including with Timothy Bjork’s electric saw.  (Spaniac Decl., Ex. F, Pl. Dep., 40:8-18, 41:24-42:24.)  In light of this evidence, the court finds that Bjork Defendants have not established that Lauer Defendants were solely liable for Plaintiff’s claimed damages.  Moreover, “‘[a] “good faith” settlement does not call for perfect or even nearly perfect apportionment of liability.’”  (PacifiCare of California v. Bright Medical Associates, Inc. (2011) 198 Cal.App.4th 1451, 1465.)  Lauer Defendants’ payment of $85,000 is not “grossly disproportionate to what a reasonable person, at the time of the settlement, would estimate the settling defendant’s liability to be.”  (Tech-Bilt, supra, 38 Cal.3d at p. 499 [internal quotations omitted].)

Second, the court finds that the other Tech-Bilt factors weigh in favor of finding that the settlement terms are in good faith.  The court finds the following factors further establish that the Settlement Agreement was executed in good faith: (1) Plaintiff made a settlement demand on Lauer Defendants for $90,000 before the parties subsequently reached their settlement of $85,000; (2) the parties previously participated in a private mediation; (3) counsel continued to discuss a global settlement and engaged in further settlement discussions; (4) the $85,000 payment will be made to Plaintiff in exchange for the release of her claims and the release of claims brought by her children; (5) Bjork Defendants have introduced no evidence of collusion, fraud, or tortious conduct; and (6) the recognition that Lauer Defendants should pay less in settlement than they would if they were found liable after a trial.  (Spaniac Decl., ¶¶ 7, 4, 6, Ex. A, Settlement Agreement, ¶ 4; Tech-Bilt, supra, 38 Cal.3d at p. 499.)

For the reasons set forth above, the court finds that Bjork Defendants have failed to meet their burden of establishing that the Settlement Agreement “is so far ‘out of the ballpark’” as to be inconsistent with the equitable objectives of section 877.6.  (Tech-Bilt, supra, 38 Cal.3d at pp. 499-500.)

ORDER

            The court denies defendants Bjork Plumbing, Inc., and Timothy Bjork’s motion to challenge and contest good faith settlement.

The court finds that the settlement entered into by plaintiff Melissa DeMarco, on one hand, and defendants Paul Lauer and Laura Lauer, as individuals and trustees of the Paul and Laura Lauer Family Trust, on the other hand, as set forth in the Settlement and Release Agreement, is in good faith within the meaning of Code of Civil Procedure § 877.6, subdivision (a). 

Because the court has determined that the settlement entered into by plaintiff Melissa DeMarco, on one hand, and defendants Paul Lauer and Laura Lauer, as individuals and trustees of the Paul and Laura Lauer Family Trust, on the other hand, is in good faith, the court grants defendants Paul Lauer and Laura Lauer’s, as individuals and trustees of the Paul and Laura Lauer Family Trust, application for good faith settlement determination, filed with the court on March 8, 2022.  (Code Civ. Proc., § 877.6.) 

The court orders that all other joint tortfeasors or co-obligors are barred from any further claims against Lauer Defendants for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.  (Code Civ. Proc., § 877.6, subd. (c).) 

The court orders that the demurrer and motion to strike filed by Lauer Defendants on April 27, 2020 are taken off calendar as moot.

The court orders defendants Paul Lauer and Laura Lauer, as individuals and as trustees of the Paul and Laura Lauer Family Trust, to give notice of this ruling.

IT IS SO ORDERED.

DATED:  August 31, 2022

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTIES:             Defendants Paul Lauer and Laura Lauer, as individuals and Trustees of the Laura Lauer Family Trust

RESPONDING PARTY:       Plaintiff Melissa DeMarco

(1)   Demurrer to First Amended Complaint

MOVING PARTIES:             Defendants Paul Lauer and Laura Lauer, as individuals and Trustees of the Laura Lauer Family Trust

RESPONDING PARTY:       Plaintiff Melissa DeMarco

(2)   Motion to Strike Punitive Damages from First Amended Complaint

The court considered the moving, opposition, and reply papers filed in connection with the demurrer and motion to strike.   

BACKGROUND

Plaintiff Melissa DeMarco (“Plaintiff”) filed this action on September 30, 2019 against defendants Paul Lauer, Laura Lauer, Paul Andres Lauer and Laura P. Lauer as Trustees of the Paul and Laura Lauer Family Trust, Timothy Bjork, and Bjork Plumbing, Inc.  On March 16, 2020, Plaintiff filed the operative First Amended Complaint, alleging six causes of action for (1) negligent performance of work; (2) breach of contract; (3) negligence and negligent hiring and supervision; (4) negligence per se; (5) strict liability for ultrahazardous activities; and (6) intentional infliction of emotional distress.

Defendants Paul Lauer and Laura Lauer, as individuals and Trustees of the Laura Lauer Family Trust (“Defendants”), filed a demurrer and motion to strike.

DEMURRER

The court sustains Defendants’ demurrer to Plaintiff’s second cause of action for breach of contract because it does not state facts sufficient to constitute a cause of action since Plaintiff fails to identify which terms of the contract were breached by Defendants.  (Code Civ. Proc., § 430.10, subd. (e).)

The court sustains Defendants’ demurrer to Plaintiff’s fourth cause of action for negligence per se because Plaintiff’s Complaint fails to allege the violation of a specific statute and instead incorporates exhibits which contain references to various regulatory provisions.  Thus, Plaintiff’s cause of action fails to state facts sufficient to allege a cause of action and, is also rendered uncertain by the vague reference to exhibits.  (Code Civ. Proc., § 430.010, subd. (e), (f).)

The court sustains Defendants’ demurrer to Plaintiff’s fifth cause of action for strict liability for ultrahazardous activities because it does not state facts sufficient to constitute a cause of action since Plaintiff fails to allege facts to establish that defendant Paul Lauer was engaged in ultrahazardous activity.  (Code Civ. Proc., § 430.10, subd. (e).)

The court sustains Defendants’ demurrer to Plaintiff’s sixth cause of action for intentional infliction of emotional distress because it does not state facts sufficient to constitute a cause of action since Plaintiff fails to allege facts to establish extreme and outrageous behavior.  (Code Civ. Proc., § 430.10 subd. (e).)

The court overrules the demurrer as to the alleged failure to join necessary parties.

MOTION TO STRIKE

The court denies as moot Defendants’ motion to strike paragraphs 69, 72, and 76 from the First Amended Complaint, because the court has sustained the causes of action containing those allegations.

The court grants Defendants’ motion to strike Plaintiff’s prayer for punitive damages, because the court has sustained Defendants’ demurrer to the causes of action on which Plaintiff’s request for punitive damages is based.  

ORDER

The court sustains Defendants’ demurrer to the second, fourth, fifth, and sixth causes of action in Plaintiff’s First Amended Complaint with leave to amend. 

The court denies as moot Defendants’ motion to strike paragraphs 69, 72, and 76 from the FAC.

The court grants Defendants’ motion to strike Plaintiff’s prayer for relief No. 3 on page 14 of the FAC (punitive damages) with leave to amend.

The court orders that Plaintiff has 20 days leave to file a second amended complaint. 

The court orders Defendants Paul Lauer and Laura Lauer, as individuals and as Trustees of the Paul and Laura Lauer Family Trust to give notice of this ruling.

IT IS SO ORDERED.

DATED:  August 31, 2022

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court