Judge Robert B. Broadbelt, Case Number: 20STCV43833, Date: 2024-01-26 Tentative Ruling

Judge: Robert B. Broadbelt, Case: 20STCV43833, Date: 2024-01-26 Tentative Ruling

Tentative rulings are sometimes, but not always, posted. The purpose of posting a tentative ruling is to to help focus the argument. The posting of a tentative ruling is not an invitation for the filing of additional papers shortly before the hearing.

MOVING PARTIES: Defendant Wells Fargo Bank, N.A. (joined by plaintiff Felisa Dee Richards on January 3, 2024)

RESPONDING PARTIES: Defendants Gregory Funding, LLC, and Ajax Mortgage Loan Trust 2018-G

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

The court grants defendants Gregory Funding, LLC, and Ajax Mortgage Loan Trust 2018-G’s request for judicial notice. (Evid. Code, § 452, subd. (d).)

Defendant Wells Fargo Bank, N.A. (“Settling Defendant”) moves the court for an order determining that the settlement agreement entered into by and between it and plaintiff Felisa Dee Richards (“Plaintiff”) was made in good faith pursuant to Code of Civil Procedure sections 877 and 877.6. Defendants Gregory Funding, LLC, and Ajax Mortgage Loan Trust 2018-G (“Non-Settling Defendants”) contend that the settlement was not made 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.)¿ Code of Civil Procedure section 877.6, subdivision (a)(1) provides, in relevant part, that, on noticed motion, “[a]ny party to an action wherein 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 . . . and one or more alleged tortfeasors or co-obligors . . . .”¿ “The party asserting the lack of good faith shall have the burden of proof on that issue.”¿ (Code Civ. Proc., § 877.6, subd. (d).)¿¿¿

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 evaluation of whether a settlement was made in good faith is required to “be made on the basis of information available at the time of settlement.”¿ (Id. at p. 499.)¿ “‘[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.’ [Citation.]”¿ (Ibid.)¿

Pursuant to the “Amended Settlement Agreement and Release” (the “Settlement Agreement”) entered into by and between Settling Defendant, on the one hand, and Plaintiff, on the other hand (collectively, the “Settling Parties”), Settling Defendant has agreed to settle this action with Plaintiff for the total amount of $400,000. (Supp. Dineen Decl., Ex. A, Settlement Agreement, p. 6, ¶ 4.1.) The Settling Parties reached agreement to settle this action following their attendance at a mediation before Richard Copeland. (Supp. Dineen Decl., ¶¶ 3, 6.) The Settling Parties executed an original settlement agreement, but thereafter agreed to revise that agreement upon the objections of the non-settling defendants regarding the non-disparagement clause. (Supp. Dineen Decl., ¶¶ 6-8.) The Settlement Agreement that is the subject of this motion does not include the non-disparagement clause with which the non-settling defendants took issue. (Supp. Dineen Decl., ¶ 8.)

The court finds that (1) the Settlement Agreement satisfies the factors set forth in Tech-Bilt, and (2) Non-Settling Defendants have not met their burden to demonstrate that (i) the Settlement Agreement “is so far ‘out of the ballpark’ in relation to these factors as to be inconsistent with the equitable objectives of the statute[,]” or (ii) that there exists fraud, collusion, or tortious conduct aimed to injure their interests. (Tech-Bilt, Inc., supra, 38 Cal.3d at pp. 499-500; Code Civ. Proc., §¿877.6, subd. (d).)

Non-Settling Defendants contend that the settlement reached by the Settling Parties was the result of collusion aimed to injure the interests of Non-Settling Defendants. They point to the following provision that was included in the original settlement agreement and has since been removed: Plaintiff “may need to take positions on factual issues in the Actions that [Settling Defendant] does not agree with; however, [Plaintiff] will covenant to do so in a manner that maximally protects [Settling Defendant] and maintains the integrity of the settlement agreement without prejudicing her ability to prosecute her claims[.]” (Opp., p. 1:6-10 [quoting from original settlement agreement]; Supp. Freeling Decl., ¶ 4; Supp. Dineen Decl., Ex. A, Settlement Agreement, p. 6, ¶ 3.20 [stating that Settling Parties “now wish to amend their settlement to remove all provisions related to non-disparagement”].)

First, the court finds that the language quoted above, which was included in the original settlement’s provision titled “Non-Disparagement,” does not show the existence of collusion.

As conceded by Non-Settling Defendants, upon objection of the other parties, the Settling Parties amended the Settlement Agreement to exclude that language. Moreover, Settling Defendant’s counsel has explained that (1) the purpose of the clause “was to address speech on social media and other similar platforms completely outside of the court proceedings in this case[,]” and (2) it was not Settling Defendant’s intent to impact witness testimony or to restrict Plaintiff’s speech in this action. (Supp. Dineen Decl., ¶¶ 7-8.) This is consistent with the language of the full non-disparagement provision, in which the objectionable language was included, which provided that Plaintiff would refrain from making disparaging comments about Settling Defendant publicly and online. (Supp. Freeling Decl., ¶ 4.)

Thus, the court finds that Non-Settling Defendants have not met their burden to show the existence of collusion based solely on the since-excluded language set forth above.

Second, the court finds that the Settlement Agreement satisfies the Tech-Bilt factors.[1]

Settling Defendant has presented argument supporting its defense of Plaintiff’s claims to show that the $400,000 settlement amount is proportional to the approximate amount that Plaintiff could have recovered at trial. Further, the court (1) notes that Plaintiff is the only plaintiff in this action and will therefore recover the entire settlement amount; (2) recognizes that Settling Defendant, as a settlor, should pay less in settlement than it would if it were found liable after trial; and (3) finds relevant that settlement was reached following arms-length negotiations during a mediation with third party Richard Copeland. (Tech-Bilt, Inc., supra, 38 Cal.3d at p. 499; Supp. Dineen Decl., ¶¶ 3, 6-7.) The court finds that these factors weigh in favor of finding that the Settlement Agreement was made in good faith.

For the reasons set forth above, the court finds that Non-Settling Defendants have not met their burden to show that the Settlement Agreement was not made in good faith. (Code Civ. Proc., §§¿877, 877.6, subd. (d).) Thus, the court determines that the Settlement Agreement was made in good faith and therefore grants Settling Defendant’s motion.

The court grants defendant Wells Fargo Bank, N.A.’s renewed motion for determination of good faith settlement.

The court finds that the “Amended Settlement Agreement and Release” entered into by and between plaintiff Felisa Dee Richards, on the one hand, and defendant Wells Fargo Bank, N.A., on the other hand, is in good faith within the meaning of Code of Civil Procedure section 877.6, subdivision (a).

The court orders that all other joint tortfeasors or co-obligors are barred from any further claims against defendant Wells Fargo Bank, N.A. 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 defendant Wells Fargo Bank, N.A. to give notice of this ruling.

[1] The court notes that Non-Settling Defendants do not appear to dispute that the Settlement Agreement satisfies the Tech-Bilt factors, excluding the factor concerning collusion. (Opp., p. 3:3-8 [noting that the moving papers “focus primarily on the presence of Tech-Bilt factors other than the factor precluding” collusion, and stating that Non-Settling Defendants “are not questioning the Settling Parties’ satisfaction of any of those other factors”].)

felisa dee richards ; Plaintiff, vs. gregory funding llc , et al.; Defendants.	Case No.:	20STCV43833

	Hearing Date:	January 26, 2024

	Time:	10:00 a.m.

	[Tentative] Order RE: defendant’s renewed motion for determination of good faith settlement