Judge: Shirley K. Watkins, Case: 19VECV00998, Date: 2023-01-27 Tentative Ruling

If ALL parties submit on the tentative, then no appearance is necessary unless some other matter (i.e., Case Management Conference) is on calendar. It is not necessary to call the court to request oral argument. Oral argument is permitted on all tentative rulings.

Case Number: 19VECV00998    Hearing Date: January 27, 2023    Dept: T

            [TENTATIVE] ORDER:  Plaintiff/Cross-Complainant/Cross-Defendant National Glass, LLC’s Application for Determination of Good Faith Settlement is GRANTED. 

Defendants/Cross-Complainants Southwest Stucco, Inc.; Uzi Adam Secharia; and Old Republic Surety Company’s Motion to Contest Good Faith Settlement is DENIED.

Introduction

            Plaintiff/Cross-Complainant/Cross-Defendant National Glass, LLC (NGL) applied for determination of good faith settlement on their settlement with Defendant/Cross-Complainants Landmark View, Inc. (Landmark,) 7040 Van Nuys Partnership, LLC (VNP,) American Contractors Indemnity Company (ACIC,) and Western Surety Company (Western) (collectively referred to as, Settling Parties.)  As relevant to the instant Application and the concurrent Motion to Contest, NGL agreed to pay $160,000.00 to Landmark and VNP. 

            Defendants/Cross-Complainants Southwest Stucco, Inc.; Uzi Adam Secharia; and Old Republic Surety Company (collectively, Southwest) moved to contest the good faith determination of the settlement between the Settling Parties. 

            Discussion 

Southwest argued that NGL’s settlement payment of $160,000.00 is only 22% of Landmark/VNP’s alleged $705,624.00 in total damages and not within the reasonable range/“ballpark” of its proportionate liability.  Parties challenging the good faith nature of a settlement agreement have the burden to demonstrate that it lies so far “out of the ballpark” of the Tech-Bilt factors that it is inconsistent with the equitable objectives of the statute.  (Code Civ. Proc. sec. 877.6(d); Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499; Nutrition Now, Inc. v. Superior Court (2003) 105 Cal.App.4th 209, 213-14.)  “[T]he determination whether the settlement was in good faith must be based on competent, admissible evidence.”  (Brehm Communities v. Superior Court (2001) 88 Cal.App.4th 730, 736.)  The evidence must be limited to the information available to the settling parties when they settled. “Good faith” is not affected by the fact the parties did not have access to all the evidence ultimately offered at trial on the disputed issues.  (Toyota Motor Sales U.S.A., Inc. v. Superior Court (1990) 220 Cal.App.3d 864, 878.)  In support, Southwest presented expert testimony (i.e., Declaration & Supplemental Declaration of Michael Roberts) to show that NGL has greater liability for Landmark/VNP’s damages.  In response, NGL submitted their expert’s testimony (i.e.,  Declaration of James Cassell) to show that NGL had no liability for the water damage.  Where there is a factual dispute, determination of “good faith” is left to the trial court's discretion.  (Tech-Bilt, Inc. v. Woodward-Clyde & Assocs., supra, 38 Cal.3d at pg. 502.)  Both parties submitted expert testimony as to the alleged source of the leak.  Mr. Roberts’ opinion that the leak was caused by faulty windows is based upon the fact that there was “no obvious evidence that it started above the frame of the window.”  (Roberts’ Decl. par. 4-5.)  However, Mr. Cassell’s declaration presented facts/photographs showing that there was water staining above the window frames.  (Cassell Decl. pars. 6 and 8 and Exhs. B and D.)  Further, Mr. Cassell’s declaration presented facts/photographs showing cracks in the stucco and non-compliance with standards applicable to sealing or caulking of V-grooves.  (Cassell Decl. pars. 7 and 10 and Exhs. B, C, and E.)  Because Mr. Roberts’ opinion is grounded on a disputed fact (i.e., alleged lack of water intrusion above the window frame,) the Court does not find Mr. Roberts’ opinion to be persuasive on the issue of NGL’s purported liability for the purposes of its instant analysis.  Southwest failed to show that the settlement payment is “grossly disproportionate” as to the Settling Parties’ estimated liability. 

Within Mr. Roberts’ Supplemental Declaration, Mr. Roberts’ presented the requirements in installing the windows at issue and that failures to seal the joints could lead to water infiltration.  However, Mr. Roberts’ opinion does not address the specificities of the windows at issue.  Opinions in generalities is insufficient to show that NGL, in this situation, failed to comply with installation requirements.  Further, it is of no consequence that destructive testing has yet to be performed.  The standard on the instant motion is based upon facts available at the time of settlement.  Mr. Roberts’ supplemental declaration did not add any additional facts to support his opinion as to NGL’s alleged proportionate liability.  Because the expert testimony of Mr. Cassell is persuasive to overcome the opinion of Mr. Roberts, the Court finds that the settlement payment is within the reasonable range of NGL’s proportionate and estimated liability. 

            Southwest then argued that Settling Parties’ opposition failed to present a rough approximation of the total projected recovery, the settlor’s proportionate liability, the financial condition of the settling defendants, whether any other insurance existed, and the offset/credits to be applied to non-settling parties.  NGL argued that they had zero to minimal proportionate liability as to the alleged damages, which would mean that the rough approximation of the total projected recovery against NGL would be zero to minimal.  Further, Settling Parties stated that the only claims against NGL were construction defect claims alleged by Landmark and VNP.  NGL asserted that there are no other active cross-complaints against NGL for comparative fault or equitable indemnity.   It is noted that the license bond sureties in this action, Western and ACIC, are included as Settling Parties and the settlement provided they would be released and discharged from this action.  The Settling Parties argued that NGL’s financial condition is irrelevant since the settlement was not disproportionately low.  The Court finds the argument persuasive, especially because the settlor’s financial condition is only one factor of many in determining good faith.  Southwest’s argument as to lack of offsets/credits is unpersuasive because offsets/credits applicable to non-settling parties is not an enumerated factor in determining good faith.  Southwest’s Reply arguments are not found to be persuasive.

            The Application for Determination of Good Faith Settlement is GRANTED.

            The Motion to Contest Good Faith Settlement is DENIED. 

            IT IS SO ORDERED, ____________________ TO GIVE NOTICE.