Judge Upinder S. Kalra, Case 20STCV26362 2022-08-03 Tentative Ruling

Judge: Upinder S. Kalra, Case: 20STCV26362, Date: 2022-08-03 Tentative Ruling

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Case Number: 20STCV26362 Hearing Date: August 3, 2022 Dept: 51

Tentative Ruling

Judge Upinder S. Kalra, Department 51

HEARING DATE: August 3, 2022

CASE NAME: Vanessa Delgado, et al. v. 8000 Bell Gardens, LLC

CASE NO.: 20STCV26362

DEFENDANTS’ MOTION FOR DETERMINATION OF GOOD FAITH SETTLEMENT

MOVING PARTY: Defendants Dale W. Self, et al.

RESPONDING PARTY(S): None as of July 29, 2022. Defendants filed a Notice of Non-Opposition on July 22, 2022.

REQUESTED RELIEF:

1. An order determining that the settlement between the parties was entered in good faith

TENTATIVE RULING:

1. The Motion for Determination of Good Faith Settlement is GRANTED.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiff Bell Gardens Avenue, LLC entered into an agreement of purchase and sale of real property and escrow instructions (“Purchase and Sale Agreement”) with 8000 Bell Gardens, LLC to purchase an undeveloped land which is located at 8000 Bell Gardens Avenue, Bell Gardens, California 91201 (“Subject Property”). Plaintiff Bell Gardens Avenue, LLC and Vanessa Delgado (“Delgado”) (collectively “Plaintiffs”) allege that Defendants 8000 Bell Gardens, LLC, Dale W. Self, Karen N. Self (“the Self’s”) individually and as Trustees of the Self Revocable Trust (collectively “Defendants”) intentionally and/or negligently did not disclose the Subject Property’s hazardous subsurface soil contamination.

On July 13, 2020, Plaintiffs filed the Complaint, and on March 11, 2021, the Second Amended Complaint (“SAC”) against Defendants for the following causes of action:

(1) Intentional Misrepresentation;

(2) Negligent Misrepresentation;

(3) Concealment;

(4) Negligence (ODIC);

(5) Action Per Gov. Code, § 815.2 & 815.4;

(6) Negligence Per Se;

(7) Violation of Health & Safety Code § 41700; and

(8) Civil Conspiracy.

The current Motion for Determination of Good Faith Settlement pursuant to CCP § 877.6 was filed on July 13, 2022. No opposition was filed. Notice of Non-Opposition was filed by Defendants on July 22, 2022.

Service:

The Proof of Service attached to the Motion indicates that the parties, per agreement, were served via email/electronic service. All parties were served via overnight delivery and electronic service to the OneLegal e-service on July 12, 2022.

LEGAL STANDARD

California 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 . . . .” “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).) Although a determination that a settlement was in good faith does not discharge any other party from liability, “it shall reduce the claims against the others in the amount stipulated” by the settlement. (Code Civ. Proc., § 877, subd. (a).)

“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 City of Grand View Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261, the court provided the following guidance regarding a motion for a good faith settlement determination:

This court notes that of the hundreds of motions for good faith determination presented for trial court approval each year, the overwhelming majority are unopposed and granted summarily by the trial court. At the time of filing in many cases, the moving party does not know if a contest will develop. If each motion required a full recital by declaration or affidavit setting forth a complete factual response to all of the Tech-Bilt factors, literally thousands of attorney hours would be consumed and inch-thick motions would have to be read and considered by trial courts in an exercise which would waste valuable judicial and legal time and clients’ resources. . .. That is to say, when no one objects, the barebones motion which sets forth the ground of good faith, accompanied by a declaration which sets forth a brief background of the case is sufficient.

If the good faith settlement is contested, section 877.6, subdivision (d), sets forth a workable ground rule for the hearing by placing the burden of proving the lack of good faith on the contesting party. 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 nonsettlor who asserts that the settlement was not made in good faith. If contested, declarations by the nonsettlor should be filed which in many cases could require the moving party to file responsive counterdeclarations to negate the lack of good faith asserted by the nonsettling contesting party.

(192 Cal.App.3d 1251, 1260-1261 [citation omitted].)

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.” (Tech-Bilt, Inc., supra, 38 Cal.3d 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.)

“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.” (Id. at pp. 499-500.)

“[A] court not only looks at the alleged tortfeasor's potential liability to the plaintiff, but it must also consider the culpability of the tortfeasor vis-à-vis other parties alleged to be responsible for the same injury. Potential liability for indemnity to a nonsettling defendant is an important consideration for the trial court in determining whether to approve a settlement by an alleged tortfeasor. [Citation.]” (TSI Seismic Tenant Space, Inc. v. Superior Court (2007) 149 Cal.App.4th 159, 166.)

ANALYSIS:

Defendants/ Dale W. Self, Karen N. Self, Dale W. Self and Karen N. Self as Trustees of the Self Revocable Trust, 8000 Bell Gardens, LLC, and the City of Maywood (“Defendants”) move to have the court determine that the settlement agreement was entered in good faith.

1. Burden:

“The party asserting the lack of good faith shall have the burden of proof on that issue.” (Code Civ. Proc., § 877.6, subd. (d).) Here, Plaintiffs have the burden to prove that the good faith settlement should be denied. As of July 29, 2022, no opposition has been filed.

2. Factors:

To determine whether settlement has been in good faith, courts look at certain factors. 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.”

3. Analysis:

The complaint filed by Plaintiffs alleged that the Defendants failed to disclose that certain soil that was transported from the City of Maywood contained lead.

Defendants move for a determination of good faith settlement. Courts use the factors in Tech-Bilt to determine if a settlement was made in good faith.

The first factor is the proportionate liability. Defendants argue that the potential recovery is $1 million. The Plaintiffs seek reimbursement to remediate the lead soil contamination. (Motion 5: 27 – 6: 1). This claim was measured based on the approximate amount Plaintiffs expected to pay, $1 million, versus what was actually paid, approximately $2 million. Even though the Plaintiffs sought $5 million for alleged lost profits, “numerous members of Plaintiffs have testified that they had no intention of participating in actual construction portion of development.” (Motion 6: 4-7; Dec. Goldstein, Ex. 3). Additionally, defendant’s liability is not certain as is evident by the Selfs’ motion for summary judgment, which was granted. Lastly, the proportionate liability is low, less than 20% combined. This number is this low because Defendants allowed the Plaintiffs to inspect what they wanted for two years, and it was another party, Odic, who provided incorrect information. (Dec. Goldstein ¶ 10-11).

The second factor is the settlement amount. The settlement amount is $500,000, in addition to the withdrawal of Mrs. Self’s motion for attorney’s fees totaling $474,000. This would total $974,000, which is almost the entire remediation damages. Even based on the claimed $6,000,000 in damages, this amount would still total 16% of that amount. (Dec. Goldstein ¶ 11-12).

The third factor is allocation of settlement proceeds. Defendants contend that this factor does not apply as the funds are going to both joint Plaintiffs.

The fourth factor is a “recognition that a settlor should pay less in settlement than he would if he were found liable after trial.” (Tech-Bilt, supra, 38 Cal.3d 488 at pg. 499). Here, Defendants argues that they will be paying more than the allege proportionate liability to settle. Because trials are uncertain and incur great expense over a complex case that is scheduled to last 6-8 weeks, this factor favors settlement.

The fifth factor is the financial condition and insurance. Defendants contend that this factor is not at issue because the Defendants’ defense is not being paid for under an insurance policy and its financial condition is not at issue. (Motion 7: 20-21).

The last factor is that the settlement negotiations were done with a third-party neutral without fraud or collusion. Here, the settlement agreement was reached via a full day of mediation between the parties. There is no evidence that the settlement was the product of fraud, collusion, or tortious conduct.

The Tech-Bilt factors have been satisfied. The parties engaged in a fair mediation, with no evidence of tortious conduct. The proposed settlement amount is fair, at $974,000, which is the $500,000 settlement amount and the withdrawal of the attorneys’ fee motion requesting $474,000. The proportionate of liability is low. Plaintiffs also indicated construction was not a priority. Additionally, the cost of a 6-8 week trial, and further motions based on that trial would incur a great expense. Lastly, the Plaintiffs did not provide an opposition. Therefore, the settlement agreement is fair and reasonable.

Conclusion:

For the foregoing reasons, the Court decides the pending motion as follows:

Motion for Determination of Good Faith Settlement is GRANTED.

Moving party is to give notice.

IT IS SO ORDERED.

Dated: August 3, 2022 __________________________________ Upinder S. Kalra

Judge of the Superior Court