Judge: Yolanda Orozco, Case: 21STCV22809, Date: 2023-02-21 Tentative Ruling
Case Number: 21STCV22809 Hearing Date: February 21, 2023 Dept: 31
DETERMINATION OF GOOD FAITH SETTLEMENT
TENTATIVE RULING
Defendants Patricia Hamada’s
and Breach City Brokers, Inc.’s Motion for Determination of Good Faith
Settlement is GRANTED.
Background
On June 18, 2021, Plaintiffs Alexis Capozzi and Noel Alaka initiated the present action by filing a complaint against Defendants Yong Yoo, Regina Cheung, Patricia Hamada (“Hamada”), and Beach City Brokers, Inc. Plaintiffs entered into a purchase agreement for real property located at 8329 Pershing Drive, Unit 4, Playa Del Ray sold by Yong Yoo and Regina Cheung on May 15, 2020. Hamada is a real estate agent employed by Beach City Brokers, Inc. (“Broker”); both Hamada and Broker facilitated the transaction between the parties. Escrow closed on June 18, 2020. Plaintiffs thereafter discovered black mold, water damage, and scraped asbestos throughout the property. (Compl., ¶ 14.) A mold inspector advised Plaintiffs that the home was unsafe for habitation. (Id.)
The sellers, Yong Yoo and Regina Cheung, were dismissed from the action with prejudice on April 6, 2022, pursuant to a settlement agreement negotiated between the parties.
The Third Amended Complaint (TAC), alleges causes of action for:
1) Breach of Contract;
2) Violation of Civil Code section 1102, et seq.;
3) Negligent Misrepresentation;
4) Fraud;
5) Breach of Fiduciary Duty; and
6) Nuisance
On January 09, 2023, Defendants Patricia Hamada and Beach City Brokers, Inc. filed a Motion for Determination of Good Faith Settlement.
A notice of non-opposition
was filed on February 10, 2023.
Legal Standard
Under Code of Civil Procedure section 877.6, the court
applies the factors identified by the California Supreme Court in Tech-Bilt,
Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488 to determine
whether a settlement is in good faith and if the settlement amount is “in the
ballpark” of the settling party’s share of liability for injuries:¿¿¿
¿¿
1. a rough approximation of the plaintiff's total recovery;¿¿
2. an approximation of the settling party's share of the liability;¿¿
3. recognition that a settling party should pay less in
settlement than if found liable after a trial;¿¿
4. the allocation of the settlement proceeds among plaintiffs;¿¿
5. the settling party's financial condition and insurance
policy limits;¿¿
6. evidence that the plaintiff and the settling party acted
with an intent to make the non-settling parties pay more than their fair share
(considered fraud and collusion under Tech-Bilt).¿¿
¿¿
CCP section 877.6 permits the court to evaluate a
settlement made between a plaintiff and a defendant when the defendant is a
joint tortfeasor with other non-settling defendants. A determination that the
settlement is a good faith settlement under Section 877.6 will bar any claims
for equitable contribution or comparative indemnity. The burden is on the party
opposing the settlement to show it was not made in good faith. (Code Civ.
Proc., § 877.6,¿subd. (d).)¿ Accordingly, the party asserting the lack of “good
faith” may meet this burden by demonstrating that the settlement is so far “out
of the ballpark” as to be inconsistent with the equitable objectives of the
statute. (See Tech-Bilt, Inc., supra, 38 Cal.3d¿at pp. 499-500.)
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.)¿
Discussion
Settling Defendants Patricia Hamada and Beach City Brokers, Inc. seek a determination that their settlement with Plaintiffs was entered into in good faith and meets the standards set out in Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1995) 38 Cal.3d 488.)
Settling Defendants also seek an order that already dismissed defendants Regina Cheung and Yong Yoo and dismissed cross-defendant Del Rey Villas Homeowners Association, are barred from asserting claims against Settling Defendants for indemnity.
Defendants Regina Cheung and Yoog Yoo settled their claims for $102,000.00
Since this motion is unopposed, the Settling Defendants burden of showing that the settlement was made in good faith is slight. (See City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261 [holding that a barebones motion including a declaration setting forth a brief background is sufficient].)
After mediation, Plaintiff and the remaining Settling Defendants agreed to settle, with Defendants paying Plaintiffs $65,000.00 in exchange for a dismissal with prejudice an a waiver of Civil Code section 1542.
The settlement involves Plaintiffs’ second through fifth causes of action for Negligent Misrepresentation, Fraud, Breach of Fiduciary Duty, and Nuisance. Plaintiff alleges settling Defendants only disclosed cosmetic damages and failed to disclose hidden damages to the interior walls, ceilings, floor, exterior walls, doors, and roof in the Agent Visual Inspection Disclosure. (TAC ¶ 8-10.) The TAC alleges that by opening the windows of the property during the open house and advising Plaintiffs to not speak to other residents in the building, Defendants concealed the presence of mold in the subject property. (TAC ¶¶ 14-15.) Settling Defendants assert that inspections of the subject property failed to report the presence of water damage, mold, or asbestos. (TAC ¶¶ 10, 11.)
Settling Defendants assert that the settlement is 70% of Plaintiffs’ remaining claimed damages, considering the settlement with the Yoos for $102,000.00 and excluding the costs of mold remediation and attorney’s fees. (Catalanotti Decl. ¶ 7.) Moreover, Plaintiffs had already agreed to a release from liability in exchange for a reduced-price reduction related to repairs at the time of purchase. (Id. ¶ 6, 7, Ex. B, C.) Plaintiffs proceeded with the purchase of the subject property after the sellers reduced the price, with the price contingent on the Plaintiffs taking responsibility for any remaining repairs and expenses. (Id. ¶ 9, Ex. D.)
Settling Defendants have one E&O insurance policy with a $1mm policy limit. Settling Defendants assert they had no obligation to inspect the property for latent defects, especially considering that Plaintiff’s own inspection company failed to uncover any alleged defects. (See Civ. Code § 2079.3; Peake v. Underwood (2014) 227 Cal.App.4th 428, 441 [real estate agent only had duty to disclose visible defects and not defects not visible and not reasonably apparent during a reasonable property inspection].)
For all the state reasons, the Court agrees that the settlement amount is fair, reasonable, and not disproportionate to Settling Defendants’ liability. The Court also finds that the Settling Defendants did not settle with the intent to make the other parties pay more than their fair share of damages and the settlement amount was the result of arms-length negotiations using a mediator. (Catalanotti Decl. ¶ 11.)
The Motion is GRANTED.
Conclusion
Defendants Patricia Hamada’s and Breach City Brokers, Inc.’s Motion for Determination of Good Faith Settlement is GRANTED.
The Court sets an OSC re dismissal on March 21, 2023, at 9 a.m.
Moving party to give notice.