This is a construction defect action brought by plaintiff Symantec Corporation (“Symantec”), owner of two 200,000 square foot buildings, Building A and Building B, joined by a connecting walkway (collectively, “the Facility”) in Springfield, Oregon. Upon completion of Building B and the walkway, Symantec alleges the Facility experienced vapor penetration and extensive structural and seismic deficiencies. On or about May, 2010 Symantec filed its original complaint. The operative Third Amended Complaint was filed on or about December, 2012 and asserts five causes of action: (1) breach of contract; (2) professional negligence; (3) common counts; (4) breach of express and implied warranties; and (5) negligence. The named defendants include: Sares-Regis Group of Northern California, LP (“Sares”), Hellmuth Obata + Kassabaum, Inc (“Obata”), Hok/Burgess, LLC (“Hok”), and Floor Seal Technology, Inc (“Floor Seal”).

In January, 2013 Sares filed a cross-complaint against Symantec, Matt Construction Corporation (“Matt Construction”), KLT Consulting Structural Engineers (“KLT”), Wood-Lam Structures, Inc. (“Wood-Lam”), Chambers Construction, Co. (“Chambers”), Deamor Associates, Inc. (“Deamor”), Umpqua Roofing Company, Inc. (“Umpqua”), McKenzie Glass (“Mckenzie”), Performance Contracting, Inc. (“Performance”), Omlid & Swinney Fire Protection Systems, Inc. (“Omlid”), ACCO Engineered Systems, Inc. (“ACCO”), Alliant Systems, LLC (“Alliant”), Gary Pierce Painting, Inc. (“Gary Pierce”), CGC Industries DBA Culver Glass Company (“CGC”), Eugene Mirror and Glass (“EMG”), River Roofing, Inc. (“RRI”), Professional Service Industries, Inc. (“PSI”), Richard Graves (“Graves”), and Malarkey Roofing Products (“MRP”).

Sares, the last defendant to settle, now moves for determination of good faith settlement with Symantec. The motion is unopposed.

Sares’ Motion for Determination of a Good Faith Settlement with Plaintiff Symantec

Sares provided development management services during the construction of Building B and the Connector.

The Court has not been provided with any of the specifics of the Settlement Agreement reached by the parties. Rather, the only portion of the Settlement Agreement included in the moving papers for the instant motion is the Settlement Agreement’s confidentiality clause that states in relevant part:

“The terms of this Agreement shall be kept confidential by the parties and their counsel and shall not be disclosed or publicized by the parties or their counsel to any person not a party hereto, except for legal proceedings to enforce performance or to prosecute or defend any action including seeking a court determination of the good faith settlement under Code of Civil Procedure 877.6, where disclosure is required by law, or otherwise required by court order…”

Analysis: “Any party to an action in which it is alleged that two or more parties are joint tortfeasors … shall be entitled to a hearing on the issue of good faith of a settlement entered into by the plaintiff … and one or more alleged tortfeasors[.]” (Code Civ. Proc., § 877.6, subd. (a)(1).) In determining whether a proposed settlement is made in good faith, the Court may consider affidavits and, in its discretion, it may receive other evidence at the hearing on the motion. (Id., § 877.6, subd. (b).) “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.” (Id., § 877.6, subd. (c).) “The party asserting the lack of good faith shall have the burden of proof on that issue.” (Id., § 877.6, subd. (d).)

In Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, the California Supreme Court set forth the following factors for consideration of a proposed settlement: (1) a rough approximation of plaintiffs’ total recovery and the settler’s proportionate liability; (2) the amount paid in settlement; (3) the allocation of settlement proceeds among plaintiffs; (4) discount for settlement before trial; (5) the financial conditions and insurance policy limits of settling defendants; and, (6) the existence of collusion, fraud, or tortious conduct aimed to injure the interests of non-settling defendants. (Tech-Bilt, supra, 38 Cal.3d at p. 499.) The party asserting the lack of good faith, who has the burden of proof on that issue, should be permitted to demonstrate 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. (Id. at p. 500.) Such a demonstration would establish that the proposed settlement was not a “settlement made in good faith” within the terms of Code of Civil Procedure Section 877.6. (Id. at pp. 499-500.) However, bad faith is not “established by a showing that a settling defendant paid less than his theoretical proportionate or fair share.” (Id. at p. 499.)

Under Code of Civil Procedure section 877 subdivision (a), a good faith settlement reduces the claims against non-settling joint tortfeasors claimed to be liable for the same tort or co-obligors mutually subject to contribution rights in the amount stipulated by the release, the dismissal or the covenant, or in the amount of the consideration paid for it, whichever is the greater. “Where there are multiple defendants, each having potential liability for different areas of damage, an allocation of the settlement amount must be made. [Citations.] Failure to do so may preclude a ‘good faith’ determination because there is no way to determine the appropriate setoff pursuant to section 877 against the nonsettling defendant. [Citations.] It is the burden of the settling parties to explain to the court and to all other parties the evidentiary basis for any allocations and valuations made sufficient to demonstrate that a reasonable allocation was made. [Citation.]” (L.C. Rudd & Son v. Superior Court (1997) 52 Cal.App.4th 742, 750.) “[W]hat should be required of the settling parties is that they furnish to the court and to all parties an evidentiary showing of a rational basis for the allocations made and the credits proposed. They must also show that they reached these allocations and credit proposals in an atmosphere of appropriate adverseness so that the presumption may be applied that a reasonable valuation was reached. [Citation.]” (Regan Roofing v. Superior Court (1994) 21 Cal.App.4th 1685, 1704.)

However, if no party contests a settlement’s good faith nature, a trial court need not consider the Tech-Bilt factors. City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261 (“[O]nly when the good faith nature of a settlement is disputed, it is incumbent upon the trial court of consider and weigh the Tech-Bilt factors.”). Where there is no objection to good faith settlement “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.” Id.

As stated previously, Sares’ motion for determination of good faith settlement is not opposed. However, the entire point of a good faith settlement is that the Court reviews the settlement and determines it has in fact been made in good faith. Even when the good faith settlement motion is unopposed, and therefore the Tech-Bilt factors need not be met, City of Grand Terrace still exacts some evidence, requiring grounds for good faith to be set forth. Surely this means more than the parties’ assurance that good faith exists, and includes the terms of the settlement. As such the Court cannot grant Sares’ motion for determination of good faith settlement. Rather, Sares should re-file the motion conditionally under seal, attaching the settlement agreement for the Court’s review.

For all of these reasons, Sares’ motion for determination of good faith settlement is DENIED without prejudice.