Case Number: KC064733 Hearing Date: May 27, 2014 Dept: O

Wahl, et al. v. Armstrong Garden Centers, Inc., et al. (KC064733)

1. Cross-Defendant Ashland Inc.’s MOTION FOR FINDING OF GOOD FAITH SETTLEMENT

Respondent: 1. Cross-Complainant TJ Maxx of California
2. Plaintiffs Wahl, et al.

2. Specially-Appearing Cross-Defendant Essential Ingredients, Inc. (Roe 2)’s MOTION TO QUASH SUMMONS AND CROSS-COMPLAINT OF T.J. MAXX OF CALIFORNIA, LLC

Respondent: Cross-Complainant TJ Maxx of California

3. Defendant TJ Maxx of California’s MOTION TO QUASH DEPOSITION SUBPOENAS FOR PERSONAL APPEARANCE AND FOR PROTECTIVE ORDER

Respondents: NO OPPOSITION

TENTATIVE RULING

1. GFS

Cross-Defendant Ashland Inc.’s motion for finding of good faith settlement is GRANTED.

Any party to an action in which it is alleged that two or more parties are joint tortfeasors or co-obligors on a contract debt may seek a judicial determination that a settlement was made in good faith; such a determination bars any other joint tortfeasor or co-obligor from any further claims against the settling tortfeasor for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault. The party asserting the lack of good faith shall have the burden of proof on that issue.” (CCP 877.6 (a), (c)-(d).)

The Tech-Bilt court developed a number of different factors to consider when determining whether a settlement is made in “good faith.” The settlement amount, while clearly a relevant factor, is not the sole consideration. For example, bad faith is not established simply by showing that a settling defendant paid less than his or her theoretical proportionate or fair share. Such a rule would unduly discourage settlements – damages are often speculative, and the probability of legal liability is often uncertain or remote. Further, even where damages are great and liability certain, a disproportionately low settlement figure is often reasonable in the case of a relatively insolvent, and uninsured, or underinsured, joint tortfeasor. Moreover, such a rule would tend to convert the pretrial settlement approval procedure into a full scale mini trial.

The intent and policies underlying 877.6 require that a number of factors be taken into account including a rough approximation of plaintiff’s 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.

Finally, practical considerations obviously require that the evaluation be made on the basis of information available at the time of settlement. 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. The party asserting the lack of good faith has the burden of proof on that issue (CCP 877.6(d)) and 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 877.6. (Tech-Bilt, Inc. v. Woodward-Clyde & Assoc. (1985) 38 Cal.3d 488, 498-501.)

The Tech-Bilt factors can be summarized as follows:

(1) A rough approximation of plaintiff’s total recovery and the settlor’s proportionate liability;
(2) The amount paid in settlement;
(3) The allocation of settlement proceeds among defendants;
(4) A recognition that a settlor should pay less in settlement than he would if he were found liable after a 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 the nonsettling defendants.

Where the nonsettling defendants contest “good faith,” the moving party must make a sufficient showing of all the Tech-Bilt factors. (City of Grand Terrace v. Sup.Ct (1987) 192 Cal.App.3d 1251, 1262.)

Cross-Defendant Ashland Inc. moves for GFS determination between Cross-Defendant and Plaintiffs for $10,000.00 to be allocated as follows: $2,500 to Michelle Wahl, $2,500 to Laurence Wahl, and $5,000 to Delaney Wahl. The settlement appears to be fair and reasonable given that Ashland has a minor role in the litigation. Ashland’s product, Klucel, is a thickening agent that is widely used and inherently safe. The formula for the pourable gel fuel was a proprietary trade secret and Ashland had no involvement with use of its thickening agent in the gel fuel. The court also recognizes that less is paid in settlement than if the case went for trial. There is no evidence of any collusion, fraud, or tortious conduct aimed to injure nonsettling Defendants.

While Defendant TJ Maxx disputes the good faith settlement, its objections are without merit. TJ Maxx argues that it did not have a chance to conduct discovery, but fails to address the fact that TJ Maxx is familiar with the Delgado case, which involves TJ Maxx’s sister corporation concerning the same fire pot and Defendant entities. In that matter Ashland submitted thousands of pages of documents establishing that its product is safe. In Delgado, experts for both Plaintiffs and Defendants agree that the fire was caused by ethanol vapors, and not Klucel.

Accordingly, the court finds that the settlement meets the Tech-Bilt factors for good faith. Motion is GRANTED.

2. Motion to Quash Summons

Specially-Appearing Cross-Defendant Essential Ingredients, Inc. (Roe 2)’s motion to quash summons and cross-complaint of T.J. Maxx of California, LLC is GRANTED.

MOTION TO QUASH:
A defendant, on or before the last day of his or her time to plead or within any further time that the court may for good cause allow, may serve and file a notice of motion to quash service of summons on the ground of lack of jurisdiction of the court over him or her. (CCP 418.10(a)(1).)

When a nonresident defendant challenges personal jurisdiction the burden shifts to the plaintiff to demonstrate by a preponderance of the evidence that all necessary jurisdictional criteria are met. (Jewish Defense Org. v. Superior Court (1999) 72 Cal. App. 4th 1045, 1054-55.) This burden must be met by competent evidence in affidavits and authenticated documentary evidence. (Id. at 1055.)

GENERAL JURISDICTION:
General jurisdiction may lie for all purposes if a defendant has established a presence in the forum state by virtue of activities in the state which are extensive or wide-ranging, or substantial and systematic, in which case a defendant’s contacts take the place of physical presence within the state. (Integral Dev’t Corp. v. Weissenbach (2002) 99 Cal. App. 4th 576, 583-84.) The cause of action need not be related to the defendant’s contacts. (Thomson v. Anderson (2003) 113 Cal.App.4th 258, 265-266.)

SPECIFIC JURISDICTION:
Specific jurisdiction results when the defendant’s contacts with the forum state, though not enough to subject the defendant to the general jurisdiction of the forum, are sufficient to subject the defendant to suit in the forum on a cause of action related to or arising out of those contacts. (Aquila, Inc. v. Superior Court (2007) 148 Cal.App.4th 556, 569-570.) Specific jurisdiction exists if: (1) the defendant has purposefully availed itself of forum benefits with respect to the matter in controversy; (2) the controversy is related to or arises out of the defendant’s contacts with the forum; and (3) the assertion of jurisdiction would comport with fair play and substantial justice. (Id. at 570.) Courts must additionally evaluate the burden on the defendant of appearing in the forum, the forum state’s interest in adjudicating the claim, the plaintiff’s interest in convenient and effective relief within the forum, judicial economy, and the shared interest of the several states in furthering fundamental substantive social policies. (Id.)

This court finds that Cross-Complainant has failed to meet its burden of establishing general and/or specific jurisdiction over Essential Ingredients, Inc.

Essential Ingredients is not a California corporation, has no presence in California, does not do business in the state, and has never sold, shipped, or otherwise delivered the product at issue, Klucel, to California. As the Supreme Court, in Goodyear Dunlop Tires Operations, S.A. v. Brown (2011) 131 S.Ct.2846, 2857 has held: “Mere purchases made in the forum State, even if occurring at regular intervals, are not enough to warrant a State’s assertion of general jurisdiction over a nonresident corporation in a cause of action NOT RELATED TO THOSE PURCHASE TRANSACTIONS.” Thus, there is no showing of a substantial or systematic contact with California to confer general jurisdiction over this entity.

As to specific jurisdiction, T.J. Maxx contends that Essential Ingredients purposefully availed itself to California jurisdiction by doing business with Ross Organic Specialty Sales, Inc., who then distributes Essential’s products throughout the western US, including California. However, “the defendant’s transmission of goods permits the exercise of jurisdiction only where the defendant can be said to have targeted the forum; as a general rule, it is not enough that the defendant might have predicted that its goods will reach the forum State… The ‘substantial connection’ between the defendant and the forum State necessary for a finding of minimum contacts must come about by an action of the defendant purposefully directed toward the forum State. The placement of a product into the stream of commerce, without more, is not an act of the defendant purposefully directed toward the forum State.” (J. McIntyere Mach., Ltd. v. Nicastro (2011) 131 S.Ct. 2780.) In Dow Chem. Canada ULC v. Superior Court (2011) 202 Cal.App.4th 170, a company sold a component part outside of California, which was incorporated into a final product that caused injury in California. As with Klucel, the product in Dow was not in any way California specific. Without additional conduct, these facts are insufficient to establish purposeful availment.

Accordingly, the court finds that plaintiff failed to demonstrate by a preponderance of the evidence that defendant is subject to this court’s jurisdiction. Motion to quash is GRANTED.

3. Motion to Quash Deposition Subpoena

Defendant TJ Maxx of California’s motion to quash deposition subpoenas for personal appearance and for protective order is GRANTED.

If a subpoena requires the attendance of a witness or the production of books, documents, electronically stored information, or other things before a court, or at the trial of an issue therein, or at the taking of a deposition, the court, upon motion reasonably made by any person described in subdivision (b), or upon the court’s own motion after giving counsel notice and an opportunity to be heard, may make an order quashing the subpoena entirely, modifying it, or directing compliance with it upon those terms or conditions as the court shall declare, including protective orders. (CCP 1987.1(a).)

If the deponent is not a party to the action or an officer, director, managing agent, or employee of a party, a party serving a deposition notice under this section shall use any process and procedures required and available under the laws of the state, territory, or insular possession where the deposition is to be taken to compel the deponent to attend and to testify, as well as to produce any document, electronically stored information, or tangible thing for inspection, copying, testing, sampling, and any related activity. (CCP 2026.010(c).)

Plaintiffs served Jennifer Karmonick and Eric Rubel, attorneys for TJ Maxx, with subpoenas within the District of Columbia, utilizing a California State Deposition Subpoena. As Karmonick and Rubel are non-party witnesses, service in this manner is improper. Further, these individuals are counsels for TJ Maxx, and have objected to testifying based on the attorney client privilege. Plaintiffs failed to file any opposition raising facts that would demonstrate that the privilege will not be implicated. Motion is GRANTED.