CIV532571 GARY CECCATO, ET AL. VS. 1893 WOODLAND EPA LLC, ET AL.

DAVID MONTGOMERY 1893 WOODLAND EPA LLC
PETER H. BONIS DAVID J. LONICH

MOTION TO CONFIRM SETTLEMENT IN GOOD FAITH TENTATIVE RULING:

The motion to confirm settlement in good faith is granted. The Tech-Bilt factors weigh in favor of finding that the settlement was in good faith. The ruling on this motion does not affect Christina O’Brien, who is not one of the moving parties and does not appear to be a party to the settlement at issue.

A. Rough approximation of plaintiffs’ recovery and settlor’s proportionate liability.

“The ultimate determinant of good faith is whether the settlement is grossly disproportionate to what a reasonable person at the time of settlement would estimate the settlor’s liability to be.” (City of Grand Terrace v. Sup.Ct. (1987) 192 Cal.App.3d 1251, 1262.) That the settlement was 1.16 percent of the claimed damages does not, by itself, denote a lack of good faith. (See Cahill v. San Diego Gas & Elec. Co. (2011) 194 Cal. App. 4th 939, 968 (settlement of 0.5 percent of potential damages was within ballpark based on facts known at time of settlement); Wysong & Miles Co. v. W. Indus. Movers (1983) 143 Cal. App. 3d 278, 283 (approving settlement less than one percent of potential damages).)

1893 WOODLAND’s Cross-complaint alleged a single cause of action against PENINSULA GOLD for breach of fiduciary duty. The maximum potential recovery (according to Ceccatos’ Opposition) was $1.2 million, but PENINSULA GOLD’s probable liability was low. PENINSULA GOLD demurred to 1893 WOODLAND’s 3rd Amended Cross-complaint on statute of frauds grounds. Demurrer was overruled, but only because the cross-complaint did not allege that the listing agreement was for a commission. (See Civ. Code sect. 1624, subd. (a)(4) (statute of frauds applies to agreements that provide real estate agent with commission); see Minute Order overruling demurrer, March 1, 2018.) The facts show that Peninsula Gold did earn a commission on the sale, strongly implying that the agreement was, in fact, subject to the statute of frauds.

There was no written broker’s agreement, and the Ceccatos offer no evidence suggesting that PENINSULA GOLD was, in fact, an agent of 1893 WOODLAND. Based on the present showing for this motion, PENINSULA GOLD’s potential liability on 1893 Woodland’s cross-complaint was close to 0.0 percent.

B. The Amount Paid in Settlement.

The settlement amount is not unreasonably low, since there was an extremely low likelihood that 1893 WOODLAND would prevail against PENINSULA GOLD for breach of fiduciary duty. There can be no breach of agent’s duty if no agency existed.

C. Settlor’s financial condition and insurance policy limits.

The Ceccatos are likely correct in presuming that PENINSULA GOLD has an insurance policy. However, the existence of insurance and the financial condition of Peninsula Gold is given low weight, since the potential liability was low.

D. Collusion, fraud, or tortious conduct.

No evidence suggests fraud or collusion.

E. Ruling

The motion to confirm settlement in good faith is granted.

The Court dismisses with prejudice the Fourth and Fifth Causes of action in the Ceccatos’ Crosscomplaint against Peninsula Gold (breach of fiduciary duty and professional negligence).

If the tentative ruling is uncontested, it shall become the order of the Court. Thereafter, counsel for Peninsula Gold shall prepare a written order consistent with the Court’s ruling for the Court’s signature, pursuant to California Rules of Court, Rule 3.1312, and provide written notice of the ruling to all parties who have appeared in the action, as required by law and the California Rules of Court.