Case Number: EC062161    Hearing Date: August 08, 2014    Dept: A

Harford Casualty v Claud Townsley, Inc.

MOTION FOR DETERMINATION OF GOOD FAITH SETTLEMENT

Calendar: 8
Case: EC062161
Date: 8/8/14

MP: Defendant, Roofing Supply Group – Southern California, LLC
RP: Defendant, Freshair Environmental Services, Inc.

RELIEF REQUESTED:
Order determining that the settlement between the Plaintiff and the Defendant, Roofing Supply Group – Southern California, LLC, was a good faith settlement under CCP section 877.6.

DISCUSSION:
This case arises from the Plaintiff’s claim that the Defendants’ wrongful conduct caused it to make a payment to its insured for damages resulting from a collapse of the insured’s roof.
This hearing concerns the motion of the Defendant, Roofing Supply Group – Southern California, LLC (“Roofing Supply”), for an order finding that its settlement with the Plaintiff is a good faith settlement under CCP section 877.6. Under the settlement, Roofing Supply agreed to pay $10,000 in return for a dismissal of the Complaint. A determination that their settlement is a good faith settlement under CCP section 877.6 will bar any claims for equitable contribution or comparative indemnity.
The Defendant, Freshair Environmental Services, Inc., filed opposition.

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. When a motion seeking a determination under CCP section 877.6 is not opposed, the burden on the moving parties to show that the settlement was made in good faith is slight. 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).
However, when the motion is contested, then the moving parties must make a sufficient showing in the moving papers or in the reply papers. Id. at 1262 (holding that evidence showing a lack of good faith requires the moving party to provide evidence to negate the lack of good faith asserted by the contesting party). CCP section 877.6(d) then imposes the burden of showing that the settlement was not made in good faith on the contesting party.
In order to determine whether the settlement was made in good faith under CCP section 877.6, the Court applies the following factors identified by the California Supreme Court in Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488 to determine whether the settlement amount is “in the ballpark” of the settling party’s share of liability for the 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).

The Supreme Court explained that CCP section 877.6 is designed to further two equitable policies: 1) encouragement of settlements and 2) equitable allocation of costs among joint tortfeasors. Id. Those policies would be not be served by an approach which emphasizes one to the virtual exclusion of the other. Id. Accordingly, a settlement will not be found in good faith unless the amount is reasonable in light of the settling tortfeasor’s proportionate share of liability. Std. Pac. of San Diego v. A. A. Baxter Corp. (1986) 176 Cal. App. 3d 577, 589.
Further, the Legislature intended “good faith” to encompass a broader range of considerations than mere absence of palpable wrongdoing. Id. at 588. It’s not necessary to find collusion; instead, “good faith” encompasses the problem of a settling defendant not paying an amount “in the ballpark” of the settling party’s share of liability.

Here, the Plaintiff, Hartford Casualty Insurance Company, paid a claim to its insured for damages resulting from a roof collapse that occurred on August 6, 2012 during a roof repair. The claim is that the roof collapse occurred due to the weight of the pallets of roofing materials that were stored on the roof. There is also a claim that water damage occurred on August 30, 2012 when rainwater leaked through the hole in the roof. The Plaintiff brought claims against the Defendants, who were involved in the repairs on the roof.

The Defendant, Roofing Supply, provided roofing supplies for the repair work.

The following proceeds with an analysis of Roofing Supply’s application with the Tech-Bilt factors.

1) A rough approximation of the plaintiff’s total recovery
The damages are the Plaintiff’s $430,000 payment to the insured. This is the amount demanded in the Complaint. Accordingly, a rough approximation of the Plaintiff’s recovery is $430,000.

2) An approximation of the settling party’s share of the liability
Roofing Supply delivered the roofing materials for the re-roofing project. The supplies were transported to the roof from the street with a conveyor on Roofing Supply’s delivery truck on July 17, 2012. Central Roofing took possession of the roofing materials and had control over them during the re-roofing project. There was a three week delay between delivery and commencement of the project because asbestos was discovered in the roof. The collapse occurred on August 6, 2012, which was 20 days after Roofing Supply had delivered the roofing materials.
These facts indicate that Roofing Supply’s share of liability is slight. Roofing Supply did not have possession or control of the roofing supplies after delivery. Its role in the events was to provide the roofing materials and to assist with the transport of the materials to the roof. Accordingly, an approximation of Roofing Supply’s share of liability would find it has a very small share of liability.
In the opposition, the Defendant argues that Roofing Supply should be liable because the weight of the supplies it delivered was the cause of the collapse. However, this is not a persuasive argument regarding causation because Roofing Supply did not have control or possession of the roofing supplies during the twenty days between delivery of the roofing materials and the roof collapse. Roofing Supply’s conduct is not sufficiently proximate to the cause of the damages to impose any substantial amount of liability.
Roofing Supply has offered to pay $10,000. This is approximately 2% of the total recovery. The 2% amount is consistent with Roofing Supply’s small share of liability for the roof collapse that occurred three weeks after it delivered the roofing materials.

3) recognition that a settling party should pay less in settlement than if found liable after a trial
The payment of $10,000 is proportionate to what a trier-of-fact is likely to impose on Roofing Supply at trial.

4) The allocation of the settlement proceeds among plaintiffs
This does not appear to be a factor.

5) The settling party’s financial condition and insurance policy limits
Roofing Supply offers no facts regarding its financial condition. This factor is irrelevant to the pending motion because the amount paid is not based on Roofing Supply’s ability to pay; instead, the amount paid is based on Roofing Supply’s desire to terminate this litigation.

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).
The Defendant’s attorney, Todd Austin, provides facts in his declaration to demosntrate that the settlement was obtained after arms-length negotiations. Mr. Austin states that the purpose of paying the money was to obtain peace of mind and to terminate this litigation as to Roofing Supply.
The opposition papers offer no evidence that Roofing Supply and the Plainiff engaged in fraud or collusion.
Accordingly, there are no grounds to find that fraud or collusion taint the settlement.

This analysis demonstrates that Roofing Supply is entitled to a finding that the settlement is a good faith settlement under CCP section 877.6. Roofing Supply has offered to make a payment of $10,000, which would compensate the Plaintiff for the small share of liability that Roofing Supply possesses for damages resulting from the roof collapse and water damage. Further, there is no evidence that Roofing Supply and the Plaintiff engaged in fraud and collusion when they settled the claims.

Therefore, the Court will grant the application of Roofing Supply for a finding under CCP section 877.6 that its settlement with the Plaintiff was a good faith settlement.

RULING:
Grant motion for good faith determination.