Rosa Cervantes vs. JTS Communities, Inc.
Nature of Proceeding:
Filed By:
Motion Contesting Good Faith Settlement Determination
Loorz, Shawn C.

JTS’ Motion Contesting Good Faith Settlement Determination as to the settlement between plaintiffs and Lyman & Sons Inc. is denied. The settlement is found to be in good faith and the court will sign the formal order accompanying the application.

In this construction defect action, Lyman & Sons provided rough grading on a select number of lots. The parties reached settlement for the sum of $6,000. The settlement was reached after a mediation with Bruce Edwards. Lyman & Sons contends the grading was not defective but has agreed to contribute to the settlement of the grading issues. The settlement includes an issue release and waiver of claims for any damages which in any way arise out of Lyman’s work. Thus, plaintiffs will not be seeking damages from JTS arising out of Lyman & Sons grading work.

JTS contends that the settlement is not in good faith because the injuries alleged to the property are indivisible from those created by other subcontractors. JTS contends in a footnote that damage from grading is indivisible from damage from the concrete slab cracks, and therefore JTS is going to be held liable for Lyman’s defective work.

In Tech Bilt, Inc. v. Woodward-Clyde & Associates. (1984) 38 Cal. 3d 488, the California Supreme Court laid out the analysis that should be employed by courts when evaluating a settlement under CCP § 877.6. The following factors are to be considered by the court when determining if settlement was made in good-faith:1. A rough approximation of the plaintiffs total recovery and the settlor’s proportionate liability. 2.The amount paid in the settlement. 3. The allocation of settlement proceeds among plaintiffs. 4. The financial conditions and insurance policy limits of the settling defendants. 5. The existence of collusion, fraud or tortious conduct aimed to injure the interests of non-settling defendants. Id. At 499.

Where good faith is contested, the settling party is required to make a sufficient evidentiary showing of all the Tech Bilt factors. City of Grand Terrace v Superior Court (1987) 192 Cal.App.3d 1251, 1262. Once the settling party has presented a prima facie showing of good faith by addressing the Tech-Bilt factors, the nonsettling defendant has the burden of proving that the settlement is out of the ballpark. Tech-Bilt v. Woodward-Clyde & Assoc. (1985) 38 Cal.App.3d 488, 499-500.

Settling party has contended that there were no defects in the grading.

A determination of good faith settlement has two consequences. First, a good faith settlement reduces the claims against the non-settling defendants in the amount of the settlement. (CCP §877(a).) “This is known as the offset, or setoff, and comes into play when the plaintiff settles for a figure which he or she believes represents partial damages, and goes against the remaining defendant or defendants for the remainder.” (Dillingham Construction, N.A., Inc. v. Nadel Partnership, Inc.(1998) 64 Cal.App.4th 264, 278.) Second, a good faith settlement “bar[s] 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.” (CCP §877.6(c).) “This means that defendants who have settled for less than their proportionate share of damages cannot be required to pay any more, and the nonsettling defendants can be forced to make up the shortfall.” (Dillingham , 64 Cal.App.4th at 279.)

JTS has not presented any evidence that the damages are indivisible or that the rough grading performed by Lyman & Sons was defective. Therefore JTS has not met its burden to show that the settlement is not in good faith.

The Court will sign the proposed formal order accompanying the application.