John C Ellsworth et al vs Sierra Pacific Windows et al

Case Number

19CV02346

Case Type

Hearing Date / Time

Fri, 04/26/2024 - 10:00

Nature of Proceedings

Motion: Good Faith Settlement

Tentative Ruling

For the reasons set forth herein, the motion of Intervenor, Security National Insurance Company, for determination of good faith settlement, is granted. The court will sign the proposed order submitted by Security National Insurance Company.

Background:

This action commenced on May 2, 2019, by the filing of the complaint by plaintiffs John C. Ellsworth and Janice L. Ellsworth as Trustees of the Casa Gran Vista Revocable Trust against defendants Sierra Pacific Windows (“Sierra”) and Ken Taub dba KT Construction Company (“KT”) setting forth causes of action for: (1) Negligence; (2) Negligence per se; (3) Breach of contract; (4) Breach of implied and express warranties; and (5) Breach of implied warranties. Quality Plastering, Inc. (“Quality”) is not named in the complaint.

As set forth in the complaint:

Plaintiffs are the owners of real property located at 1410 Northridge Road, Santa Barbara. (Complaint, ¶ 1.)

Sierra was a product manufacturer who provided materials in the nature of doors and windows which were installed at plaintiffs’ property. (Complaint, ¶ 7.) All of the doors and windows were defectively manufactured and installed which caused water intrusion and property damage to plaintiffs’ property. (Ibid.) Defects consist of improper installation of the Masonry brick and stone, improper installation of the grading system, improper installation of the roofing system, improperly installed windows and doors, defectively manufactured windows and doors, improper installation of tile and grout, improper finishing and painting, improper installation of cabinets, improper installation of swimming pool tiles, failure of the stucco system around the doors and windows, stained exterior and interior finishes, and damage as the result of water intrusion and mold. (Complaint, ¶ 12.)

On October 18, 2019, KT filed a cross-complaint against Sierra, and Moes 1 through 100, setting forth causes of action for: (1) Express indemnity; (2) Implied indemnity; (3) Equitable indemnity; (4) Breach of express warranty; (5) Breach of implied warranty; (6) Negligence; (7) Breach of written and/or oral contract; and (8) Declaratory relief. On June 17, 2020, KT filed an amendment to the cross-complaint substituting in true names for Moes 1 through 7. Quality is “Moe 2.” Quality filed its answer to the cross-complaint on August 19, 2020, asserting a general denial and 59 affirmative defenses.

On June 17, 2020, Chris Scott Masonry (“CSM”) was substituted in as Moe 6 of KT’s cross-complaint. Having failed to timely file an answer to the cross-complaint, default was entered against CSM, in favor of KT, on September 30, 2022. On February 7, 2024, pursuant to stipulation, the default was set aside.

On March 18, 2024, Security National Insurance Company (“SNIC”) obtained an order allowing it to intervene on behalf of CSM. On April 9, 2024, SNIC filed its complaint in intervention.

CSM was a subcontractor on the project at the subject property as it pertains to sandstone veneers, ledgers, paving and a fireplace surround. (Bednar Dec., ¶ 3.) SNIC insured CSM during the work. (Bednar Dec., ¶ 5.) Chris Scott, the owner of CSM, could not be located so SNIC intervened on behalf of CSM. (Ibid.) SNIC is providing a defense to CSM under a reservation of rights and has made a determination that there is no coverage for the claims against CSM under the policy issued to CSM by SNIC. (Bednar Dec., ¶ 6.)

SNIC has entered into a settlement agreement with KT in the amount of $45,000.00 in exchange for a full release and dismissal with prejudice of CSM. (Bednar Dec., ¶ 7.)

SNIC now moves for determination of good faith settlement. The motion is unopposed.

Analysis:

“Any party to an action in which it is alleged that two or more parties are joint tortfeasors or co-obligors . . . shall be entitled to a hearing on the issue of the good faith of a settlement entered into by the plaintiff or other claimant and one or more alleged tortfeasors or co-obligors . . .” (Code Civ. Proc., § 877.6, subd. (a)(1),)

Code of Civil Procedure section 877 provides:

“Where a release, dismissal with or without prejudice, or a covenant not to sue or not to enforce judgment is given in good faith before verdict or judgment to one or more of a number of tortfeasors claimed to be liable for the same tort, or to one or more other co-obligors mutually subject to contribution rights, it shall have the following effect:

“(a) It shall not discharge any other such party from liability unless its terms so provide, but it shall reduce the claims against the others 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.

“(b) It shall discharge the party to whom it is given from all liability for any contribution to any other parties.

“(c) This section shall not apply to co-obligors who have expressly agreed in writing to an apportionment of liability for losses or claims among themselves.

“(d) This section shall not apply to a release, dismissal with or without prejudice, or a covenant not to sue or not to enforce judgment given to a co-obligor on an alleged contract debt where the contract was made prior to January 1, 1988.”

“When confronted with motions for good faith settlements, judges should . . . not yearn for the unreal goal of mathematical certainty. Because the application of section 877.6 requires an educated guess as to what may occur should the case go to trial, all that can be expected is an estimate, not a definitive conclusion.” (North County Contractor’s Assn. v. Touchstone Ins. Services (1994) 27 Cal.App.4th 1085, 1090.) “ ‘[A] “good faith” settlement does not call for perfect or even nearly perfect apportionment of liability.’ [Citation.]” (Ibid.)

“[T]he intent and policies underlying section 877.6 require that a number of factors be taken into account including a rough approximation of plaintiffs’ 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. [Citation.] 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.’ [Citation.] The party asserting the lack of good faith, who has the burden of proof on that issue (§ 877.6, subd. (d)), 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.” (Tech-Bilt v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499-500 (Tech-Bilt).)

The declaration of counsel for SNIC, and the attached exhibits demonstrate evidence as to all the factors outlined by Tech-Bilt. SNIC denies any liability in this case and has entered into the settlement with KT to avoid any further litigation and trail costs. There does not appear to be any collusion or tortious conduct involved in the settlement.

Given the facts of this case, the $45,000.00 settlement is within the reasonable range and the settlement is in good faith.

The purpose of a motion for determination of good faith settlement is to discharge the party to whom it is given from all liability for any contribution to any other parties.

“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.” (Code Civ. Proc., § 877.6, subd. (c).)

The motion will be granted. The court has reviewed the proposed order submitted by SNIC and will sign it as the order of the court.