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Holmes v. Home Depot USA

July 8, 2009


The opinion of the court was delivered by: Sandra M. Snyder United States Magistrate Judge


(DOC. 214)


(DOC. 199)

Plaintiffs are proceeding with a civil action in this Court. The matter has been referred to the Magistrate Judge for all proceedings, including the entry of final judgment, pursuant to 28 U.S.C. § 636(c), Fed. R. Civ. P. 73(b), and Local Rule 73-301. Pending before the Court is the motion of Defendant DAPCO

Industries, Inc. (DAPCO), for determination that a settlement entered into between DAPCO and Plaintiffs Alice and Vernon Holmes is in good faith pursuant to Cal. Civ. Proc. Code §§ 877 and 877.6. The motion was filed on June 2, 2009, along with a memorandum and declarations of Toby M. Magarian, David G. Howitt, Ph.D., and Warren R. Paboojian. On June 22, 2009, Defendant Walbro filed opposition, along with a request for judicial notice, and the declaration of Mark B. Busick in opposition to the motion; courtesy copies of portions of two deposition transcripts were also received. On the same date, Defendant Briggs & Stratton (B&S) filed opposition to the motion, which included a memorandum and the declaration of Lawrence A. Margoles in opposition to the motion, with attachments. On June 26, 2009, Dapco filed a reply, which included a reply memorandum and the declaration of Toby M. Magarian. On July 2, 2009, the motion came on regularly for hearing in Department 7 before the Honorable Sandra M. Snyder, United States Magistrate Judge. Toby Magarian appeared for the moving party, Defendant DAPCO, and Mark B. Busick appeared for Defendant Walbro; Lawrence A. Margoles appeared telephonically on behalf of Defendant Briggs and Stratton (B&S); Christopher Egan appeared telephonically on behalf of Defendant MTD; and there was no appearance on behalf of Plaintiff.*fn1 The Court had reviewed the papers submitted in connection with the motion. After argument, the matter was submitted to the Court.

I. Introduction

The action is based on general negligence, strict products liability, and breach of warranty; Plaintiffs seek to recover damages for personal injury and property damage that both Plaintiffs suffered when a lawnmower which Defendants manufactured and sold was used by Plaintiff Vernon Holmes in August 2005, and resulted in a fire. The action was removed to this Court in September 2006.

II. Request for Judicial Notice

The request of Defendant Walbro Engine Management, LLC, for judicial notice will be granted. The Court may take judicial notice of facts that are capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. Fed. R. Evid. 201(b); United States v. Bernal-Obeso, 989 F.2d 331, 333 (9th Cir. 1993). Judicial notice may be taken of court records. Valerio v. Boise Cascade Corp., 80 F.R.D. 626, 635 n. 1 (N.D.Cal.1978), aff'd., 645 F.2d 699 (9th Cir. 1981); see also Colonial Penn Ins. Co. v. Coil, 887 F.2d 1236, 1239 (4th Cir. 1989); Rodic v. Thistledown Racing Club, Inc., 615 F.2d 736, 738 (6th. Cir. 1980).

III. Legal Standards

The second amended complaint (Doc. 86) followed removal based on diversity of citizenship and an amount in controversy exceeding $75,000 (Doc. 1, p. 2). State law generally supplies the rules of decision in federal diversity cases. 28 U.S.C. § 1652; Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). Cal. Civ. Proc. Code § 877 provides that where a release 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 discharges other parties from liability only if its terms so provide; it shall reduce the claims against the others in the amount stipulated by the release or in the amount of the consideration paid for it, whichever is the greater; and it shall discharge the party to whom it is given from all liability for any contribution to any other parties. Cal. Civ. Proc. Code § 877.6 provides for a party to bring a motion for determination that the settlement is in good faith. Section 877.6(a)(2) expressly requires that the application for determination of good faith settlement shall indicate the settling parties, and the basis, terms, and amount of the settlement. Section 877.6(b) provides that the issue of the good faith of a settlement may be determined by the court on the basis of affidavits served with the notice of hearing and any counter-affidavits filed in response, or the court may in its discretion receive other evidence at the hearing. A prima facie showing of the settlement is sufficient to shift the burden of proof: a brief background of the case and statement of the grounds of good faith, supported by a declaration, is sufficient where good faith is uncontested; however, if the good faith nature of a settlement is disputed, then section 877.6(d) provides that the party asserting the lack of good faith shall have the burden of proof on that issue, and the trial court must consider and weigh the Tech-Bilt factors. City of Grant Terrace v. Superior Court, 192 Cal.App.3d 1251, 12651 (1987).

Section 877.6(c) provides that 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.

Section 877 and its substantive provisions govern this federal action, although the procedural provisions of § 877.6 do not necessarily even if a settlement agreement provides that California law applies. Nevertheless, it is appropriate for a district court to consider and determine the good faith question. Federal Sav. and Loan Ins. Corp. v. Butler, 904 F.2d 505, 511 (9th Cir. 1990). Further, in the absence of a conflict with federal procedures or other factors giving rise to federal concerns, state settlement procedures are to be applied by federal courts to state causes of action where they are outcome-determinative. Slaven v. BP ...

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