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The Marine Group, LLC D/B/A Marine Group v. Marine Travelift

January 30, 2013

THE MARINE GROUP, LLC D/B/A MARINE GROUP BOAT WORKS; AND NATIONAL UNION FIRE INSURANCE
FOR CO. OF PITTSBURGH, DETERMINATION OF GOOD FAITH PENNSYLVANIA., PLAINTIFFS,
v.
MARINE TRAVELIFT, INC.; ALL-LIFT SYSTEMS, INC.; OLSON FABRICATION, INC.; EXACTECH, INC.; JUST IN TIME CORP.; SOUTHERN WEAVING CO.; AND DOES 4-20, DEFENDANTS.



The opinion of the court was delivered by: Barry Ted Moskowitz, Chief Judge United States District Court

ORDER GRANTING MOTIONS SETTLEMENT

Pending before the Court are motions for determination of good faith settlement filed by Plaintiffs The Marine Group LLC d/b/a Marine Boat Works ("Marine Group") and National Union Fire Insurance Co. of Pittsburgh, Pennsylvania ("National Union") and the following Defendants: Seymour Machine, Inc. ("Seymour") (ECF No. 155); Southern Weaving Company ("Southern Weaving") (ECF No. 157); Just In Time Corporation ("JIT") (ECF No. 158); and All-Lift Systems Inc. ("All-Lift") (ECF No. 159) (collectively, "Settling Defendants"). For the reasons set forth herein, the Court GRANTS all four motions.

I. BACKGROUND

On January 19, 2009, Plaintiff Marine Group was lifting the motor yacht M/V Katrion ("Katrion") at its repair facility in Chula Vista, California, when the 600C boat hoist being used to lift the Katrion malfunctioned, causing the Katrion to hit a concrete sea wall. Together with its insurer National Union, Marine Group has brought claims against various manufacturers and distributors associated with the boat hoist. Defendants Marine Travelift, Inc. ("Marine Travelift"), which manufactured the actual hoist and designed the component parts, and Exactech, Inc. ("Exactech"), which manufactured the steel components of the hoist except for the sling link connectors and pins, are the sole non-settling defendants (collectively, "Non-Settling Defendants").*fn1

On March 16, 2010, Plaintiffs filed this action in the Superior Court of the State of California for the County of San Diego. On April 21, 2010, Defendants removed the action to this Court, asserting diversity jurisdiction pursuant to 28 U.S.C. § 1441(b), which the Court confirmed in its May 24, 2010 order (ECF No. 16) after the citizenship of the members of Plaintiff Marine Group as a limited liability company (LLC) was established.

On September 13, 2012, after the parties engaged in voluntary mediation, Plaintiffs filed a Notice of Partial Settlement (ECF No. 152), and the Settling Defendants filed their individual motions for determination of good faith settlement shortly thereafter. While these motions have been pending before the Court, Plaintiffs and Defendant Marine Travelift each filed motions for partial summary judgment, which were taken under submission on December 14, 2012.

The material terms of the collective settlement agreement ("Agreement") between Plaintiffs and Settling Defendants (collectively, "Settling Parties") provide:

* For an aggregate settlement sum of $1,000,000, each Settling Defendant will pay or cause to be paid to Plaintiff the following amounts: $256,250.00 by All-Lift; $306,250.00 by JIT; $356,250.00 by Seymour; and $81,250.00 by Southern Weaving.

* The Settling Parties will release all present and future claims against one another, including waiving any presently unknown claims that may later arise pursuant to California Civil Code § 1542.*fn2

* Each of the parties shall bear their own attorneys' fees and costs, except with regard to any action taken to enforce the Agreement, in which case the prevailing parties will be entitled to reasonable attorney fees.

* In return for the payments, Plaintiff will move to dismiss the case with prejudice as to the Settling Defendants.

* The Agreement is conditional upon a finding by this Court that "the settlement ... is in good faith, or any similar procedure or determination in the discretion of the Court, that will bar equitable cross claims against the SETTLING DEFENDANTS." Settlement Agreement § 3.5.

II. DISCUSSION

The Settling Defendants seek a determination by the Court that their settlement with Plaintiffs is in good faith under California law. The Non-Settling Defendants advocate that the Court deny the Settling Defendants' motions for determination of good faith settlement as inapposite, arguing that this case falls under the Court's admiralty jurisdiction, not its diversity jurisdiction. In addition, with regard to Defendant All-Lift, the Non-Settling Defendants allege that at the outset of the lawsuit, the three initial defendants (Marine Travelift, All-Lift, and Olson Fabrication, Inc, who has since been dismissed) entered into a stipulation to preserve claims among the defendants. Therefore, Marine Travelift concludes, All-Lift's motion should be denied because a determination of good faith by ...


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