United States District Court, S.D. California
UNITED STATES OF AMERICA for the Use and Benefit of PENN AIR CONTROL INC., a California corporation, Plaintiff,
BILBRO CONSTRUCTION COMPANY, INC., a California corporation; and INTERNATIONAL FIDELITY INSURANCE COMPANY, a New Jersey corporation; Defendants. BILBRO CONSTRUCTION COMPANY, INC., a California corporation, Counterclaim Plaintiff,
PENN AIR CONTROL INC., a California corporation; and ALPHA MECHANICAL, INC., a California corporation; Counterclaim Defendants. ALPHA MECHANICAL, INC., a California corporation, Counterclaim Plaintiff,
BILBRO CONSTRUCTION COMPANY, INC., a California corporation; FERGUSON PAPE BALDWIN ARCHITECTS, INC., a California corporation; SPARLING, INC., a Washington corporation; SHADPOUR CONSULTING ENGINEERS, INC., a California corporation; and DOES 1 through 10; Counterclaim Defendants.
WILLIAM Q. HAYES UNITED STATES DISTRICT JUDGE
matter before the Court is the Motion for a Determination of
Good Faith Settlement (ECF No. 146) filed by Counterclaim
defendants Sparling, Inc. and Ferguson Pope Baldwin
Air Control Inc. (“Penn Air”) initiated this
action by filing the Complaint against Bilbro Construction
Company. Inc. (“Bilbro”) and International
Fidelity Insurance Company (“Fidelity”). (ECF No.
1). Penn Air alleges that Bilbro wrongly failed to pay for
services Penn Air performed during the renovation of Watkins
Hall, a building in Monterey, California. Id. Bilbro
filed a counterclaim against Penn Air and Alpha Mechanical,
Inc. (“Alpha”) based on the noise level of the
HVAC systems installed in Watkins Hall. Id. Alpha
filed a counterclaim against Bilbro; Ferguson Pape Baldwin
Architects, Inc. (“FPBA”); Sparling, Inc.; and
Shadpour Consulting Engineers (“SC Engineers”).
(ECF No. 45). Alpha's counterclaim includes causes of
action for (1) breach of contract against Bilbro, (2) breach
of fiduciary duty against Bilbro, (3) negligence against
Bilbro, (4) full indemnity against S.C. Engineers, and (5)
partial indemnity against S.C. Engineers. Id.
September 8, 2017, Counterclaim Defendants FPBA and Sparling
filed the Motion for Determination of Good Faith Settlement
(ECF No. 146). According to FPBA and Sparling, they
“have agreed to settle this matter with Alpha for $385,
000.” Id. at 6. FPBA and Sparling ask the
Court to order
[t]hat the settlement between FPBA and Sparling and Alpha
[(the “Settlement”)] was entered in good faith
[and t]hat any present or future claims and/or
counter-complaints against FPBA or Sparling, for equitable
comparative contribution, implied contractual indemnity, or
partial or comparative indemnity, based on comparative
negligence or comparative fault, and/or for declaratory
relief arising out of the incident(s) giving rise to this
litigation, shall be forever barred pursuant to Code of Civil
Procedure sections 877.6.
Id. at 3. Bilbro and Fidelity filed an Opposition to
the Motion for a Determination of Good Faith Settlement. (ECF
No. 149). However, Bilbro and Fidelity do not contend that
the Settlement was not entered into in good
Code of Civil Procedure § 877.6 lays out the procedure
to be followed when one or more, but not at all, joint
defendants enter into a settlement agreement with a
plaintiff. First, “a settling party may give notice of
settlement to all parties and to the court, together with an
application for determination of good faith
settlement.” Cal. Civ. Proc. Code § 877.6(a)(2).
Then, “a nonsettling party may file a notice of motion
to contest the good faith of the settlement.”
Id. “The party asserting the lack of good
faith shall have the burden of proof on that issue.”
Id. at § 877.6(d). To determine whether a
settlement was made in good faith, a court considers: (1) the
amount of the settlement, (2) a rough approximation of the
plaintiff's total recovery and the settlers'
proportionate liability, (3) allocation of settlement
proceeds among the plaintiff's settlement, (4) the
settlers' financial condition and insurance limits, (5)
evidence of fraud or collusion; and (6) a recognition that a
settler should pay less in settlement than he would if he
were found liable at trial. Tech-Bilt Inc. v.
Woodward-Clyde & Associates, 38 Cal.3d 488, 499-500
(1985). “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.” Cal. Civ.
Proc. Code § 877.6(c).
party contends that the Settlement was not entered into in
good faith. See ECF No. 149 (contending that Bilbro
is entitled to a setoff, not that the Settlement was not
entered into in good faith). Based on this fact, the
Court's knowledge of the terms of the Settlement, and the
Court's review of the factors articulated in
Tech-Bilt, 38 Cal.3d at 488, the Court finds that
the Settlement was entered into in good faith within the
meaning of California Code of Civil Procedure § 877.6.
The Court's determination that the Settlement was made in
good faith bars Bilbro (or any party added as a joint
defendant in Alpha's negligence claim) from asserting any
claims against FPBA or Sparling “for equitable
comparative contribution, or partial or comparative
indemnity, based on comparative negligence or comparative
fault.” Cal. Civ. Proc. Code § 877.6(c).
HEREBY ORDERED that the Motion for Determination of Good
Faith Settlement (ECF No. 146) is GRANTED. The Court
determines that the Settlement was made in good faith and
approves the Settlement pursuant to California Code of Civil
Procedure § 877.6.