Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_16-cv-00003/USCOURTS-casd-3_16-cv-00003-6/pdf.json

Nature of Suit Code: 130
Nature of Suit: Miller Act
Cause of Action: 28:1330 Breach of Contract

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA for

the Use and Benefit of PENN AIR

CONTROL INC., a California

corporation,

Plaintiff,

CASE NO. 16cv0003-WQH-NLS

ORDER

v.

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,

 v.

PENN AIR CONTROL INC., a

California corporation; and ALPHA

MECHANICAL, INC., a California

corporation;

 Counterclaim Defendants.

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ALPHA MECHANICAL, INC., a

California corporation,

 Counterclaim Plaintiff,

 v.

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.

HAYES, Judge:

The 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 Architects, Inc.

I. Background

Penn 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 SC Engineers, and (5) partial

indemnity against SC Engineers. Id. 

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On 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 faith.1

II. Discussion

California 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

1

 Bilbro and Fidelity contend that Bilbro, as the only Defendant named in Alpha’s negligence

claim that is not a party to the Settlement, “is entitled to a full and complete setoff of the settlement

sum of $385,000.” (ECF No. 149 at 2). The Motion for a Determination of Good Faith Settlement

(ECF No. 146) does not require this Court to decide whether or not Bilbro is entitled to a setoff. 

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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).

No 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).

III. Conclusion

IT IS 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. 

DATED: November 15, 2017

WILLIAM Q. HAYES

United States District Judge

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