Opinion ID: 1234083
Heading Depth: 1
Heading Rank: 5

Heading: Good Faith Settlement

Text: (5a) Bay and Bowen initially contend that the trial court abused its discretion in determining Home's $30,000 settlement was in good faith. If the trial court did abuse its discretion, there would be no need for us to determine whether a good faith settlement bars an indemnity claim based on a theory of implied contractual indemnity. We conclude, however, that the trial court did not abuse its discretion. (6) In Tech-Bilt, Inc. v. Woodward-Clyde & Associates, supra, 38 Cal.3d 488, 492-501 ( Tech-Bilt ), we undertook an extensive analysis of the proper interpretation of the good faith settlement requirement in sections 877 and 877.6. Observing that these statutory provisions are generally intended to promote two major goals  the equitable sharing of costs among the parties at fault and the encouragement of settlements (38 Cal.3d at p. 494)  we explained that the good faith requirement is the key to harmonizing these two objectives. As we said: The good faith provision ... mandates that the courts review agreements purportedly made under its aegis to insure that such settlements appropriately balance the contribution statute's dual objectives. (38 Cal.3d at p. 494, fn. omitted.) We also explained in Tech-Bilt: [T]he intent and policies underlying section 877.6 require that a number of factors be taken into account [in determining good faith,] 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. Such a demonstration would establish that the proposed settlement was not a `settlement made in good faith' within the terms of section 877.6. ( Tech-Bilt, supra, 38 Cal.3d at pp. 499-500.) (5b) Because in this case plaintiffs had sought, at least at one point in the litigation, as much as $1 million in damages for the parking space discrepancy, Bay and Bowen contend that, in applying the Tech-Bilt factors, the trial court should have found that Home's $30,000 settlement was so far `out of the ballpark' as to render the settlement not in good faith. We disagree. There was abundant evidence to suggest that the $1 million figure was grossly exaggerated. Plaintiffs themselves, in their second amended complaint, sought only $350,000 for the parking space shortage. Bay's and Bowen's own expert determined the total loss in value at only $75,000. More important, the evidence before the trial court provided substantial support for Home's contention that, at most, it bore only minor responsibility for the representations Bay and Bowen had made in marketing the condominium units. As discussed earlier, the evidence presented by Home established that officials of Bay and Bowen knew of the discrepancy in the parking space figure before Bay obtained the second Department of Real Estate report used in marketing the units. Given this evidence, the trial court did not abuse its discretion in finding that Bay and Bowen had failed to demonstrate that the settlement was not in good faith.