Opinion ID: 602899
Heading Depth: 2
Heading Rank: 2

Heading: The Contingent Appeal: Reinstatement of the Third-Party Complaint.

Text: 33 The question now arises whether we should also reverse the order dismissing the third party complaint. The court originally denied Broco's motion to dismiss on Sept. 28, 1990 because it found the settlement was not in good faith. The court dismissed Broco on December 14, 1990, but only because the third-party claim was moot. 4 Broco is not appealing from the Sept. 28 order. Rather, it asks this court to affirm the Dec. 14 dismissal of Broco and now rule as a matter of law that the Yanez/Broco settlement was in good faith. The government asks that this court reverse dismissal of Broco and reinstate the third-party complaint. 34 A finding of good faith under Cal.Civ.P.Code § 877 is a finding of fact. Owen v. United States, 713 F.2d 1461, 1466 (9th Cir.1983) (citing River Garden Farms, Inc. v. Superior Court, 26 Cal.App.3d 986, 998, 103 Cal.Rptr. 498, 506 (1972)). The government asserts that only a trial court may reach a decision [on § 877 good faith], guided by the evidentiary material presented to it. River Garden Farms, supra. 35 The government also emphasizes that the court did not rule on Broco's motion for reconsideration of the Sept. 28, 1989 Order. If the Yanez-United States case is reinstated, the district court will again have jurisdiction to determine whether the Yanez-Broco suit was settled in good faith, i.e. to rule on Broco's outstanding motion for reconsideration. 36 The government also argues that Broco's motions to dismiss the third-party complaint were actually motions for summary judgment since Broco went beyond the pleadings and asked the court to consider exhibits (twenty exhibits in the first motion, twenty-five in the motion for reconsideration). As summary judgment motions, the United States argues that material issues of fact remain as to whether the settlement was in good faith. Indeed, Broco spends much of its brief arguing facts that it asserts the district court did not consider in its initial ruling on Sept. 28, 1989. Broco also contends that new facts have arisen since the Sept. 28th motion which also support a good faith settlement. The government responds that, even if this court were to invoke its discretionary powers, the government must be allowed a hearing on the question. It cites Singer Co. v. Superior Court, 179 Cal.App.3d 875, 890, 225 Cal.Rptr. 159 (1986) (notice and hearing required before denial of property interest). 37 We agree that whether a settlement is in good faith under Cal.Civ.P.Code § 877 is a finding of fact for the trial court. We reverse and reinstate Broco. The district court should rule on Broco's motion for reconsideration and consider all Broco's arguments. The district court is advised to apply all the factors enunciated in Tech-Bilt, Inc. v. Woodward-Clyde & Associates, 38 Cal.3d 488, 213 Cal.Rptr. 256, 698 P.2d 159 (1985). It appears that the district court overlooked several of these factors when determining the settlement was not in good faith. The factors are: 38
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41 4. A recognition that a settlor should pay less in settlement than he would if he were found liable after trial; 42 5. The financial conditions and insurance policy limits of settling defendants; and, 43 6. The existence of collusion, fraud, or tortious conduct aimed to injure the interest of non-settling defendants. 44 Tech-Bilt, 213 Cal.Rptr. at 262-63, 698 P.2d at 166-67.