Court Opinion

ID: 9722377
Source: CourtListenerOpinion
Date Created: 2023-08-26 09:28:03.163761+00
Date Added: 2024-06-11T18:24:34.706898
License: Public Domain

*114POCHÉ, J.
I respectfully dissent.
My disagreement is with footnote 9. (Majority opn., ante, pp. 112-113.) There and only there does the majority come to grips with IRM’s major point made at oral argument: that IRM is entitled to remand so that it can contest the good faith of the settlement on the basis of standards recently announced by the California Supreme Court in Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488 [213 Cal.Rptr. 256, 698 P.2d 159]. The refusal of this court to allow such a hearing is not premised on any belief that Tech-Bilt does not apply to cases pending on appeal.1 Instead, the majority finds that IRM has waived the point. In my view, the majority is reaching beyond any fair reading of the record in finding a waiver below, and in finding waiver on appeal it is being patently unfair. IRM should be allowed its day in court to test the settlement in light of Tech-Bilt. I would therefore reverse and remand for a new hearing under Code of Civil Procedure section 877.6.2

Waiver in the Trial Court

As the majority acknowledges, the matter came for hearing on shortened notice—two days—and upon moving papers citing the incorrect statutory provision. (See majority opn., ante, p. 102.) Not surprisingly then, IRM did not file written opposition to the motion.3 In characterizing what transpired at that hearing the majority opinion tells us that counsel for IRM expressed “no significant opposition to the good faith nature of the settlement.” (Majority opn., ante, p. 102.) I read the transcript of that hearing quite differently. The following excerpt is the key passage.
“[Counsel for IRM]: Last thing I would like to add is I was at the Bench/ Bar Settlement Conferences, or at least the most recent one in this case. And my recollection is that although these things can be left to anyone’s judgment, we were in the two hundred thirty thousand dollar to two hundred fifty thousand dollar ballpark. [¶] My current understanding is that Pioneer Shower Door has ten thousand dollars on this case. And that my client has twenty-five thousand dollars on this case. So together with the one hundred fifty thousand dollars here and the twenty-five and the ten, it appears that’s getting into the ballpark of the total value of the case, [¶] If it is, if that’s true, and everyone can argue about that, then we face what’s now come to *115be known as the Owens problem, [¶] I would cite to the Court that not being able to prepare written papers on this, there is a substantial conflict in the law right now created by a Ninth Circuit case called Owens vs. U.S. That says when you get close to the full value of the case, other factors must come into play in determining the good or bad faith of a settlement, [¶] And I would say without really having the opportunity to examine the settlement contract and give the court the authority of River Gardens Farms and Owens, difficult for me to really address in particular the other points, [¶] The Court: Well, I think the current law, at least insofar as this State is concerned, almost fraud and collusion is required to indicate the settlement is not in good faith. At least that’s my understanding of the current law. [¶] I haven’t read your Circuit Court case. Not binding on this Court. Only advisory. [¶] Mr. Carniato, [counsel for Merritt Construction Company] do you wish to add anything on the record? [¶] Mr. Carniato: No, your Honor. [¶] The Court: I was the Judge on the Bench/Bar panel that handled the settlement in this conference matter. It did not settle. But the panel thought the two hundred thousand dollars was a fair figure. And two hundred thirty thousand dollars was not unreasonable, either. But I would find at this point this is a good faith settlement and do approve the Mary Carter agreement.”
Nowhere in that passage, or in the entire transcript for that matter, do I find a concession by counsel for IRM that the settlement was in good faith. On the contrary, I find counsel attempting to muster the best argument he could under unfair time constraints. What is most important to me is that IRM’s counsel managed to find and to cite to the trial court two cases, River Garden Farms, Inc. v. Superior Court (1972) 26 Cal.App.3d 986 [103 Cal.Rptr. 498], and Owen v. United States (9th Cir. 1983) 713 F.2d 1461, each of which went contrary to the then prevailing test of what was a good faith settlement (see, e.g., Dompeling v. Superior Court (1981) 117 Cal.App.3d 798 [173 Cal.Rptr. 38]) and each of which was subsequently relied upon by the California Supreme Court in setting forth its new test of good faith in Tech-Bilt. (Id., 38 Cal.3d at pp. 496-497 [text and fn. 6].)4 To call that a waiver is to trifle with the transcript.
Why else would counsel cite these cases if he were not trying to challenge the good faith of the Mary Carter settlement? As far as I am concerned, counsel did enough to entitle IRM to raise the matter on appeal.5

*116
Waiver on Appeal

My colleagues also point out that in its opening brief, IRM conceded that the settlement was in good faith. (See majority opn., ante, p. 112.) What was the state of the law on point coming from the California Court of Appeal at that time? Listen again to the trial court judge: “The Court: Well, I think the current law, at least insofar as this State is concerned, almost fraud and collusion is required to indicate the settlement is not in good faith. At least that’s my understanding of the current law. [f] I haven’t read your Circuit Court case. Not binding on this Court. Only advisory.” That is a brilliantly accurate statement by a trial judge who was obviously on top of the law. Since on this record there is no evidence that either Western Shower Door or Neis Carlson dba Merritt Construction Company engaged in such conduct, IRM decided not to waste this court’s time with such argument in its briefs.
Then—after briefing—the law changed abruptly: Tech-Bilt came down and changed entirely the rules of the game. Given this record it is unfair in the extreme to deny IRM a hearing under the new rules.
In effect what the majority opinion does is announce a new rule of standing which will have the effect of encouraging frivolous appeals while putting at a premium those counsel—who unlike most members of the Court of Appeal—were sufficiently clairvoyant to have anticipated Tech-Bilt.
For these reasons, I would remand for a new hearing under the new criteria that apply to section 877.6.

Cases subsequent to Tech-Bilt have not hesitated to apply its new test of good-faith settlement within the meaning of Code of Civil Procedure section 877.6. (See, e.g., Standard Pacific of San Diego v. A. A. Baxter Corp. (1986) 176 Cal.App.3d 577, 585 [222 Cal.Rptr. 106]; Sagadin v. Ripper (1985) 175 Cal.App.3d 1141, 1176-1177 [221 Cal.Rptr. 675].)

All further statutory references are to the Code of Civil Procedure.

Frankly, I do not understand why plaintiff’s request to shorten time was granted.

Actually, Tech-Bilt relied upon the predecessor to Owen, another Ninth Circuit case, Commercial U. Ins. Co. v. Ford Motor Co. (9th Cir. 1981) 640 F.2d 210.

In fact counsel for IRM did just what the majority says he did not do. (See majority opn., ante, p. 112, fn. 9.)