Pag-Daly City, LLC v. Quality Auto Locators, Inc et al

Filing 348

ORDER GRANTING JOINT MOTION FOR GOOD FAITH SETTLEMENT DETERMINATION by Hon. William Alsup granting 318 Motion Good Faith Settlement.(whalc4, COURT STAFF) (Filed on 2/27/2014)

1
2
3
4
5
6
7
IN THE UNITED STATES DISTRICT COURT

8

FOR THE NORTHERN DISTRICT OF CALIFORNIA

9
United States District Court
For the Northern District of California

10

12

PAG-DALY CITY, LLC, d.b.a. CITY
TOYOTA, a California limited liability
company,

13

Plaintiff,

11

14
15
16

No. C 12-3907 WHA
ORDER GRANTING JOINT MOTION
FOR GOOD FAITH SETTLEMENT
DETERMINATION

v.
QUALITY AUTO LOCATORS, INC., et al.,
Defendants.
/

17
INTRODUCTION
18
19

In this action for receipt of stolen property and conversion, plaintiff and defendant

20

Faulkner Trevose, Inc., d.b.a. Faulkner Toyota jointly move for a good faith settlement

21

determination pursuant to California Code of Civil Procedure Sections 877 and 877.6. The motion

22

is GRANTED.

23
STATEMENT
24
25

Plaintiff PAG-Daly City, LLC alleges that auto broker defendants misappropriated

26

plaintiff’s right to receive new Toyota inventory during a supply crunch. Plaintiff alleges broker

27

defendants allowed dealer defendants to purchase the right to receive new vehicles that Toyota had

28

awarded plaintiff, who went uncompensated for this transfer.
Plaintiff filed this diversity action against numerous out-of-state dealers and brokers in July

1
2

2012. A January 28 order, which explored the relevant factual and procedural background more
fully, granted plaintiff’s motion for leave to file a second amended complaint. The new complaint

3
joined broker defendant Classic Motors, Inc., its two principals, and defendant Beechmont Motors.
4
5

Plaintiff’s claims against defendant Faulkner include damages of $138,000, which may be

6

subject to trebling via California Penal Code Section 496, in addition to attorney’s fees and costs.

7

Settling parties now move for approval of a good faith settlement under California Code of Civil

8

Procedure Sections 877 and 877.6. Plaintiff has agreed to dismiss with prejudice all claims in this

9
action against defendant Faulkner as part of a larger general release, in exchange for $175,000.
United States District Court
For the Northern District of California

10
11

The joint motion states that this agreement is conditioned upon the issuance of an order

12

determining that the settling parties have acted in good faith. No defendant has filed an opposition

13

to the motion; four — PLE Enterprises, Inc. d.b.a. Rolling Hills Toyota, The Walker Auto Group,

14

Inc. d.b.a. Walker Toyota, Page Imports, Inc. d.b.a. Page Toyota, and BWTI, Inc. d.b.a. Bert

15

Wolfe Toyota — have filed notices of non-opposition.

16
17
18

ANALYSIS
A court sitting in diversity has discretion to determine whether a settlement is in good faith

19

under California Code of Civil Procedure Section 877.6. Mason & Dixon Intermodal, Inc. v.

20

Lapmaster Int’l LLC, 632 F.3d 1056, 1064 (9th Cir. 2011). When a settlement is determined to

21

have been made in good faith, further negligence-based equitable contribution or comparative

22
23

indemnity claims against settling parties are barred “so long as the other tortfeasors were given

24

notice and an opportunity to be heard.” Gackstetter v. Frawley, 135 Cal. App. 4th 1257, 1273

25

(2006). A determination that a settlement has been conducted in good faith will also “reduce the

26

claims against the [remaining defendants] in the amount stipulated by the release.” Cal. Civ. Proc.

27

Code § 877(a). A contested motion is subject to a multi-factor test set out by the California

28
Supreme Court to examine whether settling parties have reached a good faith agreement; however:
2

1

3

Only when the good faith nature of a settlement is disputed, it is incumbent upon
the trial court to consider and weigh the Tech-Bilt factors. Once there is a showing
made by the settlor of the settlement, the burden of proof on the issue of good faith
shifts to the nonsettlor who asserts that the settlement was not made in good faith.

4

City of Grand Terrace v. Superior Court, 192 Cal. App. 3d 1251, 1261 (1987); see also Tech-Bilt,

2

5

Inc. v. Woodward-Clyde & Assocs., 38 Cal. 3d 488, 499 (1985). Notice of the instant motion was

6
given to all parties, and was hand-delivered by process server by January 24 to defendants joined
7
8
9
United States District Court
For the Northern District of California

10
11
12

in the action by the second amended complaint, as well as those not represented in the suit or by
counsel. Under California statute, nonsettling defendants have twenty days following hand
delivery of the notice to oppose; that time is now past. No defendant has filed an opposition, and
four have filed notices of non-opposition. Two additional chances to belatedly oppose were
presented at the February 20 case management conference and again during the February 27

13
14
15

hearing on this matter. Because no party contests the motion, it is unnecessary to weigh the TechBilt factors. City of Grand Terrace at 1261. The joint motion is therefore GRANTED.

16
17
18

CONCLUSION
For the reasons stated, the unopposed joint motion for an order determining that plaintiff
and defendant Faulkner have reached settlement in good faith pursuant to California Code of Civil

19
20

Procedure Section 877 and 877.6 is GRANTED.

21
22

IT IS SO ORDERED.

23
24

Dated: February 27, 2014.

25

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

26
27
28
3