Pacific Coast Steel et al v. Leany et al

Filing 431

ORDER Granting 420 Moving Settling Defendants' Motion for Good Faith Settlement. Any and all claims for indemnification and/or contribution pursuant to NRS 17.245 that could be made by the Non-Settling Defendants against the Moving Settl ing Defendants are barred. The full amount of the promissory note, $26 million, shall be a setoff or offset against any judgment issued in favor of Plaintiffs and against Non-Settling Defendants, up to the full amount of the said judgment. Signed by Judge Kent J. Dawson on 9/30/13. (Copies have been distributed pursuant to the NEF - EDS)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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PACIFIC COAST STEEL, a Delaware
general partnership, et al.,

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Case No. 2:09-CV-2190-KJD-PAL
Plaintiffs,

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ORDER GRANTING MOTION FOR
FINDING OF GOOD FAITH
SETTLEMENT

v.
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TODD LEE LEANY, et al.,
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Defendants.
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A hearing on Defendants Todd Lee Leany, the Todd Lee Leany Irrevocable Trust, Century

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Steel, Inc., a Nevada corporation, Calico Construction Supply LLC, Century Steel Holdings, Inc.,

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Century Properties Henderson 18 LLC, and Century Steel, Inc., a Utah corporation (collectively,

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“Moving Settling Defendants”) Motion for Good Faith Settlement (the “Motion”) was held on

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August 27, 2013 at 9 a.m. James D. Kilroy and Chad R. Fears of the law firm Snell Wilmer, LLP

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appeared on behalf of Plaintiffs Pacific Coast Steel and San Diego Steel Holdings Group, Inc.

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(“Plaintiffs”). Joseph S. Kistler of the law firm Hutchison & Steffen, LLC appeared on behalf of the

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Moving Settling Defendants. Matthew L. Johnson of the law firm Matthew L. Johnson and

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Associates, P.C. appeared on behalf of Tamara Mae L. Hunt and the Tamra Mae L. Hunt Irrevocable

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Trust (“Non-Settling Defendants”). No counsel appeared on behalf of Lynn Leany Family Trust (the

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“Non-moving Settling Defendants”), and Non-Moving Settling Defendants took no position on the

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Motion.

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The Court, having considered Moving Defendants’ Motion for Good Faith Settlement (#420),

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Non-Settling Defendants’ Limited Opposition to Motion for Finding of Good Faith Settlement

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(#422), Errata to the Limited Opposition to Motion for Finding of Good Faith Settlement (#423),

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Notice of Filing (#427), Objection to the Proposed Order (#428), Response to the Objection (#429)

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and arguments of counsel, enters the following Findings of Fact, Conclusions of Law, and Order.

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FINDINGS OF FACT

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1. Plaintiffs entered into a settlement agreement (the “Settlement Agreement”) with the

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Moving Settling Defendants and the Non-Moving Settling Defendants (collectively “Settling

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Defendants”).

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2. The Settlement Agreement requires Settling Defendants to execute a $26 million non-

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recourse promissory note secured by multiple pieces of real property and other property. In return all

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contract and tort claims of Plaintiffs against Settling Defendants, and all affirmative claims filed by the

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Settling Defendants will be dismissed with prejudice with each party to bear their own fees and costs.

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3. The amount being paid under the Settlement Agreement by Settling Defendants versus the

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potential liability of Settling Defendants is fair and adequate.
4. The amount received by Plaintiffs under the Settlement Agreement versus the problems of

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Plaintiffs securing a judgment and then successfully executing on any judgment secured is fair and

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adequate.

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5. The Non-Settling Defendants receive a substantial benefit as a result of the Settlement,

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since the Settlement sum of $26 million will offset any judgment entered against the Non-Settling

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Defendants, whether the judgment is based on tort or contract claims. The settling parties have

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represented to the Court that the contract claims are inextricably intertwined with and subsumed in

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the tort claims of their case. Further, Non-Settling Defendants have represented that they have

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preserved causes of action for indemnity as between defendants. The Court will consider a jury

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instruction requiring the jury to separate the damages, if any, into tort and other causes of action.

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6. There was no allegation presented that the Settlement Agreement was the result of
collusion aimed at injuring the Non-Settling Defendants.
7. There was no allegation presented that the Settlement Agreement was procured by fraud.

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CONCLUSIONS OF LAW
1. Unlike the “nominal sum” addressed by the Nevada Supreme Court in Doctors Company v.

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Vincent, 98 P.3d 681 (Nev. 2004), the settlement sum here – $26 million – is fair, reasonable, and

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substantial, given Settling Defendants’ exposure and the difficulty Plaintiffs face in prevailing on the

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merits of their claims and successfully executing on any judgment against Settling Defendants that

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Plaintiffs actually receive.

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2. The Settlement Agreement was entered into in good faith pursuant to NRS 17.245.

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ORDER

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IT IS HEREBY ORDERED that:

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1. The Moving Settling Defendants’ Motion for Good Faith Settlement (#420) is

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GRANTED.

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2. Any and all claims for indemnification and/or contribution pursuant to NRS 17.245 that

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could be made by the Non-Settling Defendants against the Moving Settling Defendants are barred.

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3. The full amount of the promissory note, $26 million, shall be a setoff or offset against any

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judgment issued in favor of Plaintiffs and against Non-Settling Defendants, up to the full amount of

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the said judgment.

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DATED this 30th day of September 2013.

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_____________________________
Kent J. Dawson
United States District Judge
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