Defendant/Cross-Complainant Moorefield Construction, Inc.?s Motion for Determination of Good Faith Settlement
The hearing on Defendant Moorefield Construction, Inc.?s motion for determination of good faith settlement is CONTINUED to July 8, 2016 at 9:00 a.m. to permit the parties to file supplemental briefing on the below-described issues.? Each party may file a supplemental brief, no longer than 10 pages exclusive of declarations and exhibits, on or before June 24, 2016 on only the issues outlined below. The parties may also file responsive supplemental briefs, no longer than 5 pages, on or before July 1, 2016.
As an initial matter, Moorefield is to provide in its supplemental briefing evidence that the subject settlement agreement has been executed. Both California and Colorado law contemplate that a settlement be executed before the benefits from a good faith determination attaches. (CCP ? 877.6(a)(1) [entitlement ?to a hearing on the issue of the good faith of a settlement entered into by the plaintiff or other claimant and one or more alleged tortfeasors or co-obligors? (emphasis added)]; Colo. Rev. Stat. Ann. ? 13-50.5-105 (West) [settling tortfeasor discharged from all liability ?[w]hen a release or a covenant not to sue . . . is givenin good faith? (emphasis added)].)
Assuming that the settlement agreement was executed, it is still unclear to the court whether Colorado or California law applies. Although both Moorefield and T.W. Lath agree that the construction contract between Plaintiff and Moorefield states that Colorado law governs (Motion p. 7; Opposition p. 4), T.W. Lath argues that its subcontract with Moorefield is governed by California law (Opposition p. 11).
Aside from citation to contract provisions, neither side presents any meaningful choice of law analysis, as set forth in Sommer v. Gabor(1995) 40 Cal.App.4th 1455, 1467, for the situation when the parties present different contracts and argue that their respective choice of law provision applies. Accordingly, the parties are to submit supplemental briefing on this issue.
Assuming arguendo that Colorado law applies, it is still unclear whether a determination of good faith settlement is a substantive or procedural issue. It appears that the issue may be substantive. (See Britz, Inc. v. Dow Chemical Co. (1999) 73 Cal.App.4th 177, 182; Hutchins v. Juneau Tanker Corp. (1994) 28 Cal.App.4th 493, 500.) But if it is a procedural issue, then it appears that CCP ? 877.6 may nonetheless be applied. Accordingly, the parties should address this issue in supplemental briefing as well.
Finally, if CCP ? 877.6 does apply to this motion, then an allocation of settlement proceeds will be needed. (Alcal Roofing & Insulation v. Superior Court (1992) 8 Cal.App.4th 1121, 1124-25, 1129; L.C. Rudd & Son, Inc. v. Sup.Ct. (1997) 52 Cal.App.4th 742, 750.)