Defendant/Cross-Complainant Moorefield Construction, Inc.?s Motion for Determination of Good Faith Settlement
The Motion for Determination of Good Faith Settlement by Defendant/Cross-Complainant Moorefield Construction is GRANTED. The hearing on this motion was continued to permit Moorefield to provide evidence that the subject settlement agreement has been executed, and to provide supplemental briefing on what law applies to this motion for determination of good faith settlement.
As to the first issue, Moorefield filed a copy of the signed settlement agreement that is the subject of this motion on 07/01/16.
As to the second issue, although they disagree on whether a good faith determination under Colorado law is a substantive or procedural issue, both Moorefield and cross-defendant T.W. Lath agree that Colorado law applies to the determination of good faith settlement sought by this motion. Accordingly, the Court applies Colorado law in determining whether the subject settlement was made in good faith.
Colorado has ?decline[d] to adopt the ?reasonable range? test set forth inTech?Bilt. Instead, . . . for purposes of section 13?50.5?105, a settlement is reached in ?good faith? in the absence of collusive conduct.? (Copper Mountain, Inc. v. Poma of America, Inc. (Colo. 1995) 890 P.2d 100, 108.) ?Any negotiated settlement involves cooperation, but not necessarily collusion. It becomes collusive in this context when it is aimed to injure the interests of an absent tortfeasor. . . . it is the burden of the party challenging the agreement to prove that the agreement was collusive.? (Ibid. [internal quotes omitted].)
T.W. Lath argues that the settlement is collusive without an allocation of the settlement amount and if the settlement amount includes damages that Villa Sport cannot recover as a matter of law. (06/24/16 T.W. Lath Supp. Brief p. 9.) ?If Moorefield paid Villa Sport damages it cannot legally recover, and then assigned its indemnity rights to Villa Sport so Villa Sport could collect those same prohibited damages again from the subcontractors, the settlement was designed to injure the rights of the non-settling parties and is collusive.? (07/01/16 T.W. Lath Supp. Response p. 2.)
T.W. Lath has failed to meet its burden of showing the settlement was collusive. It does not cite to any Colorado authority that requires an allocation of the settlement amount to determine whether the settlement was made in good faith. Without a requirement that Moorefield and Villa Sport allocate settlement proceeds, the failure to do so does not appear aimed to injure the rights of T.W. Lath or any other nonsettling party or tortfeasor.
Furthermore, T.W. Lath?s argument appears logically flawed. If, as T.W. Lath suggests, Moorefield pays settlement money to Villa Sport for damages that Villa Sport cannot legally recover, then Moorefield?s assignment of indemnity rights to Villa Sport for the purpose of collecting those same prohibited damages from the subcontractors would fail for the same reason?they cannot be legally recovered.
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