In re Fertility

• Decision Date: 11 May 2022
• Docket Number: A164472
• Parties: PACIFIC FERTILITY CASES
• Court: California Court of Appeals Court of Appeals

78 Cal.App.5th 568

294 Cal.Rptr.3d 30

PACIFIC FERTILITY CASES

A164472

Court of Appeal, First District, Division 1, California.

Filed May 11, 2022

Horvitz & Levy, Julian W. Park, San Francisco, Frederic D. Cohen, Stephen E. Norris, Burbank; Swanson Martin & Bell, John J. Duffy, Kevin Ringel ; Zenere Cowden & Stoddard, Marc G. Cowden and Adam M. Stoddard, San Jose, for Defendant and Appellant Chart Inc.

Galloway, Lucchese, Everson & Picchi, Joseph S. Picchi, Sukhwinder K. Bajwa and Aaron T. Schultz, Walnut Creek, for Defendants and Respondents Pacific Fertility Center, Carl Herbert, Eldon Schriock, Philip Chenette, Carolyn Givens, Liyun Li and Isabelle Ryan.

Morrison & Foerster, Erin M. Bosman, Julie Y. Park, San Diego, William F. Tarantino and James R. Sigel, San Francisco, for Defendants and Respondents Pacific MSO, LLC, Prelude Fertility, Inc. and Joseph Conaghan.

Humes, P. J.

When one of multiple tortfeasor defendants intends to settle a case before it is resolved against all defendants, the tortfeasor may petition the trial court for a determination that the settlement was made in good faith. ( Code Civ. Proc.,¹ § 877.6.) If the court makes such a determination, the other defendants are barred from obtaining contribution or indemnification from the settling tortfeasor based on the parties’ comparative negligence or fault. ( § 877.6, subd. (c).) The court's good faith determination is reviewable by writ of mandate. ( § 877.6, subd. (e).)

In this case, we consider whether such a determination is also reviewable in an appeal brought by a nonsettling defendant. Respondents Pacific MSO, LLC (Pacific MSO), Prelude Fertility, Inc. (Prelude), Pacific Fertility Center (PFC), Dr. Joseph Conaghan, and individual PFC physicians—a group of defendants that settled the claims against them (settling defendants)—argue that it is not. Appellant Chart Inc. (Chart), a nonsettling defendant, argues that it is. Addressing a split in the Courts of Appeal on the issue, we reaffirm a decades-old decision of this division summarily concluding that a good faith settlement determination is reviewable only by a timely petition for writ of mandate in accordance with section 877.6. ( Housing Group v. Superior Court (1994) 24 Cal.App.4th 549, 552, 29 Cal.Rptr.2d 460 ( Housing Group ).) We therefore dismiss the appeal.

I.BACKGROUND

These coordinated proceedings arose following the failure in 2018 of a cryogenic storage tank, which was manufactured by Chart and used by PFC, a San Francisco fertility clinic, to store patients’ reproductive material. During the failure, the tank's nitrogen levels dropped, causing the temperature to rise and potentially endangering the eggs and embryos stored inside. PFC patients and others affected by the tank's failure sought recourse, resulting in hundreds of claims in federal and state courts and arbitration proceedings.

A putative class action was first filed in federal court against PFC, Prelude, Pacific MSO, and Chart.² (See In re Pacific Fertility Center Litigation (N.D.Cal., case No. 3:18-cv-01586) filed May 30, 2018.) As a result of motions to compel arbitration, and an ensuing appeal to the Ninth Circuit Court of Appeals, claims against Chart proceeded in federal court while claims against the remaining defendants proceeded in arbitration. The district court, however, denied the plaintiffs’ motion for class certification. As a result, nearly 150 individual lawsuits against Chart were pending in federal court.

The first federal bellwether trial was conducted in mid-2021, resulting in a jury verdict against Chart.³ The jury found that the cryogenic storage tank had a manufacturing defect and failed to perform as safely as expected. It also concluded that the tank's design was a substantial factor in causing harm to the plaintiffs. The jury apportioned 90 percent of the liability to Chart and 10 percent to PFC.

In the meantime, claimants not involved in the federal litigation filed 60 individual lawsuits in California state courts against PFC, Pacific MSO, Prelude, and Chart, and those lawsuits were coordinated into these proceedings. Arbitration was compelled for claims against PFC but not the other defendants. All told, approximately 260 claims were pending in arbitration proceedings.

After 18 months of settlement negotiations and mediation, extensive written discovery, depositions, laboratory inspections, tests on the failed cryogenic storage tank, and additional trials in federal court, the settling defendants reached an agreement to resolve the claims against them in all courts and arbitration proceedings. The agreement was expressly conditioned on final court approval of the settlement's good faith. The settling defendants moved for a good faith settlement determination under section 877.6, and the trial court granted the motion in November 2021. The court also stated that it was dismissing with prejudice "[a]ll existing cross-complaints" for equitable indemnity or contribution against the settling defendants.

In December 2021, Chart filed a petition for writ of mandate in this court to challenge the trial court's good faith settlement determination. The following month, we denied the petition. In April 2022, our state Supreme Court denied Chart's petition for review of our denial of the writ petition. (Chart Inc. v. Superior Court , review denied Apr. 13, 2022, S272985.)

Meanwhile, on January 21, 2022, two days after we denied its writ petition, Chart filed a notice of appeal from the order determining the settlement was in good faith. The settling defendants then moved to dismiss the appeal.

II.DISCUSSION

In arguing that the appeal must be dismissed, the settling defendants cite this division's conclusion that "[t]he determination of the good faith of a settlement may only be reviewed by a timely petition for writ of mandate." ( Housing Group, supra , 24 Cal.App.4th at p. 552, 29 Cal.Rptr.2d 460.) And they point to subsequent appellate decisions agreeing with that conclusion. (See O'Hearn v. Hillcrest Gym & Fitness Center, Inc. (2004) 115 Cal.App.4th 491, 499, 9 Cal.Rptr.3d 342 ( O'Hearn ); Main Fiber Products, Inc. v. Morgan & Franz Ins. Agency (1999) 73 Cal.App.4th 1130, 1136, 87 Cal.Rptr.2d 108 ( Main Fiber ).) Chart, in contrast, cites cases holding that, while a good faith settlement determination may be reviewed by writ of mandate in accordance with section 877.6, subdivision (e), it may also be reviewed in an appeal from a final judgment. ( Cahill v. San Diego Gas & Electric Co. (2011) 194 Cal.App.4th 939, 956, 124 Cal.Rptr.3d 78 ( Cahill ); Wilshire Ins. Co. v. Tuff Boy Holding, Inc. (2001) 86 Cal.App.4th 627, 636, 103 Cal.Rptr.2d 480 ( Tuff Boy ); Maryland Casualty Co. v. Andreini & Co. (2000) 81 Cal.App.4th 1413, 1423, 97 Cal.Rptr.2d 752 ( Maryland Casualty ).)⁴ With these conflicting decisions in mind, we carefully reexamine section 877.6, ultimately reaffirming the conclusion we reached in Housing Group .⁵

A. Legal Framework and Standard of Review

" ‘The fundamental rule of statutory construction is that a court should ascertain the intent of the Legislature so as to effectuate the purpose of the law.’ " ( Upland Police Officers Assn. v. City of Upland (2003) 111 Cal.App.4th 1294, 1303, 4 Cal.Rptr.3d 629 ( Upland ); see also Dyna-Med, Inc. v. Fair Employment & Housing Com. (1987) 43 Cal.3d 1379, 1386–1387, 241 Cal.Rptr. 67, 743 P.2d 1323.) "Because the statutory language is generally the most reliable indicator of legislative intent, we first examine the words themselves, giving them their usual and ordinary meaning and construing them in context." ( Esberg v. Union Oil Co. (2002) 28 Cal.4th 262, 268, 121 Cal.Rptr.2d 203, 47 P.3d 1069, superseded by statute on other grounds as stated in Bernard v. City of Oakland (2012) 202 Cal.App.4th 1553, 1561 & fn. 5, 136 Cal.Rptr.3d 578.) "The statute's plain meaning controls the court's interpretation unless its words are ambiguous." ( Green v. State of California (2007) 42 Cal.4th 254, 260, 64 Cal.Rptr.3d 390, 165 P.3d 118.)

"If the words in the statute do not, by themselves, provide a reliable indicator of legislative intent, ‘[s]tatutory ambiguities often may be resolved by examining the context in which the language appears and adopting the construction which best serves to harmonize the statute internally and with related statutes.’ " ( People v. Arias (2008) 45 Cal.4th 169, 177, 85 Cal.Rptr.3d 1, 195 P.3d 103.) Moreover, " ‘statutes must be construed so as to give a reasonable and common-sense construction consistent with the apparent purpose and intention of the lawmakers—a construction that is practical rather than technical, and will lead to wise policy rather than mischief or absurdity. [Citation.] In approaching this task, the courts may consider the consequences which might flow from a particular interpretation and must construe the statute with a view to promoting rather than defeating its general purpose and the policy behind it.’ " ( Upland, supra , 111 Cal.App.4th at p. 1303, 4 Cal.Rptr.3d 629.) When " ‘the language permits more than one reasonable interpretation, ... the court looks "to a variety of extrinsic aids, including the ostensible objects to be achieved, the evils to be remedied, the legislative history, public policy, contemporaneous administrative construction, and the statutory scheme of which the statute is a part." ’ " ( S. B. Beach Properties v. Berti (2006) 39 Cal.4th 374, 379, 46 Cal.Rptr.3d 380, 138 P.3d 713.) Ultimately, " ‘[i]f a statute is amenable to two alternative interpretations, the one that leads to the more reasonable result will be followed.’ " ( People v. Cornett (2012) 53 Cal.4th 1261, 1271, 139 Cal.Rptr.3d 837, 274 P.3d 456, italics added.)

" ‘Statutory interpretation is a clear question of law for our determination anew on appeal.’ " ( Daugherty v. City and County of San Francisco (2018) 24 Cal.App.5th 928, 944, 234 Cal.Rptr.3d 773 ; Breslin v. City and County of San Francisco (2007) 146 Cal.App.4th...