Singer Co. v. Superior Court
| Decision Date | 07 April 1986 |
| Docket Number | COOL-TEMP |
| Citation | 179 Cal.App.3d 875,225 Cal.Rptr. 159 |
| Court | California Court of Appeals Court of Appeals |
| Parties | The SINGER COMPANY, Petitioner, v. The SUPERIOR COURT of Fresno County, Respondent;AIR CONDITIONING COMPANY, Real Party in Interest. Civ. F006130. |
Petitioner, The Singer Company (hereafter Singer), seeks a peremptory writ of mandate directing the Superior Court of Fresno County to vacate its order dismissing Singer's cross-complaint against real party in interest, Cool-Temp Air Conditioning Company (hereafter Cool-Temp). Singer had cross-complained for indemnity, contribution and declaratory relief arising from an action for personal injuries in which Singer is a defendant; Cool-Temp had previously settled plaintiffs' personal injury claims. Singer argues that respondent court abused its discretion (1) in failing to require Cool-Temp to comply with Singer's request for discovery relevant to the good faith of Cool-Temp's settlement before deciding that issue as to Singer and (2) in dismissing Singer's cross-complaint.
Singer's petition requires us to decide the fundamental question of whether a joint tortfeasor not a party to the lawsuit, either by complaint or cross-complaint, at the time another joint tortfeasor settles with the plaintiff is bound by an ensuing determination pursuant to Code of Civil Procedure section 877.6 1 that the settlement is in good faith. Fundamental constitutional principles of due process compel us to conclude that an unnamed joint tortfeasor whose potential liability is known, or reasonably should be known, to the settling parties but who is given no opportunity to be heard on the good faith of a prior settlement is not bound by a good faith determination; he has the right to challenge that finding once he has been brought into the litigation. We further hold that to make
this challenge a realistic one, the party brought in later must have a concurrent right to engage in limited discovery against the settling defendant to elicit such evidence relevant to the determination of good faith as was available at the time of settlement, whether or not then actually presented. We will grant the writ.
This petition stems from consolidated actions for the wrongful death of two children in a fire at the residence of Manuel Silva, Sr., and Mary Silva (jointly the Silvas). The Silvas and Cool-Temp were defendants in each action. In addition, the Silvas cross-complained against Cool-Temp for indemnity. Singer was not named in either complaint or in any cross-complaint.
In deposition the Silvas testified their air conditioning unit had clicked on only moments before the fire was observed on May 2, 1982. Investigative reports indicated the fire had started when natural gas which had leaked and accumulated in the attic was ignited by a spark from the relay in the air conditioning unit. Cool-Temp had been responsible for servicing the Silvas' heating and air conditioning units for several years prior to the fire and had made several service calls to the Silvas' residence during that period. Witnesses observed the Cool-Temp service truck at the Silva residence shortly before the fire occurred.
In January 1984 an expert retained by the Silvas was deposed and testified that, in his opinion, a gasket on the gas regulator had failed, causing the leakage and contributing to the fire. The regulator, built by Singer, was about 24 years old at the time of the fire. An employee of Southern California Gas Company (hereafter SoCal Gas) had been deposed in October 1983 concerning standard replacement of regulators that old.
About March 1, 1984, Cool-Temp settled each wrongful death action (involving claims of damages of approximately $252,000 and $500,000, respectively) for $5,000. Thereafter Cool-Temp moved for determination that each such settlement was in good faith. The motion was granted, and both complaints and all cross-complaints against Cool-Temp were dismissed with prejudice.
Singer was first brought into the litigation when it was served as a cross-defendant in a cross-complaint filed by the Silvas in January 1985. Singer answered on March 1, 1985, and filed a cross-complaint for indemnity, contribution and declaratory relief against Cool-Temp, SoCal Gas and the Silvas. On March 25, Singer served Cool-Temp with two sets of interrogatories and three requests for identification and production of documents. By this discovery, Singer sought evidence relevant to those factors identified by the California Supreme Court in Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 213 Cal.Rptr. 256, 698 P.2d 159 as appropriate guidelines in a trial court's assessment of the good faith of a settlement. Specifically, Singer sought information including "the extent and nature of Cool-Temp's involvement with the installation and servicing of the gas appliances in the Silvas' residence, the extent of Cool-Temp's insurance coverage regarding installation and servicing of appliances, documentation regarding the settlement and the financial condition of Cool-Temp at the time of settlement."
In April 1985 Singer's attorney wrote a separate letter to the attorney for each plaintiff offering to settle each party's wrongful death claim for $5,000 in exchange for a dismissal with prejudice. Each offer to settle was to remain open for a week, but Singer's attorney never received a reply from either offeree.
On April 11, 1985, and in reliance upon the trial court's 1984 determination that its settlement with plaintiffs was in good faith, Cool-Temp moved to dismiss Singer's cross-complaint. Singer opposed the motion and, during the pendency of the motion, again deposed the expert retained by the Silvas. At that time the expert testified it was "probable" that the fire was the result of a defect in the dual air conditioning- At the hearing on Cool-Temp's motion to dismiss, respondent court recognized Singer had the right, founded upon principles of due process, to challenge the good faith of Cool-Temp's settlement before that settlement could be raised as a bar to Singer's claim. Singer claimed, and Cool-Temp denied, that Singer's attempts to furnish respondent court relevant information necessary to evaluate the good faith of Cool-Temp's 1984 settlement were frustrated by Cool-Temp's "wrongful and bad faith refusal" to comply with Singer's discovery requests. However, despite Singer's repeated requests, respondent court refused to continue the hearing until a date after Cool-Temp provided the material information requested by the discovery propounded by Singer.
/heating unit. He also admitted he did not know whether the gasket in the regulator was corroded or not, or even what type of gasket was in the regulator.
Respondent court ruled that the settlements between Cool-Temp and the individual plaintiffs were made in good faith and consequently dismissed Singer's first, second, fifth and sixth causes of action, those causes of action seeking partial indemnity, contribution, or declaratory relief. The court stated its opinion that under either Tech-Bilt, supra, or the previous standard, Singer had failed to satisfy its burden of proving the settlement was not in good faith.
Singer first contends a writ of mandate should issue because Cool-Temp's settlements with the plaintiffs were not in good faith and thus did not preclude Singer's cross-complaint for partial indemnity and contribution. Secondly, Singer contends the trial court failed to follow the requisite procedure specified in section 877.6, subdivision (a). Finally, Singer argues the trial court abused its discretion in ruling on the good faith of Cool-Temp's settlements before Singer could complete discovery relevant to the lack of good faith. Cool-Temp counters that because Singer's petition relied on inadmissible evidence, Singer failed to meet its statutory burden of proving a lack of good faith in Cool-Temp's settlements with plaintiffs.
We preface our discussion with recognition of the basic principle that neither this court nor any other can absolutely bar the mere act of filing a complaint or cross-complaint for contribution or partial indemnity. In the context of the instant case, therefore, we must proceed from the premise that, despite the legislative intent we glean from the statutes we shall discuss and notwithstanding the actual good faith, or lack thereof, of Cool-Temp's settlements with plaintiffs, Cool-Temp cannot be protected from being named a cross-defendant in a cross-complaint by a joint-tortfeasor and from being consequently forced to respond in some manner. Therefore, the focus of our inquiry must be the disposition of that cross-complaint, seeking to accommodate (1) the policy favoring settlement of litigation as well as that favoring equitable sharing of tort liability, (2) the reasonable expectation of a settling tortfeasor that he will escape the burden and expense of prolonged litigation, and (3) the fundamental constitutional principle that no one shall be deprived of a substantial property right without due process of law. With this goal in mind, we turn to consideration of the statutory and decisional law governing joint and several tort liability in California.
In 1957, section 877 was added to the Code of Civil Procedure; that statute provides:
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