Alcala Co. v. Superior Court

These proceedings arise out of a condominium construction defect suit. The homeowners association sued the developers and two general contractors which in turn filed cross-complaints against the subcontractors. The developers and one general contractor entered into a sliding scale or “Mary Carter” settlement agreement with the plaintiff which the trial court found to be in good faith. The court allowed the settling defendants to remain as defendants in the direct action brought by the association.

In this opinion, we address whether the trial court abused its discretion when it allowed the settling developers and general contractor to continue as defendants in the direct action. We conclude it did not. Rather, adequate disclosure of the settlement agreement and the true interests of the parties to the jury can adequately protect the interests of the nonsettling parties.

Background

Oliver McMillan/Odmark Partnership and related entities (OMOP) developed a 312-unit condominium project known as Uptown. Newmark Construction Company (Newmark) and Nielsen Construction Company (Nielsen) were general contractors. Alcala Company, Inc. (Alcala) was a subcontractor on the…