Bobrow/Thomas & Associates v. Superior Court

Typically, in a construction defect case brought before us, some but not all of the defendants have settled, the superior court has confirmed the settlement (Code Civ. Proc., § 877.6), and we are asked simply to review its determination that the settlement was within the “ballpark,” as that term was used in Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499-500 [ 213 Cal.Rptr. 256 , 698 P.2d 159 ]. Our task this time is more difficult because here contractual indemnity rights connect the defendants, and two defendants procured insurance policies to cover a third defendant who did not settle. The settling defendants have attempted either to satisfy in advance or to cut off the nonsettling defendant’s contractual indemnity claims and to short-circuit its insurance coverage by inducing the plaintiff to tailor its lawsuit to protect the settling defendants and their insurers.

The settlement raises two intertwined questions: (1) Have the settling defendants achieved their goals of undermining indemnity and insurance claims? and (2) Does the settlement qualify as a “good faith” settlement in spite of its objective of abridging the nonsettling defendant’s…