Bob Parrett Construction, Inc. v. Superior Court

The employees of two corporations were charged and convicted of defrauding the United States government. The corporations, which were not charged with any crimes but were potentially liable for common law tort damages and civil fines, settled their claims (one for $1 million, the other for $200,000) and obtained releases from the United States. One corporation then sued the other for indemnity and damages, which resulted in the defendant corporation’s motion for a determination that its $200,000 settlement was made in good faith and thus barred the other corporation’s claims. (Code Civ. Proc., §§ 877, 877.6.) Without reaching its merits, the trial court denied the motion on the ground that the good faith statute does not apply in this context. We conclude otherwise and issue a writ of mandate directing the trial court to determine the merits of the motion.

FACTS

A.

The Department of Defense and other agencies of the United States contracted with TRW, Inc., which in turn contracted with Bob Parrett Construction, Inc. (BPC) to perform multipurpose commercial construction services ancillary to TRW’s work for the United States. At the times relevant to these proceedings,…