Stage Nine Design, LLC v. Rock-It Cargo, LLC ( 2021 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 STAGE NINE DESIGN, LLC, No. 2:21-cv-00722-WBS-AC 13 Plaintiff, 14 v. ORDER RE: DEFENDANT ROCK-IT CARGO USA, LLC’S MOTION FOR 15 ROCK-IT CARGO USA, LLC; VALUED GOOD FAITH SETTLEMENT FREIGHT SERVICES, LLC; DETERMINATION 16 GLOBALTRANZ ENTERPRISES, LLC; SPN CARGO, INC.; and DOES 1 to 17 20, inclusive, 18 Defendants. 19 20 ----oo0oo---- 21 Plaintiff Stage Nine Design, LLC (“Stage Nine”) 22 brought this action against defendants Rock-It Cargo USA, LLC 23 (“Rock-It”), GlobalTranz Enterprises, LLC (“GlobalTranz”), SPN 24 Cargo, Inc. (“SPN”), and Valued Freight Services, LLC (“Valued 25 Freight”), for negligence, breach of contract, and violations of 26 the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. 27 § 14706.1 (See generally GlobalTranz’s Notice of Removal, Ex. A 28 1 Stage Nine’s complaint was created using “Cause of 1 (“Compl.”) (Docket No. 1-1).) Stage Nine and Rock-It reached a 2 settlement agreement in May 2021. (Decl. of Jacob R. Fisher 3 (“Fisher Decl.”) ¶ 11 (Docket No. 25).) Rock-It now moves for a 4 determination that its settlement with Stage Nine was in good 5 faith and for an indemnity and contribution bar under California 6 Code of Civil Procedure §§ 877, 877.6. (Mot. for Good Faith 7 Settlement Determination (Docket No. 25).) 8 I. Factual Background 9 In April 2020, Stage Nine engaged Rock-It to arrange 10 shipping services to transport its traveling pop culture museum 11 exhibition (entitled “Hall of Heroes”) from West Palm Beach, 12 Florida, to the Springfield Museum in Springfield, Massachusetts 13 in July 2020. (Compl. ¶ 3.) Shortly thereafter, Rock-It 14 subcontracted its obligations under the engagement to Valued 15 Freight, who subsequently subcontracted the shipment to 16 GlobalTranz. (Compl. ¶ 4.) On July 8, 2020, GlobalTranz hired 17 SPN to operate as the motor carrier for the shipment. (Id.) 18 On or around July 10, 2020, SPN picked up the 19 Action” forms provided by the Judicial Council of California. 20 The complaint contains two “Cause of Action” forms--one for breach of contract, and one for negligence--with numbered 21 allegations attached to each. (See Compl. at 14-18, 19-22.) 22 However, in the thirteenth paragraph of the allegations supporting each cause of action, Stage Nine alleges that 23 defendants are liable for Stage Nine’s losses under 49 U.S.C. § 14706. (See Compl. at 14, 19.) 24 The allegations listed in support of Stage Nine’s second “Cause of Action” for negligence are identical to 25 allegations listed in support of its “Cause of Action” for breach of contract. (Compare Compl. at 19-22 with Compl. at 14- 26 18.) Any subsequent references to numbered allegations in Stage 27 Nine’s complaint will therefore correspond with the allegations listed in support of Stage Nine’s first “Cause of Action,” 28 located at pages 14-18 of the complaint. 1 exhibition trailer from West Palm Beach. (Compl. ¶ 5.) En 2 route to Massachusetts, the SPN driver, Veljko, stopped at the 3 Kenworth dealer in Riviera Beach, Florida, because he noticed 4 the “check engine” light illuminate on his tractor. (Id.) 5 Stage Nine alleges that Veljko left the trailer on the street 6 unattended and unsecured near the dealership as the tractor was 7 being serviced. (Id.) On or about July 11, 2020, the trailer 8 was stolen, and still has not been recovered. (Id.) Stage Nine 9 alleges that the value of its goods inside the trailer is 10 approximately $462,742. (Id.) 11 Stage Nine and Rock-It’s relationship was governed by 12 a 2017 written agreement, in which Rock-It agreed to perform 13 transportation brokerage services and logistics assistance on 14 behalf of Stage Nine (the “2017 Agreement”). (Compl. ¶ 1.) 15 (Compl. ¶¶ 1, 17-18.) According to the terms of the 2017 16 Agreement, Rock-It agreed to “use its best efforts to select and 17 engage responsible carriers, warehousemen and other 18 transportation intermediaries . . . .” (Compl. ¶ 2.) Stage 19 Nine claims that Rock-It breached the terms of the 2017 20 Agreement and acted negligently by “failing to use its best 21 efforts to select and engage responsible carriers and other 22 transportation intermediaries,” failing to “ensure there was 23 adequate insurance without exclusions to protect Stage Nine,” 24 and failing to “properly and reasonable supervise and oversee 25 the shipment.” (Compl. ¶ 17.) Stage Nine further claims that 26 Valued Freight, GlobalTranz, and SPN breached their agreements 27 under a third-party beneficiary theory and acted negligently. 28 (Compl. ¶¶ 18-20.) 1 Stage Nine settled its claims against Rock-It in May 2 2021. (See Fisher Decl., Ex. D (“Settlement Agreement”).) As 3 set forth in the Settlement Agreement, Stage Nine agreed to 4 waive all claims against Rock-It arising out of the 5 transportation of the Hall of Heroes exhibition, in exchange for 6 Rock-It’s agreement to waive claims it has against Stage Nine 7 related to two unpaid invoices for transportation services other 8 those at issue in this case, worth $18,840. (See id.; Fisher 9 Decl. ¶ 11; Mot. for Good Faith Settlement Determination at 7.) 10 Both Valued Freight and SPN oppose Rock-It’s motion 11 for a good-faith settlement determination. (See Valued Freight 12 Amended Opp’n (Docket No. 33); SPN Opp’n (Docket No. 35).) 13 Prior to the court’s dismissal of Stage Nine’s claims and SPN’s 14 cross-claims against GlobalTranz for lack of personal 15 jurisdiction, GlobalTranz also filed a short “statement” joining 16 the other non-settling defendants’ oppositions to Rock-It’s 17 motion. (GlobalTranz Statement (Docket No. 36).) 18 II. Discussion 19 A. Legal Standard 20 “Any party to an action in which it is alleged that 21 two or more parties are joint tortfeasors or co-obligors on a 22 contract debt shall be entitled to a hearing on the issue of the 23 good faith of a settlement entered into by the plaintiff . . . 24 and one or more alleged tortfeasors or co-obligors . . . .” 25 Cal. Code of Civ. P. § 877.6(a)(1). “A determination by the 26 court that the settlement was made in good faith shall bar any 27 other joint tortfeasor or co-obligor from any further claims 28 against the settling tortfeasor or co-obligor for equitable 1 comparative contribution, or partial or comparative indemnity, 2 based on comparative negligence or comparative fault.” Cal. 3 Code Civ. P. § 877.6(c). “A good faith finding also reduces the 4 claims against the nonsettling defendants in the amount 5 stipulated by the settlement.” TSI Seismic Tenant Space, Inc. 6 v. Superior Ct., 149 Cal. App. 4th 159, 165 (4th Dist. 2007) 7 (citing Cal. Code Civ. P. § 877(a)). Where, as here, the 8 plaintiff has brought claims against defendants under state law 9 as well as the Carmack Amendment to the Interstate Commerce Act, 10 the Ninth Circuit has held that the Carmack Amendment does not 11 preempt California’s good-faith settlement law, and therefore 12 that California Code of Civil Procedure §§ 877 & 877.6 still 13 apply. 14 In the seminal case Tech-Bilt, Inc. v. Woodward-Clyde 15 & Associates, 38 Cal. 3d 488 (1985), the California Supreme 16 Court identified the following non-exclusive factors courts are 17 to consider in determining if a settlement is in good faith 18 under § 877.6: (1) a rough approximation of the plaintiffs’ 19 total recovery and the settlor’s proportionate liability; (2) 20 the amount to be paid in settlement; (3) the allocation of 21 settlement proceeds among the plaintiffs; (4) a recognition that 22 a settlor should pay less in settlement than he would if he were 23 found liable after a trial; (5) the financial conditions and 24 insurance policy limits of the settling defendants; and (6) the 25 existence of collusion, fraud, or tortious conduct aimed to 26 injure the interests of non-settling defendants. Tech-Bilt, 38 27 Cal. 3d at 499. 28 “Thus, Tech–Bilt held that in determining whether a 1 settlement was made in good faith for purposes of section 877.6, 2 a key factor a trial court should consider is whether the amount 3 paid in settlement bears a reasonable relationship to the 4 settlor's proportionate share of liability.” TSI, 149 Cal. App. 5 4th at 166 (citing Tech-Bilt, 38 Cal. 3d at 499-500). “This is 6 because one of the main goals of section 877.6 is ‘allocating 7 costs equitably among multiple tortfeasors.’” Id. 8 “Accordingly, a court not only looks at the alleged tortfeasor's 9 potential liability to the plaintiff, but it must also consider 10 the culpability of the tortfeasor vis-à-vis other parties 11 alleged to be responsible for the same injury. Potential 12 liability for indemnity to a nonsettling defendant is an 13 important consideration for the trial court in determining 14 whether to approve a settlement by an alleged tortfeasor.” Id. 15 Parties opposing a motion for good-faith settlement 16 have the burden of proving that the settling parties entered 17 into the agreement in bad faith. Tech-Bilt, 38 Cal. 3d at 499; 18 see also Cal. Code Civ. P. § 877.6(d) (“The party asserting the 19 lack of good faith shall have the burden of proof on that 20 issue.”). Ultimately, the determination is left to the trial 21 court’s discretion. Tech-Bilt, 38 Cal. 3d at 502. 22 B. Analysis 23 1. Amount to be Paid in Settlement Compared to Proportionate Liability 24 25 The first, second, and fourth Tech-Bilt factors 26 require the court to examine the amount to be paid to the 27 plaintiff in relation to the settling party’s approximate 28 1 proportionate liability.2 In conducting this inquiry, the court 2 asks whether “the amount of the settlement is within the 3 reasonable range of the settling tortfeasor’s proportional share 4 of comparative liability for the plaintiff’s injuries.” Id. at 5 499. The settlement amount need not equal the settling party’s 6 potential liability with mathematical certainty--it need only be 7 “in the ballpark” of the settling party’s proportionate share of 8 liability. Id. at 501 n.9; see also Moore v. ANG Transport 9 Inc., No. 2:18-cv-02919 WBS KJN, 2020 WL 406777, *2 (E.D. Cal. 10 Jan. 24, 2020). Further, the trial court must remain mindful of 11 the fact that settling parties often “pay less in settlement 12 than [they] would if [they] were found liable after a trial.” 13 Tech-Bilt, 38 Cal. 3d at 499. 14 Here, the amount to be paid to Stage Nine is the value 15 of freight charges owed by Stage Nine to Rock-It on invoices 16 other than for the items at issue in this case, or $18,840. 17 (Settlement Agreement at 1; Fisher Decl. ¶ 11.) Rock-It’s 18 principal argument in support of its motion is that this amount 19 is well “within the ballpark” of its proportionate liability 20 because Rock-It effectively limited its liability to Stage Nine 21 for damages or losses arising out of transportation of the Hall 22 of Heroes exhibition via contract to $10,720. (See Mot. for 23 Good-Faith Settlement Determination at 7-9.) 24 a. Limitation of Liability via Contract 25 26 2 The court need not consider the third Tech-Bilt factor --the allocation of settlement proceeds among the plaintiffs--in 27 this case, as there is only one plaintiff to whom the value of Rock-It’s settlement will be distributed. See Tech-Bilt, 38 28 Cal. 3d at 499. 1 The 2017 Agreement between Stage Nine and Rock-It 2 provides that Rock-It “will not be liable for any loss, damage, 3 or delay to goods caused by a carrier or warehouse,” and that 4 “for . . . truck transportation . . . liability for damage is 5 limited to $0.50 per pound or $40 per article . . . whichever is 6 less.” (2017 Agreement ¶ 1A.) Courts routinely uphold such 7 contractual limitations on liability, even against claims of 8 negligence, so long as the agreement is “clear and explicit, 9 free of ambiguity or obscurity, and tell[s] the prospective 10 releasor he or she is releasing the other from liability.” 11 Conservatorship of Link, 158 Cal. App. 3d 138, 143 (1st Dist. 12 1984); see also Nat'l Rural Telecomm. Coop. v. DIRECTTV, Inc., 13 319 F. Supp. 2d 1040, 1048 (C.D. Cal. 2003) (“Under California 14 law, parties may agree by their contract to the limitation of 15 their liability in the event of a breach.”). 16 No party seriously disputes that the language in Rock- 17 It and Stage Nine’s 2017 Agreement is sufficiently clear and 18 explicit so as to limit Rock-It’s liability under Stage Nine’s 19 state-law claims for breach of contract and negligence to $0.50 20 per pound or $40 per article, whichever is less.3 Rather, the 21 non-settling defendants argue that the limitation of liability 22 clause in the 2017 Agreement is irrelevant because Rock-It faces 23 potentially greater liability under Stage Nine’s third claim for 24 violations of the Carmack Amendment to the Interstate Commerce 25 26 3 Though Valued Freight’s counsel contended at oral argument that there is no evidence Stage Nine signed the 2017 27 Agreement, the copy of the agreement attached to Rock-It’s motion clearly contains the signature of the CEO of Stage Nine, 28 Troy Carlson. (See 2017 Agreement at 3.) 1 Act. (See Valued Freight Amended Opp’n at 2-4; SPN Opp’n at 3.) 2 The Carmack Amendment imposes liability on carriers 3 for “all losses relating to goods [the carriers] transport[] in 4 interstate commerce.” Chubb Grp. of Ins. Cos. v. H.A. Transp. 5 Sys., 243 F. Supp. 2d 1064, 1068 (C.D. Cal. 2002). The statute 6 governs two classes of carriers: “motor carriers” and “freight 7 forwarders,”4 49 U.S.C. §§ 14706(a), and “absolutely preempts all 8 state common law claims against such carriers and freight 9 forwarders.” Chubb, 243 F. Supp. 2d at 1068-69. “Brokers,” by 10 contrast, are exempt from the statute’s liability scheme, and 11 instead may only be held liable under state law.5 Id. (citing 12 4 The Carmack Amendment defines a “freight forwarder” as 13 a person holding itself out to the general public (other than as a 14 pipeline, rail, motor, or water carrier) to provide transportation of 15 property for compensation and in the ordinary course of its business— 16 (A) assembles and consolidates, or 17 provides for assembling and consolidating, shipments and 18 performs or provides for break- bulk and distribution operations 19 of the shipments; 20 (B) assumes responsibility for the transportation from the place of 21 receipt to the place of destination; and 22 (C) uses for any part of the 23 transportation a carrier subject to jurisdiction under this 24 subtitle. 25 49 U.S.C. § 13102(8). 26 5 The Carmack Amendment defines a “broker” as “a person, 27 other than a motor carrier or an employee or an agent of a motor carrier, that . . . sells, offers for sale, negotiates for, or 28 holds itself out by solicitation, advertisement, or otherwise as 1 Hughes Aircraft Co. v. N. Am. Van Lines, Inc., 970 F.2d 609, 613 2 (9th Cir. 1992)). 3 Thus, whether Stage Nine has a claim against Rock-It 4 under the Carmack Amendment depends on whether Rock-It was 5 acting as a motor carrier, freight forwarder, or a broker in the 6 underlying transaction. See id. If Rock-It acted as a motor 7 carrier or freight forwarder, the Carmack Amendment applies, and 8 the non-settling defendants are correct that the limitation of 9 liability clause in the 2017 Agreement alone would not operate 10 to limit Rock-It’s liability. See Mason & Dixon Intermodal, 11 Inc. v. Lapmaster Int’l, LLC, No. C 08-1232 VRW, 2009 WL 12 10680948, *8 (N.D. Cal. May 11, 2009) (“Mason & Dixon I”). If, 13 however, Rock-It acted as a broker, Stage Nine may only hold 14 Rock-It liable under state law, and the 2017 Agreement’s 15 limitation of liability clause is sufficient. See id. 16 Each side points to evidence from the 2017 Agreement 17 and Rock-It’s “Forwarder Bill of Lading” to argue that Rock-It 18 was acting as a freight forwarder or a broker, respectively. 19 (See Valued Freight Amended Opp’n at 2-3; Reply to SPN Opp’n at 20 4 (Docket No. 38).) Even assuming the court could resolve this 21 dispute based on the limited evidence submitted by the parties, 22 see Ensco, Inc. v. Weicker Transfer & Storage Co., 689 F.2d 921, 23 925 (10th Cir. 1982) (a carrier’s status “is determined not by 24 reference to its authority but rather by reference to what it 25 holds itself out to be”), the court need not do so at this time. 26 Although the Carmack Amendment generally holds carriers strictly 27 selling, providing, or arranging for, transportation by motor 28 carrier for compensation.” 49 U.S.C. § 13102(2). 1 liable for the full value of lost or damaged cargo, it does 2 permit carriers to effectively limit their liability in certain 3 circumstances, which are present in this case. See Mason & 4 Dixon I, 2009 WL 10680948, at *7. 5 b. Limitation of Liability under the Carmack Amendment 6 7 Under the Carmack Amendment, carriers may limit their 8 liability in one of two ways: via declaration by the shipper, or 9 via written agreement, as long as the agreement is reasonable 10 under the circumstances. Id. “Reasonableness is articulated 11 under the four-pronged Hughes test requiring carriers to (1) 12 ‘maintain a tariff in compliance with the requirements of the 13 Interstate Commerce Commission’; (2) ‘give the shipper a 14 reasonable opportunity to choose between two or more levels of 15 liability’; (3) ‘obtain the shipper’s agreement as to his choice 16 of carrier liability limit’; and (4) ‘issue a bill of lading 17 prior to moving the shipment that reflects any such agreement.’” 18 Mason & Dixon I, 2009 WL 10680948, at *7 (quoting Hughes 19 Aircraft v. N. Am. Van Lines, 970 F.2d 609, 611-12 (9th Cir. 20 1992)). 21 Here, the evidence shows that Rock-It successfully met 22 the requirements set forth in the Hughes test by signing the 23 2017 Agreement with Stage Nine and issuing a bill of lading for 24 the shipment at issue. Hughes, 970 F.2d at 611-12. The first 25 requirement, that a carrier maintain a tariff in compliance with 26 the requirements of the Interstate Commerce Commission, was 27 superseded by statute in 1995 and is no longer necessary for a 28 carrier to limit its liability under the Carmack Amendment. See 1 Mason & Dixon I, 2009 WL 10680948, at *7 (“The Interstate 2 Commerce Commission Termination Act of 1995 eliminated the need 3 to maintain a tariff with the ICC.”); 49 U.S.C. §§ 13710(a)(4), 4 14706(c)(1)(B). 5 The second requirement is that Rock-It must have given 6 Stage Nine a reasonable opportunity to choose between two or 7 more levels of liability. Hughes, 970 F.2d at 611-12. In their 8 2017 Agreement, Rock-It gave Stage Nine the opportunity to 9 choose between a limitation of liability of $40 per article (or 10 $0.50 per pound, whichever is less) or to purchase, for an 11 increased fee, additional “coverage for physical loss or damage 12 in excess of these limits by initialing the ‘I do’ space in 13 [paragraph] 1B below and declaring the actual replacement value 14 of the goods . . . .” (2017 Agreement ¶ 1A.) The Agreement 15 goes on to “encourage[] [Stage Nine] to purchase freight 16 insurance or to instruct Rock-It to purchase freight insurance 17 on its behalf if the aforesaid limitations pose unacceptable 18 risks to the customer.” (Id.) The 2017 Agreement therefore 19 clearly provided Stage Nine with “both reasonable notice of the 20 liability limitation and the opportunity to obtain information 21 necessary to making a deliberate and well-informed choice.” 22 Hughes, 970 F.2d at 612. Because Stage Nine signed the 2017 23 Agreement without requesting additional coverage or declaring 24 the actual replacement value of its goods, Rock-It also 25 satisfied the third Hughes requirement by obtaining Stage Nine’s 26 agreement to limit liability to $40 per article or $0.50 per 27 pound, whichever is less. Id.; (2017 Agreement ¶ 1A). 28 The fourth requirement is that Rock-It must have 1 issued a bill of lading reflecting the $40 per article limited 2 liability disclaimer prior to moving the Hall of Heroes 3 exhibition. Hughes, 970 F.2d at 611-12. The parties have 4 submitted a document titled “Rock-It Cargo USA LLC Forwarder 5 Bill of Lading” which expressly states “Unless a greater valued 6 is declared, Shipper hereby releases the value to a maximum 7 value subject to $0.50 per lb or $40 per article, whichever is 8 less, unless otherwise indicated.” (Valued Freight Amended 9 Opp’n, Ex. 3 (“Forwarder Bill of Lading”) (Docket No. 33).) 10 Stage Nine, the shipper, appears to have signed the bill of 11 lading on July 10, 2020, indicating that the bill was issued by 12 Rock-It prior to shipment in compliance with the fourth Hughes 13 requirement. See Hughes, 970 F.2d at 611-12. 14 Accordingly, Rock-It’s limitation of liability to $40 15 per article or $0.50 per pound was equally effective regardless 16 of whether the Carmack Amendment applies. The non-settling 17 defendants’ argument that Rock-It faces greater potential 18 liability under the Carmack Amendment than under Stage Nine’s 19 claims for breach of contract and negligence is therefore 20 without merit. 21 c. Whether $18,840 fairly approximates Rock- It’s Proportionate Liability 22 23 Finally, the non-settling defendants argue that, even 24 if Rock-It’s liability is limited to $40 per article or $0.50 25 per pound, the settlement does not fairly approximate Rock-It’s 26 proportionate liability because Rock-It has not provided 27 adequate evidence of the weight or number of articles present in 28 the missing trailer. (See Valued Freight Amended Opp’n at 6.) 1 Rock-It does not make any representations as to the weight of 2 the cargo contained with in the trailer. Rather, Rock-It relies 3 on an “inventory manifest” for the missing trailer to argue that 4 the trailer contained 268 “articles,” and therefore that its 5 maximum liability is $10,720 (268 x $40). (See Decl. of Jacob 6 R. Fisher in Support of Mot. for Good-Faith Settlement 7 Determination ¶ 14 (Docket No. 25); Decl. of Troy Carlson in 8 Support of GlobalTranz Mot. to Dismiss, Ex. 1 (“Hall of Heroes 9 Manifest”) (Docket No. 40-2); Mot. for Good-Faith Settlement 10 Determination at 9.) 11 The “inventory manifest” cited by Rock-It consists of 12 a spreadsheet which lists the individual components of the Hall 13 of Heroes exhibition, the value of each component, and the total 14 cost of replacing each component (including that of any 15 necessary labor). (See Hall of Heroes Manifest.) Rock-It 16 appears to have derived its figure for the number of “articles” 17 in the trailer by counting the total number of non-empty rows in 18 the spreadsheet. (See id.) However, because many of the 19 spreadsheet’s entries reflect the number of labor hours that 20 would be required to rebuild portions of the exhibition (e.g., 21 row 1.12, “Labor Hours” for rebuilding the “Superman Statute & 22 Phone Booth Display), and other entries reflect multiple 23 components (e.g., row 10.7, “Custom Stands for Rubber Figurines; 24 Qty: 180”), it is unlikely that the actual number of articles in 25 the trailer was 268, as Rock-It contends. Ignoring entries 26 which estimate the number of labor hours required to replace 27 certain portions of the exhibition, and accounting for the 28 listed “quantity” of each entry on the spreadsheet, the true 1 number of lost articles on the stolen trailer appears to be 2 closer to 584. (See id.) 3 Based on this number, Rock-It’s maximum liability is 4 actually closer to $23,360, or slightly more than twice as much 5 as Rock-It contends in its motion. Thus, the amount Rock-It has 6 agreed to pay Stage Nine ($18,840) is not 175% of its maximum 7 liability, as Rock-It argues, but closer to 80%. Nevertheless, 8 the court is satisfied that Rock-It’s settlement fairly 9 approximates its proportionate liability and therefore warrants 10 approval. See Tech-Bilt, 38 Cal. 3d at 499. 11 The allegations and evidence before the court indicate 12 that Rock-It’s conduct played a comparatively minor role 13 compared to that of other parties in causing Stage Nine’s loss. 14 Stage Nine itself failed to declare the actual value of the 15 contents of the trailer or inform Rock-It that extra precautions 16 should be taken on account of the exhibition’s value. (See 2017 17 Agreement; Forwarder Bill of Lading.) SPN, of course, is the 18 motor carrier whose negligence in leaving the trailer 19 “unattended and unsecured” overnight on the side of the road is 20 alleged to be most proximate to the loss of the trailer. (Compl. 21 ¶ 5.) And other defendants are alleged to have had a more 22 direct role in selecting SPN as the motor carrier for the job. 23 (Compl. ¶ 4.) 24 Given Rock-It’s limited role in the transaction, Stage 25 Nine’s express agreement to limit Rock-It’s liability to $40 per 26 article, and the fact that the California Supreme Court has 27 instructed that settling parties “should pay less in settlement 28 than [they] would if [they] were found liable after a trial,” 1 the court finds Rock-It’s settlement to be within the reasonable 2 range of its proportional liability. See Tech-Bilt, 38 Cal. 3d 3 at 499.6 4 2. Rock-It’s Financial Condition and Insurance Policy Limits 5 6 The fifth Tech-Bilt factor accounts for the financial 7 condition and any applicable insurance policy limits of the 8 settling party. Id. This factor is generally used to assess 9 whether a “disproportionately low settlement” is nevertheless 10 reasonable due to the defendant’s insolvency or underinsured 11 state. See id. Here, no party has provided any information 12 indicating that Rock-It is insolvent or inadequately insured 13 and, even if they had, the court has already determined that 14 Rock-It’s settlement fairly approximates its potential liability 15 6 SPN further contends that it is unclear from Rock-It’s 16 motion whether the value of its settlement with Stage Nine is $18,840 (the purported value of the outstanding invoices Rock-It 17 has agreed not to collect) or $10,720 (the amount to which Rock- 18 It contends its liability was limited by contract). Because a finding of good faith reduces the amount the plaintiff may 19 ultimately collect from non-settling defendants by the value of the settlement, see TSI Seismic, 149 Cal. App. 4th at 165, SPN 20 argues that it would be prejudiced by the approval of Rock-It’s settlement because it would be unclear how much the final 21 judgment in this case should be reduced. However, even assuming 22 that SPN is correct, and the value of Rock-It’s settlement is unclear, the court need not determine the exact value of the 23 setoff to which the non-settling defendants (including SPN) are entitled until final judgment. For the issue before the court 24 at this juncture--whether Rock-It entered into its settlement with Stage Nine in good faith under §§ 877 & 877.6--the 25 difference between a value of $18,840 and $10,720 is immaterial, as both values are sufficiently “within the ballpark” of Rock- 26 It’s proportional liability for the reasons discussed above. 27 See Tech-Bilt, 38 Cal. 3d at 501 n.9. The court will therefore not deny Rock-It’s motion on the basis that the value of Rock- 28 It’s settlement is unclear, as urged by SPN. 1 in this matter and is therefore not “disproportionately low.” 2 This factor therefore does not weigh against a finding of good 3 faith. See id. 4 3. Collusion, Fraud, or Tortious Conduct 5 The sixth and final Tech-Bilt factor requires the 6 court to consider whether Stage Nine and Rock-It employed 7 collusion, fraud, or tortious conduct to injure any of the non- 8 settling defendants. None of the non-settling defendants have 9 provided the court with any direct evidence of collusion, 10 fraudulent, or tortious conduct by Rock-It or Stage Nine. 11 Rather, the non-settling defendants ask the court to essentially 12 infer that Rock-It’s primary motivation in entering into the 13 Settlement Agreement was to obtain a corresponding bar against 14 contribution and indemnity claims by the non-settling defendants 15 under § 877(b). (See Valued Freight Amended Opp’n at 8-9; SPN 16 Opp’n at 3-4); Cal. Code Civ. P. §§ 877(b); 877.6(c). 17 Beyond merely presenting the bald assertion that there 18 is “much room for indemnity against Rock-it by . . . [Valued 19 Freight], GlobalTranz, and SPN,” the non-settling defendants do 20 little to identify contractual or otherwise implied claims for 21 indemnity or contribution that a finding of good faith would 22 extinguish. In fact, the only other defendant to deal directly 23 with Rock-It, Valued Freight, expressly agreed to defend and 24 indemnify Rock-It for any losses or damage arising out of the 25 performance of their agreement, in addition to agreeing to 26 assume full liability for any losses arising during 27 transportation of the exhibition. (Mot. for Good-Faith 28 Settlement Determination, Ex. C (“Co-Broker Agreement”) ¶¶ 8, 10 1 (Docket No. 25).) There also does not appear to be any basis 2 for holding GlobalTranz or SPN liable based on Rock-It’s 3 contract with Valued Freight under a third-party beneficiary 4 theory. See GECCMC 2005-C1 Plummer Street Office Ltd. 5 Partnership v. JPMorgan Chase Bank, Nat. Ass’n, 671 F.3d 1027, 6 1033 (9th Cir. 2012) (“only a party to a contract or an intended 7 third-party beneficiary may sue to enforce the terms of a 8 contract”). 9 To date, none of the non-settling defendants have 10 brought a single cross-claim for contribution or indemnity 11 against Rock-It.7 Even assuming one or more of them have claims 12 for implied indemnity or contribution under state tort law or 13 the Carmack Amendment, see 49 U.S.C. § 14706(b) (stating that 14 the carrier issuing the bill of lading is “entitled to recover 15 from the carrier over whose line or route the loss or injury 16 occurred the amount required to be paid to the owners of the 17 property”), the value of any such claim is likely to be low, 18 given that SPN’s negligence appears to have been the most 19 proximate cause of the loss of the trailer and the lack of 20 evidence showing that Stage Nine informed Rock-It of the true 21 value of the trailer’s cargo. The non-settling defendants have 22 therefore failed to provide a basis upon which the court could 23 conclude that Rock-It colluded with Stage Nine or otherwise 24 7 This includes SPN, which did bring a cross-claim 25 against GlobalTranz prior to the dismissal of all claims against GlobalTranz for lack of personal jurisdiction. (Docket No. 7.) 26 Although GlobalTranz is no longer a defendant in this action, it 27 also did not identify any potential cross-claims against Rock-It in its (albeit, limited) opposition to Rock-It’s motion. (See 28 GlobalTranz Statement at 2.) 1 engaged in fraud to shield itself from potential claims for 2 contribution or indemnity against it via settlement. 3 Accordingly, the court finds that the non-settling 4 defendants have failed to meet their burden of proving that 5 Rock-It entered into the Settlement Agreement with Stage Nine in 6 bad faith. See Tech-Bilt, 38 Cal. 3d at 499. 7 B. Rule 54(b) 8 SPN further argues that Federal Rule of Civil 9 Procedure 54(b) bars this court from finding that Rock-It and 10 Stage Nine’s settlement was entered into in good faith at this 11 time. (See SPN Opp’n 2-3.) Rule 54(b) states that, “[w]hen an 12 action presents more than one claim for relief . . . or when 13 multiple parties are involved, the court may direct entry of a 14 final judgment as to one or more, but fewer than all, claims or 15 parties only if the court expressly determines that there is no 16 just reason for delay.” Fed. R. Civ. P. 54(b). Rule 54 defines 17 “judgment” to include “any order from which an appeal lies.” 18 Fed. R. Civ. P. 54(a). SPN contends that, because “there is a 19 recognized right of appeal from an order entered pursuant to 20 California C.C.P. § 887,” the order results in a judgment and, 21 thus, under Rule 54(b), the court may not enter such an order 22 without an express determination that there is no just reason 23 for delay. (SPN Opp’n at 2.) 24 SPN does not cite to any authority which supports its 25 proposition that a good faith settlement order constitutes a 26 final judgment. In fact, both cases cited by SPN specifically 27 describe a good-faith settlement determination an “interlocutory 28 decree.” Md. Cas. Co. v. Andreini & Co. of S. Cal., 81 Cal. 1 App. 4th 1413, 1424 (2d Dist. 2000). While such a decree may be 2 reviewed “by prejudgment writ [or] postjudgment appeal,” it does 3 not itself constitute a final judgment. Id. at 1425; see also 4 Greshko v. Cnty. of Los Angeles, 194 Cal. App. 3d 822, 827 n.1 5 (2d Dist. 1987) (“The ruling on the motions for determination of 6 good faith settlement is reviewable on appeal from the judgment 7 (order of dismissal) as an ‘intermediate ruling, proceeding, 8 order or decision which involves the merits or necessarily 9 affects the judgment or order appealed from . . . .’”). 10 Courts routinely enter orders determining that a 11 settlement has been made in good faith prior to the resolution 12 of all claims or entry of final judgment, without expressly 13 finding that there is no just reason for delay. See, e.g., 14 Mason & Dixon Intermodal, Inc. v. Lapmaster Int’l, LLC, No. C 15 08-1232 VRW, 2009 WL 10680878, *4 (N.D. Cal. Oct. 21, 2009), 16 aff’d Mason & Dixon Intermodal, Inc. v. Lapmaster Int’l, LLC, 17 632 F.3d 1056, 1064 (9th Cir. 2011); City of West Sacramento v. 18 R and L Business Management, No. 2:18-cv-2249629 WBS EFB, 2019 19 WL 2249629, *4 (E.D. Cal. May 24, 2019). Because SPN has failed 20 to provide any authority to the contrary, the court finds that 21 it may issue an order determining that Rock-It’s settlement was 22 entered into in good faith without an express finding that there 23 is no just reason for delay. 24 IT IS THEREFORE ORDERED that Rock-It’s motion for 25 good-faith settlement determination be, and the same hereby is, 26 GRANTED. The court ORDERS as follows: 27 1. Under California Code of Civil Procedure §§ 877 and 28 877.6, the settlement agreement reached by the settling parties eee ee EI I mI IEE IEE ED Oe 1 is in good faith and is a fair, adequate, and reasonable 2 settlement only as to plaintiffs’ claims against the settling 3 defendants; 4 2. No contribution or indemnity claims against Rock-It 5 arising out of Stage Nine’s Complaint or any related cross- 6 | claims or counterclaims will be allowed. 7 | Dated: August 26, 2021 □□ tteom. Ad. bt—~ 8 WILLIAM B. SHUBB UNITED STATES DISTRICT JUDGE 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 21