Essex Portfolio, L.P. v. F.D. Thomas, Inc., et al.

LINE # CASE # CASE TITLE RULING LINE 1 20CV371719 Millan v. Bouton Construction, Inc. See Line 1 for tentative ruling (Class Action / PAGA) LINE 2 20CV374597 Regional Medical Center of San Jose, et See Line 2 for tentative ruling al. v. County of Santa Clara dba Valley Health Plan LINE 3 20CV374597 Regional Medical Center of San Jose, et See Line 2 for tentative ruling al. v. County of Santa Clara dba Valley Health Plan LINE 4 20CV374597 Regional Medical Center of San Jose, et See Line 2 for tentative ruling al. v.

County of Santa Clara dba Valley Health Plan LINE 5 21CV383976 Goodman v. Boba Guys, Inc. (Class See Line 5 for tentative ruling Action) LINE 6 23CV423933 Running v. United Security Specialists, See Line 6 for tentative ruling Inc. (Class Action / PAGA) LINE 7 23CV427314 Good Samaritan Hospital, L.P., et al. v. See Line 7 for tentative ruling Kaiser Foundation Health Plan, Inc. on motions to seal at Lines 7 – 20 LINE 21 24CV428938 Essex Portfolio, L.P. vs F.D. Thomas, Inc. See Line 21 for tentative et al ruling LINE 22 24CV448267 Raj Parihar vs MIPS Holding, Inc.

See Line 22 for tentative ruling LINE 23 24CV448267 Raj Parihar vs MIPS Holding, Inc. See Line 23 for tentative ruling LINE 24 25CV480101 Isabella La Tour Vs SLT Lending Spv, See Line 24 for tentative Inc., a Delaware corporation et al (Class ruling Action / PAGA)

Calendar Line 21

Case Name: Essex Portfolio, L.P. v. F.D. Thomas, Inc., et al. Case Nos.: 24CV428938

The above-entitled action comes on for hearing before the Honorable Theodore C. Zayner on August 19, 2026, at 1:30 p.m. in Department 19. The Court now issues its tentative ruling as follows: I.

Introduction

This is a construction defect involving multiple defendants. Defendant DeSilva Gates Construction, LLC (“DeSilva”) moves for an order determining a good faith settlement with plaintiff Essex Portfolio, L.P. (“Plaintiff”).2 Defendant F.D. Thomas, Inc. (“Thomas”) opposes DeSilva’s motion and DeSilva has filed a reply. DeSilva was the rough grading contractor during the construction project, an apartment complex in San Jose, California, currently known as the Enso Apartments and previously known as the Baypointe Apartments, located at 175 Baypointe Parkway, San Jose, California 95134.3 The primary injury asserted by Plaintiff is the intrusion of water through the exterior envelope into an underground parking structure.

Plaintiff filed its initial complaint on January 8, 2024. It filed an amended complaint on May 13, 2024, asserting causes of action against DeSilva and others for (1) breach of contract, (2) breach of express warranty, (3) breach of implied warranty, and (4) negligence. On April 8, 2025, Plaintiff filed a request for dismissal, without prejudice, against DeSilva and the clerk entered the dismissal on that same date.4

2 The Court grants DeSilva’s request for judicial notice of Plaintiff’s original complaint, filed January 8, 2024; DeSilva’s answer, filed February 20, 2024; Plaintiff’s first amended complaint, filed May 13, 2024; and DeSilva’s answer to Plaintiff’s first amended complaint, filed May 21, 2024. (See Evid. Code, § 452, subd. (d).) 3 Due to the nature of the instant motion, the Court finds a full statement of facts and procedural history unnecessary. 4 The Court grants DeSilva’s request for judicial notice of the request for dismissal. (See Evid. Code, § 452, subd. (d).)

On May 6, 2025, Silverline Construction, Inc. (“Silverline”) filed a cross-complaint asserting causes of action against DeSilva and others for (1) equitable indemnity, (2) contribution, and (3) declaratory relief. Silverline has not opposed the motion for good faith settlement.5 II. Legal Standard “Where a release, dismissal with or without prejudice, or a covenant not to sue or not to enforce judgment is given in good faith before verdict or judgment to one or more of a number of tortfeasors claimed to be liable for the same tort, or to one or more other co-obligors mutually subject to contribution rights, it shall have the following effect: It shall not discharge any other such party from liability unless its terms so provide, but it shall reduce the claims against the others in the amount stipulated by the release, the dismissal or the covenant, or in the amount of the consideration paid for it, whichever is the greater.” (Code Civ.

Proc., § 877, subd. (a).) “It shall discharge the party to whom it is given from all liability for any contribution to any other parties.” (Code Civ. Proc., § 877, subd. (b).) A settling party may apply for a determination of good faith settlement. (Code Civ. Proc., § 877.6, subd. (a)(2).) A nonsettling party may object. (Ibid.) “A determination by the court that the settlement was made in good faith shall bar any other joint tortfeasor or coobligor from any further claims against the settling tortfeasor or co-obligor for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.” (Id., subd. (c).)

Courts consider several factors when determining whether a settlement is entered in good faith: a rough approximation of plaintiff’s total recovery; the settling defendant’s proportionate liability; the amount paid in settlement; the allocation of settlement proceeds among plaintiffs; the recognition that a settling defendant should pay less in settlement than it would if found liable after a trial; the financial conditions and insurance policy limits of settling defendants; and the existence of collusion, fraud, or tortious conduct aimed to injure the interests of nonsettling defendants. (Tech-Bilt, Inc. v.

Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499 (Tech-Bilt).) A defendant’s

5 DeSilva’s proof of service filed with the motion as well as a later amended proof of service show service on Silverline.

settlement must not be “ ‘grossly disproportionate to what a reasonable person, at the time of the settlement, would estimate the settling defendant’s liability to be.’ ” (Ibid.) The party asserting lack of good faith has the burden of proof. (Code Civ. Proc., § 877.6, subd. (d).) A settlement will be denied when it is “so far ‘out of the ballpark’ in relation to these factors as to be inconsistent with the equitable objectives of the statute.” (Tech-Bilt, supra, 38 Cal.3d at p. 500.) Regarding the relative burdens of the parties, one appellate court has explained: This court notes that of the hundreds of motions for good faith determination presented for trial court approval each year, the overwhelming majority are unopposed and granted summarily by the trial court.

At the time of filing in many cases, the moving party does not know if a contest will develop. If each motion required a full recital by declaration or affidavit setting forth a complete factual response to all of the Tech-Bilt factors, literally thousands of attorney hours would be consumed and inch-thick motions would have to be read and considered by trial courts in an exercise which would waste valuable judicial and legal time and clients’ resources. It must also be remembered that Tech-Bilt was decided on a contested basis.

We are unaware of any reported decision which has reversed an uncontested good faith determination and we, therefore, conclude that only when the good faith nature of a settlement is disputed, it is incumbent upon the trial court to consider and weigh the Tech-Bilt factors. That is to say, when no one objects, the barebones motion which sets forth the ground of good faith, accompanied by a declaration which sets forth a brief background of the case is sufficient. If the good faith settlement is contested, section 877.6, subdivision (d), sets forth a workable ground rule for the hearing by placing the burden of proving the lack of good faith on the contesting party.

Once there is a showing made by the settlor of the settlement, the burden of proof on the issue of good faith shifts to the nonsettlor who asserts that the settlement was not made in good faith. [Citations.] If contested, declarations by the nonsettlor should be filed which in many cases could require the moving party to file responsive counterdeclarations to negate the lack of good faith asserted by the nonsettling contesting party.

(City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261-1262 [concluding that moving party’s motion supported only by declaration mentioning relevant insurance policy exclusion in general terms, “the existence of the declaratory relief action, and that $ 60,000 was paid by USAA to settle all claims of plaintiff against settlor, after which the declaratory relief action was dismissed” was sufficient because “a prima facie showing of a good faith settlement was set forth by settler”].)

“At a minimum, a party seeking confirmation of a settlement must explain to the court and to all other parties: who has settled with whom, the dollar amount of each settlement, if any settlement is allocated, how it is allocated between issues and/or parties, what nonmonetary consideration has been included, and how the parties to the settlement value the nonmonetary consideration.” (Alcal Roofing & Insulation v. Superior Court (1992) 8 Cal.App.4th 1121, 1129.) Thereafter, “[t]he party asserting the lack of good faith shall have the burden of proof on that issue.” (Code Civ.

Proc., § 877.6, subd. (d).) “Obtaining a determination that a settlement is in bad faith is a nullity under the statute, or, put simply, has the same effect as making no motion at all--the settlement does not act as a bar to further contribution and the nonsettling defendants can continue to pursue the settling defendant for a greater share of the damages.” (Bailey v. Reliance Insurance Co. (2000) 79 Cal.App.4th 449, 457-458.) III. DeSilva’s Prior Application for Good Faith Settlement DeSilva previously filed an application for good faith settlement, which Thomas opposed via a motion for order denying DeSilva’s application.

After a hearing on February 24, 2026, the Court (Hon. Jeffrey B. El-Hajj) denied the motion without prejudice via written order, finding that DeSilva had provided insufficient information about the terms of the settlement and the basis therefore. IV. Merits of the Instant Motion DeSilva maintains that as the rough grading contractor for the project, its “scope of work was to rough grade the original site prior to construction, excavate and off-haul soil for construction of the garage, backfill with pea gravel, along the garage wall along Baypointe Parkway after construction of that wall, and backfill with imported soil along the remaining three garage walls after those walls were completed.” (Declaration of Heather N.

Ingle- Gernhardt in Support of Motion for Determination of Good Faith Settlement (“Ingle-Gernhardt Decl.”), ¶ 7.) After significant investigation involving destructive testing of the premises, Plaintiff determined that the investigation revealed no damage caused by DeSilva and it had no basis to assert liability against DeSilva. (Ingle-Gernhardt Decl., ¶¶ 8-9.) Accordingly, Plaintiff

approached DeSilva offering to dismiss the first amended complaint against it, without prejudice, in exchange for a waiver of DeSilva’s right to seek fees and costs. (Id. at ¶ 9.) DeSilva accepted that offer and Plaintiff dismissed the First Amended Complaint as to DeSilva without prejudice. (Id. at ¶¶ 11-12.) DeSilva contends that, “[f]rom February 6, 2024, through April 8, 2025, DeSilva incurred $42,178.28 in attorney fees, $7,023.39 in expert expenses (Lombard Consulting), and $529.00 in vendor expenses (Nationwide), totaling $49,730.67.” (Id. at ¶ 10.)

Thus, it asserts that its waiver of fees and costs has the value of $49,730.67. (See Armstrong World Indus. v. Superior Court (1989) 215 Cal.App.3d 951, 954 (Armstrong) [“a waiver of litigation costs by a settling defendant effects a reduction in the liability of nonsettling defendants in the same manner as though the settlement involved payment of the equivalent amount to plaintiff in cash.”].) Thomas opposes the motion, arguing that the settlement, which provides for no cash payment, is outside the ballpark of DeSilva’s actual liability.

It relies on the declaration of its expert, Peter Oliver Patterson (“Patterson”), a licensed contractor and construction expert, who has been involved in construction projects in various capacities since 1975. (See Declaration of Peter Oliver Patterson Supporting F.D. Thomas, Inc.’s Opposition to DeSilva Gates Construction, LLC’s Motion for Determination of Good Faith Settlement (“Patterson Decl.”), ¶ 2.) Patterson declares that he attended the destructive testing at the property, during which he observed damage occurring below the grade to the waterproof membrane installed by Thomas. (Id. at ¶ 4.)

Marks on the membrane were consistent with teeth found on construction equipment used in the backfill process. (Ibid.) Patterson states “it is reasonable to determine that the damage was not a result of installation but by other subcontractors using earth moving equipment after the installation of the waterproofing membrane and foam protection board was completed.” (Ibid.) Patterson also viewed photos taken during the construction process. (Patterson Decl., ¶ 5.) From this, he “found the waterproofing and protection board was installed in vertical lifts by F.D.

Thomas, Inc. and was then backfilled. This was repeated until the waterproofing membrane was designated to have reached the desired elevation, and then backfill was completed by others.” (Ibid.) The waterproof membrane was installed without damage but the

protection board was damaged after the backfill process. (Id. at ¶¶ 5(a)&5(b).) “The backfill is higher than the protection board or the protection board is forced out of place during the backfill process. Fills in excess of 8 [inches] of loose material containing debris were installed in conflict with the soils report. The debris, when in contact with the protection board, may result in damage to the waterproof membrane.” (Id. at ¶ 5(c).) Patterson concludes, “It is my opinion as a construction industry expert that the waterproofing membrane installed by F.D.

Thomas, Inc. was damaged after their installation was completed. Since the damage occurred below grade to the protection board and waterproofing membrane at multiple locations, the grading contractor who performed the backfill process may have some liability and should not be dismissed from this lawsuit.” (Id. at ¶ 6.) The Court notes that Thomas has standing to challenge the motion despite the fact that it has not filed a cross-complaint against DeSilva and DeSilva does not dispute this. (Code Civ.

Proc., § 877.6, subd. (a)(1) [“Any party to an action in which it is alleged that two or more parties are joint tortfeasors or co-obligors on a contract debt shall be entitled to a hearing on the issue of the good faith of a settlement entered into by the plaintiff or other claimant and one or more alleged tortfeasors or co-obligors[.]”].) It has been stated that “in moving under section 877.6 for a good faith settlement determination, the moving party must set forth the value of the consideration paid and an evidentiary basis for that valuation, and must demonstrate that the valuation ‘was reached in a sufficiently adversarial manner to justify the presumption that a reasonable valuation was reached.’ [Citations.]” (Franklin Mint Co. v.

Superior Court (2005) 130 Cal.App.4th 1550, 1558.) “A nonsettling defendant may then challenge the settlement by ‘attempt[ing] to prove that the parties’ assigned value is too low and that a greater reduction in plaintiff’s claims against the remaining defendants is actually warranted.’ [Citation.]” (Ibid.) DeSilva contends that because Plaintiff has determined that no liability exists on its part, the ballpark figure for its liability is zero. It further asserts that the offset value of the settlement is $49,730.67, the amount it waived in costs.

Thomas, on the other hand, provides no estimate of the “ballpark” value of DeSilva’s liability. The First Amended Complaint, which is attached to the declaration of Thomas’s counsel, does not provide any basis for determining an amount of damages that could be assigned to DeSilva. Thomas has the burden of proving

that the settlement amount of $49,730.67. (Long Beach Memorial Medical Center v. Superior Court (2009) 172 Cal.App.4th 865, 873 [“The party asserting lack of good faith bears the burden of proof. ([Code Civ. Proc.,] § 877.6, subd. (d).) That party must show that the settlement is so far ‘ “out of the ballpark” ’ as to be inconsistent with the equitable goals of section 877.6. (Tech-Bilt, supra, 38 Cal.3d at pp. 499-500.)”].) Thomas has not done so. Thomas appears to contend that DeSilva has paid no amount toward its liability, when it should actually be paying its proportionate share.

But, in Armstrong, supra, 215 Cal.App.3d 951, the prevailing defendant was awarded $15,000 in litigation costs but agreed not to collect the $15,000, in exchange for the plaintiff’s agreement not to appeal the judgment. (Id. at p. 954.) The Armstrong court held that the defendant’s forbearance from seeking an award to which it was entitled was legal consideration for a contract and was equivalent to the plaintiff receiving $15,000. (Id. at p. 958.) It concluded that “a waiver of litigation costs by a settling defendant effects a reduction in the liability of nonsettling defendants in the same manner as though the settlement involved payment of the equivalent amount to plaintiff in cash.” (Id. at p. 954; see also Garcia v.

Duro Dyne Corp. (2007) 156 Cal.App.4th 92, 105-106 [where settling defendants would have prevailed at trial and been entitled to costs as prevailing parties, cost waivers had offset value].) Here, as in Armstrong, DeSilva is a prevailing defendant, in this case because Plaintiff’s case against it has been dismissed. (Code Civ. Proc., § 1032, subd. (a)(4) [“ ‘Prevailing party’ includes . . . a defendant in whose favor a dismissal is entered . . . “].) Thomas makes no argument regarding DeSilva’s entitlement to the costs it claims it waived in the settlement; nor does it dispute the amount of those costs.

Because DeSilva would be entitled to costs as a prevailing party and has set forth a prima facie value of the cost amount and Thomas has not contested that amount, the court finds that the value of the settlement is $49,730.67 and the remaining non-settling defendants are entitled to an offset of liability in that amount. VII.

Conclusion

The motion is GRANTED. Moving party DeSilva shall prepare the order.

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