The Fourth District finds that California Code of Civil Procedure §877.6 applies only where defendants are joint tortfeasors or co-obligors on a single contractual debt to plaintiff.
Thomas and Debra Pigott brought suit under the Song–Beverly Consumer Warranty Act, California’s Lemon Law, alleging various defects in their motorhome. The Pigotts sought the overtime, financed, price of the vehicle plus unspecified other damages, civil penalties, attorney fees, costs and expenses. They sued Cummins, the manufacturer of the engine, and Tiffin Motorhomes, the manufacturer of the coach, among others. Cummins and Tiffin were sued on separate warranties attaching to the component parts for which each party was separately and distinctly responsible. The complaint did not allege any tort claims or tort damages.
The Piggots and Cummins reached a nominal settlement. Cummins filed a motion for an order determining that the settlement was in good faith under California Code of Civil Procedure §877.6. Tiffin opposed the motion arguing the settlement amount was not commensurate with Cummins’ liability, i.e. it was not “in the ballpark.” Alternatively, Tiffin argued §877.6 did not apply at all because each defendant was being sued by plaintiffs on a separate contractual obligation.
The trial court granted the motion. The good faith determination insulated Cummins from any potential obligations to its co-defendants for contribution or equitable indemnity based on comparative negligence or comparative fault.
The Court of Appeal reversed the trial court’s decision, finding that the plain language of §877.6(a)(1) permits a good faith order only where “two or more parties are joint tortfeasors or co-obligors on a contract debt.” The Court found that the crucial phrase was “a contract debt,” which it construed to mean that the parties must be co-obligors on a single contract. The Court reasoned that where defendants are not obligors on the same contract, their obligations are neither “joint” nor “joint and several” and, therefore, do not give rise to any right of contribution. The Court commented, “if the legislature intended §877.6 to apply to any multiple wrongdoers, it could have said so. It did not.”
Comment: This seems a hollow victory for Tiffin, since the court’s reasoning presumes that neither party has contribution rights against the other.