Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 SMARTER HOA SOLUTIONS INC., Case No.: 3:24-cv-01781-JAH-MMP 12 Plaintiff, ORDER GRANTING RENEWED 13 v. MOTION FOR GOOD FAITH SETTLEMENT DETERMINATION 14 CARMEN PEÑA; CASANET PROPERTY MANAGEMENT, LLC, 15 [Dkt. No. 54] Defendants. 16 17 Before the Court is Defendant Casanet Property Management, LLC’s (“Casanet”) 18 Renewed Motion for Good Faith Settlement Determination between Defendant Casanet 19 and Plaintiff Smarter HOA Solutions Inc. (“HOA”) (collectively, the “Settling Parties”), 20 filed pursuant to Cal. Code of Civ. Proc. § 877.6. Dkt. No. 54-1 (“Mot.”). Defendant 21 Carmen Peña, proceeding pro se, opposes the Motion and Defendant Casanet has replied. 22 Dkt. Nos. 57 (“Opp’n”), 58 (“Reply”). The parties also filed supplemental briefing 23 pursuant to the Court’s July 31, 2026, order finding insufficient facts to evaluate whether 24 the Settling Parties’ proposed settlement was made in good faith. See Dkt. Nos. 67 (“Suppl. 25 Br. Order”), 68 (“Suppl. Br.”), 70 (“Suppl. Resp.”), 71 (“Suppl. Reply”). 26 For the reasons discussed below, the Court GRANTS the Motion and determines 27 that the proposed settlement between the Settling Parties was made in good faith pursuant 28 to California Code of Civil Procedure section 877.6. 1 BACKGROUND 2 The complete background of this case is discussed in detail in the Court’s prior 3 Orders. See Dkt. Nos. 51, 52, 67, 69. Relevant here, both HOA and Casanet engage in the 4 business of providing management services for homeowner associations. Defendant Peña 5 was previously an officer, director, and owner of HOA and was subsequently a consultant 6 for both HOA and Casanet, albeit at different times. 7 Plaintiff HOA alleges four causes of action against Defendant Casanet: (1) 8 Intentional Interference with Contractual Relations; (2) Intentional Interference with 9 Prospective Economic Advantage; (3) Trade Secret Misappropriation Under the Defend 10 Trade Secrets Act, 18 U.S.C. § 1836; and, (4) Misappropriation of Trade Secrets under Cal. 11 Civ. Code § 3426. See Dkt. No. 1 (“Complaint”). Relevant here, Plaintiff HOA’s 12 Complaint does not specifically allege damage amounts or state the quantity or total value 13 of all HOA contracts at issue between the Settling Parties. See generally Compl. 14 On July 24, 2025, Defendant Casanet filed a motion for good faith settlement 15 determination on behalf of the Settling Parties pursuant to Cal. Civ. Proc. Code § 877.6. 16 Dkt. No. 35. The terms of the proposed settlement sought, inter alia, non-compete 17 provisions between the Settling Parties, a “no call list” of clients, and a “no hire” restriction 18 against Defendant Peña or her family members. Id. Defendant Peña opposed the motion, 19 and Defendant Casanet replied. See Dkt. Nos. 44, 46. Plaintiff HOA also filed a 20 declaration in response to Defendant Peña’s opposition. See Dkt. No. 45. 21 On March 27, 2026, the Court denied the Settling Parties’ motion for good faith 22 settlement determination, declining to consider the merits of the motion and finding the 23 proposed settlement unenforceable under Cal. Bus. & Prof. Code § 16600. Dkt. No. 52. 24 On April 1, 2026, Defendant Casanet filed the instant Motion on behalf of the 25 Settling Parties, curing the concerns identified by the Court in denying Defendant 26 Casanet’s prior motion but seeking a good faith settlement determination on substantially 27 the same grounds. Dkt. No. 54 at 2. Defendant Peña opposes the Motion and Defendant 28 Casanet has filed a reply. See generally Opp’n, Reply. 1 On April 9, 2026, Magistrate Judge Pettit stayed discovery between Plaintiff HOA 2 and Defendant Casanet pending this Court’s ruling on the instant Motion. Dkt. No. 56. 3 On July 31, 2026, the Court deferred ruling on the Motion and ordered supplemental 4 briefing limited in scope to address deficiencies identified in the Court’s order. See Suppl. 5 Briefing Order. Notably, the Court found the record was devoid of facts from which to 6 evaluate a rough approximation of Plaintiff HOA’s total recovery and Defendant Casanet’s 7 proportionate liability. Suppl. Briefing Order at 8–10. Accordingly, the Court ordered the 8 Settling Parties to “supplement their Motion with affidavits, declarations or other evidence 9 that address the deficiencies identified in this [Court’s] Order,” permitted Defendant Peña 10 to respond only to new information provided in the Supplemental Briefing, and permitted 11 the Settling Parties to reply thereto. Id. at 10–11. 12 On August 17, 2026, Defendant Casanet timely filed a supplemental brief on behalf 13 of the Settling Parties setting forth the factual basis for their valuation of Plaintiff HOA’s 14 potential recovery and of Defendant Casanet’s exposure on the claims alleged against it. 15 Defendant Peña and Defendant Casanet timely filed a supplemental response and a 16 supplemental reply respectively. 17 The Motion is now fully briefed and ripe for determination on the merits. 18 DISCUSSION 19 I. Legal Standard 20 Federal courts apply the substantive provisions of § 877 to determine whether a 21 settlement agreement was made in good faith. Fed. Sav. & Loans Ins. Corp. v. Butler, 904 22 F.2d 505, 511 (9th Cir. 1990) (“section 877.6 procedures do not govern a federal action . . 23 . [but] the substantive provisions . . . are applicable”); Rutgard v. Haynes, 61 F. Supp. 2d 24 1082, 1085 (S.D. Cal. 1999) (“Cal. Code Civ. Pro. § 877 applies to federal court actions, 25 and authorizes a federal court to determine if a prior settlement agreement from a state 26 court case was entered into in good faith.”). The major goals of the statute are “first, 27 equitable sharing of costs among the parties at fault, and second, encouragement of 28 settlements.” Tech-Bilt, Inc. v. Woodward-Clyde & Assocs., 698 P.2d 159, 163 (Cal. 1985) 1 (quoting River Garden Farms, Inc. v. Super. Ct., 26 Cal. App. 3d 986, 993 (Cal. Ct. App. 2 1972). The California statute provides, in pertinent part: 3 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 4 to one or more of a number of tortfeasors claimed to be liable for the same 5 tort, or to one or more other co-obligors mutually subject to contribution rights, it shall have the following effect: 6 7 (a) 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 8 amount stipulated by the release, the dismissal or the covenant, or in 9 the amount of the consideration paid for it, whichever is the greater.

10 (b) It shall discharge the party to whom it is given from all liability for 11 any contribution to any other parties.

12 Cal. Civ. Proc. Code §877. 13 A court’s determination of good faith settlement “bar[s] any other joint tortfeasor or 14 co-obligor from any further claims against the settling tortfeasor or co-obligor for equitable 15 comparative contribution, or partial or comparative indemnity, based on comparative 16 negligence or comparative fault.” Cal. Civ. Proc. Code §877.6(c). 17 In Tech-Bilt, the California Supreme Court established that a settlement is made in 18 “good faith” under § 877.6 if “the amount of the settlement is within the reasonable range 19 of the settling tortfeasor’s proportional share of comparative liability for the plaintiff’s 20 injuries.” 698 P.2d at 166. According to the court, the “reasonable range” test “leaves 21 substantial latitude to the parties and to the discretion of the trial court” to determine 22 whether a settlement is made in good faith. Id. at 167. 23 Under Tech-Bilt, the California Supreme Court enumerated six factors courts should 24 consider in determining whether a settlement was made in good faith: 25 1) A rough approximation of the plaintiff’s total recovery and the settlor’s 26 proportionate liability; 27 2) The amount paid in settlement; 28 3) The allocation of settlement proceeds among plaintiffs; 1 4) A recognition that a settlor should pay less in settlement than if found liable 2 after trial; 3 5) The financial conditions and insurance policy limits of settling defendants; 4 and, 5 6) Whether there is evidence of collusion, fraud, or tortious conduct aimed to 6 injure the interests of nonsettling defendants. 7 Id. at 166–167. 8 A district court’s good faith determination under § 877.6 is “fact-sensitive and 9 discretionary.” Shawmut Bank, N.A. v. Kress Assoc., 33 F.3d 1477, 1504 (9th Cir. 1994). 10 “[A] defendant’s settlement figure must not be grossly disproportionate to what a 11 reasonable person, at the time of the settlement, would estimate the settling defendant’s 12 liability to be.” Tech-Bilt, 698 P.2d at 167 (quoting Torres v. Union Pac. R.R. Co., 157 13 Cal. App. 3d 499, 509 (Ct. App. 1984)). Because a “trial court is charged only with making 14 a ‘rough approximation’ of a settling defendant’s ‘proportionate liability’ based on 15 information ‘available at the time of settlement. . . . any factual findings or determinations 16 made on contested issues of liability or damages are tentative and solely for the purposes 17 of evaluating the good faith of a proposed settlement as of the date of such evaluation.” 18 Toyota Motor Sales U.S.A., Inc. v. Super. Ct., 220 Cal. App. 3d 864, 879 n.9. (citing Tech- 19 Bilt, 698 P.2d at 167) (emphasis in original). 20 Defendant Peña objects to a determination of good faith settlement under § 877.6 21 and therefore bears the burden of proof to demonstrate “the settlement is so far ‘out of the 22 ballpark’ . . . as to be inconsistent with the equitable objectives of the statute.” Tech-Bilt, 23 698 P.2d at 167. The Court will “liberally construe” Defendant Peña’s pleadings given 24 that Defendant Peña is appearing pro se. See Erickson v. Pardus, 551 U.S. 89, 94 (2007) 25 (“[a] document filed pro se is ‘to be liberally construed’”); see also Fed. R. Civ. P. 8(e) 26 (“Pleadings must be construed so as to do justice.”). 27 II. Good Faith Determination Pursuant to § 877.6 28 The Settling Parties seek a determination that their proposed settlement (“Proposed 1 Settlement”) was made in good faith under § 877.6. Under the terms of the Proposed 2 Settlement, Defendant Casanet seeks to pay Plaintiff HOA a total of $108,000, paid in 3 monthly installments, in exchange for Plaintiff HOA’s dismissal of all claims against 4 Defendant Casanet. Mot. at 2. The Proposed Settlement also requests a “standard mutual 5 release/ § 1542 waiver limited to the Settling Parties and their defined affiliates, an 6 agreement to refrain from the use of trade secrets, a neutral non-disparagement between 7 the Settling Parties only, court-retained jurisdiction for enforcement, timing mechanics, 8 and dismissal upon completion.” Id. 9 In support, Defendant Casanet addresses each of the Tech-Bilt factors to argue the 10 Proposed Settlement was made in good faith. Specifically, Defendant Casanet argues: the 11 proposed settlement amount “reflects a reasoned allocation for claims asserted against 12 CASANET after considering disputed liability, causation, and damages, and the relative 13 roles of non-settling parties”; the proposed settlement amount “is substantial and is within 14 a reasonable range given the claims at issue and litigation posture”; there are no allocation 15 issues given that Plaintiff HOA is the sole plaintiff to the action; the proposed settlement 16 amount “recognizes that a settlor pays less in settlement than if found liable after trial, 17 consistent with Tech-Bilt”; the stipulated judgment “is tailored to CASANET’s realities 18 while ensuring meaningful recovery to Plaintiff”; and the “record shows arm’s-length 19 negotiations between adversaries” devoid of collusion or prejudice to Defendant Peña. See 20 Mot. at 5. In addition, Defendant Casanet’s Supplemental Briefing provides an estimated 21 accounting of the revenues, expenses, and contract values of three contracts at issue 22 between the Settling Parties. See Suppl. Br. at 3–5. 23 Defendant Peña opposes, arguing the settlement “attempt[s] to monetize a void 24 contract,” “is a lopsided application of justice,” and that settlement is improper because the 25 litigation is based on invalid trade secret claims. See generally Opp’n. Defendant Peña’s 26 Supplemental Response also alleges Defendant Casanet’s proportionate liability is 27 “objectively zero,” characterizes Defendant Casanet’s calculations as speculative and 28 internally contradictory, and asserts that the $108,000 payment evidences collusion and an 1 improper effort to subsidize Plaintiff HOA’s continued litigation against her. See generally 2 Suppl. Resp. 3 Defendant Casanet responds that Defendant Peña applies the incorrect legal 4 standard, that the Proposed Settlement does not prejudice Defendant Peña because she 5 receives a corresponding setoff, and that Tech-Bilt requires only an approximation based 6 on the information available at the time of settlement. See generally Suppl. Reply. 7 1. Tech-Bilt Factors 8 When considering the good faith determination of a settlement, the court need not 9 evaluate every factor, unless the determination is contested. City of Grand Terrace v. 10 Super. Ct., 192 Cal. App. 3d 1251, 1261 (Ct. App. 1987). “[W]hen the good faith nature 11 of a settlement is disputed, it is incumbent upon the trial court to consider and weigh the 12 Tech-Bilt factors.” Id. No single factor is dispositive in the determination of good faith, 13 however the proportion of liability is weighed heavily. Toyota Motor Sales U.S.A., Inc. v. 14 Super. Ct., 220 Cal. App. 3d 864, 871 (Ct. App. 1990). Thus, the Court will evaluate each 15 of the Tech-Bilt factors given that the Proposed Settlement is contested. 16 Under the first and most heavily weighted Tech-Bilt factor, the Court must evaluate 17 a rough approximation of Plaintiff HOA’s total recovery and Defendant Casanet’s 18 proportionate liability. Tech-Bilt, 698 P.2d at 166–67; Toyota Motor Sales, 220 Cal. App. 19 3d at 871. Here, Defendant Casanet represents it acquired three one-year homeowner 20 association management contracts previously managed by Plaintiff HOA—the 21 Orangewood, Verona, and Arboretum HOAs. Suppl. Br. at 3. According to Defendant 22 Casanet, the three contracts generate gross payments of $8,795.00 per month, or $105,540 23 in annual gross income.1 Id. at 4. Defendant Casanet pays an accounting service $31,140 24 25 26 1 Defendant Casanet explains that the calculations of compensatory damages are based upon Casanet’s contracts with the three homeowner associations: 27 To date, Plaintiff has not produced the three contracts with the HOAs at issue 28 1 per year to collect the homeowners’ dues and prepare financial reports for the HOAs, 2 yielding a net figure of $74,400 per year before other business expenses. Id. Defendant 3 Casanet represents that Plaintiff HOA received and retained three months of management 4 fees for each of the contracts after Defendant Casanet acquired the contracts such that the 5 remaining term of the one-year contracts was at most nine months. Id. Accordingly, 6 Defendant Casanet estimates Plaintiff HOA’s lost profits at $55,800—seventy-five percent 7 of the $74,400 annual net figure. Id. at 4. 8 In addition, relying on the December 19, 2022, Letter of Intent underlying Plaintiff 9 HOA’s purchase of the business from Defendant Peña, which assigned a value of $10,000 10 per management contract lost, Defendant Casanet calculates the diminution in the value of 11 Plaintiff HOA’s business attributable to the three terminated contracts at $30,000. Id.; see 12 also Compl., Ex. A at 6–7 (Letter of Intent to Purchase). Together, Defendant Casanet 13 projects its full potential exposure at $127,533.17 based on the $55,800 in Plaintiff HOA’s 14 estimated lost profits, the $30,000 diminution in Plaintiff HOA’s business value, and 15 $41,733.17 in unjust enrichment based on Defendant Casanet’s adjusted net business 16 income. Id. at 4–5. 17 As to this factor, the Court finds that Defendant Casanet’s Supplemental Briefing 18 provides the factual support necessary to determine that the Settling Parties have entered 19 into a settlement in good faith. Measured against Defendant Casanet’s own projections, 20 the $108,000 settlement payment exceeds the $85,800 sum of Plaintiff HOA’s estimated 21 lost profits and diminution in business value, and amounts to approximately eighty-five 22 23 good faith settlement determination. Without the contracts, CASANET is 24 unable to calculate the precise contract amounts, including the remaining term 25 of the contract, monthly price term and any offsets to the gross income such as accounting or other services. 26 Id. at 3 n.1. In addition, the Court notes that the Settling Parties not provided evidence of, 27 nor does Plaintiff’s Complaint state, the quantity or total value of HOA contracts at issue 28 between the Settling Parties. See generally Mot.; Compl. 1 percent of Defendant Casanet’s projected full exposure of $127,533.17. Suppl. Br. at 5. A 2 settlement figure at or near the high end of the settling defendant’s reasonably estimated 3 exposure is not “grossly disproportionate to what a reasonable person, at the time of the 4 settlement, would estimate the settling defendant’s liability to be.” Tech-Bilt, 698 P.2d at 5 167 (quoting Torres, 157 Cal. App. 3d at 509). Moreover, because the settlement payment 6 approaches the full measure of the compensatory damages Plaintiff HOA could plausibly 7 recover on the claims asserted against Defendant Casanet, the settlement leaves little risk 8 that Defendant Peña will be left to bear a share of liability properly attributable to 9 Defendant Casanet—the principal equitable concern animating the statute. See Tech-Bilt, 10 698 P.2d at 163. 11 Under Tech-Bilt, the approximate calculations provided by Defendant Casanet are 12 sufficient for the Court to evaluate both the total recovery available to Plaintiff HOA on 13 the claims asserted against Defendant Casanet and Defendant Casanet’s proportionate 14 share of that recovery.2 See Com. Union Ins. Co. v. Ford Motor Co., 640 F.2d 210, 213 15 (9th Cir. 1981) (holding that representations by counsel about the conduct of settling parties 16 is competent evidence of a “mutual decision to settle the dispute”). Tech-Bilt does not 17 demand precision. The evaluation must “be made on the basis of information available at 18 the time of settlement,” and the required approximation is expressly a rough one. Tech- 19 Bilt, 698 P.2d at 166–67. On the current record, the Court agrees with Defendant Casanet 20 that Plaintiff has not alleged sufficient facts showing malice as to Defendant Casanet to 21 justify punitive damages. See generally Compl. Thus, based on the record before the 22 23 24 2 The Court expresses no view on the merits of Plaintiff HOA’s remaining claims against Defendant Peña or of Defendant Casanet’s assertion that the contracts at issue were 25 terminated for cause. See Suppl. Br. at 3 n.2. “These are issues which may ultimately be 26 contested and litigated at trial.” Toyota Motor Sales, 220 Cal. App. 3d at 879 n.9. “Moreover, any good faith determination once made is unaffected by subsequent 27 determinations made at trial as to the actual liability of the parties or the amount of damages 28 sustained by a plaintiff.” Id. (citation omitted). 1 Court, the Court finds Defendant Casanet’s calculations based on compensatory damages 2 and unjust enrichment reasonable and in good faith. Accordingly, based on the first factor, 3 the Court finds the Proposed Settlement was made in good faith under § 877.6. 4 The remaining Tech-Bilt factors likewise support a determination of good faith. The 5 amount paid—$108,000 in monthly installments—is substantial in absolute terms and 6 relative to the approximated recovery. Plaintiff HOA is the sole plaintiff, so no issue arises 7 concerning the allocation of settlement proceeds among plaintiffs. The settlement 8 appropriately reflects “a recognition that a settlor should pay less in settlement than he 9 would if he were found liable after a trial,” indeed, the discount from Defendant Casanet’s 10 projected full exposure is a modest one. Tech-Bilt, 698 P.2d at 166. As to the financial 11 condition of the settling defendant, Defendant Casanet’s financial showing of an adjusted 12 net profit of $41,733.17 on the three contracts at issue before staffing costs, and a net loss 13 thereafter—suggests that a $108,000 installment obligation is a significant commitment 14 relative to Defendant Casanet’s means, and no insurance policy limits have been identified 15 as relevant. See Suppl. Br. at 4–5. Finally, as discussed in the Court’s analysis of 16 Defendant Peña’s objections, the Court finds no evidence of collusion, fraud, or tortious 17 conduct aimed to injure Defendant Peña’s interests. 18 Accordingly, the Court finds that the Proposed Settlement between the Settling 19 Parties was made in good faith under § 877.6, subject to the Court’s evaluation of 20 Defendant Peña’s objections. 21 2. Defendant Peña’s Objections 22 As the party asserting the lack of good faith, Defendant Peña bears the burden of 23 proof. Cal. Civ. Proc. Code § 877.6(d); Tech-Bilt, 698 P.2d at 167. To carry that burden, 24 Defendant Peña must demonstrate that the settlement is so far “out of the ballpark” in 25 relation to the Tech-Bilt factors as to be inconsistent with the equitable objectives of the 26 statute. Tech-Bilt, 698 P.2d at 167. In liberally construing Defendant Peña’s four main 27 arguments, the Court find that Defendant Peña fails to satisfy her burden. See Erickson, 28 551 U.S. at 94. 1 First, Defendant Peña contends that because the Court determined that the non- 2 competition agreement between Plaintiff HOA and Defendant Peña is unenforceable, see 3 Dkt. No. 51, Defendant Casanet’s proportionate liability is “objectively zero,” rendering 4 any six-figure payment disproportionate by definition. Suppl. Resp. at 2. This argument 5 misstates both the Court’s prior order and the governing standard. The claims resolved by 6 the Proposed Settlement—intentional interference with contractual relations, intentional 7 interference with prospective economic advantage, and misappropriation of trade secrets 8 under federal and California law—remain pending against Defendant Casanet, and are 9 predicated on Defendant Casanet’s acquisition of the Orangewood, Verona, and Arboretum 10 management contracts, not on the enforceability of the non-competition agreement 11 between Plaintiff HOA and Defendant Peña. See Compl.; Suppl. Br. at 2–3. The Court’s 12 March 27, 2026 order issuing judgment in favor of Defendant Peña on Plaintiff HOA’s 13 breach of contract claim did not dispose of those claims. See Dkt. No. 51. Moreover, a 14 determination of good faith does not require a settling defendant to concede liability or to 15 pay a judicially established share of fault. Tech-Bilt recognizes that damages are frequently 16 speculative and that the probability of liability is often uncertain or remote, which is why 17 settlement value is measured by a rough approximation of potential exposure rather than 18 by adjudicated fault. See Tech-Bilt, 698 P.2d at 166–67. That Defendant Casanet continues 19 to maintain defenses on the merits while paying a substantial sum to end the litigation is 20 the ordinary posture of a settling defendant; it is not evidence of bad faith. 21 Second, Defendant Peña argues that Defendant Casanet’s calculations are 22 speculative and internally contradictory. Defendant Peña argues that Defendant Casanet 23 cannot calculate the precise contract amounts without the three underlying contracts at 24 issue because Defendant Casanet maintains that the contracts were terminated as to 25 Plaintiff HOA for cause and thus produced no damages as to Defendant Casanet. Suppl. 26 Resp. at 2–3 (citing Suppl. Br. at 3 nn.1–2). The Court finds this argument unavailing in 27 light of the record before the Court. Discovery between the Settling Parties is stayed 28 pending resolution of this Motion, Dkt. No. 56, and the contracts have not been produced. 1 Tech-Bilt requires only that the evaluation be made on the basis of the information available 2 at the time of settlement. 698 P.2d at 167. Defendant Casanet has provided estimated 3 revenue and expense amounts drawn from its own performance of the contracts at issue, 4 which the Court finds to be competent evidence from which Defendant Casanet may 5 calculate a rough approximation of proportionate liability. See Owen By & Through Owen 6 v. United States, 713 F.2d 1461, at 1466 n.8 (9th Cir. 1983) (“The statements of counsel 7 regarding the circumstances surrounding settlement are competent evidence on the 8 question of good faith.”) (citation omitted). Defendant Peña’s argument goes to the weight 9 of that showing, not to its existence. Nor are Defendant Casanet’s disputes as to liability 10 and damages inconsistent with good faith given that, under the standard applied here, 11 “factual findings or determinations made on contested issues of liability or damages are 12 tentative and solely for the purposes of evaluating the good faith of a proposed settlement.” 13 See Toyota Motor Sales, 220 Cal. App. 3d at 879 n.9. 14 Third, Defendant Peña’s central argument—that $108,000 exceeds any exposure 15 Defendant Casanet could actually face—alleges no cognizable injury to her interests. The 16 good faith requirement principally protects nonsettling defendants against settlements that 17 are disproportionately low relative to the settling defendant’s share of fault, which would 18 leave the nonsettling defendants to bear more than their equitable share of the plaintiff’s 19 recovery. See Tech-Bilt, 698 P.2d at 163. A settlement that is “too high” operates in 20 Defendant Peña favor. Under section 877(a), the claims against Defendant Peña are 21 reduced by the amount stipulated in the release or the amount of the consideration paid, 22 whichever is greater, while the accompanying good faith determination bars only claims 23 against Defendant Casanet for contribution and comparative indemnity. Cal. Civ. Proc. 24 Code §§ 877(a), 877.6(c); see Abbott Ford, Inc. v. Super. Ct., 43 Cal. 3d 858, 873 (1987); 25 Reed v. Wilson, 73 Cal. App. 4th 439, 444 (Ct. App. 1999). Put differently, pursuant to the 26 terms of the Proposed Settlement, Defendant Peña stands to receive a dollar-for-dollar 27 reduction of the $108,000 payment against any judgment Plaintiff HOA may obtain against 28 Defendant Peña. 1 Fourth, Defendant Peña asserts that the Proposed Settlement is collusive, “an exit 2 engineered to absorb Plaintiff HOA’s attorneys’ fees, to strip away the parties and 3 discovery necessary to test Plaintiff HOA’s trade secret allegations, and to isolate her as 4 the sole remaining defendant.” Suppl. Resp. at 3–5. “Collusion” is a secret combination, 5 conspiracy, or concert of action between two or more persons for a fraudulent or deceitful 6 purpose. F.T.C. v. Warner Commc’ns Inc., 742 F.2d 1156, 1160 (9th Cir. 1984) (quoting 7 Black’s Law Dictionary 240 (5th ed. 1979)). Defendant Peña fails to allege any facts 8 showing secret, fraudulent, or deceitful concerted action. Rather, Defendant Peña appears 9 to allege collusion based on the mere fact that the Settling Parties having negotiated a 10 settlement between themselves. 11 However, that the Proposed Settlement ends Defendant Casanet’s defense costs or 12 that Plaintiff HOA will be compensated reflects ordinary and legitimate motivations 13 attending nearly every settlement rather than tortious conduct aimed at injuring Defendant 14 Peña’s interests. Nor does the Proposed Settlement impair Defendant Peña’s defense. The 15 stay of discovery between the Settling Parties was ordered pending resolution of this 16 Motion, Dkt. No. 56, and a good faith determination bars only claims against Defendant 17 Casanet for equitable comparative contribution or partial or comparative indemnity. Cal. 18 Civ. Proc. Code § 877.6(c). It does not limit Defendant Peña’s ability to conduct discovery 19 of, or to subpoena testimony and documents from Defendant Casanet or its representatives. 20 Finally, that Defendant Peña will remain a defendant after Defendant Casanet settles is 21 precisely the consequence sections 877 and 877.6 contemplate, not evidence bad faith. 22 Accordingly, the Court finds no evidence of collusion between the Settling Parties. To the 23 contrary, the record shows the Proposed Settlement was negotiated at arm’s length by the 24 Settling Parties, with valuable consideration flowing from Defendant Casanet to Plaintiff 25 HOA, and which benefits Defendant Peña by proportionally reducing her potential liability. 26 In sum, Defendant Peña opposes the Motion in principle but fails to do so in 27 substance. Defendant Peña’s arguments litigate Plaintiff HOA’s underlying claims rather 28 than addressing substantive objections to a determination of good faith under § 877.6. 1 Because Defendant Peña fails to allege a cognizable injury to her interests pursuant to the 2 Tech-Bilt factors, the Court finds that Defendant Peña failed to satisfy her burden to prove 3 the Proposed Settlement was not made in good faith pursuant to § 877.6. 4 Accordingly, the Court finds that, on the record presently before the Court, the 5 Proposed Settlement between the Settling Parties was made in good faith pursuant to § 6 877.6. See Tech-Bilt, 698 P.2d at 166–67. 7 CONCLUSION 8 For the reasons set forth above, and after careful review of the parties’ briefing and 9 the record before the Court, the Court FINDS the Proposed Settlement was made in good 10 faith within the meaning of California Code of Civil Procedure section 877.6. 11 Accordingly, IT IS HEREBY ORDERED: 12 1. The Court GRANTS Defendant Casanet’s Renewed Motion for Good 13 Faith Settlement Determination, Dkt. No. 54, and FINDS that the 14 Proposed Settlement between Defendant Casanet and Plaintiff HOA was 15 entered into in good faith pursuant to California Code of Civil Procedure 16 section 877.6; 17 2. Pursuant to California Code of Civil Procedure section 877.6(c), any 18 claims by joint tortfeasors or co-obligors against Defendant Casanet for 19 equitable comparative contribution, or partial or comparative indemnity, 20 based on comparative negligence or comparative fault, are BARRED; 21 3. Pursuant to California Code of Civil Procedure section 877(a), the claims 22 against Defendant Peña shall be reduced by the amount stipulated in the 23 release or the amount of the consideration paid for it, whichever is greater; 24 and, 25 4. The Settling Parties shall file the appropriate documents to effectuate the 26 dismissal of Plaintiff HOA’s claims against Defendant Casanet consistent 27 with the terms of the Proposed Settlement. 28 // I IT IS SO ORDERED. 2 || DATED: September 18, 2026 4 jib A. h USTON jf UNITED STATES DISTRICT JUDGE 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15