914 F2d 1496 Itt Industrial Credit Co v. Allied Fidelity Insurance Co Minnesota Insurance Guaranty Association

914 F.2d 1496

Unpublished Disposition

ITT INDUSTRIAL CREDIT CO., a Nevada corporation, Plaintiff-Appellee,
ALLIED FIDELITY INSURANCE CO., an Indiana corporation,
Robert W. SKINNER, Third-party-defendant-Appellee,
Skinner Bonding and Insurance Agency, Inc., a California
corporation, Cross-claim-defendant-Appellee

NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.


No. 89-15528.


United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 6, 1990.
Decided Sept. 26, 1990.


Before NELSON and TROTT, Circuit Judges, and STEPHENS,* District Judge.




Co-defendant Allied appeals the district court's judgment barring its cross-complaint against co-defendant Skinner Bonding, on the ground that it is not a joint tortfeasor for purposes of Cal.Civ.Pro.C. Sec. 877.6, and its action is, therefore, not barred by a good faith settlement between plaintiff, ITT, and co-defendant Skinner Bonding. We affirm.



In July 1984, Padon and Associates ("Padon") leased restaurant and entertainment equipment to Corporate Magic, Inc. ("CMI"). Padon assigned its rights under this lease to plaintiff ITT Industrial Credit Co. ("ITT"). Skinner Bonding and Insurance Agency, Inc. ("Skinner Bonding"), acting as an agent for Allied Fidelity Insurance Co. ("Allied"), executed and delivered a surety bond in favor of ITT guaranteeing CMI's obligation under the lease in the amount of $500,000 plus ten percent late charges and attorney's fees. In April 1986, CMI defaulted on its obligation. Subsequently Allied refused to pay ITT on the bond.1


ITT brought the present action against Allied and Skinner Bonding claiming damages of $500,000 and late charges and attorney's fees for a total of $635,000. Allied filed cross-claims against Skinner Bonding and Robert W. Skinner. It is these cross-claims which are at issue on this appeal. ITT and Skinner Bonding reached a settlement agreement in which Skinner Bonding agreed to pay $300,000 in cash, $165,000 allocated towards the $500,000 bond claim and $135,000 towards the late charges and attorney's fees.


The district court found that this settlement was made in good faith, and dismissed the action against Skinner Bonding. The district court later found that the dismissal should also include the cross-claim between the settling and non-settling defendants under Cal.Civ.Pro.C. Sec. 877.6. Final judgment was entered on March 15, 1989. Defendant Allied filed notice of appeal on April 11, 1989.



A trial court's interpretation of state law is reviewed under the same independent de novo standard as are questions of federal law. In re McLinn, 739 F.2d 1395, 1397 (9th Cir.1984) (en banc).


At the time of this transaction, Cal.Civ.Pro.C. Sec. 877.6 provided, that where a settlement is reached between a plaintiff and a defendant, "[a] determination by the court that the settlement was made in good faith shall bar any other joint tortfeasor from any further claims against the settling tortfeasor for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault." Cal.Civ.Pro.C. Sec. 877.6(c) (West Supp.1990) (deleting later amendments).2 The legislative intent behind this statute is that a good faith determination of one party's liability should bar any further claims against that party, to encourage settlement and the equitable sharing of costs. Abbott Ford, Inc. v. Superior Court, 43 Cal.3d 858, 872 (1987); Singer Co. v. Superior Court, 179 Cal.App.3d 875 (1986). A determination of good faith indicates that the settlement reflects the relative liabilities, and that the policies of equity and settlement behind Sec. 877.6 are advanced. See Owen v. United States, 713 F.2d 1461, 1464 (9th Cir.1983).


The sole issue on appeal is whether the co-defendants were joint tortfeasors under California law.3 Whether the co-defendants are joint tortfeasors for purposes of Cal.Civ.Pro.C. Sec. 877.6 depends on the nature of the plaintiff's complaint. The term "joint tortfeasors" refers to defendants whose negligence or other tortious acts have concurred to produce injury. Turcon Construction Inc. v. Norton-Villiers, Ltd., 139 Cal.App.3d 280, 282-83 (1983). This includes joint, concurrent, and successive tortfeasors. Turcon, 139 Cal.App.3d at 283. In Turcon, a motorcycle rider injured in an accident with an automobile sued both the motorcycle manufacturer and the automobile driver. The plaintiff settled with the motorcycle manufacturer. The court held that this settlement barred any cross-claim brought by the car driver against the motorcycle manufacturer.


The fact that one party may be entirely responsible for all damages does not affect this bar. In Far West Financial Corp. v. D & S Co., 46 Cal.3d 796 (1988), the California Supreme Court held that Cal.Civ.Pro.C. Sec. 877.6(c) bars claims by allegedly vicariously or derivatively liable tortfeasors seeking total equitable indemnity. Id. at 810. This holds true even where, "if the indemnity claim had gone to trial, the trier of fact might have concluded that the equities supported a total shifting of loss to the more culpable tortfeasor." Id. at 816. The Court's rationale is that any such relative liability is part of the determination of good faith. If the non-settling tortfeasor is dissatisfied, it should attack the determination of good faith. Id. But see County of Los Angeles v. Superior Court, 155 Cal.App.3d 798, 803 (1984) (Sec. 877.6 no bar to counter-claim where parties were not joint tortfeasors, but instead "one was nothing more than a conduit" for the other's negligence), disapproved in part, Bay Development, Ltd., 90 C.D.O.S. at 3851 n. 12.


In the present case, plaintiff clearly stated a tort claim against the two defendants. Ignoring the claims for insurance bad faith, or for intentional breach of the implied covenant of good faith and fair dealing, which may or may not be torts for purposes of this statute, the plaintiff alleges negligence against both defendants in count four. In addition, plaintiff stated a claim for negligent misrepresentation against Skinner Bonding in count seven, and a principal is vicariously liable for the torts of its agents. Allied would be jointly liable for this claim as well. Ritter v. Technicolor Corp., 27 Cal.App.3d 152, 154-55 (1972) (Cal.Civ.Pro.C. Sec. 877 includes vicarious liability in the term joint tortfeasors).


Since Allied limited its attack to the issue of whether the co-defendants were joint tortfeasors and we find that they were, the district court's judgment is AFFIRMED.


The Honorable Albert Lee Stephens, Jr., Chief Judge Emeritus, Central District of California, sitting by designation


This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3


Shortly, Allied was ordered into liquidation by an Indiana state court. Minnesota Insurance Guarantee Association ("MIGA") steps into the shoes of Allied. For purposes of this memo, all references are to Allied


The statute was later amended to prelude claims between co-obligors under a contract where one has entered into a good faith settlement with the plaintiff. See Cal.Civ.Pro.C. Sec. 877.6(c) (West Supp.1990)


Allied does not argue that an explicit contractual indemnity clause exists between itself and Skinner Bonding or Robert Skinner so as to avoid the affect of Cal.Civ.Pro.C. Sec. 877.6. See Bay Development, Ltd., v. Superior Court of San Diego County, 90 C.D.O.S. 3847, 3851-52 (Cal. May 31, 1990)