W. Bradley Elec., Inc. v. Mitchell Eng'g

318 Cal.Rptr.3d 747

W. BRADLEY ELECTRIC, INC., et al., Cross-defendants and Respondents,

v.MITCHELL ENGINEERING, Cross-complainant and Appellant.

A167137

Court of Appeal, First District, Division 5.

Filed February 28, 2024

Certified for Partial Publication.^*

Trial Court: City & County of San Francisco Superior Court, Trial Judge: Richard B. Ulmer Jr. (City & County of San Francisco Super. Ct. Nos. CGC19575663, CGC20583018) Sellar Hazard & Lucia; Christian Lucia, Concord, Ganette Mary-Marie Genetti, Santa Clara, Justin Michael Graham, and Peter Keith Pritchard, Los Angeles, for Appellants.

Rankin, Shuey, Mintz, Lampasona & Harper; Kevin R. Mintz, Oakland, Nima B. Aminian, The Aguilera Law Group; Raymond E. Brown for Respondents.

CHOU, J.

Defendant and cross-complainant (and appellant) Mitchell Engineering (Mitchell) appeals from an order denying its motion under Code of Civil Procedure section 473¹ to set aside a judgment dismissing its cross-complaint against cross-defendants (and respondents) W. Bradley Electric, Inc. (Bradley) and DeHaro Ramirez Group (DeHaro). Mitchell contends the dismissal should have been vacated under section 473, subdivision (d), because its attorney entered into a settlement agreement and dismissed the cross-complaint without Mitchell’s express authorization. Mitchell also contends in its reply brief that the court should have granted relief under section 473, subdivision (b), on the grounds of surprise or excusable neglect.

We will affirm the order. In the published portion of this opinion, we conclude that, even if the dismissal could be deemed void rather than voidable for purposes of section 473, subdivision (d), substantial evidence supports the conclusion that Mitchell ratified the unauthorized actions of its attorney, and Mitchell fails to establish that the trial court abused its discretion in denying the motion to set the dismissal aside. In the unpublished portion of the opinion, we conclude that Mitchell’s argument under section 473, subdivision (b), is forfeited and meritless.

I. FACTS AND PROCEDURAL HISTORY

In May 2019, plaintiffs Mary Wong (individually and as the personal representative of the Estate of Lai Lee Wong), Thomas Wong, Felix Wong, and Jerry Wong (collectively, Plaintiffs) sued Mebrhatu Behre Brhane and Doe defendants (Case No. CGC-19-575663). Plaintiffs alleged that, on March 16, 2018, Lai Lee Wong was crossing the street near Broadway and Stockton Streets in San Francisco, when a vehicle driven by Brhane, while working as a rideshare driver for Uber Technologies Inc. (Uber), struck her in the crosswalk and caused injuries that led to her death. Uber was later substituted for Doe 1 and added as a defendant.

In February 2020, Plaintiffs filed a separate complaint against Mitchell (Case No. CGC-20-583018). Plaintiffs alleged that the condition of the sidewalk and crosswalk entrance near the intersection of the accident, which was under construction as part of a project involving Mitchell, was a contributing cause of the fatal accident. According to the complaint, Mitchell "negligently controlled, designed, constructed, maintained, operated, and inspected the accident intersection so as to create a dangerous condition … that created a substantial risk of injury to the members of the general public."

Mitchell initially tendered its defense and indemnification to its insurer, The Hartford. After The Hartford appointed John Hauser as Mitchell’s lawyer, Mitchell answered the complaint and filed a cross-complaint against Brhane.

Mitchell later tendered the matter to Bradley’s insurer, The Travelers Indemnity Company of Connecticut (Travelers), as an additional insured under Bradley’s policy. Travelers agreed to defend Mitchell subject to a reservation of rights and retained the law firm of Thomas | Lucas to represent Mitchell.

After the Thomas | Lucas firm joined Mitchell’s defense, Mitchell filed an amended cross-complaint against Brhane for indemnity, partial indemnification, and declaratory relief in August 2020. That same month, the trial court consolidated Plaintiffs’ two cases under Case No. CGC19575663.

In May 2021, Mitchell filed a second amended cross-complaint against Brhane, Uber, DeHaro, and Bradley (hereafter, cross-complaint). The cross-complaint asserted causes of action for equitable indemnity and contribution against all cross-defendants, express indemnity against DeHaro and Bradley based on indemnity provisions in their subcontracts, breach of contract against DeHaro, and declaratory relief.

DeHaro then filed a cross-complaint against Mitchell, Bradley, Brhane, and Uber, seeking equitable indemnity, equitable contribution, and declaratory relief.

In November 2021, Bradley moved for summary judgment against Mitchell, setting the hearing for January 19, 2022.

A. Settlements

Plaintiffs entered into a settlement agreement with Brhane and Uber. The trial court granted their motion for a determination that the settlement was in good faith in December 2021.

Around the same time, Plaintiffs agreed to settle with DeHaro and Bradley for $10,000 each, provided that the remaining parties—including Mitchell—stipulated that the settlement was in good faith or the trial court issued a good faith settlement determination.

Lawyers for Mitchell and DeHaro began to negotiate a potential resolution of the Mitchell and DeHaro cross-actions. Mitchell was represented by Vanessa Whirl of Thomas | Lucas. The lawyers reached a proposed stipulation by which (1) Mitchell would concede the good faith of DeHaro’s settlement with Plaintiffs and (2) Mitchell and DeHaro would dismiss their cross-complaints against each other in exchange for a waiver of fees and costs.

In a December 14, 2021 email to Mitchell’s president (Curtis Mitchell) and other Mitchell personnel (Kathy Streblow and Andy Noll), Whirl apprised Mitchell that DeHaro and Bradley had settled with Plaintiffs, the trial court had approved Uber’s and Brhane’s settlement with Plaintiffs, and Mitchell still had express indemnity claims against Bradley and DeHaro. Whirl then explained the strategic benefit of the proposed settlement with DeHaro (and Bradley): "Now the question being posed is: do we dismiss against Bradley and DeHaro, leaving just us against Plaintiffs? My recommendation is yes, and here is why. [¶] 1. I have always said it does not make sense for us three defendants to be throwing mud at each other. It only strengthens Plaintiffs’ case for them. [¶] 2. Bradley has an MSJ pending before the Court. If we oppose it and lose, we could be on the hook for attorney fees to Bradley. Not good. [¶] 3. Bradley and DeHaro’s settlements of $10,000 a piece set an anchor. Mitchell is no more culpable than they are. So I want to get authority for a $10k offer to them. If they don’t take it, we move forward with the MSJ I’ve been telling you about and see how it goes." (Italics added.) Whirl’s email concluded: "Travelers is already on board with my recommendation but I wanted to discuss with you guys before I bless the settlements and dismiss our Cross-Complaints. Please let me know as soon as you can what your position is. I am available for a call if needed, although my phone rings all day and I may be unavailable when you call." (Italics added.)

The next day (December 15, 2021), without receiving any response from Mitchell, Whirl sent an email to Bradley’s attorney, stating that "[t]his will confirm our conversation wherein I agreed that my client will stipulate to your client’s settlement with Plaintiff in the amount of $10,000. We will further dismiss our express indemnity cause of action against your client in exchange for a waiver of fees and costs." (Bolding in original.) Whirl sent essentially the same email to DeHaro’s attorney, confirming that Mithell would dismiss its indemnity cause of action against DeHaro for a waiver of fees and costs.

On December 21, 2021, Whirl sent a status report to the claims adjuster for Travelers, with a copy to Streblow, a Mitchell employee. On page 12 of the 15-page report, Whirl advised that Bradley had moved for summary judgment on Mitchell’s cross-complaint. She also reported that Bradley and DeHaro had settled with Plaintiffs for $10,000 each and recounted the following: "We were requested by their respective attorneys to stipulate to the good faith nature of the settlements and drop our claims of express indemnity. After discussion with you [Travelers], we determined it was best to concede to the settlements and drop the express [indemnity] claims …. [¶] Because we are stipulating to these settlements, we obtained a waiver of fees and costs from each of them and stopped work on the Opposition to the W. Bradley MSJ."

On January 4, 2022, on Mitchell’s behalf but without Mitchell’s express authorization, Whirl signed a Stipulation Regarding Good Faith of Settlement Between Plaintiffs and DeHaro-Ramirez Corporation (Stipulation). The Stipulation states in relevant part: "The undersigned parties hereby stipulate and agree that the settlement between DeHaro and Plaintiffs is in good faith pursuant to the provisions of [] section 877.6, as well as the factors set forth in Tech-Bilt, Inc. v. Woodward-Clyde & Assocs. (1985) 38 Cal.3d 488, 213 Cal.Rptr. 256, 698 P.2d 159…. Rather than incur the burden, expense, and delay in seeking a judicial determination of good faith settlement pursuant to [] sections 877(b) and 877.6, and with the agreement to dismiss all cross-complaints pending between the parties hereto with prejudice, in return for an agreement for each party to bear its own attorney’s fees and costs of suit herein, the undersigned parties agree, and stipulate, that the settlement between Plaintiffs and DeHaro would properly be determined to be in good faith under these code sections as well as pursuant to the factors set forth in TechBilt, Inc. v. Woodward-Clyde & Assocs. (1985) 38 Cal.3d 488, 213 Cal.Rptr. 256, 698 P.2d 159, if an application or motion were to be filed with ...