WESTERN & VENICE SC, LLC; WESTERN AVENUE CAPITAL, LLC v. CARRIER JOHNSON

CONCLUSION Based on the foregoing, Plaintiff's motion to advance the trial date is DENIED. Dated this 1st day of September 2026 | | | Hon. Gary D. Roberts Judge of the Superior Court |

STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES WESTERN & VENICE SC, LLC, a California limited liability company; and WESTERN AVENUE CAPITAL, LLC, a California limited liability company, Plaintiffs, vs. CARRIER JOHNSON, a California corporation; and DOES 1 through 25, inclusive, Defendants. AND RELATED CROSS-ACTIONS. |))))))))))) | CASE NO.: 24STCV17282 [TENTATIVE] ORDER RE: KRAZAN & ASSOCIATES' APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT

CARRIER JOHNSON'S MOTION TO CONTEST KRAZAN & ASSOCIATES' APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT Dept. 733 8:30 a.m. September 1, 2026 | I. INTRODUCTION On July 11, 2024, Plaintiffs Western & Venice SC, LLC ("WVSC") and Western Avenue Capital, LLC ("WAC") (collectively, "Plaintiffs") filed a complaint against Defendant Carrier Johnson.

On September 10, 2024, Plaintiffs filed a first amended complaint. On December 5, 2024, Plaintiffs filed the operative second amended complaint ("SAC"), alleging causes of action for (1) Breach of Contract, (2) Professional Negligence, (3) Negligent Misrepresentation, and (4) Unfair Competition.

The SAC alleges the following. WAC is an integrated real estate investor and property manager based in the County of Los Angeles. (SAC, P. 11.) WVSC is the record owner of the real property located at 2340-60 West Venice Boulevard in the City of Los Angeles (the "Property"). (Id P. 12.) WAC is the Manager and controlling entity of WVSC. (Ibid.)

On or about January 11, 1959, Union Oil Company of California ("UNOCAL") drilled a well on the Property to determine whether there was oil sufficient to warrant a commercial oil drilling operation. (SAC, P. 14.). Over the course of three months, UNOCAL drilled three additional sidetracks from the main oil well. (Ibid.) UNOCAL decided not to pursue a commercial oil well at the Property and the oil well was abandoned as a "dry hole" on or about April 17, 1959. (Ibid.) The original boring and the three sidetrack borings were never "completed," or cased and cemented with steel pipe. (Ibid.)

Plaintiffs are informed and believe and thereon allege that the Property is located within, or in close proximity to, the Las Cienegas Oil Field. (SAC, P. 15.) In response to the pervasive nature of oil fields in the Los Angeles basin, the State of California and the City of Los Angeles adopted and implemented a series of laws, departments, and agencies to address development in and around areas in which oil wells were drilled. (SAC, P. 16.) Such laws govern matters such as the proximity of a new development to an abandoned oil well and the requirement to reabandon certain oil wells. (Ibid.)

Carrier Johnson (hereafter "Architect" or "Carrier Johnson") is an architecture firm that specializes in architectural design and landscape architecture and provides services for clients in the residential, hospitality, retail, mixed-use, corporate, education, healthcare/science, and technology markets. (SAC, P. 17.)

On or about March 2, 2017, Plaintiffs were introduced to Kyle Peterson ("Peterson"), who at the time held the position of Director at Architect. (SAC, P. 18.) Starting in March 2017, Peterson verbally represented to WAC co-founder and partner, Jonathan Kasirer ("Jonathan") that Architect, although based in San Diego, had a great deal of experience working in Los Angeles, that Architect had previously worked with Los Angeles contractors and subcontractors, and that Architect's Los Angeles office was fully equipped to design the Project. (Ibid.) Indeed, Peterson made repeated assurances to Jonathan that "[Architect] has built lots of buildings in Los Angeles," and even gave WAC tours of buildings Architect had designed in the Los Angeles area. (Ibid; see also generally Id., P.P. 89-94, 96-105.)

Over the next several weeks, Peterson conducted a series of massing studies, yield analyses, and preliminary site plans to determine optimal layouts of a potential development / construction project (the "Project"), which was to be located at the Property. (SAC, P. 19.)

On or about June 27, 2018, WAC and Architect entered AIA Document B101-2017 (the "Agreement"), whereby Architect agreed to provide architectural, planning, parking study, entitlements processing, as well as other design services related to the design of the Project. (SAC, P. 29.) More specifically, the Project involved the construction of a new residential apartment building with 180 residential apartment units. (Ibid.)

In or about December 2019, Burnham Nationwide ("Burnham"), was hired as an "additional service" under the Agreement, to assist with expediting and processing permits for the Project with the City of Los Angeles. (SAC, P. 48.) Addendum 12-R1 dated January 24, 2020 was fully executed by WAC and Architect on February 22, 2020. (Ibid.)

On July 3, 2019, as part of an email discussion between WAC and Architect about the necessity for an updated Soils Report, Jonathan specifically asked Architect how the depths for the new soil testing would impact the oil well on the property. Within five (5) minutes of receiving Jonathan's email, Pierotti, acting as an agent for Architect, responded that, "Because we aren't going subterranean, the oil well is less of a concern . ..." (SAC P. 40.)

Plaintiffs are informed and believe and thereon allege that sometime after its May 19, 2020 meeting with LAFD, Burnham submitted information regarding the Project to CalGEM's Construction Site Well Review ("CSWR") Program. (SAC, P. 57.)

On August 6, 2020, unbeknownst to Plaintiffs, Burnham received correspondence from CalGEM (the "August 6th Letter") advising that it had received and reviewed the Project on June 15, 2020, and noting that there was "1 known oil or gas wells located within the project boundary" that was "Not Abandoned to Current Division Requirements as Prescribed by Law and [was] Projected to be Built Over or Have Future Access Impeded" by the Project. CalGEM further advised that the "[f]ailure to plug and reabandon the well may result in enforcement action, including an order to perform reabandonment well work, pursuant to PRC Sec. 3208.1, and 3224." (SAC, P. 58.)

At the Project meeting on or about April 20, 2021, Burnham and/or Architect informed WAC of receipt of CalGEM's August 6th Letter regarding CSWR and the contents thereof. This was the first time that Plaintiffs became aware of CalGEM's August 6th letter. (SAC, P. 62.)

At the time of entering into the Agreement, and certainly as of July 2019--thirty (30) months after Public Resources Code section 3208.1 was amended--Architect knew or should have known of all California laws with respect to oil well reabandonment, including that they apply to oil wells that are not accessible or visible. (SAC, P. 63.) In fact, pursuant to the Agreement, Architect was obligated, consistent with its Standard of Care, to be knowledgeable of all federal, state, and local building codes, laws, statutes, rules, orders, and regulations that apply to the Project. (Ibid.)

Architect's general role with respect to the Project was to analyze the existing site conditions and plan, develop, and implement building designs for the Project. (SAC, P. 64.) Architect should have known that the site elements, specifically the abandoned oil well, would be required to be designed around or reabandoned prior to development activities in compliance with current California law. (SAC, P. 64.)

According to the SAC, no evidence has been produced to show that Architect did any independent investigation, nor is there any evidence that Architect obtained advice from any experts or persons knowledgeable about oil wells or that Architect sought verification or supporting evidence of any analysis, to determine how the Project would be impacted by the known presence of the oil well element beneath the Property. (Id. P. 65.)

Since learning of the reabandonment issue, Plaintiffs have been advised that due to the nature of the way the oil well and side-tracks were drilled in 1959, there is little chance it will be able to comply with the requirements under the relevant statute. (SAC P. 66.) Consequently, according to the SAC, there is no way Plaintiffs can complete the Project as currently designed by Architect. (Ibid.)

On February 6, 2025, Carrier Johnson/Architect filed a cross-complaint ("XC") against WAC, Urban One MGMT, LLC ("Urban One"), Krazan & Assocations ("Krazan"), KM3N-B, Inc. dba Terra-Petra Environment Engineering ("Terra Petra") (collectively, "Cross-Defendants"), alleging causes of action for (1) Breach of Express Duty to Indemnify, (2) Equitable Indemnity, (3) Contribution & Apportionment, and (4) Declaratory Relief re Indemnity. The XC alleges that Carrier Johnson was not responsible for addressing the potential impacts of the abandoned oil well at the Project as such work and services were far outside the scope of Carrier Johnson's contractual obligations and professional duties as an architect.

On June 20, 2025, Terra Petra filed a cross-complaint against MOES 1 through 50, alleging causes of action for (1) Total Equitable Indemnity, (2) Partial Equitable Indemnity, (3) Express Indemnity, (4) Negligence, (5) Contribution, and (6) Declaratory Relief.

On August 14, 2025, Terra Petra named Spectrum Environmental Services, Inc. ("Spectrum") as MOE 1. On February 10, 2026, Terra Petra named Akerman LLP ("Akerman") as MOE 2 and Burnham Nationwide, Inc. ("Burnham") as MOE 3.

On October 16, 2025, Spectrum filed a cross-complaint against Terra Petra, Carrier Johnson, Urban One, and Krazan, alleging causes of action for (1) Equitable Indemnity, (2) Implied Indemnity, and (3) Declaratory Relief.

On April 13, 2026, Krazan filed an application for determination of good faith settlement. In response, on May 4, 2026, Carrier Johnson filed a motion to contest the application for determination of good faith settlement. On July 13, 2026, Krazan filed an opposition. On August 25, 2026, Carrier Johnson filed a reply.

II. LEGAL STANDARD A court must approve any settlement entered into by less than all joint tortfeasors or co-obligors. (Code Civ. Proc., Sec. 877.6.) This requirement furthers two (sometimes competing) policies: (1) the equitable sharing of costs among the parties at fault, and (2) the encouragement of settlements. (Erreca's v. Superior Court (1993) 19 Cal.App.4th 1475, 1487.)

Under Code of Civil Procedure section 877.6: "A determination by the court that the settlement was made in good faith shall bar any other joint tortfeasor or co-obligor 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." (Code Civ. Proc., Sec. 877.6, subd. (c).)

"[T]he intent and policies underlying section 877.6 require that a number of factors be taken into account including [1] a rough approximation of plaintiffs' total recovery and the settlor's proportionate liability, [2] the amount paid in settlement, [3] the allocation of settlement proceeds among plaintiffs, and [4] a recognition that a settlor should pay less in settlement than he would if he were found liable after a trial. Other relevant considerations include [5] the financial conditions and insurance policy limits of settling defendants, as well as [6] the existence of collusion, fraud, or tortious conduct aimed to injure the interests of nonsettling defendants. (Citation)." (Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499 (" Tech-Bilt ").)

The Tech-Bilt factors must be evaluated "on the basis of information available at the time of the settlement." (Tech-Bilt, supra, 38 Cal.3d at p. 499.) "[A] defendant's settlement figure 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." (Torres v. Union Pacific R. Co. (1984) 157 Cal.App.3d 499, 509.)

When a motion for determination of good faith settlement is contested, the moving party must provide the court with declarations or other evidence demonstrating the facts necessary to evaluate the settlement in terms of the Tech-Bilt factors. (City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261.

After an initial showing by the moving party, the burden of proof then shifts to the nonsettling defendant to demonstrate the settlement lacks good faith. (Code Civ. Proc., Sec. 877.6, subd. (d); Abbott Ford, Inc. v. Superior Court (1987) 43 Cal.3d 858, 895.) In order to demonstrate a lack of good faith, the nonsettling party must show the settlement is so far "out of the ballpark" as to be inconsistent with the equitable objectives of section 877.6. (Nutrition Now, Inc. v. Superior Court (2003) 105 Cal.App.4th 209, 213.)

III. EVIDENTIARY OBJECTIONS a. Krazan's Objections Krazan objects to the certain portions of the Declaration of Christopher Spandau filed in support of Carrier Johnson's motion to contest. The Court overrules all objections premised on Krazan's contention that Mr. Spandau's expert opinion are based on direct and express exclusions to the July 8, 2019, Cost Estimate ("Cost Estimate") and Geotechnical Engineering Services Agreement ("Geotechnical Agreement") between Krazan and WAC.

Krazan contends that the declaration should be considered to determine Krazan's proportionate share of liability and whether the Settlement Agreement and Release (the "Settlement") between Krazan and Plaintiffs was made in good faith. However, such an argument does not translate to Mr. Spandau's declaration to be impermissible from an evidentiary standpoint, but rather is an argument best suited for the Court in addressing the merits of whether the Settlement was made in good faith.

Whether the contents of the expert testimony are immaterial to the factor of proportionate liability, on the grounds that there might be contractual exclusions, is not the same question as to whether the testimony is wholly inadmissible. (Mattco Forge, Inc. v. Arthur Young & Co. (1995) 38 Cal.App.4th 1337, 1351 ["Section 877.6 and Tech-Bilt require an evidentiary showing, through expert declarations or other means, that the proposed settlement is within the reasonable range permitted by the criterion of good faith."].)

The Court otherwise does not find that Mr. Spandau's testimony to be speculative, vague, overbroad, lacking in personal knowledge, or irrelevant. Mr. Spandau's testimony is based on his "over 40 years' experience working as a civil and geotechnical engineer over the greater southern California region" and his work performing "hundreds of geotechnical investigations for a wide variety of public and private developments ranging from commercial and residential developments to major public work projects including highways, bridges, airports, dams, flood control structures and other complex projects." (Spandau Decl., P. 2.)

The Court also does not find that the probative value of the declaration is substantially outweighed by its potential prejudice to Krazan. Krazan has not shown prejudice beyond that the existence of the declaration may be unfavorable to Krazan's position. (Vorse v. Sarasy (1997) 53 Cal. App. 4th 998, 1008 ["evidence cannot be excluded "merely because it undermines the opponent's position or shores up that of the proponent. The ability to do so is what makes evidence relevant."].) The Court overrules each of Krazan's objections.

b. Carrier Johnson's Objections Carrier Johnson objects to portions of the Declaration of Dean Alexander filed in opposition to the motion to contest. For similar reasons, the Court overrules Carrier Johnson's objections.

IV. DISCUSSION Krazan initially applied for an order determining that the Settlement between Plaintiffs (WVSC and WAC) and Krazan was made in good faith. In response, Carrier Johnson filed the instant motion to contest that the Settlement was made in good faith.

Here, Plaintiffs and Krazan entered into the Settlement with the following general terms: 1. In consideration for settlement payments totaling Forty-Nine Thousand and Nine Hundred and Ninety-Nine Dollars and Zero Cents ($49,999.00) in U.S. dollars (the "Settlement Payment" or the "Settlement Amount") and Krazan's code-compliant and good faith responses to WAC's Requests for Admission, Set One, the Settling Parties agree that this Settlement constitutes a full and final resolution of all matters between the Settling Parties arising out of or in any way related to the Project or the Project's contracts.

The Settlement Payment will only be issued after the finding of good faith by the Court ("GFS Order") (Malone Decl. P.P. 4-5, 7); 2. The Settlement includes a full mutual release of any and all disputes of any kind or nature, whether known or unknown, by, between, or among the Settling Parties, whensoever such disputes may have arose, including without limitation any and all claims that were or could have been asserted in the litigation and including without limitation any and all disputes arising out of the Project and the Project's contracts, including a waiver of California Civil Code Section 1542 (Id.

P.P. 4, 6); 3. The Settlement is not an admission of liability on the part of the Settling Parties but rather Krazan wholly denies liability (Id. P. 4); 4. Each Settling Party is to bear its own fees and costs (Ibid); and 5. The Settlement is contingent upon a finding of good faith by the Court (Id. P. 7).

a. Discovery Carrier Johnson asserts that Krazan has prevented Carrier Johnson from obtaining information that would show Krazan's liability by refusing to respond to Carrier Johnson's discovery requests. Such discovery would be directly relevant on whether the Settlement between Krazan and Plaintiffs was made in good faith.

Carrier Johnson provides that it propounded discovery targeted at discovering information related to Krazan's liability in this matter including discovery targeted at discovering whether Krazan acted with the appropriate standard of care in this matter. (McFaul Decl., P. 3; NOL Ex 1-3.) Krazan wholly failed to provide substantive responses to any of Carrier Johnson's special interrogatories and solely objected to most of Carrier Johnson's requests for admission. (Id. P. 5; NOL Ex 1-2.)

Further, according to Carrier Johnson, WAC propounded requests for admission on Krazan on or about February 3, 2026. (Id., P. 10.) Krazan has not yet responded to those discovery requests. Instead, as a portion of its consideration for the settlement agreement, "Krazan shall further provide good-faith, code compliant responses to WAC's Requests for Admission, Set One." (Malone Decl., P. 5.)

The Court agrees that Krazan's responses to Carrier Johnson's and WAC's discovery requests should be available for Carrier Johnson to use in connection with contesting the good faith of the Settlement. As Carrier Johnson provides, the discovery requests at issue are relevant to whether Krazen breached legal duties to WAC or breached its standard of care as a geotechnical engineer, which would then be used to properly assess Krazan's proportional share of liability in the matter.

Additionally, Carrier Johnson asserts that Krazan refused to provide information related to its financial condition/insurance policy limits cutting off Carrier Johnson's ability to determine whether Krazan has the financial capacity to pay a larger settlement. (NOL Ex. 3, Response to Form-Interrogatory No. 4.1; City of Grand Terrace v. Superior Ct. (1987) 192 Cal.App.3d 1251, 1265 ["it was an abuse of discretion for the trial court to find a good faith settlement in that there was insufficient evidence presented on the issues of settlor's financial condition and insurance coverage."].)

"[T]he hallmark of evidence available at the time of settlement is not only what the settling parties actually contemplated or actually presented to the court in seeking a good faith determination; available evidence also encompasses what the parties should have known. While it may not be in a settling party's best interest to develop and to present evidence which enlarges his potential liability, such evidence is available if a party later contesting the good faith of a settlement could have obtained it through investigation or discovery prior to or at the time of settlement.

On the other hand, evidence which could not reasonably have been produced by a joint tortfeasor with an interest in producing all relevant evidence is not available; such evidence may not be considered in assessing the good faith of a settlement." (Singer Co. v. Superior Ct. (1986) 179 Cal.App.3d 875, 896-97 (emphasis added) [finding an abuse of discretion where the trial court refused to postpone the good faith hearing until contesting party could "complete pertinent discovery directed" to the Tech-Bilt factors].)

"[I]t would be appropriate for the objecting non-settlor to move for a continuance of the hearing, if necessary, for the purpose of gathering facts, which could include further formal discovery, to support its statutory burden of proof as to all Tech-Bilt factors non-settlors placed in issue in order that the matter can be fully and fairly litigated." (City of Grand Terrace, supra, 192 Cal.App.3d at p. 1265.)

The Court thus continues the motion to allow Carrier Johnson to pursue discovery to have an opportunity to meaningfully contest the good faith of the Settlement. "Any other result would reward a settling defendant/tortfeasor for successfully withholding or concealing evidence at the time of the settlement in derogation of its duty to act fairly and in good faith to joint tortfeasors as well as to plaintiff." (Singer, supra, 179 Cal.App.3d at 896.)

V. CONCLUSION Based on the foregoing, the instant motion to contest is hereby CONTINUED to Tuesday, October 13, 2026 at 8:30am. Dated this 1st day of September 2026 | | | Hon. Gary D. Roberts Judge of the Superior Court | Case Number: 25STCV19227 Hearing Date: September 1, 2026 Dept: 733 SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES MARCUS LAM, an individual, Plaintiff, vs.