2:14-cv-02222
D. Nev.Aug 14, 2019Background
- Homeowners sued developer D.R. Horton for construction defects; developer filed third-party claims against subcontractors Harrison Landscape and Majestic Plumbing.
- After discovery, developer and each subcontractor mediated with a court-appointed mediator and reached separate settlement agreements.
- Harrison agreed to a $5,000 settlement (paid by its insurer) in exchange for a release of known and unknown claims, except potential additional-insured obligations.
- Majestic agreed to a $25,000 settlement in exchange for a full release of all claims.
- Both subcontractors moved for judicial determination that their settlements were made in "good faith" under Nevada law; no parties opposed either motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Harrison's settlement with developer was made in good faith under NRS § 17.245 | Plaintiffs did not oppose (no substantive position filed) | Harrison: $5,000 reached after arm's-length mediation; limited exposure; insurer paying; no collusion; settlement compensates statutory entitlements and contractual obligations | Court: Granted — settlement is in good faith |
| Whether Majestic's settlement with developer was made in good faith under NRS § 17.245 | Plaintiffs did not oppose | Majestic: $25,000 reached after mediation; parties deemed it a reasonable apportionment; no collusion; insurance/financial condition not relevant | Court: Granted — settlement is in good faith |
Key Cases Cited
- Velsicol Chemical Corp. v. Davidson, 811 P.2d 561 (Nev. 1991) (good-faith settlement determination committed to trial court discretion)
- In re MGM Grand Hotel Fire Litigation, 570 F. Supp. 913 (D. Nev. 1983) (identifies factors relevant to good-faith settlement review)
- The Doctors Co. v. Vincent, 98 P.3d 681 (Nev. 2004) (trial court has considerable discretion; MGM factors may be considered)
- Commercial Union Ins. Co. v. Ford Motor Co., 640 F.2d 210 (9th Cir. 1981) (discusses considerations such as amount paid, allocation, insurance limits, financial condition, and collusion)