Maksoud v. Hopkins
3:17-cv-00362
| S.D. Cal. | Apr 25, 2018Background
- Plaintiff Charbel Maksoud invested $250,000 in BT Software and Research, Inc. to develop a media platform called Kaliki and executed stock purchase and related agreements.
- Plaintiff alleges defendants, including Philippe Guelton and BT CEO Tirrell Payton, made misrepresentations that induced the investment; Plaintiff never received his shares and BT was forfeited.
- SheKnows (defendant) was alleged only minimally in the complaint—primarily that Guelton presented himself as affiliated with SheKnows—and Plaintiff appeared to seek vicarious liability for Guelton’s conduct.
- On March 10, 2018, Plaintiff and SheKnows executed a settlement: SheKnows will pay a sealed monetary amount, dismiss the claims with prejudice, release SheKnows (waiving Cal. Civ. Proc. Code § 1542), and disclaim any interest in certain BT-related IP.
- SheKnows moved for a good-faith settlement determination under Cal. Civ. Proc. Code § 877.6; Guelton opposed, arguing the settlement improperly lets SheKnows avoid indemnity/insurance obligations to him; other remaining defendants did not oppose.
- The district court considered the Tech-Bilt factors and granted SheKnows’s motion, barring future contribution/indemnity claims against SheKnows for the conduct at issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether SheKnows’ settlement with Maksoud was made in good faith under Cal. Civ. Proc. Code § 877.6 | Settlement not in good faith because it allows SheKnows to avoid indemnity/insurance obligations to Guelton | Settlement is reasonable given limited allegations against SheKnows, SheKnows’s sale of assets, and low likelihood of vicarious liability | Court held settlement was made in good faith and granted § 877.6 determination |
| Whether evidence shows collusion or fraud making settlement inequitable | Implied challenge via opposition to avoid indemnity issue (no specific collusion shown) | No collusion, fraud, or tortious conduct supported by record | Court found no evidence of collusion or fraud |
| Whether settlement amount is disproportionate to SheKnows’s potential liability | Plaintiff seeks full damages but did not show amount was "out of the ballpark" | Amount (sealed) is within reasonable range given SheKnows’s likely proportionate liability and litigation exposure | Court concluded monetary settlement was within reasonable range |
| Effect of § 877.6 determination on future claims | N/A (Plaintiff settled) | A good-faith determination bars future contribution/indemnity claims against SheKnows | Court ordered parties barred from future contribution/indemnity claims against SheKnows |
Key Cases Cited
- Tech-Bilt, Inc. v. Woodward-Clyde & Assocs., 698 P.2d 159 (Cal. 1985) (establishes factors for determining good-faith settlement under § 877.6)
- Mason & Dixon Intermodal, Inc. v. Lapmaster Int’l LLC, 632 F.3d 1056 (9th Cir.) (federal courts apply California law on § 877 determinations in diversity cases)
- Abbott Ford, Inc. v. Superior Court, 741 P.2d 124 (Cal. 1987) (explains § 877’s twin goals: equitable sharing of costs and encouragement of settlements)
- Long Beach Mem’l Med. Ctr. v. Superior Court, 91 Cal. Rptr. 3d 494 (Cal. Ct. App.) (courts should exercise discretion to effectuate equitable goals of § 877 and § 877.6)