Vivera Pharmaceuticals v. GD Laboratory Consulting CA4/3
G063498
| Cal. Ct. App. | Feb 21, 2025Background
- Vivera Pharmaceuticals, Inc., GD Laboratory Consulting, LLC, and others formed a joint COVID-19 testing venture, Focal Point Laboratories, which ceased operations in June 2021.
- After business dissolution, Vivera's CEO withdrew $600,000 from Focal Point's account, prompting Vivera to sue for accounting, and Focal Point to counter-sue; the cases were consolidated.
- A court-appointed receiver was established to control Focal Point’s assets as litigation proceeded.
- Blaine Holding & Development, LLC had previously secured a $400,000 judgment against Vivera in a separate matter and filed a judgment lien in this case.
- The parties reached a settlement where Vivera received a release of claims but no money, and the settlement required court approval due to the outstanding lien.
- The court approved the settlement, finding no abuse in its structure or intent to evade Blaine’s lien, and Blaine appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was the trial court right to approve the settlement despite Blaine's lien? | Settlement was fair; Vivera received only a release, not money. | Settlement evaded valid lien; Vivera benefitted unfairly. | Court approved settlement; no abuse of discretion found. |
| Should review be de novo or for abuse of discretion? | Abuse of discretion applies as court balanced equities. | De novo review correct due to statutory language. | Abuse of discretion standard is proper. |
| Did the statutory lien attach to Vivera’s cause of action or any judgment proceeds? | Lien only attaches to proceeds Vivera receives in litigation. | Lien attaches to any money Vivera could receive, per statute. | Lien did not attach, as Vivera received no money/property. |
| Do precedents (such as Abatti and Oldham) compel reversal? | Distinct facts—here, Vivera received release only, not cash. | Case law shows court must not approve settlements evading liens. | Court distinguished those cases; facts not analogous here. |
Key Cases Cited
- Pangborn Plumbing Corp. v. Carruthers & Skiffington, 97 Cal.App.4th 1039 (Cal. Ct. App. 2002) (standard for abuse of discretion in settlement approval)
- Oldham v. California Capital Fund, Inc., 109 Cal.App.4th 421 (Cal. Ct. App. 2003) (reversal required where court lacks information for settlement approval)
- Abatti v. Eldridge, 112 Cal.App.3d 411 (Cal. Ct. App. 1980) (limitations on settlements affecting judgment creditors, later changed by statute)