Judge: Anne Hwang, Case: 21STCV10175, Date: 2023-12-01 Tentative Ruling

Case Number: 21STCV10175    Hearing Date: December 1, 2023    Dept: 32

PLEASE NOTE:   Parties are encouraged to meet and confer concerning this tentative ruling to determine if a resolution may be reached.  If the parties are unable to reach a resolution and a party intends to submit on this tentative ruling, the party must send an email to the Court at sscdept32@lacourt.org indicating that party’s intention to submit.  The email shall include the case number, date and time of the hearing, counsel’s contact information (if applicable), and the identity of the party submitting on this tentative ruling.  If the Court does not receive an email indicating the parties are submitting on this tentative ruling and there are no appearances at the hearing, the Court may place the motion off calendar or adopt the tentative ruling as the order of the Court.  If all parties do not submit on this tentative ruling, they should arrange to appear in-person or remotely.  Further, after the Court has posted/issued a tentative ruling, the Court has the inherent authority to prohibit the withdrawal of the subject motion and adopt the tentative ruling as the order of the Court. 

TENTATIVE RULING

BACKGROUND

This is a negligence action arising from a motor vehicle accident. Defendant Iraj Elyaszadeh (Defendant) now moves to enforce a purported settlement agreement pursuant to Code of Civil Procedure section 664.6 with Plaintiff Kaveh Harounian (Plaintiff). Plaintiff opposes and Defendant replies.

LEGAL STANDARD

Pursuant to Code of Civil Procedure section 664.6, “if parties to pending litigation stipulate, in a writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement.  If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.”  “Section 664.6 was enacted to provide a summary procedure for specifically enforcing a settlement contract without the need for a new lawsuit.”  (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 809.)  A writing is signed by a “party” if signed by any of the following: “(1) The party; (2) An attorney who represents the party; or (3) If the party is an insurer, an agent who is authorized in writing by the insurer to sign on the insurer's behalf.” (Code Civ. Proc. § 664.6.)    

To be enforceable under Code of Civil Procedure section 664.6, any written settlement agreement outside of court must be signed. An agreement to settle under section 664.6 cannot be enforced unless it is signed by all of the litigating parties to the agreement. (J.B.B. Investment Partners, Ltd. v. Fair (2014) 232 Cal.App.4th 974, 985.) Although the Court may adjudicate disputes over the terms of the settlement agreement, the Court may not modify terms from what was agreed to by the parties. (Machado v. Myers (2019) 39 Cal.App.5th 779, 797.) 

DISCUSSION

On July 27, 2023, Plaintiff made a settlement offer to Defendant to pay $15,000 single policy limits plus costs of suit. On August 2, 2023, Defendant responded: “Loya has reviewed and considered plaintiff’s demand for policy limits plus costs set to expire today, August 2, 2023 at noon PST. At this time, Loya is prepared to extend an offer of the $15,000.00 policy limits but will not agree to cover any costs. This offer is inclusive of all liens and attorneys’ fees and is contingent upon receiving signed releases from all parties.” (Grandy Decl. ¶ 9, Exh. F.) There was no expiration date on this offer. This offer was sent via email. Defendant’s counsel’s full name was included below the email.

On August 10, 2023, Plaintiff sent a letter attached to an email stating: “Please be advised that my client, against our advise, (sic) has agreed to accept your carrier’s policy limit offer in the amount of $15,000, that you untimely conveyed. As a material condition of this settlement, you must tender payment of the full amount payable only to the law offices of Eric Bryan Seuthe & Associates’ trust account within five (5) business days of this letter. No extensions of time will be granted to your carrier to comply with this request. Should your carrier not fully comply with this settlement demand, please advise Mr. Iraj Elaszadeh, that the cost and interest that have accrued to date on my client’s Statutory Offer of compromise which was previously served are now in an amount in excess of $6,000 (and increasing).” (Id. ¶ 10, Exh. G.)

That day, Defendant sent an email purporting to confirm acceptance. Plaintiff responded via email stating “nope the deal offered is the deal my client approved i will tell him you rejected it.” (Id. ¶ 11, Exh. H.)

As stated above, a written settlement agreement outside of court must be signed by all parties subject to the settlement. Here, the facts show that the parties engaged in settlement negotiations over email. Therefore, the Court cannot enforce the settlement under section 664.6.

In the alternative, Defendant moves for leave to either file a cross-complaint or amend his answer to assert the alleged breach of contract as a defense.

Amendment to Pleadings: General Provisions

Under Code of Civil Procedure section 576, “[a]ny judge, at any time before or after commencement of trial, in the furtherance of justice, and upon such terms as may be proper, may allow the amendment of any pleading or pretrial conference order.”

Code of Civil Procedure section 473, subdivision (a)(1) provides, in relevant part: “[t]he court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading or proceeding by adding or striking out the name of any party, or by correcting a mistake in the name of a party, or a mistake in any other respect; and may, upon like terms, enlarge the time for answer or demurrer.¿ The court may likewise, in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading or proceeding in other particulars; and may upon like terms allow an answer to be made after the time limited by this code.”¿ 

“This discretion should be exercised liberally in favor of amendments, for judicial policy favors resolution of all disputed matters in the same lawsuit.”¿(Kittredge Sports Co. v. Superior Court¿(1989) 213 Cal.App.3d 1045, 1047.)¿ The Court of Appeal in Morgan v. Superior Court held “If the motion to amend is timely made and the granting of the motion will not prejudice the opposing party, it is error to refuse permission to amend and where the refusal also results in a party being deprived of the right to assert a meritorious cause of action or a meritorious defense, it is not only error but an abuse of discretion.”  (Morgan v. Superior Court (1959) 172 Cal.App.2d 527, 530, citations omitted.)  Moreover, “it is an abuse of discretion for the court to deny leave to amend where the opposing party was not misled or prejudiced by the amendment.”  (Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048 [opposing party did not establish harm by the delay in moving to amend the complaint].)

“The court may grant leave to amend the pleadings at any stage of the action.” (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2022) ¶ 6:636 (hereafter Weil & Brown).)  Denial of a motion to amend is rarely justified if the motion is timely made and granting the motion will not prejudice the opposing party. (Id. at ¶ 6:639, citations omitted.)  However, if the party seeking the amendment has been dilatory, and the delay has prejudiced the opposing party, the judge has discretion to deny leave to amend. (Id. at ¶ 6:655, citations omitted. Absent prejudice, any claimed delay alone is not grounds for denial. “If the delay in seeking the amendment has not misled or prejudiced the other side, the liberal policy of allowing amendments prevails. Indeed, it is an abuse of discretion to deny leave in such a case even if sought as late as the time of trial. (Id. at ¶ 6:653 (citing Higgins v. Del Faro (1981) 123 Cal.App.3d 558, 564-565).)  “Prejudice exists where the amendment would result in a delay of trial, along with loss of critical evidence, added costs of preparation, increased burden of discovery, etc.  . . .  But the fact that the amendment involves a change in legal theory which would make admissible evidence damaging to the opposing party is not the kind of prejudice the court will consider.”  (Weil & Brown, supra, at ¶ 6:656, citations omitted.)

“Even if some prejudice is shown, the judge may still permit the amendment but impose conditions, as the Court is authorized to grant leave ‘on such terms as may be proper.’”  (Weil & Brown, supra, at ¶ 6:663, citation omitted.)  For example, the court may cause the party seeking the amendment to pay the costs and fees incurred in preparing for trial. (Id. at ¶ 6:664 (citing Fuller v. Vista Del Arroyo Hotel, 42 Cal.App.2d 400, 404).)

California Rules of Court, rule 3.1324:  Procedural Requirements

Pursuant to California Rules of Court, rule 3.1324(a), a motion to amend a pleading before trial must:

“(1) Include a copy of the proposed amendment or amended pleadings, which must be serially numbered to differentiate it from previous pleadings or amendments;

(2) state what allegations in the previous pleading are proposed to be deleted, if any, and where, by page, paragraph, and line number, the deleted allegations are located; and

(3) State what allegations are proposed to be added to the previous pleading, if any, and where, by page, paragraph, and line number, the additional allegations are located.”

In addition, under Rule 3.1324(b), a motion to amend a pleading before trial must be accompanied by a separate declaration that specifies the following:

“(1) the effect of the amendment;

 (2) why the amendment is necessary and proper;

(3) when the facts giving rise to the amended allegations were discovered; and

(4) the reasons why the request for amendment was not made earlier.”

Here, Defendant has attached exhibit L as his First Amended Answer. Defendant seeks to add an Eighth Affirmative Defense of Breach of Written Contract and a Ninth Affirmative Defense of Equitable Estoppel. The purported breach occurred on August 10, 2023. Defendant filed this motion on September 18, 2023. Therefore, it appears Defendant did not delay in bringing this motion.

Plaintiff does not argue any undue delay or specific prejudice that will result from granting leave to amend. Instead, Plaintiff argues Defendant did not abide by rule 3.1324. The Court finds that Defendant has substantially complied with the procedural requirements under rule 3.1324 by submitting a declaration and identifying the proposed amendments in his motion. Plaintiff’s arguments that Plaintiff will be prejudiced by allowing evidence of settlement discussions at trial and requiring Plaintiff to be a witness at the time of trial can be addressed at trial.  

CONCLUSION AND ORDER

Therefore, Defendant’s motion to enforce settlement is DENIED. 

Defendant’s motion for leave to file an amended answer is GRANTED.

Defendant shall file and serve the first amended answer within ten (10) days.

            Defendant shall give notice of the Court’s order and file a proof of service of such.