Judge: Bruce G. Iwasaki, Case: 19STCV40966, Date: 2023-02-14 Tentative Ruling

Case Number: 19STCV40966    Hearing Date: February 14, 2023    Dept: 58

Judge Bruce G. Iwasaki

Department 58

Hearing Date:             February 14, 2023

Case Name:                Yesnia Flores v. SHSH Investments, Inc. et al.

Case No.:                    19STCV40966

Matter:                        Motion to Enforce Settlement

Moving Party:             Plaintiff Yesenia Flores

Responding Party:      Defendant Mikhail Shalyapin

Tentative Ruling:      The Motion to Enforce Settlement and request for attorneys’ fees and costs is granted.

Background

This was an employment action in which Yesenia Flores (Flores or Plaintiff) sued SHSH Investments, Inc., Mikhail Shalyapin, and Igor Shneyderman for discrimination, harassment, retaliation, wrongful termination, and violations of various Labor Code statutes. 

On September 22, 2022, Plaintiff requested dismissal of this case because the parties had settled.  The parties jointly stipulated for the Court to retain jurisdiction under Code of Civil Procedure section 664.6 to enforce the settlement.

Plaintiff now moves to enforce the settlement.  She contends that Mikhail Shalyapin (Shalyapin or Defendant) failed to make any payments under their agreement.  In opposition, Defendant argues that Plaintiff failed to timely satisfy a condition precedent to the payment and that his performance is delayed by operation of law under Executive Order 14024.  Plaintiff filed a reply, asserting that all conditions were satisfied and while the Executive Order explains the failure to pay, it does not serve as a justification.  

            Plaintiff also seek $5700.60 in attorneys’ fees and $60 in costs for filing this motion.

Legal Standard

The Court is authorized to enter judgment pursuant to the stipulated settlement. (Code Civ. Proc., § 664.6.)  In reviewing a motion to enforce a settlement, the Court determines “whether the parties entered into a valid and binding settlement.”  (Hines v. Lukes (2008) 167 Cal.App.4th 1174, 1182.)  “A settlement is enforceable under section 664.6 only if the parties agreed to all material settlement terms.  [Citations.]  The court ruling on the motion may consider the parties’ declarations and other evidence in deciding what terms the parties agreed to, and the court’s factual findings in this regard are reviewed under the substantial evidence standard.  [Citations.]  If the court determines that the parties entered into an enforceable settlement, it should grant the motion and enter a formal judgment pursuant to the terms of the settlement.”  (Id. at pp. 1182-1183; see also Osumi v. Sutton (2007) 151 Cal.App.4th 1355, 1357 [“Strong public policy in favor of the settlement of civil cases gives the trial court, which approves the settlement, the power to enforce it”].)

Strict compliance with the statutory requirements is necessary before a court can enforce a settlement agreement under section 664.6.  (Sully-Miller Contracting Co. v. Gledson/Cashman Construction, Inc. (2002) 103 Cal.App.4th 30, 37.)  The party seeking to enforce a settlement “must first establish the agreement at issue was set forth ‘in a writing signed by the parties’ (§ 664.6) or was made orally before the court.  [Citation.]”  (Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 304.)

Discussion

            Plaintiffs’ counsel, Christopher J. DeClue, submitted a declaration in support of the motion to enforce the Settlement Agreement. The attached Settlement Agreement is signed by all parties.  (DeClue Decl., Ex. 1.) Counsel also submitted the e-mail communications with Shalyapin indicating the failure of payment. (Id. at Ex. 3.) The most recent correspondence indicates that Shalyapin concedes that he has not submitted any payment, but that he needs “permission from the Treasury department.”  Thus, as of January 6, 2023, Defendant has not submitted payment as required under the Settlement Agreement.  The court finds that the Settlement Agreement is valid and binding.

            Defendants’ contentions have no merit.  He first argues that a condition precedent under the Settlement Agreement was not met.  The Agreement contains the following language:

A condition precedent to the Settlement Payment is counsel for Defendants’ receipt of (1) a counterpart of this Agreement that is signed and completed by Plaintiff; (2) confirmation by Plaintiff’s counsel that Igor Shneyderman has fulfilled his obligations under the agreement; and (3) a counterpart of the Stipulation that is signed and completed by Plaintiff. A condition precedent to the Dismissal of Defendant in this matter, is receipt of the entire settlement amount per Section 1.

Defendant specifically contends that “[a]s of October 14, 2022, Plaintiff has not confirmed that Defendant Shneyderman fulfilled his obligations under the settlement agreement” and that “Defendant Mikhail knew that Defendant Shneyderman had not signed mutual release (which was part of his obligations under the agreement).”

The Settlement Agreement did not specify how Plaintiff’s counsel was to confirm to Shalyapin that Shneyderman fulfilled his obligations.  Plaintiff’s counsel contends that that he “requested in open court, in [Shalyapin’s] presence, that Defendant Shneyderman be dismissed because the terms of the agreement were satisfied” and that he has had “several conversations with Defendant regarding the fact that Defendant Shneyderman had satisfied his obligations in the settlement and [Shalyapin] was holding up resolving the case.”  (Reply, p. 5:4-9.)  In the Reply, counsel also indicated that Plaintiff “hereby states that Defendant Shneyderman has complied with his obligations of his settlement agreement and was thereafter dismissed from this case.”  The Court accepts Plaintiff’s counsel’s representation that he has notified Shalyapin that Shneyderman has fulfilled his obligations.  

Shalyapin next contends that Executive Order 14024 titled “Blocking Property with respect to Specified Harmful Foreign Activities of the Government of the Russian Federation” makes his performance impossible under Civil Code section 1511.  He explains that that he had to “borrow funds from his parents that kept funds in the account of Russian Bank ‘Sberbank’ which is currently sanctioned by” the Executive Order.

Under Civil Code section 1511, the impossibility defense to a contract only applies to excuse performance “[w]hen it is prevented or delayed by an irresistible, superhuman cause, or by the act of public enemies of this state or of the United States, unless the parties have expressly agreed to the contrary.”  “Impossibility of performance is a defense and the burden of proof in establishing it rests on defendant.”  (Oosten v. Hay Haulers Dairy Employees & Helpers Union (1955) 45 Cal.2d 784, 788.”

Defendant has not met his burden to show impossibility.  The Executive Order was signed on April 15, 2021.  (Exec. Order No. 14024, 3 Fed.Reg. 20249 (Apr. 19, 2021).)  Directive 2, which Defendant cites, was signed on February 24, 2022, with an effective date of March 26, 2022.[1]  The parties signed the Settlement Agreement on July 23, 2022.  That is, the Order was in existence at the time of execution of the Settlement Agreement.  For Defendant to now claim that this operates to excuse his performance is unavailing.  

            It appears that Shalyapin is rather trying to argue frustration of purpose, which occurs when performance is possible, but the “expected value of performance to the party seeking to be excused has been destroyed by a fortuitous event.”  (Lloyd v. Murphy (1944) 25 Cal.2d 48, 53.)  However, “[m]ere difficulty, or unusual or unexpected expense does not establish frustration or impossibility of performance of a contract.”  (Glens Falls Indemnity Co. v. Perscallo (1950) 96 Cal.App.2d 799, 802.)  Here, while Shalyapin may be unable to access his parent’s funds through a Russian bank, this merely requires that he obtain the funds from another source.  The Executive Order does not frustrate his performance or render it impossible.  Accordingly, Plaintiff’s motion to enforce settlement against Defendant Shalyapin is granted.

            Under Paragraph 10 of the Settlement Agreement, a party seeking to enforce the terms is entitled to attorneys’ fees and costs.  The Court finds that the requested amount of $5,700.60 is reasonable and awards that amount.  (DeClue Reply Decl., ¶¶ 8-12.)

            Plaintiff’s counsel shall submit a proposed Judgment to the Court.