Judge: Christian R. Gullon, Case: 22PSCV01234, Date: 2023-10-18 Tentative Ruling
Case Number: 22PSCV01234 Hearing Date: October 18, 2023 Dept: O
Tentative Ruling
PLAINTIFF'S MOTION TO VACATE DISMISSAL AND ENTER
STIPULATED JUDGMENT, IN ENFORCEMENT OF SETTLEMENT is DENIED because the
default entered against Defendants has not been set aside.
Background
This is a contracts case.
On October 12, 2022, Plaintiff STRATEGIC FUNDING SOURCE,
INC. d/b/a KAPITUS filed
suit against GUARDIAN TERMITE AND PEST CONTROL, a
California corporation; NICHOLAS GREAUX (the guarantor) alleging that
Defendants have failed to repay the $25,000 loan amount and other fees.
On December 15,
2022, default was entered against Defendants.
On February 8, 2023, Plaintiff filed a ‘STIPULATION AND
[PROPOSED) ORDER OF DISMISSAL WITHOUT PREJUDICE WITH REQUEST TO RETAIN
JURISDICTIO PURSUANT TO CCP 664.6.’
On September 20, 2023,
Plaintiff filed the instant ‘MOTION TO VACATE DISMISSAL AND ENTER STIPULATED JUDGMENT, IN ENFORCEMENT
OF SETTLEMENT.’
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.” (Code Civ. Proc., § 664.6.) The court must determine
whether the settlement agreement is valid and binding. (Kohn v. Jaymar-Ruby
(1994) 23 Cal. App. 4th 1530, 1533) (emphasis added). “In order to be
enforceable pursuant to the summary procedures of section 664.6, a settlement
agreement must either be entered into orally before a court … or must be in
writing and signed by the parties.” (Weddington Prods.,
Inc. v. Flick (1998)
60 Cal.App.4th 793, 810.) Courts will not set aside a valid settlement
agreement absent fraud, undue influence, or excusable neglect. (Zamora
v. Clayborn Contracting Group, Inc. (2002) 28 Cal.4th 249, 260; see also Hulsey
v. Elsinore Parachute Center (1985) 168 Cal.App.3d 333, 339; Fraters
Glass & Paint Co. v. Southwestern Const. Co. (1930) 107 Cal.App.1,
6.)
Discussion
Plaintiff moves the Court for an order vacating dismissal
and entering a stipulated judgment against Defendants by enforcing the terms of
a written settlement, which was entered into by the parties on January 25,
2023. The Settlement Agreement required Defendant to pay the total sum of
$35,140 (the "Settlement Amount") in accordance with a specified
payment schedule. (Motion p. 1, see also Ex. 1.) However, on May 25, 2023,
Defendants defaulted under the Settlement Agreement, leaving an outstanding
balance of $21,215, plus prejudgment interest. ‘
Here, while a
review of the Stipulated Judgment and Settlement Agreement appear valid and
enforceable, Defendants remain in default, and were in default at the time of
signing the agreements.
Entry of a defendant’s default instantaneously cuts off its
right to appear in the action. A defendant has no right to participate in
the proceedings until either (a) its default is set aside (in which event, it
may respond to the complaint), or (b) a default judgment is entered (in which
event, it may appeal). (Devlin v. Kearny Mesa AMC/Jeep/Renault, Inc. (1984)
155 Cal.App.3d 381, 385-386 [“The entry of a default terminates a defendant's
rights to take any further affirmative steps in the litigation until
either its default is set aside or a default judgment is entered. [internal
citations omitted]. A defendant against whom a default has been entered is out
of court and is not entitled to take any further steps in the cause
affecting plaintiff's right of action.”]), emphasis added; see also Forbes
v. Cameron Petroleums, Inc. (1978) 83 Cal.App.3d 257, 263 [“In the present
case the filing of an answer in behalf of the defendant after his default had
been duly entered, added nothing to his legal rights, nor altered his status
in the case.) Effectively, here, Defendants could not have taken
further steps in the litigation (i.e., enter Stipulated Judgment) as default
against them was not set aside.
To the extent that Plaintiff may argue
either or both the Stipulated Judgment and/or Settlement Agreement provides
explicit language of setting aside the default, the court’s review of both
documents does not reveal such dismissal.
The Settlement Agreement’s pertinent mention of default
is that Defendants are merely in default, (See Motion, Ex. 1 [Settlement
Agreement], p. 8 of 46 of PDF [“WHEREAS, Defendant, after being properly served
with the summons and complaint in the Litigation, failed to timely respond and
default was entered against Defendant and Plaintiff is currently in the process
of seeking a default judgment against Defendant in the Litigation (the
"Default Judgment").].) Thus, there is no dismissal of the default.
If anything, the language alludes to the enforcement of the default, as that is
a necessary condition to seek default judgment.
As for the Stipulated Judgment, that following language
perhaps most closely addresses default: “IT IS FURTHER STIPULATED that
Defendants appear in the Litigation, waive service of the summons and
complaint and all jurisdictional defenses and consents to the
jurisdiction of the Court.” (Motion, Ex. A, p. 21 of 46 of PDF, ¶6 of
Stipulated Judgment, emphasis added.) However, that language does not formally,
expressly, and explicitly set aside Defendants’ default (e.g., “It is
further stipulated that the default entered on 12/5/2022 is set aside”).
Therefore, as Defendants’ default entered on 12/5/2022
remains, entry of the Stipulated Judgment would be improper, notably as
Defendants are precluded are from the opportunity to oppose the motion.
Conclusion
Based on the foregoing, the motion is denied.