Judge: Christopher K. Lui, Case: 19STCV09548, Date: 2022-10-19 Tentative Ruling
Case Number: 19STCV09548 Hearing Date: October 19, 2022 Dept: 76
Pursuant to California Rule of Court 3.1308(a)(1), the Court does not desire oral argument on the motion addressed herein. As required by Rule 3.1308(a)(2), any party seeking oral argument must notify ALL OTHER PARTIES and the staff of Department 76 of their intent to appear and argue. Notice to Department 76 may be sent by email to smcdept76@lacourt.org or telephonically at 213-830-0776. If notice of intention to appear is not given and the parties do not appear, the Court will adopt the tentative ruling as the final ruling.
Plaintiff alleges that Defendants advised Plaintiff and her mother to represent that the underlying loan was a commercial mortgage, even though it was a consumer credit transaction, which rendered the Truth in Lending Act inapplicable to the loan. Defendants allegedly knew Plaintiff did not qualify and could not afford the loan, which was for 11 months of interest only payments with a final balloon payment of $705,250.
Defendant UMRO Realty Corp., dba The Agency moves to enforce the settlement agreement between Plaintiff Robyn Pearlman and the Settling Defendants Alex Nelson and 1st Point Lending.
TENTATIVE RULING
Defendant UMRO Realty Corp., dba The Agency’s motion to enforce the settlement agreement is DENIED.
ANALYSIS
Motion To Enforce Settlement
Defendant UMRO Realty Corp., dba The Agency moves pursuant to CCP § 664.6 to enforce the settlement agreement between Plaintiff Robyn Pearlman and the Settling Defendants Alex Nelson and 1st Point Lending to extend to non-signatories to the settlement agreement, Defendant April Lopez and UMRO Realty, Inc.
Defendant argues that the settlement agreement contained a release of 1st Point Lending and its representatives and agents, and since Plaintiff has alleged that Lopez and UMRO are agents of 1st Point Lending, Plaintiff has released Lopez and UMRO from this action. Defendant requests that the Court enforce the settlement agreement and dismiss Lopez and UMRO from this action, who are the only parties remaining in this action.
Defendant points to allegations in the 4AC which allege that Lopez was acting as agent and on behalf of Nelson and 1st Point Lending. (4AC, ¶¶ 31 – 33, 36, 109, 112, 119.) Defendant also points to Plaintiff’s discovery responses that Lopez worked in conjunction with Nelson and 1st point to present the loan closing documents to Plaintiff at the loan closing. (Exh. C to Hawatmeh Decl., Response to SROG, Set One, Nos. 4 and 5.)
Defendant argues that, because Plaintiff has asserted in her pleadings and under oath in discovery responses that Lopez and UMRO are agents of the 1st Point Defendants, the Settlement Agreement released Lopez and UMRO as such agents. Defendant argues that Plaintiff is bound by the admissions in the 4AC.Defendant points to the language in the Settlement Agreement whereby Plaintiff agreed to:
“forever
release, discharge and acquit 1ST POINT LENDING… and its respective successors,
assigns, heirs, executors, representatives, … employees, agents, … of
and from, any and all claims, suits, actions, causes of action, judgments,
demands, liabilities, obligations, rights, damages, costs, attorney’s fees,
loss of service, loss of use, loss of profits, expenses and compensation
whatsoever …” (emphasis added.)
(Declaration
of Alex Nelson, Exh. A, ¶ 1, Page 2.)
However, an allegation
of agency has been held to be a conclusion of law:
"In the case at bench we are
dealing with an allegation of agency which amounts to a conclusion of law and
is not only subject to differing constructions but it is one which in the
original pleadings was coupled with an allegation that the party or parties in
question were retailers and other facts indicating that Nonkeloid, the original
source, sold its products only through certain outlets." ( Id. at p. 184.)
(Berman v. Bromberg (1997) 56 Cal.App.4th 936, 949.)
Where there is a conclusion of law or mixed factual-legal conclusion in a complaint, it is not a binding judicial admission:
On the other hand, a mere conclusion,
or a “mixed factual-legal conclusion” in a complaint, is not considered a
binding judicial admission. (Bahan, supra, 98 Cal. App. 3d at p. 812.) A mixed
factual-legal conclusion may be contradicted by a declaration or other evidence
in order to overcome a motion for summary judgment. (Ibid.)
(Castillo v. Barrera (2007) 146 Cal.App.4th 1317, 1324.)
As such, Plaintiff’s allegations regarding Lopez and UMRO being agents of the 1st Point Defendants are not binding upon Plaintiff. Thus, the question becomes whether the settling parties, Plaintiff Robyn Pearlman and Defendants Alex Nelson and 1st Point Lending, intended to release non-signatories Lopez and UMRO as part of the Settlement Agreement.
As discussed above, a settlement
agreement may be enforced under section 664.6 by the parties who signed it. But
the statute does not require that the agreement be executed by every party to
the action who benefits from it, even if indirectly, such as a third party
beneficiary.
“‘The test for determining whether a contract was made for the benefit of a
third person is whether an intent to benefit a third person appears from the
terms of the contract. [Citation.] If the terms of the contract necessarily
require the promisor to confer a benefit on a third person, then the contract,
and hence the parties thereto, contemplate a benefit to the third person. The
parties are presumed to intend the consequences of a performance of the
contract.’ [Citations.] In other words, ‘the doctrine presupposes that the
defendant made a promise which, if performed, would have benefited the third
party.’ [Citation.]” (Spinks v. Equity Residential Briarwood Apartments (2009)
171 Cal.App.4th 1004, 1022 [90 Cal. Rptr. 3d 453].) “It is not necessary that
the contract identify the third party by name as long as such third party can
show that it is one of a class of persons for whose benefit it was made.
[Citation.]” (General Motors Corp. v. Superior Court (1993) 12 Cal.App.4th 435,
444 [15 Cal. Rptr. 2d 622] [agreement that clearly released every party from
liability arising out of automobile accident applied even to parties not
named in document].) These rules apply to settlement agreements. (Weddington
Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 810–811 [71 Cal. Rptr. 2d
265] [“legal principles which apply to contracts generally apply to settlement
contracts”].)
In this case the language of the
stipulated settlement demonstrates it was made for the benefit of the
individual defendants. , “[t]he case is settled as to all claims …” and the
“entire action [is] dismissed [with] prejudice.” (Italics added.) Performance
of those acts disposes of the case against all parties, even without the
signatures of the individual defendants on the stipulated settlement.
(Provost v. Regents of University of California (2011) 201 Cal.App.4th
1289, 1299 [bold emphasis and underlining added].)
Here, the language of the Settlement Agreement does not clearly intend to benefit a class of persons to which Defendants Lopez and UMRO belong. The Settlement Agreement identifies the parties thereto as 1st Point Lending, Inc. and Alex Nelson, on the one hand, and Robyn Pearlman on the other hand. Defendants Lopez and UMRO are not mentioned as parties to the agreement, nor are they express third party beneficiaries. Nowhere do the settling parties identify Lopez and UMRO as “agents” for purpose of the release.
Further, to the extent that it is ambiguous whether Lopez and UMRO were also released, ¶ 11 of the Settlement Agreement indicate that Nelson as an individual and on behalf of 1st Point Lending, Inc. agree to have accepted service of the trial subpoena and these FPL Defendants agree to appear at trial. As Plaintiff points out, this contemplates a trial against remaining Defendants Lopez and UMRO, not an intent to release them as well, which would obviate the need for trial.
Further, ¶ 12 of the Settlement Agreement only requires that, upon clearance of the payment by 1st Point, Plaintiff file a dismissal with prejudice as it pertains to 1st Point. There is no agreement to dismiss Defendants Lopez and UMRO.
As such, the Court finds that the language of the Settlement Agreement does not evidence the parties’ intent to release Defendants Lopez and UMRO upon payment of the settlement amount.
The
motion to enforce the settlement agreement is DENIED.