Judge Deirdre Hill, Case 20TRCVP00101 2023-01-18 Tentative Ruling

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Joint Motion to Enforce Settlement and for Prevailing Party Attorneys’ Fees and Costs and to Re-Set Dismissal Review Hearing Date Pending Motion Resolution

The motion is DENIED. The OSC re dismissal will remain set for February 24, 2023.

On June 12, 2020, plaintiffs Davon Dean, Hugo Aceves, and Juan Abel Gomez filed a complaint against Lennox School District, Estate of Kent Taylor, deceased, and Janet Taylor, successor in interest of Kent Taylor for (1) sexual harassment quid pro quo, (2) hostile work environment harassment, (3) failure to prevent harassment, (4) intentional infliction of emotional distress, and (5) negligent infliction of emotional distress. Plaintiffs allege that they are three males and employees of defendant who were sexually harassed by the former superintendent of the Lennox School District.

On February 23, 2021, plaintiffs filed a request for dismissal as to estate of Kent Taylor and Janet Taylor.

On September 29, 2022, defendant Lennox School District filed a notice of conditional settlement, stating that a request for dismissal would be filed no later than November 11, 2022.

CCP §664.6 states: “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.”

“A trial court, when ruling on a section 664.6 motion, acts as a trier of fact. Section 664.6’s ‘express authorization for trial courts to determine whether a settlement has occurred is an implicit authorization for the trial court to interpret the terms and conditions to settlement.’” Skulnick v. Roberts Express, Inc. (1992) 2 Cal. App. 4th 884, 889 (citation omitted).

CCP §187 states: “When jurisdiction is, by the Constitution or this Code, or by any other statute, conferred on a Court or judicial officer, all the means necessary to carry it into effect are also given; and in the exercise of this jurisdiction, if the course of proceeding be not specifically pointed out by this Code or the statute, any suitable process or mode of proceeding may be adopted which may appear most conformable to the spirit of this Code.”

Plaintiffs request that the court enforce their settlement agreement by finding a material breach and thus, defendant should pay prevailing party attorneys’ fees and costs as against defendant Lennox School District, pursuant to CCP §664.6, in the amount of $14,673.31.

Plaintiffs argue that they “are entitled under the settlement agreement to be compensated for the steps they were forced to take to secure late payment from Lennox.” Under the settlement agreement, defendant agreed to pay the sum of $4.5 million to plaintiffs and that “[p]ayment shall be issued within 30 days of full execution of” the agreement. Agreement, ¶3. “For its part, Defendant represents and warrants that it has authority to commit to the payment, referenced in paragraph 3 above, to be issued on its behalf by its insurer ASCIP, within 30 days of the full execution of this Agreement.” Id., ¶18. Further, under “Enforcement Costs,” the parties agree that in the event one party breaches any provision of this agreement, the party “deemed prevailing shall be entitled to reimbursement of costs and reasonable attorneys’ fees incurred in conjunction with enforcement of this Agreement. The Los Angeles Superior Court shall retain jurisdiction to enforce the terms of this Agreement pursuant to California Code of Civil Procedure section 664.6.” Id., ¶14. Plaintiffs note that defendant drafted the settlement agreement, including the 30-day deadline.

Plaintiffs contend that the settlement agreement was executed on October 11, 2022, and the due date for payment was November 11, 2022. Plaintiffs assert that at the 30-day mark, plaintiffs’ counsel contacted defense counsel to inquire as to the payment. Defense counsel indicated that payment would be issued the following Tuesday or Wednesday. When no payment arrived, defense counsel indicated that payment would arrive per tracking information on November 18. Settlement checks arrived on November 18 and were at that point subject to a bank hold of approximately two weeks. See David Lavine decl.

Plaintiffs cite to 10 CCR section 2695.7(h), contending that defendant’s insurer is in violation of this regulation. Under this section, “upon receipt of a properly executed release, every insurer, . . . shall immediately, but in no event more than 30 calendar days later, tender payment . . . .”

Thus, plaintiffs argue, defendant materially breached the settlement agreement by making payment eight days late.

In opposition, defendant argues that the motion is moot because of its substantial compliance with the settlement agreement. Plaintiffs have been paid, “albeit a few days late” by defendant’s insurer. Further, defendant argues, plaintiffs’ acceptance of the benefits of the settlement operates as an accord and satisfaction as well as a waiver of any claim that full and final payment has not been made. Defendant also argues that plaintiffs have not shown why the late payment is not merely a de minimus deviation from the settlement agreement and that a minor delay in payment was not a breach of the settlement agreement as the delay was not unreasonable. Defendant asserts that it exercised its best efforts to assure timely payment of the settlement and it was only due to oversight that the funds were not timely transmitted. Defendant contends that even if it had received some indication that the payments were going to be issued “slightly late, it had no ability to timely issue the payments itself.”

Defendant explains that the adjuster for Alliance of Schools for Cooperative Insurance Programs (“ASCIP”), defendant’s insurer, requested W9s from plaintiffs on October 13, 2022, in order to process requests for the settlement checks and plaintiffs’ counsel provided them on October 18, 2022. On November 10, 2022, after plaintiffs’ counsel inquired as to the status of payment, the adjuster discovered that due to oversight, he had not requested the settlement checks. On November 10, the adjuster began preparation of the check requests and advised the financial department to be on alert and ready to expedite the checks as soon as he could complete the requests. The adjuster deviated from the process by which ASCIP check requests must be processed through the LA County Office of Education to avoid further delay and took steps to fund the settlement checks directly through ASCIP to expedite the transmittal of the checks. The Claims Technician, however, was out the next day for Veteran’s Day, and the check requests could not be processed until the following week. Further, the adjuster had some confusion over whether the attorneys’ fees should be included in the checks versus being included in a separate check. He also encountered an internal financial issue with regard to the check requests based upon the amounts of the checks. After those issues were resolved, on November 16, 2022, the checks were issued and processed for delivery directly to plaintiffs’ counsel. Defense counsel supplied the tracking information to plaintiffs’ counsel on November 17, 2022. On November 18, 2022 plaintiffs’ counsel acknowledged receipt of the settlement checks. See declarations of Richard Valero and Deborah Lee Germain.

Defendant also argues that the court did not retain jurisdiction to enforce the settlement agreement because reference in the settlement agreement to CCP §664.6 by itself unaccompanied by an actual request in writing by the parties or orally before the court is insufficient to confer jurisdiction on the court to enforce the settlement agreement. See Mesa RHF Partners, L.P. v. City of Los Angeles (2019) 33 Cal. App. 5^th 913, 918.

Defendant further argues that any duty under the agreement was discharged by plaintiffs’ breach of the agreement in failing to file the request for dismissal. Defendant also contends that plaintiffs’ attorney’s fees and costs were included within the settlement payment and such obligation was fully satisfied.

The court finds that it has jurisdiction under CCP §664.6. Plaintiffs made the request during the pendency of the case and presented a writing (settlement agreement) that contained a CCP §664.6 provision. See Mesa RHF Partners, supra, at 917. The court also finds that defendant has performed under the settlement agreement by making payment to plaintiffs and thus the court declines to enter judgment. The court does not make any findings as to whether the settlement agreement was materially breached, whether plaintiffs are the prevailing party, or whether defendant has any defenses for the delay in payment. Plaintiff is seeking to recover attorney’s fees and costs for its enforcement of the settlement agreement, and not for the court to enforce the settlement agreement.

Motion
for Dismissal Pursuant to CRC Rule 3.1385 and Request for Sanctions Pursuant to
CCP §128.5

The motion is DENIED. The OSC re dismissal will remain on calendar
for February 24, 2023.

On June 12, 2020, plaintiffs Davon
Dean, Hugo Aceves, and Juan Abel Gomez filed a complaint against Lennox School District,
Estate of Kent Taylor, deceased, and Janet Taylor, successor in interest of
Kent Taylor for (1) sexual harassment quid pro quo, (2) hostile work
environment harassment, (3) failure to prevent harassment, (4) intentional
infliction of emotional distress, and (5) negligent infliction of emotional
distress. Plaintiffs allege that they
are three males and employees of defendant who were sexually harassed by the
former superintendent of the Lennox School District.

On February 23, 2021, plaintiffs
filed a request for dismissal as to estate of Kent Taylor and Janet Taylor.

On September 29, 2022, defendant
Lennox School District filed a notice of conditional settlement and that a
request for dismissal would be filed no later than November 11, 2022.

Cal. Rules of Court, Rule
3.1385: “(a)(1) If an entire case is
settled or otherwise disposed of, each plaintiff or other party seeking
affirmative relief must immediately file written notice of the settlement or
other disposition with the court and serve the notice on all parties . . . .
(c)(1) If the settlement agreement conditions dismissal of the entire case on
the satisfactory completion of specified terms that are not to be performed
within 45 days of the settlement, . . . the notice of conditional settlement
served and filed by each plaintiff or other party seeking affirmative relief
must specify the date by which the dismissal is to be filed. If the plaintiff or other party required to
serve and file a request for dismissal within 45 days after the dismissal date
specified in the notice does not do so, the court must dismiss the entire case
unless good cause is shown why the case should not be dismissed. (2) If the plaintiff or other party required
to serve and file a request for dismissal within 45 days after the dismissal
date specified in the notice does not do so, the court must dismiss the entire
case unless good cause is shown why the case should not be dismissed. . . .
(e) If a party who has served and filed
a notice of settlement under (a) determines that the case cannot be dismissed
within the prescribed 45 days, that party must serve and file a notice and a
supporting declaration advising the court of that party's inability to dismiss
the case within the prescribed time, showing good cause for its inability to do
so, and proposing an alternative date for dismissal. The notice and a supporting declaration must
be served and filed at least 5 court days before the time for requesting
dismissal has elapsed. If good cause is
shown, the court must continue the matter to allow additional time to complete
the settlement. The court may take such
other actions as may be appropriate for the proper management and disposition
of the case.”

Under CCP §128.5, “(a) A trial court
may order a party, the party’s attorney, or both to pay any reasonable
expenses, including attorney’s fees, incurred by another party as a result of
bad-faith actions or tactics that are frivolous or solely intended to cause
unnecessary delay. This section also applies to judicial arbitration
proceedings under Chapter 2.5 (commencing with Section 1141.10) of Title 3 of
Part 3. (b)(1) ‘Actions or tactics’
include, but are not limited to, the making or opposing of motions or the
filing and service of a complaint or cross-complaint . . . . (2) ‘Frivolous’
means totally and completely without merit or for the sole purpose of harassing
an opposing party. . . .”

Defendant
Lennox School District requests that the court dismiss the case with prejudice pursuant
to Cal. Rules of Court, Rule 3.1385 and for an order awarding sanctions against
plaintiffs and their counsel in the amount of $2,000 for the reasonable costs
and attorney’s fees with bringing the motion pursuant to CCP §128.5.

Defendant
argues that plaintiffs failed to file a request for dismissal with prejudice in
accordance with the settlement agreement and the notice of settlement.

Defendant
filed a notice of settlement stating that a request for dismissal was to be
filed by November 11, 2022.

Under
the settlement agreement, “After receipt and successful transaction of the
settlement funds described in Paragraph 3 of this Agreement, Plaintiffs shall
file, within five business days, a Request for Dismissal with prejudice of the
Lawsuit and serve on District a copy of such Dismissal by email.” See Deborah Lee-Germain decl., Exh. A.

Defendant
contends that plaintiffs’ counsel acknowledged receipt of the settlement checks
on November 18, 2022, but has not filed a request for dismissal and does not have
good cause for failing to do so.

In
opposition, plaintiffs argue that they have good cause because of their motion
to enforce the settlement agreement in light of defendant’s payment of the
settlement funds after the due date.

The
court finds that plaintiffs did not violate Rule 3.1385 in light of their
motion to enforce settlement agreement.

As
to defendant’s request for sanctions under CCP §128.5, the court finds that
neither plaintiffs nor plaintiffs’ counsel engaged in bad-faith actions or tactics
by failing to file a request for dismissal.
Further, as argued by plaintiffs, the request is defective as it was not
filed as a separate motion. CCP
§128.5(f)(1)(A).