Judge: Edward B. Moreton, Jr., Case: 23SMCV05468, Date: 2024-08-12 Tentative Ruling

Case Number: 23SMCV05468    Hearing Date: August 12, 2024    Dept: 205

Superior Court of California

County of Los Angeles – West District

Beverly Hills Courthouse / Department 205

BACKGROUND

Plaintiff Sheila Nasre and Defendant Benham Kazemi Movahed bought a property located at 603 North Doheny Drive, #2B, Beverly Hills, CA 90210 (“Property”) with the intent of cohabitating there together and holding it for long-term investment.  Shortly after moving in, Plaintiff and Defendant began a brief romantic relationship which Defendant claims to have ended.  Plaintiff thereafter decided she no longer wanted to own the Property with Defendant and initiated a partition action.  Defendant, however, desires to maintain the Subject Property rather than having it sold.  Defendant currently resides in the Subject Property, while Plaintiff moved out.  She continues paying her half of the mortgage obligation, which remains in both of their names. (Benham Decl. at ¶3).  Plaintiff thereafter filed a complaint for partition.

The parties entered into a Settlement Agreement (“Agreement”) on February 21, 2024.  (Ex. B to Schiffer Decl.).  The Agreement provided that “Defendant will have ninety (90) days from the full execution of this Agreement [by May 21, 2024] to buy out Plaintiff’s interest by paying Plaintiff $175,334.95 and one hundred twenty (120) days from the full execution of this Agreement [by June 21, 2024] to transfer title from Plaintiff and assume/refinance the existing Chase loan.”  (Id.)  According to paragraph 24 of the Agreement, “time is of the essence.  Timely performance is an essential obligation under this agreement.”  (Id.)

Loan assumption was desirable to Defendant (who does not wish to sell the Subject Property) since the interest rate at the time the parties purchased the Subject Property was substantially lower than current interest rates.  Because of Defendant’s concerns that factors beyond his control might affect the timing of those processes, the parties incorporated a cooperation clause into the Agreement. (Ex. B Schiffer Decl., ¶2).

Since the Agreement was entered into, the loan assumption process has taken longer than expected.  Chase has provisionally approved the loan for inclusion in its loan assumption program, but the application remains pending final review and approval by Chase’s underwriter which will likely need an additional 60-90 days.  (Benham Decl. ¶5.)

The source of the payoff funds to Plaintiff will be Defendant’s brother, Shahram Kazemi Movahed (who will also be assuming the loan with Defendant and will be on title with Defendant once the process is complete and Plaintiff is removed from title).  (Shahram Decl. ¶2.)  However, because Shahram will not be on title until the loan assumption process is complete, Shaham was uncomfortable paying the buyout funds since he has no current interest in the Property, and therefore no protection.  (Shahram Decl. ¶3; Benham Decl. ¶4). 

On May 20, 2024, counsel for Defendant shared this development with counsel for Plaintiff and Defendant offered to pay either interest on the buyout funds or Plaintiff’s half of the mortgage payment for the next 90 days so that the loan assumption process can be completed.  Defendant also offered to simultaneously list the property for sale (with no offers accepted for 90 days) so that there would be no lost time under the listing provision of the Agreement.  (Schiffer Decl. ¶6.)  Plaintiff refused “any extensions.”  (Schiffer Decl. ¶6, Ex. C).

Defendant contends this position is counter to the language of the Agreement which imposes cooperation obligations on the parties in Paragraph 2 as follows: “In order to facilitate the buyout and loan assumption process, Plaintiff and defendant must comply with any reasonable request of any lenders, agents, insurance entities, HOA, county tax assessor, or anyone else reasonably involved in the buyout and loan assumption process.  The parties shall also cooperate with one another in the event that one party tries to assume/refinance the loan from Chase.”  

Defendant also claims Plaintiff has failed to pay her portion of the past due HOA dues, property tax, and homeowners insurance despite repeated requests for those payments by Defendant.  (Benham Decl. ¶ 6).  Defendant argues this violates Paragraph 4 of the Agreement which states, “The buyout amounts do not include HOA payments and taxes of the property from January 1, 2024. The payments from January 1, 2024, shall be split equally between the parties.” (emphasis added).  Defendant further claims Plaintiff’s failure to pay violates Paragraph 25 which states that “the parties shall jointly pay/obtain insurance for the subject property in a timely manner to satisfy the loan condition of Chase.” 

This hearing is on Defendant’s motion to enforce settlement and for attorneys’ fees.  Defendant argues that the Court should enforce the settlement agreement pursuant to Code Civ. Proc. §664.6, and pursuant to the terms of the Agreement, the Court should require that (1) Plaintiff allow an additional 90 days in which Defendant may buyout Plaintiff’s interest in the Property and allow for the loan assumption to be completed in exchange for Defendant paying either interest on the buyout funds or Plaintiff’s half of the existing mortgage obligation during that time; (2) Plaintiff pay her share of the property tax, insurance and HOA fees, and (3) Plaintiff pay Defendant’s attorney’s fees and costs as allowed under the Agreement. 

LEGAL STANDARD

Code Civ. Proc. §664.6 provides, in pertinent part, as follows: “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.”  

In hearing a Code Civ. Proc. §664.6 motion, the trial court may receive evidence, determine disputed facts, and enter terms of a settlement agreement as a judgment.  (Bowers v. Raymond J. Lucia Companies, Inc. (2012) 206 Cal.App.4^th 724, 732.)  The Court may also receive oral testimony in addition to declarations. (Kohn v. Jaymar-Ruby, Inc. (1994) 23 Cal.App.4^th 1530, 1533.) 

The Court may interpret the terms and conditions of the settlement (Fiore v. Alvord (1985) 182 Cal.App.3d 561, 566), but the Court may not create material terms of a settlement, as opposed to deciding what terms the parties themselves have previously agreed upon.   (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 810). 

Strict compliance with the statutory requirements is necessary before a court can enforce a settlement agreement under this statute.  (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.4^th 299, 304.)  

The settlement must include the signatures of the parties seeking to enforce the agreement, and against whom enforcement is sought.  (J.B.B. Investment Partners, Ltd. v. Fair (2014) 232 Cal.App.4th 974, 985.)  “[A] writing is signed by a party if it is signed by … [a]n attorney who represents the party.”  (Cal. Civ. Proc. Code § 664.6(b)(2).)  

DISCUSSION

Defendant asks the Court to require that Plaintiff allow an additional 90 days to complete the assumption process in exchange for Defendant paying either interest on the buyout funds or Plaintiff’s half of the existing mortgage obligation during that time.  This motion runs counter to the plain language of the settlement, requiring Defendant to pay Plaintiff $175,334.95 by May 21, 2024 and stating that time is of the essence.  The Court cannot create material terms of a settlement, as opposed to deciding what terms the parties themselves have previously agreed upon.  (Weddington Productions, Inc., 60 Cal.App.4th at 810). 

Defendant points to the cooperation clause.  But that only requires Plaintiff cooperate in the loan assumption process.  It does not countermand the requirement that Defendant pay Plaintiff $175,334.95 by May 21, 2024.  In the event that Defendant made a timely payment and then needed some more time to complete the loan assumption process, he could possibly rely on the cooperation clause.  But he failed to make the required payment to Plaintiff. 

Defendant argues that the extra time he seeks is “consistent with the time of the Partition of Real Property Act.”  But the parties set a different time schedule in the Agreement, and Defendant cites no caselaw which says that the parties cannot deviate from the time provided in the Partition of Real Property Act, as the parties did here. 

Defendant also asks the Court to require Plaintiff to pay her share of HOA dues, property tax and home insurance.  Plaintiff points out that Defendant himself has failed to pay any of these property expenses.  In any event, there is no provision in the Agreement as to when these property expenses must be made.  As neither party has made the property expenses, the Court declines to enforce these provisions of the Agreement, particularly when there is no time limit stated in the Agreement.    

As Plaintiff has not been paid, Plaintiff asks the Court enforce paragraph 2 of the Agreement which states “if Defendant is unable to buyout Plaintiff’s interest and/or refinance/assume the loan within the time set forth …. The Subject Property shall be listed on the Multiple Listing Service for sale.  The Parties agree to select the highest qualified bidding buyer within 90 days of the listing date or which 45 days of the listing date if the highest qualified bidding buyer matches or exceeds the listing price.”  (Ex. B to Schiffer Decl.)  Pursuant to paragraph 2 of the Agreement, the Court orders that the Property be listed on the Multiple Listing Service for sale. 

CONCLUSION

Based on the foregoing, the Court DENIES Defendant’s motion to enforce settlement and for attorneys’ fees.  The Court orders that the Property be listed on the Multiple Listing Service within 30 days of this Order.    

IT IS SO ORDERED.

DATED: August 12, 2024                                                    ___________________________

Edward B. Moreton, Jr.

Judge of the Superior Court