Judge: Frank M. Tavelman, Case: 24BBCV00115, Date: 2024-11-08 Tentative Ruling

Case Number: 24BBCV00115    Hearing Date: November 8, 2024    Dept: A

LOS ANGELES SUPERIOR COURT

NORTH CENTRAL DISTRICT - BURBANK

DEPARTMENT A

MOTION TO ENFORCE SETTLEMENT

NOTICE:

The Court is not requesting oral argument on this matter.  The Court is guided by California Rules of Court, Rule 3.1308(a)(1) whereby notice of intent to appear is requested.  Unless the Court directs argument in the Tentative Ruling, no argument is requested and any party seeking argument should notify all other parties and the court by 4:00 p.m. on the court day before the hearing of the party’s intention to appear and argue.  The tentative ruling will become the ruling of the court if no argument is received.  

Notice may be given either by email at BurDeptA@LACourt.org or by telephone at (818) 260-8412.

ALLEGATIONS: 

Valik Vartan (Plaintiff) brings this action against Kia Motors America, Inc. (Kia). Plaintiff alleges that Kia sold him a defective 2020 Kia Optima and thereafter refused to repurchase the vehicle in violation of the Song-Beverly Act.

Before the Court is a Motion to Enforce Settlement brought by Plaintiff. Plaintiff argues that Kia’s counsel initially agreed to a settlement in writing but thereafter refused to comply. Kia opposes the motion, arguing that no such writing exists.  

ANALYSIS: 

I.                    LEGAL STANDARD 

Pursuant to C.C.P. § 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." "Section 664.6 was enacted to provide a summary procedure for specifically enforcing a settlement contract without the need for a new lawsuit." (Chan v. Lund (2010) 188 Cal.App.4th 1159, 1165-66 [quoting Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 809-10.]) Under C.C.P. § 664.6, a court may determine disputed factual issues regarding the settlement agreement and even permits the court "to entertain challenges to the actual terms of the stipulation, that is, whether there actually was a settlement … and to interpret the terms of the settlement agreement." (Fiore v. Alvord (1985) 182 Cal.App.3d 561, 566.)

The Court notes that C.C.P. § 664.6 was amended in 2021 to clarify the Legislature’s intent that the statutes use of the word “parties” included attorney representatives. (See Greisman v. FCA US, LLC (2024) 103 Cal.App.5th 1310.)

II.                 MERITS

Facts

On May 17, 2024, Kia’s counsel emailed Plaintiff’s counsel stating the following:

We have authority to repurchase this vehicle and to pay reasonable fees and costs. I would like to confirm whether Plaintiff still intends to dispose of the vehicle. Our repurchase estimate is $28,500. We will need lender records to confirm the lease payments and apparently Plaintiff paid cash for the purchase. Let me know how Plaintiff intends to proceed.

(Bravo Decl., Exh. A at p. 13.)

Between May 22 and June 13, Plaintiff’s counsel then sent Kia’s counsel the requested lease payments and other financial information. (Bravo Decl., Exh. A at pgs. 11-12.) This occurred over the course of three emails. (Id.) On June 13, Kia’s counsel responded, “Thank you for the information.” (Id. at p. 10.)

On June 13, June 19, and June 27, Plaintiff’s counsel sent emails asking Kia’s counsel for an update on the “repurchase offer breakdown”. (Id. at pgs. 8-10.)  On June 27, Kia’s counsel responded with their own calculations of the repurchase offer. (Id. at p. 8.) Plaintiff’s counsel responded with “These calculations are confirmed. Offer accepted.” (Id. at p. 7.)

On July 3, Kia’s counsel sent a proposed release agreement and asked that Plaintiff’s counsel track any revisions in Microsoft Word. (Id. at p.6.) On the same day, Plaintiff’s counsel sent a redlined version of the agreement back. (Id.) A review of the redlined agreement shows that Plaintiff’s counsel requested a 30 day repayment, rather than Kia’s proposed 90 days. (Bravo Decl., Exh. B at p. 4.) Among other minor changes, Plaintiff’s counsel also proposed essentially removing the non-disclosure clause. (Id. at p. 9.) This redlined agreement is not signed by either party.

On August 2, Kia’s counsel asked Plaintiff’s counsel if they could not just use a release they used in a previous matter between the firms. (Bravo Decl., Exh. A at p. 5.) Plaintiff’s counsel responded that the redlined agreement was essentially the same. (Id. at p. 4.) Kia’s counsel countered that the payment periods were different. (Id.) No direct response to this email from Kia’s counsel is included.

On August 5, August 9, August 20, and August 27, Plaintiff’s counsel sent emails to Kia’s counsel requesting an update on the proposed repurchase. (Id. at pgs. 1-4.) Kia’s counsel admits that they did not respond to these emails. (Proudfoot Decl. ¶ 5.)

Discussion

The question presented by the instant motion is whether the email exchange between Plaintiff’s counsel and Kia’s counsel constitutes a writing signed by the parties within the meaning of C.C.P. § 664.6. This requires the Court to balance the generally applicable principles of contract law with the stringent requirements of C.C.P. § 664.6. As will be explained below, the Court finds that these communications do not constitute an agreement signed by Kia’s counsel.

Contract law has long recognized that an agreement may be enforceable prior to its enshrinement in a formal agreement. “When parties intend that an agreement be binding, the fact that a more formal agreement must be prepared and executed does not alter the validity of the agreement” (Blix Street Records, Inc. v. Cassidy (2010) 191 Cal.App.4th 39, 48.) On the other hand, because a motion under C.C.P. § 664.6 is akin to a summary proceeding, strict compliance with the statutory requirements is necessary. (Sully-Miller Contracting Co. v. Gledson/Cashman Construction, Inc. (2002) 103 Cal.App.4th 30, 37.) On its face, C.C.P. § 664.6 seems to contradict the traditional understanding that an enforceable agreement can be reached prior to the signing of a formal agreement. Examining the cases of J.B.B. Investment Partners, Ltd. v. Fair (2014) 232 Cal.App.4th 974 (J.B.B. 2014) and J.B.B. Investment Partners Ltd. v. Fair (2019) 37 Cal.App.5th 1 (J.B.B. 2019) helps to clarify this apparent discrepancy.

In J.B.B. 2014, an investor moved to enforce a settlement agreement between various LLCs and their founding member, Fair. (J.B.B. 2014 supra, 232 Cal.App.4th at 977.) In ruling that the settlement was enforceable, the trial court found that an email exchange between Fair and counsel for Plaintiff’s constituted a signed agreement under C.C.P. § 664.6 (Id. at 982.) The Court of Appeal reversed, holing that for an electronic signature to satisfy the § 664.6 requirement that the agreement be signed by the parties, there must be evidence that the parties agreed to conduct a transaction by electronic means and that the signing party intended with his or her printed name to sign the electronic record, in accordance with California Uniform Electronic Transactions Act (UTEA; Civ Code § 1633.1 et seq.). (Id. at 988-990.) The Court of Appeal determined that the trial court lacked the substantial evidence that Fair intended his email sign-off to be a signature under the UETA. (Id.) Simply printing ones name at the end of an email was not sufficient to create a settlement agreement enforceable under C.C.P. § 664.6. (Id. at 989.)

J.B.B. 2019 concerned the same parties as J.B.B. 2014, though this time the attempt to enforce the settlement was not made pursuant to C.C.P. § 664.6. Instead, the LLC’s sought to enforce the settlement agreement through the traditional method of bringing an independent lawsuit for the enforcement of contract. (J.B.B. 2019 supra, 37 Cal.App.5th at 7.) In making its ruling, the Court of Appeal was clear that this procedural difference allowed for the more liberal application of general contract principles. The court rejected Fair’s argument that J.B.B. 2014 already found his intent to form binding agreement was lacking. (Id. at 13.) The court clarified that J.B.B. 2014 did not preclude the court from considering whether Fair’s emails signaled an intent to enter into a binding agreement under general contract law. (Id.) The court noted specifically that J.B.B. 2014 expressed “no opinion as to whether plaintiffs can enforce the July 4 offer by another method, such as a motion for summary judgment for breach of contract.” (J.B.B. 2014 supra at 991.)

Applying the principles of J.B.B. 2014 and J.B.B. 2019 to the instant case, the Court finds there is insufficient evidence that Kia’s counsel intended to enter into a binding agreement. The release presented as Exhibit B by Plaintiff’s counsel is not signed. As such, the only signature which could form the basis for an enforceable settlement agreement under C.C.P. § 664.6 would be the email signature of Kia’s counsel. As J.B.B. 2014 makes clear, the email signature must be accompanied by evidence of an intent to form an agreement.  Furthermore, the email does not appear to contain an electronic signature under the Uniform Electronic Transaction Act, but what appears to be an automatic signature line that appears to be autogenerated for the email. (Civ. Code §1633.1 et. seq.)

Here, that intent is lacking. None of the correspondence from Kia’s counsel contains any wording which could be construed as an acceptance. It is apparent from the back and forth between Counsel that the repurchase offer left a good deal of the agreement’s terms to be decided at a later date. Further, the response of Kia’s counsel to the redlined version of the release reveals the parties disagreed as to the terms of repayment and non-disclosure. There is no evidence from the email exchange to indicate that Kia’s counsel intended their email signature to be anything more than a standard sign-off, the likes of which is included in nearly every email communication from an attorney at this point. While these emails could be evidence of mutual consent under common contract law, they do not constitute a signed agreement within the context of C.C.P. § 664.6

This Court has not been shy in granting motions to enforce settlement brought under C.C.P. § 664.6, even when the basis for the agreement is an email signature of a party’s attorney. Regardless, the cases in which the Court has previously granted such judgments are ones in which the party seeking to avoid enforcement has signaled its intent to be bound via an email with language unequivocally stating they accept the offer. The distinguishing factor in this case is that the emails from Kia’s counsel express trepidation, rather than consent to be bound.

Accordingly, the motion to enforce settlement is DENIED.

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RULING:

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records. 

ORDER 

Valik Vartan’s Motion to Enforce Settlement came on regularly for hearing on November 8, 2024, with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows: 

THE MOTION TO ENFORCE SETTLEMENT IS DENIED.

TRIAL SETTING CONFERENCE IS SET FOR MARCH 11, 2025.

KIA TO PROVIDE NOTICE.   

IT IS SO ORDERED. 

DATE:  November 8, 2024                            _______________________________ 

                                                                        F.M. TAVELMAN, Judge 

Superior Court of California 

County of Los Angeles