Judge: H. Jay Ford, III, Case: 22SMCV00511, Date: 2023-02-14 Tentative Ruling

Case Number: 22SMCV00511    Hearing Date: February 14, 2023    Dept: O

Case Name:  Zomber, et al. v Panagiotis, et al.

SUBJECT:                 MOTION TO ENFORCE SETTLEMENT AGREEMENT PER CCP §664.6

MOVING PARTY:   Plaintiffs Peter J. Zomber and Law Offices of Peter J. Zomber

RESP. PARTY:         Defendant Matthew Panagiotis

TENTATIVE RULING

            Plaintiffs Peter J. Zomber and Law Offices of Peter J. Zomber’s Motion to Enforce Settlement Agreement per CCP §664.6 is GRANTED.

            Plaintiff seeks entry of judgment under the parties November 29, 2022 settlement agreement.  See Plaintiffs’ Motion, Ex. 1.  Plaintiff did not receive the payment due on December 1, 2022 until December 2, 2022.  See Motion, Dec. of P. Zomber, ¶5.  Plaintiff seeks entry of the full amount due under the settlement agreement ($27,500.01) based on Section 2.2 of the agreement, which accelerates all payments due if payment is not received on the first of each month.  Id. at ¶7, Ex. 1, Section 2.2. 

            Defendant concedes that the December 1, 2022 payment was not received by Plaintiffs until December 2, 2022.  See Opposition, Dec. of J. Kjar, ¶3.  Defendant testifies that his office did not send the payment on November 30, 2022 as planned, because a staff member failed to follow counsel’s instructions and FedEx’d the check on December 1, 2022.  Id.  Defendant argues, however, that (1) if the payment was untimely, it was due to the mistake of counsel and Defendant is entitled to discretionary relief from the judgment requested by Plaintiffs under CCP §473(b); and (2) the “mailbox rule” applies, so that the obligation was fulfilled at the time Defendant placed payment in the mail with FedEx.

            Defendant frames the request as relief from the judgment requested by Plaintiff.  However, no judgment has been entered.  Defendant is not seeking relief from a judgment, dismissal or ordered that has been entered against him, nor does the statute indicate it relief can be used prophylactically. 

            Defendant is seeking relief from a breach of contract pursuant to CCP §473(b), not a judgment, dismissal or order.   Defendant fails to cite any authority applying CCP §473(b) to relieve a party of his breach of contract.  The policy reasons for relief under CCP §473(b) are not present here, because relief from Defendant’s breach of contract would not allow for trial on the merits. Relief would merely restore the financial benefit of the settlement agreement to Defendant by excusing his undisputed breach.  “It is well settled that appellate courts have always been and are favorably disposed toward such action upon the part of the trial courts as will permit, rather than prevent, the adjudication of legal controversies upon their merits.  Thus, the provisions of section 473 of the Code of Civil Procedure are to be liberally construed and sound policy favors the determination of actions on their merits.”  Zamora v. Clayborn Contracting Group, Inc. (2002) 28 Cal.4th 249, 255–256 (typographical error in settlement offer was “excusable” for purposes of discretionary relief and discretionary relief is not limited to involuntary judgments or dismissals). 

            Mandatory relief under CCP §473(b) only applies to defaults, default judgments and dismissals.  See Henderson v. Pacific Gas & Electric Co. (2010) 187 Cal.App.4^th 215, 226.  Defendant is not seeking relief from any default, default judgment or dismissal.  At best, Defendant is seeking relief from a judgment entered pursuant to stipulation. 

Discretionary relief under CCP §473(b) only applies to relieve a party from a judgment, dismissal or order entered due to excusable neglect or reasonable mistake.  “The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect.”  CCP §473(b). 

Here, the mistake or neglect was on the part of Defense counsel.  The “discretionary relief provision of section 473 only permits relief from attorney error fairly imputable to the client, i.e., mistakes anyone could have made.  See Zamora v. Clayborn Contracting Group, Inc. (2002) 28 Cal.4^th 249, 258.  In other words, “neglect is excusable if a reasonably prudent person under similar circumstances might have made the same error.”  Austin v. LAUSD (2016) 244 Cal.App.4^th 918, 929.  It does not apply to conduct below the professional standard of care for attorneys because “to hold otherwise would be to eliminate the express statutory requirement of excusability and effectively eviscerate the concept of attorney malpractice.”  Zamora, supra, 28 Cal.4^th at 258. 

Defense counsel was responsible for keeping track of applicable deadlines.  See Munroe v. Los Angeles County Civil Service Com. (2009) 173 Cal.App.4^th 1295, 12797, 1303.  Based Defense counsel’s declaration and the internal email exchanges with staff, Defense counsel knew it was crucial that Plaintiffs receive the check by December 1, 2022.  See Opposition, Dec. of J. Kjar, ¶¶2-3; Dec. of J. O’Neill, ¶2, Ex. A.  Counsel instructed Jessica O’Neill to send the checks by overnight mail on November 30, 2022 so that it would be received by December 1, 2022, as required under the settlement agreement. Despite knowledge of how crucial it was that payment be received by December 1, 2022, the task of mailing out the checks was delegated from O’Neill to Stuart to Cristal Ramirez.  Somewhere along the line of delegation, counsel failed to put the checks in the mail until December 1, 2002 and no one discovered the error until December 2, 2022 after Plaintiffs’ counsel demanded to know where the checks were.  See Opposition, Dec. of J. O’Neill, ¶4.  Defense counsel’s lack of oversight of the mailing of the checks, including failing to simply confirm with staff that the checks had been mailed, was not excusable neglect or error given how crucial the deadline was.  See Henderseon v. Pacific Gas & Electric Co., supra, 187 Cal.App.4^th at 231 (plaintiff’s counsel was responsible for preparing plaintiff’s opposition to summary judgment and supervising paralegal who was assigned task to prepare and file timely opposition; counsel’s negligent failure to supervise paralegal was inexcusable neglect).  Defense counsel was fully aware of Section 2.2’s acceleration clause in the event any payment was not received on time. 

            Defendant also fails to establish that the “mailbox rule” applies.  “When a creditor directs a debtor to mail payment, it is deemed that the payment is made when it is deposited in the mail. Otherwise, the payment is not effective until received by the creditor.”  Sleep EZ v. Mateo (2017) 13 Cal.App.5th Supp. 1.  The settlement agreement does not direct Defendant to mail payment.  The Settlement Agreement states, “Payments shall be sent to Zomber at the following address, unless otherwise specific in writing by Zomber…If payment…is not received on the due date, the total sum of the remaining payment sis then due and payable immediately.”  See Motion, Ex. A, Settlement Agreement, Sections 2.1 and 2.2.  There is nothing in the applicable sections directing that payment be “sent” by mail.  In addition, Section 2.2 explicitly states that the payment must be “received” on the due date. 

            Based on the undisputed facts, Panagiotis breached the Settlement Agreement by failing to ensure receipt of payment by December 1, 2022, the due date agreed upon by the parties.  Panagiotis admittedly mailed the payment December 1, 2022 through FedEx, making it impossible for Plaintiffs to receive payment by the due date.  Plaintiffs are entitled to entry of judgment in the full amount of Defendant’s debt—$26,666.78, which reflects a credit of $3,33.32.

            Plaintiffs also ask for attorney’s fees and costs to enforce the Settlement Agreement.  However, Plaintiff Peter Zomber is representing himself as Plaintiff and he is also representing The Law Office of Peter Zomber, a legal corporation, in his capacity as an employee of The Law Office of Peter Zomber.  The captions of the pleadings and this motion list Peter Zomber of The Law Office of Peter Zomber as counsel.  Zomber testifies that he is seeking to recover fees based on the time he personally spent on the case. 

Zomber cannot recover fees for representing himself as an individual.  “It is settled that Gorman, the client, would not be able to recover contractual attorney fees had he been represented by Gorman, a sole practitioner. It is also settled that, if the Gorman firm had represented itself in litigation, it would not be able to recover for its own attorney fees.”  Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 93. 

Likewise, The Law Office of Peter Zomber cannot recover fees for the time spent by its employee, Peter Zomber, to represent the firm in this action.  “Here, unlike PLCM Group and Gilbert, but like Trope, there is no attorney-client relationship between KLA and its individual attorneys. The individual KLA attorneys are not comparable to in-house counsel for a corporation, hired solely for the purpose of representing the corporation. The attorneys of KLA are the law firm's product. When they represent the law firm, they are representing their own interests. As such, they are comparable to a sole practitioner representing himself or herself. Where, as in Gilbert, an attorney is sued in his or her individual capacity and he obtains representation from other members of his or her law firm, those other members have no personal stake in the matter and may, in fact, charge for their work. Not so with a law firm that is sued in its own right and appears through various members.”  Witte v. Kaufman (2006) 141 Cal.App.4^th 1201, 1211. 

            The mere fact that an attorney has chosen to incorporate does not change the analysis.  “We recognize that the law allows for professional law corporations. (Corp.Code, §§ 13400, et seq.; Bus. & Prof.Code, §§ 6160, et seq.) In our opinion, the rationale of Trope applies to a lawyer who is representing himself in litigation, whether or not that lawyer has chosen to incorporate. Though his corporation may send the bill, the same person is the attorney and the client. When the client is also the chief executive officer, chief financial officer, and president of the corporation, there is the same lack of a true attorney-client relationship as with the members of the law firm representing the firm in Witte v. Kaufman, supra, 141 Cal.App.4th 1201, 46 Cal.Rptr.3d 845.”  Gorman, supra, 178 Cal.App.4^th at 95. 

            Plaintiffs’ request for fees is denied.  Plaintiffs are entitled, however, to recover costs incurred in connection with this Motion.  Plaintiffs incurred $61.65 in costs on this motion. 

            Plaintiffs’ Motion to Enforce Settlement Agreement is GRANTED.  Judgment is entered in the amount of $26,666.78, plus costs in the amount of $61.65.