Judge: Helen Zukin, Case: 21SMCV00876, Date: 2022-10-27 Tentative Ruling
Case Number: 21SMCV00876 Hearing Date: October 27, 2022 Dept: 207
Background
On May 12, 2021, Plaintiff Health Club Marketing Specialist
Inc dba The Duchess Yacht Charter Service (“Plaintiff”) initiated this action
against Defendants Onboat, Inc. (“Onboat”), Kevin Wei Wang, and Bingli Wang
(collectively, “Defendants”), asserting the sole cause of action for violation
of Business and Professions Code § 17200. The operative First Amended Complaint
(“FAC”) was filed on September 13, 2021. Plaintiff alleges Defendants have been
operating, managing, chartering, or controlling boating vessels without proper
licensing or adhering to safety regulations, and, as a result, Defendants have
been able to increase their revenue. (FAC ¶¶ 29, 36.)
On August 29, 2022, the parties executed a Settlement
Agreement and Mutual Release. Plaintiff now moves to enforce this agreement,
arguing Defendants have not complied with its terms. Alternatively, Plaintiff
asks the Court to extend the discovery cut-off date in this action to permit
Plaintiff to conduct discovery to oppose motions for summary judgment
previously filed by Defendants which came off calendar following the parties’
settlement. Defendants oppose the motion, arguing they have fully complied with
the terms of the agreement.
Legal Standard
Code
Civ. Proc. § 664.6 provides “[i]f 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 motion brough under section 664.6, 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.4th 724, 732.) The Court may also
receive oral testimony in addition to declarations. (Kohn v. Jaymar-Ruby,
Inc. (1994) 23 Cal.App.4th 1530, 1533.) The Court may interpret the terms
and conditions to 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.4th 299, 304.)
Analysis
The parties acknowledge they entered into a valid settlement
agreement on August 29, 2022. (Ex. A to Stoner Decl.) The agreement requires
Onboat to make certain changes to its website. Specifically, the agreement
calls for Onboat to display a list of eight bullet points on its website which
“must be displayed and accepted by the user receiving the charter before the
reservation can be completed.” (Id. at ¶ 2(a).) The agreement specifies
that “After the above language is displayed, the user must affirmatively ‘accept’
to proceed with the reservation process. If the charterer declines to
affirmatively mark the ‘accept’ box, the reservation process shall not be
completed.” (Id.) Onboat was also required to modify the Frequently
Asked Questions (“FAQ”) portion of its website by adding the question “What
should I know about bareboat charters?” followed by the same list of eight
bullet points. (Id. at ¶ 2(b).) The agreement also requires changes to
Defendants’ charter agreement by including the same bullet points with the
additional requirement that the “charterer must sign or initial below such
language to acknowledge acceptance or the vessel will not be contracted for
charter.” (Id. at ¶ 4.)
Plaintiff argues Defendants have not modified the website as
required by paragraph 2(a) and have not modified the charter as required by
paragraph 4. The Court will discuss each section in turn.
1. Website Disclosures and Acceptance
Plaintiff acknowledges the required bullet points have been
added to Onboat’s website. However, Plaintiff argues they are improperly “presented
in the check-out cart sandwiched amid the final stage of the booking and
payment process” on the website. (Motion at 3.) Plaintiff argues the bullet
points must be displayed on their own separate package with a separate acknowledgement.
The Court finds no such requirement imposed by the settlement agreement. As set
forth above, the agreement only requires the bullet points be displayed and be
followed by a mechanism requiring the user to accept the disclosures to proceed
with the booking. Plaintiff does not dispute Onboat’s website lists the bullet
points followed by a requirement for the user to accept to proceed with the
booking. This is all that is required under the terms of the agreement.
Plaintiff argues “The disclosure font must also be the same
size as the font used to confirm the product, date, time, and price.” (Motion
at 3.) Plaintiff also asks the Court to require Onboat to either move the
disclosures up on the website and include a separate acceptance that applies only
to the disclosures, or, alternatively, create a separate website page which
only includes the bullet points and acceptance mechanism. (Motion at 4.)
Paragraph 2(a) of the settlement agreement contains no such requirements as to
font size, nor does it require the bullet points be placed at certain location
on the website or on their own separate page. (Ex. A to Stoner Decl.)
As set
forth above, the Court may not create new material terms of a settlement which
are not included in the parties’ agreement. (Weddington Productions, Inc.,
supra, 60 Cal.App.4th 793.) The settlement agreement executed by
the parties does not include any requirements as to font size or location of
the bullet point disclosures. Accordingly, the Court finds Defendants
have satisfied their obligations under the settlement agreement to add the
disclosures followed by a mechanism requiring the user to accept the
disclosures in order to proceed with the booking.
3. Charter Agreement
As for the modification of Defendants’ charter agreement, Plaintiff
acknowledges Defendants have added the required bullet points but argues they
were improperly inserted “at the end of their charter contract far removed from
the bareboat section.” (Motion at 4.) Defendants’ obligations with respect to
the modification of the charter agreement are set forth at paragraph 4 of the
settlement agreement. Paragraph 4 states in pertinent part:
[T]he contract for the charter (the
“bareboat charter agreement”) shall include the language set forth in the
bullet points in Section 2(a) above. The charterer must sign or initial below
such language to acknowledge acceptance or the vessel will not be contracted
for charter. This revision to the bareboat charter agreement shall occur within
seven calendar days of the Effective Date.
(Ex. A to Stoner Decl. at ¶ 4.) Plaintiff argues under the
settlement agreement, the bullet point disclosures should be the first, second,
or third item on Defendants’ charter agreements. (Motion at 4-5.) The Court
finds no such requirement imposed by paragraph 4. Paragraph 4 does not obligate
Defendants to place the disclosures in a particular part or area of their
charter agreements, rather it simply requires Defendants to add the disclosures
to the agreement and require the customer to sign or initial below them to
acknowledge acceptance as a precondition to chartering a vessel. Plaintiff does
not dispute that Defendants have added the bullet point disclosures to their
charter agreements and require a customer to sign or initial below them to
acknowledge acceptance. Accordingly, the Court finds Defendants have complied
with the terms of paragraph 4 of the settlement agreement in modifying their
charter agreement.
Taken overall, Plaintiff’s motion acknowledges Defendants
have complied with the letter of the settlement agreement but takes issue with
the method of Defendants’ compliance. However, Plaintiff has not put before the
Court any evidence which would suggest the parties had a meeting of the minds
regarding the method of Defendants’ compliance. The terms of the settlement
agreement are clear and unambiguous in what modifications are required of
Onboat’s website or Defendants’ charter agreements. The parties could have
included specific requirements as to how these changes would be implemented but
ultimately chose not to do so. Indeed, it appears from Defendants’ opposition
that before the parties signed the agreement, Plaintiff’s counsel was given
advanced notice of the location where Onboat intended to add the required
disclosures to its website. (McCrary Decl. at ¶ 2.) Plaintiff made no objection
to Defendants’ proposal and proceeded to sign the settlement agreement.
On such facts, the Court finds Plaintiff has not provided any
basis to read the requested terms into the settlement agreement after the fact
concerning the location or font size of the bullet point disclosures. The Court
thus DENIES Plaintiff’s motion to enforce the settlement as Plaintiff has not
demonstrated Defendants are not in compliance with the parties’ August 29,
2022, settlement agreement.
The Court similarly DENIES Plaintiff’s request to set a new
discovery cut-off date. Plaintiff’s request for a new discovery cut-off date is
premised on the Court finding no valid settlement agreement exists between the
parties. (Notice at 2.) The parties do not dispute the existence or validity of
the August 29 settlement agreement, and thus the Court has no basis to conclude
there is no valid settlement between the parties. As the case has settled,
there is no need for the Court to set a new discovery cutoff date.
4. Defendants’ Request for Attorney’s Fees
Defendants ask the Court to award them $10,000 in attorney’s
fees incurred in opposing Plaintiff’s motion pursuant to paragraph 13 of the
settlement agreement. Paragraph 13 states in pertinent part:
In the event of litigation or any other
action or proceeding between the parties to interpret or enforce this
Settlement Agreement or any part thereof or otherwise arising out of or relating
to this Settlement Agreement, the prevailing party shall be entitled to recover
its reasonable attorneys’ fees and costs. Provided, however, that any award of
prevailing party fees and costs pursuant to this provision shall not exceed
ten-thousand dollars ($10,000).
(Ex. A to Stoner Decl. at ¶ 13.)
Defendants state they have incurred $12,208 in attorney’s fees for 22.4 hours
of attorney time at $545 per hour but acknowledge their request for fees is
necessarily capped at $10,000 pursuant to the express terms of paragraph 13.
The
Court finds Defendants are entitled to an award of reasonable attorney’s fees
pursuant to paragraph 13 of the settlement agreement as Defendants have
prevailed on Plaintiff’s motion. “It is well established that the determination
of what constitutes reasonable attorney fees is committed to the discretion of the
trial court, whose decision cannot be reversed in the absence of an abuse of discretion.”¿
(Melnyk¿v. Robledo¿(1976) 64 Cal.App.3d 618, 623.)¿ In exercising its discretion,
the court should consider a number of factors, including the nature of the litigation,
its difficulty, the amount involved, the skill required in handling the matter,
the attention given, the success or failure, and the resulting judgment.¿ (Id.)
In determining the proper amount of fees to award, courts use the lodestar method.¿
The lodestar figure is calculated by multiplying the total number of reasonable
hours expended by the reasonable hourly rate.¿ “Fundamental to its determination
. . . [is] a careful compilation of the time spent and reasonable hourly compensation
of each attorney . . . in the presentation of the case.”¿ (Serrano v.¿Priest¿(1977)
20 Cal.3d 25, 48.)¿ A fee request that appears unreasonably inflated is a special
circumstance permitting the trial court to reduce the award or deny one altogether.”¿
(Serrano v. Unruh¿(1982) 32 Cal.3d 621, 635.)
The Court in its discretion finds
the $10,000 requested by Defendants to be excessive in light of the relatively
straightforward nature of Plaintiff’s motion. The Court in its discretion
awards Defendants $2,500 in reasonable attorney’s fees as the prevailing party
on Plaintiff’s motion pursuant to paragraph 13 of the settlement agreement.
Conclusion
Plaintiff’s motion to enforce the settlement agreement, or, alternatively,
set a new discovery cutoff date is DENIED. Defendants are awarded $2,500 in
reasonable attorney’s fees incurred in defending against Plaintiff’s motion
pursuant to the attorney fee provision included in paragraph 13 of the parties’
settlement agreement.