Judge: Joel L. Lofton, Case: 23AHCV01222, Date: 2024-05-02 Tentative Ruling
Case Number: 23AHCV01222 Hearing Date: May 2, 2024 Dept: X
Tentative Ruling
Judge Joel L. Lofton, Dept X
HEARING DATE: May 02, 2024
CASE NUMBER: 23AHCV01222
CASE NAME: Night Light, Inc. v. Background Images, LLC.
MOVING PARTY: Plaintiff Night Light, Inc.
OPPOSING PARTY: Defendant Background Images, LLC
MOTION: Timely filed on March 04, 2024
OPPOSITION: Timely filed April 16,
2024
REPLY: Timely filed
on April 24, 2024
Grant in Part
On May 31, 2024, Plaintiff filed the operative Complaint for
breach of contract and common counts.
Plaintiff moved for default to be entered against the
Defendant on July 24, 2023, the clerk did so the same day.
On September 7, 2023, Defendant filed notice that the
parties stipulated to setting aside the default and allowing Defendant to file
an answer to the Complaint. The Court recognized the stipulation and set aside
the default on September 8, 2023.
Defendant filed its Answer to the Complaint on September 25,
2023.
Plaintiff now moves for the Court to enforce the parties’
Settlement Agreement and enter the judgement in the amount of $226,148.40.
Defendant files in opposition. Plaintiff does file a reply,
Code of Civil Procedure section 664.6 (“CCP § 664.6”)
states: “If parties to pending litigation stipulate, in a writing signed by the
parties outside of 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.” (Code Civ. Proc., §
664.6, subd. (a) [emphasis added].) For purposes of the statute, “a writing is
signed by a party if it is signed by any of the following [among other
individuals]: (1) ¶ The party. (2) ¶ An attorney who represents the party.”
(Code Civ. Proc., § 664.6, subd. (b) [emphasis added].)
“On a motion to enforce, the court must determine whether
the settlement agreement is valid and binding. [Citation.] The court assesses
whether the material terms of the settlement were reasonably well-defined and
certain, and whether the parties expressly acknowledged that they understood
and agreed to be bound by those terms. [In re Marriage of Assemi (1994)
7 Cal.4th 896, 911.]” (Estate of Jones (2022) 82 Cal.App.5th
948, 952.)
The court may interpret the terms and conditions of a
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).
A.
Retention of Jurisdiction
Here, the parties
signed a stipulation containing the parties’ agreement for the Court to retain
jurisdiction under Code of Civil Procedure §664.6 to enforce the terms of the
Stipulation and enter judgment in the event of default. (See John D. Monte Decl;
Exh. A.) The Court notes that the parties did not seek a dismissal of the
action and thus the Court still retains jurisdiction over the action.
Therefore, the
Court finds that the Stipulation complies with the requirements under CCP §
664.6, and it has retained jurisdiction to enter judgment pursuant to the
parties’ Stipulation in this action.
B.
Entry of Judgment
The Settlement
Agreement provides that the parties agreed to settle the matter for a principal
sum of $62,000.00, payable in three monthly installments of $20,667.00. (Monte
Decl.; Exhibit A ¶ 2.) The installment payments were due on January 31, 2024,
February 29, 2024, and March 29, 2024. (Id.; Exh. A ¶ 3.) No grace
period was given for any installment payment. (Id.) Plaintiff provides
the declaration of its counsel who states that Plaintiff advised him that the Defendant
did not make its first full payment on January 31, 2024. (John D. Monte Decl. ¶
5.) On February 6, 2024, counsel emailed Defendant with a Notice of default and
Election of Remedies and made several meet and confer efforts that included
Plaintiff’s request to enter into a Stipulated judgment with the Defendant. (Id.
¶ 6.) Yet these efforts failed. (Id.; Exhs. C, D, E.) Per the agreement,
in the event Defendant fails to make any payment required under the agreement
timely or fails to make a payment, Plaintiff is entitled to the full amount
demanded in the complaint. (Id.; Exh. A ¶ 7.)
In opposition,
Defendant concedes that it was late in making payments under the agreement but contends
that the Settlement Agreement’s Default and Remedies clause constitutes an
unenforceable penalty because it bears no relationship to the amount that the
parties agreed upon, citing Purcell v. Schweitzer (2014) 224 Cal.App.4th
969, 974. Indeed, the court in Purcell held that a provision allowing
recovery of the original liability constituted an unenforceable penalty in
light of a borrower’s prior payments. Here, Plaintiff’s request does not factor
in the $20,667 in payments already made by Defendant. Moreover, Plaintiff does
not explain how it is entitled to prejudgment interest. Per the Settlement
Agreement, in the event of default, Plaintiff can collect a judgment of
$215,255.40 and reasonable attorney’s fees and costs. Yet the agreement does
not indicate that interest can be collected. While this does not negate the
clear violation of the terms of the Settlement Agreement, the Court fails to
see the value in awarding the full amount, considering the payments made by the
Defendant.
The plaintiff
prays for the Court to enforce the parties’ settlement agreement and enter
judgment for $226,148.40, representing the sum of the principal amount of
$219,255.40, plus $1,662 in pre-judgment interest and $5,031 in attorney’s fees
and cost. Noting that Defendant has already made $20,667.00, the Court is
inclined to enter judgment in the amount of 203,619.40, representing the
difference between the principal amount of $219,255.40 minus $20,667.00 in
payments made by the Defendant, plus $5,031.00 in attorney’s fees and cost.
Conclusion
Plaintiff’s motion to enforce the settlement agreement
pursuant to CCP § 664.6 is granted in part. Judgment is entered in the amount
of $203,619.40.
Plaintiff is ordered to provide notice of this ruling.
Dated: May
2,
2024 ___________________________________
Joel
L. Lofton
Judge
of the Superior Court
Parties
who intend to submit on this tentative must send an email to the court
indicating their
intention
to submit. alhdeptx@lacourt.org