Judge Katherine Chilton, Case Number: 20STLC06026, Date: 2023-05-25 Tentative Ruling

Judge: Katherine Chilton, Case: 20STLC06026, Date: 2023-05-25 Tentative Ruling

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Case Number: 20STLC06026 Hearing Date: May 25, 2023 Dept: 25

PROCEEDINGS: MOTION TO VACATE DISMISSAL, ENFORCE SETTLEMENT, AND ENTER JUDGMENT

MOVING PARTY: Plaintiff State Farm Mutual Automobile Insurance Company

RESP. PARTY: Defendant Martha Isabel Prudencio

MOTION TO VACATE DISMISSAL, ENFORCE SETTLEMENT, AND ENTER JUDGMENT

(CCP § 664.6)

TENTATIVE RULING:

Plaintiff State Farm Mutual Automobile Insurance Company’s Motion to Set Aside Dismissal, Enforce Settlement, and Enter Judgment is GRANTED. Dismissal entered on May 16, 2022, is vacated, and judgment is entered for Plaintiff and against Defendant for $17,810.99 as follows: principal amount of $17,263.19 and $547.80 in interest.

SERVICE:

[ ] Proof of Service Timely Filed (CRC, rule 3.1300) OK

[ ] Correct Address (CCP §§ 1013, 1013a) OK

[ ] 16/21 Court Days Lapsed (CCP §§ 12c, 1005(b)) OK

OPPOSITION: Filed on May 12, 2023. [ ] Late [ ] None

REPLY: None filed as of May 23, 2023. [ ] Late [X] None

ANALYSIS:

I. Background

On July 21, 2020, Plaintiff State Farm Mutual Automobile Insurance Company (“Plaintiff”) filed an action against Defendant Martha Isabel Prudencio (“Defendant”) for subrogation, stemming from an automobile collision between Defendant, on the one hand, and an individual insured by Plaintiff’s automobile insurance policy, on the other hand. (Compl.) Plaintiff compensated the insured for claimed damages in the amount of $21,648.19 and filed the instant claim against Defendant for allegedly causing the damages. (Ibid. pp. 3-5.) On October 29, 2020, Defendant filed an Answer to the Complaint.

On May 9, 2022, Plaintiff filed a Stipulation for Settlement and Entry of Judgment (“Stipulation”), signed by both parties, to dismiss the action on the premise that Defendant would compensate Plaintiff in the settlement amount of $8,385.00. (5-9-22 Stipulation.) On May 16, 2022, the Court dismissed the entire case without prejudice pursuant to the Stipulation. (5-16-22 Order.)

On February 10, 2023, Plaintiff filed the instant Motion to Vacate Dismissal, Enforce Settlement Agreement, and Enter Judgment (“Motion”), as well as a Memorandum of Costs. Defendant filed an Opposition on May 12, 2023. No reply has been filed.

II. Legal Standard & Discussion

CCP § 664.6, provides a summary procedure that enables judges to enforce a settlement agreement by entering a judgment pursuant to the terms of the parties’ settlement. In particular, the statute provides:

(a) 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.

(b) For purposes of this section, a writing is signed by a party if it is signed by any of the following:

(1) The party.

(2) An attorney who represents the party.

(3) If the party is an insurer, an agent who is authorized in writing by the insurer to sign on the insurer's behalf.

CCP § 664.6(a)-(b) (emphasis added).

III. Discussion

A. Retention of Jurisdiction

“‘[V]oluntary dismissal of an action or special proceeding terminates the court’s jurisdiction over the matter.’ (Conservatorship of Martha P. (2004) 117 Cal.App.4th 857, 867) [12 Cal.Rptr.3d 142.) ‘If requested by the parties,’ however, ‘the [trial] court may retain jurisdiction over the parties to enforce [a] settlement until performance in full of the terms of the settlement.’ (§ 664.6, italics added.)” (Mesa RHF Partners, L.P. v. City of Los Angeles (2019) 33 Cal.App.5th 913, 917.) “‘Because of its summary nature, strict compliance with the requirements of section 664.6 is prerequisite to invoking the power of the court to impose a settlement agreement.’” (Ibid. (quoting Sully-Miller Contracting Co. v. Gledson/Cashman Construction, Inc. (2002) 103 Cal.App.4th 30, 37).)

“A request for the trial court to retain jurisdiction under section 664.6 ‘must conform to the same three requirements which the Legislature and the courts have deemed necessary for section 664.6 enforcement of the settlement itself: the request must be made (1) during the pendency of the case, not after the case has been dismissed in its entirety, (2) by the parties themselves, and (3) either in a writing signed by the parties or orally before the court.’” (Ibid. (quoting Wackeen v. Malis (2002) 97 Cal.App.4th 429, 440).) “The ‘request must be express, not implied from other language, and it must be clear and unambiguous.’” (Ibid. (quoting Wackeen, supra, 97 Cal.App.4th at 440).)

Here, the parties signed a Stipulation for Settlement and Order (“Stipulation”) containing the parties’ agreement for the Court to retain jurisdiction pursuant to Code of Civil Procedure § 664.6 to enforce the terms of the stipulation and enter judgment in the event of default. (5-9-22 Stipulation ¶ 16.) Prior to the dismissal of this action, the Stipulation was signed by the parties and submitted to the Court. (Ibid. at pp. 4-6.) On May 16, 2022, the Court dismissed the entire case pursuant to the Stipulation and expressly stated that it “shall retain Jurisdiction to enforce the Stipulation for Settlement pursuant to California Code of Civil Procedure section 664.6.” (5-16-22 Order.)

The Court finds that the Stipulation complies with § 664.6 requirements and the Court has retained jurisdiction to enter judgment pursuant to the parties’ Stipulation in this action.

B. Entry of Judgment

The Stipulation Agreement filed by Plaintiff on May 9, 2022, provides that Plaintiff and Defendant agreed to dismiss the action on the premise that Defendant would compensate Plaintiff for the settlement amount of $8,385.00. (5-9-22 Stipulation ¶ 4.) Pursuant to the Stipulation, Defendant’s insurance carrier, Progressive Insurance, would pay the sum of $2,885.00. (Ibid. at ¶ 6(A).) Defendant would pay the remaining balance of $5,500.00 by making a lump-sum payment of $1,500.00 no later than July 1, 2022, and making subsequent monthly payments of $100.00 starting on October 1, 2022, and due on the first of each month until the balance is paid in full. (Ibid. ¶ 6(B).) No interest would accrue as long as Defendant made monthly payments. (Ibid. at ¶ 6(C).) All parties signed the Stipulation. (Ibid. at pp. 4-6.)

The Stipulation also provides that Defendant will have a 10-day grace period to make a monthly payment. (Ibid. ¶ 11.) If Defendant fails to make the payment, Plaintiff will provide written notice of default to Defendant. (Ibid. at ¶ 11.) If Defendant does not cure the default within ten (10) days of receiving notice, “Plaintiff may immediately cause Judgment to be entered pursuant to the terms set forth in this Stipulation for the full amount of $21,648.19, less any monies paid to date of the breach.” (Ibid. at ¶ 9.)

On February 10, 2023, Plaintiff filed the instant Motion alleging that Defendant breached the Stipulation and seeking judgment in the amount of $19,325.43 for the settlement amount, interest accrued at 7% per annum, attorney’s fees and costs, minus payments from Defendant and Defendant’s insurance carrier. (Mot. pp. 1-2.)

On or about May 26, 2022, Defendant’s insurance carrier made a payment of $2,885.00 to Plaintiff. (Mahfouz II Decl. ¶ 7.) As of the date of the Motion, Defendant has only made a payment of $1,500.00. (Ibid. at ¶ 9.) Plaintiff’s counsel sent past due notices to Defendant on January 19 and January 31, 2023. (Ibid., Ex. B.) As of the date of this Motion, Defendant has not cured the default and there is an outstanding balance remaining. (Ibid. at ¶ 10.) Plaintiff seeks to have the dismissal set aside and judgment entered in the amount of $19,325.43 as follows: $21,648.19 (principal amount), plus $547.80 (interest accrued at a legal rate of 7% per annum since default date of October 1, 2022), plus $475.00 (costs), plus $1,039.44 (attorney’s fees), minus $4,385.00 (payments made by Defendant and Defendant’s insurance carrier). (Ibid. at ¶¶ 11-12.)

Plaintiff states that it is entitled to prejudgment interest at a rate of seven (7) percent per annum, as set forth in the Stipulation. (Memorandum p. 5.) Plaintiff calculates interest from October 1, 2022, date of default, to February 10, 2023, the date the instant Motion was prepared, which results in $547.80 in interest. (Ibid.)

Plaintiff calculates attorney’s fees based on the Los Angeles County Superior Court Local Rule 3.214, which provides that a recovery between $10,000.01 and $50,000 warrants $690 in attorney’s fees, plus 3% of the excess over $10,000, amounting to a total of $1,03944. (Ibid. at p. 6.) Furthermore, Plaintiff has submitted a Memorandum of Costs showing that it requests $370 for filing the initial Complaint, $45.00 for service of process, and $60.00 for filing the instant Motion, for a total of $475 in costs. (Ibid.; 2-10-23 Memorandum of Costs.)

Defendant opposes Plaintiff’s Motion. First, Defendant requests that the Court continue the hearing to provide Defendant with additional time to make monthly payments, particularly given the “dramatic difference between the prayed for judgment and the balance on the settlement total.” (Oppos. pp. 2-3.) Defendant has demonstrated compliance with the Stipulation by making the $1,500 lump sum payment and the continuance will allow counsel to determine why Defendant has not made additional payments. (Ibid. at p. 3.) Second, Defendant argues that the Stipulation does not provide for prejudgment interest in the event of default as it only states that settlement payments would be interest-free; thus, Defendant has not agreed to pay pre-judgment interest. (Ibid. at p. 4.) Third, the Stipulation does not provide for attorney’s fees and costs, but rather states that each side is responsible for its own attorney’s fees and costs. (Ibid.) Furthermore, Plaintiff cannot be awarded attorney’s fees and costs as a prevailing party because the subrogation action was resolved through a settlement agreement. (Ibid. at pp. 4-5.)

The Court finds the Stipulation to be valid and enforceable under Code of Civil Procedure § 664.6. Plaintiff provides evidence that Defendant stopped making payments and did not respond to Plaintiff’s written notice of default. Thus, a valid and signed stipulation agreement was breached and the Court retained jurisdiction to enter judgment upon breach. Pursuant to the Stipulation and the Court order entered on May 16, 2022, the Court may set aside the dismissal and enforce the settlement agreement.

However, the Court does not find that Plaintiff is entitled to attorney’s fees and costs. The Stipulation expressly states that “[e]ach side shall bear their own costs and attorney’s fees relating to this matter, except as stipulated above.” (5-9-22 Stip. ¶ 18.) There is no other reference to attorney’s fees and costs in the Stipulation. Hence, the Court finds that Plaintiff has not shown that it is entitled to attorney’s fees and costs.

Plaintiff argues that it is entitled to pre-judgment interest pursuant to Civil Code § 3287(a), which states that “[a] person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in the person upon a particular day, is entitled also to recover interest thereon from that day….” (Memorandum p. 5.) The Court finds that pursuant to § 3287(a), Plaintiff may recover pre-judgment interest. The Court also finds Plaintiff’s calculation reasonable and grants its request for $547.80 in interest.

Accordingly, Plaintiff’s Motion to Set Aside Dismissal, Enforce Settlement, and Enter Judgment is GRANTED. Dismissal entered on May 16, 2022, is vacated, and judgment is entered for Plaintiff and against Defendant for $17,810.99 as follows: principal amount of $17,263.19 and $547.80 in interest.

IV. Conclusion & Order

For the foregoing reasons,

Moving party is ordered to give notice.