Judge Latrice A. G. Byrdsong, Case Number: 17STLC01365, Date: 2023-10-18 Tentative Ruling

Judge: Latrice A. G. Byrdsong, Case: 17STLC01365, Date: 2023-10-18 Tentative Ruling

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Case Name: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. MELISSA ZAPATA; JUAN ZAPATA; and DOES 1-40

Motion: Motion to Vacate Dismissal and Motion to Enforce Settlement and Enter Judgment

Ruling: Plaintiff’s Motion to Vacate Dismissal and Motion Enforce Settlement and Enter Judgment is GRANTED.

On September 8, 2017, Plaintiff State Farm Mutual Automobile Insurance Company (“Plaintiff”) filed a complaint for subrogation and recovery against Defendants Melissa Zapata (“Defendant Melissa”), Juan Zapata, and Does 1 to 40. The complaint arises from an automobile accident involving Plaintiff’s insured.

On June 25, 2019, Plaintiff filed and served a Stipulation for Settlement and Order (the “Settlement Agreement”). The Settlement Agreement relevantly provides that: (1) Plaintiff has paid out $18,853.13 in property damages, and is seeking recovery of the monies paid in the amount of $18,853.13; (2) the parties settled the matter in the amount of $9,550.00, and $5,000.00 of such amount will be paid by Defendant Melissa; (3) should Defendant Melissa be in default, Plaintiff’s attorney will provide Defendant Melissa with written notice of the default and Defendant Melissa will have 10 days within which to remedy the default; and (4) should Defendant Melissa default on any payment made to Plaintiff, and fails to remedy such default, Plaintiff’s attorney may, by ex parte motion, submit an order to the court for entry of judgment against Defendant Melissa without further notice. The Settlement Agreement also provides that, in the event of default, “[j]udgment will be entered in the amount of $18,853.13, plus all costs of suit and reasonable attorney’s fees, as well as any additional costs incurred in enforcement of this agreement, less any payments that have been made by Defendant and Defendant’s insurance carrier to Plaintiff, as of that date.” Defendant signed the Settlement Agreement on May 27, 2019, and Plaintiff signed the Settlement Agreement on May 30, 2019.

On August 15, 2019, the Court entered an order regarding settlement. The Court’s order indicates that the parties stipulated that Defendant Melissa would make the following payments: (1) a payment of $4,550.00 paid by Defendant Melissa’s insurance company, Infinity Insurance, to be received by Plaintiff’s attorney, Clerkin, Sinclair & Mahfouz, LLP; and (2) $100.00 to be paid by Defendant Melissa no later than June 18, 2019, and continue on the 18th day of each month until the total settlement amount of $5,000.00 is paid in full. The order also provides that “should Defendant default on said payments and remain in default for more than ten (10) days, Plaintiff will, by ex parte motion, submit an order to the court for entry of judgment against Defendant in the amount of $18,853.13, plus interest at the legal rate, from June 18, 2019, plus the costs and attorney’s fees incurred by Plaintiff, less any payments that have been made by Defendant and Defendant’s insurance carrier to Plaintiff.”

The Court’s order dismissed the action without prejudice in its entirety. The Court’s order, however, provides that “the Court shall retain Jurisdiction to enforce the Stipulation for Settlement pursuant to California Code of Civil Procedure section 664.6.” On August 15, 2019, the Court entered an order of dismissal which dismissed the entire action without prejudice pursuant to California Code of Civil Procedure, Section 664.6.

On July 24, 2023, Plaintiff filed and served an unopposed motion to vacate dismissal and motion to enforce the Settlement Agreement and enter judgment against Defendant Melissa in the amount of $12,427.96, which is comprised of the principal settlement amount plus interest accrued thereon at 7% per annum, court costs, and attorneys’ fees, less payments received from Defendant Melissa and Defendant Melissa’s insurance carrier. Any opposition brief was required to be filed and served at least nine court days prior to the hearing. Code Civ. Proc. § 1005(b).

On July 24, 2023, Plaintiff filed a memorandum of costs seeking total costs of $1,460.59.

In support of the motion, Plaintiff contends that: (1) pursuant to California Code of Civil Procedure, Section 664.6, the Court can vacate the dismissal; (2) the Court has authority to retain jurisdiction over the parties to enforce the settlement agreement until performance of the agreement is complete; (3) the parties entered into an enforceable agreement and the Court should grant the motion to enforce a settlement agreement and enter judgment against Defendant Melissa; and (4) Plaintiff is entitled to interest, costs, and attorneys’ fees.

“Code of Civil Procedure section 664.6 provides a summary procedure to enforce a settlement agreement by entering judgment pursuant to the terms of the settlement.” Hines v. Lukes (2008) 167 Cal.App.4th 1174, 1182. “[I]f the parties to pending litigation enter into a settlement either in writing signed by the parties or orally before the court, the court, upon a motion, may enter judgment pursuant to the terms of the settlement.” Ibid. “The court retains jurisdiction to enforce a settlement under the statute even after a dismissal, but only if the parties requested such a retention of jurisdiction before the dismissal.” Ibid. “Such a request must be made either in writing signed by the parties or orally before the court.” Ibid.

“A court ruling on a motion under Code of Civil Procedure section 664.6 must determine whether the parties entered into a valid and binding settlement.” Ibid. “A settlement is enforceable under section 664.6 only if the parties agreed to all material settlement terms.” Ibid. “The court ruling on the motion may consider the parties’ declarations and other evidence in deciding what terms the parties agreed to.” Ibid. “If the court determines that the parties entered into an enforceable settlement, it should grant the motion and enter a formal judgment pursuant to the terms of the settlement.” Ibid. Code Civ. Proc. § 664.6 “expressly provides for the court to enter judgment pursuant to the terms of the settlement.” Id. at p. 1183.

In support of the motion, Plaintiff presents the declaration of its counsel, Richard L. Mahfouz II (“Mahfouz”), who states that this matter arises out of a property damage subrogation claim due to an automobile accident that occurred on or about February 11, 2017. Mahfouz Decl., ¶ 3. Defendant Melissa negligently operated a motor vehicle which caused property damage to a vehicle insured by Plaintiff. Id. Plaintiff filed its complaint alleging that because of Defendant Melissa’s negligence, damages resulted to Plaintiff’s insured’s vehicle. Id., ¶ 5. Plaintiff, under its policy, paid to or on behalf of its insured, the sum of $18,853.13 and became subrogated to that amount. Id.

On May 27, 2019, a settlement was reached wherein the parties agreed to settle the matter for $9,550.00 pursuant to the Settlement Agreement. Id., ¶ 6 and Exhibit A. The parties agreed that Defendant Melissa’s insurance carrier was to pay Plaintiff $4,550.00 and Defendant Melissa was to pay Plaintiff a total of $5,000.00 by a $100.00 down payment upon the signing of the Settlement Agreement and no later than June 18, 2019. Id. Defendant Melissa was required to pay installments of $100.00 on the 18th of each calendar month thereafter until the balance was paid in full. Id. On July 19, 2019, Defendant Melissa’s insurance carrier, Infinity Insurance Company, made a payment in the amount of $4,500.00 to Plaintiff. Id., ¶ 7.

Mahfouz declares that, to date, Plaintiff has only received $4,000.00 from Defendant Melissa and written notice of default was provided to Defendant Melissa pursuant to the terms of the Settlement Agreement. Id., ¶¶ 8-9 and Exhibit B. To date, Defendant Melissa has failed to remedy the default and there is an outstanding balance that remains unpaid by Defendant Melissa to Plaintiff pursuant to the Settlement Agreement, and Defendant Melissa has failed to comply with the Settlement Agreement. Id., ¶¶ 10,11.

Mahfouz declares that the total requested judgment of $12,427.96 is comprised of “the principal settlement amount of $18,853.13, plus interest of $664.24, which accrued at the legal rate of 7% per annum since the default date of 1/18/2023, plus costs of $505.00, plus attorney’s fees of $955.59, less payments received by Defendant Melissa and Defendant Melissa’s insurance carrier of $8,550.00.” Id., ¶ 12.

The Court finds that it has authority to enforce the Settlement Agreement pursuant to Hines v. Lukes, supra, 167 Cal.App.4th 1174, 1182. The Court also has jurisdiction to vacate the dismissal and enforce the Settlement Agreement as the parties explicitly requested—and furthermore agreed—that the Court would retain jurisdiction to enforce such agreement. Mahfouz Decl., Exhibit A. The Court furthermore determines that the parties entered into a valid and binding agreement. The declaration of Plaintiff’s counsel sets forth the terms of the settlement and indicates that Defendant Melissa was a party to such agreement. Plaintiff has indicated that Defendant Melissa is in default under the terms of the Settlement Agreement. The Settlement Agreement sets forth the terms of judgment that shall be entered in the event of default. Mahfouz Decl., Exhibit A. Also, given the Plaintiff’s motion is unopposed, there is an inference that the motion is meritorious. Sexton v. Superior Court (1997) 58 Cal.App.4th 1403, 1410.

Plaintiff contends that it is entitled to interest pursuant to the Settlement Agreement and Code Civ. Proc. § 3287(a).

“A person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover interest thereon from that day.” Code Civ. Proc. § 3287(a).

Here, the Court finds that the Settlement Agreement entitles Plaintiff to an award of pre-judgment interest. Moreover, as discussed above, the Court has found that the Settlement Agreement is valid and enforceable. The Court therefore finds that Plaintiff can be awarded interest pursuant to the terms of the Settlement Agreement.

Plaintiff contends that it is entitled to recover costs in this action if it is the prevailing party according to the Settlement Agreement and California Code of Civil Procedure, Section 1032. Plaintiff also asserts that it is entitled to recover reasonable attorneys’ fees pursuant to the terms of the Settlement Agreement and California Code of Civil Procedure, Section 1021.

“[A] prevailing party is entitled as a matter of right to recover costs in any action or proceeding.” Code Civ. Proc. § 1032(b). “Except as attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties; but parties to actions or proceedings are entitled to their costs.” Code Civ. Proc. § 1021.

Plaintiff indicates that it has incurred recoverable costs of $505.00 pursuing this matter against Defendant Melissa. As to attorneys’ fees, Plaintiff contends that it is entitled to recover fees in the amount of $955.59.

Plaintiff contends that the attorneys’ fees it requests are reasonable under Los Angeles Superior Court Local Rule, Rule 3.214, which provides that “[w]hen promissory note, contract, or statute provides for the recovery of reasonable attorneys’ fees . . . the fee may be fixed pursuant to the following schedule: $10,000.01 to $50,000, $690 plus 3% of the excess over $10,000.” Motion at 6:21-24.

Initially, the Court finds that Plaintiff’s request for allowable fees under Local Rule 3.214 cites an inaccurate amount as a fee of $690 plus 3% of the excess over $10,000 is for default cases. Los Angeles Superior Court Local Rules, Rule 3.214. Where a case is contested, however, such fee is fixed at $870 plus 6% of the excess over $10,000. Los Angeles Superior Court Local Rules, Rule 3.214.[1] Defendant Melissa filed an answer in this action. The Court, however, finds the amount of attorneys’ fees requested by Plaintiff is a lower amount than set forth under the fee schedule for a contested case in Los Angeles Superior Court Local Rules, Rule 3.214.

Therefore, the Court finds that Plaintiff is entitled to attorneys’ fees and costs.

II. Conclusion

In sum, Plaintiff’s motion is GRANTED. The Dismissal entered on 08/15/2019 is set aside and vacated and Default Judgment is entered against the Defendant in the total amount of $12,427.96.

[1] 6% of the excess over $10,000.00 in this action, based on the total judgment amount of $12,247.96 equals $134.87. Thus, Plaintiff would be entitled to attorneys’ fees in a total amount of $1,004.87 under Local Rule 3.214.