Judge Lisa K. Sepe-Wiesenfeld, Case Number: 20SMCV01076, Date: 2024-01-19 Tentative Ruling

Judge: Lisa K. Sepe-Wiesenfeld, Case: 20SMCV01076, Date: 2024-01-19 Tentative Ruling

Defendant Sprout Mortgage, LLC’s Motion to Enforce Confidential Settlement Agreement Pursuant to CCP section 664.6 is GRANTED. Plaintiffs Shahram Jeff Javidzad and Monica Nourman Javidzad, individually and as Co-Trustees of the JM Javidzad 2008 Trust dated September 18, 2008’s escrow company is hereby ordered to release $24,600.11 to Defendant Sprout Mortgage, LLC. Defendant Sprout Mortgage, LLC’s Request for Attorneys’ Fees is DENIED without prejudice. Defendant Sprout Mortgage, LLC may file a separately noticed motion for attorney fees and costs as to these motions.

Plaintiffs Shahram Jeff Javidzad and Monica Nourman Javidzad, individually and as Co-Trustees of the JM Javidzad 2008 Trust dated September 18, 2008 (“Plaintiffs”) and Defendant Sprout Mortgage, LLC (“Defendant”) both move to enforce the terms of a confidential settlement agreement between the parties. At the outset, the Court notes that only Defendant obtained a proper hearing reservation for a motion to enforce a settlement agreement, while Plaintiffs obtained a hearing reservation for a motion to seal, as seen in the reservation receipt attached to their motion to enforce the settlement agreement. The hearing reservation system is designed to allow the Court sufficient time to consider each motion, balancing the size of the motion and the time needed for proper consideration with the Court’s large caseload, and obtaining a reservation for the wrong motion type essentially allows a party to unfairly jump the line to have their motion heard earlier than the Court may have had availability to do so had the motion been properly reserved. Plaintiffs’ counsel is familiar with the reservation system, and the Court would be within its discretion to continue the hearing on Plaintiffs’ motion or take it off calendar entirely for failure to obtain a proper hearing reservation, which is the usual procedure when a motion hearing is improperly reserved in this manner. Nonetheless, the Court exercises its discretion here to consider both motions because Defendant, who properly reserved their motion hearing, would be prejudiced by a continuance of Plaintiffs’ motion, as both motions are properly considered at the same time. The Court advises Plaintiffs’ counsel that future instances of reserving a hearing with the wrong motion type will result in a continuance of the hearing on the motion or taking the motion off calendar for failure to obtain a proper reservation.

“If 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. 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.)

In August 2022, the parties attended mediation and reached a tentative settlement agreement, which was finalized in writing and signed on August 24 and 26, 2022, by all parties. (Def.’s Mot., Pelletier Decl. ¶ 3, Ex. A.) In their motion, Plaintiffs focus on the drafting process and argue that the language of the agreement and the parties’ correspondence concerning the intent of the language used makes clear that all parties mutually intended that Defendant would be responsible for the property taxes attributable to the time period of Defendant’s ownership of the property, while Plaintiffs would be responsible only for future property taxes or any property taxes attributable to their ownership prior to the August 3, 2020, foreclosure sale. Defendant argues in its motion that the agreement provides for Plaintiffs to pay all future property tax payments, defense counsel made clear that it had no intention of making any further tax payments on the property and that the payment due in November 2022 would be Plaintiffs’ responsibility, Plaintiffs signed the agreement after receiving this email, and Plaintiffs are now attempting to avoid their obligations under the agreement. Defendant, therefore, seeks an order instructing Plaintiffs’ escrow company to release $24,600.11 to Defendant, as escrow is holding these funds because Plaintiffs refuse to close the sale of the property until Defendant paid a portion of the November 2022 property tax payment, and awarding Defendant its fees and costs incurred in bringing this motion.

The plain language of the agreement stated that “Plaintiffs shall be responsible for all future property tax payments, including but not limited to, the property taxes that will be due in November 2022.” (Def.’s Mot., Pelletier Decl. ¶ 3, Ex. A, at § 2.) The agreement also includes an integration clause stating that the agreement “may be amended only by an agreement in writing signed by the Parties.” (Def.’s Mot., Pelletier Decl. ¶ 3, Ex. A, at § 20.) Even if the parties disagreed about the meaning of this language, it was clarified in an email from defense counsel on August 23, 2022, before Plaintiffs signed the agreement, wherein counsel stated, “My client has paid all taxes since the loan’s origination to protect their lien, but they will not pay for November’s taxes if your clients are staying in the property and buying it back,” and “[f]or November 2022, I was referring to the tax payment that will come due at that time.” (Pls.’ Mot., Vivoli Decl. ¶ 2, Ex. 1.) Plaintiffs then signed the agreement with the language of the agreement making clear that Plaintiffs were to pay the property taxes due in November 2022. This does not read to mean that Plaintiffs only owed future payments; it reads to plainly require Plaintiffs to pay the tax payment owed in November 2022. If Plaintiffs did not agree to this, they should have modified the agreement, but they did not, and defense counsel made clear that Defendant would not pay the tax payment that would come due in November 2022. Plaintiffs’ construction of the agreement to mean only that Plaintiffs were responsible for future tax payments is not well taken, as the agreement does not read this way, and email communication makes clear that this was not Defendant’s understanding. Thus, Defendant is entitled to an order instructing Plaintiffs’ escrow company to release $24,600.11 to Defendant, as Plaintiffs were to be responsible for this payment pursuant to the parties’ agreement.

Defendant seeks an award of attorney fees and costs in the amount of $7,698.00 pursuant to the parties’ agreement for the prevailing party in an action to enforce or interpret the agreement to recover its fees and other expenses incurred. While Defendant is entitled to its fees and costs, Defendant has not provided sufficient information about the basis for its fees, as it does not break down the hours spent for each task, thereby precluding a meaningful analysis by the Court as to whether the amount is justified.

Accordingly, Defendant Sprout Mortgage, LLC’s Motion to Enforce Confidential Settlement Agreement Pursuant to CCP section 664.6 is GRANTED. Plaintiffs Shahram Jeff Javidzad and Monica Nourman Javidzad, individually and as Co-Trustees of the JM Javidzad 2008 Trust dated September 18, 2008’s escrow company is hereby ordered to release $24,600.11 to Defendant Sprout Mortgage, LLC. Defendant Sprout Mortgage, LLC’s Request for Attorneys’ Fees is DENIED without prejudice. Defendant Sprout Mortgage, LLC may file a separately noticed motion for attorney fees and costs as to these motions. Plaintiffs Shahram Jeff Javidzad and Monica Nourman Javidzad, individually and as Co-Trustees of the JM Javidzad 2008 Trust dated September 18, 2008’s Motion to Enforce Settlement Agreement Pursuant to Code of Civil Procedure section 664.6 and for an Award of Fees and Costs is DENIED.

The trial court “may order that a record be filed under seal only if it expressly finds facts that establish: (1) There exists an overriding interest that overcomes the right of public access to the record; (2) The overriding interest supports sealing the record; (3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; (4) The proposed sealing is narrowly tailored; and (5) No less restrictive means exist to achieve the overriding interest.” (McGuan v. Endovascular Techs., Inc. (2010) 182 Cal.App.4th 974, 988, paragraph breaks omitted.)

Defendant Sprout Mortgage, LLC (“Defendant”) moves to file its Motion to Enforce Confidential Settlement Agreement Pursuant to CCP section 664.6 under seal on the ground the terms of the settlement agreement are confidential, as the parties agreed not to disclose the agreement’s terms, and unauthorized disclosure could subject the disclosing party to damages. The Court ordered Defendant to provide a supplemental declaration describing the purported harm to either party should the terms of the subject settlement agreement be disclosed and describing how the sealing is narrowly tailored to seal as little information as is necessary. Defendant describes that there is an interest in settlement and the accompanying privacy needs to encourage settlement, Defendant would be in breach of the agreement if the agreement is publicly disclosed, and Defendant’s servicer would be prejudiced by disclosure because other individuals could look to this agreement with unrealistic hopes for settlement, thereby negatively impacting the ability to settle actions.

While a stipulation between the parties to keep the agreement confidential does not itself provide a basis for the Court to seal the motion, as there is a right of public access to court records, the Court finds it proper to seal the subject motion and agreement here, as the motion discusses the agreement throughout. Accordingly, Defendant Sprout Mortgage, LLC’s Motion for Order Allowing Defendant to File Motion to Enforce Confidential Settlement Agreement Under Seal Pursuant to CRC Rule 2.551 is GRANTED.