Judge Lisa R. Jaskol, Case Number: 22STCV00757, Date: 2024-11-21 Tentative Ruling

On February 10, 2021, Plaintiff Lisa Graham (“Plaintiff”) filed this action against Defendants Costco Wholesale Corporation, Costco Wholesale Membership, Inc., and Does 1-100 for premises liability. Plaintiff later amended the complaint to include Defendants Robert Gayton as Doe 1 and Russell Lee as Doe 2.

On January 7, 2022, Defendants Costco Wholesale Corporation, Costco Wholesale Membership, Inc., and Russell Lee filed an answer.

On January 2, 2024, the Court granted Plaintiff’s counsel’s motion to be relieved as counsel.

On August 22, 2024, Plaintiff filed a document titled “Notice of Acceptance of Settlement and Cancellation of Trial.” A Release and Settlement Agreement, which Plaintiff had signed and dated August 22, 2024, was attached.

On September 24, 2024, Plaintiff filed a motion to release settlement funds. The motion was set for hearing on November 21, 2024. On November 4, 2024, Defendant Costco Wholesale Corporation (“Defendant”) filed an opposition.

“(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:

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

In deciding motions made under Code of Civil Procedure section 664.6, courts “must determine whether the parties entered into a valid and binding settlement.” (Kohn v. Jaymar-Ruby (1994) 23 Cal.App.4th 1530, 1533.) On a motion to enforce a settlement under Code of Civil Procedure section 664.6, courts have the power to decide disputed facts and to interpret the agreement. (Fiore v. Alvord (1985) 182 Cal.App.3d 561, 566; L. Edmon & C. Karnow, Cal. Practice Guide: Civil Procedure Before Trial (Rutter 2023) ¶¶ 12:977–12:978.5, pp. 12(ll)-139 to 12(ll)-140.) Courts may receive evidence, determine disputed facts including the terms the parties previously agreed on, and enter the terms of a settlement agreement as a judgment, but they may not create new material terms. (Osumi v. Sutton (2007) 151 Cal.App.4th 1355, 1360.)

Plaintiff asserts that the Release and Settlement Agreement which she signed on August 22, 2024 obligates Defendant to “release settlement funds” before Plaintiff pays the lien which her former counsel has asserted on her recovery.

“Upon receipt of this executed Release and Settlement Agreement, RELEASEES^{[^[1]]} shall pay the settlement amount of eighty thousand dollars and no cents ($80,000.00) as follows, subject to a reduction of this amount in order to satisfy any statutory liens in which separate draft(s) will be issued. Plaintiff Lisa Graham acknowledges and agrees that her prior counsel of record, Law Offices of Gary K. Walch, a Law Corporation has asserted an attorney lien and that any such lien will be negotiated by Ms. Graham and paid out of the settlement amount of $80,000. And thereafter, the remaining payment will be paid to Lisa Graham.”

Fairly interpreted, the Release and Settlement Agreement requires Plaintiff to negotiate the amount of the lien with her former counsel before “Releasees” pay the settlement amount. Presumably the parties intended that Plaintiff negotiate the lien amount with her former counsel and communicate that amount to Defendant, which would arrange for payment of the negotiated lien amount to Plaintiff’s former counsel. After paying the lien amount to Plaintiff’s former counsel, Defendant would arrange for payment of the remaining settlement funds to Plaintiff.

Based on this interpretation, the Court denies Plaintiff’s motion because she has not satisfied the Release and Settlement Agreement’s requirement that she negotiate the amount of the lien which her former attorney has asserted on her recovery before she receives payment of the remaining settlement proceeds.

The Court DENIES Plaintiff Lisa Graham's motion for an order releasing settlement funds.

The Court denies Defendant Costco Wholesale Corporation's request for sanctions.

Moving party is ordered to file the proof of service of this ruling with the Court within five days.
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[1] “ ‘RELEASEES’ shall refer to COSTCO WHOLESALE CORPORATION, COSTCO WHOLESALE MEMBERSHIP, INC, RUSSELL LEE (sued herein as DOE No. 2) and all related and/or connected persons, entities, firms, associations, divisions, parent companies, affiliated companies, subsidiary companies, heirs, representatives, employees, employers, insurers, reinsurers, adjusters, and any person or entity whose liability and/or rights derive from its connection to this defined group.”