Judge: Mark H. Epstein, Case: 22SMCV01304, Date: 2023-05-17 Tentative Ruling

Case Number: 22SMCV01304    Hearing Date: May 17, 2023    Dept: R

This is here for a motion to file an FAC and to enforce a settlement.  The court turns to the enforcement motion first.

The motion is to enforce under 664.6 is decided under that statute, not general contract law.  The statute was enacted to provide a speedy way to enforce an agreement.  Rather than enforce it through the more cumbersome summary judgment or separate trial mechanism, a streamlined motion can be brought to enforce.  Thus, where the statutory requirements are met, a normal 16 day noticed motion can be brought to enforce the deal.  The requirements are that the agreement either: (1) be in a writing signed by the parties or their counsel; or (2) stated orally before the court.  There is no writing, so this stands or falls on whether there was an oral statement by the parties before the court.

At the outset, the court rejects defendant’s recitation of what an agreement requires.  It is well settled that an agreement can be binding even if the parties intend to replace it with a “long form” agreement at a later date.  So long as the agreement contains the critical terms, it can be enforced.  Here, the purported agreement was clear enough.  Defendant would pay $15,000 and plaintiff would dismiss her case with prejudice.  That is enough for a contract.  The court can imply a reasonable period for the payment to be made, and there are no other important terms that are needed.  While other terms (like confidentiality, mutuality of releases, choice of law, broad form release, and the like) are often added to the long form agreement, they are not necessary to a contract.

The purported settlement came at an MSC before Judge Cowan.  After extensive talks with the parties separately, plaintiff apparently expressed a willingness to settle at $15,000, but not less.  At least according to plaintiff’s counsel, defendant must have agreed as well because Judge Cowan then called the parties together (virtually) and announced a settlement at $15,000.  According to plaintiff, at no time during the MSC had they ever been told that defendant was insisting on a confidentiality agreement.  According to plaintiff’s counsel, Judge Cowan announced that there was a deal at $15,000 and he vacated all dates.  He set an OSC re: Dismissal (Settlement).  After that, it is a bit murky.

At least shortly after that, defense counsel stated that the agreement had to be confidential.  Plaintiff’s counsel rejected the confidentiality requirement.  Judge Cowan, apparently, still believed that there was a deal because he did not walk back the order vacating the various dates but instead told the parties to come back if there was a problem.

Plaintiff’s counsel then explained the issue further to plaintiff, who then agreed to the clause.  On April 10, 2023, plaintiff’s counsel wrote to defense counsel (who was preparing a settlement agreement) and said to include a confidentiality provision.  Defense counsel’s response was “Sounds good.  I will have a settlement drafted for you.”  On April 13, 2023, defense counsel sent over a working draft of the agreement, but expressly stated that the draft had not been presented to her clients yet.  On April 17, 2023, defense counsel said no deal.  While no particular reason was given, it is clear from the papers that defendant simply thought better of the proposition and did not want to pay the $15,000.

On the 664.6 motion, there is one question before the court.  When Judge Cowan announced a deal, what was the immediate response by the parties.  To put it bluntly, if both parties said or did anything that indicates acquiescence, then there is a deal and that is enough to constitute an agreement before the court.  But if one party acquiesced (plaintiff) and the other party said “we also need confidentiality,” then it is not.  Even if that was mentioned for the first time after Judge Cowan announced a settlement, it is not enough.  The court reads the statute as requiring that the acknowledgement of settlement be by all parties before the court at the same time.  In these days of MSC’s and no court reporters, there remains a question as to whether it needs to be “on the record” and what that means (for example, does it mean in open court where the general public can hear it?).  For today’s purposes, though, the court will assume it is enough if assent is given via CourtConnect (or the equivalent) with all parties in the virtual room with the judge.  The court notes that the 664.6 agreement—if it is enforceable—would NOT include confidentiality. 

While the court will inquire, the court also notes that under section 664.6 and case law interpreting the statute, the goal is to eliminate ambiguity.  That is why there must be a written agreement signed by the parties or counsel settling the case or there must be a statement made with all parties present in court.  If it is clear that the parties reached a deal, then there is no due process concern about enforcing it.  But if there is uncertainty as to whether a deal was struck at all, then the court is concerned about enforcing the agreement through this method.  Case law is instructive.  In In re Marriage of Assemi (1994) 7 Cal.4th 896, our Supreme Court discussed certain aspects concerning what is sufficient under section 664.6.  The court directed a court asked to grant a 664.6 motion to determine whether the material terms were “explicitly defined,” whether the “supervising judicial officer questioned the parties regarding their understanding of those terms,” and whether “the parties expressly acknowledged their understanding and agreement to be bound by those terms.”  (Id., at p. 911.)  It is plain that the point is to prevent just what is happening now.  What the court thinks is needed is whether, at some point, Judge Cowan (or a party) recited the terms and asked each party if that party agreed.  If both parties answered in the affirmative, a deal would be struck.  If either party started adding new terms, there is no deal (unless those terms are agreed to then and there).  So far as the court can tell, Judge Cowan announced the settlement presumably consisting of a payment of $15,000 in return for a dismissal (and likely a release).  However, it does not appear that both parties then orally said that they agreed to that settlement.  That is the question the court will address at this hearing.  If both parties said that there was an agreement, the addition by defendant of an another term—even if it is very shortly after expressing assent—comes too late.  The deal was struck in court and it will be enforced.  But if Judge Cowan announced the settlement but defendant never after that announcement accepted it unconditionally, then there is no deal.  The court notes that this is not akin to a summary judgment motion.  The court acts here as the trier of fact concerning what occurred at the MSC and it can weigh the evidence.  (Ibid.)

If there is no 664.6 agreement, then the court will have to consider whether there is a more traditional settlement.  But before going down that path—which is not before the court today—the court would have to determine whether anyone is really interested in pursuing the settlement through the other tools at hand, which could be a bit cumbersome and may ultimately turn on whether “Sounds good.  I will have a settlement drafted for you” is sufficient to constitute acceptance from an objective standpoint. 

If the 664.6 motion is denied, the court will need to determine whether or not to allow leave to amend to add additional causes of action.  Essentially, plaintiff wants to add a slew of new causes of action.  The court is inclined to DENY the motion.  Plaintiff seeks an expedited trial.  While the initial trial date was vacated, the court will still put the case on a rocket docket.  But what plaintiff cannot do is to amend the case to add a number of new causes of action and still demand priority.  Nor can the court really see the benefit of most of them.  To the extent plaintiff is arguing negligence per se, that is really just negligence.  In a negligence per se case, the “per se” substitutes for the standard of care—in other words, the statute says what must be done and not done.  There still must be a traditional showing of a pre-existing duty, breach of that duty, and damages.  Critically, the per se does not substitute for a duty owed to the plaintiff; it merely applies—once a duty is shown—to set forth the applicable standard of care.  The measure of damages is no different than a regular negligence case.  Having said that, the court understands that to the extent defendant intends to argue that plaintiff stopped paying the fee to store the pet and therefore he had the right to dispose of the pet, a statute might well foreclose that right.  If that is truly an issue between the parties—that is, the case may stand or fall on that—the court will consider allowing the amendment.  What the statute or regulation requires ought not demand a ton of additional discovery, and whether defendant complied with a particular number of days ought not be a difficult fact either.  But that is one cause of action, not many.

The other torts are designed to be able to obtain damages for emotional distress.  The court assumes that plaintiff fears that she cannot get any emotional distress damages under contract, so she is seeking tort relief.  A few things.  If plaintiff is correct, that might require some not insignificant discovery.  In other words, if this was an economic damages case only and now it is emotional distress, a fair amount of discovery might be required.  That is prejudicial on a preferential calendar.  But there is a more fundamental problem.  The court believes that this may very well be one of the few contract cases where emotional distress damages are recoverable.

The most well known line of cases in this area relates to funeral homes and human remains.  The improper handling of human remains is a breach of contract, but it gives rise to emotional distress damages.  (Wilson v. Houston Funeral Home (1996) 42 Cal.App.4th 1124.)  Here, we are not dealing with a human; we are dealing with a pet.  That is a distinction with a difference.  However, under these unusual circumstances, it could well be that this falls within the line of cases dealing with family heirlooms and the like.  For example, if one contracts to re-set a family heirloom and the jeweler negligently loses that heirloom, the measure of damages is not purely economic; emotional distress damages (or emotional distress-like damages) can sometimes be recovered.  (Windeler v. Scheers Jewelers (1970) 8 Cal.App.3d 844, 850-851.)  Similarly, where the defendant is “on notice that a breach [of the agreement] would result in emotional and mental suffering by the plaintiff as well as other forms of compensable damage” emotional distress damages might be recoverable.  (Wynn v. Monterey Club (1980) 111 Cal.App.3d 789, 801.)  The court is not convinced that this is not such a case.  Defendant was well aware of the pet’s status with plaintiff—that is why plaintiff asked that the remains be stored and why plaintiff wanted certain parts to be kept separate from the body, which she planned to bury.  To the extent that emotional distress damages are recoverable—and right now the court is leaning toward the view that they are—the amendment is unnecessary.

For both reasons, the court is inclined to DENY the motion.