Judge: Michael E. Whitaker, Case: 23SMCV03167, Date: 2024-09-10 Tentative Ruling

Case Number: 23SMCV03167    Hearing Date: September 10, 2024    Dept: 207

TENTATIVE RULING

MOTION

Plaintiff Westlake Flooring Company, LLC d/b/a Westlake Flooring Services moves to enforce a settlement agreement purportedly entered into with Defendants Whittington Motor Sports, Inc. d/b/a Wires Only and RD William Whittington.  The motion is unopposed. 

ANALYSIS

Code of Civil Procedure section 664.6 provides that “[i]f 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.” (Code Civ. Proc., § 664.6.) In ruling on a motion to enter judgment, the court acts as a trier of fact. The court must determine whether the parties entered into a valid and binding settlement. To do so, the court may receive oral testimony in addition to declarations. (Kohn v. Jaymar-Ruby, Inc. (1994) 23 Cal.App.4th 1530, 1533.)

This litigation is no longer “pending,” as a dismissal was entered at Plaintiff’s request, on April 9, 2024.  However, the Court may retain jurisdiction to enforce the settlement if the parties request it prior to the entry of dismissal.  (See Ironridge Global IV, Ltd. v. ScripsAmerica, Inc. (2015) 238 Cal.App.4th 259, 267; Sayta v. Chu (2017) 17 Cal.App.5th 960, 964.)  Here, the Court granted the parties’ stipulation for the Court to retain jurisdiction on March 21, 2024. 

The issue on a motion to enforce settlement agreement under Code of Civil Procedure section 664.6 is whether the parties entered into a valid and binding settlement agreement. (See Viejo v. Bancorp. (1989) 217 Cal.App.3d 200, 209, fn. 4 [“a court's power to make factual determinations under section 664.6 is generally limited to whether the parties entered into a valid and binding settlement agreement”].)  In other words, the only issue before the court is whether an agreement exists; not whether the agreement has been breached.

Attached as Exhibit 1 to the Declaration of Jonathan Zhan is a fully executed forbearance agreement acknowledging that as of January 25, 2024, (1) Defendants Whittington Motor Sports, Inc. dba Wires Only (“Wires Only”) and RD William Whittington (“Whittington”) (together, “Debtors”) owed non-party to this litigation, Midway Rent A Car, Inc. dba Midway Leasing and HFC Acceptance LLC dba Midway HFCA LLC (together, “Midway”); and Plaintiff Westlake Flooring Company, LLC dba Westlake Flooring Services (“Westlake”) $1,395,490.45 in connection with the four leased vehicles listed in Exhibit A to the forbearance agreement; and (2) Wires Only separately owes Westlake an additional $504,622.25 in connection with a promissory note and loan and security agreement, for a total outstanding amount Debtors owe of $1,900,112.70. 

In exchange for Midway and Westlake’s agreement to forbear immediate collection of the full amount owed, Debtors agreed to the repayment plan as outlined in Exhibit B to the forbearance agreement.  The forbearance agreement further provides that Debtors will provide as collateral the Art Collection described in Exhibit C to the forbearance agreement with a value of $447,000 and stock in West Coast Cigarette, Inc. valued at $4,957,157, to be returned to Debtors upon full repayment of the outstanding amounts owed.  Debtors were further required to deliver possession of the Mercedes Metris van or pay off that vehicle in the amount of $188,029.10, within five days of the execution of the forbearance agreement.

The parties further agreed to the execution of the stipulated judgment, attached as Exhibit D to the forbearance agreement, in favor of Plaintiff Westlake and non-party Midway and against Debtors, jointly and severally, for the full outstanding amount of $1,900,112.70. 

The agreement further provides, “Debtors further waive their right to notice of any court hearings necessary to enter the Stipulated Judgment in any such lawsuit and waive their right to appeal entry of the Stipulated Judgment in any such lawsuit.”

In the event of default, the forbearance agreement provides creditors shall provide 15 calendar days for debtors to cure, following written notice, and may thereafter move to enforce the forbearance agreement and/or file the stipulated judgment to be entered as a final judgment.  The Court notes that because Midway is not a party to this lawsuit, it lacks jurisdiction to enter the stipulated judgment as drafted, and Westlake has not provided any authority for the Court to enter the stipulated judgment under Section 664.6 in favor of non-parties, such as Midway.  Absent such authority, the Court declines to enter the stipulated judgment. 

CONCLUSION AND ORDER

            The Court denies Plaintiff Westlake’s motion to enforce settlement under Code of Civil Procedure section 664.6 without prejudice. 

              Plaintiff Westlake shall provide notice of the Court’s ruling and file the notice with a proof of service forthwith. 

DATED:  September 10, 2024                                               ___________________________

                                                                                          Michael E. Whitaker

                                                                                          Judge of the Superior Court