Judge: Michael P. Linfield, Case: 23STCV05312, Date: 2023-08-28 Tentative Ruling
The Court often posts its tentative several days in advance of the hearing. Please re-check the tentative rulings the day before the hearing to be sure that the Court has not revised the ruling since the time it was posted.
Please call the clerk at (213) 633-0154 by 4:00 pm. the court day before the hearing if you wish to submit on the tentative.
Case Number: 23STCV05312 Hearing Date: August 28, 2023 Dept: 34
SUBJECT: Motion to Enforce Settlement Agreement
Moving
Party: Plaintiff Charles Floyd
Resp.
Party: Defendant
Mercedes-Benz USA, LLC
The Court GRANTS the Motion.
Defendant shall remit payment to
Plaintiff pursuant to the Settlement Agreement within seven (7) days.
Incidental costs, attorney’s fees,
and costs are AWARDED in favor of Plaintiff and against Defendant in the total
amount of $6,911.65.
BACKGROUND:
On
March 9, 2023, Plaintiff Charles Floyd filed his Complaint against Defendants Mercedes-Benz
USA, LLC and Keyes European, LLC on causes of action arising from the
Song-Beverly Consumer Warranty Act.
On June
22, 2023, Plaintiff filed his Judicial Council Form CM-200, Notice of
Settlement of Entire Case.
On July
13, 2023, the Court dismissed the case with prejudice and retained jurisdiction
to make orders to enforce any and all terms of settlement, including judgment,
pursuant to Code of Civil Procedure section 664.6.
On
August 2, 2023, Plaintiff filed his Motion to Enforce Settlement.
On
August 15, 2023, Defendant Mercedes-Benz USA, LLC (“Defendant”) filed its
Opposition to the Motion. In support of its Opposition, Defendant concurrently
filed Declaration of Ali Ameripour.
On August
22, 2023, Plaintiff filed his Reply regarding the Motion.
ANALYSIS:
I.
Legal
Standard
“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.” (Code
Civ. Proc., § 664.6, subd. (a).)
“Section 664.6 was enacted to provide a
summary procedure for specifically enforcing a settlement contract without the
need for a new lawsuit.” (Weddington Prod., Inc. v. Flick (1998) 60
Cal.App.4th 793, 809.) In deciding motions made under Section 664.6, judges
“must determine whether the parties entered into a valid and binding
settlement.” (Kohn v. Jaymar-Ruby (1994) 23 Cal.App.4th 1530, 1533.)
II. Discussion
A.
The
Settlement Pursuant to Code of Civil Procedure Section 998
On May 12, 2023, Defendants made a
compromise offer to Plaintiff pursuant to Code of Civil Procedure section 998.
(Motion, Exh. B, p. 3:13.) Plaintiff accepted the offer (now “Settlement
Agreement”) on May 30, 2023. (Decl. Ali Ameripour, Exh. 1, p. 4:22.)
(The Court notes that the
Declaration of Shawn Halbert attached to the Motion appears to incorrectly
declare that the Settlement Agreement was accepted on June 30, 2023. [Motion,
Decl. Halbert, ¶ 4.] This appears to be incorrect, both because the signed
Settlement Agreement provided by Defendant shows a signature of May 30, 2023
and because the vehicle was surrendered on June 21, 2023. [Motion, Decl.
Halbert, ¶ 5.])
The relevant portions of the
Settlement Agreement are as follows:
OPTION 1: REPURCHASE
1. MBUSA will pay the
total amount of $30,500.00 to Plaintiff, plus all lease payments made by
Plaintiff that are due on or after May 24, 2023. In addition, MBUSA will pay
Mercedes-Benz Financial Services directly the remaining amounts necessary to
repurchase the Subject Vehicle (including without limitation any remaining
payments, the lease-end buyout amount, and termination fees, if applicable),
and obtain clear title.
2. It is an express
condition of this Offer that, if accepted, MBUSA will perform its obligations
within 45 days of acceptance on a mutually agreeable date and location, with
Plaintiff returning the Subject Vehicle to a mutually agreeable authorized
Mercedes-Benz dealership and [sic] on or before that same date executing all
required California Department of Motor Vehicle forms, including but not
limited to, DMV Form 262, necessary to transfer title of the Subject Vehicle to
MBUSA free and clear of all liens and encumbrances (except for any lease, which
will be paid off by MBUSA as stated above), and MBUSA thereafter providing
Plaintiff and Mercedes-Benz Financial Services with the check or checks
necessary to obtain clear title for the Subject Vehicle. It is a further
express condition of this Offer that, if accepted, Plaintiff will promptly
provide to MBUSA the current lease payoff information, current payment history,
current registration of the Subject Vehicle, and a copy of the front and back
sides of the Subject Vehicle’s title (if available).
OPTION 2: PAYMENT WITHOUT SURRENDER
3.
As
an alternative to the consideration offered in Paragraphs 1 – 2 (Option 1), in
lieu of MBUSA paying Plaintiff the above amounts and Plaintiff surrendering the
vehicle per the above paragraphs, MBUSA will pay the total amount of $30,500.00
to Plaintiff within 30 days of acceptance of this Offer. Plaintiff will not be
required by this Offer to surrender the vehicle to MBUSA under this option
(though this does not alter any obligation under the Subject Vehicle’s lease to
return the Subject Vehicle).
(Motion, Exh. B.)
B. The Parties’ Arguments
Plaintiff moves the Court to: (1) enforce
the terms of the settlement agreement; (2) order Defendant to remit payment
pursuant to the Settlement Agreement within five court days of the entry of
this Order; (3) order Defendant to compensate Plaintiff for the incidental
expenses he incurred as a result of Defendant’s alleged breach of the
Settlement Agreement by incurring rental car charges; and (4) order Defendant
to compensate Plaintiff $5,091.65 for the reasonable costs and attorneys’ fees
associated with this Motion. (Motion, p. 10:12–21.)
Plaintiff argues: (1) that Defendant
violated the Settlement Agreement, which is valid and binding; (2) that
Plaintiff is entitled to incidental and consequential damages as a result of
Defendant’s alleged breach of the Settlement Agreement; and (3) that Plaintiff
is entitled to recover the reasonable costs and attorney’s fees associated with
bringing this Motion. (Motion, pp. 5:13, 6:18–19, 8:13–14.)
Defendant opposes the Motion,
arguing: (1) that Plaintiff allegedly breached the Settlement Agreement, not
Defendant; (2) that Code of Civil Procedure section 664.6 does not apply here;
(3) that Plaintiff did not incur incidental damages; and (4) that the
Settlement Agreement does not allow for additional attorney’s fees.
(Opposition, pp. 2:9, 4:5, 4:25, 6:7.)
Plaintiff reiterates his arguments
in his Reply.
C. Whether the Settlement Agreement is Valid
Defendant argues that Code of Civil
Procedure section 664.6 does not apply here because: (1) the Settlement
Agreement is signed by Plaintiff’s Counsel instead of Plaintiff; and (2) the
Settlement Agreement is not signed by Defendant. (Opposition, p. 4:17–20.)
Defendant cites Levy v. Superior Court (1995) 10 Cal.4th 578, 584 in
support of these arguments. (Ibid.)
Plaintiff argues: (1) that Levy was
legislatively abrogated in 2020 when the statute was amended to allow attorneys
to sign on behalf of parties; and (2) that the parties petitioned the Court on
July 13, 2023 to dismiss the case with the Court retaining jurisdiction
pursuant to Code of Civil Procedure section 664.6. (Reply, p. 2:2–17.)
The Court agrees with Plaintiff’s
arguments.
First, Code of Civil Procedure section 664.6, subdivision
(b)(2) explicitly allows attorneys to sign enforceable settlement agreements on
behalf of their clients. The Court
wonder why Defense Counsel would cite the Court to Levy, a 1995 case
that was Legislatively abrogated in 2020.
An attorney “ (A) Shall employ, . . . such means only as are
consistent with truth; (B) Shall not seek to mislead the judge, . . . or jury
by an artifice or false statement of fact or law; (C) Shall not intentionally
misquote to a tribunal the language of a book, statute, or decision.” (Rules of Professional Conduct, Rule 5-200.) Further, “[a]n attorney is an officer of the
court and owes the court a duty of candor . . . The duty of candor is not
simply an obligation to answer honestly when asked a direct question by the
trial court. It includes an affirmative duty to inform the court when a
material statement of fact or law has become false or misleading in light of
subsequent events.” (Levine v. Berschneider (2020) 56
Cal.App.5th 916, 921.)
Second, Code of Civil Procedure
section 664.6, subdivision (a) allows the Court to enter judgment pursuant to
the terms of a settlement if the parties to pending litigation stipulate “in a
writing signed by the parties outside of the presence of the court or orally
before the court”.
Finally, the Court is perplexed as
to why Defense Counsel believes that they did not sign the Settlement
Agreement. The signature of Defense Counsel Soheyl Tahsildoost is clearly
visible on page 3, lines 14 through 15 of the Settlement Agreement.
The Settlement Agreement is valid
and enforceable pursuant to Code of Civil Procedure section 664.6.
D. Breach of the Settlement Agreement
Plaintiff argues that he has performed
under the Settlement Agreement by surrendering the vehicle to Keyes European,
an authorized Mercedes-Benz dealership, and completing all the required
surrender documents at that time. (Motion, p. 3:2–4.) Plaintiff further argues
that Defendant has breached the contract by not remitting payment by July 17,
2023. (Id. at p. 4:1–3.)
Defendant argues that Plaintiff
breached the contract because he “lease returned” the vehicle. (Opposition, p.
3:16–18.) According to Defendant, a lease return is different from a return for
repurchase of the vehicle from Plaintiff, and Plaintiff’s lease return has in
turn caused a delay for Defendant. (Id. at pp. 3:22–28, 4:1.)
The Court
disagrees with Defendant’s argument.
The relevant
portion of the Settlement Agreement states the following: “It is an express
condition of this Offer that, if accepted, MBUSA will perform its obligations
within 45 days of acceptance on a mutually agreeable date and location, with
Plaintiff returning the Subject Vehicle to a mutually agreeable authorized
Mercedes-Benz dealership and [sic] on or before that same date executing all
required California Department of Motor Vehicle forms, including but not
limited to, DMV Form 262, necessary to transfer title of the Subject Vehicle to
MBUSA free and clear of all liens and encumbrances (except for any lease, which
will be paid off by MBUSA as stated above), and MBUSA thereafter providing
Plaintiff and Mercedes-Benz Financial Services with the check or checks
necessary to obtain clear title for the Subject Vehicle.” (Motion, Exh. B, p.
2:1–11.)
The Settlement Agreement does not make
any distinction between “returning” and “lease returning” — it simply requires
of Plaintiff: (1) “returning the Subject Vehicle”; (2) to a mutually agreeable
dealership; (3) on or before the 45th day from acceptance of the Settlement
Agreement; and (4) with Plaintiff completing all forms necessary to transfer
title to Defendant free and clear of all liens and encumbrances.
The term “returning” is plain, and Plaintiff
complied by returning the vehicle to the dealership. Defendant is the one who
drafted the Settlement Agreement; if Defendant had wanted a more specific
procedure to be followed (e.g., “returning for direct repurchase by the
manufacturer” instead of “lease returning”) when there appears to have been two
possibilities, it was Defendant’s responsibility to make that clear. (Victoria
v. Super. Ct. (1985) 40 Cal.3d 734, 738 [“Ambiguities in contract language
are to be resolved against the drafter.”].)
Plaintiff performed all of his
obligations under the Settlement Agreement: (1) Plaintiff returned the vehicle;
(2) to a mutually agreeable dealership; (3) on June 21, which was before 45
days of acceptance of the Settlement Agreement (the last day of which was July
14, 2023); and (4) completed all the forms necessary to transfer title to
Defendant free and clear of all liens and encumbrances. It is completely
irrelevant to the terms of the Settlement Agreement whether there is a delay to
Defendant due to the method of the return.
It appears, however, that Defendant has
not complied with any of its obligations under the Settlement Agreement. Thus,
Defendant is in breach of the Settlement Agreement.
E.
Incidental
and Consequential Damages
Plaintiff
argues that he has incurred car rental costs as of July 18, 2023 because he has
been unable to use the settlement proceeds to purchase a new car. (Motion, p.
7:15–27 and Decl. Halbert, ¶ 16.) Plaintiff argues that he is entitled to these
damages pursuant to Civil Code section 1794, subdivision (b)(1) and Commercial
Code sections 2711 through 2713.
Defendant argues
that there were no incidental or consequential damages here because the end of
the lease was June 24, 2023, and Plaintiff was always going to need a new car
after returning this vehicle because this case is about a leased vehicle.
(Opposition, pp. 4:26–28, 5:1–5.) Defendant also points out that the amount of
money Plaintiff spent on rentals was unreasonable because Plaintiff could have
taken out a lease at a much cheaper rate. (Id. at pp. 5:25–28, 6:1–2.)
The Court agrees
with Plaintiff’s argument.
Defendant’s breach is a failure to promptly
make restitution to Plaintiff, and rental car costs actually incurred by
Plaintiff are the exact type of incidental damages that are allowed by both
statute and case law. (Civ. Code, §§ 1793.2, subd. (d)(2)(B) and 1794; see also
Kirzhner v. Mercedes-Benz USA, LLC (2020) 9 Cal.5th 966, 971–72.)
Further, the reasonableness of the
rental costs incurred is not at issue because the language of the statute is
“rental car costs actually incurred by the buyer.” (Civ. Code, § 1793.2,
subd. (d)(2)(B), emphasis added.) “We keep in mind that the [Song-Beverly
Consumer Warranty] Act is ‘manifestly a remedial measure, intended for the
protection of the consumer; it should be given a construction calculated to
bring its benefits into action.’” (Kirzhner, supra, 9 Cal.5th at
972, quoting Murillo v. Fleetwood Enters., Inc. (1998) 17 Cal.4th 985,
990.)
Plaintiff claims that the rental car
costs are $75.00 per day. (Motion, p. 1:17–19.) The Court will award rental car
costs in favor of Plaintiff and against Defendant at the rate of $75.00 per day
from July 15, 2023 (the first day of Defendant’s breach) until September 11,
2023 (one week after the last day Defendant will have to comply with this
Order), for total incidental costs of $4,350.00.
F. Whether Attorney’s Fees and Costs are
Recoverable
Plaintiff argues that attorney’s
fees and costs are available for recovery of the fees and costs incurred for
this Motion pursuant to Civil Code section 1794, subdivision (d). (Motion, p.
8:15–19.)
Defendant argues that attorney’s
fees are not available because there is no provision for the award of such fees
pursuant to the Settlement Agreement. (Opposition, p. 6:10–20.)
The Court agrees
with Plaintiff’s argument.
The following is
the relevant language in the Settlement Agreement: “MBUSA will pay Plaintiff’s
attorney’s fees, expenses and costs in the amount of $7,000.00 in full
satisfaction of any attorney’s fees, expenses and costs owed to Plaintiff in
this action.” (Decl. Ameripour, Exh. 1, p. 2:21–23, emphasis added.)
However, the attorney’s fees and costs Plaintiff currently seeks are for fees
and costs incurred after this action (i.e., for subsequent enforcement
of the Settlement Agreement). There is no language in the Settlement Agreement
that limits recovery of fees and costs for subsequent enforcement of the
Settlement Agreement. Thus, the language of the Settlement Agreement does not
apply to this request for fees and costs, and the attorney’s fees and costs
provision in Civil Code section 1794, subdivision (d) controls.
G. The Amount of Attorney’s Fees and Costs
“Under
the lodestar adjustment methodology, the trial court must initially determine
the actual time expended and then ascertain whether under all the
circumstances¿of the case the amount of actual time expended and the monetary charge being made for the time expended are
reasonable. Factors to be considered include, but are not limited to, the
complexity of the case and procedural demands, the attorney skill exhibited and the results achieved. The prevailing party and fee applicant
bears the burden of showing that the fees incurred were reasonably necessary
to¿the conduct of the litigation, and were reasonable in amount. It follows that if the prevailing
party fails to meet this burden, and the court finds the time expended or
amount charged is not reasonable under the circumstances, then the court must
take this into account and award attorney fees in a lesser amount.” (Mikhaeilpoor
v. BMW of N. Am., LLC (2020) 48 Cal.App.5th 240, 247 [cleaned up].)
Plaintiff seeks
$5,291.65 in fees and costs. (Reply, p. 8:17–18.) This consists of $61.65 in
filing fees, 10.1 hours of work by Counsel Halbert at the rate of $500.00 per
hour, and 0.8 hours of work by a legal assistant at the rate of $225.00 per
hour. (Motion, Decl. Halbert, ¶¶ 34, 37.)
The Court finds that the costs and hourly
rates are reasonable but that the number of hours incurred for this matter is
unreasonable. This was a straightforward motion to enforce a settlement. The
Court will award attorney’s fees and costs in favor of Plaintiff and against
Defendant in the total amount of $2,561.65, which consists of $61.65 in costs
and 5 hours of attorney work at the rate of $500.00.
III. Conclusion
The Court GRANTS the Motion.
Defendant shall remit payment to
Plaintiff pursuant to the Settlement Agreement within seven days.
Incidental costs, attorney’s fees,
and costs are AWARDED in favor of Plaintiff and against Defendant in the total
amount of $6,911.65.