Judge: Michael P. Linfield, Case: BC673149, Date: 2023-08-11 Tentative Ruling

Case Number: BC673149    Hearing Date: August 11, 2023    Dept: 34

SUBJECT:         Motion to Enforce Settlement Agreement

Moving Party:  Plaintiffs People of the State of California, ex rel. ILWU-PMA Welfare Plan and ILWU-PMA Welfare Plan

Resp. Party:    Defendant Rigoberto Arias

The Motion is GRANTED in part.  The Court will enter judgement against Defendant Arias for $150,000.

BACKGROUND:

On December 18, 2017, Plaintiffs People of the State of California, ex rel. ILWU-PMA Welfare Plan and ILWU-PMA Welfare Plan filed their Complaint against Defendants David Ehl, Ohana Wellness Center, LLC, Dr. Ehl Chiropractic Corporation, One Life Acupuncture, APC, and Mobility Chiropractors, Inc. on causes of action arising from alleged insurance fraud.

        On November 5, 2019, Plaintiffs amended their Complaint to substitute Doe 6 with Rigoberto Arias.

        On June 16, 2021, Plaintiffs filed their First Amended Complaint.

        On March 2, 2022, Plaintiffs filed their Corrected First Amended Complaint.

        On June 24, 2022, Plaintiffs filed their Second Amended Complaint.

        From August 17, 2022 to August 19, 2022, the Court held a bench trial in this matter. The Court found: (1) on the first cause of action, in favor of Plaintiffs and against Defendants One Life Acupuncture, APC, Ohana Wellness Center, LLC and Ohana Management Corporation; (2) on the first cause of action, in favor of Plaintiffs and against Defendant Myron Mailo; (3) on the second causes of action, in favor of Plaintiffs and against all Defendants; and (4) on the third cause of action, in favor of Plaintiffs and against all Defendants.

        On November 7, 2022, by request of Plaintiffs, the Clerk’s Office dismissed without prejudice Rigoberto Arias from the Second Amended Complaint.

        On November 28, 2022, the Court entered its Final Judgment in this matter.

        On July 18, 2023, Plaintiffs filed their Motion to Enforce Settlement Agreement Pursuant to Code Civ. Proc. § 664.6 (“Motion”). In support of their Motion, Plaintiffs concurrently filed: (1) Memorandum of Points and Authorities (“Memorandum”); and (2) Declaration of Maisie C. Sokolove.

        On August 3, 2023, Defendant Rigoberto Arias (“Defendant”) filed his Response to the Motion.

        No reply or other response has been filed to 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 Alleged Settlement Agreement

The oral record before the Court from August 17, 2022 is as follows:

Counsel Fraysse (Counsel for Plaintiff)

“I think this accurately reflects the agreement that we have. It’s a payment of $300,000, $150,000 up front with $150,000 in installment payments made over two years. The installment payments will be secured by a deed of trust on property owned by Mr. Arias located on Hondo Street in the City of Downey. There is a cooperation component to the settlement that he will testify fully concerning his involvement and provide all information in a matter involving compounded drugs now pending in L.A. Superior Court before Judge Highberger in complex lit known as People ex rel. ILWU-PMA Welfare Plan vs. Rx Unlimited Pharmacy and other defendants. It’s case number BC670620. And this would include appearing for an examination under oath and accepting subpoenas.

“The cooperation is predicated on providing 100 percent of the information in the possession of Mr. Arias, and if it’s later discovered that Mr. Arias withheld or concealed information from the Plan, that the Plan may bring the matter to JAMS for an arbitration to determine whether Mr. Arias is in breach of the settlement agreement. And if he is found to be in breach of the settlement agreement, then he’ll stipulate to a judgment of $600,000 in this matter.

“We’d ask that the Court retain jurisdiction per CCP 666.4 [sic] to enforce the agreement just as we did with the No [sic] case — which I believe the Court ordered it in the No [sic] case when we appeared last Friday. And in exchange for the payments and the promises, the Plan will provide a full release and dismissal to Mr. Arias in this case and it’s all subject to being reduced to a full written settlement agreement.

“I don’t — have I left anything out?”

Counsel Walker: (Counsel for Defendant)

“No, that accurately reflects our agreement.”

        Counsel Fraysse:

        “Okay.”

The Court:

        “All right. Is Mr. Arias on the line currently?”

Mr. Arias:

        “Yes.”

The Court:

“Okay. Do you have any questions regarding the agreement or anything that you wish to add?”

Mr. Arias:

        No, Your Honor.

The Court:

“Okay. And this is your understanding of the agreement that you’ve entered into, Mr. Arias, is that correct?”

Mr. Arias:

        Yes, Your Honor.

The Court:

“All right. All right. Then we will proceed with the trial. . . .”

(Decl. Sokolove, Exh. A, pp. 4–7.)

B.      The Parties’ Arguments

Plaintiffs move the Court to enter judgment against Defendant pursuant to the terms agreed orally before the Court on August 17, 2022. (Memorandum, p. 5:13–14.)

Plaintiffs argue that the Court should enforce this settlement agreement because Defendant has informed Plaintiff that he is unable to comply with his payment obligations. (Memorandum, p. 4:7–11; Decl. Sokolove, Exh. D.)

        Defendant responds: (1) that the settlement agreement was not reduced to a writing; (2) that the settlement agreement did not specify all the terms and conditions as to monthly payments; (3) that Defendant has faced a change in circumstances, which, similar to family law, warrants a change in the terms of the settlement terms; and (4) that, if appropriate, the Court should refer this matter to a mediator to resolve the terms of a modified settlement agreement. (Response, pp. 2:15–18, 3:3–4, 3:13–15, 3:21–25.)

        Plaintiffs have not submitted a reply or a further response.

C.          Whether there is a Valid, Binding, and Enforceable Settlement

        A settlement agreement that is made orally before the Court can be enforceable pursuant to Code of Civil Procedure section 664.6, subdivision (a). In other words, a settlement agreement need not be reduced to a writing signed by the parties outside of the presence of the Court in order to be enforceable.

        However, in order to enforce a settlement contract, the Court “must determine whether the parties entered into a valid and binding settlement.” (Kohn, supra, 23 Cal.App.4th at p. 1533.)

        Plaintiffs submit to the Court a signed Order (officially titled “Joint Request and Stipulation and [Proposed] Order to Maintain Continuing Jurisdiction to Enforce Settlement Agreement Under Code of Civil Procedure Section 664.6”). (Decl. Sokolove, Exh. B.) The Order is signed by the Parties’ respective counsel on August 24, 2022 and by the Court on September 20, 2022. (Id. at pp. 2–3.)

        The Order is notable for at least two reasons. First, Defendant did not sign the Order. Second, the Order is not a “full written settlement agreement.” The Order does not list any of the terms of the settlement orally agreed to before the Court. There are no details whatsoever about payments, cooperation, or release of claims. The Order only stipulates and orders that the Court retain jurisdiction to enforce the settlement. (Decl. Sokolove, Exh. B, p. 2:5–7.)

        The Court does not have a “full written settlement agreement” that amplifies the language of the Parties’ oral agreement on the record.  Thus, the only agreement that the Court could enforce is the oral stipulation on the record.

        That oral stipulation required Defendant Arias to pay “$300,000, $150,000 up front with $150,000 in installment payments made over two years.” As Defendant argues in his opposition, there are no terms specified for the “payments made over two years.”  (See Opposition, p. 3:14-18.) Thus, this Court cannot determine whether the parties contemplated 24 equal monthly payments of $6,250.00, one payment of $150,000.00 at the end of the two-year period, or something else.  The Court cannot enforce this term of the agreement.

        However, the oral agreement also required Defendant Arias to pay “$150,000 up front.”  Defendant has not made any such payment. Defendant argues that his wages have gone down since the time of the agreement, but there is no evidence of such a “fact.”  (See, e.g., Ponte v. County of Calaveras (2017) 14 Cal.App.5th 551, 556 [“the arguments of counsel in a motion are not a substitute for evidence, such as a statutorily required affidavit.”])  Even if satisfactory evidence had been presented showing a diminution in Defendant’s wages, it would not change the fact that Defendant had voluntarily entered into this agreement and is still bound by it.

III.     Conclusion

The Motion is GRANTED in part.  The Court will enter judgement against Defendant Arias for $150,000.