Judge: Michelle Williams Court, Case: 19STCV37788, Date: 2022-08-23 Tentative Ruling

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Case Number: 19STCV37788    Hearing Date: August 23, 2022    Dept: 74

19STCV37788           TERESITA ALBA vs H&O UNIQUE CONSTRUCTION

Defendants Ofer Hayon & H&O Unique Construction Inc.’s Joint Motion to Enforce Settlement Agreement per C.C.P. 664.6

TENTATIVE RULING:  Defendants Ofer Hayon & H&O Unique Construction Inc.’s Joint Motion to Enforce Settlement Agreement per C.C.P. 664.6 is GRANTED.  Defendants are ordered to provide a proposed judgment consistent with the Court’s ruling herein.

Background

On October 22, 2019, Plaintiff Teresita Alba, individually and as Trustee of the Teresita A. Alba Trust filed a complaint against Defendants H&O Unique Construction, Inc., Ofer Hayon, Alex Pedram Mehdiani, and S.B.S. Trust Deed Network arising out of agreements to demolish, finance, and build a new multi-unit residential property. The First Amended Complaint added Victor Franklin Alba as a Plaintiff and California Prime Realty, Inc., Salud B Mangahis, and Sally Mangahis as Defendants. The First Amended Complaint asserts causes of action for: (1) financial elder abuse, (2) breach of contract, (3) breach of fiduciary duty, (4) concealment, (5) conversion, (6) recission of contract, (7) cancellation of instrument, (8) quiet title, and (9) injunction.   

On April 26, 2021, Defendants H&O Unique Construction, Inc. and Ofer Hayon filed a First Amended Cross-Complaint against Plaintiff Teresita Alba, individually and as Trustee of the Teresita A. Alba Trust filed, Victor Alba, Alex Mehdiani, California Prime Realty, Inc., S.B.S. Trust Deed Network, Salud B. Mangahis, and Sally Mangahis. The First Amended Cross-Complaint asserts causes of action for: (1) breach of contract; (2) quantum meruit; (3) equitable indemnity; (4) implied indemnity; (5) apportionment of fault/contribution; and (6) declaratory relief.  

On May 21, 2021, the Court granted Defendant Salud Mangahis’s unopposed application for determination of good faith settlement between Mangahis and Plaintiffs.  

On November 3, 2021, the Court denied Defendant H&O Unique Construction, Inc. and Ofer Hayon’s first motion for determination of good faith settlement without prejudice.   

On May 25, 2022, the Court denied Defendant H&O Unique Construction, Inc. and Ofer Hayon’s second motion for determination of good faith settlement with prejudice.

On August 3, 2022, Defendants Alex Mehdiani and California Prime Realty, Inc. filed a “Notice of Entry of Stipulation and Order of Bankruptcy Court re: Relief of Automatic Stay,” which attached an order in Teresita Alba’s bankruptcy case stating “Relief from Automatic Stay pursuant to 11 U.S.C. § 362 is granted to allow the Parties and all parties in the matter entitled Teresita Alba, et. al. v. H&O Unique Construction. Inc., et. al. which was filed by the Debtor in Los Angeles Superior Court on October 22, 2019 with Case No. 19STCV37788 (the ‘State Court Action’) to continue the litigation under applicable non-bankruptcy laws as per the Stipulation.” Accordingly, Plaintiff’s bankruptcy does not prevent the Court from ruling on the instant motion.

Motion

On January 5, 2022, Defendants Ofer Hayon & H&O Unique Construction Inc. filed this motion to enforce the settlement agreement between them and Plaintiffs.

Opposition

In opposition, Plaintiffs contend the moving Defendants cannot waive the determination of good faith settlement condition in the settlement agreement.

Reply

In reply, Defendants argue they are the sole beneficiaries of the condition and therefore are permitted to waive it and enforce the terms of the settlement.

Defendants’ objection to paragraph 4 of the Theodosiadis declaration is SUSTAINED.

Motion to Enforce Settlement

Standard

Pursuant to Code of Civil Procedure section 664.6, “[i]f 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.”

“A motion to enforce a settlement agreement under Code of Civil Procedure section 664.6 provides a summary procedure for specifically enforcing a settlement contract without the need for a new lawsuit.” (Red & White Distribution, LLC v. Osteroid Enterprises, LLC (2019) 38 Cal.App.5th 582, 586.) In deciding motions made under Section 664.6, the Court “must determine whether the parties entered into a valid and binding settlement.”  (Kohn v. Jaymar-Ruby (1994) 23 Cal.App.4th 1530, 1533.) “If the court determines that the parties entered into an enforceable settlement, it should grant the motion and enter a formal judgment pursuant to the terms of the settlement.” (Hines v. Lukes (2008) 167 Cal.App.4th 1174, 1182.)  “The statutory language makes it clear, however, that a party moving for the entry of judgment pursuant to a settlement under Code of Civil Procedure section 664.6 need not establish a breach of contract to support relief under the statute.” (Id. at 1185.) “Section 664.6's express authorization for trial courts to determine whether a settlement has occurred is an implicit authorization for the trial court to interpret the terms and conditions to settlement.” (Fiore v. Alvord (1985) 182 Cal.App.3d 561, 566.)

Discussion

Defendants’ motion is supported by their counsel’s declaration that attaches the Settlement Agreement and Mutual Release between Teresita Alba, individually and as Trustee of the Teresita A. Alba Trust dated November 1, 2016 (“Teresita”); and Victor Franklin Alba (“Victor”) (Collectively “Plaintiffs”), on the one hand, and OFER HAYON(“Hayon”) And H&O UNIQUE CONSTRUCTION, INC. (“H&O”) (collectively, “Defendants”), on the other hand.” (Vafa Decl. Ex. A.) The agreement provided, in relevant part:

Defendants will pay $25,000 (twenty-five thousand dollars) to Plaintiffs (the “Payment”), subject to Court’s granting of Defendants Motion for Good Faith Settlement (“MGS”), which will be filed within fourteen (14) days after all parties and their respective counsels of records’s signatures of this Settlement Agreement. Payment shall be made by Wire Transfer and made payable to Law Office of Silvio Nardoni Client Trust Account . . . within thirty (30) days of the Court’s granting of MGS.

(Id. § 2.2.) Plaintiffs agreed to deposit the payment within one court day of receipt and thereafter “execute and file with the Los Angeles Superior Court (the “Court”) a dismissal with prejudice (the “First Amended Complaint Dismissal”) of the Court Action, subject to the Court retaining jurisdiction to enforce the settlement and any necessary judgment in the event of default of this Settlement Agreement.’ (Id. § 2.3) Defendants further agreed “[w]ithin two (2) court days of Plaintiffs’ filing and service of the Conformed Copy of the Clerk’s First Amended Complaint Dismissal, Defendants shall execute and file with the Court a dismissal with prejudice (the “Cross-Complaint Dismissal”) of the Court Action, subject to the Court retaining jurisdiction to enforce the settlement and any necessary judgment in the event of default of this Settlement Agreement.” (Id. § 2.4.) The parties entered into a valid and enforceable settlement agreement.

As noted above, the Court denied Defendants’ motion for determination of good faith settlement. Nevertheless, Defendants mailed the settlement check in the amount of $25,000.00 on January 10, 2022, waiving the condition that their payment was “subject to Court’s granting of Defendants Motion for Good Faith Settlement.” (Vafa Reply Decl. Ex. 1.) In opposition, Plaintiffs contend Defendants cannot waive this requirement and the Court cannot enter judgment pursuant to the terms of the settlement agreement.

“A settlement agreement is a contract, and the legal principles which apply to contracts generally apply to settlement contracts.” (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 810.) Additionally, “[i]t is well settled a contracting party may waive conditions placed in a contract solely for that party's benefit.” (Sabo v. Fasano (1984) 154 Cal.App.3d 502, 505.) The Court finds Defendants can waive a provision of the agreement and enforce the settlement. A determination of good faith settlement only benefits Defendants as alleged joint tortfeasors and co-obligors. (See Code Civ. Proc. § 877.6 (c) (“A determination by the court that the settlement was made in good faith shall bar any other joint tortfeasor or co-obligor from any further claims against the settling tortfeasor or co-obligor for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.”).) Plaintiffs do not cite any evidence or authority to suggest that a good faith determination would benefit any party other than Defendants. Enforcement of the agreement would not, as Plaintiffs contend, result in a substantially different agreement or ignore a material term. Rather, the Court enforces Plaintiffs’ obligation to dismiss the First Amended Complaint once payment is received. (Vafa Decl. Ex. A § 2.3.)

While Defendants indicate they mailed the settlement check on January 10, 2022, they do not indicate whether Plaintiffs deposited the check. On its face, the check became void after 120 days, which has long expired. (Vafa Reply Decl. Ex. 1.)

In the conclusion of the motion, Defendants request the Court enforce the settlement by “[e]nter[ing] judgment against Plaintiffs and in favor of Hayon Defendants,” and dismissing Plaintiffs’ First Amended Complaint as against them as well as the Hayon Defendants’ cross-complaint as against Plaintiffs. (Mot. at 13:8.) However, the settlement does not call for a judgment “against Plaintiffs,” but rather Defendants’ payment of $25,000.00 to Plaintiffs.

The proper judgment to be entered by the Court in connection with Defendants’ motion is to enter judgment in favor of Plaintiffs and against Defendants Ofer Hayon & H&O Unique Construction Inc. in the amount of $25,000.00, dismiss Plaintiffs’ First Amended Complaint with prejudice as to Defendants Ofer Hayon & H&O Unique Construction Inc., and dismiss Ofer Hayon & H&O Unique Construction Inc. Cross-Complaint with prejudice as to Plaintiffs.