Judge: Robert B. Broadbelt, Case: 20STCV04420, Date: 2022-09-13 Tentative Ruling

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Case Number: 20STCV04420    Hearing Date: September 13, 2022    Dept: 53

Superior Court of California

County of Los Angeles – central District

Department 53

MOVING PARTIES:              Defendants Warner Records, Inc., Warner Music Group Corp., and Aaron Bay-Schuck

RESPONDING PARTY:       Plaintiff Michael Flynn

(1)   Motion to File Records under Seal

MOVING PARTIES:              Defendants Warner Records, Inc., Warner Music Group Corp., and Aaron Bay-Schuck

RESPONDING PARTY:        Plaintiff Michael Flynn

(2)   Motion to Enforce Settlement Agreement

The court considered the moving, opposition, and reply papers filed in connection with each motion.  

BACKGROUND

Plaintiff Michael Flynn (“Plaintiff”) filed this action against defendants Warner Music Group Corp., Warner Records, Inc., and Aaron Bay-Schuck (“Defendants”) on February 4, 2020.

On July 26, 2021, Plaintiff filed a Notice of Settlement of Entire Case.

Defendant filed the pending motion to seal and motion to enforce settlement agreement on January 7, 2022.

OBJECTIONS

The court sustains Plaintiff’s July 21, 2022 objection to Defendants’ proposed order.

The court overrules Plaintiff’s objections to the declaration of Adam Levin, filed on July 21, 2022.

MOTION TO SEAL

Defendants move the court for an order sealing the confidential settlement agreement attached as Exhibit A to the declaration of Adam Levin, filed by Defendants on January 7, 2022.  

Generally, court records are presumed to be open unless confidentiality is required by law.  (Cal. Rules of Court, rule 2.550, subd. (c).)  If the presumption of access applies, the court may order that a record be filed under seal “if it expressly finds facts that establish:  (1) There exists an overriding interest that overcomes the right of public access to the record; (2) The overriding interest supports sealing the record; (3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; (4) The proposed sealing is narrowly tailored; and (5) No less restrictive means exist to achieve the overriding interest.”  (Cal. Rules of Court, rule 2.550, subd. (d).) 

The court finds that (1) there exists an overriding interest not to disclose the settlement agreement that overcomes the right of public access to this record, since the settlement contains a confidentiality provision agreed to by the parties; (2) this interest supports sealing the record to preserve the confidentiality of the agreement; (3) a substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; (4) the proposed sealing is narrowly tailored since the parties bargained for the confidentiality of its terms; and (5) there are no less restrictive means to achieve the overriding interest.  (Cal. Rules of Court, rule 2.550, subd. (d).)

The court therefore grants Defendants’ motion to seal.

MOTION TO ENFORCE SETTLEMENT AGREEMENT

Defendants move the court for an order enforcing the settlement agreement entered into by and between plaintiff Michael Flynn, on the one hand, and defendants Warner Records Inc., Warner Music Group Corp., and Aaron Bay-Schuck, on the other hand, pursuant to Code of Civil Procedure section 664.6.  Plaintiff filed an opposition, contending that (1) the settlement agreement does not constitute a final, binding agreement, because settlement was conditioned upon the negotiation and execution of a long-form agreement, (2) alternatively, the settlement is ambiguous, and (3) the mediator’s proposed settlement violates the Older Workers Benefit Protection Act.

Code of Civil Procedure section 664.6 provides:  “If 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.  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.”  This provision “provides a summary procedure to enforce a settlement agreement by entering judgment pursuant to the terms of the settlement.”  (Hines v. Lukes (2008) 167 Cal.App.4th 1174, 1182.) 

Before judgment may be entered pursuant to section 664.6, two requirements must be satisfied: (1) the parties must agree to the material terms of a settlement contract before a judgment can be entered pursuant to the terms of the settlement (i.e., contract formation), and (2) there must be a writing signed by the parties that contains the material terms.  (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 797.)  “‘[I]f an essential element is reserved for the future agreement of both parties, as a general rule the promise can give rise to no legal obligation until such future agreement.  Since either party in such a case may, by the very terms of the promise, refuse to agree to anything to which the other party will agree, it is impossible for the law to affix any obligation to such a promise.’  [Citation.]”  (Id. at p. 812.)  Thus, “[a] settlement is enforceable under section 664.6 only if the parties agreed to all material settlement terms.”  (Hines, supra, 167 Cal.App.4th at p. 1182.)

First, the court finds that the settlement agreement is valid and binding.

Plaintiff argues that the settlement agreement is invalid on the ground that it is subject to various conditions precedent.  Specifically, Plaintiff argues that the settlement was conditional upon (1) Plaintiff’s execution of a full and complete general release, and (2) Defendants’ preparation of a long-form settlement agreement.

The court finds that the provisions requiring Plaintiff to execute a general release and defense counsel to provide a long-form agreement do not constitute conditions precedent, or establish that the parties left an essential term for future agreement.

“A condition precedent is one which is to be performed before some right dependent thereon accrues, or some act dependent thereon is performed.”  (Civ. Code, § 1436.)  “Conditions precedent may be created either expressly—by words such as ‘subject to’ or ‘conditioned upon’—or impliedly.  [Citation.]  They are generally disfavored and are strictly construed against a party arguing the agreement imposes one.  [Citation.]  Courts will not interpret a provision as a condition precedent absent clear, unambiguous language requiring that construction.”  (Estate of Charles A. Jones (2022) ____ Cal.App.5th ____, 2022 WL 4006977 at *2.)

Plaintiff cites paragraphs 4 and 5 in the settlement agreement, filed under seal with the court, as imposing conditions precedent on the parties.  (Opp., p. 4:4-13.)  Although these provisions do impose certain obligations on the parties, Plaintiff points to no language establishing that these conditions were “to be performed before some right dependent thereon accrue[d]….”  (Civ. Code, § 1436.)  Further, neither paragraph 4 nor paragraph 5 contains express conditions precedent or implied conditions.  Finally, as noted by Defendants in reply, although the second introductory paragraph in the settlement states that it is made “pursuant to the following terms and conditions[,]” Plaintiff does not point to any other language in the settlement agreement which would indicate that this phrase was meant to impose conditions precedent on the parties.  (Reply, p. 4:18-19 [quoting settlement agreement under seal].)  The other provisions of the confidential settlement agreement refute this contention, and make clear that the parties intended the agreement, as signed by Plaintiff and Defendants following mediation, to be binding on the parties.  (Levin Decl., Ex. A, ¶¶ 13-14.)

The court notes that Plaintiff also contends that the terms of the long-form agreement were material to Defendants, as expressed by their outward conduct and attempt to expand the release provision beyond the mediator’s proposal.  (See Ryan Decl., ¶ 7.)  The court disagrees because (1) the plain language of the settlement agreement, as set forth above, establishes that all material terms had been agreed upon, and (2) there is no evidence establishing that the settlement agreement signed by the parties was not intended to be binding until a long-form settlement was reached in light of the express terms of the contract.  (Levin Decl., Ex. A, ¶¶ 13-14; Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 307.)  The court interprets the terms of the settlement agreement, read together, to reflect “‘no more than an intent to further reduce the informal writing [i.e., the settlement agreement signed by the parties following mediation] to a more formal one’” [i.e., the long-form settlement], and therefore finds that the failure to provide the long-form “does not negate the existence of the” parties’ settlement agreement.  (Harris, supra, 74 Cal.App.4th at p. 307.)  Thus, the court finds that Plaintiff has not met his burden of establishing that the parties reserved an essential element of the settlement agreement for the future agreement of Plaintiff and Defendant.  (Weddington Productions, Inc., supra, 60 Cal.App.4th at p. 812.)

Second, the court finds that the language of the settlement agreement is not ambiguous.  Courts may not enforce an agreement unless its terms are “‘sufficiently certain to make the precise act which is to be done clearly ascertainable.’  [Citation.]  It must not only contain all the material terms but express them in a reasonably definite manner.”  (White Point Co. v. Herrington (1968) 268 Cal.App.2d 458, 465.)  The court finds that the challenged provisions—specifically, paragraphs 3, 4, 5, and 6—are not so uncertain that their meanings cannot be ascertained, and that they express the material terms in a reasonably definite manner.

Third, the court finds that any failure to fully comply with the statutory requirements set forth in the Older Workers Benefit Protection Act, expressed in 29 U.S.C. section 626, subdivision (f), would not render the parties’ settlement agreement wholly unenforceable.  Instead, the failure to comply with the waiver requirements would only render the settlement agreement “unenforceable against [Plaintiff] insofar as it purports to waive or release [his] [Age Discrimination in Employment Act of 1967] claim.”  (Oubre v. Entergy Operations (1997) 522 U.S. 422, 427-428; Flynn Decl., ¶ 2 [stating that Flynn was over the age of 40 at the time the settlement was signed].)

The court therefore finds that the settlement agreement executed by Plaintiff and Defendants following mediation is valid and enforceable.

However, Defendants fail to specify the terms of the judgment sought within their notice of motion and motion.  Defendants generally request the court enforce the parties’ settlement pursuant to section 664.6.  (Notice, p. 2:6-7, Motion, p. 8:5-7.)  Defendants’ proposed order—to which the court has sustained Plaintiff’s objection and therefore denies Defendants’ request to enter that order—requests the court enter an order (1) granting their motion and (2) dismissing Plaintiff’s complaint.  Under section 664.6, the court may only “enter judgment pursuant to the terms of the settlement.”  (Code Civ. Proc., § 664.6, subd. (a).)  Defendants have not identified the terms of the settlement agreement, pursuant to which the court is requested to enter judgment. 

The court therefore finds that it may not enter judgment as requested by Defendants in their proposed order.  First, there is no evidence that Defendants paid Plaintiff the settlement amount agreed upon.  (Flynn Decl., ¶¶ 13, 15; Reply, p. 13:3-4 [“Defendants are, and at all times have been, ready to perform”].)  Because Defendants have not satisfied their obligation to pay the settlement amount agreed to in paragraph 2 of the settlement, Defendants are not entitled to an order dismissing Plaintiff’s action.  Second, Defendants have not requested the court enter judgment against them in the sum specified in paragraph 2 of the parties’ settlement agreement.

The court therefore denies Defendants’ motion without prejudice to filing a new motion to enter judgment pursuant to section 664.6 that either (1) requests the court to enter judgment against Defendants in the amount specified in paragraph 2 of the parties’ confidential settlement agreement, or (2) presents evidence establishing that Defendants have performed their obligations to pay to Plaintiff the amount specified in paragraph 2 of the parties’ confidential settlement agreement, and also requests an order that the action be dismissed pursuant to paragraph 6 of the parties’ confidential settlement agreement and Code of Civil Procedure section 581d.

ORDER

The court grants defendants Warner Records Inc., Warner Music Group Corp., and Aaron Bay-Schuck’s motion to seal the settlement agreement attached to the “Declaration of Adam Levin in Support of Defendants’ Motion to Enforce Settlement Agreement Pursuant to Code of Civil Procedure section 664.6,” filed on January 7, 2022. 

First, the court orders that the complete, unredacted version of the Declaration of Adam Levin in Support of Defendants’ Motion to Enforce Settlement Agreement Pursuant to Code of Civil Procedure section 664.6,” filed on January 7, 2022, shall be filed under seal.

            Second, the court orders defendants Warner Records Inc., Warner Music Group Corp., and Aaron Bay-Schuck to file a public version of the “Declaration of Adam Levin in Support of Defendants’ Motion to Enforce Settlement Agreement Pursuant to Code of Civil Procedure section 664.6” which states that Exhibit A is filed under seal pursuant to this court’s order.   

Pursuant to California Rules of Court, rule 2.551 subdivision (e), the court directs the clerk to file this order, maintain the records ordered sealed in a secure manner, and clearly identify the records as sealed by this this order. 

The court further orders that no persons other than the court are authorized to inspect the sealed records.

The court denies defendants Warner Records Inc., Warner Music Group Corp., and Aaron Bay-Schuck’s motion to enforce settlement agreement without prejudice.

            The court orders defendants Warner Records Inc., Warner Music Group Corp., and Aaron Bay-Schuck to give notice of this ruling. 

IT IS SO ORDERED.

DATED:  September 13, 2022

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court