Judge Ronald F. Frank, Case 21TRCV00874 2023-03-01 Tentative Ruling

Judge: Ronald F. Frank, Case: 21TRCV00874, Date: 2023-03-01 Tentative Ruling

Case Number: 21TRCV00874 Hearing Date: March 1, 2023 Dept: 8

Tentative Ruling

HEARING DATE: March 1, 2023¿

CASE NUMBER: 21TRCV00874

CASE NAME: BMI Installations, Inc. v. Dangia Group, Inc., et al.

MOVING PARTY: Defendants, Reg8 Plaza Hermosa, LLC

RESPONDING PARTY: No opposition filed

TRIAL DATE: September 12, 2023

MOTION:¿ (1) Defendant’s June 24, 2022 Motion to Enforce Settlement Agreement

Tentative Ruling: (1) ARGUE. The subject settlement agreement has a payment schedule after which the duty to file a release of the mechanics lien and the dismissal of all parties including Reg8Plaza would be triggered. The evidence before the Court is that the settlement payments were not made, a condition precedent to dismissing Reg8 and to releasing the mechanics lien. Given the withdrawal of BMI’s motion to enforce, and its CMC statement indicating that the settlement had cratered, the Court will hear from Reg8 as to whether even an intended third-party beneficiary can enforce a settlement where the two performing parties have abandoned the written agreement and Plaintiff has elected to proceed to trial instead of seeking to enforce the written settlement agreement

I. BACKGROUND¿

A. Factual¿

Defendant, Reg8 Plaza Hermosa, LLC (“Reg8 Plaza”) notes that on November 30, 2021, Plaintiff BMI Installations, Inc. (hereinafter “BMI”), filed its complaint alleging two causes of action, the first cause of action for breach of contract against Defendant DAN and the second cause of action for Foreclosure of Mechanic’s Lien against Defendant Reg8 Plaza, the owner of the subject property where BMI worked for DAN, the general contractor and a lender, Defendant Alliance Life Insurance Company of America (“Alliance”). Reg8 Plaza contends that on March 8, 2022, Plaintiff BMI dismissed Alliance without prejudice, and on March 12, 2022, Defendant Reg 8 Plaza filed a Notice of Related Case.

Reg8 Plaza further contends that on May 3, 2022, BMI filed its Motion to Enforce Settlement Agreement pursuant to Code of Civil Procedure section 664.6 based on the sole factual assertion that it should be enforced as a money Judgment against Defendant DAN due to DAN’s failure to timely pay any of the two installment payments of $13,000.00 called for under the agreement. Reg8 Plaza asserts that the motion was reserved for hearing for June 2, 2022, in Department M of this court. The motion attached a written Settlement Agreement and Release (“SAR”) signed by BMI and DAN in late March and early April of 2022, and a Declaration of BMI’s counsel Robert L. Backman. (Declaration of Brandon C. Murphy, (Murphy Decl., ¶ 3. Exhibit B.) Although not attached to Reg8 Plaza’s motion, the SAR contained a payment plan requiring that the consideration for the settlement be paid in two installments, the last of which was due May 9, 2022. The dismissal of all parties and all causes of action was due to be filed withing 7 calendar days of the clearance of the second installment check. (SAR, ¶2.)

Reg8 Plaza asserts that on May 17, 2022, it filed a formal Joinder for Clarification addressing how BMI’s motion failed to recognize that the settlement agreement contains mutual obligations of BMI as to the Release of the Lien and all disputes on this alleged debt against all “parties,” specifically including defendant Reg8 Plaza and its tenant, Splitting Hairs Hermosa LLC. Reg8 Plaza requested the Court, under its powers under Code of Civil Procedure section 664.6, to examine the contractual language and make the required interpretation of the subject written SAR and issue its order against BMI to file a dismissal with prejudice of Reg8 Plaza and to order BMI to prepare and record a Release of the subject Mechanic’s Lien. The subject Mechanic’s Lien to be Released was attached to the Joinder as Exhibit A and was incorporated by reference. (Murphy Decl., ¶ 4, Exhibit C.)

On May 19, 2022, BMI withdrew its then-pending Motion. Despite the existence of Reg8 Plaza’s Joinder filed, the original Motion to Enforce the Settlement Agreement was taken off calendar. (Murphy Decl., ¶¶ 5, 6, 7.) That led to the joining party’s determination to file its own motion to enforce the settlement, which is what is currently before the Court.

B. Procedural

On June 24, 2022, Reg8 Plaza filed this Motion to Enforce Settlement. No opposition has been filed.

¿II. ANALYSIS

A. Legal Standard

Under Code of Civil Procedure, section 664.6:

(a)¿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.

(b) For purposes of this section, a writing is signed by a party if it is signed by any of the following:

(1) The party.

(2) An attorney who represents the party.

(3) If the party is an insurer, an agent who is authorized in writing by the insurer to sign on the insurer's behalf.”

B. Discussion

Reg8 Plaza asserts that BMI had chosen to seek the benefits of expedited settlement but did not accept or propose in its motion to fulfill its obligations and burdens described and set forth in the SAR. Reg8 Plaza also asserts that the subject SAR is between BMI and DAN but the language of the settlement agreement specifically covers the release of all parties, all disputes and release of the subject Lien. Reg8 Plaza contends that BMI should be required to comply with the SAR contractual terms as to defendant, Reg8 Plaza. Reg8 Plaza also asserts that it is a third-party beneficiary of BMI’s settlement with DAN. Reg8 Plaza contends that the SAR was clearly crafted to benefit Reg8, it identified Reg8 Plaza by name, and reflected that Reg8 Platform was in the class of defendants to be released. But Reg8 has not cited any authorities for the proposition that even an intended TPB can enforce a bilateral contract over the objection of both signing, contracting parties. Here, it appears Dangia determined not to fulfill its payment obligation, and BMI determined to treat the SAR as having been abandoned so it elected to proceed with trial rather than settlement.

On May 20, 2022, Dangia filed a CMC statement indicating that Dangia and Retrofit “have achieved settlement” and noted the motion to enforce the settlement. But on May 19, the day before Dangia’s arguably ambiguous CMC statement, BMI filed its notice of withdrawal of the motion to enforce. Thereafter, on May 23, 2022, BMI filed a CMC statement and posted jury fees, the CMC statement indicating that “Plaintiff attempted to settle the case” and that since Dangia did not perform “Plaintiff desires to disregard the settlement agreement and proceed to trial.” Thus, prior to the CMC hearing with Judge Tanaka last June, the two parties to the SAR had both manifested intention to abandon the settlement they both signed but neither had performed, and to proceed forward with litigating rather than settling. Reg8’s joinder thus became “collateral damage.”

On June 2, 2022, Judge Tanaka held a CMC in Case No. 21TRCV00750, Retrofit Service vs Dangia Group, finding that the low-numbered case was deemed to be related to the later-filed Case No. 21TRCV00874 in which the instant motion was subsequently filed. Judge Tanaka had previously related two other cases, No. 21TRCV00768 and 22TRCV00750, by Minute Order dated May 17, 2022. Because Reg8 gave written notice of the June 2 ruling, it was aware of Judge Tanaka’s determination of the Notices of Related Case as all four related cases were listed in Reg8’s Notice of Ruling. There is no indication in Judge Tanaka’s June 2, 2022 Minute Order nor in Reg8’s written notice of ruling that the issue of the withdrawn motion to enforce settlement nor Reg8’s joinder was discussed with or decided by Judge Tanaka. Judge Tanaka did set the cases for trial, but thereafter in an administrative reassignment of civil cases pending in the Southwest District, this case and hundreds more were reassigned for all purposes to Inglewood. At the first hearing in Inglewood on October 26, 2022, no mention was made of Reg8’s motion to compel enforcement of the abandoned and unperformed settlement agreement; however, Judge Frank’s Minute Order indicates the FSC and trial dates previously set by Judge Tanaka would stand because the “case is moving forward.”

The Court will allow the parties to argue whether Reg8 Plaza can enforce the bilateral and since abandoned settlement agreement when neither of the parties who signed that settlement agreement intend to perform or enforce it.